EN BANC

July 4, 2017

G.R. No. 231658

REPRESENTATIVES EDCEL C. LAGMAN, TOMASITO S. VILLARIN, GARY C. ALEJANO, EMMANUEL A.

BILLONES, AND TEDDY BRAWNER BAGUILAT, JR., Petitioners
vs.
HON. SALVADOR C. MEDIALDEA, EXECUTIVE SECRETARY; HON. DELFIN N. LORENZANA, SECRETARY OF
THE DEPARTMENT OF NATIONAL DEF'ENSE AND MARTIAL LAW ADMINISTRATOR; AND GEN.
EDUARDO ANO, CHIEF OF STAFF OF THE ARMED FORCES OF THE PHILIPPINES AND MARTIAL LAW
IMPLEMENTOR, Respondents

x-----------------------x

G.R. No. 231771

EUFEMIA CAMPOS CULLAMAT, VIRGILIO T. LIN CUNA, ATELIANA U. HIJOS, ROLAND A. COBRADO,
CARL ANTHONY D. OLALO, ROY JIM BALANGIDG, RENATO REYES, JR., CRISTIN A E. PALABAY,
AMARYLLIS H. ENRIQUEZ, ACT TEACHERS' REPRESENTATIVE ANTONIO L. TINIO, GABRIELA WOMEN'S
PARTY REPRESENTATIVE i\RLENED.BROSAS,KABATAAN PARTY-LIST REPRESENTATIVE SARAH JANE I.
ELAGO, MAE PANER, GABRIELA KRISTA DALENA, ANNA ISABELLE ESTEIN, MARK VINCENT D. LIM,
VENCER MARI CRISOSTOMO, JOVITA MONTES, Petitioners,
vs.
PRESIDENT RODRIGO DUTERTE, EXECUTIVE SECRETARY SALVADOR MEDIALDEA, DEFENSE SECRETARY
DELFIN LORENZANA, ARMED FORCES OF THE PHILIPPINES CHIEF OF STAFF LT. GENERAL EDUARDO
ANO, PHILIPPINE NATIONAL POLICE DIRECTOR-GENERAL RONALD DELA ROSA, Respondents

x-----------------------x

G.R. No. 231774

NORKAYA S. MOHAMAD, SITTIE NUR DYHANNA S. MOHAMAD, NORAISAH S. SANI, ZAHRIA P. MUTI-
MAPANDI, Petitioners,
vs.
EXECUTIVE SECRETARY SALVADOR C. MEDIALDEA, DEPARTMENT OF NATIONAL DEFENSE (DND)
SECRETARY DELFIN N. LORENZANA, DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT (DILG)
SECRETARY (OFFICER-INCHARGE) CATALINO S. CUY, ARMED FORCES OF THE PHILIPPINES (AFP) CHEF
OF STAFF GEN. EDUARDO M. AÑO, PHILIPPINE NATIONAL POLICE (PNP) CHIEF DIRECTOR GENERAL
RONALD M. DELA ROSA, NATIONAL SECURITY ADVISER HERMOGENES C. ESPERON, JR., Respondents.

DECISION

DEL CASTILLO, J.:

Effective May 23, 2017, and for a period not exceeding 60 days, President Rodrigo Roa Duterte issued
Proclamation No. 216 declaring a state of martial law and suspending the privilege of the writ of habeas
corpus in the whole of Mindanao.

The full text of Proclamation No. 216 reads as follows:

WHEREAS, Proclamation No. 55, series of 2016, was issued on 04 September 2016 declaring a state of
national emergency on account of lawless violence in Mindanao;

WHEREAS, Section 18, Article VII of the Constitution provides that 'x x x In case of invasion or rebellion,
when the public safety requires it, he (the President) may, for a period not exceeding sixty days, suspend

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the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law x
x x';

WHEREAS, Article 134 of the Revised Penal Code, as amended by R.A. No. 6968, provides that 'the crime
of rebellion or insurrection is committed by rising and taking arms against the Government for the
purpose of removing from the allegiance to said Government or its laws, the territory of the Republic of
the Philippines or any part thereof, of any body of land, naval or other armed forces, or depriving the
Chief Executive or the Legislature, wholly or partially, of any of their powers or prerogatives';

WHEREAS, part of the reasons for the issuance of Proclamation No. 55 was the series of violent acts
committed by the Maute terrorist group such as the attack on the military outpost in Butig, Lanao del
Sur in February 2016, killing and wounding several soldiers, and the mass jailbreak in Marawi City in
August 2016, freeing their arrested comrades and other detainees;

WHEREAS, today 23 May 2017, the same Maute terrorist group has taken over a hospital in Marawi City,
Lanao del Sur, established several checkpoints within the City, burned down certain government and
private facilities and inflicted casualties on the part of Government forces, and started flying the flag of
the Islamic State of Iraq and Syria (ISIS) in several areas, thereby openly attempting to remove from the
allegiance to the Philippine Government this part of Mindanao and deprive the Chief Executive of his
powers and prerogatives to enforce the laws of the land and to maintain public order and safety in
Mindanao, constituting the crime of rebellion; and

WHEREAS, this recent attack shows the capability of the Maute group and other rebel groups to sow
terror, and cause death and damage to property not only in Lanao del Sur but also in other parts of
Mindanao.

NOW, THEREFORE, I, RODRIGO ROA DUTERTE, President of the Republic of the Philippines, by virtue of
the powers vested in me by the Constitution and by law, do hereby proclaim as follows:

SECTION 1. There is hereby declared a state of martial law in the Mindanao group of islands for a period
not exceeding sixty days, effective as of the date hereof.

SECTION 2. The privilege of the writ of habeas corpus shall likewise be suspended in the aforesaid area
for the duration of the state of martial law.

DONE in the Russian Federation, this 23rd day of May in the year of our Lord, Two Thousand and
Seventeen.

Within the timeline set by Section 18, Article VII of the Constitution, the President submitted to
Congress on May 25, 2017, a written Report on the factual basis of Proclamation No. 216.

The Report pointed out that for decades, Mindanao has been plagued with rebellion and lawless
violence which only escalated and worsened with the passing of time.

Mindanao has been the hotbed of violent extremism and a brewing rebellion for decades. In more
recent years, we have witnessed the perpetration of numerous acts of violence challenging the
authority of the duly constituted authorities, i.e., the Zamboanga siege, the Davao bombing, the
Mamasapano carnage, and the bombings in Cotabato, Sultan Kudarat, Sulu, and Basilan, among others.
Two armed groups have figured prominently in all these, namely, the Abu Sayaff Group (ASG) and the
ISIS-backed Maute Group.1

The President went on to explain that on May 23, 2017, a government operation to capture the high-
ranking officers of the Abu Sayyaf Group (ASG) and the Maute Group was conducted. These groups,
which have been unleashing havoc in Mindanao, however, confronted the government operation by
intensifying their efforts at sowing violence aimed not only against the government authorities and its
facilities but likewise against civilians and their properties. As narrated in the President's Report:

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On 23 May 2017, a government operation to capture Isnilon Hapilon, a senior leader of the ASG, and
Maute Group operational leaders, Abdullah and Omarkhayam Maute, was confronted with armed
resistance which escalated into open hostility against the government. Through these groups' armed
siege and acts of violence directed towards civilians and government authorities, institutions and
establishments, they were able to take control of major social, economic, and political foundations of
Marawi City which led to its paralysis. This sudden taking of control was intended to lay the groundwork
for the eventual establishment of a DAESH wilayat or province in Mindanao.

Based on verified intelligence reports, the Maute Group, as of the end of 2016, consisted of around two
hundred sixty-three (263) members, fully armed and prepared to wage combat in furtherance of its aims.
The group chiefly operates in the province of Lanao del Sur, but has extensive networks and linkages
with foreign and local armed groups such as the Jemaah Islamiyah, Mujahidin Indonesia Timur and the
ASG. It adheres to the ideals being espoused by the DAESH, as evidenced by, among others, its
publication of a video footage declaring its allegiance to the DAESH. Reports abound that foreign-based
terrorist groups, the ISIS (Islamic State of Iraq and Syria) in particular, as well as illegal drug money,
provide financial and logistical support to the Maute Group.

The events commencing on 23 May 2017 put on public display the groups' clear intention to establish an
Islamic State and their capability to deprive the duly constituted authorities - the President, foremost -
of their powers and prerogatives.2

In particular, the President chronicled in his Report the events which took place on May 23, 2017 in
Marawi City which impelled him to declare a state of martial law and suspend the privilege of writ
of habeas corpus, to wit:

• At 1400H members of the Maute Group and ASG, along with their sympathizers, commenced their
attack on various facilities - government and privately owned - in the City of Marawi.

• At 1600H around fifty (50) armed criminals assaulted Marawi City Jail being manage by the Bureau of
Jail Management and Penology (BJMP).

• The Maute Group forcibly entered the jail facilities, destroyed its main gate, and assaulted on-duty
personnel. BJMP personnel were disarmed, tied, and/or locked inside the cells.

• The group took cellphones, personnel-issued firearms, and vehicles (i.e., two [2] prisoner vans and
private vehicles).

• By 1630H, the supply of power into Marawi City had been interrupted, and sporadic gunfights were
heard and felt everywhere. By evening, the power outage had spread citywide. (As of 24 May 2017,
Marawi City's electric supply was still cut off, plunging the city into total black-out.)

• From 1800H to 1900H, the same members of the Maute Group ambushed and burned the Marawi
Police Station. A patrol car of the Police Station was also taken.

• A member of the Provincial Drug Enforcement Unit was killed during the takeover of the Marawi City
Jail. The Maute Group facilitated the escape of at least sixty-eight (68) inmates of the City Jail.

• The BJMP directed its personnel at the Marawi City Jail and other affected areas to evacuate.

• By evening of 23 May 2017, at least three (3) bridges in Lanao del Sur, namely, Lilod, Bangulo, and
Sauiaran, fell under the control of these groups. They threatened to bomb the bridges to pre-empt
military reinforcement.

• As of 2222H, persons connected with the Maute Group had occupied several areas in Marawi City,
including Naga Street, Bangolo Street, Mapandi, and Camp Keithly, as well as the following barangays:
Basak Malutlot, Mapandi, Saduc, Lilod Maday, Bangon, Saber, Bubong, Marantao, Caloocan, Banggolo,
Barionaga, and Abubakar.

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• These lawless armed groups had likewise set up road blockades and checkpoints at the Iligan City-
Marawi City junction.

• Later in the evening, the Maute Group burned Dansalan College Foundation, Cathedral of Maria
Auxiliadora, the nun's quarters in the church, and the Shia Masjid Moncado Colony. Hostages were
taken from the church.

• About five (5) faculty members of Dansalan College Foundation had been reportedly killed by the
lawless groups.

• Other educational institutions were also burned, namely, Senator Ninoy Aquino College Foundation
and the Marawi Central Elementary Pilot School.

• The Maute Group also attacked Amai Pakpak Hospital and hoisted the DAESH flag there, among other
several locations. As of 0600H of 24May 2017, members of the Maute Group were seen guarding the
entry gates of Amai Pakpak Hospital. They held hostage the employees of the Hospital and took over the
PhilHealth office located thereat.

• The groups likewise laid siege to another hospital, Filipino-Libyan Friendship Hospital, which they later
set ablaze.

• Lawless armed groups likewise ransacked the Landbank of the Philippines and commandeered one of
its armored vehicles.

• Latest information indicates that about seventy-five percent (75%) of Marawi City has been infiltrated
by lawless armed groups composed of members of the Maute Group and the ASG. As of the time of this
Report, eleven (11) members of the Armed Forces and the Philippine National Police have been killed in
action, while thirty-five (35) others have been seriously wounded.

• There are reports that these lawless armed groups are searching for Christian communities in Marawi
City to execute Christians. They are also preventing Maranaos from leaving their homes and forcing
young male Muslims to join their groups.

• Based on various verified intelligence reports from the AFP and the PNP, there exists a strategic mass
action of lawless armed groups in Marawi City, seizing public and private facilities, perpetrating killings
of government personnel, and committing armed uprising against and open defiance of the
government.3

The unfolding of these events, as well as the classified reports he received, led the President to conclude
that -

These activities constitute not simply a display of force, but a clear attempt to establish the groups' seat
of power in Marawi City for their planned establishment of a DAESH wilayat or province covering the
entire Mindanao.

The cutting of vital lines for transportation and power; the recruitment of young Muslims to further
expand their ranks and strengthen their force; the armed consolidation of their members throughout
Marawi City; the decimation of a segment of the city population who resist; and the brazen display of
DAESH flags constitute a clear, pronounced, and unmistakable intent to remove Marawi City, and
eventually the rest of Mindanao, from its allegiance to the Government.

There exists no doubt that lawless armed groups are attempting to deprive the President of his power,
authority, and prerogatives within Marawi City as a precedent to spreading their control over the entire
Mindanao, in an attempt to undermine his control over executive departments, bureaus, and offices in
said area; defeat his mandate to ensure that all laws are faithfully executed; and remove his supervisory
powers over local govemments.4

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According to the Report, the lawless activities of the ASG, Maute Group, and other criminals, brought
about undue constraints and difficulties to the military and government personnel, particularly in the
performance of their duties and functions, and untold hardships to the civilians, viz.:

Law enforcement and other government agencies now face pronounced difficulty sending their reports
to the Chief Executive due to the city-wide power outages. Personnel from the BJMP have been
prevented from performing their functions. Through the attack and occupation of several hospitals,
medical services in Marawi City have been adversely affected. The bridge and road blockades set up by
the groups effectively deprive the government of its ability to deliver basic services to its citizens. Troop
reinforcements have been hampered, preventing the government from restoring peace and order in the
area. Movement by both civilians and government personnel to and from the city is likewise hindered.

The taking up of arms by lawless armed groups in the area, with support being provided by foreign-
based terrorists and illegal drug money, and their blatant acts of defiance which embolden other armed
groups in Mindanao, have resulted in the deterioration of public order and safety in Marawi City; they
have likewise compromised the security of the entire Island of Mindanao.5

The Report highlighted the strategic location of Marawi City and the crucial and significant role it plays in
Mindanao, and the Philippines as a whole. In addition, the Report pointed out the possible tragic
repercussions once Marawi City falls under the control of the lawless groups.

The groups' occupation of Marawi City fulfills a strategic objective because of its terrain and the easy
access it provides to other parts of Mindanao. Lawless armed groups have historically used provinces
adjoining Marawi City as escape routes, supply lines, and backdoor passages.

Considering the network and alliance-building activities among terrorist groups, local criminals, and
lawless armed men, the siege of Marawi City is a vital cog in attaining their long-standing goal: absolute
control over the entirety of Mindanao. These circumstances demand swift and decisive action to ensure
the safety and security of the Filipino people and preserve our national integrity.6

The President ended his Report in this wise:

While the government is presently conducting legitimate operations to address the on-going rebellion, if
not the seeds of invasion, public safety necessitates the continued implementation of martial law and
the suspension of the privilege of the writ of habeas corpus in the whole of Mindanao until such time
that the rebellion is completely quelled.7

In addition to the Report, representatives from the Executive Department, the military and police
authorities conducted briefings with the Senate and the House of Representatives relative to the
declaration of martial law.

After the submission of the Report and the briefings, the Senate issued P.S. Resolution No.
3888 expressing full support to the martial law proclamation and finding Proclamation No. 216 "to be
satisfactory, constitutional and in accordance with the law". In the same Resolution, the Senate declared
that it found "no compelling reason to revoke the same". The Senate thus resolved as follows:

NOW, THEREFORE, BE IT RESOLVED, as it is hereby resolved, by way of the sense of the Senate, that the
Senate finds the issuance of Proclamation No. 216 to be satisfactory, constitutional and in accordance
with the law. The Senate hereby supports fully Proclamation No. 216 and finds no compelling reason to
revoke the sarne.9

The Senate's counterpart in the lower house shared the same sentiments. The House of Representatives
likewise issued House Resolution No. 105010 "EXPRESSING THE FULL SUPPORT OF THE HOUSE OF
REPRESENTATIVES TO PRESIDENT RODRIGO DUTERTE AS IT FINDS NO REASON TO REVOKE
PROCLAMATION NO. 216, ENTITLED 'DECLARING A STATE OF MARTIAL LAW AND SUSPENDING THE
PRIVILEGE OF THE WRIT OF HABEAS CORPUS IN THE WHOLE OF MINDANAO"'.

The Petitions

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A) G.R. No. 231658 (Lagman Petition)

On June 5, 2017, Representatives Edcel C. Lagman, Tomasito s. Villarin, Gary C. Alejano, Emmanuel A.
Billones, and Teddy Brawner Baguilat, Jr. filed a Petition11 Under the Third Paragraph of Section 18 of
Article VII of the 1987 Constitution.

First, the Lagman Petition claims that the declaration of martial law has no sufficient factual basis
because there is no rebellion or invasion in Marawi City or in any part of Mindanao. It argues that acts of
terrorism in Mindanao do not constitute rebellion12 since there is no proof that its purpose is to remove
Mindanao or any part thereof from allegiance to the Philippines, its laws, or its territory.13 It labels the
flying of ISIS flag by the Maute Group in Marawi City and other outlying areas as mere
propaganda114 and not an open attempt to remove such areas from the allegiance to the Philippine
Government and deprive the Chief Executive of the assertion and exercise of his powers and
prerogatives therein. It contends that the Maute Group is a mere private army, citing as basis the
alleged interview of Vera Files with Joseph Franco wherein the latter allegedly mentioned that the
Maute Group is more of a "clan's private militia latching into the IS brand theatrically to inflate
perceived capability".15 The Lagman Petition insists that during the briefing, representatives of the
military and defense authorities did not categorically admit nor deny the presence of an ISIS threat in
the country but that they merely gave an evasive answer16 that "there is ISIS in the Philippines".17 The
Lagman Petition also avers that Lt. Gen. Salvador Mison, Jr. himself admitted that the current armed
conflict in Marawi City was precipitated or initiated by the government in its bid to capture
Hapilon.18 Based on said statement, it concludes that the objective of the Maute Group's armed
resistance was merely to shield Hapilon and the Maute brothers from the government forces, and not to
lay siege on Marawi City and remove its allegiance to the Philippine Republic.19 It then posits that if at all,
there is only a threat of rebellion in Marawi City which is akin to "imminent danger" of rebellion, which
is no longer a valid ground for the declaration of martial law.20

Second, the Lagman Petition claims that the declaration of martial law has no sufficient factual basis
because the President's Report containef "false, inaccurate, contrived and hyperbolic accounts".21

It labels as false the claim in the President's Report that the Maute Group attacked Amai Pakpak Medical
Center. Citing online reports on the interview of Dr. Amer Saber (Dr. Saber), the hospital's Chief, the
Lagman Petition insists that the Maute Group merely brought an injured member to the hospital for
treatment but did not overrun the hospital or harass the hospital personnel. 22 The Lagman Petition also
refutes the claim in the President's Report that a branch of the Landbank of the Philippines was
ransacked and its armored vehicle commandeered. It alleges that the bank employees themselves
clarified that the bank was not ransacked while the armored vehicle was owned by a third party and was
empty at the time it was commandeered.23 It also labels as false the report on the burning of the
Senator Ninoy Aquino College Foundation and the Marawi Central Elementary Pilot School. It avers that
the Senator Ninoy Aquino College Foundation is intact as of May 24, 2017 and that according to Asst.
Superintendent Ana Alonto, the Marawi Central Elementary Pilot School was not burned by the
terrorists.24 Lastly, it points out as false the report on the beheading of the police chief of Malabang,
Lanao del Sur, and the occupation of the Marawi City Hall and part of the Mindanao State University.25

Third, the Lagman Petition claims that the declaration of martial law has no sufficient factual basis since
the President's Report mistakenly included the attack on the military outpost in Butig, Lanao del Sur in
February 2016, the mass jail break in Marawi City in August 2016, the Zamboanga siege, the Davao
market bombing, the Mamasapano carnage and other bombing incidents in Cotabato, Sultan Kudarat,
and Basilan, as additional factual bases for the proclamation of martial law. It contends that these
events either took place long before the conflict in Marawi City began, had long been resolved, or with
the culprits having already been arrested.26

Fourth, the Lagman Petition claims that the declaration of martial law has no sufficient factual basis
considering that the President acted alone and did not consult the military establishment or any ranking
official27 before making the proclamation.

Finally, the Lagman Petition claims that the President's proclamation of martial law lacks sufficient
factual basis owing to the fact that during the presentation before the Committee of the Whole of the

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House of Representatives, it was shown that the military was even successful in pre-empting the ASG
and the Maute Group's plan to take over Marawi City and other parts of Mindanao; there was absence
of any hostile plan by the Moro Islamic Liberation Front; and the number of foreign fighters allied with
ISIS was "undetermined"28 which indicates that there are only a meager number of foreign fighters who
can lend support to the Maute Group.29

Based on the foregoing argumentation, the Lagman Petition asks the Court to: (1)"exercise its specific
and special jurisdiction to review the sufficiency of the factual basis of Proclamation No. 216"; and (2)
render "a Decision voiding and nullifying Proclamation No. 216" for lack of sufficient factual basis.30

In a Resolution31 dated June 6, 2017, the Court required respondents to comment on the Lagman
Petition and set the case for oral argument on June 13, 14, and 15, 2017.

On June 9, 2017, two other similar petitions docketed as G.R. Nos. 231771 and 231774 were filed and
eventually consolidated with G.R. No. 231658.32

B) G.R. No. 231771 (Cullamat Petition)

The Cullamat Petition, "anchored on Section 18, Article VII"33 of the Constitution, likewise seeks the
nullification of Proclamation No. 216 for being unconstitutional because it lacks sufficient factual basis
that there is rebellion in Mindanao and that public safety warrants its declaration. 34

In particular, it avers that the supposed rebellion described in Proclamation No. 216 relates to events
happening in Marawi City only an not in the entire region of Mindanao. It concludes that Proclamation
No 216 "failed to show any factual basis for the imposition of martial law in the entire
Mindanao,"35 "failed to allege any act of rebellion outside Marawi City, much less x x x allege that public
safety requires the imposition o martial law in the whole of Mindanao".36

The Cullamat Petition claims that the alleged "capability of the Maute Group and other rebel groups to
sow terror and cause death and damage to property"37 does not rise to the level of rebellion sufficient
to declare martial law in the whole of Mindanao.38 It also posits that there is no lawless violence in other
parts of Mindanao similar to that in Marawi City.39

Moreover, the Cullamat Petition assails the inclusion of the phrase "other rebel groups" in the last
Whereas Clause of Proclamation No. 216 for being vague as it failed to identify these rebel groups and
specify the acts of rebellion that they were supposedly waging.40

In addition, the Cullamat Petition cites alleged inaccuracies, exaggerations, and falsities in the Report of
the President to Congress, particularly the attack at the Amai Pakpak Hospital, the ambush and burning
of the Marawi Police Station, the killing of five teachers of Dansalan College Foundation, and the attacks
on various government facilities.41

In fine, the Cullamat Petition prays for the Court to declare Proclamation No. 216 as unconstitutional or
in the alternative, should the Court find justification for the declaration of martial law and suspension of
the privilege of the writ of habeas corpus in Marawi City, to declare the same as unconstitutional insofar
as its inclusion of the other parts of Mindanao.42

C) G.R. No. 231774 (Mohamad Petition)

The Mohamad Petition, denominated as a "Petition for Review of the Sufficiency of [the] Factual Basis of
[the] Declaration of Martial Law and [the] Suspension of the Privilege of the Writ of Habeas
Corpus,"43 labels itself as "a special proceeding"44 or an "appropriate proceeding filed by any
citizen"45 authorized under Section 18, Article VII of the Constitution.

The Mohamad Petition posits that martial law is a measure of last resort46 and should be invoked by the
President only after exhaustion of less severe remedies.47 It contends that the extraordinary powers of
the President should be dispensed sequentially, i.e., first, the power to call out the armed forces; second,
the power to suspend the privilege of the writ of habeas corpus; and finally, the power to declare

7
martial law.48 It maintains that the President has no discretion to choose which extraordinary power to
use; moreover, his choice must be dictated only by, and commensurate to, the exigencies of the
situation.49

According to the Mohamad Petition, the factual situation in Marawi is not so grave as to require the
imposition of martial law.50 It asserts that the Marawi incidents "do not equate to the existence of a
public necessity brought about by an actual rebellion, which would compel the imposition of martial law
or the suspension of the privilege of the writ of habeas corpus".51 It proposes that "[m]artial law can
only be justified if the rebellion or invasion has reached such gravity that [its] imposition x x x is
compelled by the needs of public safety"52 which, it believes, is not yet present in Mindanao.

Moreover, it alleges that the statements contained in the President's Report to the Congress, to wit:
that the Maute Group intended to establish an Islamic State; that they have the capability to deprive the
duly constituted authorities of their powers and prerogatives; and that the Marawi armed hostilities is
merely a prelude to a grander plan of taking over the whole of Mindanao, are conclusions bereft of
substantiation.53

The Mohamad Petition posits that immediately after the declaration of martial law, and without waiting
for a congressional action, a suit may already be brought before the Court to assail the sufficiency of the
factual basis of Proclamation No. 216.

Finally, in invoking this Court's power to review the sufficiency ofthe factual basis for the declaration of
martial law and the suspension of the privilege of the writ of habeas corpus, the Mohamad Petition
insists that the Court may "look into the wisdom of the [President's] actions, [and] not just the presence
of arbitrariness".54 Further, it asserts that since it is making a negative assertion, then the burden to
prove the sufficiency of the factual basis is shifted to and lies on the respondents.55 It thus asks the
Court "to compel the [r]espondents to divulge relevant information"56 in order for it to review the
sufficiency of the factual basis.

In closing, the Mohamad Petition prays for the Court to exercise its power to review, "compel
respondents to present proof on the factual basis [of] the declaration of martial law and the suspension
of the privilege of the writ of habeas corpus in Mindanao"57 and declare as unconstitutional
Proclamation No. 216 for lack of sufficient factual basis.

The Consolidated Comment

The respondents' Consolidated Comment58 was filed on June 12, 2017, as required by the Court. Noting
that the same coincided with the celebration of the 119th anniversary of the independence of this
Republic, the Office of the Solicitor General (OSG) felt that "defending the constitutionality of
Proclamation No. 216" should serve as "a rallying call for every Filipino to unite behind one true flag and
defend it against all threats from within and outside our shores".59

The OSG acknowledges that Section 18, Article VII of the Constitution vests the Court with the authority
or power to review the sufficiency of the factual basis of the declaration of martial law.60 The OSG,
however, posits that although Section 18, Article VII lays the basis for the exercise of such authority or
power, the same constitutional provision failed to specify the vehicle, mode or remedy through which
the "appropriate proceeding" mentioned therein may be resorted to. The OSG suggests that the
"appropriate proceeding" referred to in Section 18, Article VII may be availed of using the vehicle, mode
or remedy of a certiorari petition, either under Section 1 or 5, of Article VIII.61 Corollarily, the OSG
maintains that the review power is not mandatory, but discretionary only, on the part of the
Court. 62 The Court has the discretion not to give due course to the petition.63

Prescinding from the foregoing, the OSG contends that the sufficiency of the factual basis of
Proclamation No. 216 should be reviewed by the Court "under the lens of grave abuse of
discretion"64 and not the yardstick of correctness of the facts.65 Arbitrariness, not correctness, should be
the standard in reviewing the sufficiency of factual basis.

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The OSG maintains that the burden lies not with the respondents but with the petitioners to prove that
Proclamation No. 216 is bereft of factual basis.1âwphi1 It thus takes issue with petitioners' attempt to
shift the burden of proof when they asked the Court "to compel [the] respondents to present proof on
the factual basis"66 of Proclamation No. 216. For the OSG, "he who alleges must prove"67 and that
governmental actions are presumed to be valid and constitutional.68

Likewise, the OSG posits that the sufficiency of the factual basis must be assessed from the trajectory or
point of view of the President and base on the facts available to him at the time the decision was
made.69 It argues that the sufficiency of the factual basis should be examined not based on the facts
discovered after the President had made his decision to declare martial law because to do so would
subject the exercise of the President's discretion to an impossible standard.70 It reiterates that the
President's decision should be guided only by the information and data available to him at the time he
made the determination.71 The OSG thus asserts that facts that were established after the declaration of
martial law should not be considered in the review of the sufficiency of the factual basis of the
proclamation of martial law. The OSG suggests that the assessment of after-proclamation facts lies with
the President and Congress for the purpose of determining the propriety of revoking or extending the
martial law. The OSG fears that if the Court considers after-proclamation-facts in its review of the
sufficiency of the factual basis for the proclamation, it would in effect usurp the powers of the Congress
to determine whether martial law should be revoked or extended.72

It is also the assertion of the OSG that the President could validly rely on intelligence reports coming
from the Armed Forces of the Philippines;73 and that he could not be expected to personally determine
the veracity of thecontents of the reports.74 Also, since the power to impose martial law is vested solely
on the President as Commander-in-Chief, the lack of recommendation from the Defense Secretary, or
any official for that matter, will not nullify the said declaration, or affect its validity, or compromise the
sufficiency of the factual basis.

Moreover, the OSG opines that the petitioners miserably failed to validly refute the facts cited by the
President in Proclamation No. 216 and in his Report to the Congress by merely citing news reports that
supposedly contradict the facts asserted therein or by criticizing in piecemeal the happenings in Marawi.
For the OSG, the said news articles are "hearsay evidence, twice removed,"75 and thus inadmissible and
without probative value, and could not overcome the "legal presumption bestowed on governmental
acts".76

Finally, the OSG points out that it has no duty or burden to prove that Proclamation No. 216 has
sufficient factual basis. It maintains that the burden rests with the petitioners. However, the OSG still
endeavors to lay out the factual basis relied upon by the President "if only to remove any doubt as to
the constitutionality of Proclamation No. 216".77

The facts laid out by the OSG in its Consolidated Comment will be discussed in detail in the Court's
Ruling.

ISSUES

The issues as contained in the revised Advisory78 are as follows:

1. Whether or not the petitions docketed as G.R. Nos. 231658, 231771, and 231774 are the "appropriate
proceeding" covered by Paragraph 3, Section 18, Article VII of the Constitution sufficient to invoke the
mode of review required of this Court when a declaration of martial law or the suspension of the
privilege of the writ of habeas corpus is promulgated;

2. Whether or not the President in declaring martial law and suspending the privilege of the writ
of habeas corpus:

a. is required to be factually correct or only not arbitrary in his appreciation of facts;

b. is required to obtain the favorable recommendation thereon of the Secretary of National Defense;

9
c. is required to take into account only the situation at the time of the proclamation, even if subsequent
events prove the situation to have not been accurately reported;

3. Whether or not the power of this Court to review the sufficiency of the factual basis [of] the
proclamation of martial law or the suspension of the privilege of the writ of habeas corpus is
independent of the actual actions that have been taken by Congress jointly or separately;

4. Whether or not there were sufficient factual [basis] for the proclamation of martial law or the
suspension of the privilege of the writ of habeas corpus;

a. What are the parameters for review?

b. Who has the burden of proof?

c. What is the threshold of evidence?

5. Whether the exercise of the power of judicial review by this Court involves the calibration of
graduated powers granted the President as Commander-in-Chief, namely calling out powers, suspension
of the privilege of the writ of habeas corpus, and declaration of martial law;

6. Whether or not Proclamation No. 216 of 23 May 2017 may be considered, vague and thus null and
void:

a. with its inclusion of "other rebel groups;" or

b. since it has no guidelines specifying its actual operational parameters within the entire Mindanao
region;

7. Whether or not the armed hostilities mentioned in Proclamation No. 216 and in the Report of the
President to Congress are sufficient [bases]:

a. for the existence of actual rebellion; or

b. for a declaration of martial law or the suspension of the privilege of the writ of habeas corpus in the
entire Mindanao 1 region;

8. Whether or not terrorism or acts attributable to terrorism are equivalent to actual rebellion and the
requirements of public safety sufficient to declare martial law or suspend the privilege of the writ
of habeas corpus; and

9. Whether or not nullifying Proclamation No. 216 of 23 May 2017 will:

a. have the effect of recalling Proclamation No. 55 s. 2016; or

b. also nullify the acts of the President in calling out the armed forces to quell lawless violence in Marawi
and other parts of the Mindanao region.

After the oral argument, the parties submitted their respective memoranda and supplemental
memoranda.

OUR RULING

I. Locus standi of petitioners.

One of the requisites for judicial review is locus standi, i.e., "the constitutional question is brought
before [the Court] by a party having the requisite 'standing' to challenge it."79 As a general rule, the
challenger must have "a personal and substantial interest in the case such that he has sustained, or will
sustain, direct injury as a result of its enforcement."80 Over the years, there has been a trend towards

10
relaxation of the rule on legal standing, a prime example of which is found in Section 18 of Article VII
which provides that any citizen may file the appropriate proceeding to assail the sufficiency of the
factual basis of the declaration of martial law or the suspension of the privilege of the writ of habeas
corpus. "[T]he only requisite for standing to challenge the validity of the suspension is that the
challenger be a citizen. He need not even be a taxpayer."81

Petitioners in the Cullamat Petition claim to be "suing in their capacities as citizens of the
Republic;"82 similarly, petitioners in the Mohamad Petition all claim to be "Filipino citizens, all women,
all of legal [age], and residents of Marawi City".83 In the Lagman Petition, however, petitioners therein
did not categorically mention that they are suing's citizens but merely referred to themselves as duly
elected Representatives.84 That they are suing in their official capacities as Members of Congress couLd
have elicited a vigorous discussion considering the issuance by the House of Representatives of House
Resolution No. 1050 expressing full support to President Duterte and finding no reason to revoke
Proclamation No. 216. By such resolution, the House of Representatives is declaring that it finds no
reason to review the sufficiency of the factual basis of the martial law declaration, which is in direct
contrast to the views and arguments being espoused by the petitioners in the Lagman Petition.
Considering, however, the trend towards relaxation of the rules on legal standing, as well
as the transcendental issues involved in the present Petitions, the Court will exercise judicial self-
restraint85 and will not venture into this matter. After all, "the Court is not entirely without discretion to
accept a suit which does not satisfy the requirements of a [bona fide] case or of standing. Considerations
paramount to [the requirement of legal standing] could compel assumption of jurisdiction."86 In any case,
the Court can take judicial cognizance of the fact that petitioners in the Lagman Petition are all citizens
of the Philippines since Philippine citizenship is a requirement for them to be elected as representatives.
We will therefore consider them as suing in their own behalf as citizens of this country. Besides,
respondents did not question petitioners' legal standing.

II. Whether or not the petitions are the

"appropriate proceeding" covered by paragraph
3, Section 18, Article VII of the Constitution
sufficient to invoke the mode of review required
by the Court.

All three petitions beseech the cognizance of this Court based on the third paragraph of Section 18,
Article VII (Executive Department) of the 1987 Constitution which provides:

The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the
factual basis of the proclamation of martial law or the suspension of the privilege of the writ or the
extension thereof, and must promulgate its decision thereon within thirty days from its filing.

During the oral argument, the petitioners theorized that the jurisdiction of this Court under the third
paragraph of Section 18, Article VII is sui generis.87 It is a special and specific jurisdiction of the Supreme
Court different from those enumerated in Sections 1 and 5 of Article VIII.88

The Court agrees.

a) Jurisdiction must be
specifically conferred by the
Constitution or by law.

It is settled that jurisdiction over the subject matter is conferred only by the Constitution or by the
law.89 Unless jurisdiction has been specifically conferred by the Constitution or by some legislative act,
no body or tribunal has the power to act or pass upon a matter brought before it for resolution. It is
likewise settled that in the absence of a clear legislative intent, jurisdiction cannot be implied from the
language of the Constitution or a statute.90 It must appear clearly from the law or it will not be held to
exist.91

11
A plain reading of the afore-quoted Section 18, Article VII reveals that it specifically grants authority to
the Court to determine the sufficiency of the factual basis of the proclamation of martial law or
suspension of the privilege of the writ of habeas corpus.

b) "In an appropriate
proceeding" does not refer to a
petition for certiorari filed under
Section 1 or 5 of Article VIII

It could not have been the intention of the framers of the Constitution that the phrase "in an
appropriate proceeding" would refer to a Petition for Certiorari pursuant to Section 1 or Section 5 of
Article VIII. The standard of review in a petition for certiorari is whether the respondent has committed
any grave abuse of discretion amounting to lack or excess of jurisdiction in the performance of his or her
functions. Thus, it is not the proper tool to review the sufficiency of the factual basis of the
proclamationor suspension. It must be emphasized that under Section 18, Article VII, the Court is tasked
to review the sufficiency of the factual basis of the President's exercise of emergency powers. Put
differently, if this Court applies the standard of review used in a petition for certiorari, the same would
emasculate its constitutional task under Section 18, Article VII.

c) Purpose/significance of
Section 18, Article VII is to
constitutionalize the pre-Marcos
martial law ruling in In the Matter of
the Petition for Habeas Corpus of Lansang.

The third paragraph of Section 18, Article VII was inserted by the framers of the 1987 Constitution to
constitutionalize the pre-Marcos martial law ruling of this Court in In the Matter of the Petition for
Habeas Corpus of Lansang,92 to wit: that the factual basis of the declaration of martial law or the
suspension of the privilege of the writ of habeas corpus is not a political question but precisely within
the ambit of judicial review.

"In determining the meaning, intent, and purpose of a law or constitutional provision, the history of the
times out of which it grew and to which it may be rationally supposed to bear some direct relationship,
the evils intended to be remedied, and the good to be accomplished are proper subjects of inquiry."93 Fr.
Joaquin G. Bernas, S.J. (Fr. Bernas), a member of the Constitutional Commission that drafted the 1987
Constitution, explained:

The Commander-in-Chief provisions of the 1935 Constitution had enabled President Ferdinand Marcos
to impose authoritarian rule on the Philippines from 1972 to 1986. Supreme Court decisions during that
period upholding the actions taken by Mr. Marcos made authoritarian rule part of Philippine
constitutional jurisprudence. The members of the Constitutional Commission, very much aware of these
facts, went about reformulating the Commander-in-Chief powers with a view to dismantling what had
been constructed during the authoritarian years. The new formula included revised grounds for the
activation of emergency powers, the manner of activating them, the scope of the powers, and review of
presidential action.94 (Emphasis supplied)

To recall, the Court held in the 1951 case of Montenegro v. Castaneda95 that the authority to decide
whether there is a state of rebellion requiring the suspension of the privilege of the writ of habeas
corpus is lodged with the President and his decision thereon is final and conclusive upon the courts. This
ruling was reversed in the 1971 case of Lansang where it was held that the factual basis of the
declaration of martial law and the suspension of the privilege of the writ of habeas corpus is not a
political question and is within the ambit of judicial review.96 However, in 1983, or after the declaration
of martial law by former President Ferdinand E. Marcos, the Court, in Garcia-Padilla v.
Enrile,97 abandoned the ruling in Lansang and reverted to Montenegro. According to the Supreme Court,
the constitutional power of the President to suspend the privilege of the writ of habeas corpus is not
subject to judicial inquiry.98

12
Thus, by inserting Section 18 in Article VII which allows judicial review of the declaration of martial law
and suspension of the privilege of the writ of habeas corpus, the framers of the 1987 Constitution in
effect constitutionalized and reverted to the Lansang doctrine.

d) Purpose of Section 18,

Article VII is to provide additional
safeguard against possible abuse by
the President on the exercise of the
extraordinary powers.

Section 18, Article VII is meant to provide additional safeguard against possible abuse by the President in
the exercise of his power to declare martial law or suspend the privilege of the writ of habeas
corpus. Reeling from the aftermath of the Marcos martial law, the framers of the Constitution deemed it
wise to insert the now third paragraph of Section 18 of Article VII.99 This is clear from the records of the
Constitutional Commission when its members were deliberating on whether the President could
proclaim martial law even without the concurrence of Congress. Thus:

MR. SUAREZ. Thank you, Madam President.

The Commissioner is proposing a very substantial amendment because this means that he is vesting
exclusively unto the President the right to determine the factors which may lead to the declaration of
martial law and the suspension of the writ of habeas corpus. I suppose he has strong and compelling
reasons in seeking to delete this particular, phrase. May we be informed of his good and substantial
reasons?

MR. MONSOD. This situation arises in cases of invasion or rebellion. And in previous interpellations
regarding this phrase, even during the discussions on the Bill of Rights, as I understand it, the
interpretation is a situation of actual invasion or rebellion. In these situations, the President has to act
quickly. Secondly, this declaration has a time fuse. It is only good for a maximum of 60 days. At the end
of 60 days, it automatically terminates. Thirdly, the right of the judiciary to inquire into the sufficiency of
the factual basis of the proclamation always exists, even during those first 60 days.

MR. SUAREZ. Given our traumatic experience during the past administration, if we give exclusive right to
the President to determine these factors, especially the existence of an invasion or rebellion and the
second factor of determining whether the public safety requires it or not, may I call the attention of the
Gentleman to what happened to us during the past administration. Proclamation No. 1081 was issued
by Ferdinand E. Marcos in his capacity as President of the Philippines by virtue of the powers vested
upon him purportedly under Article VII, Section 10 (2) of the Constitution, wherein he made this
predicate under the "Whereas" provision:

Whereas, the rebellion and armed action undertaken by these lawless elements of the Communists and
other armed aggrupations organized to overthrow the Republic of the Philippines by armed violence and
force have assumed the magnitude of an actual state of war against our people and the Republic of the
Philippines.

And may I also call the attention of the Gentleman to General Order No. 3, also promulgated by
Ferdinand E. Marcos, in his capacity as Commander-in-Chief of all the Armed Forces of the Philippines
and pursuant to Proclamation No. 1081 dated September 21, 1972 wherein he said, among other things:

Whereas, martial law having been declared because of wanton destruction of lives and properties,
widespread lawlessness and anarchy and chaos and disorder now prevailing throughout the country,
which condition has been brought about by groups of men who are actively engaged in a criminal
conspiracy to seize political and state power in the Philippines in order to take over the government by
force and violence, the extent of which has now assumed the proportion of an actual war against our
people and the legitimate government ...

13
And he gave all reasons in order to suspend the privilege of the writ of habeas corpus and declare
martial law in our country without justifiable reason. Would the Gentleman still insist on the deletion of
the phrase 'and, with the concurrence of at least a majority of all the members of the Congress'?

MR. MONSOD. Yes, Madam President, in the case of Mr.Marcos, he is undoubtedly an aberration in our
history and national consciousness. But given the possibility that there would be another Marcos, our
Constitution now has sufficient safeguards. As I said, it is not really true, as the Gentleman has
mentioned, that there is an exclusive right to determine the factual basis because the paragraph
beginning on line 9 precisely tells us that the Supreme Court may review, in an appropriate proceeding
filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the
suspension of the privilege of the writ or the extension thereof and must promulgate its decision on the
same within 30 days from its filing.

I believe that there are enough safeguards. The Constitution is supposed to balance the interests of the
country. And here we are trying to balance the public interest in case of invasion or rebellion as against
the rights of citizens. And I am saying that there are enough safeguards, unlike in 1972 when Mr. Marcos
was able to do all those things mentioned.100

To give more teeth to this additional safeguard, the framers of the 1987 Constitution not only placed the
President's proclamation of martial law or suspension of the privilege of the writ of habeas
corpus within the ambit of judicial review, it also relaxed the rule on standing by allowing any citizen to
question before this Court the sufficiency of the factual basis of such proclamation or suspension.
Moreover, the third paragraph of Section 18, Article VII veritably conferred upon any citizen a
demandable right to challenge the sufficiency of the factual basis of said proclamation or suspension. It
further designated this Court as the reviewing tribunal to examine, in an appropriate proceeding, the
sufficiency of the factual basis and to render its decision thereon within a limited period of 30 days from
date of filing.

e) Purpose of Section 18,

Article VII is to curtail the extent of
the powers of the President.

The most important objective, however, of Section 18, Article VII is the curtailment of the extent of the
powers of the Commander-in-Chief. This is the primary reason why the provision was not placed in
Article VIII or the Judicial Department but remained under Article VII or the Executive Department.

During the closing session of the Constitutional Commission's deliberations, President Cecilia Muñoz
Palma expressed her sentiments on the 1987 Constitution. She said:

The executive power is vested in the President of the Philippines elected by the people for a six-year
term with no reelection for the duration of his/her life. While traditional powers inherent in the office of
the President are granted, nonetheless for the first time, there are specific provisions which curtail the
extent of such powers. Most significant is the power of the Chief Executive to suspend the privilege of
the writ of habeas corpus or proclaim martial law.

The flagrant abuse of that power of the Commander-in-Chief by Mr. Marcos caused the imposition of
martial law for more than eight years and the suspension of the privilege of the writ even after the
lifting of martial law in 1981. The new Constitution now provides that those powers can be exercised
only in two cases, invasion or rebellion when public safety demands it, only for a period not exceeding
60 days, and reserving to Congress the power to revoke such suspension or proclamation of martial law
which congressional action may not be revoked by the President. More importantly, the action of the
President is made subject to judicial review, thereby again discarding jurisprudence which render[s] the
executive action a political question and beyond the jurisdiction of the courts to adjudicate.

For the first time, there is a provision that the state of martial law does not suspend the operation of the
Constitution nor abolish civil courts or legislative assemblies, or vest jurisdiction to military tribunals
over civilians, or suspend the privilege of the writ. Please forgive me if, at this point, I state that this

14
constitutional provision vindicates the dissenting opinions I have written during my tenure in the
Supreme Court in the martial law cases.101

f) To interpret "appropriate
proceeding" as filed under Section 1
of Article VIII would be contrary to
the intent of the Constitution.

To conclude that the "appropriate proceeding" refers to a Petition for Certiorari filed under the
expanded jurisdiction of this Court would, therefore, contradict the clear intention of the framers of the
Constitution to place additional safeguards against possible martial law abuse for, invariably, the third
paragraph of Section 18, Article VII would be subsumed under Section 1 of Article VIII. In other words,
the framers of the Constitution added the safeguard under the third paragraph of Section 18, Article VII
on top of the expanded jurisdiction of this Court.

g) Jurisdiction of the Court is

not restricted to those enumerated in
Sections I and 5 of Article VIII

The jurisdiction of this Court is not restricted to those enumerated in Sections 1 and 5 of Article VIII. For
instance, its jurisdiction to be the sole judge of all contests relating to the election, returns, and
qualifications of the President or Vice-President can be found in the last paragraph of Section 4, Article
VII.102 The power of the Court to review on certiorari the decision, order, or ruling of the Commission on
Elections and Commission on Audit can be found in Section 7, Article IX(A).103

h) Unique features of the third

paragraph of Section 18, Article VII
make it sui generis.

The unique features of the third paragraph of Section 18, Article VII clearly indicate that it should be
treated as sui generis separate and different from those enumerated in Article VIII. Under the third
paragraph of Section 18, Article VII, a petition filed pursuant therewith will follow a different rule on
standing as any citizen may file it. Said provision of the Constitution also limits the issue to the
sufficiency of the factual basis of the exercise by the Chief Executive of his emergency powers. The usual
period for filing pleadings in Petition for Certiorari is likewise not applicable under the third paragraph of
Section 18, Article VII considering the limited period within which this Court has to promulgate its
decision.

A proceeding "[i]n its general acceptation, [is] the form in which actions are to be brought and defended,
the manner of intervening in suits, of conducting them, the mode of deciding them, of opposing
judgments, and of executing."104 In fine, the phrase "in an appropriate proceeding" appearing on the
third paragraph of Section 18, Article VII refers to any action initiated by a citizen for the purpose of
questioning the sufficiency of the factual basis of the exercise of the Chief Executive's emergency
powers, as in these cases. It could be denominated as a complaint, a petition, or a matter to be resolved
by the Court.

III. The power of the Court to review the

sufficiency of the factual basis of the
proclamation of martial law or the suspension of
the privilege of the writ of habeas corpus under
Section 18, Article VII of the 1987 Constitution is
independent of the actions taken by Congress.

During the oral argument,105 the OSG urged the Court to give! deference to the actions of the two co-
equal branches of the Government: on' the part of the President as Commander-in-Chief, in resorting to
his extraordinary powers to declare martial law and suspend the privilege of the writ of habeas
corpus; and on the part of Congress, in giving its imprimatur to Proclamation No. 216 and not revoking
the same.

15
The framers of the 1987 Constitution reformulated the scope of the extraordinary powers of the
President as Commander-in-Chief and the review of the said presidential action. In particular, the
President's extraordinary powers of suspending the privilege of the writ of habeas corpus and imposing
martial law are subject to the veto powers of the Court and Congress.

a) The judicial power to review

versus the congressional power to
revoke.

The Court may strike down the presidential proclamation in an appropriate proceeding filed by any
citizen on the ground of lack of sufficient factual basis. On the other hand, Congress may revoke the
proclamation or suspension, which revocation shall not be set aside by the President.

In reviewing the sufficiency of the factual basis of the proclamation or suspension, the Court considers
only the information and data available to the President prior to or at the time of the declaration; it is
not allowed td "undertake an independent investigation beyond the pleadings."106 On the other hand,
Congress may take into consideration not only data available prior to, but likewise events supervening
the declaration. Unlike the Court I which does not look into the absolute correctness of the factual basis
as will be discussed below, Congress could probe deeper and further; it can delve into the accuracy of
the facts presented before it.

In addition, the Court's review power is passive; it is only initiated by the filing of a petition "in an
appropriate proceeding" by a citizen. On the other hand, Congress' review mechanism is automatic in
the sense that it may be activated by Congress itself at any time after the proclamation or suspension
was made.

Thus, the power to review by the Court and the power to revoke by Congress are not only totally
different but likewise independent from each other although concededly, they have the same trajectory,
which is, the nullification of the presidential proclamation. Needless to say, the power of the Court to
review can be exercised independently from the power of revocation of Congress.

b) The framers of the 1987

Constitution intended the judicial
power to review to be exercised
independently from the congressional
power to revoke.

If only to show that the intent of the framers of the 1987 Constitution was to vest the Court and
Congress with veto powers independently from each other, we quote the following exchange:

MS. QUESADA. Yesterday, the understanding of many was that there would be safeguards that Congress
will be able to revoke such proclamation.

MR. RAMA. Yes.

MS. QUESADA. But now, if they cannot meet because they have been arrested or that the Congress has
been padlocked, then who is going to declare that such a proclamation was not warranted?

xxxx

MR. REGALADO. May I also inform Commissioner Quesada that the judiciary is not exactly just standing
by. A petition for a writ of habeas corpus, if the Members are detained, can immediately be applied for,
and the Supreme Court shall also review the factual basis. x x x107

c) Re-examination of the
Court's pronouncement in Fortun v.
President Macapagal-Arroyo

16
Considering the above discussion, the Court finds it imperative to re-examine, reconsider, and set aside
its pronouncement in Fortun v. President Macapagal-Arroyo108 to the effect that:

Consequently, although the Constitution reserves to the Supreme Court the power to review the
sufficiency of the factual basis of the proclamation or suspension in a proper suit, it is implicit that the
Court must allow Congress to exercise its own review powers, which is automatic rather than initiated.
Only when Congress defaults in its express duty to defend the Constitution through such review should
the Supreme Court step in as its final rampart. The constitutional validity of the President's proclamation
of martial law or suspension of the writ of habeas corpus is first a political question in the hands of
Congress before it becomes a justiciable one in the hands of the Court.109

xxxx

If the Congress procrastinates or altogether fails to fulfill its duty respecting the proclamation or
suspension within the short time expected of it, then the Court can step in, hear the petitions
challenging the President's action, and ascertain if it has a factual basis. x x x110

By the above pronouncement, the Court willingly but unwittingly clipped its own power and
surrendered the same to Congress as well as: abdicated from its bounden duty to review. Worse, the
Court considered' itself just on stand-by, waiting and willing to act as a substitute in case Congress
"defaults." It is an aberration, a stray declaration, which must be rectified and set aside in this
proceeding.111

We, therefore, hold that the Court can simultaneously exercise its power of review with, and
independently from, the power to revoke by Congress. Corollary, any perceived inaction or default on
the part of Congress does not deprive or deny the Court of its power to review.

IV. The judicial power to review the sufficiency

of factual basis of the declaration of martial law
or the suspension of the privilege of the writ of
habeas corpus does not extend to the calibration
of the President's decision of which among his
graduated powers he will avail of in a given
situation.

The President as the Commander-in-Chief wields the extraordinary powers of: a) calling out the armed
forces; b) suspending the privilege of the writ of habeas corpus; and c) declaring martial law.112 These
powers may be resorted to only under specified conditions.

The framers of the 1987 Constitution reformulated the powers of the Commander-in-Chief by revising
the "grounds for the activation of emergency powers, the manner of activating them, the scope of the
powers, and review of presidential action."113

a) Extraordinary powers of the

President distinguished.

Among the three extraordinary powers, the calling out power is the most benign and involves ordinary
police action.114 The President may resort to this extraordinary power whenever it becomes necessary to
prevent or suppress lawless violence, invasion, or rebellion. "[T]he power to call is fully discretionary to
the President;"115 the only limitations being that he acts within permissible constitutional boundaries or
in a manner not constituting grave abuse of discretion.116 In fact, "the actual use to which the President
puts the armed forces is x x x not subject to judicial review."117

The extraordinary powers of suspending the privilege of the writ of habeas corpus and/or declaring
martial law may be exercised only when there is actual invasion or rebellion, and public safety requires it.
The 1987 Constitution imposed the following limits in the exercise of these powers: "(1) a time limit of
sixty days; (2) review and possible revocation by Congress; [and] (3) review and possible nullification by
the Supreme Court."118

17
The framers of the 1987 Constitution eliminated insurrection, and the phrase "imminent danger thereof'
as grounds for the suspension of the privilege of the writ of habeas corpus or declaration of martial
law.119 They perceived the phrase "imminent danger" to be "fraught with possibilities of
abuse;"120 besides, the calling out power of the President "is sufficient for handling imminent danger."121

The powers to declare martial law and to suspend the privilege of the writ of habeas corpus involve
curtailment and suppression of civil rights and individual freedom. Thus, the declaration of martial law
serves as a warning to citizens that the Executive Department has called upon the military to assist in
the maintenance of law and order, and while the emergency remains, the citizens must, under pain of
arrest and punishment, not act in a manner that will render it more difficult to restore order and enforce
the law.122 As such, their exercise requires more stringent safeguards by the Congress, and review by the
Court.123

b) What really happens during martial law?

During the oral argument, the following questions cropped up: What really happens during the
imposition of martial law? What powers could the President exercise during martial law that he could
not exercise if there is no martial law? Interestingly, these questions were also discussed by the framers
of the 1987 Constitution, viz.:

FR. BERNAS. That same question was asked during the meetings of the Committee: What precisely does
martial law add to the power of the President to call on the armed forces? The first and second lines in
this provision state:

A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning
of the civil courts or legislative assemblies...

The provision is put there, precisely, to reverse the doctrine of the Supreme Court. I think it is the case
of Aquino v. COMELEC where the Supreme Court said that in times of martial law, the President
automatically has legislative power. So these two clauses denied that. A state of martial law does not
suspend the operation of the Constitution; therefore, it does not suspend the principle of separation of
powers.

The question now is: During martial law, can the President issue decrees? The answer we gave to that
question in the Committee was: During martial law, the President may have the powers of a
commanding general in a theatre of war. In actual war when there is fighting in an area, the President as
the commanding general has the authority to issue orders which have the effect of law but strictly in a
theater of war, not in the situation we had during the period of martial law. In other words, there is an
effort here to return to the traditional concept of martial law as it was developed especially in American
jurisprudence, where martial law has reference to the theater of war.124

xxxx

FR. BERNAS. This phrase was precisely put here because we have clarified the meaning of martial law;
meaning, limiting it to martial law as it has existed in the jurisprudence in international law, that it is a
law for the theater of war. In a theater of war, civil courts are unable to function. If in the actual theater
of war civil courts, in fact, are unable to function, then the military commander is authorized to give
jurisdiction even over civilians to military courts precisely because the civil courts are closed in that area.
But in the general area where the civil courts are open then in no case can the military courts be given
jurisdiction over civilians. This is in reference to a theater of war where the civil courts, in fact, are
unable to function.

MR. FOZ. It is a state of things brought about by the realities of the situation in that specified critical
area.

FR. BERNAS. That is correct.

MR. FOZ. And it is not something that is brought about by a declaration of the Commander-in-Chief.

18
FR. BERNAS. It is not brought about by a declaration of the Commander-in-Chief. The understanding
here is that the phrase 'nor authorize the conferment of jurisdiction on military courts and agencies over
civilians' has reference to the practice under the Marcos regime where military courts were given
jurisdiction over civilians. We say here that we will never allow that except in areas where civil courts
are, in fact, unable to function and it becomes necessary for some kind of court to function.125

A state of martial law is peculiar because the President, at such a time, exercises police power, which is
normally a function of the Legislature. In particular, the President exercises police power, with the
military’s assistance, to ensure public safety and in place of government agencies which for the time
being are unable to cope with the condition in a locality, which remains under the control of the
State.126

In David v. President Macapagal-Arroyo,127 the Court, quoting Justice Vicente V. Mendoza's (Justice
Mendoza) Statement before the Senate Committee on Justice on March 13, 2006, stated that under a
valid declaration of martial law, the President as Commander-in-Chief may order the "(a) arrests and
seizures without judicial warrants; (b) ban on public assemblies; (c) [takeover] of news media and
agencies and press censorship; and (d) issuance of Presidential Decrees x x x".128

Worthy to note, however, that the above-cited acts that the President may perform do not give him
unbridled discretion to infringe on the rights of civilians during martial law. This is because martial law
does not suspend the operation of the Constitution, neither does it supplant the operation of civil courts
or legislative assemblies. Moreover, the guarantees under the Bill of Rights remain in place during its
pendency. And in such instance where the privilege of the writ of habeas corpus is also suspended, such
suspension applies only to those judicially charged with rebellion or offenses connected with invasion.129

Clearly, from the foregoing, while martial law poses the most severe threat to civil liberties,130 the
Constitution has safeguards against the President's prerogative to declare a state of martial law.

c) "Graduation" of powers
refers to hierarchy based on scope
and effect; it does not refer to a
sequence, order, or arrangement by
which the Commander-in-Chief must
adhere to.

Indeed, the 1987 Constitution gives the "President, as Commander-in- Chief, a 'sequence' of 'graduated
power[s]'. From the most to the least benign, these are: the calling out power, the power to suspend the
privilege of the writ of habeas corpus, and the power to declare martial law."131 It must be stressed,
however, that the graduation refers only to hierarchy based on scope and effect. It does not in any
manner refer to a sequence, arrangement, or order which the Commander-in-Chief must follow. This so-
called "graduation of powers" does not dictate or restrict the manner by which the President decides
which power to choose.

These extraordinary powers are conferred by the Constitution with the President as Commander-in-
Chief; it therefore necessarily follows that the power and prerogative to determine whether the
situation warrants a mere exercise of the calling out power; or whether the situation demands
suspension of the privilege of the writ of habeas corpus; or whether it calls for the declaration of martial
law, also lies, at least initially, with the President. The power to choose, initially, which among these
extraordinary powers to wield in a given set of conditions is a judgment call on the part of the President.
As Commander-in-Chief, his powers are broad enough to include his prerogative to address exigencies
or threats that endanger the government, and the very integrity of the State.132

It is thus beyond doubt that the power of judicial review does not extend to calibrating the President's
decision pertaining to which extraordinary power to avail given a set of facts or conditions. To do so
would be tantamount to an incursion into the exclusive domain of the Executive and an infringement on
the prerogative that solely, at least initially, lies with the President.

19
d) The framers of the 1987
Constitution intended the Congress
not to interfere a priori in the
decision-making process of the
President.

The elimination by the framers of the 1987 Constitution of the requirement of prior concurrence of the
Congress in the initial imposition of martial law or suspension of the privilege of the writ of habeas
corpus further supports the conclusion that judicial review does not include the calibration of the
President's decision of which of his graduated powers will be availed of in a given situation. Voting 28 to
12, the framers of the 1987 Constitution removed the requirement of congressional concurrence in the
first imposition of martial law and suspension of the privilege.133

MR. PADILLA.x x x

We all agree with the suspension of the writ or the proclamation of martial law should not require
beforehand the concurrence of the majority of the Members of the Congress. However, as provided by
the Committee, the Congress may revoke, amend, or shorten or even increase the period of such
suspension.134

xxxx

MR. NATIVIDAD. First and foremost, we agree with the Commissioner's thesis that in the first imposition
of martial law there is no need for concurrence of the Members of Congress because the provision says
'in case of actual invasion or rebellion.' If there is actual invasion and rebellion, as Commissioner
Crispino de Castro said, there is a need for immediate response because there is an attack. Second, the
fact of securing a concurrence may be impractical because the roads might be blocked or barricaded. x x
x So the requirement of an initial concurrence of the majority of all Members of the Congress in case of
an invasion or rebellion might be impractical as I can see it.

Second, Section 15 states that the Congress may revoke the declaration or lift the suspension.

And third, the matter of declaring martial law is already a justiciable question and no longer a political
one in that it is subject to judicial review at any point in time. So on that basis, I agree that there is no
need for concurrence as a prerequisite to declare martial law or to suspend the privilege of the writ
of habeas corpus. x x x135

xxxx

MR. SUAREZ. Thank you.

The Commissioner is suggesting that in connection with Section 15, we delete the phrase 'and, with the
concurrence of at least a majority of all the Members of the Congress...'

MR. PADILLA. That is correct especially for the initial suspension of the privilege of the writ of habeas
corpus or also the declaration of martial law.

MR. SUAREZ. So in both instances, the Commissioner is suggesting that this would be an exclusive
prerogative of the President?

MR. PADILLA. At least initially, for a period of 60 days. But even that period of 60 days may be shortened
by the Congress or the Senate because the next sentence says that the Congress or the Senate may even
revoke the proclamation.136

xxxx

MR. SUAREZ. x x x

20
The Commissioner is proposing a very substantial amendment because this means that he is vesting
exclusively unto the President the right to determine the factors which may lead to the declaration of
martial law and the suspension of the writ of habeas corpus. I suppose he has strong and compelling
reasons in seeking to delete this particular phrase. May we be informed of his good and substantial
reasons?

MR. MONSOD. This situation arises in cases of invasion or rebellion. And in previous interpellations
regarding this phrase, even during the discussions on the Bill of Rights, as I understand it, the
interpretation is a situation of actual invasion or rebellion. In these situations, the President has to act
quickly. Secondly, this declaration has a time fuse. It is only good for a maximum of 60 days. At the end
of 60 days, it automatically terminates. Thirdly, the right of the judiciary to inquire into the sufficiency of
the factual basis of the proclamation always exists, even during those first 60 days.

xxxx

MR. MONSOD. Yes, Madam President, in the case of Mr. Marcos[,] he is undoubtedly an aberration in
our history and national consciousness. But given the possibility that there would be another Marcos,
our Constitution now has sufficient safeguards. As I said, it is not really true, as the Gentleman
mentioned, that there is an exclusive right to determine the factual basis because the paragraph being
on line 9 precisely tells us that the Supreme court may review, in an appropriate proceeding filed by any
citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the
privilege of the writ or the extension thereof and must promulgate its decision on the same within 30
days from its filing.

I believe that there are enough safeguards. The Constitution is supposed to balance the interests of the
country. And here we are trying to balance the public interest in case of invasion or rebellion as against
the rights of citizens. x x x

MR. SUAREZ. Will that prevent a future President from doing what Mr. Marcos had done?

MR. MONSOD. There is nothing absolute in this world, and there may be another Marcos. What we are
looking for are safeguards that arereasonable and, I believe, adequate at this point. On the other hand,
in case of invasion or rebellion, even during the first 60 days when the intention here is to protect the
country in that situation, it would be unreasonable to ask that there should be a concurrence on the
part of the Congress, which situation is automatically terminated at the end of such 60 days.

xxxx

MR. SUAREZ. Would the Gentleman not feel more comfortable if we provide for a legislative check on
this awesome power of the Chief Executive acting as Commander-in-Chief?

MR. MONSOD. I would be less comfortable if we have a presidency that cannot act under those
conditions.

MR. SUAREZ. But he can act with the concurrence of the proper or appropriate authority?

MR. MONSOD. Yes. But when those situations arise, it is very unlikely that the concurrence of Congress
would be available; and, secondly, the President will be able to act quickly in order to deal with the
circumstances.

MR. SUAREZ. So, we would be subordinating actual circumstances to expediency?

MR. MONSOD. I do not believe it is expediency when one is trying to protect the country in the event of
an invasion or a rebellion.137

The foregoing exchange clearly manifests the intent of the Constitution not to allow Congress to
interfere a priori in the President's choice of extraordinary powers.

21
e) The Court must similarly
and necessarily refrain from
calibrating the President's decision of
which among his extraordinary
powers to avail given a certain
situation or condition.

It cannot be overemphasized that time is paramount in situations necessitating the proclamation of

martial law or suspension of the privilege of the writ of habeas corpus. It was precisely this time element
that prompted the Constitutional Commission to eliminate the requirement of 1 concurrence of the
Congress in the initial imposition by the President of martial law or suspension of the privilege of the
writ of habeas corpus.

Considering that the proclamation of martial law or suspension of the privilege of the writ of habeas
corpus is now anchored on actual invasion or rebellion and when public safety requires it, and is no
longer under threat or in imminent danger thereof, there is a necessity and urgency for the President to
act quickly to protect the country.138 The Court, as Congress does, must thus accord the President the
same leeway by not wading into the realm that is reserved exclusively by the Constitution to the
Executive Department.

j) The recommendation of the

Defense Secretary is not a condition
for the declaration of martial law or
suspension of the privilege of the writ
of habeas corpus.

Even the recommendation of, or consultation with, the Secretary of National Defense, or other high-
ranking military officials, is not a condition for the President to declare martial law. A plain reading of
Section 18, Article VII of the Constitution shows that the President's power to declare martial law is not
subject to any condition except for the requirements of actual invasion or rebellion and that public
safety requires it. Besides, it would be contrary to common sense if the decision of the President is
made dependent on the recommendation of his mere alter ego. Rightly so, it is only on the President
and no other that the exercise of the powers of the Commander-in-Chief under Section 18, Article VII of
the Constitution is bestowed.

g) In any event, the President

initially employed the most benign
action - the calling out power -
before he declared martial law and
suspended the privilege of the writ of
habeas corpus.

At this juncture, it must be stressed that prior to Proclamation No. 216 or the declaration of martial law
on May 23, 201 7, the President had already issued Proclamation No. 55 on September 4, 2016,
declaring a state of national emergency on account of lawless violence in Mindanao. This, in fact, is
extant in the first Whereas Clause of Proclamation No. 216. Based on the foregoing presidential actions,
it can be gleaned that although there is no obligation or requirement on his part to use his extraordinary
powers on a graduated or sequential basis, still the President made the conscious anddeliberate effort
to first employ the most benign from among his extraordinary powers. As the initial and preliminary
step towards suppressing and preventing the armed hostilities in Mindanao, the President decided to
use his calling out power first. Unfortunately, the situation did not improve; on the contrary, it only
worsened. Thus, exercising his sole and exclusive prerogative, the President decided to impose martial
law and suspend the privilege of the writ of habeas corpus on the belief that the armed hostilities in
Mindanao already amount to actual rebellion and public safety requires it.

V. Whether or not Proclamation No. 216 may

be considered vague and thus void because of (a)
its inclusion of "other rebel groups"; and (b) the

22
absence of any guideline specifying its actual
operational parameters within the entire
Mindanao region.

Proclamation No. 216 is being facially challenged on the ground of "vagueness" by the insertion of the
phrase "other rebel groups"139 in its Whereas Clause and for lack of available guidelines specifying its
actual operational parameters within the entire Mindanao region, making the proclamation susceptible
to broad interpretation, misinterpretation, or confusion.

This argument lacks legal basis.

a) Void-for-vagueness doctrine.

The void-for-vagueness doctrine holds that a law is facially invalid if "men of common intelligence must
necessarily guess at its meaning and differ as to its application."140 "[A] statute or act may be said to be
vague when it lacks comprehensible standards that men of common intelligence must necessarily guess
at its meaning and differ in its application. [In such instance, the statute] is repugnant to the
Constitution in two respects: (1) it violates due process for failure to accord persons, especially the
parties targeted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled
discretion in carrying out its provisions and becomes an arbitrary flexing of the Government muscle."141

b) Vagueness doctrine applies

only in free speech cases.

The vagueness doctrine is an analytical tool developed for testing "on their faces" statutes in free
speech cases or, as they are called in American law, First Amendment cases.142 A facial challenge is
allowed to be made to a vague statute and also to one which is overbroad because of possible "'chilling
effect' on protected speech that comes from statutes violating free speech. A person who does not
know whether his speech constitutes a crime under an overbroad or vague law may simply restrain
himself from speaking in order to avoid being charged of a crime. The overbroad or vague law thus chills
him into silence."143

It is best to stress that the vagueness doctrine has a special application only to free-speech cases. They
are not appropriate for testing the validity of penal statutes.144 Justice Mendoza explained the reason as
follows:

A facial challenge is allowed to be made to a vague statute and to one which is overbroad because of
possible 'chilling effect' upon protected speech. The theory is that ' [w]hen statutes regulate or
proscribe speech and no readily apparent construction suggests itself as a vehicle for rehabilitating the
statutes in a single prosecution, the transcendent value to all society of constitutionally protected
expression is deemed to justify allowing attacks on overly broad statutes with no requirement that the
person making the attack demonstrate that his own conduct could not be regulated by a statute drawn
with narrow specificity.' The possible harm to society in permitting some unprotected speech to go
unpunished is outweighed by the possibility that the protected speech of others may be deterred and
perceived grievances left to fester because of possible inhibitory effects of overly broad statutes.

This rationale does not apply to penal statutes. Criminal statutes have general in terrorem effect
resulting from their very existence, and, if facial challenge is allowed for this reason alone, the State may
well be prevented from enacting laws against socially harmful conduct. In the area of criminal law, the
law cannot take chances as in the area of free speech.

xxxx

In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed for
testing 'on their faces' statutes in free speech cases or, as they are called in American law, First
Amendment cases. They cannot be made to do service when what is involved is a criminal statute. With
respect to such statute, the established rule is that'one to whom application of a statute is constitutional
will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to

23
other persons or other situations in which its application might be unconstitutional.' As has been
pointed out, 'vagueness challenges in the First Amendment context, like overbreadth challenges
typically produce facial invalidation, while statutes found vague as a matter of due process typically are
invalidated [only] 'as applied' to a particular defendant.' x x x145

Invalidation of statutes "on its face" should be used sparingly because it results in striking down statutes
entirely on the ground that they might beapplied to parties not before the Court whose activities are
constitutionally protected.146 "Such invalidation would constitute a departure from the usual
requirement of 'actual case and controversy' and permit decisions to be made in a sterile abstract
context having no factual concreteness."147

c) Proclamation No. 216

cannot be facially challenged using
the vagueness doctrine.

Clearly, facial review of Proclamation No. 216 on the grounds of vagueness is unwarranted.
Proclamation No. 216 does not regulate speech, religious freedom, and other fundamental rights that
may be facially challenged.148 What it seeks to penalize is conduct, not speech.

As held by the Court in David v. President Macapagal-Arroyo,149 the facial review of Proclamation No.
1017, issued by then President Gloria Macapagal-Arroyo declaring a state of national emergency, on
ground o vagueness is uncalled for since a plain reading of Proclamation No. 10171 shows that it is not
primarily directed at speech or even speech-related1 conduct. It is actually a call upon the Armed Forces
of the Philippines (AFP) to prevent or suppress all forms of lawless violence. Like Proclamation No. 1017,
Proclamation No. 216 pertains to a spectrum of conduct, not free speech, which is manifestly subject to
state regulation.

d) Inclusion of "other rebel

groups " does not make Proclamation
No.216 vague.

The contention that the phrase "other rebel groups" leaves Proclamation No. 216 open to broad
interpretation, misinterpretation, and confusion, cannot be sustained.

In People v. Nazario,150 the Court enunciated that:

As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men 'of
common intelligence must necessarily guess at its meaning and differ as to its application.' It is
repugnant to the Constitution in two respects: (1) it violates due process for failure to accord persons,
especially the parties targetted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers
unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government
muscle.

But the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving clause
or by construction. Thus, in Coates v. City of Cincinnati, the U.S. Supreme Court struck down an
ordinance that had made it illegal for 'three or more persons to assemble on any sidewalk and there
conduct themselves in a manner annoying to persons passing by.' Clearly, the ordinance imposed no
standard at all 'because one may never know in advance what annoys some people but does not annoy
others.'

Coates highlights what has been referred to as a 'perfectly vague' act whose obscurity is evident on its
face. It is to be distinguished, however, from legislation couched in imprecise language - but which
nonetheless specifies a standard though defectively phrased - in which case, it may be 'saved' by proper
construction.151

The term "other rebel groups" in Proclamation No. 216 is not at all vague when viewed in the context of
the words that accompany it. Verily, the text of Proclamation No. 216 refers to "other rebel groups"
found in Proclamation No. 55, which it cited by way of reference in its Whereas clauses.

24
e) Lack of guidelines/
operational parameters does not
make Proclamation No. 216 vague.

Neither could Proclamation No. 216 be described as vague, and thus void, on the ground that it has no
guidelines specifying its actual operational parameters within the entire Mindanao region. Besides,
operational guidelines will serve only as mere tools for the implementation of the proclamation. In Part
III, we declared that judicial review covers only the sufficiency of information or data available to or
known to the President prior to, or at the time of, the declaration or suspension. And, as will be
discussed exhaustively in Part VII, the review will be confined to the proclamation itself and the Report
submitted to Congress.

Clearly, therefore, there is no need for the Court to determine the constitutionality of the implementing
and/or operational guidelines, general orders, arrest orders and other orders issued after the
proclamation for being irrelevant to its review. Thus, any act committed under the said orders in
violation of the Constitution and the laws, such as criminal acts or human rights violations, should be
resolved in a separate proceeding. Finally, there is a risk that if the Court wades into these areas, it
would be deemed as trespassing into the sphere that is reserved exclusively for Congress in the exercise
of its power to revoke.

VI. Whether or not nullifying Proclamation No.

216 will (a) have the effect of recalling
Proclamation No. 55; or (b) also nullify the acts
of the President in calling out the armed forces to
quell lawless violence in Marawi and other parts
of the Mindanao region.

a) The calling out power is in a

different category from the power to
declare martial law and the power to
suspend the privilege of the writ of
habeas corpus; nullification of
Proclamation No. 216 will not affect
Proclamation No. 55.

The Court's ruling in these cases will not, in any way, affect the President's declaration of a state of
national emergency on account of lawless violence in Mindanao through Proclamation No. 55 dated
September 4, 2016, where he called upon the Armed Forces and the Philippine National 1 Police (PNP)
to undertake such measures to suppress any and all forms of lawless violence in the Mindanao region,
and to prevent such lawless violence from spreading and escalating elsewhere in the Philippines.

In Kulayan v. Tan,152 the Court ruled that the President's calling out power is in a different category from
the power to suspend the privilege of the writ of habeas corpus and the power to declare martial law:

x x x Congress may revoke such proclamation or suspension and the Court may review the sufficiency of
the factual basis thereof. However, there is no such equivalent provision dealing with the revocation or
review of the President's action to call out the armed forces. The distinction places the calling out power
in a different category from the power to declare martial law and the power to suspend the privilege of
the writ of habeas corpus, otherwise, the framers of the Constitution would have simply lumped
together the three powers and provided for their revocation and review without any qualification.153

In other words, the President may exercise the power to call out the Armed Forces independently of the
power to suspend the privilege of the writ of habeas corpus and to declare martial law, although, of
course, it may also be a prelude to a possible future exercise of the latter powers, as in this case.

Even so, the Court's review of the President's declaration of martial law and his calling out the Armed
Forces necessarily entails separate proceedings instituted for that particular purpose.

25
As explained in Integrated Bar of the Philippines v. Zamora,154 the President's exercise of his power to
call out the armed forces to prevent or suppress lawless violence, invasion or rebellion may only be
examined by the Court as to whether such power was exercised within permissible constitutional limits
or in a manner constituting grave abuse of discretion.155

In Zamora, the Court categorically ruled that the Integrated Bar of the ' Philippines had failed to
sufficiently comply with the requisites of locus standi, as it was not able to show any specific
injury which it had suffered or could suffer by virtue of President Joseph Estrada's order deploying the
Philippine Marines to join the PNP in visibility patrols around the metropolis.156

This locus standi requirement, however, need not be complied with in so far as the Court's jurisdiction
to review the sufficiency of the factual basis of the President's declaration of martial law or suspension
of the privilege ofthe writ of habeas corpus is concerned. In fact, by constitutional design, such review
may be instituted by any citizen before the Court,157 without the need to prove that he or she stands to
sustain a direct and personal injury as a consequence of the questioned Presidential act/s.

But, even assuming arguendo that the Court finds no sufficient basis for the declaration of martial law in
this case, such ruling could not affect the President's exercise of his calling out power through
Proclamation No. 55.

b) The operative fact doctrine.

Neither would the nullification of Proclamation No. 216 result in the nullification of the acts of the
President done pursuant thereto. Under the "operative fact doctrine," the unconstitutional statute is
recognized as an "operative fact" before it is declared unconstitutional.158

Where the assailed legislative or executive act is found by the judiciary to be contrary to the
Constitution, it is null and void. As the new Civil Code puts it: 'When the courts declare a law to be
inconsistent with the Constitution, the former shall be void and the latter shall govern. Administrative or
executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the
Constitution.' The above provision of the Civil Code reflects the orthodox view that an unconstitutional
act, whether legislative or executive, is not a law, confers no rights, imposes no duties, and affords no
protection. This doctrine admits of qualifications, however. As the American Supreme Court stated: 'The
actual existence of a statute prior to such a determination [of constitutionality], is an operative fact and
may have consequences which cannot always be erased by a new judicial declaration. The effect of the
subsequent ruling as to the invalidity may have to be considered in various aspects, - with respect to
particular regulations, individual and corporate, and particular conduct, private and official.

The orthodox view finds support in the well-settled doctrine that the Constitution is supreme and
provides the measure for the validity of legislative or executive acts. Clearly then, neither the legislative
nor the executive branch, and for that matter much less, this Court, has power under the Constitution to
act contrary to its terms. Any attempted exercise of power in violation of its provisions is to that extent
unwarranted and null.

The growing awareness of the role of the judiciary as the governmental organ which has the final say on
whether or not a legislative or executive measure is valid leads to a more appreciative attitude of
theemerging concept that a declaration of nullity may have legal consequences which the more
orthodox view would deny. That for a period of time such a statute, treaty, executive order, or
ordinance was in 'actual existence' appears to be indisputable. What is more appropriate and logical
then than to consider it as 'an operative fact?' (Emphasis supplied)159

However, it must also be stressed that this "operative fact doctrine" is not a fool-proof shield that would
repulse any challenge to acts performed during the effectivity of martial law or suspension of the
privilege of the writ of habeas corpus, purportedly in furtherance of quelling rebellion or invasion, and
promotion of public safety, when evidence shows otherwise.

VII. The Scope of the Power to Review.

26
a) The scope of the power of
review under the 1987 Constitution
refers only to the determination of the
sufficiency of the factual basis of the
declaration of martial law and
suspension of the privilege of habeas
corpus.

To recall, the Court, in the case of In the Matter of the Petition for Habeas Corpus of Lansang,160 which
was decided under the 1935 Constitution,161 held that it can inquire into, within proper bounds, whether
there has been adherence to or compliance with the constitutionally-imposed limitations on the
Presidential power to suspend the privilege of the writ of habeas corpus.162 "Lansang limited the review
function of the Court to a very prudentially narrow test of arbitrariness."163 Fr. Bernas described the
"proper bounds" in Lansang as follows:

What, however, are these 'proper bounds' on the power of the courts? The Court first gave the general
answer that its power was 'merely to check - not to supplant - the Executive, or to ascertain merely
whether he has gone beyond the constitutional limits of his jurisdiction, not to exercise the power vested
in him or to determine the wisdom of his act. More specifically, the Court said that its power was not
'even comparable with its power over civil or criminal cases elevated thereto by appeal...in which cases
the appellate court has all the powers of the courtof origin,' nor to its power of quasi-judicial
administrative decisions where the Court is limited to asking whether 'there is some evidentiary
basis' for the administrative finding. Instead, the Court accepted the Solicitor General's suggestion that
it 'go no further than to satisfy [itself] not that the President's decision is correct and that public safety
was endangered by the rebellion and justified the suspension of the writ, but that in suspending the writ,
the President did not act arbitrarily.'164

Lansang, however, was decided under the 1935 Constitution. The 1987 Constitution, by providing only
for judicial review based on the determination of the sufficiency of the factual bases, has in fact done
away with the test of arbitrariness as provided in Lansang.

b) The "sufficiency of factual

basis test".

Similarly, under the doctrine of contemporaneous construction, the framers of the 1987 Constitution
are presumed to know the prevailing jurisprudence at the time they were drafting the Constitution. Thus,
the phrase "sufficiency of factual basis" in Section 18, Article VII of the Constitution should be
understood as the only test for judicial review of the President's power to declare martial law and
suspend the privilege of the writ of habeas corpus under Section 18, Article VII of the Constitution. The
Court does not need to satisfy itself that the President's decision is correct, rather it only needs to
determine whether the President's decision had sufficient factual bases.

We conclude, therefore, that Section 18, Article VII limits the scope of judicial review by the introduction
of the "sufficiency of the factual basis" test.

As Commander-in-Chief, the President has the sole discretion to declare martial law and/or to suspend
the privilege of the writ of habeas corpus, subject to the revocation of Congress and the review of this
Court. Since the exercise of these powers is a judgment call of the President, the determination of this
Court as to whether there is sufficient factual basis for the exercise of such, must be based only on facts
or information known by or available to the President at the time he made the declaration or
suspension, which facts or information are found in the proclamation as well as the written Report
submitted by him to Congress. These may be based on the situation existing at the time the declaration
was made or past events. As to how far the past events should be from the present depends on the
President.

Past events may be considered as justifications for the declaration and/or suspension as long as these
are connected or related to the current situation existing at the time of the declaration.

27
As to what facts must be stated in the proclamation and the written Report is up to the President.165 As
Commander-in-Chief, he has sole discretion to determine what to include and what not to include in the
proclamation and the written Report taking into account the urgency of the situation as well as national
security. He cannot be forced to divulge intelligence reports and confidential information that may
prejudice the operations and the safety of the military.

Similarly, events that happened after the issuance of the proclamation, which are included in the
written report, cannot be considered in determining the sufficiency of the factual basis of the
declaration of martial law and/or the suspension of the privilege of the writ of habeas corpus since these
happened after the President had already issued the proclamation. If at all, they may be used only as
tools, guides or reference in the Court's determination of the sufficiency of factual basis, but not as part
or component of the portfolio of the factual basis itself.

In determining the sufficiency of the factual basis of the declaration and/or the suspension, the Court
should look into the full complement or totality of the factual basis, and not piecemeal or individually.
Neither should the Court expect absolute correctness of the facts stated in the proclamation and in the
written Report as the President could not be expected to verify the accuracy and veracity of all facts
reported to him due to the urgency of the situation. To require precision in the President's appreciation
of facts would unduly burden him and therefore impede the process of his decision-making. Such a
requirement will practically necessitate the President to be on the ground to confirm the correctness of
the reports submitted to him within a period that only the circumstances obtaining would be able to
dictate. Such a scenario, of course, would not only place the President in peril but would also defeat the
very purpose of the grant of emergency powers upon him, that is, to borrow the words of Justice
Antonio T. Carpio in Fortun, to "immediately put an end to the root cause of the emergency".166 Possibly,
by the time the President is satisfied with the correctness of the facts in his possession, it would be too
late in the day as the invasion or rebellion could have already escalated to a level that is hard, if not
impossible, to curtail.

Besides, the framers of the 1987 Constitution considered intelligence reports of military officers as
credible evidence that the President ca appraise and to which he can anchor his judgment,167 as appears
to be the case here.

At this point, it is wise to quote the pertinent portions of the Dissenting Opinion of Justice Presbitero J.
Velasco Jr. in Fortun:

President Arroyo cannot be blamed for relying upon the information given to her by the Armed Forces
of the Philippines and the Philippine National Police, considering that the matter of the supposed armed
uprising was within their realm of competence, and that a state of emergency has also been declared in
Central Mindanao to prevent lawless violence similar to the 'Maguindanao massacre,' which may be an
indication that there is a threat to the public safety warranting a declaration of martial law or
suspension of the writ.

Certainly, the President cannot be expected to risk being too late before declaring martial law or
suspending the writ of habeas corpus. The Constitution, as couched, does not require precision in
establishing the fact of rebellion. The President is called to act as public safety requires.168

Corollary, as the President is expected to decide quickly on whether there is a need to proclaim martial
law even only on the basis of intelligence reports, it is irrelevant, for purposes of the Court's review, if
subsequent events prove that the situation had not been accurately reported to him.

After all, the Court's review is confined to the sufficiency, not accuracy, of the information at hand
during the declaration or suspension; subsequent events do not have any bearing insofar as the Court's
review is concerned. In any event, safeguards under Section 18, Article VII of the Constitution are in
place to cover such a situation, e.g., the martial law period is good only for 60 days; Congress may
choose to revoke it even immediately after the proclamation is made; and, this Court may investigate
the factual background of the declaration.169

28
Hence, the maxim falsus in uno, falsus in omnibus finds no application in this case. Falsities of and/or
inaccuracies in some of the facts stated in the proclamation and the written report are not enough
reasons for the Court to invalidate the declaration and/or suspension as long as there are other facts in
the proclamation and the written Report that support the conclusion that there is an actual invasion or
rebellion and that public safety requires the declaration and/or suspension.

In sum, the Court's power to review is limited to the determination of whether the President in
declaring martial law and suspending the privilege of the writ of habeas corpus had sufficient factual
basis. Thus, our review would be limited to an examination on whether the President acted within the
bounds set by the Constitution, i.e., whether the facts in his possession prior to and at the time of the
declaration or suspension are sufficient for him to declare martial law or suspend the privilege of the
writ of habeas corpus.

VIII. The parameters for determining the

sufficiency of the/actual basis/or the declaration
of martial law and/or the suspension of the
privilege of the writ of habeas corpus.

a) Actual invasion or rebellion,

and public safety requirement.

Section 18, Article VII itself sets the parameters for determining the sufficiency of the factual basis for
the declaration of martial law and/or the suspension of the privilege of the writ of habeas
corpus, "namely (1) actual invasion or rebellion, and (2) public safety requires the exercise of such
power."170 Without the concurrence of the two conditions, the President's declaration of martial law
and/or suspension of the privilege of the writ of habeas corpus must be struck down.

As a general rule, a word used in a statute which has a technical or legal meaning, is construed to have
the same technical or legal meaning.171 Since the Constitution did not define the term "rebellion," it
must be understood to have the same meaning as the crime of "rebellion" in the Revised Penal Code
(RPC).172

During the July 29, 1986 deliberation of the Constitutional Commission of 1986, then Commissioner
Florenz D. Regalado alluded to actual rebellion as one defined under Article 134 of the RPC:

MR. DE LOS REYES. As I see it now, the Committee envisions actual rebellion and no longer imminent
rebellion. Does the Committee mean that there should be actual shooting or actual attack on the
legislature or Malacañang, for example? Let us take for example a contemporary event - this Manila
Hotel incident, everybody knows what happened. Would the Committee consider that an actual act of
rebellion?

MR. REGALADO. If we consider the definition of rebellion under Articles 134 and 135 of the Revised
Penal Code, that presupposes an actual assemblage of men in an armed public uprising for the purposes
mentioned in Article 134 and by the means employed under Article 135. x x x173

Thus, rebellion as mentioned in the Constitution could only refer to rebellion as defined under Article
134 of the RPC. To give it a different definition would not only create confusion but would also give the
President wide latitude of discretion, which may be abused - a situation that the Constitution see k s to
prevent.174

Article 134 of the RPC states:

Art. 134. Rebellion or insurrection; How committed. - The crime of rebellion or insurrection is committed
by rising publicly and taking arms against the Government for the purpose of removing from the
allegiance to said Government or its laws, the territory of the Philippine Islands or any part thereof, of
any body of land, naval or other armed forces, depriving the Chief Executive or the Legislature, wholly or
partially, of any of their powers or prerogatives.

29
Thus, for rebellion to exist, the following elements must be present, to wit: "(l) there is a (a) public
uprising and (b) taking arms against the Government; and (2) the purpose of the uprising or movement
is either (a) to remove from the allegiance to the Government or its laws: (i) the territory of the
Philippines or any part thereof; or (ii) any body of land, naval, or other armed forces; or (b) to deprive
the Chief Executive or Congress, wholly or partially, of any of their powers and prerogatives."175

b) Probable cause is the

allowable standard of proof for the
President.

In determining the existence of rebellion, the President only needs to convince himself that there is
probable cause or evidence showing that more likely than not a rebellion was committed or is being
committed.176 To require him to satisfy a higher standard of proof would restrict the exercise of his
emergency powers. Along this line, Justice Carpio, in his Dissent in Fortun v. President Macapagal-
Arroyo, concluded that the President needs only to satisfy probable cause as the standard of proof in
determining the existence of either invasion or rebellion for purposes of declaring martial law, and that
probable cause is the most reasonable, most practical and most expedient standard by which the
President can fully ascertain the existence or non-existence of rebellion necessary for a declaration of
martial law or suspension of the writ. This is because unlike other standards of proof, which, in order to
be met, would require much from the President and therefore unduly restrain his exercise of emergency
powers, the requirement of probable cause is much simpler. It merely necessitates an "average man [to
weigh] the facts and circumstances without resorting to the calibration of the rules of evidence of which
he has no technical knowledge. He [merely] relies on common sense [and] x x x needs only to rest on
evidence showing that, more likely than not, a crime has been committed x x x by the accused."177

To summarize, the parameters for determining the sufficiency of factual basis are as follows: l) actual
rebellion or invasion; 2) public safety requires it; the first two requirements must concur; and 3) there is
probable cause for the President to believe that there is actual rebellion or invasion.

Having laid down the parameters for review, the Court shall nowproceed to the core of the controversy -
whether Proclamation No. 216,Declaring a State of Martial Law and Suspending the Privilege of the Writ
of Habeas Corpus in the whole of Mindanao, lacks sufficient factual basis.

IX. There is sufficient factual basis for the

declaration of martial law and the suspension of
the writ of habeas corpus.

At this juncture, it bears to emphasize that the purpose of judicial review is not the determination of
accuracy or veracity of the facts upon which the President anchored his declaration of martial law or
suspension of the privilege of the writ of habeas corpus; rather, only the sufficiency of the factual basis
as to convince the President that there is probable cause that rebellion exists. It must also be reiterated
that martial law is a matter ofurgency and much leeway and flexibility should be accorded the President.
As such, he is not expected to completely validate all the information he received before declaring
martial law or suspending the privilege of the writ of habeas corpus.

We restate the elements of rebellion for reference:

1. That there be (a) public uprising, and (b) taking up arms against the Government; and

2. That the purpose of the uprising or movement is either: (a) to remove from the allegiance to said
Government or its laws the territory of the Philippines or any part thereof, or any body of land, naval or
other armed forces or (b) to deprive the Chief Executive or Congress, wholly or partially, of any of their
powers or prerogatives.178

Petitioners concede that there is an armed public uprising in Marawi City.179 However, they insist that
the armed hostilities do not constitute rebellion in the absence of the element of culpable political
purpose, i.e., the removal from the allegiance to the Philippine Government or its laws: (i) the territory

30
of the Philippines or any part thereof; or (ii) any body of land, naval, or other armed forces; or (b) to
deprive the Chief Executive or Congress, wholly or partially, of any of their powers and prerogatives.

The contention lacks merit.

a) Facts, events and

information upon which the President
anchored his decision to declare
martial law and suspend the privilege
of the writ of habeas corpus.

Since the President supposedly signed Proclamation No. 216 on May 23, 2017 at 10:00 PM,180 the Court
will consider only those facts and/or events which were known to or have transpired on or before that
time, consistent with the scope of judicial review. Thus, the following facts and/or events were deemed
to have been considered by the President in issuing Proclamation No. 216, as plucked from and extant in
Proclamation No. 216 itself:

1. Proclamation No. 55 issued on September 4, 2016, declaring a state of national emergency on

account of lawless violence in Mindanao;181

2. Series of violent acts182 committed by the Maute terrorist group including:

a) Attack on the military outpost in Butig, Lanao del Sur m February 2016, killing and
wounding several soldiers;

b) Mass jailbreak in Marawi City in August 2016 of the arrested comrades of the Maute
Group and other detainees;

3. On May 23, 2017:183

a) Takeover of a hospital in Marawi;

b) Establishment of several checkpoints within Marawi;

c) Burning of certain government and private facilities;

d) Mounting casualties on the part of the government;

e) Hoisting the flag of ISIS in several areas; and

f) Capability of the Maute Group and other rebel groups to sow terror, and cause death and damage to
property not only in Lanao del Sur but also in other parts of Mindanao; and the Report 184 submitted to
Congress:

1. Zamboanga siege;185

2. Davao bombing;186

3. Mamasapano carnage;187

4. Cotabato bombings;188

5. Sultan Kudarat bombings;189

6. Sulu bombings;190

7. Basilan bombings;191

31
8. Attempt to capture Hapilon was confronted with armed resistance by combined forces of ASG and the
Maute Group;192

9. Escalation of armed hostility against the government troops;193

10. Acts of violence directed not only against government authorities and establishments but civilians as
well;194

11. Takeover of major social, economic and political foundations which paralyzed Marawi City;195

12. The object of the armed hostilities was to lay the groundwork for the establishment of a
DAESH/ISIS wilayat or province;196

13. Maute Group has 263 active members, armed and combat-ready;197

14. Extensive networks or linkages of the Maute Group with foreign and local armed groups;198

15. Adherence of the Maute Group to the ideals espoused by ISIS;199

16. Publication of a video showing Maute Group's declaration of allegiance to ISIS;200

17. Foreign-based terrorist groups provide financial and logistical support to the Maute Group;201

18. Events on May 23, 2017 in Marawi City, particularly:

a) at 2:00 PM, members and sympathizers of the Maute Group and ASG attacked various government
and privately-owned facilities;202

b) at 4:00 PM, around fifty (50) armed criminals forcibly entered the Marawi City Jail; facilitated the
escape of inmates; killed a member of PDEA; assaulted and disarmed on-duty personnel and/or locked
them inside the cells; confiscated cellphones, personnel-issued firearms, and vehicles;203

c) by 4:30 PM, intem1ption of power supply; sporadic gunfights; city-wide power outage by evening;204

d) from 6:00 PM to 7:00 PM, Maute Group ambushed and burned the Marawi Police Station;
commandeered a police car;205

e) BJMP personnel evacuated the Marawi City Jail and other affected areas;206

f) control over three bridges in Lanao del Sur, namely, Lilod, Bangulo, and Sauiaran, was taken by the
rebels;207

g) road blockades and checkpoints set up by lawless armed groups at the Iligan-Marawi junction;208

h) burning of Dansalan College Foundation, Cathedral of Maria Auxiliadora, the nuns' quarters in the
church, and the Shia Masjid Moncado Colony;209

i) taking of hostages from the church;210

j) killing of five faculty members of Dansalan College foundation;211

k) burning of Senator Ninoy Aquino College Foundation and Marawi Central Elementary Pilot School;212

1) overrunning of Amai Pakpak Hospital;213

m) hoisting the ISIS flag in several areas;214

32
n) attacking and burning of the Filipino-Libyan Friendship Hospital;215

o) ransacking of a branch of Landbank of the Philippines and commandeering an armored vehicle;216

p) reports regarding Maute Group's plan to execute Christians;217

q) preventing Maranaos from leaving their homes;218

r) forcing young Muslims to join their group;219 and

s) intelligence reports regarding the existence of strategic mass action of lawless armed groups in
Marawi City, seizing public and private facilities, perpetrating killings of government personnel1 , and
committing armed uprising against and open defiance of the Government.220

b) The President's Conclusion

After the assessment by the President of the aforementioned facts, he arrived at the following
conclusions, as mentioned in Proclamation No. 216 and the Report:

1) The Maute Group is "openly attempting to remove from the allegiance to the Philippine Government
this part of Mindanao and deprive the Chief Executive of his powers and prerogatives to enforce the
laws of the land and to maintain public order and safety in Mindanao, constituting the crime of
rebellion."221

2) "[L]awless armed groups have taken up arms and committed public uprising against the duly
constituted government and against the people of Mindanao, for the purpose of removing Mindanao -
starting with the City of Marawi, Lanao del Sur - from its allegiance to the Government and its laws and
depriving the Chief Executive of his powers and prerogatives to enforce the laws of the land and to
maintain public order and safety in Mindanao, to the great damage, prejudice, and detriment of the
people therein and the nation as a whole."222

3) The May 23, 2017 events "put on public display the groups' clear intention to establish an Islamic
State and their capability to deprive the duly constituted authorities - the President, foremost - of their
powers and prerogatives. "223

4) "These activities constitute not simply a display of force, but a clear attempt to establish the groups'
seat of power in Marawi City for their planned establishment of a DAESH wilayat or province covering
the entire Mindanao."224

5) "The cutting of vital lines for transportation and power; the recruitment of young Muslims to further
expand their ranks and strengthen their force; the armed consolidation of their members throughout
Marawi City; the decimation of a segment of the city population who resist; and the brazen display of
DAESH flags constitute a clear, pronounced, and unmistakable intent to remove Marawi City, and
eventually the rest of Mindanao, from its allegiance to the Government."225

6) "There exists no doubt that lawless armed groups are attempting to deprive the President of his
power, authority, and prerogatives within Marawi City as a precedent to spreading their control over the
entire Mindanao, in an attempt to undermine his control over executive departments, bureaus, and
offices in said area; defeat his mandate to ensure that all laws are faithfully executed; and remove his
supervisory powers over local governments."226

7) "Law enforcement and other government agencies now face pronounced difficulty sending their
reports to the Chief Executive due to the city-wide power outages. Personnel from the BJMP have been
prevented from performing their functions. Through the attack and occupation of several hospitals,
medical services in Marawi City have been adversely affected. The bridge and road blockades set up by
the groups effectively deprive the government of its ability to deliver basic services to its citizens. Troop
reinforcements have been hampered, preventing the government from restoring peace and order in the

33
area. Movement by both civilians and government personnel to and from the city is likewise
hindered."227

8) "The taking up of arms by lawless armed groups in the area, with support being provided by foreign-
based terrorists and illegal drug money, and their blatant acts of defiance which embolden other armed
groups in Mindanao, have resulted in the deterioration of public order and safety in Marawi City; they
have likewise compromised the security of the entire Island of Mindanao."228

9) "Considering the network and alliance-building activities among terrorist groups, local criminals, and
lawless armed men, the siege f Marawi City is a vital cog in attaining their long-standing goal: absolute
control over the entirety of Mindanao. These circumstances demand swift and decisive action to ensure
the safety and security of the Filipino people and preserve our national integrity."229

Thus, the President deduced from the facts available to him that there was an armed public uprising, the
culpable purpose of which was to remove from the allegiance to the Philippine Government a portion of
its territory and to deprive the Chief Executive of any of his powers and prerogatives, leading the
President to believe that there was probable cause that the crime of rebellion was and is being
committed and that public safety requires the imposition of martial law and suspension of the privilege
of the writ of habeas corpus.

A review of the aforesaid facts similarly leads the Court to conclude that the President, in issuing
Proclamation No. 216, had sufficient factual bases tending to show that actual rebellion exists. The
President's conclusion, that there was an armed public uprising, the culpable purpose of which was the
removal from the allegiance of the Philippine Government a portion of its territory and the deprivation
of the President from performing his powers and prerogatives, was reached after a tactical
consideration of the facts. In fine, the President satisfactorily discharged his burden of proof.

After all, what the President needs to satisfy is only the standard of probable cause for a valid
declaration of martial law and suspension of the privilege of the writ of habeas corpus. As Justice Carpio
decreed in his Dissent in Fortun:

x x x [T]he Constitution does not compel the President to produce such amount of proof as to unduly
burden and effectively incapacitate her from exercising such powers.

Definitely, the President need not gather proof beyond reasonable doubt, which is the standard of proof
required for convicting an accused charged with a criminal offense.x x x

xxxx

Proof beyond reasonable doubt is the highest quantum of evidence, and to require the President to
establish the existence of rebellion or invasion with such amount of proof before declaring martial law
or suspending the writ amounts to an excessive restriction on 'the President's power to act as to
practically tie her hands and disable her from effectively protecting the nation against threats to public
safety.'

Neither clear and convincing evidence, which is employed in either criminal or civil cases, is
indispensable for a lawful declaration of martial law or suspension of the writ. This amount of proof
likewise unduly restrains the President in exercising her emergency powers, as it requires proof greater
than preponderance of evidence although not beyond reasonable doubt.

Not even preponderance of evidence, which is the degree of proof necessary in civil cases, is demanded
for a lawful declaration of martial law.

xxxx

Weighing the superiority of the evidence on hand, from at least two opposing sides, before she can act
and impose martial law or suspend the writ unreasonably curtails the President's emergency powers.

34
Similarly, substantial evidence constitutes an unnecessary restriction on the President's use of her
emergency powers. Substantial evidence is the amount of proof required in administrative or quasi-
judicial cases, or that amount of relevant evidence which a reasonable mind might accept as adequate
to justify a conclusion.

I am of the view that probable cause of the existence of either invasion or rebellion suffices and satisfies
the standard of proof for a valid declaration of martial law and suspension of the writ.

Probable cause is the same amount of proof required for the filing of a criminal information by the
prosecutor and for the issuance of an arrest warrant by a judge. Probable cause has been defined as a
'set of facts and circumstances as would lead a reasonably discreet and prudent man to believe that the
offense charged in the Information or any offense included therein has been committed by the person
sought to be arrested.'

In determining probable cause, the average man weighs the facts and circumstances without resorting
to the calibrations of the rules of evidence of which he has no technical knowledge. He relies on
common sense. A finding of probable cause needs only to rest on evidence showing that, more likely
than not, a crime has been committed and that it was committed by the accused. Probable cause
demands more than suspicion; it requires less than evidence that would justify conviction.

Probable cause, basically premised on common sense, is the most reasonable, most practical, and most
expedient standard by which the President can fully ascertain the existence or non-existence of
rebellion, necessary for a declaration of martial law x x x230

c) Inaccuracies, simulations,
falsities, and hyperboles.

The allegation in the Lagman Petition that the facts stated in Proclamation No. 216 and the Report are
false, inaccurate, simulated, and/or hyperbolic, does not persuade. As mentioned, the Court is not
concerned about absolute correctness, accuracy, or precision of the facts because to do so would unduly
tie the hands of the President in responding to an urgent situation.

Specifically, it alleges that the following facts are not true as shown by its counter-evidence.231

FACTUAL STATEMENTS COUNTER-EVIDENCE

(1) that the Maute group attacked Amai Pakpak Statements made by:
Hospital and hoisted the DAESH flag there, (a) Dr. Amer Saber, Chief of the Hospital
among several locations. As of 0600H of 24 May (b) Health Secretary Paulyn Ubial;
2017, members of the Maute Group were seen (c) PNP Spokesperson Senior Supt. Dionardo
guarding the entry gates of the Amai Pakpak Carlos;
Hospital and that they held hostage the (d) AFP Public Affairs Office Chief Co. Edgard
employees of the Hospital and took over the Arevalo; and
PhilHealth office located thereat (Proclamation (e) Marawi City Mayor Majul Gandamra denying
No. 216 and Report); that the hospital was attacked by the Maute
Group citing online news articles of Philstar,
Sunstar, Inquirer, and Bombo Radyo.232
2. that the Maute Group ambushed and burned Statements made by PNP Director General
the Marawi Police Station (Proclamation No. Ronald dela Rosa and Marawi City Mayor Majul
216 and the Report); Gandamra in the online news reports of ABS-
CBN News and CNN Philippines233 denying that
the Maute group occupied the Marawi Police
Station.
3. that lawless armed groups likewise ransacked Statement made by the bank officials in the on-
the Landbank of the Philippines and line news article of Philstar234 that the Marawi
commandeered one of its armored vehicles City branch was not ransacked but sustained
(Report); damages from the attacks.

35
 4. that the Marawi Central Elementary Pilot Statements in the on-line news article of
School was burned (Proclamation No. 216 and Philstar235 made by the Marawi City Schools
the Report); Division Assistant Superintendent Ana Alonto
denying that the school was burned and
Department of Education Assistant Secretary
Tonisito Umali stating that they have not
received any report of damage.
5. that the Maute Group attacked various Statement in the on-line news article of
government facilities (Proclamation No. 216 and Inquirer236 made by Marawi City Mayor Majul
the Report). Gandamra stating that the ASG and the Maute
Terror Groups have not taken over any
government facility in Marawi City.

However, the so-called counter-evidence were derived solely from unverified news articles on the
internet, with neither the authors nor the sources shown to have affirmed the contents thereof It was
not even shown that efforts were made to secure such affirmation albeit the circumstances proved
futile. As the Court has consistently ruled, news articles are hearsay evidence, twice removed, and are
thus without any probative value, unless offered for a purpose other than proving the truth of the
matter asserted.237 This pronouncement applies with equal force to the Cullamat Petition which likewise
submitted online news articles238 as basis for their claim of insufficiency of factual basis.

Again, it bears to reiterate that the maxim falsus in uno, falsus in omnibus finds no application in these
cases. As long as there are other facts in the proclamation and the written Report indubitably showing
the presence of an actual invasion or rebellion and that public safety requires the declaration and/or
suspension, the finding of sufficiency of factual basis, stands.

d) Ruling in Bedol v.
Commission on Elections not
Applicable.

Petitioners, however, insist that in Bedol v. Commission on Elections,239 news reports may be admitted
on grounds of relevance, trustworthiness, and necessity. Petitioners' reliance on this case is misplaced.
The Court in Bedol made it clear that the doctrine of independent relevant statement, which is an
·exception to the hearsay rule, applies in cases "where only the fact that such statements were made is
relevant, and the truth or falsity thereof is immaterial."240 Here, the question is not whether such
statements were made by Saber, et. al., but rather whether what they said are true. Thus, contrary to
the view of petitioners, the exception in Bedol finds no application here.

e) There are other independent

facts which support the finding that,
more likely than not, rebellion exists
and that public safety requires it.

Moreover, the alleged false and/or inaccurate statements are just pieces and parcels of the Report;
along with these alleged false data is an arsenal of other independent facts showing that more likely
than not, actua1 rebellion exists, and public safety requires the declaration of martial law or suspension
of the privilege of the writ of habeas corpus. To be precise, the alleged false and/or inaccurate
statements are only five out of the severa1 statements bulleted in the President's Report. Notably, in
the interpellation by Justice Francis H. Jardeleza during the second day of the oral argument, petitioner
Lagman admitted that he was not aware or that he had no personal knowledge of the other incidents
cited.241 As it thus stands, there is no question or challenge with respect to the reliability of the other
incidents, which by themselves are ample to preclude the conclusion that the President's report is
unreliable and that Proclamation No. 216 was without sufficient factual basis.

Verily, there is no credence to petitioners' claim that the bases for the President's imposition of martial
law and suspension of the writ of habeas corpus were mostly inaccurate, simulated, false and/or
hyperbolic.

36
X. Public safety requires the declaration of
martial law and the suspension of the privilege of
the writ of habeas corpus in the whole of
Mindanao.

Invasion or rebellion alone may justify resort to the calling out power but definitely not the declaration
of martial law or suspension of the privilege of the writ of habeas corpus. For a declaration of martial
law or suspension of the privilege of the writ of habeas corpus to be valid, there must be a concurrence
of actual rebellion or invasion and the public safety requirement. In his Report, the President noted that
the acts of violence perpetrated by the ASG and the Maute Group were directed not only against
government forces or establishments but likewise against civilians and their properties.242 In addition
and in relation to the armed hostilities, bomb threats were issued;243 road blockades and checkpoints
were set up;244 schools and churches were burned;245 civilian hostages were taken and killed;246 non-
Muslims or Christians were targeted;247 young male Muslims were forced to join their group;248 medical
services and delivery of basic services were hampered;249 reinforcements of government troops and
civilian movement were hindered;250 and the security of the entire Mindanao Island was
compromised.251

These particular scenarios convinced the President that the atrocities had already escalated to a level
that risked public safety and thus impelled him to declare martial law and suspend the privilege of the
writ of habeas corpus. In the last paragraph of his Report, the President declared:

While the government is presently conducting legitimate operations to address the on-going rebellion, if
not the seeds of invasion, public safety necessitates the continued implementation of martial law and
the suspension of the privilege of the writ of habeas corpus in the whole of Mindanao until such time
that the rebellion is completely quelled.252

Based on the foregoing, we hold that the parameters for the declaration of martial law and suspension
of the privilege of the writ f habeas corpus have been properly and fully complied with. Proclamation No.
216 has sufficient factual basis there being probable cause to believe that rebellion exists and that public
safety requires the martial law declaration and the suspension of the privilege of the writ of habeas
corpus.

XI. Whole of Mindanao

a) The overriding and

paramount concern of martial law is
the protection of the security of the
nation and the good and safety of the
public.

Considering the nation's and its people's traumatic experience martial law under the Marcos regime,
one would expect the framers of the 1987 Constitution to stop at nothing from not resuscitating the law.
Yet it would appear that the constitutional writers entertained no doubt about the necessity and
practicality of such specie of extraordinary power and thus, once again, bestowed on the Commander-
in-Chief the power to declare martial law albeit in its diluted form.

Indeed, martial law and the suspension of the privilege of the writ of habeas corpus are necessary for
the protection of the security of the nation; suspension of the privilege of the writ of habeas corpus is
"precautionary , and although it might [curtail] certain rights of individuals, [it] is for the purpose of
defending and protecting the security of the state or the entire country and our sovereign
people".253 Commissioner Ople referred to the suspension of the privilege of the writ of habeas
corpus as a "form of immobilization" or "as a means of immobilizing potential internal enemies"
"especially in areas like Mindanao."254

Aside from protecting the security of the country, martial law also guarantees and promotes public
safety. It is worthy of mention that rebellion alone does not justify the declaration of martial law or

37
suspension of the privilege of the writ of habeas corpus; the public safety requirement must likewise be
present.

b) As Commander-in-Chief, the
President receives vital, relevant,
classified, and live information which
equip and assist him in making
decisions.

In Parts IX and X, the Court laid down the arsenal of facts and events that formed the basis for
Proclamation No. 216. For the President, the totality of facts and events, more likely than not, shows
that actual rebellion exists and that public safety requires the declaration of martial law and suspension
of the privilege of the writ of habeas corpus. Otherwise stated, the President believes that there is
probable cause that actual rebellion exists and public safety warrants the issuance of Proclamation No.
216. In turn, the Court notes that the President, in arriving at such a conclusion, relied on the facts and
events included in the Report, which we find sufficient.

To be sure, the facts mentioned in the Proclamation and the Report are far from being exhaustive or all-
encompassing. At this juncture, it may not be amiss to state that as Commander-in-Chief, the President
has possession of documents and information classified as "confidential", the contents of which cannot
be included in the Proclamation or Report for reasons of national security. These documents may
contain information detailing the position of government troops and rebels, stock of firearms or
ammunitions, ground commands and operations, names of suspects and sympathizers, etc. , In fact,
during the closed door session held by the Court, some information came to light, although not
mentioned in the Proclamation or Report. But then again, the discretion whether to include the same in
the Proclamation or Report is the judgment call of the President. In fact, petitioners concede to this.
During the oral argument, petitioner Lagman admitted that "the assertion of facts [in the Proclamation
and Report] is the call of the President."255

It is beyond cavil that the President can rely on intelligence reports and classified documents. "It is for
the President as [C]ommander-in[C]hief of the Armed Forces to appraise these [classified evidence or
documents/]reports and be satisfied that the public safety demands the suspension of the
writ."256 Significantly, respect to these so-called classified documents is accorded even "when [the]
authors of or witnesses to these documents may not be revealed."257

In fine, not only does the President have a wide array of information before him, he also has the right,
prerogative, and the means to access vital, relevant, and confidential data, concomitant with his
position as Commander-in-Chief of the Armed Forces.

c) The Court has no machinery

or tool equal to that of the
Commander-in-Chief to ably and
properly assess the ground
conditions.

In contrast, the Court does not have the same resources available to the President. However, this should
not be considered as a constitutiona1 lapse. On the contrary, this is in line with the function of the Court,
particularly in this instance, to determine the sufficiency of factual basis of Proclamation No. 216. As
thoroughly discussed in Part VIII, the determination by the Court of the sufficiency of factual basis must
be limited only to the facts and information mentioned in the Report and Proclamation. In fact, the
Court, in David v. President Macapagal-Arroyo,258 cautioned not to "undertake an independent
investigation beyond the pleadings." In this regard, "the Court will have to rely on the fact-finding
capabilities of the [E]xecutive [D]epartment;"259 in turn, the Executive Department will have to open its
findings to the Court,260 which it did during the closed door session last June 15, 2017.

d) The 1987 Constitution

grants to the President, as
Commander-in-Chief, the discretion

38
to determine the territorial coverage
or application of martial law or
suspension of the privilege of the writ
of habeas corpus.

Section 18, Article VII of the Constitution states that "[i]n case of invasion or rebellion, when the public
safety requires it, [the President] may x x x suspend the privilege of writ of habeas corpus or place the
Philippines or any part thereof under martial law." Clearly, the Constitution grants to the President the
discretion to determine the territorial coverage of martial law and the suspension of the privilege of the
writ of habeas corpus. He may put the entire Philippines or only a part thereof under martial law.

This is both an acknowledgement and a recognition that it is the Executive Department, particularly the
President as Commander-in-Chief, who is the repository of vital, classified, and live information
necessary for and relevant in calibrating the territorial application of martial law and the suspension of
the privilege of the writ of habeas corpus. It, too, is a concession that the President has the tactical and
military support, and thus has a more informed understanding of what is happening on the ground. Thus,
the Constitution imposed a limitation on the period of application, which is 60 days, unless sooner
nullified, revoked or extended, but not on the territorial scope or area of coverage; it merely stated "the
Philippines or any part thereof," depending on the assessment of the President.

e) The Constitution has

provided sufficient safeguards against
possible abuses of Commander-in-
Chief's powers; further curtailment of
Presidential powers should not only
be discouraged but also avoided.

Considering the country's history, it is understandable that the resurgence of martial law would
engender apprehensions among the citizenry. Even the Court as an institution cannot project a stance of
nonchalance. However, the importance of martial law in the context of our society should outweigh
one's prejudices and apprehensions against it. The significance of martial law should not be undermined
by unjustified fears and past experience. After all, martial law is critical and crucial to the promotion of
public safety, the preservation of the nation's sovereignty and ultimately, the survival of our country. It
is vital for the protection of the country not only against internal enemies but also against those
enemies lurking from beyond our shores. As such, martial law should not be cast aside, or its scope and
potency limited and diluted, based on bias and unsubstantiated assumptions.

Conscious of these fears and apprehensions, the Constitution placed several safeguards which
effectively watered down the power to declare martial law. The 1987 Constitution "[clipped] the powers
of [the] Commander-in-Chief because of [the] experience with the previous regime."261 Not only were
the grounds limited to actual invasion or rebellion, but its duration was likewise fixed at 60 days, unless
sooner revoked, nullified, or extended; at the same time, it is subject to the veto powers of the Court
and Congress.

Commissioner Monsod, who, incidentally, is a counsel for the Mohamad Petition, even exhorted his
colleagues in the Constitutional Convention to look at martial law from a new perspective by elaborating
on the sufficiency of the proposed safeguards:

MR. MONSOD. x x x

Second, we have been given a spectre of non sequitur, that the mere declaration of martial law for a
fixed period not exceeding 60 days, which is subject to judicial review, is going to result in numerous
violations of human rights, the predominance of the military forever and in untold sufferings. Madam
President, we are talking about invasion and rebellion. We may not have any freedom to speak of after
60 days, if we put as a precondition the concurrence of Congress. That might prevent the President from
acting at that time in order to meet the problem. So I would like to suggest that, perhaps, we should
look at this in its proper perspective. We are only looking at a very specific case. We are only looking at a

39
case of the first 60 days at its maximum. And we are looking at actual invasion and rebellion, and there
are other safeguards in those cases.262

Even Bishop Bacani was convinced that the 1987 Constitution has enough safeguards against
presidential abuses and commission of human rights violations. In voting yes for the elimination of the
requirement of prior concurrence of Congress, Bishop Bacani stated, viz.:

BISHOP BACANI. Yes, just two sentences. The reason I vote II yes is that despite my concern for human
rights, I believe that a good President can also safeguard human rights and human lives as well. And I do
not want to unduly emasculate the powers of the President. Xxx263

Commissioner Delos Reyes shared the same sentiment, to wit:

MR. DE LOS REYES. May I explain my vote, Madam President.

x x x The power of the President to impose martial law is doubtless of a very high and delicate nature. A
free people are naturally jealous of the exercise of military power, and the power to impose martial law
is certainly felt to be one of no ordinary magnitude. But as presented by the Committee, there are many
safeguards: 1) it is limited to 60 days; 2) Congress can revoke it; 3) the Supreme Court can still review as
to the sufficiency of factual basis; and 4) it does not suspend the operation of the Constitution. To
repeat what I have quoted when I interpellated Commissioner Monsod, it is said that the power to
impose martial law is dangerous to liberty and may be abused. All powers may be abused if placed in
unworthy hands. But it would be difficult, we think, to point out any other hands in which this power
will be more safe and at the same time equally effectual. When citizens of the State are in arms against
each other and the constituted authorities are unable to execute the laws, the action of the President
must be prompt or it is of little value. x x x264 (Emphasis supplied)

At this juncture, it bears to stress that it was the collective sentiment of the framers of the 1987
Constitution that sufficient safeguards against possible misuse and abuse by the Commander-in-Chief of
his extraordinary powers are already in place and that no further emasculation of the presidential
powers is called for in the guise of additional safeguards. The Constitution recognizes that any further
curtailment, encumbrance, or emasculation of the presidential powers would not generate any good
among the three co-equal branches, and to the country and its citizens as a whole. Thus:

MR. OPLE. The reason for my concern, Madam President, is that when we put all of these encumbrances
on the President and Commander-in-Chief during an actual invasion or rebellion, given an intractable
Congress that may be dominated by opposition parties, we may be actually impelling the President to
use the sword of Alexander to cut the Gordian knot by just declaring a revolutionary government that
sets him free to deal with the invasion or the insurrection. x x x265 (Emphasis supplied)

f) Rebellion and public safety;

nature, scope, and range.

It has been said that the "gravamen of the crime of rebellion is an armed public uprising against the
government;"266 and that by nature, "rebellion is x x x a crime of masses or multitudes, involving crowd
action, that cannot be confined a priori, within predetermined bounds."267 We understand this to mean
that the precise extent or range of the rebellion could not be measured by exact metes and bounds.

To illustrate: A contingent armed with high-powered firearms publicly assembled in Padre Faura, Ermita,
Manila where the Court's compound is situated. They overpowered the guards, entered the Court's
premises, and hoisted the ISIS flag. Their motive was political, i.e., they want to remove from the
allegiance to the Philippine government a part of the territory of the Philippines, particularly the Court's
compound and establish it as an ISIS-territory.

Based on the foregoing illustration, and vis-a-vis the nature of the crime of rebellion, could we validly
say that the rebellion is confined only within the Court's compound? Definitely not. The possibility that
there are other rebels positioned in the nearby buildings or compound of the Philippine General

40
Hospital (PGH) or the Manila Science High Schoo1 (MSHS) could not be discounted. There is no way of
knowing that all participants in the rebellion went and stayed inside the Court's compound.

Neither could it be validly argued that the armed contingent positioned in PGH or MSHS is not engaged
in rebellion because there is no publicity in their acts as, in fact, they were merely lurking inside the
compound of PGH and MSHS. However, it must be pointed out that for the crime of rebellion to be
consummated, it is not required that all armed participants should congregate in one place, in this case,
the Court's compound, and publicly rise in arms against the government for the attainment of their
culpable purpose. It suffices that a portion of the contingent gathered and formed a mass or a crowd
and engaged in an armed public uprising against the government. Similarly, it cannot be validly
concluded that the grounds on which the armed public uprising actually to6k place should be the
measure of the extent, scope or range, of the actual I rebellion. This is logical since the other rebels
positioned in PGH, MSHS, I or elsewhere, whose participation did not involve the publicity aspect of
rebellion, may also be considered as engaging in the crime of rebellion.

Proceeding from the same illustration, suppose we say that the President, after finding probable cause
that there exists actual rebellion and that public safety requires it, declares martial law and suspends the
writ of habeas corpus in the whole of Metro Manila, could we then say that the territorial coverage of
the proclamation is too expansive?

To answer this question, we revert back to the premise that the discretion to determine the territorial
scope of martial law lies with the President. The Constitution grants him the prerogative whether to put
the entire Philippines or any part thereof under martial law. There is no constitutional edict that martial
law should be confined only in the particular place where the armed public uprising actually transpired.
This is not only practical but also logical. Martial law is an urgent measure since at stake is the nation's
territorial sovereignty and survival. As such, the President has to respond quickly. After the rebellion in
the Court's compound, he need not wait for another rebellion to be mounted in Quezon City before he
could impose martial law thereat. If that is the case, then the President would have to wait until every
remote corner in the country is infested with rebels before he could declare martial law in
the entire Philippines. For sure, this is not the scenario envisioned by the Constitution.

Going back to the illustration above, although the President is not required to impose martial law only
within the Court's compound because it is where the armed public uprising actually transpired, he may
do so if he sees fit. At the same time, however, he is not precluded from expanding the coverage of
martial law beyond the Court's compound. After all, rebellion is not confined within predetermined
bounds.

Public safety, which is another component element for the declaration of martial law, "involves the
prevention of and protection from events that could endanger the safety of the general public from
significant danger, injury/harm, or damage, such as crimes or disasters."268 Public safety is
an abstract term; it does not take any physical form. Plainly, its range, extent or scope could not be
physically measured by metes and bounds.

Perhaps another reason why the territorial scope of martial law should not necessarily be limited to the
particular vicinity where the armed public uprising actually transpired, is because of the unique
characteristic of rebellion as a crime. "The crime of rebellion consists of many acts. It is a vast movement
of men and a complex net of intrigues and plots. Acts committed in furtherance of rebellion[,] though
crimes in themselves[,] are deemed absorbed in one single crime of rebellion."269 Rebellion absorbs
"other acts committed in its pursuance".270 Direct
271 272 273 274 275 276
assault, murder, homicide, arson, robbery, and kidnapping, just to name a few, are
absorbed in the crime of rebellion if committed in furtherance of rebellion; "[i]t cannot be made a basis
of a separate charge."277 Jurisprudence also teaches that not only common crimes may be absorbed in
rebellion but also "offenses under special laws [such as Presidential Decree No. 1829]278 which are
perpetrated in furtherance of the political offense".279 "All crimes, whether punishable under a special
law or general law, which are me e components or ingredients, or committed in furtherance thereof,
become absorbed in the crime of rebellion and cannot be isolated and charged as separate crimes in
themselves.280

41
Thus, by the theory of absorption, the crime of murder committed in Makati City, if committed in
furtherance of the crime of rebellion being hypothetically staged in Padre Faura, Ermita, Manila, is
stripped of its common complexion and is absorbed in the crime of rebellion. This all the more makes it
difficult to confine the application of martial law only to the place where the armed public uprising is
actually taking place. In the illustration above, Padre Faura could only be the nerve center of the
rebellion but at the same time rebellion is also happening in Makati City.

In fine, it is difficult, if not impossible, to fix the territorial scope of martial law in direct proportion to the
"range" of actual rebellion and public safety simply because rebellion and public safety have no fixed
physical dimensions. Their transitory and abstract nature defies precise measurements; hence, the
determination of the territorial scope of martial law could only be drawn from arbitrary, not fixed,
variables. The Constitution must have considered these limitations when it granted the President wide
leeway and flexibility in determining the territorial scope of martial law.

Moreover, the President's duty to maintain peace and public safety is not limited only to the place
where there is actual rebellion; it extends to other areas where the present hostilities are in danger of
spilling over. It is not intended merely to prevent the escape of lawless elements from Marawi City, but
also to avoid enemy reinforcements and to cut their supply lines coming from different parts of
Mindanao. Thus, limiting the proclamation and/or suspension to the place where there is actual
rebellion would not only defeat the purpose of declaring martial law, it will make the exercise thereof
ineffective and useless.

g) The Court must stay within

the confines of its power.

The Court can only act within the confines of its power.1âwphi1 For the Court to overreach is to infringe
upon another's territory. Clearly, the power to determine the scope of territorial application belongs to
the President. "The Court cannot indulge in judicial legislation without violating the principle of
separation of powers, and, hence, undermining the foundation of our republican system."281

To reiterate, the Court is not equipped with the competence and logistical machinery to determine the
strategical value of other places in the military's efforts to quell the rebellion and restore peace. It would
be engaging in an act of adventurism if it dares to embark on a mission of deciphering the territorial
metes and bounds of martial law. To be blunt about it, hours after the proclamation of martial law none
of the members of this Court could have divined that more than ten thousand souls would be forced to
evacuate to Iligan and Cagayan de Oro and that the military would have to secure those places also;
none of us could have predicted that Cayamora Maute would be arrested in Davao City or that his wife
Ominta Romato Maute would be apprehended in Masiu, Lanao del Sur; and, none of us had an inkling
that the Bangsamoro Islamic Freedom Fighters (BIFF) would launch an attack in Cotabato City. The Court
has no military background and technical expertise to predict that. In the same manner, the Court lacks
the technical capability to determine which part of Mindanao would best serve as forward operating
base of the military in their present endeavor in Mindanao. Until now the Court is in a quandary and can
only speculate whether the 60-day lifespan of Proclamation No. 216 could outlive the present hostilities
in Mindanao. It is on this score that the Court should give the President sufficient leeway to address the
peace and order problem in Mindanao.

Thus, considering the current situation, it will not serve any purpose if the President is goaded into using
"the sword of Alexander to cut the Gordian knot"282 by attempting to impose another encumbrance;
after all "the declaration of martial law or the suspension of the privilege of the writ of habeas corpus is
essentially an executive act."283

Some sectors, impelled perhaps by feelings of patriotism, may wish to subdue, rein in, or give the
President a nudge, so to speak, as some sort of reminder of the nation's experience under the Marcos-
styled martial law. However, it is not fair to judge President Duterte based on the ills some of us may
have experienced during the Marcos-martial law era. At this point, the Court quotes the insightful
discourse of Commissioner Ople:

MR. OPLE. x x x

42
xxxx

Madam President, there is a tendency to equate patriotism with rendering the executive branch of the
government impotent, as though by reducing drastically the powers of the executive, we are rendering a
service to human welfare. I think it is also important to understand that the extraordinary measures
contemplated in the Article on the Executive pertain to a practical state of war existing in this country
when national security will become a common bond of patriotism of all Filipinos, especially if it is an
actual invasion or an actual rebellion, and the President may have to be given a minimum flexibility to
cope with such unprecedented threats to the survival of a nation. I think the Commission has done so
but at the same time has not, in any manner, shunned the task of putting these powers under a whole
system of checks and balances, including the possible revocation at any time of a proclamation of
martial law by the Congress, and in any case a definite determination of these extraordinary powers,
subject only to another extension to be determined by Congress in the event that it is necessary to do so
because the emergency persists.

So, I think this Article on the Executive for which I voted is completely responsible; it is attuned to the
freedom and the rights of the citizenry. It does not render the presidency impotent and, at the same
time, it allows for a vigorous representation of the people through their Congress when an emergency
measure is in force and effect.284

h) Several local armed groups

have formed linkages aimed at
committing rebellion and acts in
furtherance thereof in the whole of
Mindanao.

With a predominantly Muslim population, Marawi City is "the only Islamic City of the South." 285 On April
15, 1980, it was conferred the official title of "Islamic City of Marawi."286 The city's first name,
"Dansalan," "was derived from the word 'dansal', meaning a destination point or rendezvous. Literally, it
also means arrival or coming."287 Marawi lies in the heart of Mindanao. In fact, the Kilometer Zero
marker in Mindanao is found in Marawi City thereby making Marawi City the point of reference of all
roads in Mindanao.

Thus, there is reasonable basis to believe that Marawi is only the staging point of the rebellion, both for
symbolic and strategic reasons. Marawi may not be the target but the whole of Mindanao. As
mentioned in the Report, "[l]awless armed groups have historically used provinces adjoining Marawi City
as escape routes, supply lines, and backdoor passages;"288 there is also the plan to establish a wilayat in
Mindanao by staging the siege of Marawi. The report that prior to May 23, 2017, Abdullah Maute had
already dispatched some of his men to various places in Mindanao, such as Marawi, Iligan, and Cagayan
de Oro for bombing operations, carnapping, and the murder of military and police personnel,289 must
also be considered. Indeed, there is some semblance of truth to the contention that Marawi is only the
start, and Mindanao the end.

Other events also show that the atrocities were not concentrated in Marawi City. Consider these:

a. On January 13, 2017, an improvised explosive device (IED) exploded in Barangay Campo Uno, Lamita
City, Basilan. A civilian was killed while another was wounded.290

b. On January 19, 2017, the ASG kidnapped three Indonesians near Bakungan Island, Taganak, Tawi-
Tawi.291

c. On January 29, 2017, the ASG detonated an IED in Barangay Danapah, Albarka, Basilan resulting in the
death of two children and the wounding of three others.292

d. From March to May 2017, there were eleven (11) separate instances of IED explosions by the BIFF in
Mindanao. These resulted in the death and wounding of several personalities.293

e. On February 26, 2017, the ASG beheaded its kidnap victim, Juergen Kantner in Sulu.294

43
f. On April 11, 2017, the ASG infiltrated Inabaga, Bohol resulting in firefights between rebels and
government troops.295

g. On April 13, 2017, the ASG beheaded Filipino kidnap victim Noel Besconde.296

h. On April 20, 2017, the ASG kidnapped SSg. Anni Siraji and beheaded him three days later.297

There were also intelligence reports from the military about offensives committed by the ASG and other
local rebel groups. All these suggest that the rebellion in Marawi has already spilled over to other parts
of Mindanao.

Moreover, considering the widespread atrocities in Mindanao and the linkages established among rebel
groups, the armed uprising that was initially staged in Marawi cannot be justified as confined only to
Marawi. The Court therefore will not simply disregard the events that happened during the Davao City
bombing, the Mamasapano massacre, the Zamboanga City siege, and the countless bombings in
Cotabato, Sultan Kudarat, Sulu, and Basilan, among others.298 The Court cannot simply take the battle of
Marawi in isolation. As a crime without predetermined bounds, the President has reasonable basis to
believe that the declaration of martial law, as well as the suspension of the privilege of the writ
of habeas corpus in the whole of Mindanao, is most necessary, effective, and called for by the
circumstances.

i) Terrorism neither negates

nor absorbs rebellion.

It is also of judicial notice that the insurgency in Mindanao has been ongoing for decades. While some
groups have sought legal and peaceful means, others have resorted to violent extremism and terrorism.
Rebellion may be subsumed under the crime of terrorism, which has a broader scope covering a wide
range of predicate crimes. In fact, rebellion is only one of the various means by which terrorism can be
committed.299 However, while the scope of terrorism may be comprehensive, its purpose is distinct and
well-defined. The objective of a "'terrorist" is to sow and create a condition of widespread fear among
the populace in order to coerce the government to give in to an unlawful demand. This condition of
widespread fear is traditionally achieved through bombing, kidnapping, mass killing, and beheading,
among others. In contrast, the purpose of rebellion, as previously discussed, is political, i.e., (a) to
remove from the allegiance to the Philippine Government or its laws: (i) the territory of the Philippines
or any part thereof; (ii) any body of land, naval, or armed forces; or (b) to deprive the Chief Executive or
Congress, wholly or partially, of any of their powers and prerogatives.

In determining what crime was committed, we have to look into the main objective of the malefactors.
If it is political, such as for the purpose of severing the allegiance of Mindanao to the Philippine
Government to establish a wilayat therein, the crime is rebellion. If, on the other hand, the primary
objective is to sow and create a condition of widespread and extraordinary fear and panic among the
populace in order to coerce the government to give in to an unlawful demand, the crime is terrorism.
Here, we have already explained and ruled that the President did not err in believing that what is going
on in Marawi City is one contemplated under the crime of rebellion.

In any case, even assuming that the insurgency in Marawi City can also be characterized as terrorism,
the same will not in any manner affect Proclamation No. 216. Section 2 of Republic Act (RA) No. 9372,
otherwise known as the Human Security Act of 2007 expressly provides that "[n]othing in this Act shall
be interpreted as a curtailment, restriction or diminution of constitutionally recognized powers of the
executive branch of the government." Thus, as long as the President complies with all the requirements
of Section 18, Article VII, the existence of terrorism cannot prevent him from exercising his extraordinary
power of proclaiming martial ' law or suspending the privilege of the writ of habeas corpus. After all, the
extraordinary powers of the President are bestowed on him by the Constitution. No act of Congress can,
therefore, curtail or diminish such powers.

Besides, there is nothing in Art. 134 of the RPC and RA 9372 which states that rebellion and terrorism
are mutuallty exclusive of each other or that they cannot co-exist together. RA 9372 does not expressly

44
or impliedly repeal Art. 134 of the RPC. And while rebellion is one of the predicate crimes of terrorism,
one cannot absorb the other as they have different elements.300

Verily, the Court upholds the validity of the declaration of martial law and suspension of the privilege of
the writ of habeas corpus in the entire Mindanao region.

At the end of the day, however ardently and passionately we may believe in the validity or correctness
of the varied and contentious causes or principles that we espouse, advocate or champion, let us not
forget that at this point in time we, the Filipino people, are confronted with a crisis of such magnitude
and proportion that we all need to summon the spirit of unity and act as one undivided nation, if we are
to overcome and prevail in the struggle at hand.

Let us face up to the fact that the siege in Marawi City has entered the second month and only God or
Allah knows when it would end. Let us take notice of the fact that the casualties of the war are mounting.
To date, 418 have died. Out of that were 303 Maute rebels as against 71 government troops and 44
civilians.

Can we not sheathe our swords and pause for a while to bury our dead, including our differences and
prejudices?

WHEREFORE, the Court FINDS sufficient factual bases for the issuance of Proclamation No. 216
and DECLARES it as CONSTITUTIONAL. Accordingly, the consolidated Petitions are hereby DISMISSED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

EN BANC

June 19, 2018

G.R. No. 237428

REPUBLIC of the PHILIPPINES, represented by SOLICITOR GENERAL JOSE C. CALIDA, Petitioner

vs.
MARIA LOURDES P.A. SERENO, Respondent

RESOLUTION

TIJAM, J.:

This resolution treats of the following motions:

1. Maria Lourdes P. A. Sereno’s (respondent) Ad Cautelam Motion for Reconsideration of this Court's
Decision 1 dated May 11, 2018, the dispositive portion of which states:

WHEREFORE, the Petition for Quo Warranto is GRANTED. Respondent Maria Lourdes P. A. Sereno is
found DISQUALIFIED from and is here y adjudged GUILTY
of UNLAWFULLY HOLDING and EXERCISING the OFFICE OF THE CHIEF JUSTICE. Accordingly, Respondent
Maria Lourdes P.A. Sereno is OUSTED and EXCLUDED therefrom.

The position of the Chief Justice of the Supreme Court is declared vacant and the Judicial and Bar
Council is directed to commence the application and nomination process.

This Decision is immediately executory without need of further action from the Court.

45
Respondent Maria Lourdes P.A. Sereno is ordered to SHOW CAUSE within ten (10) days from receipt
hereof why she should not be sanctioned for violating the Code of Professional Responsibility and the
Code of Judicial Conduct for transgressing the subjudice rule and for casting aspersions and ill motives to
the Members of the Supreme Court.

SO ORDERED.2

2. Respondent’s Ad Cautelam Motion for Extension of Time to File Reply (to the Show Cause Order
dated 11 May 2018).

We first dispose of respondent's Motion for Reconsideration.

Respondent claims denial of due process because her case was allegedly not heard by an impartial
tribunal. She reiterates that the six (6) Justices ought to have inhibited themselves on the grounds of
actual bias, of having personal knowledge of disputed evidentiary facts, and of having acted as a
material witness in the matter in controversy. Respondent also argues denial of due process when the
Court supposedly took notice of extraneous matters as corroborative evidence and when the Court
based its main Decision on facts without observing the mandatory procedure for reception of evidence.

She reiterates her arguments that the Court is without jurisdiction to oust an impeachable officer
through quo warranto; that the official acts of the Judicial and Bar Council (JBC) and the President
involves political questions that cannot be annulled absent any allegation of grave abuse of discretion;
that the petition for quo warranto is time-barred; and that respondent was and is a person of proven
integrity.

By way of Comment, the Republic of the Philippines (Republic), through the Office of the Solicitor
General (OSG), seeks a denial of respondent's motion for reconsideration for being proforma. In any
case, the OSG argues that respondent's motion lacks merit as there was no denial of due process and
that quo warranto is the appropriate remedy to oust an ineligible impeachable officer. The OSG adds
that the issue of whether respondent is a person of proven integrity is justiciable considering that the
decision-making powers of the JBC are limited by judicially discoverable standards. Undeviating from its
position, the OSG maintains that the petition is not time-barred as Section 11, Rule 66 of the Rules of
Court does not apply to the State and that the peculiar circumstances of the instant case preclude the
strict application of the prescriptive period.

Disputing respondent's claims, the OSG reiterates that respondent's repeated failure to file her
Statement of Assets, Liabilities and Net Worth (SALN) and her non-submission thereof to the JBC which
the latter required to prove the integrity of an applicant affect respondent's integrity. The OSG
concludes that respondent, not having possessed of proven integrity, failed to meet the constitutional
requirement for appointment to the Judiciary.

Carefully weighing the arguments advanced by both parties, this Court finds no reason to reverse its
earlier Decision.

Respondent is seriously in error for claiming denial of due process. Respondent refuses to recognize the
Court's jurisdiction over the subject matter and over her person on the ground that respondent, as a
purported impeachable official, can only be removed exclusively by impeachment. Reiterating this
argument, respondent filed her Comment to the Petition, moved that her case be heard on Oral
Argument, filed her Memorandum, filed her Reply/Supplement to the OSG's Memorandum and now,
presently moves for reconsideration. All these representations were made ad cautelam which, stripped
of its legal parlance, simply means that she asks to be heard by the Court which jurisdiction she does not
acknowledge. She asked relief from the Court and was in fact heard by the Court, and yet she claims to
have been denied of due process. She repeatedly discussed the supposed merits of her opposition to
the present quo warranto petition in various social and traditional media, and yet she claims denial of
due process. The preposterousness of her claim deserves scant consideration.

46
Respondent also harps on the alleged bias on the part of the six (6) Justices and that supposedly, their
failure to inhibit themselves from deciding the instant petition amounts to a denial of due process.

Respondent's contentions were merely a rehash of the issues already taken into consideration and
properly resolved by the Court. To reiterate, mere imputation of bias or partiality is not enough ground
for inhibition, especially when the charge is without basis. Acts or conduct clearly indicative of
arbitrariness or prejudice has to be shown.3 Verily, for bias and prejudice to be considered sufficient
justification for the inhibition of a Member of this Court, mere suspicion is not enough.

Moreover, as discussed in the main Decision, respondent's allegations on the grounds for inhibition
were merely based on speculations, or on distortions of the language, context and meaning of the
answers given by the concerned Justices as resource persons in the proceedings of the Committee on
Justice of the House of Representatives. These matters were squarely resolved by the Court in its main
Decision, as well as in the respective separate opinions of the Justices involved.

Indeed, the Members of the Court's right to inhibit are weighed against their duty to adjudicate the case
without fear of repression. Respondent's motion to require the inhibition of Justices Teresita J.
Leonardo-De Castro, Lucas P. Bersamin, Diosdado M. Peralta, Francis H. Jardeleza, Samuel R. Martires,
and Noel Gimenez Tijam, who all concurred to the main Decision, would open the floodgates to the
worst kind of forum shopping, and on its face, would allow respondent to shop for a Member of the
Court who she perceives to be more compassionate and friendly to her cause, and is clearly antithetical
to the fair administration of justice.

Bordering on the absurd, respondent alleges prejudice based on the footnotes of the main Decision
which show that the draft thereof was being prepared as early as March 15, 2018 when respondent has
yet to file her Comment. Respondent forgets to mention that the Petition itself was filed on March 5,
2018 where the propriety of the remedy of quo warranto was specifically raised. Certainly, there is
nothing irregular nor suspicious for the Member-in-Charge, nor for any of the Justices for that matter, to
have made a requisite initial determination on the matter of jurisdiction. In professing such argument,
respondent imputes fault on the part of the Justices for having been diligent in the performance of their
work.

Respondent also considers as irregular the query made by the Member-in-Charge with the JBC Office of
the Executive Officer (OEO) headed by Atty. Annaliza S. Ty-Capacite (Atty. Capacite ). Respondent points
out that the same is not allowed and shows prejudice on the part of the Court.

For respondent's information, the data were gathered pursuant to the Court En Bane’s Resolution dated
March 20, 2018 wherein the Clerk of Court En Banc and the JBC, as custodian and repositories of the
documents submitted by respondent, were directed to provide the Court with documents pertinent to
respondent's application and appointment as an Associate Justice in 2010 and as Chief Justice of the
Court in 2012 for the purpose of arriving at a judicious, complete, and efficient resolution of the instant
case. In the same manner, the "corroborative evidence" referred to by respondent simply refers to
respondent's acts and representations ascertainable through an examination of the documentary
evidence appended by both parties to their respective pleadings as well as their representations during
the Oral Argument. Reference to respondent's subsequent acts committed during her incumbency as
Chief Justice, on the other hand, are plainly matters of public record and already determined by the
House of Representatives as constituting probable cause for impeachment.

II

The Court reaffirms its authority to decide the instant quo warranto action. This authority is expressly
conferred on the Supreme Court by the Constitution under Section 5, Article VIII which states that:

Sec. 5. The Supreme Court shall have the following powers:

1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls,
and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

47
x x x x (Emphasis ours)

Section 5 of Article VIII does not limit the Court's quo warranto jurisdiction only to certain public officials
or that excludes impeachable officials therefrom. In Sarmiento v. Mison, 4 the Court ruled:

The task of the Court is rendered lighter by the existence of relatively clear provisions in the Constitution.
In cases like this, we follow what the Court, speaking through Mr. Justice (later, Chief Justice) Jose Abad
Santos stated in Gold Creek Mining Corp. v. Rodriguez, that:

The fundamental principle of constitutional construction is to give effect to the intent of the framers of
the organic law and of the people adopting it. The intention to which force is to be given is that which
is embodied and expressed in the constitutional provisions themselves.5 (Emphasis ours)

The Constitution defines judicial power as a "duty" to be performed by the courts of justice.6 Thus, for
the Court to repudiate its own jurisdiction over this case would be to abdicate a constitutionally
imposed responsibility.

As the Court pointed out in its Decision, this is not the first time the Court took cognizance of a quo
warranto petition against an impeachable officer. In the consolidated cases of Estrada v. Macapagal-
Arroyo7 and Estrada v. Desierto, 8 the Court assumed jurisdiction over a quo warranto petition that
challenged Gloria Macapagal-Arroyo's title to the presidency.

Arguing that the aforesaid cases cannot serve as precedent for the Court to take cognizance of this case,
respondent makes it appear that they involved a totally different issue, one that concerned Joseph E.
Estrada's immunity from suit, specifically: "Whether conviction in the impeachment proceedings is a
condition precedent for the criminal prosecution of petitioner Estrada. In the negative and on the
assumption that petitioner is still President, whether he is immune from criminal prosecution."9

Respondent's allegation is utterly false and misleading. A cursory reading of the cases will reveal that
Estrada's immunity from suit was just one of the issues raised therein. Estrada in fact sought a quo
warranto inquiry into Macapagal-Arroyo's right to assume the presidency, claiming he was simply a
President on leave.

Respondent also asserts that Estrada cannot serve as precedent for the Court to decide this case
because it was dismissed, and unlike the instant petition, it was filed within the prescribed one (1)-year
period under Section 11, Rule 66 of the Rules of Court. 10

The argument fails to persuade. Estrada was dismissed not because the Court had no jurisdiction over
the quo warranto petition but because Estrada's challenge to Macapagal-Arroyo's presidency had no
merit. In ruling upon the merits of Estrada's quo warranto petition, the Court has undeniably exercised
its jurisdiction under Section 5(1) of Article VIII. Thus, Estrada clearly demonstrates that the Court's quo
warranto jurisdiction extends to impeachable officers.

Furthermore, as will be discussed elsewhere in this Resolution, the filing of the instant petition was not
time-barred. The issue of prescription must be addressed in light of the public interest that quo
warranto is meant to protect.

Accordingly, the Court could, as it did in Estrada, assume jurisdiction over the instant quo
warranto petition against an impeachable officer.

Quo warranto and impeachment are two distinct proceedings, although both may result in the ouster of
a public officer. Strictly speaking, quo warranto grants the relief of "ouster", while impeachment affords
"removal."

A quo warranto proceeding is the proper legal remedy to determine a person's right or title to a public
office and to oust the holder from its enjoyment. 11 It is the proper action to inquire into a public
officer's eligibility12 or the validity of his appointment. 13 Under Rule 66 of the Rules of Court, a quo
warranto proceeding involves a judicial determination of the right to the use or exercise of the office.

48
Impeachment, on the other hand, is a political process undertaken by the legislature to determine
whether the public officer committed any of the impeachable offenses, namely, culpable violation of the
Constitution, treason, bribery, graft and corruption, other high crimes, or betrayal of public trust. 14 It
does not ascertain the officer's eligibility for appointment or election, or challenge the legality of his
assumption of office. Conviction for any of the impeachable offenses shall result in the removal of the
impeachable official from office. 15

The OSG 's quo warranto petition challenged respondent's right and title to the position of Chief Justice.
He averred that in failing to regularly disclose her assets, liabilities and net worth as a member of the
career service prior to her appointment as an Associate Justice of the Court, respondent could not be
said to possess the requirement of proven integrity demanded of every aspiring member of the Judiciary.
The OSG thus prayed that respondent's appointment as Chief Justice be declared void.

Clearly, the OSG questioned the respondent's eligibility for appointment as Chief Justice and sought to
invalidate such appointment. The OSG's petition, therefore, is one for quo warranto over which the
Court exercises original jurisdiction.

As the Court previously held, "where the dispute is on the eligibility to perform the duties by the person
sought to be ousted or disqualified a quo warranto is the proper action." 16

Respondent harps on the supposed intent of the framers of the Constitution for impeachable officers to
be removed only through impeachment. 17 However, a circumspect examination of the deliberations of
the 1986 Constitutional Commission will reveal that the framers presumed that the impeachable officers
had duly qualified for the position. Indeed, the deliberations which respondent herself cited 18 showed
that the framers did not contemplate a situation where the impeachable officer was unqualified for
appointment or election.

Accordingly, respondent's continued reliance on the Court's pronouncement in Mayor Lecaroz v.

Sandiganbayan, 19 Cuenca v. Hon. Fernan,20 Jn Re Gonzales,21 Jarque v. Desierto22 and Marcoleta v.
Borra23 (Lecaroz etc.) is misplaced. Not one of these cases concerned the validity of an impeachable
officer's appointment. To repeat, Lecaroz involved a criminal charge against a mayor before the
Sandiganbayan, while the rest were disbarment cases filed against impeachable officers principally for
acts done during their tenure in public office. The officers' eligibility or the validity of their appointment
was not raised before the Court. The principle laid down in said cases is to the effect that during their
incumbency, impeachable officers cannot be criminally prosecuted for an offense that carries with it the
penalty of removal, and if they are required to be members of the Philippine Bar to qualify for their
positions, they cannot be charged with disbarment. The proscription does not extend to actions assailing
the public officer's title or right to the office he or she occupies. The ruling therefore cannot serve as
authority to hold that a quo warranto action can never be filed against an impeachable officer.

The Court's quo warranto jurisdiction over impeachable officers also finds basis in paragraph 7, Section 4,
Article VII of the Constitution which designates it as the sole judge of the qualifications of the President
and Vice-President, both of whom are impeachable officers. With this authority, the remedy of quo
warranto was provided in the rules of the Court sitting as the Presidential Electoral Tribunal (PET).

Respondent, however, argues that quo warranto petitions may be filed against the President and Vice-
President under the PET Rules "only because the Constitution specifically permits" them under Section 4,
Article VII. According to respondent, no counterpart provision exists in the Constitution giving the same
authority to the Court over the Chief Justice, the members of the Constitutional Commissions and the
Ombudsman. Respondent, thus, asserts that the Constitution made a distinction between elected and
appointive impeachable officials, and limited quo warranto to elected impeachable officials. For these
reasons, respondent concludes that by constitutional design, the Court is denied power to remove any
of its members.24

The Court is not convinced. The argument, to begin with, acknowledges that the Constitution in fact
allows quo warranto actions against impeachable officers, albeit respondent limits them to the
President and Vice-President. This admission refutes the very position taken by respondent
that all impeachable officials cannot be sued through quo warranto because they belong to a "privileged

49
class" of officers who can be removed only through impeachment.25 To be sure, Lecaroz, etc. did not
distinguish between elected and appointed impeachable officers.

Furthermore, that the Constitution does not show a counterpart provision to paragraph 7 of Section 4,
Article VII for members of this Court or the Constitutional Commissions does not mean that quo
warranto cannot extend to non-elected impeachable officers. The authority to hear quo
warranto petitions against appointive impeachable officers emanates from Section 5(1) of Article VIII
which grants quo warranto jurisdiction to this Court without qualification as to the class of public
officers over whom the same may be exercised.

Respondent argues that Section 5(1) of Article VIII is not a blanket authority, otherwise paragraph 7 of
Section 4, Article VII would be "superfluous." Superfluity, however, is not the same as inconsistency.
Section 4, Article VII is not repugnant to, and clearly confirms, the Court's quo warranto jurisdiction
under Section 5(1) of Article VIII. Respondent herself has not alleged any irreconcilability in these
provisions.

Indeed, contrary to respondent's claim, Section 4 of Article VII is not meant to limit the Court's quo
warranto jurisdiction under Article VIII of the Constitution. In fact, We held that "[t]he power wielded by
PET is "a derivative of the plenary judicial power allocated to the courts of law, expressly provided in the
Constitution."26 Thus, the authority under Section 4 of Article VII to hear quo warranto petitions assailing
the qualifications of the President and Vice-President is simply a component of the Court's quo
warranto jurisdiction under Article VIII. This finds support in the nature of quo warranto as a remedy to
determine a person's right or title to a public office, 27 which is not confined to claims of ineligibility but
extends to other instances or claims of usurpation or unlawful holding of public office as in the cases
of Lota v. CA and Sangalang,28 Moro v. Del Castillo, Jr.,29 Mendoza v. Allas,30 Sen. Defensor
Santiago v. Sen. Guingona, Jr. 31 and Estrada. It will be recalled that in Estrada, the Court took
cognizance of, and ruled upon, a quo warranto challenge to a vice-president's assumption of the
presidency; the challenge was based, not on ineligibility, but on therein petitioner's claim that he had
not resigned and was simply a president on leave. To sustain respondent's argument, therefore, is to
unduly curtail the Court's judicial power and to dilute the efficacy of quo warranto as a remedy against
the "unauthorized arbitrary assumption and exercise of power by one without color of title or who is not
entitled by law thereto."32 It bears to reiterate that:

While an appointment is an essentially discretionary executive power, it is subject to the limitation that
the appointee should possess none of the disqualifications but all the qualifications required by
law. Where the law prescribes certain qualifications for a given office or position, courts may
determine whether the appointee has the requisite qualifications, absent which, his right or title
thereto may be declared void. 33 (Citations omitted and emphasis ours)

This Court has the constitutional mandate to exercise jurisdiction over quo warranto petitions. And
as Estrada and the PET Rules show, impeachable officers are not immune to quo warranto actions. Thus,
a refusal by the Court to take cognizance of this case would not only be a breach of its duty under the
Constitution, it would also accord respondent an exemption not given to other impeachable officers.
Such privilege finds no justification either in law, as impeachable officers are treated without distinction
under the impeachment provisions34 of the Constitution, or in reason, as the qualifications of the Chief
Justice are no less important than the President's or the Vice-President's.

Respondent's insistence that she could not be removed from office except through impeachment is
predicated on Section 2, Article XI of the Constitution. It reads:

Sec. 2. The President, the Vice-President, the Members of the Supreme Court, the Members of the
Constitutional Commissions, and the Ombudsman may be removed from office on impeachment for,
and conviction of, culpable violation of the Constitution, treason, bribery, graft and corruption, other
high crimes, or betrayal of public trust. All other public officers and employees may be removed from
office as provided by law, but not by impeachment. (Emphasis ours)

By its plain language, however, Section 2 of Article XI does not preclude a quo warranto action
questioning an impeachable officer's qualifications to assume office. These qualifications include age,

50
citizenship and professional experience - matters which are manifestly outside the purview of
impeachment under the above-cited provision.

Furthermore, Section 2 of Article XI cannot be read in isolation from Section 5(1) of Article VIII of the
Constitution which gives this Court its quo warranto jurisdiction, or from Section 4, paragraph 7 of
Article VII of the Constitution which designates the Court as the sole judge of the qualifications of the
President and Vice-President.

In Civil Liberties Union v. The Executive Secretary, 35 the Court held:

It is a well-established rule in constitutional construction that no one provision of the Constitution is to

be separated from all the others, to be considered alone, but that all the provisions bearing upon a
particular subject are to be brought into view and to be so interpreted as to effectuate the great
purposes of the instrument. Sections bearing on a particular subject should be considered and
interpreted together as to effectuate the whole purpose of the Constitution and one section is not to be
allowed to defeat another, if by any reasonable construction, the two can be made to stand together.

In other words, the court must harmonize them, if practicable, and must lean in favor of a construction
which will render every word operative, rather than one which may make the words idle and
nugatory. 36 (Citations omitted)

Section 2 of Article XI provides that the impeachable officers may be removed from office on
impeachment for and conviction of culpable violation of the Constitution, treason, bribery, graft and
corruption, other high crimes, or betrayal of public trust. Lack of qualifications for appointment or
election is evidently not among the stated grounds for impeachment. It is, however, a ground for a quo
warranto action over which this Court was given original jurisdiction under Section 5(1) of Article VIII.
The grant of jurisdiction was not confined to unimpeachable officers. In fact, under Section 4, paragraph
7 of Article VII, this Court was expressly authorized to pass upon the qualifications of the President and
Vice-President. Thus, the proscription against the removal of public officers other than by impeachment
does not apply to quo warranto actions assailing the impeachable officer's eligibility for appointment or
election.

This construction allows all three provisions to stand together and to give effect to the clear intent of
the Constitution to address not only the impeachable offenses but also the issue of qualifications of
public officers, including impeachable officers.

As this Court intoned in its Decision, to take appointments of impeachable officers beyond the reach of
judicial review is to cleanse them of any possible defect pertaining to the constitutionally prescribed
qualifications which cannot otherwise be raised in an impeachment proceeding.

To illustrate this, the Court cited the requirement that the impeachable officer must be a natural-born
citizen of the Philippines. We explained that if it turns out that the impeachable officer is in fact of
foreign nationality, respondent's argument will prevent this Court from inquiring into this important
qualification that directly affects the officer's ability to protect the interests of the State. Unless
convicted of an impeachable offense, the officer will continue in office despite being clearly disqualified
from holding it. We stressed that this could not have been the intent of the framers of the Constitution.

Respondent, however, contends that the above-cited defect will actually constitute a ground for
impeachment because the appointee's continued exercise of public functions despite knowledge of his
foreign nationality amounts to a culpable violation of the Constitution.

The argument is untenable. Citizenship is a qualification issue which this Court has the authority to
resolve. Thus, in Kilosbayan Foundation v. Exec. Sec. Ermita,37 where the appointment of Sandiganbayan
Justice Gregory S. Ong (Ong) to this Court was sought to be annulled for the latter's supposed failure to
comply with the citizenship requirement under the Constitution, We stated that:

Third, as to the proper forum for litigating the issue of respondent Ong's qualification for membership of
this Court. This case is a matter of primordial importance involving compliance with a Constitutional

51
mandate. As the body tasked with the determination of the merits of conflicting claims under the
Constitution, the Court is the proper forum for resolving the issue, even as the JBC has the initial
competence to do so.38 (Citation omitted and emphasis ours)

In the subsequent case of Topacio v. Assoc. Justice Gregory Santos Ong, et al.,39 Ong's citizenship was
raised anew, this time to prevent him from further exercising the office of a Sandiganbayan Associate
Justice. The Court held that the challenge was one against Ong's title to the office which must be raised
in a quo warranto proceeding, thus:

While denominated as a petition for certiorari and prohibition, the petition partakes of the nature of
a quo warranto proceeding with respect to Ong, for it effectively seeks to declare null and void his
appointment as an Associate Justice of the Sandiganbayan for being unconstitutional. While the
petition professes to be one for certiorari and prohibition, petitioner even adverts to a quo
warranto aspect of the petition.

Being a collateral attack on a public officer's title, the present petition for certiorari and prohibition must
be dismissed.

The title to a public office may not be contested except directly, by quo warranto proceedings; and it
cannot be assailed collaterally, even through mandamus or a motion to annul or set aside order.
In Nacionalista Party v. De Vera, the Court ruled that prohibition does not lie to inquire into the validity
of the appointment of a public officer.

x x x [T]he writ of prohibition, even when directed against persons acting as judges or other judicial
officers, cannot be treated as a substitute for quo warranto or be rightfully called upon to perform any
of the functions of the writ. If there is a court, judge or officer de facto, the title to the office and the
right to act cannot be questioned by prohibition. If an intruder takes possession of a judicial office, the
person dispossessed cannot obtain relief through a writ of prohibition commanding the alleged intruder
to cease from performing judicial acts, since in its very nature prohibition is an improper remedy by
which to determine the title to an office.40 (Citations omitted and emphasis ours)

Determining title to the office on the basis of a public officer's qualifications is the function of quo
warranto. For this reason, impeachment cannot be treated as a substitute for quo warranto.

Furthermore, impeachment was designed as a mechanism "to check abuse of power."41 The grounds for
impeachment, including culpable violation of the Constitution, have been described as referring to
"serious crimes or misconduct"42 of the "vicious and malevolent" kind.43 Citizenship issues are hardly
within the ambit of this constitutional standard.

The Constitution must be construed in light of the object sought to be accomplished and the evils sought
to be prevented or remedied.44 An interpretation that would cause absurdity is not favored.45

It thus bears to reiterate that even the PET Rules expressly provide for the remedy of election protest.
Following respondent's theory that an impeachable officer can be removed only through impeachment
means that a President or Vice-President against whom an election protest has been filed can demand
for the dismissal of the protest on the ground that it can potentially cause his/her removal from office
through a mode other than by impeachment. To sustain respondent's position is to render election
protests under the PET Rules nugatory. The Constitution could not have intended such absurdity since
fraud and irregularities in elections cannot be countenanced, and the will of the people as reflected in
their votes must be determined and respected.

The preposterousness of allowing unqualified public officials to continue occupying their positions by
making impeachment the sole mode of removing them was likewise aptly discussed by Our esteemed
colleague Justice Estela M. Perlas-Bernabe when she stated that qualification should precede
authority, viz:

Owing to both the "political" and "offense-based" nature of these grounds, I am thus inclined to believe
that impeachment is not the sole mode of "removing" impeachable officials as it be clearly absurd for

52
any of them to remain in office despite their failure to meet the minimum eligibility requirements, which
failure does not constitute a ground for impeachment. Sensibly, there should be a remedy to oust all our
public officials, no matter how high-ranking they are or criticial their functions may be, upon a
determination that they have not actually qualified for election or appointment. While I do recognize
the wisdom of insulating impeachable officials from suits that may impede the performance of vital
public functions, ultimately, this concern cannot override the basic qualification requirements of public
office. There is no doubt that qualification should precede authority. Every public office is created and
conferred by law.xx x. 46 (Emphasis in the original)

Underlying all constitutional provisions on government service is the principle that public office is a
public trust.47 The people, therefore, have the right to have only qualified individuals appointed to public
office. To construe Section 2, Article XI of the Constitution as proscribing a quo warranto petition is to
deprive the State of a remedy to correct a public wrong arising from defective or void appointments.
Equity, however, will not suffer a wrong to be without remedy.48 It stands to reason, therefore, that quo
warranto should be available to question the validity of appointments especially of impeachable officers
since they occupy the upper echelons of government and are capable of wielding vast power and
influence on matters of law and policy.

III

Much noise and hysteria have been made that a sitting Chief Justice can only be removed by
impeachment and that quo warranto is an improper remedy not sanctioned by the Constitution. The
wind of disinformation was further fanned by respondent who claimed that her ouster was orchestrated
by the President. This campaign of misinformation attempted to conceal and obfuscate the fact that the
main issue in the petition which the Court is tasked to resolve is the qualification of respondent.

In the instant motion, respondent made mention of Senate Resolution No. 738,49 which urges this Court
to review Our May 11, 2018 Decision as it sets a "dangerous precedent that transgresses the exclusive
powers of the legislative branch to initiate, try and decide all cases of impeachment." This Resolution
was supposedly aimed to express "the sense of the Senate to uphold the Constitution on the matter of
removing a Chief Justice from office." We have to remind the respondent, however, that while a
majority of the Senators - 14 out of the 23 members - signed the said Resolution, the same has not yet
been adopted by the Senate to date. In fact, the Court takes judicial notice that on May 31, 2018, the
Senate adjourned its interpellation without any conclusion as to whether the Resolution is
adopted. 50 Without such approval, the Senate Resolution amounts to nothing but a mere scrap of paper
at present.

The Senate Resolution also appears to have been drafted, signed by some Senators, and interpellated on
while respondent's motion for reconsideration is still pending consideration by the Court. While the
concerned Members of the Senate insist on non-encroachment of powers, the Senate Resolution itself
tends to influence, if not exert undue pressure on, the Court on how it should resolve the pending
motion for reconsideration. The importance and high regard for the institution that is the Senate is
undisputed. But the Court, in the discharge of its Constitutional duty, is also entitled to the same degree
of respect and deference.

At any rate, and with due regard to the Members of the Senate, We emphasize that the judicial
determination of actual controversies presented before the courts is within the exclusive domain of the
Judiciary. "The separation of powers doctrine is the backbone of our tripartite system of government. It
is implicit in the manner that our Constitution lays out in separate and distinct Articles the powers and
prerogatives of each co-equal branch of government."51 Thus, the act of some of the Senators
questioning the Court's judicial action is clearly an unwarranted intrusion to the Court's powers and
mandate.

To disabuse wandering minds, there is nothing violative or intrusive of the Senate's power to remove
impeachable officials in the main Decision. In fact, in the said assailed Decision, We recognized that the
Senate has the sole power to try and decide all cases of impeachment. We have extensively discussed

53
therein that the Court merely exercised its Constitutional duty to resolve a legal question referring to
respondent's qualification as a Chief Justice of the Supreme Court. We also emphasized that this Court's
action never intends to deprive the Congress of its mandate to make a determination on impeachable
officials' culpability for acts committed while in office. We even explained that impeachment and quo
warranto may proceed independently and simultaneously, albeit a ruling of removal or ouster of the
respondent in one case will preclude the same ruling in the other due to legal impossibility and
mootness.

Quo warranto is not a figment of imagination or invention of this Court. It is a mandate boldly enshrined
in the Constitution52 where the judiciary is conferred original jurisdiction to the exclusion of the other
branches of the government. Quo warranto, not impeachment, is the constitutional remedy prescribed
to adjudicate and resolve questions relating to qualifications, eligibility and entitlement to public office.
Those who chose to ignore this fact are Constitutionally blind. US Supreme Court Justice Scalia once
said: "If it is in the Constitution, it is there. If it is not in the Constitution, it is not there." 53 There is
nothing in Our Constitution that says that impeachable officers are immuned, exempted, or excluded
from quo warranto proceedings when the very issue to be determined therein is the status of an officer
as such. No amount of public indignation can rewrite or deface the Constitution.

IV

The plain issue in the instant case is whether respondent is eligible to occupy the position of Chief
Justice. To determine whether or not respondent is eligible, the primordial consideration is whether
respondent met the requisite Constitutional requirements for the position. Questions on eligibility
therefore present a justiciable issue, which can be resolved by juxtaposing the facts with the
Constitution, as well as pertinent laws and jurisprudence. In Kilosbayan Foundation,54 the Court affirmed
its jurisdiction to resolve the issue on the qualification for membership of this Court as the body tasked
with the determination of the merits of conflicting claims under the Constitution, even when the JBC has
the initial competence to do so. 55

True enough, constitutionally committed to the JBC is the principal function of recommending
appointees to the Judiciary. The function to recommend appointees carries with it the concomitant duty
to screen applicants therefor. The JBC's exercise of its recommendatory function must nevertheless
conform with the basic premise that the appointee possesses the non-negotiable qualifications
prescribed by the Constitution. While the JBC enjoys a certain leeway in screening aspiring magistrates,
such remains to be tightly circumscribed by the Constitutional qualifications for aspiring members of the
Judiciary. 56 These Constitutional prerequisites are therefore deemed written into the rules and
standards which the JBC may prescribe in the discharge of its primary function. The JBC cannot go
beyond or less than what the Constitution prescribes.

The surrender to the JBC of the details as to how these qualifications are to be determined is rendered
necessary and in keeping with its recommendatory function which is nevertheless made expressly
subject to the Court's exercise of supervision.

As an incident of its power of supervision over the JBC, the Court has the authority to insure that the JBC
performs its duties under the Constitution and complies with its own rules and standards. Indeed,
supervision is an active power and implies the authority to inquire into facts and conditions that renders
the power of supervision real and effective. 57 Under its power of supervision, the Court has ample
authority to look into the processes leading to respondent's nomination for the position of Chief Justice
on the face of the Republic's contention that respondent was ineligible to be a candidate to the position
to begin with.

Arguments were raised against the Court's assumption over the quo warranto petition on the premise
that the determination of the integrity requirement lies solely on the JBC's discretion and thus, a prior
nullification of the JBC's act on the ground of grave abuse of discretion through a certiorari petition is
the proper legal route.

The question of whether or not a nominee possesses the reqms1te qualifications is determined based
on facts and as such, generates no exercise of discretion on the part of the nominating body. Thus,

54
whether a nominee is of the requisite age, is a natural-born citizen, has met the years of law practice,
and is of proven competence, integrity, probity, and independence are to be determined based on facts
and cannot be made dependent on inference or discretion, much less concessions, which the
recommending authority may make or extend. To say that the determination of whether a nominee is of
"proven integrity" is a task absolutely contingent upon the discretion of the JBC is to place the integrity
requirement on a plateau different from the rest of the Constitutional requirements, when no such
distinction is assigned by the Constitution. As well, to treat as discretionary on the part of the JBC the
question of whether a nominee is of "proven integrity" is to render the Court impotent to nullify an
otherwise unconstitutional nomination unless the Court's jurisdiction is invoked on the ground of grave
abuse of discretion. Such severely limiting course of action would effectively diminish the Court's
collegial power of supervision over the JBC.

To re-align the issue in this petition, the Republic charges respondent of unlawfully holding or exercising
the position of Chief Justice of the Supreme Court. The contents of the petition pose an attack to
respondent's authority to hold or exercise the position. Unmoving is the rule that title to a public office
may not be contested except directly, by quo warranto proceedings. 58 As it cannot be assailed
collaterally, certiorari is an infirm remedy for this purpose. It is for this reason that the Court previously
denied a certiorari and prohibition petition which sought to annul appointment to the Judiciary of an
alleged naturalized citizen. 59

Aguinaldo, et al. v. Aquino, et al., 60 settles that when it is the qualification for the position that is in
issue, the proper remedy is quo warranto pursuant to Topacio. 61 But when it is the act of the appointing
power that is placed under scrutiny and not any disqualification on the part of the appointee, a petition
for certiorari challenging the appointment for being unconstitutional or for having been done in grave
abuse of discretion is the apt legal course. In Aguinaldo, the Court elucidated:

The Court recognized in Jardeleza v. Sereno that a petition for certiorari is a proper remedy to question
the act of any branch or instrumentality of the government on the ground of grave abuse of discretion
amounting to lack or excess of jurisdiction by any branch or instrumentality of the government, even if
the latter does not exercise judicial, quasi-judicial or ministerial functions.

In opposing the instant Petition for Certiorari and Prohibition, the OSG cites Topacio in which the Court
declares that title to a public office may not be contested except directly, by quo warranto proceedings;
and it cannot be assailed collaterally, such as by certiorari and prohibition.

However, Topacio is not on all fours with the instant case. In Topacio, the writs of certiorari and
prohibition were sought against Sandiganbayan Associate Justice Gregory S. Ong on the ground that he
lacked the qualification of Filipino citizenship for said position. In contrast, the present Petition
for Certiorari and Prohibition puts under scrutiny, not any disqualification on the part of respondents
Musngi and Econg, but the act of President Aquino in appointing respondents Musngi and Econg as
Sandiganbayan Associate Justices without regard for the clustering of nominees into six separate
shortlists by the JBC, which allegedly violated the Constitution and constituted grave abuse of discretion
amounting to lack or excess of jurisdiction. This would not be the first time that the Court, in the
exercise of its expanded power of judicial review, takes cognizance of a petition for certiorari that
challenges a presidential appointment for being unconstitutional or for having been done in grave abuse
of discretion.xx x.62 (Italics and citations omitted.)

A certiorari petition also lacks the safeguards installed in a quo warranto action specifically designed to
promote stability in public office and remove perpetual uncertainty in the title of the person holding the
office. For one, a certiorari petition thrives on allegation and proof of grave abuse of discretion. In a quo
warranto action, it is imperative to demonstrate that the respondent have usurped, intruded into or
unlawfully held or exercised a public office, position or franchise.

For another, certiorari may be filed by any person alleging to have been aggrieved by an act done with
grave abuse of discretion. In a quo warranto action, it is the Solicitor General or a public prosecutor,
when directed by the President or when upon complaint or when he has good reason to believe that the
grounds for quo warranto can be established by proof, who must commence the action. The only
instance when an individual is allowed to commence such action is when he or she claims to be entitled

55
to a public office or position usurped or unlawfully held or exercised by another. In such case, it is
incumbent upon the private person to present proof of a clear and indubitable right to the office.
If certiorari is accepted as the proper legal vehicle to assail eligibility to public office then any person,
although unable to demonstrate clear and indubitable right to the office, and merely upon claim of
grave abuse of discretion, can place title to public office in uncertainty.

Tellingly also, the rules on quo warranto do not require that the recommending or appointing authority
be impleaded as a necessary party, much less makes the nullification of the act of the recommending
authority a condition precedent before the remedy of quo warranto can be availed of. The JBC itself did
not bother to intervene in the instant petition.

Under Section 6, Rule 66 of the Rules of Court, when the action is against a person for usurping a public
office, position or franchise, it is only required that, if there be a person who claims to be entitled
thereto, his or her name should be set forth in the petition with an averment of his or her right to the
office, position or franchise and that the respondent is unlawfully in possession thereof. All persons
claiming to be entitled to the public office, position or franchise may be made parties and their
respective rights may be determined in the same quo warranto action. The appointing authority, or in
this case the recommending authority which is the JBC, is therefore not a necessary party in a quo
warranto action.

Peculiar also to the instant petition is the surrounding circumstance that an administrative matter
directly pertaining to the nomination of respondent is pending before the Court. While the
administrative matter aims to determine whether there is culpability or lapses on the part of the JBC
members, the factual narrative offered by the latter are all extant on record which the Court can take
judicial notice of. Thus, considerations regarding the lack of due process on the part of the JBC present
only a superficial resistance to the Court's assumption of jurisdiction over the instant quo
warranto petition.

In any case, the rules on quo warranto vests upon the Court ancillary jurisdiction to render such further
judgment as "justice requires."63 Indeed, the doctrine of ancillary jurisdiction implies the grant of
necessary and usual incidental powers essential to effectuate its jurisdiction and subject to existing laws
and constitutional provisions, every regularly constituted court has power to do all things that are
reasonably necessary for the administration of justice within the scope of its jurisdiction and for the
enforcement of its judgments and mandates. 64 Accordingly, "demands, matters or questions ancillary or
incidental to, or growing out of, the main action, and coming within the above principles, may be taken
cognizance of by the court and determined, since such jurisdiction is in aid of its authority over the
principal matter, even though the court may thus be called on to consider and decide matters which, as
original causes of action, would not be within its cognizance."65

This Court had likewise amply laid down the legal and factual bases for its ruling against the dismissal of
the instant petition on the ground of prescription. Our ruling on this matter is anchored upon the very
purpose of such prescriptive period as consistently held by this Court for decades and also upon
consideration of the unique underlying circumstances in this case which cannot be ignored.

In addition to the catena of cases cited in the assailed Decision, the Court, in Madrigal v. Prov. Gov.
Lecaroz, 66 exhaustively explained the rationale behind the prescriptive period:

The unbending jurisprudence in this jurisdiction is to the effect that a petition for quo
warranto and mandamus affecting titles to public office must be filed within one (1) year from the date
the petitioner is ousted from his position. xx x The reason behind this being was expounded in the case
of Unabia v. City Mayor, etc., x x x where We said:

"x x x[W]e note that in actions of quo warranto involving right to an office, the action must be instituted
within the period of one year. This has been the law in the island since 1901, the period having been
originally fixed in Section 216 of the Code of Civil Procedure (Act No. 190). We find this provision to be
an expression of policy on the part of the State that persons claiming a right to an office of which they

56
are illegally dispossessed should immediately take steps to recover said office and that if they do not
do so within a period of one year, they shall be considered as having lost their right thereto by
abandonment. There are weighty reasons of public policy and convenience that demand the adoption
of a similar period for persons claiming rights to positions in the civil service. There must be stability in
the service so that public business may [not] be unduly retarded; delays in the statement of the right
to positions in the service must be discouraged. The following considerations as to public officers, by
Mr. Justice Bengzon, may well be applicable to employees in the civil service:

'Furthermore, constitutional rights may certainly be waived, and the inaction of the officer for one year
could be validly considered as waiver, i.e., a renunciation which no principle of justice may prevent, he
being at liberty to resign his position anytime he pleases.

And there is good justification for the limitation period; it is not proper that the title to public office
should be subjected to continued uncertain[t]y, and the peoples' interest require that such right should
be determined as speedily as practicable.'

"Further, the Government must be immediately informed or advised if any person claims to be
entitled to an office or a position in the civil service as against another actually holding it, so that the
Government may not be faced with the predicament of having to pay the salaries, one, for the person
actually holding the office, although illegally, and another, for one not actually rendering service
although entitled to do so.xx x."67 (Citations omitted and emphasis ours)

The long line of cases decided by this Court since the l 900's, which specifically explained the spirit
behind the rule providing a prescriptive period for the filing of an action for quo warranto, reveals that
such limitation can be applied only against private individuals claiming rights to a public
office, not against the State.

Indeed, there is no proprietary right over a public office. Hence, a claimed right over a public office may
be waived. In fact, even Constitutionally-protected rights may be waived. Thus, We have consistently
held that the inaction of a person claiming right over a public office to assert the same within the
prescriptive period provided by the rules, may be considered a waiver of such right. This is where the
difference between a quo warranto filed by a private individual as opposed to one filed by the State
through the Solicitor General lies. There is no claim of right over a public office where it is the State itself,
through the Solicitor General, which files a petition for quo warranto to question the eligibility of the
person holding the public office. As We have emphasized in the assailed Decision, unlike
Constitutionally-protected rights, Constitutionally-required qualifications for a public office can never be
waived either deliberately or by mere passage of time. While a private individual may, in proper
instances, be deemed to have waived his or her right over title to public office and/or to have
acquiesced or consented to the loss of such right, no organized society would allow, much more a
prudent court would consider, the State to have waived by mere lapse of time, its right to uphold and
ensure compliance with the requirements for such office, fixed by no less than the Constitution, the
fundamental law upon which the foundations of a State stand, especially so when the government
cannot be faulted for such lapse.

On another point, the one-year prescriptive period was necessary for the government to be immediately
informed if any person claims title to an office so that the government may not be faced with the
predicament of having to pay two salaries, one for the person actually holding it albeit illegally, and
another to the person not rendering service although entitled to do so. It would thus be absurd to
require the filing of a petition for quo warranto within the one-year period for such purpose when it is
the State itself which files the same not for the purpose of determining who among two private
individuals are entitled to the office. Stated in a different manner, the purpose of the instant petition is
not to inform the government that it is facing a predicament of having to pay two salaries; rather, the
government, having learned of the predicament that it might be paying an unqualified person, is acting
upon it head-on.

Most importantly, urgency to resolve the controversy on the title to a public office to prevent a hiatus or
disruption in the delivery of public service is the ultimate consideration in prescribing a limitation on
when an action for quo warranto may be instituted. However, it is this very same concern that precludes

57
the application of the prescriptive period when it is the State which questions the eligibility of the
person holding a public office and not merely the personal interest of a private individual claiming title
thereto. Again, as We have stated in the assailed Decision, when the government is the real party in
interest and asserts its rights, there can be no defense on the ground of laches or limitation, 68 otherwise,
it would be injurious to public interest if this Court will not act upon the case presented before it by the
Republic and merely allow the uncertainty and controversy surrounding the Chief Justice position to
continue.

Worthy to mention is the fact that this is not the first time that this Court precluded the application of
the prescriptive period in filing a petition for quo warranto. In Cristobal v. Melchor,69 the Court
considered certain exceptional circumstances attending the case, which took it out of the rule on the
one-year prescriptive period. Also, in Agcaoili v. Suguitan, 70 the Court considered, among others,
therein petitioner's good faith and the injustice that he suffered due to his forcible ouster from office in
ruling that he is not bound by the provision on the prescriptive period in filing his action for quo
warranto to assert his right to the public office. When the Court in several cases exercised liberality in
the application of the statute of limitations in favor of private individuals so as not to defeat their
personal interests on a public position, is it not but proper, just, reasonable, and more in accord with the
spirit of the rule for this Court to decide against the application of the prescriptive period considering
the public interest involved? Certainly, it is every citizen's interest to have qualified individuals to hold
public office, especially which of the highest position in the Judiciary.

From the foregoing disquisition, it is clear that this Court's ruling on the issue of prescription is not
grounded upon provisions of the Civil Code, specifically Article 1108(4)71 thereof. Instead, the mention
thereof was intended merely to convey that if the principle that "prescription does not lie against the
State" can be applied with regard to property disputes, what more if the underlying consideration is
public interest.

To be clear, this Court is not abolishing the limitation set by the rules in instituting a petition for quo
warranto. The one-year prescriptive period under Section 11, Rule 66 of the Rules of Court still stands.
However, for reasons explained above and in the main Decision, this Court made distinctions as to when
such prescriptive period applies, to wit: (1) when filed by the State at its own instance, through the
Solicitor General, 72 prescription shall not apply. This, of course, does not equate to a blanket authority
given to the Solicitor General to indiscriminately file baseless quo warranto actions in disregard of the
constitutionally-protected rights of individuals; (2) when filed by the Solicitor General or public
prosecutor at the request and upon relation of another person, with leave of court, 73 prescription shall
apply except when established jurisprudential exceptions 74 are present; and (3) when filed by an
individual in his or her own name, 75 prescription shall apply, except when established jurisprudential
exceptions are present. In fine, Our pronouncement in the assailed Decision as to this matter explained
that certain circumstances preclude the absolute and strict application of the prescriptive period
provided under the rules in filing a petition for quo warranto.

Thus, this Court finds no reason to reverse its ruling that an action for quo warranto is imprescriptible if
brought by the State at its own instance, as in the instant case.

In any case, and as aptly discussed in the main Decision, the peculiarities of the instant case preclude
strict application of the one-year prescriptive period against the State. As observed by Justice Perlas-
Bernabe in her Separate Opinion, "x x x if there is one thing that is glaringly apparent from these
proceedings, it is actually the lack of respondent's candor and forthrightness in the submission of her
SALNs."76 Respondent's actions prevented the State from discovering her disqualification within the
prescriptive period. Most certainly, thus the instant case is one of those proper cases where the one-
year prescriptive period set under Section 11, Rule 66 of the Rules of Court should not apply.

VI

Respondent reiterates her argument that her case should be treated similarly as in Concerned Taxpayer
v. Doblada Jr. 77

58
As extensively discussed in the main Decision, respondent, unlike Doblada, did not present contrary
proof to rebut the Certifications from U.P. HRDO that respondent's SALNs for 1986, 1987, 1988, 1992,
1999, 2000, 2001, 2003, 2004, 2005 and 2006 are not in its possession and from the Ombudsman that
based on its records, there is no SALN filed by respondent except that for 1998. Being uncontroverted,
these documents suffice to support this Court's conclusion that respondent failed to file her SALNs in
accordance with law.

In Doblada, the contrary proof was in the form of the letter of the head of the personnel of Branch 155
that the SALN for 2000 exists and was duly transmitted and received by the Office of the Court
Administrator as the repository agency. In respondent's case, other than her bare allegations attacking
the credibility of the aforesaid certifications from U.P. HR.DO and the Ombudsman, no supporting proof
was presented. It bears to note that these certifications from the aforesaid public agencies enjoy a
presumption that official duty has been regularly performed. These certifications suffice as proof of
respondent's failure to file her SALN until contradicted or overcome by sufficient evidence.
Consequently, absent a countervailing evidence, such disputable presumption becomes conclusive. 78

As what this Court has stated in its May 11, 2018 Decision, while government employees cannot be
required to keep their SALNs for more than 10 years based from the provisions of Section 8, paragraph
C(4) of Republic Act No. 6713,79 the same cannot substitute for respondent's manifest ineligibility at the
time of her application. Verily, even her more recent SALNs, such as those in the years of 2002 to 2006,
which in the ordinary course of things would have been easier to retrieve, were not presented nor
accounted for by respondent.

Respondent attempts to strike a parallelism with Doblada by claiming that she, too, religiously filed her
SALNs. The similarity however, ends there. Unlike in Doblada, respondent failed to present contrary
proof to rebut the evidence of non-filing. If, indeed, she never missed filing her SALNs and the same
were merely lost, or missing in the records of the repository agency, this Court sees nothing that would
prevent respondent from securing a Certification which would provide a valid or legal reason for the
copies' non-production.

VII

Respondent insists that the filing of SALNs bears no relation to the Constitutional qualification of
integrity.1âwphi1 For her, the measure of integrity should be as what the JBC sets it to be and that in
any case, the SALN laws, being malum prohibitum, do not concern adherence to moral and ethical
principles.

Respondent's argument, however, dangerously disregards that the filing of SALN is not only a
requirement under the law, but a positive duty required from every public officer or employee, first and
foremost by the Constitution. 80 The SALN laws were passed in aid of the enforcement of the
Constitutional duty to submit a declaration under oath of one's assets, liabilities, and net worth. This
positive Constitutional duty of filing one's SALN is so sensitive and important that it even shares the
same category as the Constitutional duty imposed upon public officers and employees to owe allegiance
to the State and the Constitution. 81 As such, offenses against the SALN laws are not ordinary offenses
but violations of a duty which every public officer and employee owes to the State and the Constitution.
In other words, the violation of SALN laws, by itself, defeats any claim of integrity as it is inherently
immoral to violate the will of the legislature and to violate the Constitution.

Integrity, as what this Court has defined in the assailed Decision, in relation to a judge's qualifications,
should not be viewed separately from the institution he or she represents. Integrity contemplates both
adherence to the highest moral standards and obedience to laws and legislations. Integrity, at its
minimum, entails compliance with the law.

In sum, respondent has not presented any convincing ground that would merit a modification or
reversal of Our May 11, 2018 Decision. Respondent, at the time of her application, lacked proven
integrity on account of her failure to file a substantial number of SALNs and also, her failure to submit
the required SALNs to the JBC during her application for the position. Although deviating from the
majority opinion as to the proper remedy, Justice Antonio T. Carpio shares the same finding:

59
Since respondent took her oath and assumed her posit10n as Associate Justice of the Supreme Court on
16 August 2010, she was required to file under oath her SALN within thirty (30) days after assumption of
office, or until 15 September 2010, and the statements must be reckoned as of her first day of service,
pursuant to the relevant provisions on SALN filing.

However, respondent failed to file a SALN containing sworn statements reckoned as of her first day of
service within thirty (30) days after assuming office. While she allegedly submitted an "entry SALN" on
16 September 2010, it was unsubscribed and the statements of her assets, liabilities and net worth were
reckoned as of 31 December 2009, and not as of her first day of service, or as of 16 August 2010. x x x

xxxx

The Constitution, law, and rules clearly require that the sworn entry SALN "must be reckoned as of
his/her first day of service" and must be filed "within thirty (30) days after assumption of office."
Evidently, respondent failed to file under oath a SALN reckoned as of her first day of service, or as of 16
August 2010, within the prescribed period of thirty (30) days after her assumption of office. In other
words, respondent failed to file the required SALN upon her assumption of office, which is a clear
violation of Section 17, Article XI of the Constitution. In light of her previous failure to file her SALNs for
several years while she was a UP College of Law Professor, her failure to file her SALN upon assuming
office in 2010 as Associate Justice of this Court constitutes culpable violation of the Constitution, a
violation committed while she was already serving as an impeachable office.82 (Citation omitted and
emphasis ours)

Having settled respondent's ineligibility and ouster from the position, the Court reiterates its directive to
the JBC to immediately commence the application, nomination and recommendation process for the
position of Chief Justice of the Supreme Court.

WHEREFORE, respondent Maria Lourdes P. A. Sereno's Ad Cautelam Motion for Reconsideration

is DENIED with FINALITY for lack of merit. No further pleadings shall be entertained. Let entry of
judgment be made immediately.

The Court REITERATES its order to the Judicial and Bar Council to commence the application and
nomination process for the position of the Chief Justice without delay. The ninety-day (90) period83 for
filling the vacancy shall be reckoned from the date of the promulgation of this Resolution.

SO ORDERED.

NOEL GIMENEZ TIJAM

Associate Justice

THIRD DIVISION

January 30, 2019

G.R. No. 189162

POLO PLANTATION AGRARIAN REFORM MULTIPURPOSE COOPERATIVE (POPARMUCO), REPRESENTED

BY SILANDO GOMEZ AND ELIAS RAMOS, Petitioner
vs.
RODOLFO T. INSON, CESO III, AS REGIONAL DIRECTOR OF THE DEPARTMENT OF AGRARIAN REFORM,
REGION VII - CEBU CITY, Respondent

DECISION

LEONEN, J.:

Respondent Rodolfo T. Inson (Regional Director Inson)'s cognizance of the Petition for
Inclusion/Exclusion of farmer beneficiaries, and his subsequent issuance of the March 12, 2010 Order

60
disqualifying some members of petitioner Polo Plantation Agrarian Reform Multipurpose Cooperative
(POPARMUCO), were improper. Nonetheless, these acts do not constitute an indirect contempt of court.

For this Court's resolution is a Petition for Contempt1 filed by POPARMUCO, a duly organized and
registered cooperative of agrarian reform beneficiaries,2 against Regional Director Inson of the
Department of Agrarian Reform, Region VII, Cebu City.

Sometime in 2003, a 394.9020-hectare portion of the landholding3 owned by Polo Coconut Plantation,
Inc. (Polo Coconut) in Polo, Tanjay, Negros Oriental was placed under the coverage of the
Comprehensive Agrarian Reform Program, pursuant to Republic Act No. 6657 or the Comprehensive
Agrarian Reform Law.4 A Notice of Coverage was sent on May 23, 2003 to Polo Coconut President Rene
Espina (Espina).5

On December 11, 2003, the Department of Agrarian Reform received from the Land Bank of the
Philippines a Memorandum of Valuation, indicating the amount of ₱85,491,784.60 as just compensation
for 393.1327 hectares6 of Polo Coconut property. A Notice of Land Valuation and Acquisition was then
sent to Polo Coconut. On January 16, 2004, a Certificate of Deposit was issued to Polo Coconut for the
said amount.7

After Polo Coconut failed to reply to the Notice of Land Valuation and Acquisition, the Department of
Agrarian Reform conducted summary administrative proceedings to determine just compensation. In his
March 31, 2004 Resolution,8 Regional Adjudicator Atty. Arnold C. Arrieta (Regional Adjudicator Arrieta)
of the Department of Agrarian Reform Adjudication Board (the Adjudication Board), Region VII, Cebu
City affirmed the valuation offered by Land Bank of the Philippines in the amount of ₱85,491,784.60.9

Meanwhile, Polo Coconut's title was canceled in favor of the Republic of the Philippines. On January 27,
2004, a collective Certificate of Land Ownership Award, with CLOA No. 00114438, was issued. It was
registered on January 30, 2004, under Transfer Certificate of Title (TCT) No. T-802,10 in favor of
POPARMUCO members whom the Department of Agrarian Reform identified as agrarian reform
beneficiaries.11

Subsequently, the Provincial Agrarian Reform Officer of Negros Oriental, Stephen Leonidas, sent Espina
a letter dated July 16, 2004, informing him of the Department of Agrarian Reform's intention to proceed
with the relocation survey of the property.12 Polo Coconut moved for the suspension of the survey, but
Regional Adjudicator Arrieta denied the Motion for lack of jurisdiction.13

Polo Coconut filed before the Court of Appeals a Petition for Certiorari questioning the propriety of
subjecting its property to the Comprehensive Agrarian Reform Program. It contended that the City of
Tanjay had already reclassified the area into a mixed residential, commercial, and industrial land. It also
assailed the eligibility of the identified agrarian reform beneficiaries.14

On February 16, 2005, the Court of Appeals ruled in favor of Polo Coconut. It found that the Polo
Coconut property was no longer an agricultural land when the Department of Agrarian Reform placed it
under the Comprehensive Agrarian Reform Program. Further, it held that the identified beneficiaries
were not qualified as beneficiaries, as they were not tenants of Polo Coconut.15 The Court of Appeals
disposed as follows:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DECLARING as NOT
VALID the acts of the [Department of Agrarian Reform] of subjecting PCPCI’s [Polo estate] to the
coverage of the CARP, of canceling and causing the cancellation of [PCPCI’s] Transfer Certificate of Title
No. T-2304 covering such land, of issuing or causing the issuance of Transfer Certificate of Title No. T-
36318 for this land in the name of the Republic of the Philippines by way of transfer to it, of issuing or
causing the issuance of Transfer Certificate of Title No. T-802 for the said land in the names of
[petitioner-beneficiaries] in the case at bench by way of award of them of such land as purported farm
beneficiaries and of doing other things with the end in view of subjecting [the Polo estate] to CARP
coverage, SETTING ASIDE and ENJOINING such acts and the consequence thereof, ORDERING the
[petitioner-beneficiaries] to vacate the premises of [the Polo estate] if they had entered such premises,
and ORDERING the respondent Register of Deeds of Negros Oriental to cancel Transfer Certificate of

61
Title Nos. T-36318 and T-802 and to reinstate Transfer Certificate of Title No. T-2304 in the name of
petitioner PCPCI.

SO ORDERED.16 (Citation omitted)

In its September 3, 2008 Decision, this Court in Department of Agrarian Reform v. Polo Coconut
Plantation Company, Inc.17 reversed the Court of Appeals Decision.18 It confirmed the acts of the
Department of Agrarian Reform, through the Provincial Agrarian Reform Officer, and declared the
issuance of TCT No. T-802 and CLOA No. 00114438 as valid. This Court also ruled that Polo Coconut did
not exhaust its administrative remedies when it directly filed a Petition for Certiorari before the Court of
Appeals instead of first filing a protest or opposition before the Department Secretary.19 Furthermore, it
held that the property was never placed beyond the scope of the Comprehensive Agrarian Reform
Program, as the Department Secretary never approved the land's conversion.20

This Court further recognized the Department of Agrarian Reform as the proper authority to identify and
select agrarian reform beneficiaries. Courts, it ruled, cannot substitute their judgment unless there is a
clear showing of grave abuse of discretion.21 This Court farther held that the Department of Agrarian
Reform could not be deemed to have gravely abused its discretion just because its chosen beneficiaries
were not tenants of Polo Coconut. Section 22 of the Comprehensive Agrarian Reform Law, it ruled,
"does not limit qualified beneficiaries to tenants of the landowners."22

The September 3, 2008 Decision became final and executory on November 26, 2008.23

On June 30, 2009, 164 alleged regular farmworkers of Polo Coconut (Alcantara, et al.) filed a Petition for
Inclusion as qualified beneficiaries in TCT No. T-802/CLOA No. 00114438 and Exclusion of those named
as beneficiaries therein (Petition for Inclusion/Exclusion).24 They were allegedly not informed when the
Department of Agrarian Reform conducted the identification and screening process for potential
beneficiaries.25 They contend that the Certificate of Land Ownership Award holders were not qualified
beneficiaries under Section 22 of the Comprehensive Agrarian Reform Law.26

On July 1, 2009, Alcantara, et al. also filed a Petition for Immediate Issuance of a Cease and Desist Order
and/or Injunction.27 They averred that the Certificate of Land Ownership Award holders had attempted
to occupy the property even without authority from the Department of Agrarian Reform. Moreover, the
Municipal Agrarian Reform Officer of Tanjay had allegedly scheduled the relocation and subdivision of
the property for the final installation of the qualified beneficiaries. Thus, they sought a Cease and Desist
Order to preserve their legal rights while the administrative proceedings for the inclusion/exclusion of
farmer beneficiaries were pending resolution.28

Acting on the Petition, Regional Director Inson issued a Cease and Desist Order29 dated July 7, 2009,
disposing as follows:

WHEREFORE, in the light of the foregoing ORDER is hereby issued:

1. DIRECTING the [Certificate of Land Ownership Award holders], their agents,

representatives, or assigns, to CEASE and DESIST from entering, occupying, and/or
taking possession of the property pending final determination of the inclusion-exclusion
proceedings, to attain and maintain a peaceful and orderly implementation of CARP in
the subject landholding;

2. ENJOINING the PARO of Oriental Negros and the MARO of Tanjay not to undertake
any relocation/subdivision survey on the subject landholding until the matter of the
inclusion-exclusion of farmer beneficiaries [has been] decided, except the areas utilized
as roads, residential, commercial, institutional and recreational portions, creeks and
rivers, etc[.]

SO ORDERED.30

62
On July 20, 2009, Regional Director Inson also issued Special Order No. 070, series of 2009, 31 creating an
independent body32 to conduct a revalidation of farmers-beneficiaries in the property. The independent
body conducted their interviews from August 3 to 7, 2009.33

On July 23, 2009, POPARMUCO members, who are Certificate of Land Ownership Award holders, filed a
Motion to Quash the Cease and Desist Order with Motion for Reconsideration.34 They alleged that they
were not given prior notice of the filing of the Petition for Inclusion/Exclusion,35 and that the Cease and
Desist Order defied this Court's September 3, 2008 Decision.36 Further, they were indeed qualified under
the Comprehensive Agrarian Reform Law as their families were landless farmworkers.37 Alcantara, et al.
allegedly did not submit their applications during the Department of Agrarian Reform's investigation on
qualified beneficiaries from 1999 to 2000.38 POPARMUCO members added that as Certificate of Land
Ownership Award holders, they were entitled to all ownership rights.39

On July 30, 2009,40 POPARMUCO members filed before the Department of Agrarian Reform Regional
Adjudication Board a Motion for Issuance of a Writ of Execution41 dated July 14, 2009, seeking to
enforce the September 3, 2008 Decision.

POPARMUCO filed before this Court a Petition for Contempt42 against respondent Inson, raising the
following grounds:

1. Respondent issued a Cease and Desist Order without any notice in violation of petitioner's
members' constitutional right to due Process.43

2. Respondent defied this Court's September 3, 2008 Decision, which ruled with finality on the
qualification of petitioner's members as beneficiaries in Polo Coconut's landholding covered
under TCT No. T-802/CLOA No. 00114438.44

3. Petitioner's members, as registered owners of the landholding involved, are entitled to the
property as the last step in the Comprehensive Agrarian Reform Program implementation.45

Petitioner prayed that a restraining order or writ of preliminary injunction be issued, directing
respondent to cease: (1) from enforcing the Cease and Desist Order in light of the Petition; and (2) from
reviewing the beneficiaries, as this Court had decided with finality on the issue. It further prayed that
this Court hold respondent guilty of contempt of court.46

In his Comment,47 respondent, through counsel, asserts that the September 3, 2008 Decision is no legal
impediment to his taking cognizance of the Petition for Inclusion/Exclusion and issuance of a Cease and
Desist Order.48 He adds that this Court had recognized the Department Secretary's exclusive jurisdiction
over the implementation of the Comprehensive Agrarian Reform Program, including the identification
and selection of its beneficiaries.49 Further, his issuance of the Cease and Desist Order is authorized
under Section 22, which vests in the Department of Agrarian Reform the power to reassess the
qualification of identified beneficiaries, and even strip them of their rights if found to have violated
agrarian laws.50

Petitioner filed a Reply,51 stating the following arguments:

1. Respondent's Comment should be expunged from the records for having been improperly
signed by respondent's counsel;52

2. Petitioners in the Petition for Inclusion/Exclusion were under the control of the previous
landowner and some of the parties in G.R. Nos. 168787 and 169271; thus, they were bound by
the September 3, 2008 Decision;53

3. Section 105 of Presidential Decree No. 1529, on the indefeasibility of a title, cannot be
subverted by the Department of Agrarian Reform's rules and regulations.54

During the pendency of this Petition, respondent dismissed in a September 29, 2009 Order55 the Motion
to Quash and upheld the validity of his Cease and Desist Order.

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Thus, petitioner filed a Manifestation with Leave of Court and Supplement to the Petition for
Contempt,56 alleging that:

1. Despite the pendency of the Petition, respondent proceeded to conduct a reinvestigation and
re-qualification of the farmer beneficiaries, "in complete defiance and lack of respect for a final
and executory judgment" issued by this Court;57 and

2. Respondent had proceeded to issue his March 12, 2010 Order58 disqualifying some of
petitioner's members.59 Specifically, the March 12, 2010 Order declared, among others, that:

a. 109 of the petitioners in the Petition for Inclusion/Exclusion are qualified agrarian
reform beneficiaries because they were connected with, or working in, the Polo Coconut
property before a Notice of Coverage was served on Polo Coconut;60

b. 62 of the petitioners were disqualified on the grounds that they worked for Polo
Coconut after the Notice of Coverage was sent, and are not yet connected with Polo
Coconut during the beneficiary identification. They also did not appear during the
investigation, are retired from service, or those whose work do not include cultivation of
the land;61

c. 39 Certificate of Land Ownership Award holders (petitioner's members) were

disqualified because they were not connected with Polo Coconut;62

d. Six (6) Certificate of Land Ownership Award holders (petitioner's members) were
disqualified as they have already migrated to other places, and thus, were disinterested
to occupy and cultivate their awarded lots;63 and

e. 102 existing Certificate of Land Ownership Award holders maintained their status as qualified
farmer beneficiaries.64

Respondent further directed the Provincial Agrarian Reform Officer of Oriental Negros "to facilitate the
inclusion of the . . . qualified agrarian reform beneficiaries in CLOA No. 00114438 under TCT No. T-802
by filing a petition before the [Provincial Agrarian Reform Adjudicator] of Oriental Negros for the
amendment/correction of the subject [Certificate of Land Ownership Award]."65

In his Comments (to the Supplemental Petition for Contempt),66 respondent reiterates his allegations in
his previous Comment. He further informs this Court that petitioner's members have voluntarily
submitted to the Department of Agrarian Reform's jurisdiction when they filed a Motion for
Reconsideration and subsequent Appeal of respondent's March 12, 2010 Order, despite the pendency of
this Petition. Thus, he avers, this Petition is considered moot.67

In its Reply,68 petitioner contends that respondent's Comments should be expunged for his counsel's
failure to indicate his Mandatory Continuing Legal Education Number. It further avers that the adjudged
agrarian reform beneficiaries have not been installed in the land despite the September 3, 2008
Decision's finality, and that the Petition has not been mooted.

In compliance with this Court's November 12, 2012 Resolution,69 both parties submitted their respective
Memoranda.70

Petitioner argues that respondent, in issuing the Cease and Desist Order, committed acts amounting to
"disobedience of or resistance to a lawful writ, process, order, judgment"71 of this Court in G.R. Nos.
168787 and 169271.72

On the other hand, respondent argues that the September 3, 2008 Decision "did not pass on the merits
of [petitioner's members'] qualifications as farmer beneficiaries."73 According to him, nowhere in the
Decision did this Court pronounce that they were qualified as beneficiaries. He contends
that Department of Agrarian Reform74 mainly involved the validity of placing the Polo Coconut property
under the coverage of the Comprehensive Agrarian Reform Program.75 The discussion on beneficiaries,

64
he avers, was included merely to highlight the Department of Agrarian Reform's exclusive jurisdiction
over issues on the program's implementation,76 and that, without proof that the Department of Agrarian
Reform committed grave abuse of discretion, this Court will not substitute its judgment.77

Respondent adds that he had legal and factual bases to issue the Cease and Desist Order. It was alleged
in the Petition for Inclusion/Exclusion that petitioner's members were not seasonal farmworkers, but
outsiders not related to the Polo Coconut management and the land.78 He points out that, per the
amended Section 22 of Republic Act No. 6657, the Department of Agrarian Reform is mandated to
monitor the beneficiaries' performance; thus, it can reevaluate their qualification, and even strip them
of their rights if they violated agrarian reform laws.79 He further states that Section 20 of Department of
Agrarian Reform Administrative Order No. 03-03 authorizes the Regional Director to issue a Cease and
Desist Order on any of these grounds:

1. That any party may suffer grave or irreparable damage;

2. That the doing of or continuance of certain acts will render the case moot and academic; or

3. That there is a need to maintain peace and order and prevent injury or loss of life and
property.80

Finally, respondent avers that petitioner's voluntary submission to the Department of Agrarian Reform's
jurisdiction, through the Motion for Reconsideration and Appeal, has rendered this case moot. The
Department of Agrarian Reform Secretary's April 3, 2013 Order, he claims, affirms his position that his
cognizance of the Petition for Inclusion/Exclusion and issuance of related Resolutions and Orders did not
constitute defiance of the September 3, 2008 Decision.81

The issue for this Court's resolution is whether or not respondent Regional Director Rodolfo T. Inson's
cognizance of the Petition for Inclusion/Exclusion of farmer beneficiaries, and his subsequent issuance of
the July 7, 2009 Cease and Desist Order and the March 12, 2010 Order disqualifying some of petitioner's
members, constitute defiance of this Court's September 3, 2008 Decision in G.R. Nos. 168787 and
169271.

This Court dismisses the Petition.

The validity of the July 7, 2009 Cease and Desist Order and the correctness of the March 12, 2010 Order
will not be discussed in this Petition for Contempt. They should instead be tackled in a more appropriate
mode and forum. Petitioner had appealed the Order partially granting the Petition for
Inclusion/Exclusion and the July 14, 2010 Order82 denying their Motion for Reconsideration. In an April 3,
2013 Order,83 the Department of Agrarian Reform Secretary dismissed the appeal for lack of merit.

We proceed first to discuss the scope of the Department of Agrarian Reform's jurisdiction in agrarian
law implementation cases.

The Comprehensive Agrarian Reform Law vested in the Department of Agrarian Reform the primary
responsibility of implementing the Comprehensive Agrarian Reform Program. Section 50 defines the
Department's powers over agrarian reform matters:

SECTION 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with primary jurisdiction to
determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all
matters involving the implementation of agrarian reform except those falling under the exclusive
jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural
Resources (DENR).

....

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Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be immediately
executory.84 (Emphasis supplied)

Sta. Rosa Realty Development Corporation v. Amante85 clarifies that Section 50 pertains to both the
Department of Agrarian Reform's: (1) administrative function, which involves enforcing, administering,
and carrying agrarian reform laws into operation; and (2) quasi-judicial function, which involves the
determination of parties' rights and obligations in agrarian reform matters.

Prior to the Comprehensive Agrarian Reform Law, however, Executive Order No. 129-A86 created the
Adjudication Board and authorized it to assume the Department of Agrarian Reform's quasi-judicial
functions:

SECTION 13. Agrarian Reform Adjudication Board. — There is hereby created an Agrarian Reform
Adjudication Board under the Office of the Secretary. The Board shall be composed of the Secretary as
Chairman, two (2) Undersecretaries as may be designated by the Secretary, the Assistant Secretary for
Legal Affairs, and three (3) others to be appointed by the President upon the recommendation of the
Secretary as members. A Secretariat shall be constituted to support the Board. The Board shall assume
the powers and functions with respect to the adjudication of agrarian reform cases under Executive
Order No. 229 and this Executive Order. These powers and functions may be delegated to the regional
offices of the Department in accordance with rules and regulations to be promulgated by the Board.
(Emphasis supplied)

Section 7 of the Comprehensive Agrarian Reform Law authorizes the Department of Agrarian Reform, in
coordination with the Presidential Agrarian Reform Council, to plan and program the acquisition and
distribution of all agricultural lands in accordance with the order of priority under the law. Inherent in
this function is the Department of Agrarian Reform's power to identify the landholdings within the
coverage of the Comprehensive Agrarian Reform Program, and to identify, screen, and select agrarian
reform beneficiaries.87 The Department of Agrarian Reform is further tasked to make support and
coordinative services available to farmer-beneficiaries and affected landowners.88

There are two (2) modes of acquiring land under the Comprehensive Agrarian Reform Law: (1)
compulsory acquisition89 and (2) voluntary offer for sale/land transfer.90

I (A)

Section 16 outlines the procedure for compulsory land acquisition:

SECTION 16. Procedure for Acquisition of Private Lands. — For purposes of acquisition of private lands,
the following procedures shall be followed:

(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice
to acquire the land to the owners thereof, by personal delivery or registered mail, and post the same in
a conspicuous place in the municipal building and barangay hall of the place where the property is
located. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with
the valuation set forth in Sections 17, 18, and other pertinent provisions hereof.

(b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered
mail, the landowner, his administrator or representative shall inform the DAR of his acceptance or
rejection of the offer.

(c) If the landowner accepts the offer of the DAR, the Land Bank of the Philippines (LBP) shall pay the
landowner the purchase price of the land within thirty (30) days after he executes and delivers a deed of
transfer in favor of the Government and surrenders the Certificate of Title and other monuments of title.

(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to
determine the compensation for the land by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the

66
receipt of the notice. After the expiration of the above period, the matter is deemed submitted for
decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision.

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response
from the landowner, upon the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.

(f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for
final determination of just compensation.

Section 16(a) requires that after identification of the land, landowners, and farmer beneficiaries, the
Department of Agrarian Reform will send a notice of acquisition to the landowner, through personal
delivery or registered mail, and post it in a conspicuous place in the municipal building and barangay hall
of the place where the property is located.

While the law does not provide how the identification process must be made, the details or guidelines
can be found in pertinent administrative issuances of the Department of Agrarian Reform or the
Provincial Agrarian Reform Council, per their rule-making power under Section 49.91

Under the Department of Agrarian Reform Administrative Order No. 01-03, or the 2003 Rules Governing
Issuance of Notice of Coverage and Acquisition of Agricultural Lands Under Republic Act No. 6657,
compulsory acquisition is commenced through two (2) ways.The first is through a Notice of Coverage.
After determining that the land is covered by the Comprehensive Agrarian Reform Program and writing
a pre-ocular inspection report, the Municipal Agrarian Reform Officer sends a Notice to the landowner.
The Notice would be posted for at least seven (7) days in the bulletin boards of the barangay hall and
municipal/city hall where the property is located.

The other way is through a Petition for Coverage, filed by any party before the Department of Agrarian
Reform's Regional Office or Provincial Office of the region or province where the property is located.
Either of these offices transmits the case folder to the Municipal Agrarian Reform Officer where the
property is located.92

Under Department of Agrarian Reform Administrative Order No. 01-03, the Municipal Agrarian Reform
Officer serves copies of the Notice of Coverage or Petition for Coverage on the landowner. Through the
Notice, the landowner is informed that his or her landholding is subjected to the Comprehensive
Agrarian Reform Program. He or she is invited to a public hearing or field investigation on the date
specified in the Notice. Moreover, the landowner is informed of his or her rights and privileges (with
corresponding restrictions and conditions), as follows:

1. apply for an exemption clearance or for exclusion from the Comprehensive Agrarian Reform
Program's coverage;

2. retain an area not exceeding five (5) hectares pursuant to Section 6 of Republic Act No. 6657;

3. nominate his/her child/ren who may qualify as beneficiary/ies to the subject landholding;
and/or

4. submit evidence for determining just compensation of the subject landholding.

The landowner or any real party-in-interest may file before the Department of Agrarian Reform
Municipal Office a protest or petition to lift the coverage of the Comprehensive Agrarian Reform
Program within 60 calendar days from receipt of the Notice.93 The protest will be resolved in accordance
with the procedure set forth in Department of Agrarian Reform Administrative Order No. 03-03, or the
2003 Rules for Agrarian Law Implementation Cases.

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Meanwhile, the process of identifying and screening potential agrarian reform beneficiaries is
suspended until after the lapse of the 60-day period from the landowner's receipt of the Notice, or upon
the authorized agency's final determination of the petition for retention, exclusion, and exemption, if
any were filed.94

Upon receipt of the Memorandum of Valuation from the Land Bank of the Philippines and Claim Folder
Profile and Valuation Summary, the Provincial Agrarian Reform Officer sends a Notice of Land Valuation
and Acquisition to the landowner in accordance with the same service procedures in Department of
Agrarian Reform Administrative Order No. 01-03.

Section 16(e) mandates the Department to take immediate possession of the land only after full
payment or deposit of the compensation with the bank (in case of rejection/non-response of
landowner), and to request the Register of Deeds to transfer title in the name of the Republic of the
Philippines, and later on to the intended beneficiaries.

I (B)

Upon land acquisition, the Department of Agrarian Reform immediately proceeds to distribute the land
to qualified beneficiaries.95

Sections 22 and 22-A96 of the Comprehensive Agrarian Reform Law provides the order of priority in the
distribution of lands covered by the Comprehensive Agrarian Reform Program to landless
farmers/farmworkers. The basic qualification for a beneficiary is his or her "willingness, aptitude, and
ability to cultivate and make the land as productive as possible."

Department of Agrarian Reform Administrative Order No. 07-0397 provides the qualifications,
disqualifications, and rights and obligations of agrarian reform beneficiaries. It also provides the
operating procedures for their: (1) identification, screening, and selection; (2) resolution of protests in
the selection; and (3) certificate of land ownership award generation and registration.

The Municipal or Provincial Agrarian Reform Officer, together with the Barangay Agrarian Reform
Committee, screens and selects the possible agrarian beneficiaries, under the criteria in Sections 4 and 5
of Department of Agrarian Reform Administrative Order No. 07-03:

Section 4. Qualifications. Only those who meet the following qualifications shall be eligible as
beneficiaries:

4.1 General Qualifications. All agrarian reform beneficiaries must be:

4.1.1 Landless as defined by R.A. No. 6657;

4.1.2 Filipino citizen;

4.1.3 Permanent resident of the barangay and/or municipality, if applicable[;]

4.1.4 At least fifteen (15) years of age or head of family at the time of acquisition of the property (titled
in the name of the Republic of the Philippines), or at least 18 years old as of 15 June 1988 in the case of
Commercial Farms (CFs); and

4.1.5 Willing and have the ability and aptitude to cultivate and make the land productive.

4.2 Specific Qualifications for Farmworkers in Commercial Farms. In addition to item 4.1 above, the
applicant must have been employed in the property being covered on June 15, 1988.

Section 5. Grounds for Disqualification/Exclusion. The following shall be the grounds for
disqualification/exclusion as ARBs of the CARP:

5.1. Failure to meet the qualifications as provided for under Section 22 of R.A. No. 6657;

68
5.2. Non-payment of an aggregate of three (3) annual amortizations or default in payment of three (3)
annual amortizations with the landowner (LO) that resulted to the foreclosure of mortgage on the
awarded land by the LBP or repossession by the landowners (in the case of voluntary land
transfer/direct payment scheme or VLT/DPS) of the awarded lands except if the non-payment of the
rental is due to crop failure as a result of fortuitous events per Section 36(6) of R.A. No. 3844, to the
extent of seventy-five percent (75%);

5.3. Misuse or diversion of financial support services extended to them (Section 37 of R.A. No. 6657);

5.4. Negligence or misuse of the land or any support extended to them (Section 22 of R.A. No. 6657);

5.5. Material misrepresentation of the ARB's basic qualifications as provided for under Section 22 of R.A.
No. 6657, P.D. No. 27, and other agrarian laws;

5.6. Sale, disposition, or abandonment of the lands awarded by government under CARP or P.D. No. 27
which is violative of the agrarian laws;

5.7. Conversion of agricultural lands to non-agricultural use without prior approval from the DAR;

5.8. Retirement from the service, whether optional or mandatory, or voluntary resignation, provided
this was not attended by coercion and/or deception, and there is no case questioning said retirement or
voluntary resignation by the applicant as of the date of approval of this Order;

5.9. Dismissal from the service for cause and there is no case filed questioning said dismissal as of the
approval of this Order and if there is any such case, the same has been affirmed by the proper entity of
government;

5.10. Obtaining a substantially equivalent and regular employment, as defined in Section 3 (m) of this
A.O.;

5.11. Retrenchment from the farm and receipt of separation pay, and the retrenchment not having been
appealed or questioned in the proper government entity as of the approval of this A.O.;

5.12. Execution of a waiver of right to become an ARB in exchange for due compensation and waiver not
having been questioned in the proper government entity as of the approval of this A.O.;

5.13. Refusal to be listed as an ARB and to provide pertinent information as requested by the DAR in the
invitation letter, which shall be construed as unwillingness on the part of the potential beneficiary to be
listed;

5.14. Forcible entry into the property or illegal detainer (e.g. after beneficiaries were paid by the LO);
and

5.15. Commission of any violation of the agrarian reform laws and regulations, or related issuances, as
determined with finality after proper proceedings by the appropriate tribunal or agency.

All qualified agrarian reform beneficiaries are then ranked in accordance with the order of priority under
Sections 22 and 22-A.98 Then, the master list of agrarian reform beneficiaries is posted for 15 days in at
least three (3) conspicuous places in the barangay hall, municipal hall, and in the community where the
property is located.99

Written protests for the inclusion/exclusion from the master list must be filed before the Department of
Agrarian Reform's Regional or Provincial Office, as the case may be, not later than 15 days from the last
day of posting of the list.100 The Regional Director will resolve the protest through summary proceedings
within 30 days from receiving the Beneficiary Screening Committee's case records or the Provincial
Office's investigation report and recommendation.101 The master list becomes final and executory after
the lapse of 15 days from receipt of the Regional Director's decision on the protest, but such finality is
only for the specific purpose of generating the certificate of land ownership award.102

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An appeal or motion for reconsideration from the Regional Director's decision or order for
inclusion/exclusion of potential agrarian reform beneficiaries in/from the master list will be governed by
Department of Agrarian Reform Administrative Order No. 03-03.

After the issuance of certificates of land ownership award, a petition to reopen the identification and
selection of agrarian reform beneficiaries may be filed on grounds of duress or threat by the landowner
against the petitioner during the identification phase. Section 14 of Department of Agrarian Reform
Administrative Order No. 07-03 provides:

SECTION 14. Re-Opening of ARB Identification and Selection

14.1 Subsequent to the issuance of CLOAs but prior to the installation of ARBs, the Regional Director
may grant due course to a sworn petition to re-open the identification, screening and selection process
on the grounds of duress or threat by the landowner against the petitioner during the identification
phase. After installation of the ARBs, only the Secretary may grant due course to such a petition.

14.2 Any petition to re-open the ARB identification, screening and selection process subsequent to
installation shall be directly filed with the Office of the Regional Director where the property is located
which shall have the exclusive jurisdiction to act on the petition. The procedures shall be in accordance
with A.O. No. 3, Series of 2003 titled, "2003 Rules for Agrarian Law Implementation Cases".

The re-opening of ARB identification, screening and selection shall, however, subscribe to the provisions
for qualification, disqualification, rights and obligations, and procedures prescribed under pertinent
sections of this Administrative Order.

As in protests for inclusion/exclusion of agrarian reform beneficiaries, petitions to reopen the

identification and selection process are governed by Department of Agrarian Reform Administrative
Order No. 03-03.103

I (C)

Under Department of Agrarian Reform Administrative Order No. 03-03,104 the Regional Director105 has
primary jurisdiction over all agrarian law implementation cases, while the Department of Agrarian
Reform Secretary106 has appellate jurisdiction over them. Rule I, Section 2 provides:

SECTION 2. ALI cases. These Rules shall govern all cases, arising from or involving:

2.1 Classification and identification of landholdings for coverage under the agrarian reform program and
the initial issuance of Certificate of Land Ownership Awards (CLOAs) and Emancipation Patents (EPs),
including protests or oppositions thereto and petitions for lifting of such coverage;

2.2 Classification, identification, inclusion, exclusion, qualification, or disqualification of potential/actual

farmer- beneficiaries;

2.3 Subdivision surveys of land under Comprehensive Agrarian Reform [Program] (CARP);

2.4 Recall, or cancellation of provisional lease rentals, Certificates of Land Transfers (CLTs) and CARP
Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (PD) No. 816,
including the issuance, recall, or cancellation of Emancipation Patents (EPs) or Certificates of Land
Ownership Awards (CLOAs) not yet registered with the Register of Deeds;

2.5 Exercise of the right of retention by landowner;

2.6 Application for exemption from coverage under Section 10 of RA 6657;

2.7 Application for exemption pursuant to Department of Justice (DOJ) Opinion No. 44 (1990);

2.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising;

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2.9 Cases of exemption/exclusion of fishpond and prawn farms from the coverage of CARP pursuant to
RA 7881;

2.10 Issuance of Certificate of Exemption for land subject of Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) found unsuitable for agricultural purposes;

2.11 Application for conversion of agricultural land to residential, commercial, industrial, or other non
agricultural uses and purposes including protests or oppositions thereto;

2.12 Determination of the rights of agrarian reform beneficiaries to homelots;

2.13 Disposition of excess area of the tenant's/farmer-beneficiary's landholdings;

2.14 Increase in area of tillage of a tenant/farmer-beneficiary;

2.15 Conflict of claims in landed estates administered by DAR and its predecessors; and

2.16 Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR.

On the other hand, in the exercise of its quasi-judicial function, the Department of Agrarian Reform,
through its adjudication arm— the Adjudication Board and its regional and provincial adjudication
boards— adopted the 2003 DARAB Rules of Procedure. Under Rule II, Section 2, the Adjudication Board
shall have exclusive appellate jurisdiction to review, reverse, modify, alter, or affirm resolutions, orders,
and decisions of its Adjudicators who have primary and exclusive original jurisdiction over the following
cases:

Rule II

Jurisdiction of the Board and its Adjudicators

SECTION 1. Primary and Exclusive Original Jurisdiction. — The Adjudicator shall have primary and
exclusive original jurisdiction to determine and adjudicate the following cases:

1.1 The rights and obligations of persons, whether natural or juridical, engaged in the management,
cultivation, and use of all agricultural lands covered by Republic Act (RA) No. 6657, otherwise known as
the Comprehensive Agrarian Reform Law (CARL), and other related agrarian laws;

1.2 The preliminary administrative determination of reasonable and just compensation of lands acquired
under Presidential Decree (PD) No. 27 and the Comprehensive Agrarian Reform Program (CARP);

1.3 The annulment or cancellation of lease contracts or deeds of sale or their amendments involving
lands under the administration and disposition of the DAR or Land Bank of the Philippines (LBP);

1.4 Those cases involving the ejectment and dispossession of tenants and/or leaseholders;

1.5 Those cases involving the sale, alienation, pre-emption, and redemption of agricultural lands under
the coverage of the CARL or other agrarian laws;

1.6 Those involving the correction, partition, cancellation, secondary and subsequent issuances of
Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with
the Land Registration Authority[.]

Rule II, Section 3 further states that neither the Adjudicator nor the Adjudication Board has jurisdiction
over matters involving the administrative implementation of the Comprehensive Agrarian Reform Law
and other agrarian laws, as they are exclusively cognizable by the Department of Agrarian Reform
Secretary.

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In Sutton v. Lim,107 this Court clarified that the Adjudication Board's jurisdiction over petitions for
cancellation of registered certificates of land ownership award is confined to agrarian disputes:

While the DARAB may entertain petitions for cancellation of CLOAs, as in this case, its jurisdiction is,
however, confined only to agrarian disputes. As explained in the case of Heirs of Dela Cruz v. Heirs of
Cruz and reiterated in the recent case of Bagongahasa v. Spouses Cesar Caguin, for the DARAB to
acquire jurisdiction, the controversy must relate to an agrarian dispute between the landowners and
tenants in whose favor CLOAs have been issued by the DAR Secretary, to wit:

The Court agrees with the petitioners' contention that, under Section 2(f), Rule II of the DARAB Rules of
Procedure, the DARAB has jurisdiction over cases involving the issuance, correction and cancellation of
CLOAs which were registered with the LRA. However, for the DARAB to have jurisdiction in such cases,
they must relate to an agrarian dispute between landowner and tenants to whom CLOAs have been
issued by the DAR Secretary. The cases involving the issuance, correction and cancellation of the CLOAs
by the DAR in the administrative implementation of agrarian reform laws, rules and regulations to
parties who are not agricultural tenants or lessees are within the jurisdiction of the DAR and not the
DARAB.

Thus, it is not sufficient that the controversy involves the cancellation of a CLOA already registered with
the Land Registration Authority. What is of primordial consideration is the existence of an agrarian
dispute between the parties.108 (Emphasis supplied, citations omitted)

In Concha v. Rubio,109 this Court, citing Lercana v. Jalandoni110 and Sta. Rosa Realty Development
Corporation v. Amante,111 held that the identification and selection of agrarian reform beneficiaries
involve the administrative implementation of the Comprehensive Agrarian Reform Program, which is
within the exclusive jurisdiction of the Department of Agrarian Reform. Hence, when seeking to contest
the selection of beneficiaries, a party should avail of the administrative remedies under the Department
of Agrarian Reform, not under the Adjudication Board. In Concha:

In Department of Agrarian Reform v. Department of Education, Culture and Sports, this Court held that
the administrative prerogative of DAR to identify and select agrarian reform beneficiaries holds sway
upon the courts:

In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the
subject properties. Further, on November 23, 1994, the Secretary of Agrarian Reform through the
Municipal Agrarian Reform Office (MARO) issued a Notice of Coverage placing the subject properties
under CARP. Since the identification and selection of CARP beneficiaries are matters involving strictly
the administrative implementation of the CARP, it behooves the courts to exercise great caution in
substituting its own determination of the issue, unless there is grave abuse of discretion committed
by the administrative agency . . .

Thus, the Municipal Agrarian Reform Officer's (MARO) decision not to include respondents as farmer-
beneficiaries must be accorded respect in the absence of abuse of discretion. It bears stressing that it is
the MARO or the Provincial Agrarian Reform Officer (PARO) who, together with the Barangay Agrarian
Reform Committee, screens and selects the possible agrarian beneficiaries. If there are farmers who
claim they have priority over those who have been identified by the MARO as beneficiaries of the land,
said farmers can file a protest with the MARO or the PARO who is currently processing the Land
Distribution Folder. Afterwards, the proper recourse of any individual who seeks to contest the selection
of beneficiaries is to avail himself of the administrative remedies under the DAR and not under the
DARAB, which is bereft of jurisdiction over this matter.112 (Emphasis in the original, citations omitted)

Under the new law, Republic Act No. 9700,113 all cases involving the cancellation of certificates of land
ownership award and other titles issued under any agrarian reform program are within the exclusive
and original jurisdiction of the Department of Agrarian Reform Secretary. Section 9 provides:

SECTION 9. Section 24 of Republic Act No. 6657, as amended, is hereby further amended to read as
follows:

72
SEC. 24. . . .

....

All cases involving the cancellation of registered emancipation patents, certificates of land ownership
award, and other titles issued under any agrarian reform program are within the exclusive and original
jurisdiction of the Secretary of the DAR.

I (D)

In addition to identifying the qualified beneficiaries, Section 22 of the Comprehensive Agrarian Reform
Law mandates the Department of Agrarian Reform to "adopt a system of monitoring the record or
performance of each beneficiary, so that any beneficiary guilty of negligence or misuse of the land or
any support extended to him shall forfeit his right to continue as such beneficiary."114

The Department of Agrarian Reform, mandated to monitor the performance of beneficiaries and ensure
the integrity of its master list of agrarian reform beneficiaries, integrated the Agrarian Reform
Beneficiaries Carding and Identification System115 in its land acquisition and distribution process.

Under the Agrarian Reform Beneficiaries Carding and Identification System, agrarian reform
beneficiaries with titles under the agrarian reform laws will be issued identification cards as proof of
their being bona fide beneficiaries. These identification cards are validated yearly based on the
Department of Agrarian Reform Municipal Office's inspection of the beneficiaries' performance and
compliance with their duties under the laws. The Municipal Office checks if they still own and cultivate
the landholding awarded to them, or if they have committed any offense. Beneficiaries found to have
violated the laws will be removed from the master list. Consequently, their identification cards and
emancipation patents or certificates of land ownership award will be canceled.

Section 24 of the Comprehensive Agrarian Reform Law states that the rights and obligations of
beneficiaries commence from the time the land is awarded to them. The certificate of land ownership
award contains the restrictions and conditions provided in the law and other applicable statutes. Thus:

SECTION 24. Award to Beneficiaries. — The rights and responsibilities of the beneficiary shall
commence from the time the DAR makes an award of the land to him, which award shall be completed
within one hundred eighty (180) days from the time the DAR takes actual possession of the land.
Ownership of the beneficiary shall be evidenced by a Certificate of Land Ownership Award, which shall
contain the restrictions and conditions provided for in this Act, and shall be recorded in the Register of
Deeds concerned and annotated on the Certificate of Title. (Emphasis supplied)

The restrictions and conditions refer to payment of annual amortizations, transferability of the awarded
land, and proper use of financial and support services, which are found in the following provisions of the
Comprehensive Agrarian Reform Law:

SECTION 26. Payment by Beneficiaries. — Lands awarded pursuant to this Act shall be paid for by the
beneficiaries to the LBP in thirty (30) annual amortizations at six percent (6%) interest per annum. The
payments for the first three (3) years after the award may be at reduced amounts as established by the
PARC: Provided, That the first five (5) annual payments may not be more than five percent (5%) of the
value of the annual gross production as established by the DAR. Should the scheduled annual payments
after the fifth year exceed ten percent (10%) of the annual gross production and the failure to produce
accordingly is not due to the beneficiary's fault, the LBP may reduce the interest rate or reduce the
principal obligation to make the repayment affordable.

The LBP shall have a lien by way of mortgage on the land awarded to the beneficiary; and this
mortgage may be foreclosed by the LBP for non-payment of an aggregate of three (3) annual
amortizations. The LBP shall advise the DAR of such proceedings and the latter shall subsequently
award the forfeited landholdings to other qualified beneficiaries. A beneficiary whose land, as provided
herein, has been foreclosed shall thereafter be permanently disqualified from becoming a beneficiary
under this Act.

73
SECTION 27. Transferability of Awarded Lands. — Lands acquired by beneficiaries under this Act may
not be sold, transferred or conveyed except through hereditary succession, or to the government, or to
the LBP, or to other qualified beneficiaries for a period of ten (10) years: Provided, however, That the
children or the spouse of the transferor shall have a right to repurchase the land from the government
or LBP within a period of two (2) years. Due notice of the availability of the land shall be given by the
LBP to the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is
situated. The Provincial Agrarian Reform Coordinating Committee (PARCCOM) as herein provided, shall,
in turn, be given due notice thereof by the BARC.

If the land has not yet been fully paid by the beneficiary, the rights to the land may be transferred or
conveyed, with prior approval of the DAR, to any heir of the beneficiary or to any other beneficiary who,
as a condition for such transfer or conveyance, shall cultivate the land himself. Failing compliance
herewith, the land shall be transferred to the LBP which shall give due notice of the availability of the
land in the manner specified in the immediately preceding paragraph.

In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for
the amounts the latter has already paid, together with the value of improvements he has made on the
land.

....

SECTION 37. Support Services to the Beneficiaries. — The PARC shall ensure that support services to
farmer-beneficiaries are provided, such as:

(a) Land surveys and titling;

(b) Liberalized terms on credit facilities and production loans;

(c) Extension services by way of planting, cropping, production and post-harvest technology transfer, as
well as marketing and management assistance and support to cooperatives and farmers' organizations;

(d) Infrastructure such as access trails, mini-dams, public utilities, marketing and storage facilities; and

(e) Research, production and use of organic fertilizers and other local substances necessary in farming
and cultivation.

....

Misuse or diversion of the financial and support services herein provided shall result in sanctions
against the beneficiary guilty thereof, including the forfeiture of the land transferred to him or lesser
sanctions as may be provided by the PARC, without prejudice to criminal prosecution. (Emphasis
supplied)

Failure of beneficiaries to comply with the prescribed conditions may result in the forfeiture of the land
awarded to them. A certificate of land ownership award may be corrected and canceled for violations of
agrarian laws, rules, and regulations.116

Department of Agrarian Reform Administrative Order No. 03-09117 provides the rules and procedures for
canceling certificates of land ownership award and other titles under the Comprehensive Agrarian
Reform Program.118 The causes of action in a petition for cancellation of a certificate of land ownership
award are:

SECTION 4. Causes of Action. — No petition for cancellation shall be filed unless it has been determined
and ruled with finality by the DAR Secretary or the Courts that:

(a) The land subject matter of the CLOA, EP or other title under agrarian reform program is found to be:

1. The retention area of the landowner;

74
2. Excluded from the coverage of CARP, PD No. 27 or other agrarian reform program;

3. Exempted from the coverage of CARP, PD No. 27 or other agrarian reform program;

4. Outside of the authority of the DAR to dispose and award, as the same falls within the authority of the
DENR to distribute;

5. Consist in the erroneous issuance of the said title resulting from the defect or lacking in
documentation (DNYP or DNYD generated titles but not yet distributed).

(b) The CLOA or EP holder is found to have:

1. Misused or diverted the financial and support services;

2. Misused the land;

3. Materially misrepresented his basic qualifications as agrarian reform beneficiary;

4. Illegally converted into other uses the awarded the land;

5. Sold, transferred, conveyed the awarded land to other person;

6. Defaulted in the payment of obligation for three (3) consecutive years in the case of Voluntary Land
Transfer/Direct Payment Scheme;

7. Failed to pay the amortization for at least three (3) annual amortizations;

8. Neglected or abandoned the awarded land; and

9. Circumvented the laws related to the implementation of the agrarian reform program.

Department of Agrarian Reform Administrative Order No. 03-09 further states that the cancellation of
registered certificates of land ownership award, emancipation patents, and other titles "under any
agrarian reform program shall be strictly regulated and may be allowed only in the manner and
conditions prescribed"119 in the Administrative Order.

II

Here, the collective Certificate of Land Ownership Award, with CLOA No. 00114438, was issued in favor
of petitioner's members120 on January 27, 2004, and registered on January 30, 2004 under TCT No. T-
802.121

On July 16, 2004, the Provincial Agrarian Reform Officer informed Polo Coconut that a resurvey of the
land will be conducted. Polo Coconut filed a Motion to suspend the survey before the Adjudication
Board, but it was denied for lack of jurisdiction. Thus, Polo Coconut filed a Petition for Certiorari.

Polo Coconut raised two (2) issues before the Court of Appeals: (1) the propriety of land coverage under
the Comprehensive Agrarian Reform Program and (2) the qualification of the identified
beneficiaries.122 The Court of Appeals ruled in favor of Polo Coconut and nullified CLOA No.
00114438/TCT No. T-802. It held that the identified beneficiaries were not tenants of Polo Coconut, and
thus, could not qualify under the program.123

Both the Department of Agrarian Reform and petitioner's members moved for reconsideration, but their
Motions were denied.124 Hence, the Department filed before this Court a Petition for Review, docketed
as G.R. No. 168787. Petitioner's members filed a separate Petition for Review, entitled "Abarca, et al. v.
Polo Coconut Plantation Company, Inc., et al." docketed as G.R. No. 169271. They contended that while
they were neither farmers nor regular farmworkers of Polo Coconut, they were either seasonal or other

75
farmworkers eligible to receive land under the Comprehensive Agrarian Reform Law.125 The two (2)
Petitions were later consolidated.

In its September 3, 2008 Decision, this Court reversed and set aside the Court of Appeals Decision. It
found that Polo Coconut did not exhaust its administrative remedies because Polo Coconut did not file a
protest or opposition before the Department of Agrarian Reform Secretary.126 Moreover, on the issue of
qualification of the identified beneficiaries, this Court found no grave abuse of discretion on the part of
the Department.127 It ruled that Section 22 of the Comprehensive Agrarian Reform Law allows the
designation of eligible beneficiaries other than the tenants of the landowners.128 Hence, this Court
declared CLOA No. 00114438/TCT No. T-802 as valid.129 Its Decision attained finality on November 26,
2008.

Seven (7) months later, on June 30, 2009, Alcantara, et al. filed the Petition for Inclusion/Exclusion. They
questioned the inclusion of petitioner's members as beneficiaries and recipients of Certificates of Land
Ownership Award. They contended that the existing certificate holders were "outsiders" and have no
connection with the Polo Coconut property.130 Respondent took cognizance of the Petition and granted
the Cease and Desist Order.

By that time, however, the September 3, 2008 Decision131 had already become final and executory.
Consequently, this Court affirmed the Department of Agrarian Reform's previous identification and
designation of qualified agrarian reform beneficiaries, who were named in CLOA No. 00114438. The
finality of this Decision meant that:

[T]he decrees thereof could no longer be altered, modified, or reversed even by the Court en banc.
Nothing is more settled in law than that a judgment, once it attains finality, becomes immutable and
unalterable, and can no longer be modified in any respect, even if the modification is meant to correct
what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court rendering it or by the highest court of the land. This
rule rests on the principle that all litigation must come to an end, however unjust the result of error may
appear; otherwise, litigation will become even more intolerable than the wrong or injustice it is
designed to correct.132 (Citations omitted)

A certificate of title serves as evidence of an indefeasible title. The title becomes incontrovertible after
expiration of the one (1)-year period from the issuance of the registration decree, upon which it was
based.133

In Estribillo v. Department of Agrarian Reform,134 the petitioners were issued emancipation patents and
transfer certificates of title over parcels of land in Barangay Angas, Sta. Josefa, Agusan del Sur, with a
total area of 527.83 hectares, from 1984 to 1988. The landholding was brought within the coverage of
the Operation Land Transfer under Presidential Decree No. 27 upon the request of its previous owner,
Hacienda Maria, Inc.

However, in December 1997, Hacienda Maria, Inc. filed 17 petitions before the Regional Agrarian
Reform Adjudicator of CARAGA, Region XIII. These petitions sought the declaration of erroneous
coverage under Presidential Decree No. 27 of 277.5008 hectares of its former landholdings. Hacienda
Maria, Inc. claimed that the area was untenanted, and that it was not paid compensation for it. It sought
that the emancipation patents covering the disputed area be canceled.

The Regional Agrarian Reform Adjudicator declared as void the transfer certificates of title and
emancipation patents over the disputed area. The Adjudication Board affirmed this decision. The Court
of Appeals dismissed petitioners' appeal on technicality, since the Verification and Certification against
Forum Shopping was not signed by all petitioners.

This Court sustained the validity of the transfer certificates of title and emancipation patents. It held
that certificates of title issued pursuant to emancipation patents are as indefeasible as transfer
certificates of title issued in registration proceedings. Further, it ruled that the transfer certificates of
title issued to the petitioners became indefeasible upon the expiration of one (1) year from the issuance
of the emancipation patents. Thus:

76
Ybañez v. Intermediate Appellate Court, provides that certificates of title issued in administrative
proceedings are as indefeasible as certificates of title issued in judicial proceedings:

....

The same confusion, uncertainty and suspicion on the distribution of government-acquired lands to the
landless would arise if the possession of the grantee of an EP would still be subject to contest, just
because his certificate of title was issued in an administrative proceeding. The silence of Presidential
Decree No. 27 as to the indefeasibility of titles issued pursuant thereto is the same as that in the Public
Land Act where Prof. Antonio Noblejas commented:

Inasmuch as there is no positive statement of the Public Land Law, regarding the titles granted
thereunder, such silence should be construed and interpreted in favor of the homesteader who come
into the possession of his homestead after complying with the requirements thereof. Section 38 of the
Land Registration Law should be interpreted to apply by implication to the patent issued by the Director
of Lands, duly approved by the Minister of Natural Resources, under the signature of the President of
the Philippines, in accordance with law.

After complying with the procedure, therefore, in Section 105 of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree (where the DAR is required to issue the
corresponding certificate of title after granting an EP to tenant-farmers who have complied with
Presidential Decree No. 27), the TCTs issued to petitioners pursuant to their EPs acquire the same
protection accorded to other TCTs. "The certificate of title becomes indefeasible and incontrovertible
upon the expiration of one year from the date of the issuance of the order for the issuance of the
patent, . . . Lands covered by such title may no longer be the subject matter of a cadastral proceeding,
nor can it be decreed to another person."

....

The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of registration. The
Property Registration Decree in fact devotes Chapter IX on the subject of EPs. Indeed, such EPs and
CLOAs are, in themselves, entitled to be as indefeasible as certificates of title issued in registration
proceedings.135 (Emphasis supplied)

In Heirs of Nuñez, Sr. v. Heirs of Villanoza,[136] where the issue was the retention limit of the purported
heirs of the landowner, this Court held:

Finally, the issuance of the title to Villanoza could no longer be revoked or set aside by Secretary
Pangandaman. Acquiring the lot in good faith, Villanoza registered his Certificate of Land Ownership
Award title under the Torrens system. He was issued a new and regular title, TCT No. NT-299755, in fee
simple; that is to say, it is an absolute title, without qualification or restriction.

Estribillo v. Department of Agrarian Reform has held that "certificates of title issued in administrative
proceedings are as indefeasible as [those] issued in judicial proceedings." Section 2 of Administrative
Order No. 03-09 provides that "[t]he State recognizes the indefeasibility of [Certificate of Land
Ownership Awards], [Emancipation Patents] and other titles issued under any agrarian reform program."

Here, a Certificate of Land Ownership Award title was already issued and registered in Villanoza's favor
on December 7, 2007. Villanoza's Certificate of Land Ownership Award was titled under the Torrens
system on November 24, 2004. After the expiration of one (1) year, the certificate of title covering the
property became irrevocable and indefeasible. Secretary Pangandaman's August 8, 2007 Order, which
came almost three (3) years later, was thus ineffective.137

Section 24 of the Comprehensive Agrarian Reform Law, as amended by Republic Act No. 9700, now
explicitly provides that certificates of land ownership award, "being titles brought under the operation
of the [T]orrens [S]ystem," enjoy the same indefeasibility and security afforded to all titles under the
Torrens System:

77
Section 24. Award to beneficiaries. — The rights and responsibilities of the beneficiaries shall commence
from their receipt of a duly registered emancipation patent or certificate of land ownership award and
their actual physical possession of the awarded land. Such award shall be completed in not more than
one hundred eighty (180) days from the date of registration of the title in the name of the Republic of
the Philippines: Provided, That the emancipation patents, the certificates of land ownership award, and
other titles issued under any agrarian reform program shall be indefeasible and imprescriptible after
one (1) year from its registration with the Office of the Registry of Deeds, subject to the conditions,
limitations and qualifications of this Act, the property registration decree, and other pertinent laws. The
emancipation patents or the certificates of land ownership award being titles brought under the
operation of the Torrens system, are conferred with the same indefeasibility and security afforded to
all titles under the said system, as provided for by Presidential Decree No. 1529, as amended by
Republic Act No. 6732.

It is the ministerial duty of the Registry of Deeds to register the title of the land in the name of the
Republic of the Philippines, after the Land Bank of the Philippines (LBP) has certified that the necessary
deposit in the name of the landowner constituting full payment in cash or in bond with due notice to the
landowner and the registration of the certificate of land ownership award issued to the beneficiaries,
and to cancel previous titles pertaining thereto.

Identified and qualified agrarian reform beneficiaries, based on Section 22 of Republic Act No. 6657, as
amended, shall have usufructuary rights over the awarded land as soon as the DAR takes possession of
such land, and such right shall not be diminished even pending the awarding of the emancipation patent
or the certificate of land ownership award.

All cases involving the cancellation of registered emancipation patents, certificates of land ownership
award, and other titles issued under any agrarian reform program are within the exclusive and original
jurisdiction of the Secretary of the DAR.

Here, by the time the Petition for Inclusion/Exclusion was filed on June 30, 2009, the September 3, 2008
Decision declaring the validity of CLOA No. 00114438 had attained finality and TCT No. T-802 had
already become incontrovertible. As registered property owners, petitioner's members were entitled to
the protection given to every Torrens title holder. Their rights may only be forfeited in case of violations
of agrarian laws, as well as noncompliance with the restrictions and conditions under the
Comprehensive Agrarian Reform Law.

III

However, petitioner's assertion that respondent's cognizance of the Petition for Inclusion/Exclusion
constituted defiance of the September 3, 2008 Decision does not lie.

In Rivulet Agro-Industrial Corporation v. Paruñgao,138 this Court explained the concept of contempt of
court:

Contempt of court is defined as a disobedience to the court by acting in opposition to its authority,
justice, and dignity, and signifies not only a willful disregard of the court's order, hut such conduct which
tends to bring the authority of the court and the administration of law into disrepute or, in some manner,
to impede the due administration of justice. To be considered contemptuous, an act must be clearly
contrary to or prohibited by the order of the court. Thus, a person cannot be punished for contempt for
disobedience of an order of the Court, unless the act which is forbidden or required to be done is clearly
and exactly defined, so that there can be no reasonable doubt or uncertainty as to what specific act or
thing is forbidden or required.139 (Emphasis supplied)

The court's contempt power should be exercised with restraint and for a preservative, and not vindictive,
purpose. "Only in cases of clear and contumacious refusal to obey should the power be exercised."140

In Rivulet Agro-Industrial Corporation, the Department officials' act of installing farmer-beneficiaries in

Rivulet Agro-Industrial Corporation's landholding did not constitute an open defiance and disobedience
of this Court's December 15, 2010 temporary restraining order in G.R. No. 193585. This Court held:

78
[W]hile the DAR was an intervenor in G.R. No. 193585, the December 15, 2010 TRO issued by the Court
was only expressly directed against the LRA Administrator, the Register of Deeds of Negros Occidental
and/or all persons acting upon their order or in their place and stead, and specifically for the following
acts: "(a) from canceling Transfer Certificate of Title No. 105742 issued in favor of petitioner RIVULET
Agro-Industrial Corporation; (b) from issuing a new certificate of title in the name of the Republic of the
Philippines; (c) from issuing Certificate of Land Ownership Award in favor of anyone covering Hacienda
Bacan, a 157.2992-hectare property situated in the Municipality of Isabela, Province of Negros
Occidental; and (d) distributing such Certificate of Land Ownership Award that it may have heretofore
issued pending trial on the merits." Clearly, the DAR and its officials were not among those enjoined.
Neither can they be considered agents of the LRA Administrator and the Register of Deeds of Negros
Occidental. Moreover, the installation of farmer-beneficiaries was not among the acts specifically
restrained, negating the claim that the performance thereof was a contumacious act.141

Here, respondent justified his cognizance of the Petition for Inclusion/Exclusion based on the
Department's exclusive prerogative in the identification, selection, and subsequent re-evaluation of
agrarian reform beneficiaries.142

However, as earlier stated, the issue on the qualification of the existing Certificate of Land Ownership
Award holders had long been laid to rest in this Court's final and executory September 3, 2008 Decision.
Some of the petitioners in the inclusion/exclusion proceedings were even respondents in that case.143

Still, respondent's erroneous cognizance of the Petition for Inclusion/Exclusion can only be deemed as
grave abuse of discretion, which is more properly the subject of a petition for certiorari, not a petition
for contempt. "No one who is called upon to try the facts or interpret the law in the process of
administering justice can be infallible in his judgment."144

At any rate, whether respondent's actions were improper is not an issue here. What is crucial in
contempt proceedings is the intent of the alleged contemnor to disobey or defy the court as held in St.
Louis University, Inc. v. Olairez:145

In contempt, the intent goes to the gravamen of the offense. Thus, the good faith or lack of it, of the
alleged contemnor is considered. Where the act complained of is ambiguous or does not clearly show on
its face that it is contempt, and is one which, if the party is acting in good faith, is within his rights, the
presence or absence of a contumacious intent is, in some instances, held to be determinative of its
character. . . . To constitute contempt, the act must be done wil[l]fully and for an illegitimate or improper
purpose.146 (Emphasis in the original, citations omitted)

All told, this Court finds no clear and contumacious conduct on the part of respondent. His acts do not
qualify as a willful disobedience to this Court nor a willful disregard of its authority.

WHEREFORE, the Petition for Contempt is DISMISSED for lack of merit.

SO ORDERED.

Peralta (Chairperson), A. Reyes, Jr., Hernando, and Carandang,* JJ., concur.

G.R. No. 201302

HYGIENIC PACKAGING CORPORATION, Petitioner

vs.
NUTRI-ASIA, INC., DOING BUSINESS UNDER THE NAME AND STYLE OF UFC PHILIPPINES (FORMERLY
NUTRI-ASIA, INC.), Respondent

DECISION

LEONEN, J.:

79
The venue for the collection of sum of money case is governed by Rule 4, Section 2 of the Rules of Court.
Unless the parties enter into a written agreement on their preferred venue before an action is instituted,
the plaintiff may commence his or her action before the trial court of the province or city either where
he or she resides, or where the defendant resides. If the party is a corporation, its residence is the
province or city where its principal place of business is situated as recorded in its Articles
ofIncorporation.1

This is a Petition for Review on Certiorari2 assailing the January 13, 2012 Decision3 and March 28, 2012
Resolution4 of the Court of Appeals in CA-G.R. SP No. 119511. The Court of Appeals granted Nutri-Asia,
Inc.'s (Nutri-Asia) Petition for Certiorari,5 and reversed and set aside the May 24, 2010 Order6 of the
Regional Trial Court Branch 46, Manila and the March 14, 2011 Joint Order7 of the Regional Trial Court
Branch 24, Manila in Civil Case No. 09-121849. The trial courts denied Nutri-Asia's Omnibus Motion to
Set for Hearing the Affirmative Defenses Pleaded in the Answer and to ·Refer the Parties to Arbitration
in a collection of sum of money case.8

Hygienic Packaging Corporation (Hygienic) is a domestic corporation that manufactures, markets, and
sells packaging materials such as plastic bottles and ratchet caps.9 Meanwhile, Nutri-Asia is a domestic
corporation that manufactures, sells, and distributes food products such as banana-based and tomato-
based condiments, fish sauce, vinegar, soy sauce, and other sauces.10

From 1998 to 2009, Hygienic supplied Nutri-Asia with KG Orange Bottles and Ratchet Caps with Liners
(plastic containers) for its banana catsup products.11 Every transaction was covered by a Purchase Order
issued by Nutri-Asia.12 The Terms and Conditions on the Purchase Order provided:

TERMS AND CONDITIONS

The following terms and conditions and any of the specifications, drawings, samples and additional
terms and conditions which may be incorporated herein by reference or appended hereto are part of
this Purchase Order. By accepting this Purchase Order or any part thereof the Seller agrees to and
accepts all terms and conditions.

1. The number of this Purchase Order must appear on the corresponding Sales Invoice, Shipping papers
and other pertinent documents and the Seller's VAT No., when applicable, must be on all
Invoices/Delivery receipts.

2. NO Payment will be made unless original sales invoice received by Buyer's accounting Department.

....

8. The Seller warrants that the Goods delivered to the Buyer will be merchantable, of commercial
standard and that the Goods will conform with (sic) the written specifications and requirements of the
Buyer. The Buyer shall have the right to reject or return any or all items found not in conformity with
such standards[,] [s]pecifications or requirements. The Seller shall likewise indemnify and hold the·
Buyer free and harmless from any and all damages incurred by the Buyer as a result of the violation of
these warranties.

The above warranties by the Seller shall also apply in case o[f] Goods consisting of packaging materials
or foodstuffs to be used as raw materials or ingredients in the manufacture or processing of foodstuff in
ensuring that they shall be fit for human consumption and free from adulteration or foreign materials
and shall comply with all the relevant food and hygiene statutes and regulations both in the Buyer's
Country and in any other such relevant country as to composition, processing (if any), packaging and
description.

....

13. Arbitration [of] all disputes arising in connection with this Contract shall be referred to an Arbitration
Committee, in accordance with the Philippine Arbitration Law, composed of three members: one (1)
member to be chosen by the Buyer; another member to be chosen by the Seller[;] and the third

80
member to be chosen by the other two members. The decision of the Arbitration Committee shall be
binding upon the parties.13

From December 29, 2007 to January 22, 2009, Nutri-Asia purchased from Hygienic 457,128 plastic
containers, for a total consideration of ₱9,737,674.62.14 Hygienic issued Sales Invoices15 and Delivery
Receipts16 to cover these transactions.17

On July 29, 2009, Hygienic filed a Complaint18 for sum of money against Nutri-Asia. It instituted the case
before the Regional Trial Court of Manila "pursuant to the stipulation of the parties as stated in the Sales
Invoices submitting themselves to the jurisdiction of the Courts of the City of Manila in any legal action
arising out of their transaction[.]"19

In its Complaint, Hygienic alleged that based on the Purchase Orders and Sales Invoices, Nutri-Asia
agreed to pay Hygienic 30 days after every delivery of plastic containers. However, Nutri-Asia refused to
pay for the goods delivered from December 29, 2007 to January 22, 2009 after their payment became
due, despite oral and written demands from Hygienic.20

Hygienic prayed that Nutri-Asia be ordered to pay it the sum of: (1) ₱9,737,674.62 plus 12% interest per
annum as the total unpaid cost of the plastic containers; (2) 25% of ₱9,737,674.62 or the amount to be
collected from Nutri-Asia as attorney's fees; (3) ₱300,000.00 as their counsel's acceptance fee; (4)
₱4,000.00 as their counsel's appearance fee for each and every appearance of its counsel in court; and
(5) costs of suit.21

In its Answer with Compulsory Counter-Claim,22 Nutri-Asia argued that the case should be dismissed as
Hygienic failed to comply with a condition precedent prior to its filing of the Complaint.23 It claimed that
under the Terms and Conditions of the Purchase Orders, Hygienic should have first referred the matter
to the Arbitration Committee. 24

Nutri-Asia alleged that the venue was also improperly laid since the Regional Trial Court of Manila was
not the proper venue for the institution of Hygienic's personal action. The Complaint should have been
filed either before the trial courts of San Pedro, Laguna or Pasig City, where the principal places of
business of Hygienic and Nutri-Asia are located, respectively. The venue of actions as stated in the Sales
Invoices could not bind Nutri-Asia since it did not give its express conformity to that stipulation. 25

Nutri-Asia admitted purchasing the plastic containers, and receiving Hygienic's Demand Letter and Final
Demand Letter.26 However, it countered that Hygienic's claim "has been extinguished on the ground of
compensation."27

Nutri-Asia claimed that of the 457,128 plastic containers, it only used 327,046 for its products, while the
130,082 pieces were unused.28 It narrated that since January 21, 2009, it received numerous customer
complaints on its UFC Banana Catsup products. Consumers complained that the catsup smelled like
detergent and soap and tasted like chemical, soap, plastic, and rubber.29 After investigation, Nutri-Asia
discovered that "the contaminated products were all manufactured on December 15, 2008 and they
[were] limited to UFC Banana Catsup in 2 kg. plastic containers supplied by [Hygienic]."30 It was
compelled to recall the contaminated products.31

Nutri-Asia stated that in the meetings held on January 22 and 23, 2009, the officers of Hygienic admitted
and confirmed that it "used a different colorant which has a poor Low Density Polyethylene (LDPE)
carrier grade or poor bonding of the die/powder (sic) with the carrier."32 The colorant bleeding in the
containers contaminated Nutri-Asia's banana catsup. Hygienic's officers allegedly assured Nutri-Asia
representatives that Hygienic will shoulder the expenses that would be incurred in the recall of the
contaminated products. Its Sales and Marketing Manager, Judith B. Lim, allegedly reassured the same in
an electronic mail.33

Nutri-Asia further stated that it sent a Letter dated May 6, 2009 to Hygienic, requesting for the
reimbursement of ₱36,304,451.27, representing the recall expenses, product and container costs,
freight and rental charges, and brand damage. This amount excludes Nutri-Asia's unrealized income.34

81
Nutri-Asia disclosed that Hygienic, in its June 9, 2009 letter, stated that it could not assess Nutri-Asia's
claims as they were not accompanied by any supporting document. It also said that it would consider
the case closed if Nutri-Asia failed to provide supporting documents by the end of June 11, 2009 office
hours. Nutri-Asia replied that Hygienic had no basis to consider the matter closed since the former did
not abandon or waive its reimbursement claim. Nutri-Asia requested for a meeting to further discuss the
matter.[[35]]

Nutri-Asia alleged that it sent Hygienic the supporting documents on June 15, 2009. However, Hygienic
stated that the documents it received were insufficient to support Nutri-Asia's reimbursement claim.
Nutri-Asia insisted that the documents were sufficient, and again suggested a meeting between the
parties.36

After a re-computation of its claims, Nutri-Asia informed Hygienic that its request for reimbursement
decreased to ₱25,850, 759.31. The new amount was due to the reduction of the number of rejects and
the reduction in freight charges, rental charges, and additional manpower charges. The parties
exchanged several correspondences, until Nutri-Asia received a copy of the Complaint. As of September
4, 2009, Nutri-Asia's expenses increased to ₱26,405,553.95. 37

In arguing that its obligation was extinguished by compensation, Nutri-Asia contended:

10.47 In the instant case, both plaintiff and defendant are bound principally and at the same time a
principal creditor of the other; both debts consist in a sum of money; both debts are due, liquidated and
demandable; and neither plaintiff [n]or defendant there be any retention or controversy, commenced
by third persons and communicated in due time to the debtor.

10.48 By virtue of compensation, the plaintiffs obligation to defendant for the said losses and damages
in the sum of P26,405,553.95 is set off to the extent of P9,737,674.12 with the defendant's alleged
obligation to plaintiff in the sum of P9,737,674.12 resulting to the extinguishment of defendant's alleged
obligation to plaintiff.38

Due to compensation, Hygienic' s unpaid obligation was reduced to Pl6,667,879.83.39 Nutri-Asia added
that Hygienic's cause of action against it had yet to accrue, and that Nutri-Asia was merely holding the
payment of P9,737,674.12 as a lien to ensure that Hygienic would pay the losses and damages it
incurred.40

Lastly, Nutri-Asia alleged that Hygienic did not come to court with clean hands, and that it acted in bad
faith when it filed the Complaint.41 It claimed that the amount charged by Hygienic was "excessive,
iniquitious[,] and unconscionable."42

After Hygienic filed its Reply,43 Nutri-Asia filed an Omnibus Motion.44 Nutri-Asia reiterated its arguments
in its Answer, adding that its affirmative defenses could "be resolved on the basis of the pleadings and
the documents attached to the complaint without the need of further hearing."45

Hygienic opposed Nutri-Asia's Omnibus Motion in its Consolidated or Joint Comment.46 It countered that
the allegation of noncompliance with a condition precedent was incorrect.47 Moreover, its cause of
action was anchored on ''the sales invoices and delivery receipts duly acknowledged by [Nutri-Asia]
through its authorized representative and that these deliveries made by [Hygienic] were not properly
paid by [Nutri-Asia]."48

Hygienic claimed that even if the cause of action was based on all attached documents in the Complaint,
which included the Purchase Orders, the arbitration clause was "inoperative or incapable of being
performed."49 This is because of the conflict between the arbitration clause in the Purchase Orders and
the submission of parties to the Manila courts' jurisdiction in the Sales Invoices. The arbitration clause
was merely an offer from Nutri-Asia, which Hygienic rejected in its Sales Invoices. To submit the dispute
to arbitration, there should have been an unequivocal agreement between the parties. This agreement
was lacking in their case.50

82
In its May 24, 2010 Order,51 the Regional Trial Court Branch 46, Manila denied the Omnibus Motion.52 It
held that the venue was properly laid. It considered the signatures of Nutri-Asia's representatives in the
Sales Invoices as the company's concurrence that any dispute would be raised before the courts of
Manila.53

The trial court also found that the elements of compensation under the Civil Code were absent. It held
that Hygienic and Nutri-Asia were not creditors and debtors of each other. Only Hygienic was the
creditor, and only Nutri-Asia was the debtor. Nutri-Asia's Counter-Claim for damages still had to be
proven.54

The trial court likewise did not give credence to Nutri-Asia's allegation that Hygienic had no cause of
action against it.55 As to the allegation that Nutri-Asia's affirmative defenses could already be resolved
without going through trial, the trial court held that the issues Nutri-Asia raised "must be heard in a full
blown trial. "56 It held:

It is the view of the court that the arguments presented are factual in nature. Trial therefore is essential
for the court to best appreciate the facts presented. It cannot be done by mere reading, study and
evaluation of the documents attached to the complaint and the arguments presented in their respective
motions and comments to prevent miscarriage of justice.

....

[Rule 16, Section 6 of the Rules of Civil Procedure] provides that it is discretionary upon the court to
conduct a preliminary hearing on the affirmative defenses as a ground for dismissal.

Considering therefore that it is discretionary upon the court to allow the hearing on special and
affirmative defenses[,] this court would rather conduct a full blown trial so it could evaluate the
respective issues raised by the parties.57

The trial court ruled that Nutri-Asia's Counter-Claim was permissive in nature; thus, it could not acquire
jurisdiction over the Counter-Claim unless the filing fees were paid.58

The dispositive portion of the trial court's May 24, 2010 Order read:

Considering the above premises, the Omnibus Motion is hereby denied.

Defendant is directed to pay the appropriate docket fees on its permissive counterclaim within thirty
(30) days from receipt of this order.

Let the pre-trial of the above case be set on July 28, 2010 at 8:30 A.M.

Notify Attys. Malinao and Po of this order.

SO ORDERED.59

Nutri-Asia filed a Motion for Reconsideration.60 However, in its March 14, 2011 Joint Order,61 the
Regional Trial Court Branch 24, Manila denied the Motion. It also endorsed the case for mediation to the
Philippine Mediation Center and set a pre-trial conference on May 11, 2011, in case mediation was
unsuccessful.62

Thus, Nutri-Asia filed a Petition for Certiorari63 before the Court of Appeals.

In its January 13, 2012 Decision,64 the Court of Appeals granted the Petition.65 It held:

Here, the trial courts rendered the assailed Orders deferring a ruling on the issues of venue and
compliance with a condition precedent, which is the arbitration clause. No trial was necessary to resolve
them. All the trial courts ought to know could be determined from the documents on record, namely,
the sales invoices, the purchase orders, the respective places of business of petitioner and private

83
respondent, and the jurisprudence on these issues. We cannot envision any factual question, and the
trial courts did not mention any, to be threshed out before they can rule on these affirmative defenses.
The error in refusing to resolve them violates so basic and elemental precepts on what and how
discretion is to be exercised. We have to set aside and reverse these Orders.66 (Emphasis in the original)

The Court of Appeals also found that "the trial courts committed grave abuse of discretion in allowing
the complaint to stand and stay in Manila."67 It held that since the signature of Nutri-Asia's employee in
the Sales Invoices was only for the receipt of goods, Nutri-Asia did not agree to be bound by the venue
stipulation in the Sales Invoices. Meanwhile, Hygienic did not deny that an arbitration clause was written
on the Purchase Orders. 68 Its representative even "acknowledged its conformity to the purchase
orders."69 Since Hygienic "availed of the advantages and benefits of the purchase orders when it acted
on them[,]"70 it is thus estopped from rebuffing the arbitration clause.71

The Court of Appeals held that Nutri-Asia should have submitted its Counter-Claim to arbitration for
resolution. Thus, whether the Counter-Claim was permissive or compulsory was irrelevant.72

The dispositive portion of the Court of Appeals January 13, 2012 Decision read:

ACCORDINGLY, the petition is GRANTED. The Orders dated May 24, 2010 and March 14, 2011 of the
Regional Trial Court, Branches 46 and 24, in Civil Case No. 09-121849, are REVERSED AND SET ASIDE.
The complaint and the counterclaim in Civil Case No. 09- 121849 are DISMISSED WITHOUT
PREJUDICE to referral of the disputes between petitioner Nutri-Asia, lnc. and private respondent
Hygienic Packaging Corporation to arbitration, as stipulated in the purchase orders. No costs.

SO ORDERED.73 (Emphasis in the original)

Hygienic filed a Motion for Reconsideration,74 but it was denied by the Court of Appeals in its March 28,
2012 Resolution.75

On May 14, 2012, Hygienic filed a Petition for Review on Certiorari76 against Nutri-Asia before this Court.
It prayed that the Court of Appeals January 13, 2012 Decision and March 28, 2012 Resolution be
reversed and set aside, and the trial court's May 24, 2010 Order and March 14, 2011 Joint Order be
reinstated.77 Respondent filed its Comment78 on August 22, 2012, while petitioner filed its Reply79 on
September 4, 2013.

In its October 7, 2013 Resolution,80 this Court gave due course to the Petition and required the parties to
submit their respective memoranda.81 Petitioner filed its Memorandum of Arguments82 on December 12,
2013, while respondent filed its Memorandum83 on December 19, 2013.

Petitioner argues that the decision of the Court of Appeals to dismiss the Complaint and deny its Motion
for Reconsideration is improper. It claims that the Court of Appeals did not discuss the issues it raised in
its pleadings.84 Moreover, if the arbitration clause was found to be valid, the Court of Appeals should
have "referred the matter to arbitration and suspended the proceedings of the case."85

Petitioner maintains that the arbitration clause lacks the elements of a valid arbitration agreement.
Although present in writing, it was not properly subscribed, and the person who signed the Purchase
Orders was only a messenger, not petitioner's authorized agent. Thus, the arbitration clause cannot bind
petitioner.86

Petitioner reiterates that the Purchase Orders constitute respondent's offer to petitioner to enter into a
contract with it. Meanwhile, the Sales Invoices constitute petitioner's counter-offer rejecting the
stipulation clause.87 Since the parties did not agree on the arbitration agreement, the arbitration clause
is "inoperative and incapable of being performed, if not totally null and void."88

Petitioner also insists that the venue was properly laid when it filed the Complaint before the trial court
in Manila. It claims that when respondent accepted the Sales Invoices without protest, it adhered to the
contract, which included the venue stipulation. Petitioner points out that the person who signed the

84
Sales Invoices was a high-ranking officer of respondent, not a mere messenger. By signing the Sales
Invoices, respondent's representative bound the company to the venue stipulation.89

Petitioner asserts that its Motion for Reconsideration and Petition are not prohibited pleadings. It filed
the Motion to question both its Complaint's dismissal and the case's supposed referral to arbitration.
Thus, the Motion does not fall under Rule 4.6 of the Special Rules of Court on Alternative Dispute
Resolution. There is no basis for this Court to deny outright the Petition, which assails the Court of
Appeals Resolution denying the Motion.90

Petitioner also argues it raised purely questions of law:91

The main contention of the petitioner is that the alleged arbitration agreement between the parties of
this case did not comply with the requisites provided in the Rules. This is certainly not a question of fact
but rather, a question of law, as it necessitates the interpretation and application of Section 4 of
[Republic Act No.] 876 to the attendant facts of the case.

....

Contrary to the position of the respondent, the specific issue on whether or not the messenger-
signatory had the authority to bind petitioner Nutri-Asia with respect to the Arbitration Clause is not at
all a question of fact. [Neither the] identity nor the rank of the signatory was not disputedor put in
question so as to require further reception of evidence and conduction of trial. The truth or falsehood of
the incidents related to the act of signing of the mere messenger is not disputed by the respondent. The
issue is only with respect to his very authority to bind petitioner Hygienic as to the alleged agreement on
arbitration. In short, the issue is limited to whether or not the messenger acted as a lawful agent of the
petitioner - and this is undeniably a pure question of law.

The same rationale applies on the issue raised by the petitioner as to whether or not the document
pertaining to the arbitration clause was properly subscribed.

. . . This specific issue merely concerns the correct application of law or jurisprudence as to the
construction of the term "subscribed" and does not require the examination of the probative value of
evidence pertaining to the document containing the arbitration clause.92 (Emphasis in the original)

Lastly, assuming that petitioner raised factual issues, it argues that these issues fall under the exceptions
provided by law and jurisprudence;93 specifically, when the Court of Appeals rendered its Decision: (1)
"based on a misapprehension of facts";94 and (2) its findings were "contrary to those of the trial
court[.]"95

Respondent counters that petitioner's Motion for Reconsideration and Petition for Review should have
been dismissed outright under Rule 4.6 of the Special Rules of Court on Alternative Dispute
Resolution.96 Since the Court of Appeals referred the dispute to arbitration, it is "immediately executory-
not subject to a motion for reconsideration, appeal[,] or petition for certiorari [.] "97

Respondent argues that the Court of Appeals correctly dismissed the case since the parties failed to
submit the case to arbitration. In any case, since it already found that the venue was improperly laid, the
Court of Appeals did not err in dismissing the case.98

Respondent further claims that the Petition raises questions of fact.99 It states that petitioner, in filing
the Petition, wants this Court "to review the evidence on record and ascertain the authority of the
persons who signed the Purchase Orders, as well as the Sales Invoices."100 This Court will then have to
examine these facts:

(a) The identities of the persons who signed the Purchase Orders and the Sales Invoices;

(b) The positions of the persons in HYGIENIC [NUTRI-ASIA never stipulated on the positions of the said
persons] who signed the Purchase Orders;

85
(c) The positions of the persons who ostensibly signed the Sales Invoices;

(d) The duties and functions of the persons who signed the Purchase Orders and the Sales Invoices;

(e) Whether the persons who signed the Purchase Orders had the authority to act on behalf of HYGIENIC
[To be clear, NUTRI-ASIA never admitted that the persons were not authorized to act on behalf of

HYGIENIC];

(f) Whether the persons who signed the Sales Invoices had the authority to act on behalf of NUTRI-ASIA
[Again, NUTRI-ASIA never admitted the alleged authority of the persons who signed the Sales

Invoices]; and

[g] The circumstances surrounding the signing of the Purchase Orders and the Sales Invoices.101

Respondent adds that the conflicting findings of the trial court and the Court of Appeals on the issue of
arbitration do not suffice to allow the Petition.102 It highlights that in resolving the case, the question is
"whether the Court of Appeals correctly determined the presence of grave abuse of discretion in the
ruling of RTC-Manila[.]"103

Contrary to petitioner's assertion, respondent contends that the arbitration clause is operative and
capable of being performed. Aside from being in writing, both parties subscribed to the Terms and
Conditions of the Purchase Orders.104 Petitioner's acceptance of the Terms and Conditions, which
included the arbitration clause, is "manifested by its issuance of the corresponding Sales Invoices, which
made reference to the relevant Purchase Orders."105 By reflecting in its Sales Invoices the serial numbers
of respondent's Purchase Orders, petitioner "effectively incorporated the Purchase Order and its
contents into the Sales Invoice, including the arbitration clause."106 For failing to refer the case to
arbitration-a condition precedent before taking judicial action-the Court of Appeals correctly dismissed
the case.107

Finally, respondent maintains that "the Sales Invoices and the venue stipulation therein did not
constitute a rejection of the arbitration clause in the Purchase Orders."108 It claims that the persons who
signed the Sales Invoices were not respondent's employees, but of a third party contractor for their
logistics operations.109 It notes that above the signature line of the Sales Invoices, the phrase "[r]eceived
the above goods in good order and condition"110 is written. The contractor's employees only signed the
Sales Invoices to signify that they received the deliveries. Their signatures cannot bind respondent to the
venue stipulation. Assuming that they were authorized by respondent, the venue stipulation cannot
supersede the arbitration clause in the Purchase Orders.111 The Sales Invoices' venue stipulation "does
not authorize either party to do away with arbitration before proceeding to the courts to seek relief."112

The sole issue for this Court's resolution is whether or not the action for collection of sum of money was
properly filed.

Petitioner and respondent differ as to where their dispute should be brought for resolution. On the one
hand, petitioner contends that the venue stipulation in the Sales Invoices should be enforced. On the
other hand, respondent asserts that the arbitration clause in the Purchase Orders should be carried out.

This Court cannot subscribe to either contention.

Parties are allowed to constitute any stipulation on the venue or mode of dispute resolution as part of
their freedom to contract under Article 1306 of the Civil Code of the Philippines, which provides:

ARTICLE 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals, good customs, public order,
or public policy.

86
Here, however, the records lack any written contract of sale containing the specific terms and conditions
agreed upon by the parties.1âшphi1 The parties failed to provide evidence of any contract, which could
have contained stipulations on the venue of dispute resolution. Nonetheless, petitioner and respondent
both claim that the Sales Invoices and the Purchase Orders, respectively, contained a stipulation on
where to raise issues on any conflict regarding the sale of plastic containers. Each party also insists that
the other party accepted the venue stipulation in the Sales Invoices or the Purchase Orders when its
representative signed them.

Upon examination of the Sales Invoices and the Purchase Orders, this Court cannot consider the
documents as contracts that would bind the parties as to the venue of dispute resolution.

A closer look at the Sales Invoices issued by petitioner reveals that above the signature of respondent's
representative is the phrase, "Received the above goods in good order and condition."113 Clearly, the
purpose of respondent's representative in signing the Sales Invoices is merely to acknowledge that he or
she has received the plastic containers in good condition. He or she did not affix his or her signature in
any other capacity except as the recipient of the goods. To extend the effect of the signature by
including the venue stipulation would be to stretch the intention of the signatory beyond his or her
objective. This Court, then, cannot bind respondent to the other stipulations in the Sales Invoices.

A scrutiny of the Purchase Orders issued by respondent also reveals that above the signature of
petitioner's representative is the phrase "Acknowledged By (Supplier)."114 Since the Purchase Orders
indicated how many pieces of plastic containers respondent wanted to order from petitioner, the
signatory merely affixed his or her signature to acknowledge respondent's order. Moreover, the
Purchase Orders included a note stating that the "[Purchase Order] must be DULY acknowledged to
facilitate payment."115

Thus, it was necessary for petitioner's representative to sign the document for the processing of
payment. The act of signing the Purchase Orders, then, was limited to acknowledging respondent's
order and facilitating the payment of the goods to be delivered. It did not bind petitioner to the terms
and conditions in the Purchase Orders, which included the arbitration clause.

Petitioner and respondent may have entered into a contract of sale with respect to petitioner's
merchandise. However, the case records do not show that they have a contract in relation to the venue
of any civil action arising from their business transaction.

Cathay Metal Corporation v. Laguna West Multi-Purpose Cooperative, Inc.116 provides, "[f]or there to be
a contract, there must be a meeting of the minds between the parties."117 Here, no evidence shows that
petitioner and respondent had a meeting of minds and agreed to submit any future issue either to the
trial court or to arbitration.

Since there is no contractual stipulation that can be enforced on the venue of dispute resolution, the
venue of petitioner's personal action will be governed by the 1997 Revised Rules of Civil Procedure. Rule
4 provides:

RULE 4

Venue of Actions

SECTION 1. Venue of Real Actions. - Actions affecting title to or possession of real property, or interest
therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein
the real property involved, or a portion thereof, is situated.

Forcible entry and detainer actions shall be commenced and tried in the Municipal Trial Court of the
municipality or city wherein the real property involved, or a portion thereof, is situated.

SECTION 2. Venue of Personal Actions. - All other actions may be commenced and tried where the
plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal

87
defendants resides, or in the case of a non-resident defendant where he may be found, at the election
of the plaintiff.

SECTION 3. Venue of Actions Against Nonresidents. - If any of the defendants does not reside and is not
found in the Philippines, and the action affects the personal status of the plaintiff, or any property of
said defendant located in the Philippines, the action may be commenced and tried in the court of the
place where the plaintiff resides, or where the property or any portion thereof is situated or found.

SECTION 4. When Rule not Applicable. - This Rule shall not apply—

(a) In those cases where a specific rule or law provides otherwise; or

(b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue
thereof.

In City of Lapu-Lapu v. Philippine Economic Zone Authority:118

[V]enue is "the place of trial or geographical location in which an action or proceeding should be
brought." In civil cases, venue is a matter of procedural law. A party's objections to venue must be
brought at the earliest opportunity either in a motion to dismiss or in the answer; otherwise the
objection shall be deemed waived. When the venue of a civil action is improperly laid, the court
cannot motu proprio dismiss the case.

The venue of an action depends on whether the action is a real or personal action. Should the action
affect title to or possession of real property, or interest therein, it is a real action. The action should be
filed in the proper court which has jurisdiction over the area wherein the real property involved, or a
portion thereof, is situated. If the action is a personal action, the action shall be filed with the proper
court where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, or in the case of a non-resident defendant where he may be found, at the
election of the plaintiff.119 (Emphasis supplied, citations omitted)

It has been consistently held that an action for collection of sum of money is a personal action.120 Taking
into account that no exception can be applied in this case, the venue, then, is "where the plaintiff or any
of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, . . .
at the election of the plaintiff."121 For a corporation, its residence is considered "the place where its
principal office is located as stated in its Articles of Incorporation."122

In its Complaint, petitioner stated that its principal place of business is on San Vicente Road beside
South Superhighway, San Pedro, Laguna.123 Meanwhile, respondent admitted in its Answer that its
principal office is at 12/F Centerpoint Building, Gamet Road comer Julia Vargas Avenue, Ortigas Center,
Pasig City.124 Considering that the amount petitioner claims falls within the jurisdiction of the Regional
Trial Court,125 petitioner may file its Complaint for sum of money either in the Regional Trial Court of San
Pedro, Laguna or in the Regional Trial Court of Pasig City.

Petitioner's erroneous belief on the applicability of the venue stipulation in the Sales Invoices led it to
file an action before the Regional Trial Court of Manila. This error is fatal to petitioner's case.

One (1) of the grounds for dismissal of an action under Rule 16, Section 1126 of the 1997 Revised Rules of
Civil Procedure is when the venue is improperly laid. Although respondent did not file a Motion to
Dismiss on this ground, it cited the improper venue as one (1)of the affirmative defenses in its
Answer:127

9. The venue of the instant complaint is improperly laid.

9.1 The instant complaint for collection of a sum of money, a personal action was filed before the
Regional Trial Court of the City of Manila which is not the proper venue for the instant complaint.

....

88
9.3 In paragraphs 1 and 2 of the instant complaint, the plaintiff had made an admission on the pleading
that its principal place of business is located at San Vicente Road beside South Superhighway, San Pedro,
[Laguna,] while the principal place of business of defendant is located at 12/F The Centerpoint Building,
Gamet Road comer Julia Vargas Avenue, Ortigas Center, Pasig City. With this admission on the pleading,
it is clear that the instant complaint should have been filed before the Regional Trial Court of San Pedro,
Laguna, where the plaintiff has its principal place of business or before the Regional Trial Court of Pasig
City, Laguna where the defendant has its principal place of business.

9.4 The parties did not validly agree in writing before the filing of the action that the Courts of the City of
Manila shall be the exclusive venue thereof.

9.5 The alleged stipulation in the Sales Invoice that the parties submit themselves to jurisdiction of the
Courts of the City of Manila in any legal action out of the transaction between the parties cannot and
should not bind defendant in the absence of the express conformity by the defendant. The defendant
has never signed the said Sales Invoice to signify its conformity to the said stipulation regarding venue of

actions.128 (Emphasis in the original)

This Court finds that the Court of Appeals is partly correct in ruling that the trial court committed grave
abuse of discretion in denying respondent's Omnibus Motion. The assailed Court of Appeals January 13,
2012 Decision held:

On the issue of venue, the trial courts committed grave abuse of discretion in allowing the complaint to
stand and stay in Manila. The sales invoices, if viewed to be a contract on venue stipulation, were not
signed by petitioner's agent to be bound by such stipulation. The signature has to do with the receipt of
the purchased goods "in good order and condition." Petitioner did not, therefore, agree to be restricted
to a venue in Manila and was never obliged to observe this unilateral statement in the sales
invoices.129 (Citation omitted)

However, contrary to the Court of Appeals' finding on the validity of the arbitration clause, this Court
cannot give the stipulation any effect as discussed earlier.

This Court reminds litigants that while the rules on venue are for the convenience of plaintiffs, these
rules do not give them unbounded freedom to file their cases wherever they may please:130

[T]he rules on venue, like the other procedural rules, are designed to insure a just and orderly
administration of justice or the impartial and even-handed determination of every action and
proceeding. Obviously, this objective will not be attained if the plaintiff is given unrestricted freedom to
choose the court where he may file his complaint or petition. The choice of venue should not be left to
the plaintiffs whim or caprice. He [or she] may be impelled by some ulterior motivation in choosing to
file a case in a particular court even if not allowed by the rules on venue.131 (Citation omitted)

WHEREFORE, premises considered, the Court of Appeals January 13, 2012 Decision and March 28, 2012
Resolution in CA-G.R. SP No. 119511 are AFFIRMED insofar as they reversed and set aside the May 24,
2010 Order and March 14, 2011 Joint Order of the Regional Trial Court, Branches 46 and 24, in Civil Case
No. 09-121849.

However, the rulings of the Court of Appeals dismissing the· Complaint and the Counter-Claim in Civil
Case No. 09-121849 without prejudice to referral of the disputes to arbitration are REVERSED and SET
ASIDE.

The Complaint and the Counter-Claim in Civil Case No. 09-121849 are DISMISSED WITHOUT
PREJUDICE to the refiling of the same claims before the proper court.

SO ORDERED.

Peralta, (Chairperson), A. Reyes, Jr., Hernando, and Carandang,* JJ., concur.

89
EN BANC

January 15, 2019

G.R. No. 231643

CHRISTIAN C. HALILI, Petitioner,

vs.
COMMISSION ON ELECTIONS, PYRA LUCAS, and CRISOSTOMO GARBO, Respondents.

x-----------------------x

G. R. No. 231657

MARINO P. MORALES, Petitioner,

vs.
PYRA LUCAS and the COMMISSION ON ELECTIONS, Respondents.
CHRISTIAN C. HALILI and CRISOSTOMO GARBO, Respondents-Intervenors.

DECISION

CARPIO, J.:

The Case

These two consolidated1 petitions2 seek to nullify and set aside the Resolution3 dated 3 August 2016 of
the Commission on Elections (COMELEC) First Division and the Resolution4 dated 26 May 2017 of the
COMELEC En Banc.

The Facts

Petitioner Marino P. Morales (Morales) was elected and served as Mayor of the Municipality of
Mabalacat, Pampanga from 1 July 2007 to 30 June 2010. He was elected again as mayor during the 2010
elections. On 15 May 2012, or during Morales' second term, Congress passed Republic Act No. (RA)
10164,5 converting the Municipality of Mabalacat into a component city. Thereafter, a plebiscite was
held. In the 2013 elections, Morales ran again and was elected as mayor of the new Mabalacat City. On
8 December 2015, Morales filed his Certificate of Candidacy6 (COC) for the 2016 elections for the
position of mayor of Mabalacat City, as substitute candidate for Wilfredo Feliciano of Aksyon
Demokratiko Party.

On 4 January 2016, respondent Pyra Lucas (Lucas), also a candidate for the position of mayor of
Mabalacat City, filed a Petition for Cancellation of the COC and/or Disqualification of Morales for the
Mayoral Position of Mabalacat City,7 docketed as SPA No. 16-001 (DC), before the COMELEC. Lucas
alleged that Morales was disqualified to run for mayor, since he was elected and had served three
consecutive terms prior to the 2016 elections. Lucas also alleged that the conversion of the Municipality
of Mabalacat into Mabalacat City did not interrupt Morales' service for the full term for which he was
elected.

On 25 January 2016, Morales filed his Verified Answer8 alleging that Lucas' petition should be summarily
dismissed for lack of certification against forum shopping, for being filed out of time, and for lack of
jurisdiction and/or cause of action. Morales claimed that his candidacy did not violate the three-term
limit rule, because the conversion of the Municipality of Mabalacat into Mabalacat City interrupted his
term. According to him, his term as mayor of Mabalacat City is not a continuation of his term as mayor
of the Municipality of Mabalacat.

On 10 May 2016, following the canvass of all election returns, the City Board of Canvassers of Mabalacat
City proclaimed Morales as elected city mayor, and petitioner Christian C. Halili (Halili) as elected city
vice mayor.

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On 20 May 2016, respondent Crisostomo Garbo (Garbo), another candidate for the position of mayor of
Mabalacat City, filed a Motion for Leave To Intervene and To Admit Attached Petition-in-
Intervention9 alleging that he was interested in the outcome of the case, since he obtained the second
highest number of votes and he should be proclaimed as mayor of Mabalacat City should Morales' COC
be cancelled.

On 28 June 2016, Halili also filed a Verified Motion for Leave to Intervene (as Respondent) and Admit
Attached Answer-in-Intervention10 alleging that, as incumbent vice mayor of Mabalacat City, he should
be proclaimed as mayor of Mabalacat City should Morales' COC be cancelled pursuant to the rule on
succession under Section 44 of RA 7160, or the Local Government Code.

On 16 December 2016, Morales filed an Opposition11 to Garbo's Petition-in-Intervention and a

Comment12 to Halili's Answer-in-Intervention before the COMELEC, alleging that both pleadings are
premature.

The Ruling of the COMELEC

In a Resolution dated 3 August 2016, the COMELEC First Division granted the petition, cancelled
Morales' COC, and ordered the proclamation of the qualified mayoralty candidate with the next higher
number of votes. The dispositive portion states:

WHEREFORE, the Petition is GRANTED. Accordingly, the Certificate of Candidacy of MARINO P. MORALES
is hereby CANCELLED. All votes cast in his favor are declared stray.

The City Board of Canvassers of Mabalacat, Pampanga is hereby ORDERED to RECONVENE, ANNUL the
proclamation of MARINO P. MORALES, PROCLAIM the qualified candidate with the next highest number
of votes, and EFFECT the necessary corrections in the Certificate of Canvass and Proclamation.

SO ORDERED.13

The COMELEC First Division ruled that Lucas' petition was a petition for cancellation of COC under
Section 78 of the Omnibus Election Code (OEC), and it was timely filed. The COMELEC First Division
likewise held that Morales committed a material misrepresentation in his COC in stating that he is
eligible to run as mayor of Mabalacat City, when in fact he is not eligible, because he violated the three-
term limit rule after having served for the same local government post for three consecutive terms prior
to the 2016 elections.

On 27 January 2017, the COMELEC En Banc granted the motions for leave to intervene filed by Garbo
and Halili.

In a Resolution dated 26 May 2017, the COMELEC En Banc denied the motion for reconsideration filed
by Morales for lack of merit, and affirmed the Resolution dated 3 August 2016 of the COMELEC First
Division.14 The COMELEC En Banc declared that Garbo, being the qualified mayoralty candidate with the
highest number of votes, should be proclaimed.

On 1 June 2017, Lucas filed a Motion for Execution, and a subsequent Manifestation alleging the finality
of the COMELEC En Banc Resolution dated 26 May 201 7. Thereafter, Morales filed an Opposition to the
Motion for Execution.

On 2 June 2017, Halili filed a Petition for Certiorari and ProhibitionWith Application for Temporary
Restraining Order and/or Status Quo Ante Order15 before us, docketed as G.R. No. 231643.

On 5 June 2017, Morales filed a Petition for Certiorari and Prohibition with Urgent Prayer for Issuance of
Temporary Restraining Order and/or Status Quo Ante Order and/or Writ of Preliminary Injunction with
Motion for Special Raffle16 before us, docketed as G.R. No. 231657.

On 8 June 2017, the COMELEC En Banc issued a Writ of Execution: (1) ordering Morales to cease and
desist from performing the functions of mayor of Mabalacat City, Pampanga; (2) directing, after due

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notice to the parties, the Special City Board of Canvassers of Mabalacat City, Pampanga to convene on
27 June 2017, 3:00 p.m., at the COMELEC Session Hall, 8th Floor, Palacio del Gobernador Building,
Intramuros, Manila and to proclaim Garbo, who garnered the highest number of votes of Seventeen
Thousand Seven Hundred Ten (17,710) votes, as the duly elected mayor of Mabalacat City, Pampanga;
and (3) directing the Special City Board of Canvassers of Mabalacat City, Pampanga to furnish a copy of
the Certificate of Proclamation to the Department of Interior and Local Government, Secretary of the
Sangguniang Panlungsod of Mabalacat City and affected parties.17

In two Resolutions both dated 11 July 2017, the Court En Banc resolved to consolidate G.R. No. 231643
with G.R. No. 231657, and to deny for lack of merit: (a) the Very Urgent Motion Reiterating the Issuance
of Temporary Restraining Order and/or Status Quo Ante Order and Writ of Preliminary Injunction (as
Respondent COMELEC Issued a Writ of Execution to Implement the Assailed Resolutions) dated 9 June
2017 filed by Morales;18 (b) the Second Very Urgent Motion to Resolve Application for TRO
and/or Status Quo Ante Order dated 21 June 2017 filed by Morales;19 and (c) the Urgent Motion to
Resolve Application for TRO/ Status Quo Ante Order and/or Writ of Preliminary Injunction dated 9 June
2017 filed by Halili.20

The Issues

In G.R. No. 231643, Halili raised the following issues:

A. Whether or not the Honorable Commission on Elections committed grave abuse of discretion
amounting to lack or excess of jurisdiction in considering the application of Aratea vs. Comelec case as
basis in declaring that "the Petitioner-Intervenor [Crisostomo Garbo] being the qualified mayoral
candidate with the highest number of votes should be proclaimed?"

B. Whether or not the Honorable Commission on Elections committed grave abuse of discretion
amounting to lack or excess of jurisdiction in not declaring a permanent vacancy in the office of the
Mayor of Mabalacat City pursuant to Section 4, R.A. 716[0] [Local Government Code of 1991] after it
cancelled the COC of Marino P. Morales?

C. Whether or not the Honorable Commission on Elections committed grave abuse of discretion
amounting to lack or excess of jurisdiction in ordering the reconvening of the 2016 Elections City Board
of Canvassers of Mabalacat City to proclaim the qualified candidate with the next highest number of
votes?21

In G.R. No. 231657, Morales raised the following issues:

a. Whether public respondent committed grave abuse of discretion amounting to lack or excess of
jurisdiction in arbitrarily treating the VERY VAGUE Lucas Petition as a Petition to Deny Due Course
despite the fact that there is NOT a single statement or allegation in said Petition that petitioner
committed "deliberate material misrepresentation";

a.1. Whether public respondent should have DISMISSED the Lucas Petition OUTRIGHT for being
defective because it is a Petition for Disqualification invoking a ground proper for a Petition to Deny Due
Course, in violation of Section 1, Rule 25, COMELEC Resolution No. 9523;

b. Assuming arguendo that the Lucas Petition can be treated as a Petition to Deny Due Course, whether
public respondent committed grave abuse of discretion amounting to lack or excess of jurisdiction when
it failed to DISMISS OUTRIGHT the Lucas Petition for being filed out of time and for failure of private
respondent to attach to said Petition a Certificat[ion] of Non-Forum Shopping, as required by the Rules;

c. Assuming arguendo that the Lucas Petition can be treated as a Petition to Deny Due Course, whether
public respondent committed grave abuse of discretion amounting to lack or excess of jurisdiction when
it did NOT dismiss the Lucas Petition despite the fact that there is no prior "authoritative ruling" yet on
petitioner's eligibility by any competent court or tribunal, following the doctrine laid down by this Court
in the case of Poe vs. Comelec. In a word, whether or not petitioner violated the three-term limit rule
when he ran for Mayor of the newly created Mabalacat City in the May 9, 2016 elections;

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d. Assuming arguendo that the Lucas Petition can be treated as a Petition to Deny Due Course, whether
public respondent committed grave abuse of discretion amounting to lack or excess of jurisdiction when
[it] refused to dismiss the Lucas Petition on the basis of its Resolution in the Castro Petition with
practically the same issues herein, which had already attained finality pending resolution of the Lucas
Petition;

e. Whether public respondent committed grave abuse of discretion amounting to lack or excess of
jurisdiction when it refused to dismiss the Lucas Petition despite the fact that it had already lost
jurisdiction over the case since the petitioner had already been proclaimed and assumed office, similar
or analogous to the ruling of this Court in various cases that "after the proclamation of the winning
candidate, disputes as to his CoC become moot (and are taken out of COMELEC's jurisdiction) and the
proper remedy is to file a quo warranto proceeding questioning the candidate's eligibility"; and

f. Public respondent committed grave abuse of discretion amounting to lack or excess of jurisdiction in
ruling that the second placer in the subject contest should replace petitioner.22

The Ruling of the Court

The primordial issue to be resolved is whether or not the COMELEC gravely abused its discretion
amounting to lack or excess of jurisdiction: (1) in finding that Morales committed a false material
representation in his COC when he declared that he was eligible to run as mayor of Mabalacat City for
the 2016 elections despite his violation of the three-term limit rule; and (2) in proclaiming Garbo as the
duly elected mayor of Mabalacat City for being the qualified candidate with the highest number of votes.

We do not find merit in both petitions.

The three-term limit rule is embodied in Section 8, Article X of the 1987 Constitution, to wit:

Section 8. The term of office of elective local officials, except barangay officials, which shall be
determined by law, shall be three years and no such official shall serve for more than three consecutive
terms. Voluntary renunciation of the office for any length of time shall not be considered as an
interruption in the continuity of his service for the full term for which he was elected.

It is restated in Section 43 of the Local Government Code, thus:

Section 43. Term of Office.- (a) x x x.

b) No local elective official shall serve for more than three (3) consecutive terms in the same position.
Voluntary renunciation of the office for any length of time shall not be considered as an interruption in
the continuity of service for the full term for which the elective official concerned was elected.

xxxx

The intention behind the three-term limit rule is not only to abrogate the "monopolization of political
power" and prevent elected officials from breeding "proprietary interest in their position" but also to
"enhance the people's freedom of choice."23 There are two conditions which must concur for the
application of the disqualification of a candidate based on violation of the three-term limit rule: (1) that
the official concerned has been elected for three consecutive terms in the same local government post,
and (2) that he has fully served three consecutive terms.24

In the present case, Morales admits that he has been elected and has served as mayor of Mabalacat,
Pampanga for three consecutive terms: (1) 2007-2010; (2) 2010-2013; and (3) 2013-2016. However,
Morales insists that his second term as mayor of the Municipality of Mabalacat was interrupted by the
conversion of the municipality into a component city. Morales claims that Mabalacat City is an entirely
different political unit from the Municipality of Mabalacat, having an increased territory, income and
population.

We are not convinced.

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We have already ruled upon the same issue in the case of Latasa v. COMELEC (Latasa),25 where we held
that the conversion of a municipality into a city does not constitute an interruption of the incumbent
official's continuity of service. We held that to be considered as interruption of service, the "law
contemplates a rest period during which the local elective official steps down from office and ceases to
exercise power or authority over the inhabitants of the territorial jurisdiction of a particular local
government unit."26

In Latasa, petitioner was elected and served as mayor of the Municipality of Digos, Davao del Sur for
terms 1992-1995, 1995-1998, and 1998-2001. During petitioner's third term, Digos was converted into a
component city. When Latasa filed his COC for the 2001 elections, we held that petitioner was
disqualified to run as mayor of Digos City for violation of the three-term limit rule, with the following
explanation:

x x x Section 2 of the Charter of the City of Digos provides:

Section 2. The City of Digos.- The Municipality of Digos shall be converted into a component city to be
known as the City of Digos, hereinafter referred to as the City, which shall comprise the present territory
of the Municipality of Digos, Davao del Sur Province. The territorial jurisdiction of the City shall be within
the present metes and bounds of the Municipality of Digos. x x x.

Moreover, Section 53 of the said Charter further states:

Section 53. Officials of the City of Digos. - The present elective officials of the Municipality of Digos shall
continue to exercise their powers and functions until such a time that a new election is held and the
duly-elected officials shall have already qualified and assumed their offices. x x x.

As seen in the aforementioned provisions, this Court notes that the delineation of the metes and
bounds of the City of Digos did not change even by an inch the land area previously covered by the
Municipality of Digos. This Court also notes that the elective officials of the Municipality of Digos
continued to exercise their powers and functions until elections were held for the new city officials.

True, the new city acquired a new corporate existence separate and distinct from that of the
municipality.1âшphi1 This does not mean, however, that for the purpose of applying the subject
Constitutional provision, the office of the municipal mayor would now be construed as a different local
government post as that of the office of the city mayor. As stated earlier, the territorial jurisdiction of
the City of Digos is the same as that of the municipality. Consequently, the inhabitants of the
municipality are the same as those in the city. These inhabitants are the same group of voters who
elected petitioner Latasa to be their municipal mayor for three consecutive terms. These are also the
same inhabitants over whom he held power and authority as their chief executive for nine years.

xxxx

x x x. In the present case, petitioner, upon ratification of the law converting the municipality to a city,
continued to hold office as chief executive of the same territorial jurisdiction. There were changes in the
political and economic rights of Digos as local government unit, but no substantial change occurred as to
petitioner's authority as chief executive over the inhabitants of Digos.27

Similarly, in Laceda, Sr. v. Limena, (Laceda),28 we held that the merger and conversion of the
municipalities of Sorsogon and Bacon into Sorsogon City did not interrupt petitioner's term as Punong
Barangay for three consecutive terms, to wit:

x x x [W]hile it is true that under Rep. Act No. 8806 the municipalities of Sorsogon and Bacon were
merged and converted into a city thereby abolishing the former and creating Sorsogon City as a new
political unit, it cannot be said that for the purpose of applying the prohibition in Section 2 of Rep. Act
No. 9164, the office of Punong Barangay of Barangay Panlayaan, Municipality of Sorsogon, would now
be construed as a different local government post as that of the office of Punong Barangay of Barangay
Panlayaan, Sorsogon City. The territorial jurisdiction of Barangay Panlayaan, Sorsogon City, is the same
as before the conversion. Consequently, the inhabitants of the barangay are the same. They are the

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same group of voters who elected Laceda to be their Punong Barangay for three consecutive terms and
over whom Laceda held power and authority as their Punong Barangay. Moreover, Rep. Act No. 8806
did not interrupt Laceda's term.29

In the present case, RA 10164, or An Act Converting the Municipality of Mabalacat in the Province of
Pampanga into a Component City to be Known as Mabalacat City, provides that:

xxxx

Sec. 2. Mabalacat City. - The Municipality of Mabalacat shall be converted into a component city to be
known as Mabalacat City, hereinafter referred to as the City. The territorial jurisdiction of the City shall
be within the present metes and bounds of the Municipality of Mabalacat, Province of Pampanga.

The foregoing provision shall be without prejudice to the resolution by the appropriate agency or forum
of any boundary dispute or case involving questions of territorial jurisdiction between Mabalacat City
and the adjoining local government units.

xxxx

Sec. 52. Officials of Mabalacat City. - The present elective officials of the Municipality of Mabalacat
shall continue to exercise their powers and functions until such time that a new election is held and the
duly-elected officials shall have already qualified and assumed their offices. Appointive officials and
employees of the municipality shall likewise continue exercising their duties and functions and they shall
be automatically absorbed by the city government of Mabalacat City. (Emphasis supplied)

When the law is clear and free from any doubt or ambiguity, there is no room for construction or
interpretation, but only application. Verba legis non est recedendum, or from the words of a statute
there should be no departure. Thus, contrary to Morales' arguments, the territorial jurisdiction of
Mabalacat City is the same as that of the Municipality of Mabalacat. Also, the elective officials of the
Municipality of Mabalacat continued to exercise their powers and functions until elections were held for
the new city officials.

Applying our ruling in Latasa, the provisions of RA 10164 mean that the delineation of the metes and
bounds of Mabalacat City did not change even by an inch the land area previously covered by the
Municipality of Mabalacat. Consequently, the inhabitants are the same group of voters who elected
Morales to be their mayor for three consecutive terms, and over whom he held power and authority as
their mayor. Accordingly, Morales never ceased from acting and discharging his duties and
responsibilities as chief executive of Mabalacat, despite the conversion of the Municipality of Mabalacat
into Mabalacat City.

In insisting that Mabalacat City is an entirely different political unit as that of the Municipality of
Mabalacat due to an alleged increased territory, income and population, Morales cites the second
paragraph of Section 2, RA 10164 and presents a Political Boundary Map before us.

We find that Morales failed to substantiate his claim that Mabalacat City is an entirely different political
unit as that of the Municipality of Mabalacat. In his Memorandum, Morales states that: "the Political
Boundary Map just offered as EXHIBIT B never made it to be released officially by the Bureau of Land
Management of the DENR and is being used only in this case as a reference tool to designate the
original and specific intent of Congress when it passed into law RA 10164, the Charter of Mabalacat City.
Though the political boundary map is complete for its intended purpose, respondent acknowledges
that it never got officially released because of circumstances beyond anyone's control. The notable
stumbling blocks against the release of this Political Boundary Map are the already on-going
litigations among various claimants and the protestations of conflicting claims by would be stakeholders
with the new added areas."30

Thus, Morales admits that there are on-going litigations, and there is no resolution by an appropriate
agency on any boundary dispute, as required by the second paragraph of Section 2, RA 10164. The
Political Boundary Map is merely offered to show the intent of Congress in passing RA 10164, when in

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fact, resort to intention is unnecessary when the law is clear. Accordingly, there is no factual or legal
authority for Morales' claim that the territorial jurisdiction of Mabalacat City is different from that of the
Municipality of Mabalacat.

Still, Morales insists that his declarations in his COC are material representations of his honest to
goodness belief that he was eligible to run.

In Aratea v. Commission on Elections (Aratea),31 we found that Lonzanida misrepresented his eligibility
because he knew fully well that he had been elected, and had served, as mayor of San Antonio,
Zambales for more than three consecutive terms, yet, he still certified that he was eligible to run for
mayor for the next succeeding term. We held that such misrepresentation constitutes false material
representation as to his qualification or eligibility for the office. We explained that:

In a certificate of candidacy, the candidate is asked to certify under oath his or her eligibility, and thus
qualification, to the office he [or she] seeks election. Even though the certificate of candidacy does not
specifically ask the candidate for the number of terms elected and served in an elective position, such
fact is material in determining a candidate's eligibility, and thus qualification for the office. Election to
and service of the same local elective position for three consecutive terms renders a candidate
ineligible from running for the same position in the succeeding elections.32 (Emphasis supplied)

In the present case, Morales' alleged lack of knowledge or notice of ineligibility is negated by the
previous cases involving the three-term limit rule and his eligibility to run, specifically Rivera III v.
Commission on Elections (Rivera)33 and Dizon v. Commission on Elections (Dizon).34

In Rivera, Morales, the present petitioner, was elected mayor of the Municipality of Mabalacat,
Pampanga for the following consecutive terms: 1995-1998, 1998-2001, and 2001-2004. In the 2004
elections, Morales ran again as mayor of the same town and was proclaimed elective mayor for the term
commencing 1 July 2004 to 30 June 2007. A petition for quo warranto was later filed against Morales
alleging that he was ineligible to run for a "fourth" term, having served as mayor for three consecutive
terms. Morales answered that his supposed 1998-2001 term could not be considered against him,
because although he was proclaimed the elected mayor and discharged the duties of mayor from 1998
to 2001, his proclamation was later nullified by the Regional Trial Court of Angeles City (RTC) and his
closest rival was proclaimed the duly elected mayor.

The Court found that Morales exceeded the three-term limit rule, because he was mayor for the entire
period from 1998 to 2001, notwithstanding the decision of the RTC. The Court ruled that the fact of
being belatedly ousted, which was after the expiry of his term, could not constitute an interruption in
Morales' service of the full term, and Morales could not be considered as a mere "caretaker of the
office" or "de facto officer" for purposes of applying the three-term limit rule. We held that "Section 8,
Article X of the Constitution is violated and its purpose defeated when an official serves in the same
position for three consecutive terms. Whether as 'caretaker' or 'de facto' officer, he exercises the
powers and enjoys the prerequisites of the office which enables him 'to stay on indefinitely."’35

In Dizon, Morales was a respondent in a disqualification proceeding when he ran again as a mayoralty
candidate during the 2007 elections. This time, the Court ruled in his favor and held that for purposes of
the 2007 elections, the three-term limit rule was no longer a disqualifying factor against Morales, to wit:

Our ruling in the Rivera case served as Morales' involuntary severance from office with respect to the
2004-2007 term. Involuntary severance from office for any length of time short of the full term provided
by law amounts to an interruption of continuity of service. Our decision in the Rivera case was
promulgated on 9 May 2007 and was effective immediately. The next day, Morales notified the vice
mayor's office of our decision. The vice mayor assumed the office of the mayor from 17 May 2007 up to
30 June 2007. The assumption by the vice mayor of the office of the mayor, no matter how short it may
seem to Dizon, interrupted Morales' continuity of service. Thus, Morales did not hold office for the full
term of 1 July 2004 to 30 June 2007.36

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Accordingly, we find that Morales misrepresented his eligibility because he knew full well that he had
been elected, and had served, as mayor of Mabalacat, Pampanga for three consecutive terms; yet, he
still certified that he was eligible to run for mayor for the next succeeding term.

Morales, however, claims that the COMELEC En Banc should take judicial notice of the COMELEC Second
Division Resolution, which dismissed Noelito Castro's Petition to Deny Due Course to or Cancel the COC
and to Disqualify Morales for the Second Time as a Mayoralty Candidate of Mabalacat City filed on 10
December 2015 (Castro's Petition),37 since it involves the same issue as the present petitions.

We do not find merit in such argument.

In the said Resolution38 dated 14 September 2016, the COMELEC Second Division dismissed Castro's
Petition due to the following procedural reasons: (1) the petition lacked verification required by both
provisions of the OEC and the COMELEC Rules of Procedure; (2) Morales was not served with a copy of
the petition; and (3) Castro failed to comply with Resolution No. 9576 requiring submission of soft
copies of pleadings in MS Word and annexes in PDF format. The COMELEC Second Division further ruled
that the petition was "dismissible" because the records of the case were bereft of any prior
authoritative ruling that Morales already served as mayor of Mabalacat City for three consecutive terms,
pursuant to Poe-Llamanzares v. Commission on Elections (Poe).39 Considering that no motion for
reconsideration was filed, the COMELEC Second Division Resolution became final on 22 December
2016,40 and the COMELEC En Banc has nothing to decide on Castro's Petition. Election cases shall be
heard and decided in division, provided that motions for reconsideration of decisions shall be decided by
the COMELEC En Banc.41

On the other hand, we find that in arguing that the COMELEC En Banc should consider the COMELEC
Second Division Resolution on Castro's Petition because the "Castro Case is very similar to the instant
Petition in that both are petitions to deny due course and/or to cancel the Certificate of
Candidacy ("COC") of respondent for alleged violation of the three-term limit rule [and] x x x both
Petitions arise from the same set of facts and both availed of the same relief from this commission
(Petition to Deny Due Course),"42 Morales essentially admits that Lucas' petition is properly filed under
Section 78 of the OEC, contrary to his argument that Lucas' petition is vague and wrongly construed by
the COMELEC as a petition to deny due course.

In Albania v. Commission on Elections,43we held that the COMELEC has the authority to examine the
allegations of every pleading filed, obviously aware that its averments, rather than its title/caption, are
the proper gauges in determining the true nature of the cases filed before it. Thus, the COMELEC aptly
found that Lucas' petition contains the essential allegations of a "Section 78" petition, namely: (1) the
candidate made a representation in his COC; (2) the representation pertains to a material matter which
would affect the substantive rights of the candidate; and (3) the candidate made a false representation
with the intention to deceive the electorate as to his qualification for public office or deliberately
attempted to mislead, misinform, or hide a fact which would otherwise render him ineligible.44

Contrary to Morales' argument that since he had been proclaimed and had assumed office as mayor in
2016, disputes as to his COC became moot and the proper remedy is to file a quo warranto proceeding
questioning his eligibility, we held in Velasco v. Commission on Elections45 that the COMELEC's
jurisdiction to deny due course to and cancel a COC continues, to wit:

x x x. If the disqualification or COC cancellation/denial case is not resolved before election day, the
proceedings shall continue even after the election and the proclamation of the winner. In the
meanwhile, the candidate may be voted for and be proclaimed if he or she wins, but the COMELEC's
jurisdiction to deny due course and cancel his or her COC continues. This rule applies even if the
candidate facing disqualification is voted for and receives the highest number of votes, and even if the
candidate is proclaimed and has taken his oath of office. The only exception to this rule is in the case of
congressional or senatorial candidates with unresolved disqualification or COC denial/cancellation cases
after the elections. Pursuant to Section 17 of Article VI of the Constitution, the COMELEC ipso jure loses
jurisdiction over these unfinished cases in favor of the respective Senate or the House of
Representatives electoral tribunals after the candidates take their oath of office.46

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Moreover, we held in Fermin v. Commission on Elections47 that the Court has already likened a
proceeding under Section 78 to a quo warranto proceeding under Section 253 of the OEC since they
both deal with the eligibility or qualification of a candidate, with the distinction mainly in the fact that a
"Section 78" petition is filed before proclamation, while a petition for quo warranto is filed after
proclamation of the wining candidate.

Thus, Section 78 of the OEC states:

Sec. 78. Petition to deny due course to or cancel a certificate of candidacy. - A verified petition seeking
to deny due course or to cancel a certificate of candidacy may be filed by the person exclusively on the
ground that any material representation contained therein as required under Section 74 hereof is false.
The petition may be filed at any time not later than twenty-five days from the time of the filing of the
certificate of candidacy and shall be decided, after due notice and hearing, not later than fifteen days
before the election.

Under Section 78, a petition to deny due course to or to cancel a COC must be filed within 25 days from
the time of filing of the COC. Morales filed his COC on 8 December 2015. Thus, Lucas had until 2 January
2016 to file the petition under Section 78, but since 2 January 2016 fell on a Saturday, Lucas had until
the next working day or 4 January 2016 to file the petition. We, thus, find that Lucas timely filed her
petition on 4 January 2016 under Section 78 of the OEC. Furthermore, contrary to Morales' insistence,
the COMELEC Rules of Procedure do not require that a certification of non-forum shopping be attached
to the petition.48 At any rate, we held that the COMELEC's rules of procedure on certifications of non-
forum shopping should be liberally construed, and COMELEC's interpretation of such rules in accordance
with its constitutional mandate should carry great weight.49

We likewise find no merit in Morales' argument that a prior authoritative ruling is necessary pursuant
to Poe.

We held in Francisco v. Commission on Elections50 that the COMELEC can be the proper body to make
the pronouncement against which the truth or falsity of a material representation in a COC can be
measured. The COMELEC, as an adjunct to its adjudicatory power, may investigate facts or ascertain the
existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their
official action. We upheld our ruling in Aratea that no prior judgment recognizing a candidate's service
for three consecutive terms was necessary to effect the cancellation of his COC.

At any rate, we also held in Poe that self-evident facts of unquestioned or unquestionable veracity and
judicial confessions are bases equivalent to prior decisions against which the falsity of representation
can be determined.51 Since Morales admits having been elected and having served for three consecutive
terms, his admission already served as basis against which the falsity of his representation can be
determined.

Knowing fully well that he had been elected and had fully served three consecutive terms for the same
local government post, Morales' representation in his COC that he was eligible to run as mayor
constitutes false material representation as to his qualification or eligibility for the office, which is a
ground for a petition to deny due course to or cancel a COC. Accordingly, we find that Morales' COC is
void ab initio, and he was never a candidate at all, and all votes for him were considered stray
votes.1âшphi1

As we held in Aratea, a violation of the three-term limit rule is an ineligibility affecting the qualification
of a candidate to elective office and the misrepresentation of such is a ground to grant the petition to
deny due course to or cancel a COC.52 A person whose COC had been denied due course and/or
cancelled under Section 78 is deemed to have not been a candidate at all, because his COC is considered
void ab initio and thus, cannot give rise to a valid candidacy and necessarily to valid votes.53 In Jalosjos,
Jr. v. Commission on Elections,54 we explained that:

Decisions of this Court holding that the second-placer cannot be proclaimed winner if the first-placer is
disqualified or declared ineligible should be limited to situations where the certificate of candidacy of
the first-placer was valid at the time of filing but subsequently had to be cancelled because of a violation

98
of law that took place, or a legal impediment that took effect, after the filing of the certificate of
candidacy. If the certificate of candidacy is void ab initio, then legally the person who filed such void
certificate of candidacy was never a candidate in the elections at any time. All votes for such non-
candidate are stray votes and should not be counted. Thus, such non-candidate can never be a first-
placer in the elections. If a certificate of candidacy void ab initio is cancelled on the day, or before the
day, of the election, prevailing jurisprudence holds that all votes for that candidate are stray votes. If
a certificate of candidacy void ab initio is cancelled one day or more after the elections, all votes for
such candidate should also be stray votes because the certificate of candidacy is void from the very
beginning. This is the more equitable and logical approach on the effect of the cancellation of a
certificate of candidacy that is void ab initio.

Otherwise, a certificate of candidacy void ab initio can operate to defeat one or more valid certificates
of candidacy for the same position. 55 (Emphasis supplied)

The rule on succession under Section 4456 of RA 7160, as espoused by Halili, would not apply if the
permanent vacancy was caused by one whose COC was void ab initio. In case of vacancies caused by
those with void ab initio COCs, the person legally entitled to the vacant position would be the candidate
who garnered the next highest number of votes among those eligible.57 In this case, it is Garbo who is
legally entitled to the position of mayor, having garnered the highest number of votes among the
eligible candidates. Thus, the COMELEC correctly proclaimed Garbo as mayor of Mabalacat City.

Where a material COC misrepresentation under oath is made, thereby violating both our election and
criminal laws, we are faced as well with an assault on the will of the people of the Philippines as
expressed in our laws.58 In a choice between provisions on material qualifications of elected officials, on
the one hand, and the will of the electorate in any given locality, on the other, we believe and so hold
that we cannot choose the will of the electorate.59

In a special civil action for certiorari, the burden rests on the petitioner to prove grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the public respondent in issuing the
impugned order, decision or resolution.60 Grave abuse of discretion is such "capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction, or [an] exercise of power in an arbitrary and
despotic manner by reason of passion or personal hostility, or an exercise of judgment so patent and
gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined,
or to act in a manner not at all in contemplation of law."61 In short, grave abuse of discretion arises
when a court or tribunal violates the Constitution, the law, or existing jurisprudence.62 In this case, the
Court finds the COMELEC's disquisitions to be amply supported by the Constitution, law, and
jurisprudence.

WHEREFORE, we DISMISS the petitions for lack of merit and AFFIRM the assailed Resolution dated 3
August 2016 of the Commission on Elections First Division and the Resolution dated 26 May 2017 of the
Commission on Elections En Banc.

SO ORDERED.

Bersamin, C. J., Peralta, Del Castillo, Perlas-Bernabe, Leonen, Jardeleza, Caguioa, A. Reyes, Jr., Gesmundo,
J. Reyes, Jr., Hernando, and Carandang, JJ., concur.

EN BANC

August 15, 2017

G.R. No. 226679

SALVADOR ESTIPONA, JR. y ASUELA, Petitioner,

vs.
HON. FRANK E. LOBRIGO, Presiding Judge of the Regional Trial Court, Branch 3, Legazpi City, Albay,
and PEOPLE OF THE PHILIPPINES, Respondents.

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DECISION

PERALTA, J.:

Challenged in this petition for certiorari and prohibition1 is the constitutionality of Section 23 of Republic
Act (R.A.) No. 9165, or the "Comprehensive Dangerous Drugs Act of 2002, "2 which provides:

SEC 23. Plea-Bargaining Provision. - Any person charged under any provision of this Act regardless of the
imposable penalty shall not be allowed to avail of the provision on plea-bargaining.3

The facts are not in dispute.

Petitioner Salvador A. Estipona, Jr. (Estipona) is the accused in Criminal Case No. 13586 for violation of
Section 11, Article II of R.A. No. 9165 (Possession of Dangerous Drugs). The Information alleged:

That on or about the 21st day of March, 2016, in the City of Legazpi, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, not being lawfully authorized to possess
or otherwise use any regulated drug and without the corresponding license or prescription, did then and
there, willfully, unlawfully and feloniously have, in his possession and under his control and custody, one
(1) piece heat-sealed transparent plastic sachet marked as VOP 03/21/16- l G containing 0.084 [gram] of
white crystalline substance, which when examined were found to be positive for Methamphetamine
Hydrocloride (Shabu), a dangerous drug.

CONTRARY TO LAW.4

On June 15, 2016, Estipona filed a Motion to Allow the Accused to Enter into a Plea Bargaining
Agreement,5 praying to withdraw his not guilty plea and, instead, to enter a plea of guilty for violation of
Section 12, Article II of R.A. No. 9165 (Possession of Equipment, Instrument, Apparatus and Other
Paraphernalia for Dangerous Drugs) with a penalty of rehabilitation in view of his being a first-time
offender and the minimal quantity of the dangerous drug seized in his possession. He argued that
Section 23 of R.A. No. 9165 violates: (1) the intent of the law expressed in paragraph 3, Section 2
thereof; (2) the rule-making authority of the Supreme Court under Section 5(5), Article VIII of the 1987
Constitution; and (3) the principle of separation of powers among the three equal branches of the
government.

In its Comment or Opposition6 dated June 27, 2016, the prosecution moved for the denial of the motion
for being contrary to Section 23 of R.A. No. 9165, which is said to be justified by the Congress'
prerogative to choose which offense it would allow plea bargaining. Later, in a Comment or
Opposition7 dated June 29, 2016, it manifested that it "is open to the Motion of the accused to enter
into plea bargaining to give life to the intent of the law as provided in paragraph 3, Section 2 of [R.A.
No.] 9165, however, with the express mandate of Section 23 of [R.A. No.] 9165 prohibiting plea
bargaining, [it] is left without any choice but to reject the proposal of the accused."

On July 12, 2016, respondent Judge Frank E. Lobrigo of the Regional Trial Court (RTC), Branch 3, Legazpi
City, Albay, issued an Order denying Estipona's motion. It was opined:

The accused posited in his motion that Sec. 23 of RA No. 9165, which prohibits plea bargaining,
encroaches on the exclusive constitutional power of the Supreme Court to promulgate rules of
procedure because plea bargaining is a "rule of procedure." Indeed, plea bargaining forms part of the
Rules on Criminal Procedure, particularly under Rule 118, the rule on pre-trial conference. It is only the
Rules of Court promulgated by the Supreme Court pursuant to its constitutional rule-making power that
breathes life to plea bargaining. It cannot be found in any statute.

Without saying so, the accused implies that Sec. 23 of Republic Act No. 9165 is unconstitutional because
it, in effect, suspends the operation of Rule 118 of the Rules of Court insofar as it allows plea bargaining
as part of the mandatory pre-trial conference in criminal cases.

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The Court sees merit in the argument of the accused that it is also the intendment of the law, R.A. No.
9165, to rehabilitate an accused of a drug offense. Rehabilitation is thus only possible in cases of use of
illegal drugs because plea bargaining is disallowed. However, by case law, the Supreme Court allowed
rehabilitation for accused charged with possession of paraphernalia with traces of dangerous drugs, as
held in People v. Martinez, G.R. No. 191366, 13 December 2010. The ruling of the Supreme Court in this
case manifested the relaxation of an otherwise stringent application of Republic Act No. 9165 in order to
serve an intent for the enactment of the law, that is, to rehabilitate the offender.

Within the spirit of the disquisition in People v. Martinez, there might be plausible basis for the
declaration of Sec. 23 of R.A. No. 9165, which bars plea bargaining as unconstitutional because indeed
the inclusion of the provision in the law encroaches on the exclusive constitutional power of the
Supreme Court.

While basic is the precept that lower courts are not precluded from resolving, whenever warranted,
constitutional questions, the Court is not unaware of the admonition of the Supreme Court that lower
courts must observe a becoming modesty in examining constitutional questions. Upon which
admonition, it is thus not for this lower court to declare Sec. 23 of R.A. No. 9165 unconstitutional given
the potential ramifications that such declaration might have on the prosecution of illegal drug cases
pending before this judicial station.8

Estipona filed a motion for reconsideration, but it was denied in an Order9 dated July 26, 2016; hence,
this petition raising the issues as follows:

I.

WHETHER SECTION 23 OF REPUBLIC ACT NO. 9165, WHICH PROHIBITS PLEA BARGAINING IN ALL
VIOLATIONS OF THE SAID LAW, IS UNCONSTITUTIONAL FOR BEING VIOLATIVE OF THE CONSTITUTIONAL
RIGHT TO EQUAL PROTECTION OF THE LAW.

II.

WHETHER SECTION 23 OF REPUBLIC ACT NO. 9165 IS UNCONSTITUTIONAL AS IT ENCROACHED UPON

THE POWER OF THE SUPREME COURT TO PROMULGATE RULES OF PROCEDURE.

III.

WHETHER THE REGIONAL TRIAL COURT, AS PRESIDED BY HON. FRANK E. LOBRIGO, COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT REFUSED TO
DECLARE SECTION 23 OF REPUBLIC ACT NO. 9165 AS UNCONSTITUTIONAL.10

We grant the petition.

PROCEDURAL MATTERS

The People of the Philippines, through the Office of the Solicitor General (OSG), contends that the
petition should be dismissed outright for being procedurally defective on the grounds that: (1) the
Congress should have been impleaded as an indispensable party; (2) the constitutionality of Section 23
of R.A. No. 9165 cannot be attacked collaterally; and (3) the proper recourse should have been a
petition for declaratory relief before this Court or a petition for certiorari before the RTC. Moreover, the
OSG argues that the petition fails to satisfy the requisites of judicial review because: (1) Estipona lacks
legal standing to sue for failure to show direct injury; (2) there is no actual case or controversy; and (3)
the constitutionality of Section 23 of R.A. No. 9165 is not the lis mota of the case.

On matters of technicality, some points raised by the OSG maybe correct.1âwphi1 Nonetheless, without
much further ado, it must be underscored that it is within this Court's power to make exceptions to the
rules of court. Under proper conditions, We may permit the full and exhaustive ventilation of the
parties' arguments and positions despite the supposed technical infirmities of a petition or its alleged
procedural flaws. In discharging its solemn duty as the final arbiter of constitutional issues, the Court

101
shall not shirk from its obligation to determine novel issues, or issues of first impression, with far-
reaching implications.11

Likewise, matters of procedure and technicalities normally take a backseat when issues of substantial
and transcendental importance are present.12 We have acknowledged that the Philippines' problem on
illegal drugs has reached "epidemic," "monstrous," and "harrowing" proportions,13 and that its
disastrously harmful social, economic, and spiritual effects have broken the lives, shattered the hopes,
and destroyed the future of thousands especially our young citizens.14 At the same time, We have
equally noted that "as urgent as the campaign against the drug problem must be, so must we as
urgently, if not more so, be vigilant in the protection of the rights of the accused as mandated by the
Constitution x x x who, because of excessive zeal on the part of the law enforcers, may be unjustly
accused and convicted."15 Fully aware of the gravity of the drug menace that has beset our country and
its direct link to certain crimes, the Court, within its sphere, must do its part to assist in the all-out effort
to lessen, if not totally eradicate, the continued presence of drug lords, pushers and users.16

Bearing in mind the very important and pivotal issues raised in this petition, technical matters should
not deter Us from having to make the final and definitive pronouncement that everyone else depends
for enlightenment and guidance.17 When public interest requires, the Court may brush aside procedural
rules in order to resolve a constitutional issue.18

x x x [T]he Court is invested with the power to suspend the application of the rules of procedure as a
necessary complement of its power to promulgate the same. Barnes v. Hon. Quijano Padilla discussed
the rationale for this tenet, viz. :

Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate
the attainment of justice. Their strict and rigid application, which would result in technicalities that tend
to frustrate rather than promote substantial justice, must always be eschewed. Even the Rules of Court
reflect this principle. The power to suspend or even disregard rules can be so pervasive and compelling
as to alter even that which this Court itself has already declared to be final, x x x.

The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity
for the proper and just determination of his cause, free from the constraints of technicalities. Time and
again, this Court has consistently held that rules must not be applied rigidly so as not to override
substantial justice. 19

SUBSTANTIVE ISSUES

Rule-making power of the Supreme

Court under the 1987 Constitution

Section 5(5), A1iicle VIII of the 1987 Constitution explicitly provides:

Sec. 5. The Supreme Court shall have the following powers:

xxxx

(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal
assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for
the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish,
increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies
shall remain effective unless disapproved by the Supreme Court.

The power to promulgate rules of pleading, practice and procedure is now Our exclusive domain and no
longer shared with the Executive and Legislative departments.20 In Echegaray v. Secretary of
Justice, 21 then Associate Justice (later Chief Justice) Reynato S. Puno traced the history of the Court's
rule-making power and highlighted its evolution and development.

102
x x x It should be stressed that the power to promulgate rules of pleading, practice and procedure was
granted by our Constitutions to this Court to enhance its independence, for in the words of Justice
Isagani Cruz "without independence and integrity, courts will lose that popular trust so essential to the
maintenance of their vigor as champions of justice." Hence, our Constitutions continuously vested this
power to this Court for it enhances its independence. Under the 1935 Constitution, the power of this
Court to promulgate rules concerning pleading, practice and procedure was granted but it appeared to
be co-existent with legislative power for it was subject to the power of Congress to repeal, alter or
supplement. Thus, its Section 13, Article VIII provides:

"Sec. 13. The Supreme Court shall have the power to promulgate rules concerning pleading, practice and
procedure in all courts, and the admission to the practice of law. Said rules shall be uniform for all courts
of the same grade and shall not diminish, increase, or modify substantive rights. The existing laws on
pleading, practice and procedure are hereby repealed as statutes, and are declared Rules of Court,
subject to the power of the Supreme Court to alter and modify the same. The Congress shall have the
power to repeal, alter or supplement the rules concerning pleading, practice and procedure, and the
admission to the practice of law in the Philippines."

The said power of Congress, however, is not as absolute as it may appear on its surface. In In re:
Cunanan Congress in the exercise of its power to amend rules of the Supreme Court regarding admission
to the practice of law, enacted the Bar Flunkers Act of 1953 which considered as a passing grade, the
average of 70% in the bar examinations after July 4, 1946 up to August 1951 and 71 % in the 1952 bar
examinations. This Court struck down the law as unconstitutional. In his ponencia, Mr. Justice Diokno
held that "x x x the disputed law is not a legislation; it is a judgment - a judgment promulgated by this
Court during the aforecited years affecting the bar candidates concerned; and although this Court
certainly can revoke these judgments even now, for justifiable reasons, it is no less certain that only this
Court, and not the legislative nor executive department, that may do so. Any attempt on the part of
these departments would be a clear usurpation of its function, as is the case with the law in question."
The venerable jurist further ruled: "It is obvious, therefore, that the ultimate power to grant license for
the practice of law belongs exclusively to this Court, and the law passed by Congress on the matter is of
permissive character, or as other authorities say, merely to fix the minimum conditions for the
license." By its ruling, this Court qualified the absolutist tone of the power of Congress to "repeal, alter or
supplement the rules concerning pleading, practice and procedure, and the admission to the practice of
law in the Philippines.

The ruling of this Court in In re Cunanan was not changed by the 1973 Constitution. For the 1973
Constitution reiterated the power of this Court "to promulgate rules concerning pleading, practice and
procedure in all courts, x x x which, however, may be repealed, altered or supplemented by the
Batasang Pambansa x x x." More completely, Section 5(2)5 of its Article X provided:

xxxx

"Sec. 5. The Supreme Court shall have the following powers.

xxxx

(5) Promulgate rules concerning pleading, practice, and procedure in all courts, the admission to the
practice of law, and the integration of the Bar, which, however, may be repealed, altered, or
supplemented by the Batasang Pambansa. Such rules shall provide a simplified and inexpensive
procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall
not diminish, increase, or modify substantive rights."

Well worth noting is that the 1973 Constitution further strengthened the independence of the judiciary
by giving to it the additional power to promulgate rules governing the integration of the Bar.

The 1987 Constitution molded an even stronger and more independent judiciary. Among others, it
enhanced the rule making power of this Court. Its Section 5(5), Article VIII provides:

xxxx

103
"Section 5. The Supreme Court shall have the following powers:

xxx

(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
practice and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal
assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for
the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish,
increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall
remain effective unless disapproved by the Supreme Court. "

The rule making power of this Court was expanded. This Court for the first time was given the power to
promulgate rules concerning the protection and enforcement of constitutional rights. The Court was
also granted for the .first time the power to disapprove rules of procedure of special courts and quasi-
judicial bodies. But most importantly, the 1987 Constitution took away the power of Congress to repeal,
alter, or supplement rules concerning pleading, practice and procedure. In fine, the power to promulgate
rules of pleading, practice and procedure is no longer shared by this Court with Congress, more so with
the Executive. x x x.22

Just recently, Carpio-Morales v. Court of Appeals (Sixth Division)23 further elucidated:

While the power to define, prescribe, and apportion the jurisdiction of the various courts is, by
constitutional design, vested unto Congress, the power to promulgate rules concerning the protection
and enforcement of constitutional rights, pleading, practice, and procedure in all courts belongs
exclusively to this Court. Section 5 (5), Article VIII of the 1987 Constitution reads:

xxxx

In Echegaray v. Secretary of Justice (Echegaray), the Court traced the evolution of its rule-making
authority, which, under the 1935 and 1973 Constitutions, had been priorly subjected to a power-sharing
scheme with Congress. As it now stands, the 1987 Constitution textually altered the old provisions
by deleting the concurrent power of Congress to amend the rules, thus solidifying in one body the
Court's rule-making powers, in line with the Framers' vision of institutionalizing a " [ s] tronger and
more independent judiciary."

The records of the deliberations of the Constitutional Commission would show that the Framers
debated on whether or not the Court's rulemaking powers should be shared with Congress. There was
an initial suggestion to insert the sentence "The National Assembly may repeal, alter, or supplement the
said rules with the advice and concurrence of the Supreme Court," right after the phrase "Promulgate
rules concerning the protection and enforcement of constitutional rights, pleading, practice, and
procedure in all courts, the admission to the practice of law, the integrated bar, and legal assistance to
the underprivileged[,]" in the enumeration of powers of the Supreme Court. Later, Commissioner
Felicitas S. Aquino proposed to delete the former sentence and, instead, after the word
"[under]privileged," place a comma(,) to be followed by "the phrase with the concurrence of the
National Assembly." Eventually, a compromise formulation was reached wherein (a) the Committee
members agreed to Commissioner Aquino's proposal to delete the phrase "the National Assembly may
repeal, alter, or supplement the said rules with the advice and concurrence of the Supreme Court"
and (b) in turn, Commissioner Aquino agreed to withdraw his proposal to add "the phrase with the
concurrence of the National Assembly." The changes were approved, thereby leading to the present
lack of textual reference to any form of Congressional participation in Section 5 (5), Article
VIII, supra. Theprevailing consideration was that "both bodies, the Supreme Court and the Legislature,
have their inherent powers."

Thus, as it now stands, Congress has no authority to repeal, alter, or supplement rules concerning
pleading, practice, and procedure.x x x.24

The separation of powers among the three co-equal branches of our government has erected an
impregnable wall that keeps the power to promulgate rules of pleading, practice and procedure within

104
the sole province of this Court.25 The other branches trespass upon this prerogative if they enact laws or
issue orders that effectively repeal, alter or modify any of the procedural rules promulgated by the
Court.26 Viewed from this perspective, We have rejected previous attempts on the part of the Congress,
in the exercise of its legislative power, to amend the Rules of Court (Rules), to wit:

1. Fabian v. Desierto27 -Appeal from the decision of the Office of the Ombudsman in an administrative
disciplinary case should be taken to the Court of Appeals under the provisions of Rule 43 of
the Rules instead of appeal by certiorari under Rule 45 as provided in Section 27 of R.A. No. 6770.

2. Cathay Metal Corporation v. Laguna West Multi-Purpose Cooperative, Inc. 28 - The Cooperative Code
provisions on notices cannot replace the rules on summons under Rule 14 of the Rules.

3. RE: Petition for Recognition of the Exemption of the GSIS from Payment of Legal Fees; 29 Baguio
Market Vendors Multi-Purpose Cooperative (BAMARVEMPCO) v. Hon. Judge Cabato-Cortes;30 In Re:
Exemption of the National Power Corporation from Payment of Filing/Docket Fees; 31 and Rep. of the
Phils. v. Hon. Mangotara, et al. 32 - Despite statutory provisions, the GSIS, BAMARVEMPCO, and NPC are
not exempt from the payment of legal fees imposed by Rule 141 of the Rules.

4. Carpio-Morales v. Court of Appeals (Sixth Division)33 - The first paragraph of Section 14 of R.A. No.
6770, which prohibits courts except the Supreme Court from issuing temporary restraining order and/or
writ of preliminary injunction to enjoin an investigation conducted by the Ombudsman, is
unconstitutional as it contravenes Rule 58 of the Rules.

Considering that the aforesaid laws effectively modified the Rules, this Court asserted its discretion to
amend, repeal or even establish new rules of procedure, to the exclusion of the legislative and executive
branches of government. To reiterate, the Court's authority to promulgate rules on pleading, practice,
and procedure is exclusive and one of the safeguards of Our institutional independence.34

Plea bargaining in criminal cases

Plea bargaining, as a rule and a practice, has been existing in our jurisdiction since July 1, 1940, when the
1940 Rules took effect. Section 4, Rule 114 (Pleas) of which stated:

SEC. 4. Plea of guilty of lesser offense. - The defendant, with the consent of the court and of the fiscal,
may plead guilty of any lesser offense than that charged which is necessarily included in the offense
charged in the complaint or information.

When the 1964 Rules became effective on January 1, 1964, the same provision was retained under Rule
118 (Pleas).1âwphi1 Subsequently, with the effectivity of the 1985 Rules on January 1, 1985, the
provision on plea of guilty to a lesser offense was amended. Section 2, Rule 116 provided:

SEC. 2. Plea of guilty to a lesser offense. - The accused with the consent of the offended party and the
fiscal, may be allowed by the trial court to plead guilty to a lesser offense, regardless of whether or not it
is necessarily included in the crime charged, or is cognizable by a court of lesser jurisdiction than the trial
court. No amendment of the complaint or information is necessary. (4a, R-118)

As well, the term "plea bargaining" was first mentioned and expressly required during pre-trial. Section
2, Rule 118 mandated:

SEC. 2. Pre-trial conference; subjects. - The pre-trial conference shall consider the following:

(a) Plea bargaining;

(b) Stipulation of facts;

(c) Marking for identification of evidence of the parties;

(d) Waiver of objections to admissibility of evidence; and

105
(e) Such other matters as will promote a fair and expeditious trial. (n)

The 1985 Rules was later amended. While the wordings of Section 2, Rule 118 was retained, Section 2,
Rule 116 was modified in 1987. A second paragraph was added, stating that "[a] conviction under this
plea shall be equivalent to a conviction of the offense charged for purposes of double jeopardy."

When R.A. No. 8493 ("Speedy Trial Act of 1998 ') was enacted,35 Section 2, Rule 118 of the Rules was
substantially adopted. Section 2 of the law required that plea bargaining and other matters36 that will
promote a fair and expeditious trial are to be considered during pre-trial conference in all criminal cases
cognizable by the Municipal Trial Court, Municipal Circuit Trial Court, Metropolitan Trial Court, Regional
Trial Court, and the Sandiganbayan.

Currently, the pertinent rules on plea bargaining under the 2000 Rules37 are quoted below:

RULE 116 (Arraignment and Plea):

SEC. 2. Plea of guilty to a lesser offense. - At arraignment, the accused, with the consent of the offended
party and the prosecutor, may be allowed by the trial court to plead guilty to a lesser offense which is
necessarily included in the offense charged. After arraignment but before trial, the accused may still be
allowed to plead guilty to said lesser offense after withdrawing his plea of not guilty. No amendment of
the complaint or information is necessary. (Sec. 4, Cir. 38-98)

RULE 118 (Pre-trial):

SEC. 1. Pre-trial; mandatory in criminal cases. - In all criminal cases cognizable by

the Sandiganbayan, Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court in Cities,
Municipal Trial Court and Municipal Circuit Trial Court, the court shall, after arraignment and within
thirty (30) days from the date the court acquires jurisdiction over the person of the accused, unless a
shorter period is provided for in special laws or circulars of the Supreme Court, order a pre-trial
conference to consider the following:

(a) plea bargaining;

(b) stipulation of facts;

(c) marking for identification of evidence of the parties;

(d) waiver of objections to admissibility of evidence;

(e) modification of the order of trial if the accused admits the charge but interposes a lawful defense;
and

(f) such matters as will promote a fair and expeditious trial of the criminal and civil aspects of the case.
(Sec. 2 & 3, Cir. 38-98)

Plea bargaining is a rule of procedure

The Supreme Court's sole prerogative to issue, amend, or repeal procedural rules is limited to the
preservation of substantive rights, i.e., the former should not diminish, increase or modify the
latter.38 "Substantive law is that part of the law which creates, defines and regulates rights, or which
regulates the right and duties which give rise to a cause of action; that part of the law which courts are
established to administer; as opposed to adjective or remedial law, which prescribes the method of
enforcing rights or obtain redress for their invasions."39 Fabian v. Hon. Desierto40 laid down the test for
determining whether a rule is substantive or procedural in nature.

It will be noted that no definitive line can be drawn between those rules or statutes which are
procedural, hence within the scope of this Court's rule-making power, and those which are substantive.
In fact, a particular rule may be procedural in one context and substantive in another. It is admitted that

106
what is procedural and what is substantive is frequently a question of great difficulty. It is not, however,
an insurmountable problem if a rational and pragmatic approach is taken within the context of our own
procedural and jurisdictional system.

In determining whether a rule prescribed by the Supreme Court, for the practice and procedure of the
lower courts, abridges, enlarges, or modifies any substantive right, the test is whether the rule really
regulates procedure, that is, the judicial process for enforcing rights and duties recognized by
substantive law and for justly administering remedy and redress for a disregard or infraction of them. If
the rule takes away a vested right, it is not procedural. If the rule creates a right such as the right to
appeal, it may be classified as a substantive matter; but if it operates as a means of implementing an
existing right then the rule deals merely with procedure.41

In several occasions, We dismissed the argument that a procedural rule violates substantive rights. For
example, in People v. Lacson, 42 Section 8, Rule 117 of the Rules on provisional dismissal was held as a
special procedural limitation qualifying the right of the State to prosecute, making the time-bar an
essence of the given right or as an inherent part thereof, so that its expiration operates to extinguish the
right of the State to prosecute the accused.43 Speaking through then Associate Justice Romeo J. Callejo,
Sr., the Court opined:

In the new rule in question, as now construed by the Court, it has fixed a time-bar of one year or two
years for the revival of criminal cases provisionally dismissed with the express consent of the accused
and with a priori notice to the offended party. The time-bar may appear, on first impression,
unreasonable compared to the periods under Article 90 of the Revised Penal Code. However, in fixing
the time-bar, the Court balanced the societal interests and those of the accused for the orderly and
speedy disposition of criminal cases with minimum prejudice to the State and the accused. It took into
account the substantial rights of both the State and of the accused to due process. The Court believed
that the time limit is a reasonable period for the State to revive provisionally dismissed cases with the
consent of the accused and notice to the offended parties. The time-bar fixed by the Court must be
respected unless it is shown that the period is manifestly short or insufficient that the rule becomes a
denial of justice. The petitioners failed to show a manifest shortness or insufficiency of the time-bar.

The new rule was conceptualized by the Committee on the Revision of the Rules and approved by the
Court en banc primarily to enhance the administration of the criminal justice system and the rights to
due process of the State and the accused by eliminating the deleterious practice of trial courts of
provisionally dismissing criminal cases on motion of either the prosecution or the accused or jointly,
either with no time-bar for the revival thereof or with a specific or definite period for such revival by the
public prosecutor. There were times when such criminal cases were no longer revived or refiled due to
causes beyond the control of the public prosecutor or because of the indolence, apathy or the
lackadaisical attitude of public prosecutors to the prejudice of the State and the accused despite the
mandate to public prosecutors and trial judges to expedite criminal proceedings.

It is almost a universal experience that the accused welcomes delay as it usually operates in his favor,
especially if he greatly fears the consequences of his trial and conviction. He is hesitant to disturb the
hushed inaction by which dominant cases have been known to expire.

The inordinate delay in the revival or refiling of criminal cases may impair or reduce the capacity of the
State to prove its case with the disappearance or nonavailability of its witnesses. Physical evidence may
have been lost. Memories of witnesses may have grown dim or have faded. Passage of time makes proof
of any fact more difficult. The accused may become a fugitive from justice or commit another crime. The
longer the lapse of time from the dismissal of the case to the revival thereof, the more difficult it is to
prove the crime.

On the other side of the fulcrum, a mere provisional dismissal of a criminal case does not terminate a
criminal case. The possibility that the case may be revived at any time may disrupt or reduce, if not
derail, the chances of the accused for employment, curtail his association, subject him to public obloquy
and create anxiety in him and his family. He is unable to lead a normal life because of community
suspicion and his own anxiety. He continues to suffer those penalties and disabilities incompatible with
the presumption of innocence. He may also lose his witnesses or their memories may fade with the

107
passage of time. In the long run, it may diminish his capacity to defend himself and thus eschew the
fairness of the entire criminal justice system.

The time-bar under the new rule was fixed by the Court to excise the malaise that plagued the
administration of the criminal justice system for the benefit of the State and the accused; not for the
accused only.44

Also, We said in Jaylo, et al. v. Sandiganbayan, et al. 45 that Section 6, Rule 120 of the Rules, which
provides that an accused who failed to appear at the promulgation of the judgment of conviction shall
lose the remedies available against the judgment, does not take away substantive rights but merely
provides the manner through which an existing right may be implemented.

Section 6, Rule 120, of the Rules of Court, does not take away per se the right of the convicted accused
to avail of the remedies under the Rules. It is the failure of the accused to appear without justifiable
cause on the scheduled date of promulgation of the judgment of conviction that forfeits their right to
avail themselves of the remedies against the judgment.

It is not correct to say that Section 6, Rule 120, of the Rules of Court diminishes or modifies the
substantive rights of petitioners. It only works in pursuance of the power of the Supreme Court to
"provide a simplified and inexpensive procedure for the speedy disposition of cases." This provision
protects the courts from delay in the speedy disposition of criminal cases - delay arising from the simple
expediency of nonappearance of the accused on the scheduled promulgation of the judgment of
conviction.46

By the same token, it is towards the provision of a simplified and inexpensive procedure for the speedy
disposition of cases in all courts47 that the rules on plea bargaining was introduced. As a way of disposing
criminal charges by agreement of the parties, plea bargaining is considered to be an "important,"
"essential," "highly desirable," and "legitimate" component of the administration of justice.48 Some of its
salutary effects include:

x x x For a defendant who sees slight possibility of acquittal, the advantages of pleading guilty and
limiting the probable penalty are obvious - his exposure is reduced, the correctional processes can begin
immediately, and the practical burdens of a trial are eliminated. For the State there are also advantages
- the more promptly imposed punishment after an admission of guilt may more effectively attain the
objectives of punishment; and with the avoidance of trial, scarce judicial and prosecutorial resources are
conserved for those cases in which there is a substantial issue of the defendant's guilt or in which there
is substantial doubt that the State can sustain its burden of proof. (Brady v. United States, 397 U.S. 742,
752 [1970])

Disposition of charges after plea discussions x x x leads to prompt and largely final disposition of most
criminal cases; it avoids much of the corrosive impact of enforced idleness during pretrial confinement
for those who are denied release pending trial; it protects the public from those accused persons who
are prone to continue criminal conduct even while on pretrial release; and, by shortening the time
between charge and disposition, it enhances whatever may be the rehabilitative prospects of the guilty
when they are ultimately imprisoned. (Santobello v. New York, 404 U.S. 257, 261 [1971])

The defendant avoids extended pretrial incarceration and the anxieties and uncertainties of a trial; he
gains a speedy disposition of his case, the chance to acknowledge his guilt, and a prompt start in
realizing whatever potential there may be for rehabilitation. Judges and prosecutors conserve vital and
scarce resources. The public is protected from the risks posed by those charged with criminal offenses
who are at large on bail while awaiting completion of criminal proceedings. (Blackledge v. Allison, 431
U.S. 63, 71 [1977])

In this jurisdiction, plea bargaining has been defined as "a process whereby the accused and the
prosecution work out a mutually satisfactory disposition of the case subject to court approval."49 There
is give-and-take negotiation common in plea bargaining.50 The essence of the agreement is that both the
prosecution and the defense make concessions to avoid potential losses.51 Properly administered, plea

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bargaining is to be encouraged because the chief virtues of the system - speed, economy, and finality -
can benefit the accused, the offended party, the prosecution, and the court.52

Considering the presence of mutuality of advantage,53 the rules on plea bargaining neither create a right
nor take away a vested right. Instead, it operates as a means to implement an existing right by
regulating the judicial process for enforcing rights and duties recognized by substantive law and for
justly administering remedy and redress for a disregard or infraction of them.

The decision to plead guilty is often heavily influenced by the defendant's appraisal of the prosecution's
case against him and by the apparent likelihood of securing leniency should a guilty plea be offered and
accepted.54 In any case, whether it be to the offense charged or to a lesser crime, a guilty plea is a
"serious and sobering occasion" inasmuch as it constitutes a waiver of the fundamental rights to be
presumed innocent until the contrary is proved, to be heard by himself and counsel, to meet the
witnesses face to face, to bail (except those charged with offenses punishable by reclusion
perpetua when evidence of guilt is strong), to be convicted by proof beyond reasonable doubt, and not
to be compelled to be a witness against himself.55

Yet a defendant has no constitutional right to plea bargain. No basic rights are infringed by trying him
rather than accepting a plea of guilty; the prosecutor need not do so if he prefers to go to trial.56 Under
the present Rules, the acceptance of an offer to plead guilty is not a demandable right but depends on
the consent of the offended party57 and the prosecutor, which is a condition precedent to a valid plea of
guilty to a lesser offense that is necessarily included in the offense charged.58 The reason for this is that
the prosecutor has full control of the prosecution of criminal actions; his duty is to always prosecute the
proper offense, not any lesser or graver one, based on what the evidence on hand can sustain.59

[Courts] normally must defer to prosecutorial decisions as to whom to prosecute. The reasons for
judicial deference are well known. Prosecutorial charging decisions are rarely simple. In addition to
assessing the strength and importance of a case, prosecutors also must consider other tangible and
intangible factors, such as government enforcement priorities. Finally, they also must decide how best
to allocate the scarce resources of a criminal justice system that simply cannot accommodate the
litigation of every serious criminal charge. Because these decisions "are not readily susceptible to the
kind of analysis the courts are competent to undertake," we have been "properly hesitant to examine
the decision whether to prosecute. "60

The plea is further addressed to the sound discretion of the trial court, which may allow the accused to
plead guilty to a lesser offense which is necessarily included in the offense charged. The
word may denotes an exercise of discretion upon the trial court on whether to allow the accused to
make such plea.61 Trial courts are exhorted to keep in mind that a plea of guilty for a lighter offense than
that actually charged is not supposed to be allowed as a matter of bargaining or compromise for the
convenience of the accused.62

Plea bargaining is allowed during the arraignment, the pre-trial, or even up to the point when the
prosecution already rested its case.63 As regards plea bargaining during the pre-trial stage, the trial
court's exercise of discretion should not amount to a grave abuse thereof.64 "Grave abuse of discretion"
is a capricious and whimsical exercise of judgment so patent and gross as to amount to an evasion of a
positive duty or a virtual refusal to perform a duty enjoined by law, as where the power is exercised in
an arbitrary and despotic manner because of passion or hostility; it arises when a court or tribunal
violates the Constitution, the law or existing jurisprudence.65

If the accused moved to plead guilty to a lesser offense subsequent to a bail hearing or after the
prosecution rested its case, the rules allow such a plea only when the prosecution does not have
sufficient evidence to establish the guilt of the crime charged.66 The only basis on which the prosecutor
and the court could rightfully act in allowing change in the former plea of not guilty could be nothing
more and nothing less than the evidence on record. As soon as the prosecutor has submitted a
comment whether for or against said motion, it behooves the trial court to assiduously study the
prosecution's evidence as well as all the circumstances upon which the accused made his change of plea
to the end that the interests of justice and of the public will be served.67 The ruling on the motion must
disclose the strength or weakness of the prosecution's evidence.68 Absent any finding on the weight of

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the evidence on hand, the judge's acceptance of the defendant's change of plea is improper and
irregular.69

On whether Section 23 of R.A. No.

9165 violates the equal protection
clause

At this point, We shall not resolve the issue of whether Section 23 of R.A. No. 9165 is contrary to the
constitutional right to equal protection of the law in order not to preempt any future discussion by the
Court on the policy considerations behind Section 23 of R.A. No. 9165. Pending deliberation on whether
or not to adopt the statutory provision in toto or a qualified version thereof, We deem it proper to
declare as invalid the prohibition against plea bargaining on drug cases until and unless it is made part of
the rules of procedure through an administrative circular duly issued for the purpose.

WHEREFORE, the petition for certiorari and prohibition is GRANTED. Section 23 of Republic Act No. 9165
is declared unconstitutional for being contrary to the rule-making authority of the Supreme Court under
Section 5(5), Article VIII of the 1987 Constitution.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

EN BANC

February 12, 2019

G.R. No. 238467

MARK ANTHONY V. ZABAL, THITING ESTOSO JACOSALEM, AND ODON S. BANDIOLA, Petitioners
vs.
RODRIGO R. DUTERTE, President of the Republic of the Philippines; SALVADOR C. MEDIALDEA,
Executive Secretary; and EDUARDO M. ANO, [Secretary] of the Department of Interior and Local
Government, Respondents

DECISION

DEL CASTILLO, J.:

Paradise is a place of bliss, felicity, and delight. 1 For Filipinos and foreign nationals alike, Boracay - a
small island in Malay, Aklan, with its palm-fringed, pristine white sand beaches, azure waters, coral reefs,
rare seashells,2 and a lot more to offer,3 - is indeed a piece of paradise. Unsurprisingly, Boracay is one of
the country's prime tourist destinations. However, this island-paradise has been disrespected, abused,
degraded, over-used, and taken advantage of by both locals and tourists. Hence, the government gave
Boracay its much-needed respite and rehabilitation. However, the process by which the rehabilitation
was to be implemented did not sit well with petitioners, hence, the present petition.

The Case

Before this Court is a Petition for Prohibition and Mandamus with Application for Temporary Restraining
Order, Preliminary Injunction, and/or Status Quo Ante Order filed by petitioners Mark Anthony V. Zabal
(Zabal), Thiting Estoso Jacosalem (Jacosalem), and Odon S. Bandiola (Bandiola) against respondents
President Rodrigo R. Duterte (President Duterte ), Executive Secretary Salvador C. Medialdea, and
Secretary Eduardo M. Año of the Department of Interior and Local Government (DILG).

The Parties

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Zabal and Jacosalem are both residents of Boracay who, at the time of the filing of the petition, were
earning a living from the tourist activities therein. Zabal claims to build sandcastles for tourists while
Jacosalem drives for tourists and workers in the island. While not a resident, Bandiola, for his part,
claims to occasionally visit Boracay for business and pleasure. The three base their locus standi on direct
injury and also from the transcendental importance doctrine. 4 Respondents, on the other hand, are
being sued in their capacity as officials of the government.

The Facts

Claiming that Boracay has become a cesspool, President Duterte first made public his plan to shut it
down during a business forum held in Davao sometime February 2018. 5 This was followed by several
speeches and news releases stating that he would place Boracay under a state of calamity. True to his
words, President Duterte ordered the shutting down of the island in a cabinet meeting held on April 4,
2018. This was confirmed by then Presidential Spokesperson Harry L. Roque, Jr. in a press briefing the
following day wherein he formally announced that the total closure of Boracay would be for a maximum
period of six months starting April 26, 2018. 6

Following this pronouncement, petitioners contend that around 630 police and military personnel were
readily deployed to Boracay including personnel for crowd dispersal management. 7 They also allege
that the DILG had already released guidelines for the closure. 8

Petitioners claim that ever since the news of Boracay's closure came about, fewer tourists had been
engaging the services of Zabal and Jacosalem such that their earnings were barely enough to feed their
families. They fear that if the closure pushes through, they would suffer grave and irreparable damage.
Hence, despite the fact that the government was then yet to release a formal issuance on the
matter,9 petitioners filed the petition on April 25, 2018 praying that:

(a) Upon the filing of [the] petition, a TEMPORARY RESTRAINING ORDER (TRO) and/or a WRIT OF
PRELIMINARY PROHIBITORY INJUNCTION be immediately issued RESTRAINING and/or ENJOINING the
respondents, and all persons acting under their command, order, and responsibility from enforcing a
closure of Boracay Island or from banning the petitioners, tourists, and non-residents therefrom, and a
WRIT OF PRELIMINARY MANDATORY INJUNCTION directing the respondents, and all persons acting
under their command, order, and responsibility to ALLOW all of the said persons to enter and/or leave
Boracay Island unimpeded;

(b) In the alternative, if the respondents enforce the closure after the instant petition is filed, that a
STATUS QUO ANTE Order be issued restoring and maintaining the condition prior to such closure;

(c) After proper proceedings, a judgment be rendered PERMANENTLY RESTRAINING and/or ENJOINING
the respondents, and all persons acting under their command, order, and responsibility from enforcing a
closure of Boracay Island or from banning the petitioners, tourists, and non-residents therefrom, and
further DECLARING the closure of Boracay Island or the ban against petitioners, tourists, and non-
residents therefrom to be UNCONSTITUTIONAL.

Other reliefs just and equitable under the premises are similarly prayed for. 10

On May 18, 2018, petitioners filed a Supplemental Petition 11 stating that the day following the filing of
their original petition or on April 26, 2018, President Duterte issued Proclamation No. 475 12 formally
declaring a state of calamity in Boracay and ordering its closure for six months from April 26, 2018 to
October 25, 2018. The closure was implemented on even date. Thus, in addition to what they prayed for
in their original petition, petitioners implore the Court to declare as unconstitutional Proclamation No.
475 insofar as it orders the closure of Boracay and ban of tourists and nonresidents therefrom. 13

In the Resolutions dated April 26, 201814 and June 5, 2018, 15 the Court required respondents to file their
Comment on the Petition and the Supplemental Petition, respectively. Respondents filed their
Consolidated Comment16 on July 30, 2018 while petitioners filed their Reply 17 thereto on October 12,
2018.

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On October 26, 2018, Boracay was reopened to tourism.

Petitioners' Arguments

Petitioners state that a petition for prohibition is the appropriate remedy to raise constitutional issues
and to review and/or prohibit or nullify, when proper, acts of legislative and executive officials. An
action for mandamus, on the other hand, lies against a respondent who unlawfully excludes another
from the enjoyment of an entitled right or office. Justifying their resort to prohibition and mandamus,
petitioners assert that ( 1) this case presents constitutional issues, i.e., whether President Duterte acted
within the scope of the powers granted him by the Constitution in ordering the closure of Boracay and,
whether the measures implemented infringe upon the constitutional rights to travel and to due process
of petitioners as well as of tourists and non-residents of the island; and, (2) President Duterte exercised
a power legislative in nature, thus unlawfully excluding the legislative department from the assertion of
such power.

As to the substantive aspect, petitioners argue that Proclamation No. 475 is an invalid exercise of
legislative powers. They posit that its issuance is in truth a law-making exercise since the proclamation
imposed a restriction on the right to travel and therefore substantially altered the relationship between
the State and its people by increasing the former's power over the latter. Simply stated, petitioners posit
that Proclamation No. 475 partakes of a law the issuance of which is not vested in the President. As such,
Proclamation No. 475 must be struck down for being the product of an invalid exercise of legislative
power.

Likewise, petitioners argue that Proclamation No. 475 is unconstitutional for infringing on the
constitutional rights to travel and to due process.

Petitioners point out that although Section 6, Article III of the Constitution explicitly allows the
impairment of the right to travel, two conditions, however, must concur to wit: (1) there is a law
restricting the said right, and (2) the restriction is based on national security, public safety or public
health. For petitioners, neither of these conditions have been complied with. For one, Proclamation No.
475 does not refer to any specific law restricting the right to travel. Second, it has not been shown that
the presence of tourists in the island poses any threat or danger to national security, public safety or
public health.

As to the right to due process, petitioners aver that the same covers property rights and these include
the right to work and earn a living. Since the government, through Proclamation No. 475, restricted the
entry of tourists and non-residents into the island, petitioners claim that they, as well as all others who
work, do business, or earn a living in the island, were deprived of the source of their livelihood as a
result thereof. Their right to work and earn a living was curtailed by the proclamation. Moreover, while
Proclamation No. 475 cites various violations of environmental laws in the island, these, for the
petitioners, do not justify disregard of the rights of thousands of law-abiding people. They contend that
environmental laws provide for specific penalties intended only for violators. Verily, to make those
innocent of environmental transgressions suffer the consequences of the Boracay closure is tantamount
to violating their right to due process.

Petitioners likewise argue that the closure of Boracay could not be anchored on police power. For one,
police power must be exercised not by the executive but by legislative bodies through the creation of
statutes and ordinances that aim to promote the health, moral, peace, education, safety, and general
welfare of the people. For another, the measure is unreasonably unnecessary and unduly oppressive.

In their Supplemental Petition, petitioners aver that Proclamation No. 475 unduly impinges upon the
local autonomy of affected Local Government Units (LGUs) since it orders the said LGUs to implement
the closure of Boracay and the ban of tourists and non-residents therefrom. While petitioners
acknowledge the President's power of supervision over LGUs, they nevertheless point out that he does
not wield the power of control over them. As such, President Duterte can only call the attention of the
LGUs concerned with regard to rules not being followed, which is the true essence of supervision, but he
cannot lay down the rules himself as this already constitutes control.

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Finally, petitioners state that this case does not simply revolve on the need to rehabilitate Boracay, but
rather, on the extent of executive power and the manner by which it was wielded by President Duterte.
To them, necessity does not justify the President's abuse of power.

Respondents' Arguments

At the outset, respondents assert that President Duterte must be dropped as party-respondent in this
case because he is immune from suit. They also argue that the petition should be dismissed outright for
lack of basis. According to respondents, prohibition is a preventive remedy to restrain future action.
Here, President Duterte had already issued Proclamation No. 475 and in fact, the rehabilitation of the
island was then already ongoing. These, according to respondents, have rendered improper the issuance
of a writ of prohibition considering that as a rule, prohibition does not lie to restrain an act that is
already fait accompli. Neither is mandamus proper. Section 3, Rule 65 of the Rules of Court provides
that a mandamus petition may be resorted to when any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from
an office, trust, or station. Respondents argue that mandamus will not lie in this case because they were
not neglectful of their duty to protect the environment; on the contrary, they conscientiously performed
what they were supposed to do by ordering the closure of Boracay to give way to its rehabilitation. Thus,
to them, mandamus is obviously inappropriate.

At any rate, respondents contend that there is no real justiciable controversy in this case. They see no
clash between the right of the State to preserve and protect its natural resources and the right of
petitioners to earn a living. Proclamation No. 475 does not prohibit anyone from being gainfully
employed.

Respondents moreover maintain that the petition is in the nature of a Strategic Lawsuit Against Public
Participation (SLAPP) under Rule 6 of A.M. No. 09-6-8-SC or the Rules of Procedure for Environmental
Cases, or a legal action filed to harass, vex, exert undue pressure or stifle any legal recourse that any
person, institution or the government has taken or may take in the enforcement of environmental laws,
protection of the environment or assertion of environmental rights. Respondents thus assert that the
petition must be dismissed since it was filed for the said sole purpose.

With regard to the substantive aspect, respondents contend that the issuance of Proclamation No. 475
is a valid exercise of delegated legislative power, it being anchored on Section 16 of Republic Act (RA) No.
10121, otherwise known as the Philippine Disaster Risk Reduction and Management Act of 2010, or the
authority given to the President to declare a state of calamity, viz.:

SECTION 16. Declaration of State of Calamity. - The National Council shall recommend to the President
of the Philippines the declaration of a cluster of barangays, municipalities, cities, provinces, and regions
under a state of calamity, and the lifting thereof, based on the criteria set by the National Council. The
President's declaration may warrant international humanitarian assistance as deemed necessary.

They likewise contend that Proclamation No. 475 was issued pursuant to the President's executive
power under Section 1, Article VII of the Constitution. As generally defined, executive power is the
power to enforce and administer laws. It is the power of implementing the laws and enforcing their due
observance. And in order to effectively discharge the enforcement and administration of the laws, the
President is granted administrative power over bureaus and offices, which includes the power of control.
The power of control, in turn, refers to the authority to direct the performance of a duty, restrain the
commission of acts, review, approve, reverse or modify acts and decisions of subordinate officials or
units, and prescribe standards, guidelines, plans and programs. Respondents allege that President
Duterte's issuance of Proclamation No. 475 was precipitated by his approval of the recommendation of
the National Disaster Risk Reduction and Management Council (NDRRMC) to place Boracay under a
state of calamity. By giving his imprimatur, it is clear that the President merely exercised his power of
control over the executive branch.

In any case, respondents assert that the President has residual powers which are implied from the grant
of executive power and which are necessary for him to comply with his duties under the Constitution as
held in the case of Marcos v. Manglapus. 18

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In sum, respondents emphasize that the issuance of Proclamation No. 475 is within the ambit of the
powers of the President, not contrary to the doctrine of separation of powers, and in accordance with
the mechanism laid out by the Constitution.

Further, respondents dispute petitioners' allegation that Proclamation No. 475 infringes upon the rights
to travel and to due process. They emphasize that the right to travel is not an absolute right. It may be
impaired or restricted in the interest of national security, public safety, or public health. In fact, there
are already several existing laws which serve as statutory limitations to the right to travel.

Anent the alleged violation of the right to due process, respondents challenge petitioners' claim that
they were deprived of their livelihood without due process. Respondents call attention to the fact that
Zabal as sandcastle maker and Jacosalem as driver are freelancers and thus belong to the infonnal
economy sector. This means that their source of livelihood is never guaranteed and is susceptible to
changes in regulations and the overall business climate. In any case, petitioners' contentions must yield
to the State's exercise of police power. As held in Ermita-Malate Hotel & Motel Operators Association,
Inc. v. The Hon. City Mayor of Manila, 19 the mere fact that some individuals in the community may be
deprived of their present business or of a particular mode of living cannot prevent the exercise of the
police power of the State. Indeed, to respondents, private interests should yield to the reasonable
prerogatives of the State for the public good and welfare, which precisely are the primary objectives of
the government measure herein questioned

Lastly, respondents insist that Proclamation No. 475 does not unduly transgress upon the local
autonomy of the LGUs concerned. Under RA 10121, it is actually the Local Disaster Risk Reduction
Management Council concerned which, subject to several criteria, is tasked to take the lead in preparing
for, responding to, and recovering from the effects of any disaster when a state of calamity is declared.
In any case, the devolution of powers upon LGUs pursuant to the constitutional mandate of ensuring
their autonomy does not mean that the State can no longer interfere in their affairs. This is especially
true in this case since Boracay's environmental disaster cannot be treated as a localized problem that
can be resolved by the concerned LGUs only. The magnitude and gravity of the problem require the
intervention and assistance of different national government agencies in coordination with the
concerned LGUs.

As a final point, respondents aver that the bottom line of petitioners' lengthy discourse and
constitutional posturing is their intention to re-open Boracay to tourists and non-residents for the then
remainder of the duration of the closure and thus perpetuate and further aggravate the island's
environmental degradation. Respondents posit that this is unacceptable since Boracay cannot be
sacrificed for the sake of profit and personal convenience of the few.

Our Ruling

First, we discuss the procedural issues.

President Duterte is dropped as

respondent in this case

As correctly pointed out by respondents, President Duterte must be dropped as respondent in this case.
The Court's pronouncement in Professor David v. President Macapagal-Arroyo20 on the non-suability of
an incumbent President cannot be any clearer, viz.:

x x x Settled is the doctrine that the President, during his tenure of office or actual incumbency, may not
be sued in any civil or criminal case, and there is no need to provide for it in the Constitution or law. It
will degrade the dignity of the high office of the President, the Head of State, if he can be dragged into
court litigations while serving as such. Furthermore, it is important that he be freed from any form of
harassment, hindrance or distraction to enable him to fully attend to the performance of his official
duties and functions. Unlike the legislative and judicial branch, only one constitutes the executive
branch and anything which impairs his usefulness in the discharge of the many great and important
duties imposed upon him by the Constitution necessarily impairs the operation of the Government. 21

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Accordingly, President Duterte is dropped as respondent in this case.

Propriety of Prohibition and

Mandamus

Section 2, Rule 65 of the Rules of Court provides for a petition for prohibition as follows:

SEC. 2. Petition for prohibition. - When the proceedings of any tribunal, corporation, board, officer or
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its
or his jurisdiction, or with grave abuse of discretion amounting to lack or in excess of jurisdiction, and
there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty
and praying that judgment be rendered commanding the respondent to desist from further proceedings
in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice
may require.

xxxx

"Indeed, prohibition is a preventive remedy seeking that a judgment be rendered directing the
defendant to desist from continuing with the commission of an act perceived to be illegal. As a rule, the
proper function of a writ of prohibition is to prevent the performance of an act which is about to be
done. It is not intended to provide a remedy for acts already accomplished. "22

Mandamus, on the other hand, is provided for by Section 3 of the same Rule 65:

SEC. 3. Petition for mandamus. - When any tribunal, corporation, board, officer or person unlawfully
neglects the performance of an act which the law specifically enjoins as a duty resulting from an office,
trust, station, or unlawfully excludes another from the use and enjoyment of a right or office to which
such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course
of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered commanding the respondent, immediately or at
some other time to be specified by the court, to do the act required to be done to protect the rights of
the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the
respondent.

xxxx

"As the quoted provision instructs, mandamus will lie if the tribunal, corporation, board, officer, or
person unlawfully neglects the performance of an act which the law enjoins as a duty resulting from an
office, trust, or station."23

It is upon the above-discussed contexts of prohibition and mandamus that respondents base their
contention of improper recourse. Respondents maintain that prohibition is not proper in this case
because the closure of Boracay is already a fait accompli. Neither is mandamus appropriate since there
is no neglect of duty on their part as they were precisely performing their duty to protect the
environment when the closure was ordered.

Suffice it to state, however, that the use of prohibition and mandamus is not merely confined to Rule 65.
These extraordinary remedies may be invoked when constitutional violations or issues are raised. As the
Court stated in Spouses Imbong v. Hon. Ochoa, Jr.: 24

As far back as Tañada v. Angara, the Court has unequivocally declared that certiorari, prohibition
and mandamus are appropriate remedies to raise constitutional issues and to review and/or
prohibit/nullify, when proper, acts of legislative and executive officials, as there is no other plain,
speedy or adequate remedy in the ordinary course of law. This ruling was later on applied in Macalintal
v. COMELEC, Aldaba v. COMELEC, Magallona v. Ermita, and countless others. In Tañada, the Court
wrote:

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In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution,
the petition no doubt raises a justiciable controversy. Where an action of the legislative branch is
seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of
the judiciary to settle the dispute. 'The question thus posed is judicial rather than political. The duty (to
adjudicate) remains to assure that the supremacy of the Constitution is upheld. Once a 'controversy as
to the application or interpretation of constitutional provision is raised before this Court, as in the
instant case, it becomes a legal issue which the Court is bound by constitutional mandate to decide. x x
x25 (Citations omitted; emphasis supplied)

It must be stressed, though, that resort to prohibition and mandamus on the basis of alleged
constitutional violations is not without limitations. After all, this Court does not have unrestrained
authority to rule on just about any and every claim of constitutional violation.26 The petition must be
subjected to the four exacting requisites for the exercise of the power of judicial review, viz.: (a) there
must be an actual case or controversy; (b) the petitioners must possess locus standi; ( c) the question of
constitutionality must be raised at the earliest opportunity; and ( d) the issue of constitutionality must
be the lis mota of the case.27 Hence, it is not enough that this petition mounts a constitutional challenge
against Proclamation No. 475. It is likewise necessary that it meets the aforementioned requisites
before the Court sustains the propriety of the recourse.

Existence of Requisites for Judicial

Review

In La Bugal-B'laan Tribal Association, Inc. v. Sec. Ramos,28 an actual case or controversy was
characterized as a "case or controversy that is appropriate or ripe for determination, not conjectural or
anticipatory, lest the decision of the court would amount to an advisory opinion. The power does not
extend to hypothetical questions since any attempt at abstraction could only lead to dialectics and
barren legal question and to sterile conclusions unrelated to actualities."29

The existence of an actual controversy in this case is evident. President Duterte issued Proclamation No.
475 on April 26, 2018 and, pursuant thereto, Boracay was temporarily closed the same day. Entry of
non-residents and tourists to the island was not allowed until October 25, 2018. Certainly, the
implementation of the proclamation has rendered legitimate the concern of petitioners that
constitutional rights may have possibly been breached by this governmental measure. It bears to state
that when coupled with sufficient facts, "reasonable certainty of the occurrence of a perceived threat to
any constitutional interest suffices to provide a basis for mounting a constitutional challenge". 30 And
while it may be argued that the reopening of Boracay has seemingly rendered moot and academic
questions relating to the ban of tourists and non-residents into the island, abstention from judicial
review is precluded by such possibility of constitutional violation and also by the exceptional character
of the situation, the paramount public interest involved, and the fact that the case is capable of
repetition.31

As to legal standing, petitioners assert that they were directly injured since their right to travel and, their
right to work and earn a living which thrives solely on tourist arrivals, were affected by the closure. They
likewise want to convince the Court that the issues here are of transcendental importance since
according to them, the resolution of the same will have farreaching consequences upon all persons
living and working in Boracay; upon the Province of Aklan which is heavily reliant on the island's tourism
industry; and upon the whole country considering that fundamental constitutional rights were allegedly
breached.

"Legal standing or locus standi 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."32 There must be a present substantial interest and not a mere expectancy or a
future, contingent, subordinate, or consequential interest. 33

In Galicto v. Aquino III,34 the therein petitioner, Jelbert B. Galicto (Galicto) questioned the
constitutionality of Executive Order No. 7 (E07) issued by President Benigno Simeon C. Aquino III, which

116
ordered, among others, a moratorium on the increases in the salaries and other forms of compensation
of all government-owned-and-controlled corporations (GOCCs) and government financial institutions.
The Court held that Galicto, an employee of the GOCC Philhealth, has no legal standing to assail E07 for
his failure to demonstrate that he has a personal stake or material interest in the outcome of the case.
His interest, if any, was speculative and based on a mere expectancy. Future increases in his salaries and
other benefits were contingent events or expectancies to which he has no vested rights. Hence, he
possessed no locus standi to question the curtailment thereof.

Here, as mentioned, Zabal is a sandcastle maker and Jacosalem, a driver.1avvphi1 The nature of their
livelihood is one wherein earnings are not guaranteed. As correctly pointed out by respondents, their
earnings are not fixed and may vary depending on the business climate in that while they can earn much
on peak seasons, it is also possible for them not to earn anything on lean seasons, especially when the
rainy days set in. Zabal and Jacosalem could not have been oblivious to this kind of situation, they having
been in the practice of their trade for a considerable length of time. Clearly, therefore, what Zabal and
Jacosalem could lose in this case are mere projected earnings which are in no way guaranteed, and are
sheer expectancies characterized as contingent, subordinate, or consequential interest, just like
in Galicto. Concomitantly, an assertion of direct injury on the basis of loss of income does not clothe
Zabal and Jacosalem with legal standing.

As to Bandiola, the petition is bereft of any allegation as to his substantial interest in the case and as to
how he sustained direct injury as a result of the issuance of Proclamation No. 475. While the allegation
that he is a non-resident who occasionally goes to Boracay for business and pleasure may suggest that
he is claiming direct injury on the premise that his right to travel was affected by the proclamation, the
petition fails to expressly provide specifics as to how. "It has been held that a party who assails the
constitutionality of a statute must have a direct and personal interest. [He] must show not only that the
law or any governmental act is invalid, but also that [he] sustained or is in immediate 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 or act complained of."35 Indeed, the petition utterly fails to demonstrate that
Bandiola possesses the requisite legal standing to sue.

Notwithstanding petitioners' lack of locus standi, this Court will allow this petition to proceed to its
ultimate conclusion due to its transcendental importance. After all, the rule on locus standi is a mere
procedural technicality, which the Court, in a long line of cases involving subjects of transcendental
importance, has waived or relaxed, thus allowing nontraditional plaintiffs such as concerned citizens,
taxpayers, voters and legislators to sue in cases of public interest, albeit they may not have been
personally injured by a government act. 36 More importantly, the matters raised in this case, involved on
one hand, possible violations of the Constitution and, on the other, the need to rehabilitate the
country's prime tourist destination. Undeniably, these matters affect public interests and therefore are
of transcendental importance to the people. In addition, the situation calls for review because as stated,
it is capable of repetition, the Court taking judicial notice of the many other places in our country that
are suffering from similar environmental degradation.

As to the two other requirements, their existence is indubitable. It will be recalled that even before a
formal issuance on the closure of Boracay was made by the government, petitioners already brought the
question of the constitutionality of the then intended closure to this Court. And, a day after
Proclamation No. 475 was issued, they filed a supplemental petition impugning its constitutionality.
Clearly, the filing of the petition and the supplemental petition signals the earliest opportunity that the
constitutionality of the subject government measure could be raised. There can also be no denying that
the very lis mota of this case is the constitutionality of Proclamation No. 475.

Defense of SLAPP

Suffice it to state that while this case touches on the environmental issues in Boracay, the ultimate issue
for resolution is the constitutionality of Proclamation No. 475. The procedure in the treatment of a
defense of SLAPP provided for under Rule 6 of the Rules of Procedure for Environmental Cases should
not, therefore, be made to apply.

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Now as to the substantive issues.

We first quote in full Proclamation No. 475.

PROCLAMATION No. 475

DECLARING A STATE OF CALAMITY IN THE BARANGAYS OF BALABAG, MANOC-MANOC AND Y APAK

(ISLAND OF BORACAY) IN THE MUNICIPALITY OF MALAY, AKLAN, AND TEMPORARY CLOSURE OF THE
ISLAND AS A TOURIST DESTINATION

WHEREAS, Section 15, Article II of the 1987 Constitution states that the State shall protect and promote
the right to health of the people and instill health consciousness among them;

WHEREAS, Section 16, Article II of the 1987 Constitution provides that it is the policy of the State to
protect and advance the right of the people to a balanced and healthful ecology in accord with the
rhythm and harmony of nature;

WHEREAS, Section 2, Article XII of the 1987 Constitution provides that the State shall protect the
nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone;

WHEREAS, an Inter-Agency Task Force, composed of the Department of Environment and Natural
Resources (DENR), the [DILG] and the Department of Tourism (DOT), was established to evaluate the
environmental state of the Island of Boracay, and investigate possible violations of existing
environmental and health laws, rules and regulations;

WHEREAS, the investigations and validation undertaken revealed that:

a. There is a high concentration of fecal coliform in the Bolabog beaches located in the eastern
side of Boracay Island due to insufficient sewer lines and illegal discharge of untreated waste
water into the beach, with daily tests conducted from 6 to 10 March 2018 revealing consistent
failure in compliance with acceptable water standards, with an average result of 18,000 most
probable number (MPN)/1 OOml, exceeding the standard level of 400 MPN/100ml;

b. Most commercial establishments and residences are not connected to the sewerage
infrastructure of Boracay Island, and waste products are not being disposed through the proper
sewerage infrastructures in violation of environmental law, rules, and regulations;

c. Only 14 out of 51 establishments near the shores of Boracay Island are compliant with the
provision of Republic Act (RA) No. 9275 or the Philippine Clean Water Act of 2004;

d. Dirty water results in the degradation of the coral reefs and coral cover of Boracay Island,
which declined by approximately 70.5% from 1988 to 2011, with the highest decrease taking
place between 2008 and 2011 during a period of increased tourist arrivals (approximately
38.4%);

e. Solid waste within Boracay Island is at a generation rate of 90 to 115 tons per day, while the
hauling capacity of the local government is only 30 tons per day, hence, leaving approximately
85 tons of waste in the Island daily;

f. The natural habitats of Puka shells, nesting grounds of marine turtles, and roosting grounds of
flying foxes or fruit bats have been damaged and/or destroyed; and

g. Only four (4) out of nine (9) wetlands in Boracay Island remain due to illegal encroachment of
structures, including 93 7 identified illegal structures constructed on forestlands and wetlands,
as well as 102 illegal structures constructed on areas already classified as easements, and the
disappearance of the wetlands, which acts as natural catchments, enhances flooding in the area;

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WHEREAS, the findings of the Department of Science and Technology (DOST) reveal that beach erosion
is prevalent in Boracay Island, particularly along the West Beach, where as much as 40 meters of erosion
has taken place in the past 20 years from 1993 to 2003, due to storms, extraction of sand along the
beach to construct properties and structures along the foreshore, and discharge of waste water near the
shore causing degradation of coral reefs and seagrass meadows that supply the beach with sediments
and serve as buffer to wave action;

WHEREAS, the DOST also reports that based on the 2010-2015 Coastal Ecosystem Conservation and
Adaptive Management Study of the Japan International Cooperation Agency, direct discharge of waste
water near the shore has resulted in the frequent algal bloom and coral deterioration, which may
reduce the source of sand and cause erosion;

WHEREAS, the data from the Region VI - Western Visayas Regional Disaster Risk Reduction and
Management Council shows that the number of tourists in the island in a day amounts to 18,082, and
the tourist arrival increased by more than 160% from 2012 to 2017;

WHEREAS, the continuous rise of tourist arrivals, the insufficient sewer and waste management system,
and environmental violations of establishments aggravate the environmental degradation and destroy
the ecological balance of the Island of Boracay, resulting in major damage to property and natural
resources, as well as the disruption of the normal way of life of the people therein;

WHEREAS, it is necessary to implement urgent measures to address the abovementioned human-

induced hazards, to protect and promote the health and well-being of its residents, workers and tourists,
and to rehabilitate the Island in order to ensure the sustainability of the area and prevent further
degradation of its rich ecosystem;

WHEREAS, RA No. 9275 provides that the DENR shall designate water bodies, or portions thereof, where
specific pollutants from either natural or man-made source have already exceeded water quality
guidelines as non-attainment areas for the exceeded pollutants and shall prepare and implement a
program that will not allow new sources of exceeded water pollutant in non-attainment areas without a
corresponding reduction in discharges from existing sources;

WHEREAS, RA No. 9275 also mandates the DENR, in coordination with other concerned agencies and
the private sectors, to take such measures as may be necessary to upgrade the quality of such water in
non-attainment areas to meet the standards under which it has been classified, and the local
government units to prepare and implement contingency plans and other measures including relocation,
whenever necessary, for the protection of health and welfare of the residents within potentially affected
areas;

WHEREAS, Proclamation No. 1064 (s. 2006) classified the Island of Boracay into 3 77 .68 hectares of
reserved forest land for protection purposes and 628.96 hectares of agricultural land as alienable and
disposable land;

WHEREAS, pursuant to the Regalian Doctrine, and as emphasized in recent jurisprudence, whereby all
lands not privately owned belong to the State, the entire island of Boracay is state-owned, except for
lands already covered by existing valid titles;

WHEREAS, pursuant to RA No. 10121, or the Philippine Disaster Risk Reduction and Management Act of
2010, the National Disaster Risk Reduction and Management Council has recommended the declaration
of a State of Calamity in the Island of Boracay and the temporary closure of the Island as a tourist
destination to ensure public safety and public health, and to assist the government in its expeditious
rehabilitation, as well as in addressing the evolving socio-economic needs of affected communities;

NOW, THEREFORE, I, RODRIGO ROA DUTERTE, President of the Philippines, by virtue of the powers
vested in me by the Constitution and existing laws, do hereby declare a State of Calamity in the
barangays of Balabag, Manoc-Manoc and Yapak (Island of Boracay) in the Municipality of Malay, Aklan.
In this regard, the temporary closure of the Island as a tourist destination for six (6) months starting 26

119
April 2018, or until 25 October 2018, is hereby ordered subject to applicable laws, rules, regulations and
jurisprudence.

Concerned government agencies shall, as may be necessary or appropriate, undertake the remedial
measures during a State of Calamity as provided in RA No. 10121 and other applicable laws, rules and
regulations, such as control of the prices of basic goods and commodities for the affected areas,
employment of negotiated procurement and utilization of appropriate funds, including the National
Disaster Risk Reduction and Management Fund, for relief and rehabilitation efforts in the area. All
departments and other concerned government agencies are also hereby directed to coordinate with,
and provide or augment the basic services and facilities of affected local government units, if necessary.

The State of Calamity in the Island of Boracay shall remain in force and effect until lifted by the President,
notwithstanding the lapse of the six-month closure period.

All departments, agencies and offices, including government-owned or controlled corporations and
affected local government units are hereby directed to implement and execute the abovementioned
closure and the appropriate rehabilitation works, in accordance with pertinent operational plans and
directives, including the Boracay Action Plan.

The Philippine National Police, Philippine Coast Guard and other law enforcement agencies, with the
support of the Armed Forces of the Philippines, are hereby directed to act with restraint and within the
bounds of the law in the strict implementation of the closure of the Island and ensuring peace and order
in the area.

The Municipality of Malay, Aklan is also hereby directed to ensure that no tourist will be allowed entry
to the island of Boracay until such time that the closure has been lifted by the President.

All tourists, residents and establishment owners in the area are also urged to act within the bounds of
the law and to comply with the directives herein provided for the rehabilitation and restoration of the
ecological balance of the Island which will be for the benefit of all concerned.

It must be noted at the outset that petitioners failed to present and establish the factual bases of their
arguments because they went directly to this Court. In ruling on the substantive issues in this case, the
Court is, thus, constrained to rely on, and uphold the factual bases, which prompted the issuance of the
challenged proclamation, as asserted by respondents. Besides, executive determinations, such as said
factual bases, are generally final on this Court.37

The Court observes that the meat of petitioners' constitutional challenge on Proclamation No. 475 is the
right to travel.

Clearly then, the one crucial question that needs to be preliminarily answered is - does Proclamation No.
475 constitute an impairment on the right to travel?

The Court answers in the negative.

Proclamation No. 475 does not pose an

actual impairment on the right to travel

Petitioners claim that Proclamation No. 475 impairs the right to travel based on the following provisions:

NOW, THEREFORE, I, RODRIGO ROA DUTERTE, President of the Philippines, by virtue of the powers
vested in me by the Constitution and existing laws, do hereby declare a State of Calamity in the
barangays of Balabag, Manoc-Manoc and Yapak (Island of Boracay) in the Municipality of Malay, Aldan.
In this regard, the temporary closure of the Island as a tourist destination for six (6) months starting 26
April 2018, or until 25 October 2018, is hereby ordered subject to applicable laws, rules, regulations
and jurisprudence.

xxxx

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The Municipality of Malay, Aldan is also hereby directed to ensure that no tourist will be allowed entry
to the island of Boracay until such time that the closure has been lifted by the President.

xxxx

The activities proposed to be undertaken to rehabilitate Boracay involved inspection, testing, demolition,
relocation, and construction. These could not have been implemented freely and smoothly with tourists
coming in and out of the island not only because of the possible disruption that they may cause to the
works being undertaken, but primarily because their safety and convenience might be compromised.
Also, the contaminated waters in the island were not just confined to a small manageable area. The
excessive water pollutants were all over Bolabog beach and the numerous illegal drainpipes connected
to and discharging wastewater over it originate from different parts of the island. Indeed, the activities
occasioned by the necessary digging of these pipes and the isolation of the contaminated beach waters
to give way to treatment could not be done in the presence of tourists. Aside from the dangers that
these contaminated waters pose, hotels, inns, and other accommodations may not be available as they
would all be inspected and checked to determine their compliance with environmental laws. Moreover,
it bears to state that a piece-meal closure of portions of the island would not suffice since as mentioned,
illegal drainpipes extend to the beach from various parts of Boracay. Also, most areas in the island
needed major structural rectifications because of numerous resorts and tourism facilities which lie along
easement areas, illegally reclaimed wetlands, and of forested areas that were illegally cleared for
construction purposes. Hence, the need to close the island in its entirety and ban tourists therefrom.

In fine, this case does not actually involve the right to travel in its essential sense contrary to what
petitioners want to portray. Any bearing that Proclamation No. 475 may have on the right to travel is
merely corollary to the closure of Boracay and the ban of tourists and non-residents therefrom which
were necessary incidents of the island's rehabilitation. There is certainly no showing that Proclamation
No. 475 deliberately meant to impair the right to travel. Tue questioned proclamation is clearly focused
on its purpose of rehabilitating Boracay and any intention to directly restrict the right cannot, in any
manner, be deduced from its import. This is contrary to the import of several laws recognized as
constituting an impairment on the right to travel which directly impose restriction on the right, viz.:

[1] The Human Security Act of2010 or Republic Act (R.A.) No. 9372. The law restricts the right travel of an
individual charged with the crime of terrorism even though such person is out on bail.

[2] The Philippine Passport Act of 1996 or R.A. No. 8239. Pursuant to said law, the Secretary of Foreign
Affairs or his authorized consular officer may refuse the issuance of, restrict the use of, or withdraw, a
passport of a Filipino citizen.

[3] The 'Anti-Trafficking in Persons Act of 2003' or RA 9208. Pursuant to the provisions thereof, the
Bureau of Immigration, in order to manage migration and curb trafficking in persons, issued
Memorandum Order Radjr No. 2011-011, allowing its Travel Control and Enforcement Unit to 'offload
passengers with fraudulent travel documents, doubtful purpose of travel, including possible victims of
human trafficking' from our ports.

[4] The Migrant Workers and Overseas Filipinos Act of 1995 or R.A. No. 8042, as amended by R.A. No.
10022. In enforcement of said law, the Philippine Overseas Employment Administration (POEA) may
refuse to issue deployment permit[ s] to a specific country that effectively prevents our migrant workers
to enter such country.

[5] The Act on Violence Against Women and Children or R.A. No. 9262. The law restricts movement of an
individual against whom the protection order is intended.

[6] Inter-Country Adoption Act of 1995 or R.A. No. 8043. Pursuant thereto, the Inter-Country Adoption
Board may issue rules restrictive of an adoptee's right to travel 'to protect the Filipino child from abuse,
exploitation, trafficking and/or sale or any other practice in connection with adoption which is harmful,
detrimental, or prejudicial to the child.’38

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In Philippine Association of Service Exporters, Inc. v. Hon. Drilon, 39 the Court held that the consequence
on the right to travel of the deployment ban implemented by virtue of Department Order No. 1, Series
of 1998 of the Department of Labor and Employment does not impair the right.

Also significant to note is that the closure of Boracay was only temporary considering the categorical
pronouncement that it was only for a definite period of six months.

Hence, if at all, the impact of Proclamation No. 475 on the right to travel is not direct but merely
consequential; and, the same is only for a reasonably short period of time or merely temporary.

In this light, a discussion on whether President Duterte exercised a power legislative in nature loses its
significance. Since Proclamation No. 475 does not actually impose a restriction on the right to travel, its
issuance did not result to any substantial alteration of the relationship between the State and the
people. The proclamation is therefore not a law and conversely, the President did not usurp the law-
making power of the legislature.

For obvious reason, there is likewise no more need to determine the existence in this case of the
requirements for a valid impairment of the right to travel.

Even if it is otherwise, Proclamation

No. 475 must be upheld for being in
the nature of a valid police power
measure

Police power, amongst the three fundamental and inherent powers of the state, is the most pervasive
and comprehensive.40 "It has been defined as the 'state authority to enact legislation that may interfere
with personal liberty or property in order to promote general welfare."41 "As defined, it consists of (1)
imposition or restraint upon liberty or property, (2) in order to foster the common good. It is not
capable of exact definition but has be purposely, veiled in general terms to underscore its all-
comprehensive embrace."42 The police power "finds no specific Constitutional grant for the plain reason
that it does not owe its origin to the Charter"43 since "it is inborn in the very fact of statehood and
sovereignty."44 It is said to be the "inherent and plenary power of the State which enables it to prohibit
all things hurtful to the comfort, safety, and welfare of the society."45 Thus, police power constitutes an
implied limitation on the Bill of Rights. 46 After all, "the Bill of Rights itself does not purport to be an
absolute guaranty of individual rights and liberties. 'Even liberty itself, the greatest of all rights, is not
unrestricted license to act according to one's will.' It is subject to the far more overriding demands and
requirements of the greater number."47

"Expansive and extensive as its reach may be, police power is not a force without limits."48 "It has to be
exercised within bounds - lawful ends through lawful means, i.e., that the interests of the public
generally, as distinguished from that of a particular class, require its exercise, and that the means
employed are reasonably necessary for the accomplishment of the purpose while not being unduly
oppressive upon individuals."49

That the assailed governmental measure in this case is within the scope of police power cannot be
disputed. Verily, the statutes50 from which the said measure draws authority and the constitutional
provisions51 which serve as its framework are primarily concerned with the environment and health,
safety, and well-being of the people, the promotion and securing of which are clearly legitimate
objectives of governmental efforts and regulations. The motivating factor in the issuance of
Proclamation No. 475 is without a doubt the interest of the public in general. The only question now is
whether the means employed are reasonably necessary for the accomplishment of the purpose and not
unduly oppressive upon individuals.

The pressing need to implement urgent measures to rehabilitate Boracay is beyond cavil from the
factual milieu that precipitated the President's issuance of Proclamation No. 475. This necessity is even
made more critical and insistent by what the Court said in Oposa v. Hon. Factoran, Jr. 52 in regard the
rights to a balanced and healthful ecology and to health, which rights are likewise integral concerns in
this case. Oposa warned that unless the rights to a balanced and healthful ecology and to health are

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given continuing importance and the State assumes its solemn obligation to preserve and protect them,
the time will come that nothing will be left not only for this generation but for the generations to come
as well. 53 It further taught that the right to a balanced and healthful ecology carries with it the
correlative duty to refrain from impairing the environment. 54

Against the foregoing backdrop, we now pose this question: Was the temporary closure of Boracay as a
tourist destination for six months reasonably necessary under the circumstances? The answer is in the
affirmative.

As earlier noted, one of the root causes of the problems that beset Boracay was tourist influx. Tourist
arrivals in the island were clearly far more than Boracay could handle. As early as 2007, the DENR had
already determined this as the major cause of the catastrophic depletion of the island's
biodiversity. 55 Also part of the equation is the lack of commitment to effectively enforce pertinent
environmental laws. Unfortunately, direct action on these matters has been so elusive that the situation
reached a critical level. Hence, by then, only bold and sweeping steps were required by the situation.

Certainly, the closure of Boracay, albeit temporarily, gave the island its much needed breather, and
likewise afforded the government the necessary leeway in its rehabilitation program. Note that apart
from review, evaluation and amendment of relevant policies, the bulk of the rehabilitation activities
involved inspection, testing, demolition, relocation, and construction. These works could not have easily
been done with tourists present. The rehabilitation works in the first place were not simple, superficial
or mere cosmetic but rather quite complicated, major, and permanent in character as they were
intended to serve as long-term solutions to the problem. 56 Also, time is of the essence. Every precious
moment lost is to the detriment of Boracay's environment and of the health and well-being of the
people thereat. Hence, any unnecessary distraction or disruption is most unwelcome. Moreover, as part
of the rehabilitation efforts, operations of establishments in Boracay had to be halted in the course
thereof since majority, if not all of them, need to comply with environmental and regulatory
requirements in order to align themselves with the government's goal to restore Boracay into normalcy
and develop its sustainability. Allowing tourists into the island while it was undergoing necessary
rehabilitation would therefore be pointless as no establishment would cater to their accommodation
and other needs. Besides, it could not be said that Boracay, at the time of the issuance of the questioned
proclamation, was in such a physical state that would meet its purpose of being a tourist destination.
For one, its beach waters could not be said to be totally safe for swimming. In any case, the closure, to
emphasize, was only for a definite period of six months, i.e., from April 26, 2018 to October 25, 2018. To
the mind of the Court, this period constitutes a reasonable time frame, if not to complete, but to at least
put in place the necessary rehabilitation works to be done in the island. Indeed, the temporary closure
of Boracay, although unprecedented and radical as it may seem, was reasonably necessary and not
unduly oppressive under the circumstances. It was the most practical and realistic means of ensuring
that rehabilitation works in the island are started and carried out in the most efficacious and expeditious
way. Absent a clear showing of grave abuse of discretion, unreasonableness, arbitrariness or
oppressiveness, the Court will not disturb the executive determination that the closure of Boracay was
necessitated by the foregoing circumstances. As earlier noted, petitioners totally failed to counter the
factual bases of, and justification for the challenged executive action.

Undoubtedly, Proclamation No. 475 is a valid police power measure. To repeat, police power constitutes
an implied limitation to the Bill of Rights, and that even liberty itself, the greatest of all rights, is subject
to the far more overriding demands and requirements of the greater number.

For the above reasons, petitioners' constitutional challenge on Proclamation No. 475 anchored on their
perceived impairment of the right to travel must fail.

Petitioners have no vested rights on

their sources of income as to be
entitled to due process

Petitioners argue that Proclamation No. 475 impinges on their constitutional right to due process since
they were deprived of the corollary right to work and earn a living by reason of the issuance thereof.

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Concededly, "[a] profession, trade or calling is a property right within the meaning of our constitutional
guarantees. One cannot be deprived of the right to work and the right to make a living because these
rights are property rights, the arbitrary and unwarranted deprivation of which normally constitutes an
actionable wrong."57 Under this premise, petitioners claim that they were deprived of due process when
their right to work and earn a living was taken away from them when Boracay was ordered closed as a
tourist destination. It must be stressed, though, that "when the conditions so demand as determined by
the legislature, property rights must bow to the primacy of police power because property rights,
though sheltered by due process, must yield to general welfare."58 Otherwise, police power as an
attribute to promote the common good would be diluted considerably if on the mere plea of petitioners
that they will suffer loss of earnings and capital, government measures implemented pursuant to the
said state power would be stymied or invalidated. 59

In any case, petitioners, particularly Zabal and Jacosalem, cannot be said to have already acquired
vested rights to their sources of income in Boracay. As heretofore mentioned, they are part of the
informal sector of the economy where earnings are not guaranteed. In Southern Luzon Drug Corporation
v. Department of Social Welfare and Development, 60 the Court elucidated on vested rights, as follows:

x x x Vested rights are 'fixed, unalterable, or irrevocable.' More extensively, they are depicted as follows:

Rights which have so completely and definitely accrued to or settled in a person that they are not
subject to be defeated or cancelled by the act of any other private person, and which it is right and
equitable that the government should recognize and protect, as being lawful in themselves, and settled
according to the then current rules of law, and of which the individual could not be deprived arbitrarily
without injustice, or of which he could not justly be deprived otherwise than by the established methods
of procedure and for the public welfare. x x x A right is not 'vested' unless it is more than a mere
expectancy based on the anticipated continuance of present laws; it must be an established interest in
property, not open to doubt. x x x To be vested in its accurate legal sense, a right must be complete and
consummated, and one of which the person to whom it belongs cannot be divested without his consent.
x x x61

Here, Zabal and J acosalem 's asserted right to whatever they may earn from tourist arrivals in Boracay is
merely an inchoate right or one that has not fully developed and therefore cannot be claimed as one's
own. An inchoate right is a mere expectation, which may or may not come into fruition. "It is contingent
as it only comes 'into existence on an event or condition which may not happen or be performed until
some other event may prevent their vesting.’’’’62 Clearly, said petitioners' earnings are contingent in that,
even assuming tourists are still allowed in the island, the will still earn nothing if no one avails of their
services. Certainly, they do not possess any vested right on their sources of income, and under this
context, their claim of lack of due process collapses. To stress, only rights which have completely and
definitely accrued and settled are entitled protection under the due process clause.

Besides, Proclamation No. 475 does not strip Zabal and Jacosalem of their right to work and earn a living.
They are free to work and practice their trade elsewhere. That they were not able to do so in Boracay, at
least for the duration of its closure, is a necessary consequence of the police power measure to close
and rehabilitate the island.

Also clearly untenable is petitioners' claim that they were being made to suffer the consequences of the
environmental transgressions of others. It must be stressed that the temporary closure of Boracay as a
tourist destination and the consequent ban of tourists into the island were not meant to serve as
penalty to violators of environmental laws. The temporary closure does not erase the environmental
violations committed; hence, the liabilities of the violators remain and only they alone shall suffer the
same. The temporary inconvenience that petitioners or other persons may have experienced or are
experiencing is but the consequence of the police measure intended to attain a much higher purpose,
that is, to protect the environment, the health of the people, and the general welfare. Indeed, any and
all persons may be burdened by measures intended for the common good or to serve some important
governmental interest. 63

No intrusion into the autonomy of the

concerned LGUs

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The alleged intrusion of the President into the autonomy of the LG Us concerned is likewise too trivial to
merit this Court's consideration. Contrary to petitioners' argument, RA 10121 recognizes and even puts
a premium on the role of the LG Us in disaster risk reduction and management as shown by the fact that
a number of the legislative policies set out in the subject statute recognize and aim to strengthen the
powers decentralized to LGUs. 64 This role is echoed in the questioned proclamation.

The fact that other government agencies are involved in the rehabilitation works does not create the
inference that the powers and functions of the LGUs are being encroached upon. The respective roles of
each government agency are particularly defined and enumerated in Executive Order No. 5365 and all
are in accordance with their respective mandates. Also, the situation in Boracay can in no wise be
characterized or labelled as a mere local issue as to leave its rehabilitation to local actors. Boracay is a
prime tourist destination which caters to both local and foreign tourists. Any issue thereat has
corresponding effects, direct or otherwise, at a national level. This, for one, reasonably takes the issues
therein from a level that concerns only the local officials. At any rate, notice must be taken of the fact
that even if the concerned LGUs have long been fully aware of the problems afflicting Boracay, they
failed to effectively remedy it. Yet still, in recognition of their mandated roles and involvement in the
rehabilitation of Boracay, Proclamation No. 475 directed "[a]ll departments, agencies and offices,
including government-owned or controlled corporations and affected local government units x x x to
implement and execute xx x the closure [of Boracay] and the appropriate rehabilitation works, in
accordance with pertinent operational plans and directives, including the Boracay Action Plan."

As a final note, the Court in Metropolitan Manila Development Authority v. Concerned Residents of
Manila Bay, 66 called out the concerned government agencies for their cavalier attitude towards solving
environmental destruction despite hard evidence and clear signs of climate crisis. It equated the failure
to put environmental protection on a plane of high national priority to the then lacking level of
bureaucratic efficiency and commitment. Hence, the Court therein took it upon itself to put the heads of
concerned department-agencies and the bureaus and offices under them on continuing notice and to
enjoin them to perform their mandates and duties towards the clean-up and/or restoration of Manila
Bay, through a "continuing mandamus." It likewise took the occasion to state, viz.:

In the light of the ongoing environmental degradation, the Court wishes to emphasize the extreme
necessity for all concerned executive departments and agencies to immediately act and discharge their
respective official duties and obligations. Indeed, time is of the essence; hence, there is a need to set
timetables for the performance and completion of the tasks, some of them as defined for them by law
and the nature of their respective offices and mandates.

The importance of the Manila Bay as a sea resource, playground and as a historical landmark cannot be
over-emphasized. It is not yet too late in the day to restore the Manila Bay to its former splendor and
bring back the plants and sea life that once thrived in its blue waters. But the tasks ahead, daunting as
they may be, could only be accomplished if those mandated, with the help and cooperation of all civic-
minded individuals, would put their minds to these tasks and take responsibility. This means that the
State, through [the concerned department-agencies], has to take the lead in the preservation and
protection of the Manila Bay.

The era of delays, procrastination, and ad hoc measures is over. [The concerned department-agencies]
must transcend their limitations, real or imaginary, and buckle down to work before the problem at
hand becomes unmanageable. Thus, we must reiterate that different government agencies and
instrumentalities cannot shirk from their mandates; they must perform their basic functions in cleaning
up and rehabilitating the Manila Bay. x x x67

There is an obvious similarity in Metropolitan Manila Development Authority and in the present case in
that both involve the restoration of key areas in the country which were once glowing with radiance and
vitality but are now in shambles due to abuses and exploitation. What sets these two cases apart is that
in the former, those mandated to act still needed to be enjoined in order to act. In this case, the bold
and urgent action demanded by the Court in Metropolitan Manila Development Authority is now in the
roll out. Still, the voice of cynicism, naysayers, and procrastinators heard during times of inaction can
still be heard during this time of full action - demonstrating a classic case of "damn if you do, damn if
you don't". Thus, in order for the now staunch commitment to save the environment not to fade, it

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behooves upon the courts to be extra cautious in invalidating government measures meant towards
addressing environmental degradation. Absent any clear showing of constitutional infirmity,
arbitrariness or grave abuse of discretion, these measures must be upheld and even lauded and
promoted. After all, not much time is left for us to remedy the present environmental situation. To
borrow from Oposa, unless the State undertakes its solemn obligation to preserve the rights to a
balanced and healthful ecology and advance the health of the people, "the day would not be too far
when all else would be lost not only for the present generation, but also for those to come - generations
which stand to inherit nothing but parched earth incapable of sustaining life."68

All told, the Court sustains the constitutionality and validity of Proclamation No. 475.

WHEREFORE, the Petition for Prohibition and Mandamus is DISMISSED.

SO ORDERED.

Bersamin (C.J.), Peralta, A. Reyes, Jr., Gesmundo, J. Reyes, Jr., Hernando, and Carandang, JJ., concur.
Carpio and Perlas-Bernabe, JJ., see separate concurring opinions.
Leonen, J., dissent. See separate opinion.
Jardeleza, J., see concurring and dissenting opinion.
Caguioa, J., dissent. See dissenting opinion.

ECOND DIVISION

March 20, 2019

G.R. No. 194619

PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, Petitioner

vs.
OFFICE OF THE OMBUDSMAN, ROBERTO S. BENEDICTO, ANTONIO M. DIAZ, ISMAEL M. REINOSO,
SIMEON G. MIRANDA. RENATO D. TAYAG, JUAN F. TRIVINIO, CESAR VIRATA, JUAN PONCE ENRILE,
JOSE MACARIO LAUREL IV, JOSE J. LEIDO, JR. (all former directors of PNB 304 El Hogat Fil. Bldg., 115
Juan Luna St., Binondo, Manila), RAFAEL G. PEREZ, FELICISIMO R. GONZALES** (both former Managers
of PNB Dumaguete Branch, Dumaguete City), RAMON V. ESCANO, EVELINA TEVES, HERMINIO V.
TEVES, LORENZO G. TEVES, CATALINO NOEL, and LAMBERJ'O MACIAS (all former REYES, J. JR., and
LAZARO-JAVIER, JJ. Officers of Tolong Sugar Milling Company, Inc.), Respondents

DECISION

REYES, J. JR., J.:

This is a Petition for Certiorari under Rule 65 of the Rules of Court which seeks to set aside the
Resolution1 dated December 29, 2006, and the Order2 dated April 21, 2009, of the respondent Office of
the Ombudsman (Ombudsman) in OMB-C-C-03-0252-D, which, respectively, dismissed for lack of
probable cause the criminal complaints against herein private respondents; and denied the motion for
reconsideration thereon.

The Facts

On December 5, 2002, herein petitioner Presidential Commission on Good Government (PCGG), through
its then Commissioner Victoria A. Avena, filed before the Ombudsman an Affidavit-Complaint for
violation of Section 3(e) & (g) of Republic Act (R.A.) No. 3019.

In its complaint, the PCGG stated that it is in charge of the prosecution of civil and criminal cases arising
from behest loans, as discovered by the Presidential Ad Hoc Fact-Finding Committee (hereinafter, the
"Committee") created under Administrative Order No. 13, dated October 8, 1992.

126
The PCGG averred that one of the accounts investigated by the Committee's Technical Working Group
(TWG) was the account of Tolong Sugar Milling Company, Inc. (TSMCI) with the Philippine National Bank
(PNB). It explained that the TWG's examination disclosed that on March 20, 1968, PNB granted TSMCI a
stand-by irrevocable unconfirmed letter of credit in the amount of US$27,793,123.45 to cover
importation of sugar machinery and equipment in connection with TSMCI's proposed sugar central at
Sta. Catalina and Bayawan, Negros Oriental. The loan was granted under PNB Board Resolution No. 711,
dated March 20, 1968, and was purportedly secured by (1) 51.2496 hectares of agricultural land covered
by Tax Declaration (TD) Nos. 4718 and 10282; (2) Machinery and equipment, building and other
improvements to be erected and/or installed in the company's milling site; (3) 3,000 hectares of central-
owned and operated sugar plantation; and (4) Joint and solidary surety executed by TSMCI's officers.
The loan was also subjected to various conditions including the need to increase TSMCI's paid-up capital
to at least ₱7,000,000.00.

The TWG discovered that at the time of its incorporation on May 10, 1967, TSMCI only had subscribed
capital stock amounting to ₱2,000,000.00, of which only ₱500,000.00 was paid-up; that it only had
capitalization in the amount of ₱10,000,000.00; that the lands covered by TD Nos. 4718 and 10282 were
appraised by PNB Dumaguete Branch on October 21, 1967 at ₱22,350.00 only; and that the two parcels
were not titled or registered in the name of TSMCI, but in the names of some other persons. Further, a
re-inspection and re-appraisal by the PNB Credit Department on August 7-9, 1975 also disclosed that the
value of all of the assets TSMCI pledged as security for the loan amounted only to a total of
₱69,631,500.00, which was substantially insufficient to cover the loan amount of US$27,793,123.45 or
₱108,912,912.86 based on the prevailing exchange rate at that time (US$1 = ₱3.9187). Lastly, no "Joint
and Solidary Surety" undertaking by its officers could be found in the records pertaining to TSMCI's
account, contrary to the conditions set by the PNB.

The PCGG claimed that the TWG's findings show that TSMCI's account was a behest loan as shown by
the facts that: (1) TSMCI was under-capitalized; and (2) the loan was under-collateralized. Nevertheless,
despite these glaring realities and the clear financial incapability of TSMCI, it still secured the subject
loan with the PNB. Thus, the PCGG alleged that there are sufficient factual circumstances which would
support a finding of probable cause for violation of Section 3(e) and (g) of R.A. No. 3019 against the
officers/directors of TSMCI, namely: (1) Ramon V. Escaño; (2) Herminio V. Teves; (3) Evelina J. Teves; (4)
Lorenzo G. Teves; (5) Catalino Noel; and (6) Lamberto Macias, as well as the PNB Managers who
recommended the approval of the loan, and the members of the Board of Directors who approved the
pertinent Board Resolution and who may later be identified during the investigation of the case.

The complaint was initially acted upon by the Ombudsman's Fact-Finding and Intelligence Bureau (FFIB)
which obtained the list of the PNB Board of Directors and PNB-Dumaguete Branch Managers during the
period when the loan was granted. Subsequently, Roberto S. Benedicto (Benedicto), Antonio M. Diaz
(Diaz), Ismael M. Reinoso (Reinoso), Simeon G. Miranda (Miranda), Renato D. Tayag (Tayag), Juan F.
Trivinio (Trivinio), Cesar Virata (Virata), Juan Ponce Enrile (Enrile), Jose Macario Laurel IV (Laurel), and
Jose J. Leido, Jr. (Leido), all PNB Directors in 1968; and Rafael G. Perez (Perez) and Felicisimo R. Gonzalo
(Gonzalo), both former PNB-Dumaguete Branch Managers, were impleaded as respondents.

Thereafter, the Ombudsman issued an Order directing the respondents to file their respective counter-
affidavits.

However, pending the resolution of the case, Benedicto, Reinoso, Tayag, Trivinio, Leido, Evelina Teves,
and Macias died. Further, among the remaining respondents, only Enrile, Virata, Laurel, and Herminio
Teves filed their respective counter-affdavits or motions to dismiss. It would appear that copies of the
Order were not properly served on Miranda, Perez, Gonzalo, Escaño, and Noel, directing them to file
their respective counter-affidavits. Thus, copies of the Order were returned unserved. With regard to
Diaz and Lorenzo Teves, although copies of the Order were served upon them, they did not comply with
the Order.

For his part, Enrile moved for the dismissal of the complaint against him on the grounds that: (a) the
complaint failed to ascribe any act or omission constituting an offense against him; (b) the PCGG, in
effect, has no competent proof that the elements of the offense charged - particularly of actual injury -
are present in this case; and (c) assuming that a crime has been committed, the same has long

127
prescribed. Herminio Teves adopted the grounds and arguments interposed by Enrile stressing that their
situations are similar.

On the other hand, in their respective counter-affidavits, Laurel and Virata, argued that they have no
hand in the approval of the loan as they were absent from the meeting when the subject loan was
supposedly approved. Laurel further claimed that assuming that he participated in the approval of the
loan, the offense had already prescribed and that the elements of undue injury, manifest partiality,
evident bad faith and/or gross inexcusable negligence, were lacking.

Ruling of the Ombudsman

In its assailed Resolution dated December 29, 2006, the Ombudsman dismissed the criminal complaints
for violation of Section 3(e) and (g) of R.A. No. 3019 against the respondents for lack of probable cause.

The Ombudsman ratiocinated that other than the failure to properly serve them with copies of the
Order, there was no reason to indict Perez and Gonzalo for the offenses charged. It noted that neither of
them were the branch managers of PNB-Dumaguete during the period in question. It pointed out that
the subject loan was granted by PNB to TSMCI on March 20, 1968. However, Perez served as PNB-
Dumaguete Branch Manager only until August 30, 1966 or about two (2) years prior to the alleged
anomalous transaction. On the other hand, Gonzalo served as PNB-Dumaguete Branch Manager from
May 19, 1969 to May 18, 1971, or more than a year after the approval of the subject loan. Further, no
document was presented showing that either of the two former branch managers had any participation
n the grant or release of the proceeds of the loan.

Similarly, the Ombudsman opined that there was dearth of evidence to charge Miranda for the alleged
offense. It observed that Miranda's name appeared in only one document, that is, in the list of the PNB
Board of Directors in 1968 which was submitted by PNB in compliance with the
subpoena duces tecum issued by the Ombudsman. Hence, there was no evidence linking Miranda with
the alleged undue approval of the subject loan.

The Ombudsman, also cleared Laurel and Virata from the criminal charges considering that they were
absent when the PNB Board of Directors approved the alleged behest loan. As regards Laurel, the
Ombudsman pointed out that the documents attached by the PCGG to its complaint-affidavit do not
show any particular act by Laurel showing that he participated in the approval of the loan. In the same
vein, there was no allegation that Virata participated in the grant of the loan or that he exerted prior
influence leading to the approval of the loan. The Ombudsman dismissed the PCGG's contention that
Laurel and Virata's presence were not necessary as they "could easily wield influence beyond the
conference table."3 It ratiocinated that the argument lacks merit as it is a mere speculation.

As regards Escañno, Noel, Herminio V. Teves, and Lorenzo G. Teves, the Ombudsman noted that they
were impleaded as respondents on account of their being officers/directors of TSMCI. The PCGG failed
to present any evidence showing that they encouraged, persuaded, and influenced any member of the
PNB Board of Directors to vote for the approval of the loan. Nevertheless, there was no allegation of
specific acts committed by them such as encouraging, persuading, or influencing any member of the
PNB Board of Directors to vote for the approval of the subject loan.

With respect to Enrile and Diaz, the Ombudsman stated that while the two were present when the PNB
Board approved TSMCI's loan, PCGG's complaint-affidavit failed to point out circumstances that would
indicate a criminal design or collusion between them and the other respondents to cause undue injury
to the government by giving unwarranted benefits to TSMCI. Specifically, the evidence present was
insufficient to accuse Enrile and Diaz of entering into' a transaction grossly disadvantageous to the
government; and that the PCGG failed to show the element of bad faith, manifest partiality or gross
inexcusable negligence.

Finally, the Ombudsman was of the opinion that the PNB Board of Directors exercised proper caution to
ensure the chances of payment and that the loan was not under-collateralized, contrary to the
allegations by the PCGG. It perceived that the PNB Board even required TSMCI to increase its paid-up
capital as one of the conditions for the grant of the loan. Also, it stressed that in October 1967, the PNB-

128
Dumaguete Branch had appraised the real properties offered by TSMCI as security at
₱111,172,493.80,4 which is more than sufficient to cover the amount of the loan. It explained that the
appraisal conducted by the PNB in 1975, or about seven (7) years from the initial appraisal in 1967,
should be examined in the light of several factors, such as the non-inclusion of some of the mortgaged
real properties after the PNB Credit Department deemed their ownership controversial.

The dispositive portion of the assailed resolution provides:

WHEREFORE, the instant criminal complaint for violation of Section 3(e) and (g) of Republic Act No. 3019,
as amended, is hereby DISMISSED for lack of probable cause.

SO RESOLVED.5

PCGG moved for reconsideration, but the same was denied by the Ombudsman in its Order dated April
21, 2009.

Hence, this petition for certiorari.6

The Issue

WHETHER THE OFFICE OF THE OMBUDSMAN COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OR EXCESS OF JURISDICTION WHEN IT DISMISSED THE CRIMINAL COMPLAINT AGAINST
RESPONDENTS FOR LACK OF PROBABLE CAUSE.

The PCGG claims that there was no dispute that the respondents took part in the approval of the
questioned loan. It continues that the alleged specific acts by the respondents and the specific details
concerning their criminal design are matters of evidence on the motive of the offenders which are not
essential elements of the offenses charged, and therefore, matters that are best threshed out during a
full blown trial.

The PCGG also disputes the Ombudsman's findings that the PNB Board of Directors took proper
precautionary measures in approving the subject loan. It insists that the PNB Board should not have
approved the loan stressing that the two tracts of land offered as security were not registered in the
name of the borrower, thus, TSMCI could not have validly constituted a mortgage thereon; that one of
the tracts of land, specifically, the 3,170 hectares of land covered by TD Nos. 04118, 04115, and 04129,
has been verified to be within the unclassified public forest of Sta. Catalina, Negros Oriental; and that
the mere fact that the loan was also secured by the very machinery and equipment purchased, and
structures and other improvements to be erected and/or installed, using the proceeds of the loan, is
violative of the legal requirement under Article 2085 of the Civil Code, that the pledger or mortgagor be
the absolute owner of the thing pledged or mortgaged.

The Commission asserts that had the respondents-PNB Directors truly exercised proper caution to
ensure repayment of the loan, they would have realized that the borrower was a newly formed
corporation, undercapitalized, and offered unacceptable collaterals.

The Court's Ruling

As already stated, the PCGG imputes grave abuse of discretion on the part of the Ombudsman in
dismissing the criminal complaints for violation of Section 3(e) and (g) of R.A. No. 3019 against the
respondents.

Where a petition for certiorari under Rule 65 of the Rules of Court alleges grave abuse of discretion, the
petitioner should establish that the respondent court or tribunal acted in a capricious, whimsical,
arbitrary or despotic manner in the exercise of its jurisdiction as to be equivalent to lack of jurisdiction.
The reason is that the term "grave abuse of discretion" has a specific meaning. The term is not an
amorphous concept that may easily be manipulated to suit one's purpose.7

129
In a plethora of cases,8 the Court has defined the term "grave abuse of discretion" as the capricious and
whimsical exercise of judgment that is so patent and gross as to amount to an evasion of positive duty
or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where
the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.

Corollary, the petitioner in a petition for certiorari is duty-bound to prove that the respondent court or
tribunal not merely erred in its judgment but, most importantly, gravely abused its discretion in doing so.
The petitioner must show that the respondent court or tribunal acted beyond the parameters of its
jurisdiction when it issued the assailed order or resolution.

In this regard, it is well to point out that the Ombudsman's powers to investigate and prosecute crimes
allegedly committed by public officers or employees are plenary and unqualified.9 This is clear from the
applicable constitutional and statutory provisions, to wit:

Article XI, 1987 Constitution. - ACCOUNTABILITY OF PUBLIC OFFICERS

Section 13. The Office of the Ombudsman shall have the following powers, functions, and duties:

(1) Investigate on its own, or on complaint by any person, any act or omission of any public official,
employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or
inefficient.

xxxx

R.A. No. 6770. - AN ACT PROVIDING FOR THE FUNCTIONAL AND STRUCTURAL ORGANIZATION OF THE
OFFICE OF THE OMBUDSMAN AND FOR OTHER PURPOSES

Section 15. Powers, Functions and Duties. — The Office of the Ombudsman shall have the following
powers, functions and duties:

(1) Investigate and prosecute on its own or on complaint by any person, any act or omission of any
public officer or employee, office or agency, when such act or omission appears to be illegal, unjust,
improper or inefficient. It has primary jurisdiction over cases cognizable by the Sandiganbayan and, in
the exercise of primary jurisdiction, it may take over, at any stage, from any investigatory agency of
government, the investigation of such cases[.]

xxxx

The full discretion to investigate and prosecute necessarily comes with it the discretion not to file a case
as when the Ombudsman finds the complaint insufficient in form or in substance. In short, the filing or
non-filing of the information is primarily lodged within the full discretion of the Ombudsman.10 Simply
stated, the Ombudsman is empowered to determine whether there exists reasonable ground to believe
that a crime has been committed and that the accused is probably guilty thereof and, thereafter, to file
the corresponding information with the appropriate courts.11 Thus, if the Ombudsman, using
professional judgment, finds the case dismissible, the Court shall respect such findings, unless the
exercise of such discretionary powers is tainted by grave abuse of discretion.12 Similarly, the Court shall
also respect a finding of the existence of probable cause.

There is no compelling reason to depart from the Court's long-standing policy of non-interference in the
exercise by the Ombudsman of its plenary investigatory and prosecutorial powers.

The determination of the existence of probable cause lies within the discretion of the public prosecutor
after conducting a preliminary investigation upon the complaint of an offended party. Probable cause
for purposes of filing a criminal information is defined as such facts as are sufficient to engender a well-
founded belief that a crime has been committed and that the respondent is probably guilty thereof. A
finding of probable cause needs only to rest on evidence showing that more likely than not a crime has
been committed, and that it was committed by the accused. Probable cause, although it requires less
than evidence justifying a conviction, demands more than bare suspicion.13

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To engender a well-founded belief that a crime has been committed, and to determine if the
respondents are probably guilty of the same, the elements of the crime charged should, in all
reasonable likelihood, be present. This is based on the principle that every crime is defined by its
elements, without which there should be - at the most - no criminal offense.14

In this regard, Section 3(e) and (g) of R.A. No. 3019 provides:

Sec. 3. Corrupt practices of public officers. — In addition to acts or omissions of public officers already
penalized by existing law, the following shall constitute corrupt practices of any public officer and are
hereby declared to be unlawful:

xxxx

(e) Causing any undue injury to any party, including the Government, or giving any private party any
unwarranted benefits, advantage or preference in the discharge of his official[,] administrative or
judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This
provision shall apply to officers and employees of offices or government corporations charged with the
grant of licenses or permits or other concessions.

xxxx

(g) Entering, on behalf of the Government, into any contract or transaction manifestly and grossly
disadvantageous to the same, whether or not the public officer profited or will profit thereby.

xxxx

For a charge under Section 3(e), the following elements must sufficiently be alleged in the complaint: (i)
that the accused must be a public officer discharging administrative, judicial, or official functions, or a
private individual acting in conspiracy with such public officers; (ii) that he acted with manifest partiality,
evident bad faith, or inexcusable negligence; and (iii) that his action caused any undue injury to any
party, including the government, or giving any private party unwarranted benefits, advantage, or
preference in the discharge of his functions.15 On the other hand, the following elements must be shown
in the complaint to support an accusation under Section 3(g), to wit: (i) that the accused is a public
officer, or a private individual acting in conspiracy with such public officers; (ii) that he entered into a
contract or transaction on behalf of the government; and (iii) that such contract or transaction is grossly
and manifestly disadvantageous to the government.16

To establish probable cause for violation of Section 3(e) and (g) of R.A. No. 3019, the PCGG relied on
their allegations which essentially state the following: (1) that the subject loan was a behest loan
considering that the borrower was under-capitalized and the loan was under-collateralized; and (2) that
the respondents were either officers or directors of the borrower, officers of the PNB branch which
granted the loan, or members of the PNB Board of Directors which approved the loan. These allegations,
however, are insufficient to support the charges for violation of Section 3(e) and (g) of R.A. No. 3019.

A careful review of the subject complaint-affidavit would reveal that the PCGG failed to sufficiently
allege the elements of Section 3(e) and (g) of R.A. No. 3019. Although the PCGG exerted great effort in
explaining how the subject loan bears the characteristics of a behest loan, they utterly failed to
demonstrate or even allege that the respondents acted with manifest partiality, evident bad faith, or
inexcusable negligence, causing undue injury or unwarranted benefit to any party. The PCGG merely
highlighted the alleged scandalous disproportion of the assets and collateral offered by TSMCI with the
amount of the loan without even stating the alleged acts committed by the respondents which
constituted or exhibited manifest partiality, evident bad faith or inexcusable negligence.

Further, there was no allegation that the respondents-government officials and the officers of TSMCI
conspired and colluded with each other to defraud the government. As pointed out by the Ombudsman,
the complaint-affidavit is bereft of sufficient allegation and relevant documents to support the charges
therein, thus:

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Other than [the] failure to serve them with copies of the Order to file their respective counter-affidavits
because of insufficient addresses, it appears that there is no ground to indict RAFAEL G. PEREZ and
FELICISIMO R. GONZALO in the charged offenses because: 1) the US$27,793,123.45 loan was granted by
PNB to TSMCI on March 20, 1968 and neither RAFAEL G. PEREZ nor FELICISIMO R. GONZALO was the
PNB Dumaguete Branch Manager during that time; and 2) there are no documents showing that RAFAEL
G. PEREZ who served as PNB Dumaguete Branch Manager until August 30, 1966 or about two (2) years
prior to the grant of the loan, and FELICISIMO R. GONZALO who served as PNB Dumaguete Branch
Manager from May 19, 1969 to May 18, 1971, or more than a year after the loan approval, had a hand in
the grant of the loan or the release of the proceeds of the loan.

There are also no documents to support the inclusion of SIMEON G. MIRANDA in this case. SIMEON G.
MIRANDA'S name appeared in only one document, that is, in the list of PNB Board of Directors in 1968
that was submitted by the PNB in compliance with the [subpoena duces tecum] issued by this Office. His
name does not appear in the Minutes of the Meeting of the PNB Board of Directors, either as among
those present or absent, when the subject loan was approved.

Assuming that the approval [per se] of the loan is unlawful, there is no basis to indict JOSE MACARIO L.
LAUREL IV because he was absent when the Board Resolution granting the loan was approved.
Moreover, the other documents attached to the complaint do not show any particular act of JOSE
MACARIO L. LAUREL IV showing that he participated in any manner whatsoever to the grant of the said
loan. Complainant's argument that "actual presence is not absolutely necessary nor is it a condition for
securing an approval, especially for a high ranking officer who could easily wield influence beyond the
conference table" lacks merit in as much as it is a mere innuendo or speculation.

Likewise, there is no basis to indict CESAR E.A. VIRATA. Aside from the fact that he was on official
mission abroad when the grant of the loan was approved by the PNB Board of Directors, there is no
allegation [or] proof that prior to or after the grant of the loan, he had participated in any manner
whatsoever on the loan.

RAMON V. ESCA[Ñ]O, CATALINO NOEL, HERMINIO V. TEVES and LORENZO G. TEVES were named as
respondents on account of their being officers/directors of the borrower corporation. There is no
allegation of specific acts committed by them such as encouraging, persuading or influencing any
member of the [PNB] Board of Directors to vote for the approval of the loan. There is also no proof that
any one of them encouraged, persuaded or influenced any member of the PNB Board of Directors to
approve the loan. While the grant of the loan presupposes an application on the part of the borrower
corporation, the individual acts or extent of participation of the officers/directors charged with criminal
offenses must be specified to establish probable cause.

While JUAN PONCE ENRILE and ANTONIO M. DIAZ, Chairman and Member of the Board, respectively,
were present when the Board approved the grant of US$27,793,123.45 loan to TSMCI in 1968, the
complaint failed to point out circumstances that would indicate the criminal design by them or a
collusion between them and the other respondents to cause undue injury to the government by giving
unwarranted benefits to TSMCI. No enough evidence to accuse them of entering into a transaction
grossly disadvantageous to the government. So too, there is no specific details that would show the
element of bad faith, manifest partiality or gross inexcusable negligence.17(Underscoring supplied)

Even assuming, for the sake of argument, that the allegations contained in PCGG's complaint-affidavit
are sufficient to support the charges for violation of Section 3(e) and (g) of R.A. No. 3019, the Court
opines that the Ombudsman's dismissal of the same is not tainted by grave abuse of discretion.

As pointed out by the Ombudsman, the PNB-Dumaguete had appraised the properties offered by TSMCI
as security at ₱111,172,493.80 in October 1967. This could be gleaned from the TWG's Fact-Finding
Sheet which was attached to the complaint-affidavit as Annex "D."18 This appraisal negates PCGG's claim
that the value of TSMCFs collateral is substantially insufficient to cover the amount of the loan. It is
important to note that the PCGG never denied the validity of the initial appraisal in October 1967. They
only argue that the PNB Credit Department's re-appraisal in August 1975, revealed that TSMCI's
collateral was valued only at ₱69,632,000.00.

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And even if the initial appraisal should be claimed to be a ruse to defraud the government, the same
would be insufficient to establish probable cause. As aptly stated by the Ombudsman:

Assuming that the appraisal conducted by the PNB-Dumaguete Branch was anomalous[, w]ithout proof
of knowledge thereon, respondent Board of Directors could not be held liable unless there are
circumstances present suggesting that by the exercise of requisite diligence such anomalous appraisal
could be discovered by them.19

In any case, it is clear that PCGG's arguments are anchored on the Ombudsman's supposed failure to
consider that the arguments and pieces of evidence it presented, duly establish probable cause against
the respondents. In effect, the PCGG is questioning how the Ombudsman assessed the pieces of
evidence it presented — an inquiry which could not be the proper subject of a petition for certiorari.

A petition for certiorari does not include an inquiry into the correctness of its evaluation of the
evidence.1âшphi1 Errors of judgment, as distinguished from errors of jurisdiction, are not within the
province of a special civil action for certiorari, which is merely confined to issues of jurisdiction or grave
abuse of discretion.20 To justify judicial intervention, the abuse of discretion must be so patent and gross
as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law or
to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic
manner by reason of passion or hostility.21

Simply stated, no grave abuse of discretion may be attributed to the Ombudsman merely because of its
alleged misappreciation of facts and evidence. The petitioner in a certiorari proceeding must clearly
demonstrate that the court or tribunal blatantly abused its authority to a point so grave as to deprive it
of its very power to dispense justice.22

In this case, the PCGG failed to show that the Ombudsman gravely abused its discretion when it
dismissed the criminal complaint against the respondents. Instead, the instant petition is bereft of any
statement or allegation purportedly showing that the Ombudsman exercised its power in an arbitrary or
despotic manner by reason of passion or hostility. Consequently, the instant petition must be dismissed.

WHEREFORE, the present petition for certiorari is DISMISSED for lack of merit.

SO ORDERED.

Del Castillo,[*] Perlas-Bernabe, (Acting Chairperson), Caguioa, and Lazaro-Javier, JJ., concur.

EN BANC

March 12, 2019

G.R. No. 186432

THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, THE DAR REGIONAL
DIRECTOR, REGION VIII, THE PROVINCIAL AGRARIAN REFORM OFFICER OF PROVINCE OF LEYTE,
MUNICIPAL AGRARIAN REFORM OFFICER OF TABANGO, LEYTE, THE REGISTER OF DEEDS OF
LEYTE, Petitioners
vs.
HEIRS OF REDEMPTOR AND ELISAABUCAY, namely: RENAB. ABUCAY, RHEA B. ABUCAYBEDUYA, RIS B.
ABUCAYBUANTE, ELVER B. ABUCAY, REDELISA ABUCAY-AGUSTIN, RHOTA B. ABUCAY, herein
represented by attorney-in-fact RENA B. ABUCAY, Respondents

G.R. No. 186964

THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, THE DAR REGIONAL
DIRECTOR, REGION VIII, THE PROVINCIAL AGRARIAN REFORM OFFICER, PROVINCE OF
LEYTE, Petitioners
vs.

133
HEIRS OF REDEMTOR AND ELISA ABUCAY, namely: RENA B. ABUCAY, RHEA B. ABUCAY- BEDUYA, RIS B.
ABUCAY- BUANTE, ELVER B. ABUCAY, REDELISA ABUCAY-AGUSTIN, RHOTA B. ABUCAY, Respondents

DECISION

LEONEN, J.:

The jurisdiction over the administrative implementation of agrarian laws exclusively belongs to the
Department of Agrarian Reform Secretary. This is true even if the dispute involves the cancellation of
registered emancipation patents and certificates of title, which, before Republic Act No. 9700 amended
Republic Act No. 6657 or the Comprehensive Agrarian Reform Law, was cognizable by the Department
of Agrarian Reform Adjudication Board.

This resolves the consolidated1 Petitions for Review on Certiorari separately filed by the Department of
Agrarian Reform Regional Director for Region VIII2 and the Provincial Agrarian Reform Officer of
Leyte,3 both assailing the Court of Appeals September 26, 2008 Decision4 and January 30, 2009
Resolution5 in CA-G.R. CEB-SP No. 02637. The Court of Appeals reversed and set aside the May 10, 2006
Decision6 of the Department of Agrarian Reform Adjudication Board and reinstated the June 16, 2005
Decision7 of the Regional Agrarian Reform Adjudicator for Region VIII, which voided the emancipation
patents issued to the farmer-beneficiaries in this case.

On October 14, 1983, the Spouses Redemptor and Elisa Abucay (Spouses Abucay) purchased8 a 182-
hectare parcel of land from Guadalupe Cabahug (Cabahug). The property is located in Leyte and is
covered by Transfer Certificate of Title No. T-9814.9 The Deed of Absolute Sale provided that the
property "consists of various classifications, and is untenanted except for 39.459 hectares, and per
certification of the Agrarian Reform Team No. 08-28-231 appears to be within the coverage of Operation
Land Transfer as to the tenanted area of over 39 hectares."10

Sometime in 1986, 22.8409 hectares of the lot were declared covered under the Operation Land
Transfer Program pursuant to Presidential Decree No. 27.11 Emancipation patents were then issued to
the farmer-beneficiaries.12 Later, the Register of Deeds issued original certificates of title in their
names.13

On June 28, 2002, Rena B. Abucay, Rhea B. Abucay-Beduya, Ris B. Abucay-Buante, Elver B. Abucay,
Redelisa Abucay-Agustin, and Rhota B. Abucay (collectively, the Heirs of Spouses Abucay) filed before
the Regional Agrarian Reform Adjudicator a Complaint[14] for the proper determination of just
compensation.

The Heirs of Spouses Abucay alleged that they inherited the 182-hectare property upon their parents'
death and enjoyed its ownership and possession. They claimed that they did not receive any just
compensation for the 22 hectares of the property that was placed under the Operation Land Transfer
Program. The Certificate of Deposit worth ₱103,046.47-issued in 2001 by the Land Bank of the
Philippines as compensation-was not only inadequate, but was also issued to Cabahug, the property's
previous owner.15 Thus, they prayed, among others, that they be paid ₱2,000,000.00 as just
compensation.16

In his March 8, 2004 Decision,17 Regional Agrarian Reform Adjudicator Felixberto M. Diloy (Regional
Adjudicator Diloy) held that there was no proper valuation of the property to determine just
compensation. He found that the Final Notification Letter was not sent to the property's then registered
owner, Cabahug, but to her father, the deceased Sotero Cabahug. Thus, administrative due process was
not followed, which nullified the coverage of the 22-hectare property under the Operation Land
Transfer program.18 Regional Adjudicator Diloy declared the emancipation patents issued to the farmer-
beneficiaries void.19

The dispositive portion of the Decision read:

WHEREFORE, premises considered, judgment 1s hereby ordered[:]

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1. NULLIFYING the coverage of the subject landholding in the name of Guadalupe Cabahug for lack of
administrative due process;

2. DIRECTING the PARO of Leyte thru the MARO of Tabango, Leyte to effect the coverage of the property
in question under P.D. No. 27/R.A. 6657 thru the herein complainants who are subrogated to the rights
of their deceased parents and the original owner, Guadalupe Cabahug[;]

3. DECLARING the Original Certificates of Title/Emancipation Patents issued to the following farmer-
beneficiaries of the subject landholding null and void, . . .

....

with the further advi[c]e to parties to file the necessary petition for the cancellation of the said titles.

SO ORDERED.20

Following this, the Heirs of Spouses Abucay filed another Complaint21 dated April 26, 2004 for the
cancellation of original certificates of title and emancipation patents. This time, they also impleaded the
farmer-beneficiaries as respondents.22

In his June 16, 2005 Decision,23 Regional Adjudicator Diloy similarly canceled the original certificates of
title and voided the emancipation patents issued to the farmer-beneficiaries. The dispositive portion of
his Decision read:

WHEREFORE, premises considered, judgment is hereby rendered,

1. Declaring the following OCTs/EPs issued to private respondents [farmer-beneficiaries] null and void
and without force and effect:

....

2. Ordering the Register of Deeds for Leyte to effect the said cancellation of the aforementioned titles
issued to private respondents;

3. Ordering the private respondents to return the owners duplicate of titles to the MARO of Tabango,
Leyte;

4. In the meantime that the correct titles ([T]ransfer Certificate of Titles) (sic) are not yet issued, private
respondents are ordered to pay the corresponding rentals to complainants subject however to the
provision of E.O. No. 328 and other applicable agrarian laws and rules.

SO ORDERED.24

In its May 10, 2006 Decision,25 the Department of Agrarian Reform Adjudication Board reversed
Regional Adjudicator Diloy's June 16, 2005 Decision and declared itself wanting of jurisdiction over the
appeal.26 It found that the nature of the action filed by the Heirs of Spouses Abucay was an Operation
Land Transfer protest,27 an agrarian law implementation case under the primary jurisdiction of the
Regional Director28 of the Department of Agrarian Reform and the consequent appeal, to the
Department of Agrarian Reform Secretary.29

The Department of Agrarian Reform Adjudication Board also found that when Cabahug sold the
property in 1983, the farmer-beneficiaries had already owned the property they tilled pursuant to
Presidential Decree No. 27. Therefore, the Heirs of Spouses Abucay were not the proper parties to
question the agrarian reform coverage of the 22-hectare property.30

The dispositive portion of the Department of Agrarian Reform Adjudication Board Decision read:

135
WHEREFORE, premises considered[,] the assailed decision dated 16 June 2005 is
hereby REVERSED and SET ASIDE [and] a new judgment is hereby issued DISMISSING the instant
complaint for lack of merit and for lack of jurisdiction without prejudice.

SO ORDERED.31 (Emphasis in the original)

The Heirs of Spouses Abucay filed a Motion for Reconsideration, which the Department of Agrarian
Reform Adjudication Board denied in its February 27, 2007 Resolution.32

Hence, the Heirs of Spouses Abucay filed a Petition for Review33 before the Court of Appeals.

In its September 26, 2008 Decision,34 the Court of Appeals reversed the rulings of the Department of
Agrarian Reform Adjudication Board. Citing the 2003 Rules of Procedure for Agrarian Law
Implementation Cases, it held that the Regional Director had primary jurisdiction over complaints for the
cancellation of emancipation patents only if these were not yet registered with the Register of
Deeds.35 Since the emancipation patents had already been registered with the Register of Deeds of
Leyte, jurisdiction over the Complaint properly belonged to the Regional Agrarian Reform
Adjudicator.36 Consequently, the appeal's jurisdiction lies with the Department of Agrarian Reform
Adjudication Board37 under the 2003 Department of Agrarian Reform Adjudication Board Rules of
Procedure.38

In addition, the Court of Appeals held that the Heirs of Spouses Abucay were the proper parties to file
the Complaint for cancellation of original certificates of title and emancipation patents. It explained that
since Cabahug had not yet been fully paid just compensation for the property in 1983, she was still its
owner when she sold it to Spouses Abucay. Moreover, Cabahug validly transferred her title to the
property to Spouses Abucay which, upon their death, was later transferred to their children.39

Essentially agreeing with Regional Adjudicator Diloy's Decision, the Court of Appeals held that Cabahug
was not afforded due process during the acquisition proceedings. Thus, it declared void the property's
distribution to the farmer-beneficiaries and the issuance of emancipation patents and original
certificates of title.40

The dispositive portion of the Court of Appeals Decision read:

WHEREFORE, the Decision dated May 10, 2006 and the Resolution dated February 27, 2007 of the
Department of Agrarian Reform Adjudication Board (DARAB), in DARAB Case No. 13978 are REVERSED
and SET ASIDE. The Decision dated June 16, 2005 of the Regional Adjudicator is REINSTATED.
Accordingly, the OLT coverage of petitioners' property and the corresponding emancipation patents and
original certificates of title issued relative thereto are declared NULL AND VOID. No costs.

SO ORDERED.41 (Citations omitted)

The Department of Agrarian Reform Regional Director for Region VIII and the Provincial Agrarian Reform
Officer of Leyte separately filed their Motions for Reconsideration, both of which were denied in the
Court of Appeals January 30, 2009 Resolution.42

Two (2) Petitions for Review on Certiorari were filed before this Court on April 7, 2009. One (1)43 was
filed by the Department of Agrarian Reform Regional Director for Region VIII, docketed as G.R. No.
186432. The other44 was filed by the Provincial Agrarian Reform Officer of Leyte, docketed as G.R. No.
186964.

Since both Petitions assail the same Court of Appeals Decision, this Court resolved45 to consolidate G.R.
Nos. 186432 and 186964. Respondents, the Heirs of Spouses Abucay, then filed a Joint Comment 46 on
the consolidated Petitions, after which only the Provincial Agrarian Reform Officer filed a Reply.47

Petitioners maintain that respondents' Complaint for cancellation of original certificates of title and
emancipation patents is essentially an Operation Land Transfer protest that assails the coverage of the
22-hectare property under the Operation Land Transfer Program. The case, therefore, is an agrarian

136
reform law implementation case under the exclusive original jurisdiction of the Regional Director; the
appellate jurisdiction, under the Department of Agrarian Reform Secretary. Petitioners assert that the
Department of Agrarian Reform Adjudication Board correctly refused to take cognizance of the appeal
and dismissed the Complaint.48

Petitioners further argue that respondents had no legal personality to file the Complaint for cancellation
of original certificates of title and emancipation patents. Upon the effectivity of Presidential Decree No.
27, ownership of tenanted agricultural lands was automatically transferred to the farmer-beneficiaries.
It follows that Cabahug had no authority to transfer the ownership of the 22-hectare parcel of land
covered by Operation Land Transfer Program to the Spouses Abucay. Thus, respondents did not inherit
the 22-hectare property from their parents.49

Petitioners further assail the Court of Appeals' finding that Cabahug was not accorded due process
during the acquisition proceedings, arguing that she was properly notified of the coverage of the 22-
hectare property.

The Deed of Absolute Sale executed between her and Spouses Abucay expressly provided that portions
of the 182-hectare property being sold "appears to be within the coverage of Operation Land
Transfer[.]"50 Further, petitioners claim that the Court of Appeals erred in finding that no just

compensation had been paid for the property, since a Certificate of Deposit worth ₱103,046.47 was
deposited in cash and bonds in Cabahug's name on December 13, 2001.51

For their part, respondents argue that the Petitions must be dismissed for being filed without authority.
They contend that it is the Office of the Solicitor General, under Book IV, Title III, Chapter 12 of the
Administrative Code of 1987,52 which has the authority to represent before this Court the Department of
Agrarian Reform Regional Director for Region VIII and the Provincial Agrarian Reform Officer of Leyte.53

On the merits, respondents maintain that the Department of Agrarian Reform Adjudication Board had
jurisdiction over the Complaint for cancellation of original certificates of title and emancipation patents.
Here, the emancipation patents issued to the farmer-beneficiaries have already been registered with the
Register of Deeds. Citing Section 50 of the Comprehensive Agrarian Reform Law and the 2003
Department of Agrarian Reform Adjudication Board Rules of Procedure, respondents point out that the
Department of Agrarian Reform Adjudication Board has primary and exclusive original jurisdiction over
actions for cancellation of emancipation patents registered with the Land Registration Authority.54

According to respondents, petitioners in both cases, the Regional Director and the Provincial Agrarian
Reform Officer, are already estopped from questioning the jurisdiction of Regional Adjudicator Diloy and
the Department of Agrarian Reform Adjudication Board as they failed to do so at the level of the
Adjudicator or even on appeal before the Board.55

Assuming that the Department of Agrarian Reform Adjudication Board had no jurisdiction over the case,
respondents argue that it should have instead referred the case to the Department of Agrarian Reform
Secretary under Rule I, Section 6 of the 2003 Rules for Agrarian Law Implementation Cases.56

On the issue of their legal personality to file the Complaint for cancellation of original certificates of title
and emancipation patents, respondents maintain that they acquired a valid title to the 22-hectare
property from their parents. In contrast, the property was not properly acquired through the Operation
Land Transfer Program due to lack of notice and nonpayment of just compensation to Cabahug.
Cabahug, then, had remained the owner of the property until she sold it to Spouses Abucay in 1983.57

The issues for this Court's resolution are:

First, whether or not Regional Agrarian Reform Adjudicator Felixberto Diloy and the Department of
Agrarian Reform Adjudication Board have jurisdiction over the Complaint for cancellation of original
certificates of title and emancipation patents filed by respondents, the Heirs of Redemptor and Elisa
Abucay;

137
Second, whether or not respondents had legal personality to file the Complaint before the Regional
Adjudicator; and

Finally, whether or not the acquisition proceedings involving the 22-hectare property were void for lack
of administrative due process.

The Petitions are granted.

It is settled that the Regional Trial Courts, sitting as special agrarian courts,58 have original and exclusive
jurisdiction over the determination of the value of just compensation. Nonetheless, the Department of
Agrarian Reform still exercises primary jurisdiction to preliminarily determine this value.59 This is
different from determining the validity of property transfer to the farmer-beneficiaries and,
consequently, the validity of the certificates of title issued to them. When the issue in a case hinges on
whether a beneficiary has made insufficient or no payments for the land awarded to him or her, primary
administrative jurisdiction is under the Department of Agrarian Reform.

Indeed, per the rules it has promulgated, the Department of Agrarian Reform has taken cognizance of
cases involving either the issuance or cancellation of certificates of land ownership award and
emancipation patents. Cases involving registered certificates of land ownership awards, emancipation
patents, and titles emanating from them are agrarian reform disputes, of which the Department of
Agrarian Reform Adjudication Board takes cognizance.60 Meanwhile, cases involving unregistered ones
are agrarian law implementation cases, put under the jurisdiction of the Regional Directors and the
Secretary of the Department of Agrarian Reform.61

In 2009, however, Congress amended the Comprehensive Agrarian Reform Law through Republic Act No.
9700.62 Under the new Section 24, all cases involving the cancellation of registered emancipation
patents, certificates of land ownership awards, and other titles issued under any agrarian reform
program are now within the exclusive original jurisdiction of the Department of Agrarian Reform
Secretary.63 He or she takes jurisdiction over cases involving the cancellation of titles issued under any
agrarian reform program, whether registered with the Land Registration Authority or not.

Here, the doctrine should be read amid the ambient facts and without prejudice to a future case that
will deal with transfer certificates of title, considering the relevant statutes,64 as well as the equal
protection65 and social justice provisions of the Constitution.66

II

At the time of the Complaint's filing on April 26, 2004, the 2003 Department of Agrarian Reform
Adjudication Board Rules of Procedure governed the jurisdiction of the Department of Agrarian Reform
Adjudication Board. Rule II provided that adjudicators have exclusive original jurisdiction over registered
certificates of land ownership award and emancipation patents, while the Department of Agrarian
Reform Adjudication Board has appellate jurisdiction:

RULE II

Jurisdiction of the Board and its Adjudicators

SECTION 1. Primary and Exclusive Original Jurisdiction. -The Adjudicator shall have primary and exclusive
original jurisdiction to determine and adjudicate the following cases:

....

1.6 Those involving the correction, partition, cancellation, secondary and subsequent issuances of
Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with
the Land Registration Authority[;]

138
....

SECTION 2. Appellate Jurisdiction of the Board. - The Board shall have exclusive appellate jurisdiction to
review, reverse, modify, alter, or affirm resolutions, orders, and decisions of its Adjudicators.1âшphi1

No order of the Adjudicators on any issue, question, matter, or incident raised before them shall be
elevated to the Board until the hearing shall have been terminated and the case decided on the merits.

However, it is "not sufficient that the controversy [simply] involves the cancellation of a [certificate of
land ownership award] already registered with the Land Registration Authority. What is of primordial
consideration is the existence of an agrarian dispute between the parties."67 Section 3(d) of the
Comprehensive Agrarian Reform Law defines agrarian dispute as those relating to tenurial arrangements,
including leasehold and tenancy. Thus:

SECTION 3. Definitions. - For the purpose of this Act, unless the context indicates otherwise:

....

(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold,
tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning
farmworkers' associations or representation of persons in negotiating, fixing, maintaining, changing, or
seeking to arrange terms or conditions of such tenurial arrangements.

It includes any controversy relating to compensation of lands acquired under this Act and other terms
and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian
reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee.

Indeed, the emancipation patents involved here have already been registered with the Land Registration
Authority, and the grant of the Complaint filed by respondents will result in the cancellation of these
registered emancipation patents. Nonetheless, respondents primarily assailed in their Complaint the
land coverage under the Operation Land Transfer Program because the original owner, Cabahug, had
not been properly notified of it. Specifically, they contended that the notices were erroneously sent to
Cabahug's father, Sotero Cabahug. The Complaint, therefore, is essentially an Operation Land Transfer
protest, which is an agrarian law implementation case belonging to the Department of Agrarian Reform
Secretary's jurisdiction.68

Tenancy is a real right that is attached to the land and survives the sale.69 As such, when Spouses Abucay
purchased the land from Cabahug, they were subrogated to the rights and obligations of Cabahug as an
agricultural landowner. Respondents, being the land buyers' heirs, were likewise subrogated to these
rights and obligations. A tenancy relationship exists between respondents and the farmer-beneficiaries.

Still, the controversy must relate to the tenurial arrangement between the parties for the Department of
Agrarian Reform Adjudication Board to properly take cognizance of the case. Here, the controversy does
not involve negotiating, fixing, maintaining, changing, or seeking to arrange the tenurial arrangement's
terms or conditions. Respondents alleged that emancipation patents should not have been issued to
begin with since no notice of coverage was sent to Cabahug. In other words, they contend that the
property was not properly acquired through the Operation Land Transfer Program. The controversy
involves the administrative implementation of the agrarian reform program, which, as mentioned, is
under the Department of Agrarian Reform Secretary's jurisdiction.

Since the Complaint filed by respondents involves an agrarian law implementation case, Regional
Adjudicator Diloy had no jurisdiction to take cognizance of it. At that time, he should have referred the
case to the proper office of the Department of Agrarian Reform for appropriate action as provided in
Rule I, Section 6 of the Department of Agrarian Reform Administrative Order 03-03.70

139
However, with the enactment of Republic Act No. 9700, the exclusive and original jurisdiction over cases
for cancellation of registered emancipation patents now belongs to the Department of Agrarian Reform
Secretary.71

In line with this, the Department of Agrarian Reform has issued Administrative Order No. 07-14, which
outlines in Article III the procedure for the cancellation of registered emancipation patents, certificates
of land ownership awards, and other agrarian titles. The petition for cancellation shall be filed before
the Office of the Provincial Agrarian Reform Adjudicator, which would then undertake the case buildup
before forwarding it to the Department of Agrarian Reform Secretary for decision.

Thus, under Administrative Order No. 07-14, the Complaint for cancellation of original certificates of
title and emancipation patents filed by respondents should be referred to the Office of the Provincial
Agrarian Reform Adjudicator of Leyte for case buildup. Then, the case shall be decided by the
Department of Agrarian Reform Secretary.

This Court makes no determination of whether the area can still be covered by agrarian reform. The
character of the land as agricultural is not affected. We leave the issue of the propriety of the coverage
to the executive branch for its own determination.

WHEREFORE, the Petitions for Review on Certiorari are GRANTED. The September 26, 2008 Decision of
the Court of Appeals in CA-G.R. CEB-SP No. 02637, the May 10, 2006 Decision and February 27, 2007
Resolution of the Department of Agrarian Reform Adjudication Board in DARAB Case No. 13978, and the
June 16, 2005 Decision of the Regional Agrarian Reform Adjudicator in DARAB Case No. R-0800-0015-04
are all SET ASIDE. The Complaint for cancellation of original certificates of title and emancipation
patents dated April 26, 2004 is REFERRED to the Office of the Provincial Agrarian Reform Adjudicator of
Leyte for case buildup and decision by the Department of Agrarian Reform Secretary.

SO ORDERED.

Bersamin, C. J., Carpio, Peralta, Del Castillo, Caguioa, A. Reyes, Jr., Gesmundo, J. Reyes, Jr., Hernando,
and Carandang, JJ., concur.

Perlas-Bernabe, J., Please see Concurring Opinion.

Jardeleza, J., I join Concurring Opinion.

Lazaro-Javier, J., No part.

THIRD DIVISION

April 10, 2019

G.R. No. 213023

MICHAEL C. GUY, Plaintiff-Appellee

vs.
RAFFY TULFO, ALLEN MACASAET, NICOLAS V. QUIJANO, JR., JANET BAY, JESUS P. GALANG, RANDY
HAGOS, JEANY LACORTE, and VENUS TANDOC, Accused-Appellants

DECISION

LEONEN, J.:

The degree of freedom by which journalists operate to uncover and write the news is an indication of
the current state of our country's democracy. By freely obtaining vital information on matters of public
concern, citizens become socially aware and well-equipped to participate in different political processes
to exercise their rights enshrined in the fundamental law. Journalists are the sentinels who keep watch
over the actions of the government. They are the eyes and ears of the citizenry. In today's digital age,

140
the work of journalists is held to a higher standard more than ever. Beyond the multitude that
participate on social media, they have value as part of a profession that should be trusted with the truth.

Nevertheless, the probing done by journalists must be made "with good motives and for justifiable
ends[.]"1 The protection afforded by the Constitution2 to the press is not carte blanche that allows
journalists to abandon their responsibility for truth and transparency. It is incumbent upon them to
exercise a high degree of professionalism in their work, regardless of the subject of their stories.

This resolves a Petition for Review on Certiorari3 assailing the Court of Appeals June 13, 2014 Amended
Decision4 in CA-G.R. CR No. 33256.

On March 24, 2004, an article entitled "Malinis ba talaga o naglilinis-linisan lang (Sino si Finance Sec.
Juanita Amatong?)"5 was published in Abante Tonite, a newspaper of general circulation in the
Philippines.6

Written by Raffy T. Tulfo (Tulfo), the article reported that a certain Michael C. Guy (Guy), who was then
being investigated by the Revenue Integrity Protection Service of the Department of Finance for tax
fraud, went to former Department of Finance Secretary Juanita Amatong (Secretary Amatong)'s house
to ask for help.7 Secretary Amatong then purportedly called the head of the Revenue Integrity
Protection Service and directed that all the documents that the Revenue Integrity Protection Service had
obtained on Guy's case be surrendered to her.8 The article read:

Ang mga tanong ngayon, may katotohanan kaya ang akusasyon ni Salanga laban kay Amatong?
Nagsasabi naman kaya ng totoo si Amatong nang itanggi niya ang akusasyon ni Salanga laban sa kanya?

Narito ang isang balitang natanggap ng SHOOT TO KILL mula sa isang mapagkakatiwalaan at A-1 source
na kung saan ay inarbor ni Amatong sa kanyang mga tauhan ang isang negosyanteng iniimb[e]st[i]gahan
ng DoF dahil sa katiwalian sa tax refund. Narito ang kwento at kayo na ang bahalang manghusga kung
sino ang may kredibilidad, si Amatong o si Salanga?

Noong March 20, 2004, Sabado ng hapon pumunta ang isang negosyanteng nagngangalang Michael Guy
sa bahay ni Amatong. Si Guy ay iniimb[e]st[i]gahan ng mga tauhan ng Revenue Integrity Protection
Service (RIPS) ng DOF dahil sa kahinahinalang mga tax refund na natanggap nito mula sa BIR simula 1998
hanggang 2003.

Problemado si Guy sapagkat natunugan niyang iniimbestigahan na siya ng RIPS. Ito'y matapos
magpadala ng sulat ang RIPS sa Central Bank at hinihingi rito ang lahat ng mga transaksyon ng kumpanya
ni Guy sa lahat ng mga bangko. Ang nakatanggap ng sulat sa Central Bank ay kakilala ni Guy.

Noong Sabado ng hapon din, ayon sa aking source, tinawagan ni Amatong ang hepe ng RIPS para hilingin
dito na ihinto imbestigasyon laban kay Guy at isurender sa kanyang opisina ang lahat ng mga
dokumentong nakalap ng RIPS laban dito!!!9

Claiming that the article had tainted his reputation, Guy filed before the Office of the City Prosecutor of
Makati City a Complaint-Affidavit against Tulfo and the following representatives of Abante
Tonite's publisher, Monica Publishing Corporation: (1) Allen Macasaet; (2) Nicolas V. Quijano, Jr.; (3)
Janet Bay; (4) Jesus P. Galang; (5) Randy Hagos; (6) Jeany Lacorte; and (7) Venus Tandoc (collectively,
Macasaet, et al.).10

After a preliminary investigation, the Office of the City Prosecutor filed an Amended Information
charging Tulfo and Macasaet, et al. with the crime of libel.11

On arraignment, Tulfo and Macasaet, et al. refused to enter a plea. Accordingly, the Regional Trial Court
ordered that a plea of not guilty be entered for all of them.12

In its February 24, 2010 Judgment, the Regional Trial Court convicted Tulfo and Macasaet, et al. of the
crime of libel. It ruled that the prosecution was able to establish by proof beyond reasonable doubt the
elements of the crime.13

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The trial court ordered Tulfo and Macasaet, et al. to pay Guy: (1) ₱5,000,000.00 as actual damages; (2)
₱5,000,000.00 as moral damages; and (3) ₱211,200.00 as attorney's fees. 14 The dispositive portion of its
Judgment read:

WHEREFORE, the Court finds the accused Allen Macasaet, Nicolas V. Quijano, Jr., Janet Bay, Jesus P.
Galang, Randy Hagos, Jeany Lacorte, Venus Tandoc and Raffy Tulfo, GUILTY beyond reasonable doubt
of the crime of Libel, as defined in Article 353 of the Revised Penal Code, and sentences each of the
accused to pay a fine of SIX THOUSAND PESOS (P6,000.00) with subsidiary imprisonment, in case of
insolvency.

They are likewise hereby ordered to pay private complainant Michael C. Guy, jointly and severally, the
sum of FIVE MILLION PESOS (P5,000,000.00) as actual damages, FIVE MILLION PESOS
(P5,000,000.00) as moral damages, and TWO HUNDRED ELEVEN THOUSAND TWO HUNDRED PESOS
(P211,200.00) as attorney's fees.15 (Emphasis in the original)

Aggrieved, Tulfo and Macasaet, et al. filed before the Court of Appeals separate Appeals assailing the
Regional Trial Court February 24, 2010 Judgment.16

In its August 30, 2013 Decision,17 the Court of Appeals affirmed the trial court's Judgment convicting
Tulfo and Macasaet, et al. of libel. Nonetheless, it reduced the award of moral damages to P500,000.00
and ordered them to pay Guy exemplary damages in the amount of P500,000.00.18 The dispositive
portion of its Decision read:

WHEREFORE, the appeal is DENIED. The February 24, 2010 Judgment of the Regional Trial Court, Branch
132, Makati City in Criminal Case No. 04-3614 is AFFIRMED with MODIFICATION that all accused-
appellants are ordered to pay Michael Guy, jointly and severally, P500,000.00 moral damages and
₱500,000.00 exemplary damages.19 (Emphasis in the original)

Insisting on their innocence, Tulfo sought the reconsideration of the Court of Appeals August 30, 2013
Decision. Similarly, Guy moved for partial reconsideration and clarification of the Decision.20

In its June 13, 2014 Amended Decision,21 the Court of Appeals modified its August 30, 2013 Decision and
deleted the award of exemplary damages. It likewise deleted the Regional Trial Court's award of actual
damages for lack of factual and legal basis.22 The dispositive portion of its Amended Decision read:

WHEREFORE, the appeal is DENIED. The February 24, 2010 Judgment of the Regional Trial Court,
Branch 132, Makati City in Criminal Case No. 04-3614 is hereby AFFIRMED with MODIFICATIONS that
all accused-appellants are ORDERED to pay Michael Guy, jointly and severally, ₱500,000.00 moral
damages and ₱211,200.00 attorney's fees. The award of ₱5,000,000.00 actual damages is DELETED for
lack of factual and legal basis.23 (Emphasis in the original)

On August 26, 2014, Guy filed this Petition for Review on Certiorari,24 seeking the reversal of the Court
of Appeals Amended Decision and the reinstatement of the Regional Trial Court Judgment.

Petitioner maintains that contrary to the Court of Appeals' findings, there is factual and legal basis for
the award of actual damages.25 He avers that it had been established in the trial court proceedings that
he may be able to earn ₱50,000,000.00 in 10 years. This possibility, he points out, constitutes the factual
basis for the award of actual damages.26

Assuming that there is no sufficient basis for the award of actual damages, petitioner asserts that he is
still entitled to temperate damages. Citing Articles 2216, 2224, and 2225 of the Civil Code, he claims that
temperate damages may be awarded even without competent proof, as long as the court finds that the
victim has incurred some pecuniary loss.27 He insists that in his case, the libelous article tainted his
reputation, causing some of his clients to terminate their arrangements with him.28

Petitioner further claims to have had good standing in the community, which the libelous article
destroyed. Thus, he argues that the amount of ₱5,000,000.00 as moral damages is a reasonable
recompense for the grief and suffering he has endured.29

142
Petitioner maintains that as the president of MG Forex Corporation, a company engaged in foreign
exchange trading, he was a reputable businessman.30 However, as a result of the libelous article, his
business associates and clients lost trust in him. One (1) of his sisters, who was also his business
associate, sold him back her company shares after losing confidence in his dealings. Clients refused to do
business with him, terrified that they be linked with the accusations against him.31

Petitioner likewise avers that his family members doubted him. His mother berated him for bringing
shame to the family. His children were questioned in school for the article about their father.32

Finally, petitioner contends that exemplary damages should be awarded in his favor. He maintains that
respondent Tulfo deliberately took advantage of his standing as a renowned journalist to tarnish
petitioner's reputation.33 He asserts that respondent Tulfo's penchant for writing defamatory articles
should be restrained.34

In its November 12, 2014 Resolution,35 this Court directed respondents to file their comment.

In its July 13, 2015 Resolution,36 this Court required the counsels of respondents Tulfo and Macasaet, et
al. to show cause why they should not be disciplinary dealt with for their failure to file their respective
comments. It also required them to comply with the November 12, 2014 Resolution.

On September 3, 2015, respondents Macasaet, et al. filed a Compliance,37 manifesting that they would
not submit any comment and instead leave the Petition to this Court's discretion.

In his Comment38 filed on August 26, 2016, respondent Tulfo avers that the Court of Appeals correctly
deleted the award of actual damages for lack of sufficient legal basis.39 Maintaining further that the
deletion of the award of exemplary damages was proper, he argues that exemplary damages may be
awarded only when the crime was committed with one (1) or more aggravating circumstances. He
insists that the amount of moral damages should also be deleted.40

In its September 21, 2016 Resolution,41 this Court required petitioner to file a reply.

In his Reply,42 petitioner reiterates that he is entitled to actual, moral, and exemplary damages.

For this Court's resolution are the following issues:

First, whether or not there is sufficient factual basis for an award of actual damages;

Second, whether or not petitioner Michael C. Guy is entitled to moral damages; and

Finally, whether or not he is entitled to exemplary damages.

The Petition is partly meritorious.

"Generally, a criminal case has two aspects, the civil and the criminal."43 This notion is rooted in the
fundamental theory that when a criminal act is committed, two (2) different entities are offended: (1)
the State, whose law has been violated; and (2) the person directly injured by the offender's act or
omission.44 As explained in Banal v. Tadeo, Jr.:45

Generally, the basis of civil liability arising from crime is the fundamental postulate of our law that
"Every man criminally liable is also civilly liable" (Art. 100, The Revised Penal Code). Underlying this legal
principle is the traditional theory that when a person commits a crime he offends two entities namely
(1) the society in which he lives in or the political entity called the State whose law he had violated; and
(2) the individual member of that society whose person, right, honor, chastity or property was actually
or directly injured or damaged by the same punishable act or omission. . . . While an act or omission is
felonious because it is punishable by law, it gives rise to civil liability not so much because it is a crime
but because it caused damage to another. Viewing things pragmatically, we can readily see that what

143
gives rise to the civil liability is really the obligation and the moral duty of everyone to repair or make
whole the damage caused to another by reason of his own act or omission, done intentionally or
negligently, whether or not the same be punishable by law. In other words, criminal liability will give rise
to civil liability only if the same felonious act or omission results in damage or injury to another and is
the direct and proximate cause thereof. Damage or injury to another is evidently the foundation of the
civil action. Such is not the case in criminal actions for, to be criminally liable, it is enough that the act or
omission complained of is punishable, regardless of whether or not it also causes material damage to
another.46 (Citations omitted)

Nevertheless, the private offended party's interest in a criminal case is limited to the civil liability arising
from it.47 It is a fundamental principle in remedial law that if the trial court dismisses the case or renders
a judgment of acquittal, the private offended party cannot appeal the criminal aspect of the case.48 Only
the Office of the Solicitor General can represent the State in actions brought before the Court of Appeals
or this Court.49 In People v. Santiago:50

It is well-settled that in criminal cases where the offended party is the State, the interest of the private
complainant or the private offended party is limited to the civil liability. Thus, in the prosecution of the
offense, the complainant's role is limited to that of a witness for the prosecution. If a criminal case is
dismissed by the trial court or if there is an acquittal, an appeal therefrom on the criminal aspect may be
undertaken only by the State through the Solicitor General. Only the Solicitor General may represent the
People of the Philippines on appeal. The private offended party or complainant may not take such
appeal. However, the said offended party or complainant may appeal the civil aspect despite the
acquittal of the accused.51 (Emphasis supplied, citations omitted)

Similarly, in Malayan Insurance Company, Inc. v. Piccio:52

Accordingly, jurisprudence holds that if there is a dismissal of a criminal case by the trial court or if there
is an acquittal of the accused, it is only the OSG that may bring an appeal on the criminal aspect
representing the People. The rationale therefor is rooted in the principle that the party affected by the
dismissal of the criminal action is the People and not the petitioners who are mere complaining
witnesses. For this reason, the People are therefore deemed as the real parties in interest in the criminal
case and, therefore, only the OSG can represent them in criminal proceedings pending in the CA or in
this Court. In view of the corollary principle that every action must be prosecuted or defended in the
name of the real party-in-interest who stands to be benefited or injured by the judgment in the suit, or
by the party entitled to the avails of the suit, an appeal of the criminal case not filed by the People as
represented by the OSG is perforce dismissible. The private complainant or the offended party may,
however, file an appeal without the intervention of the OSG but only insofar as the civil liability of the
accused is concerned. He may also file a special civil action for certiorari even without the intervention of
the OSG, but only to the end of preserving his interest in the civil aspect of the case.53 (Emphasis
supplied, citations omitted)

Here, petitioner's sole purpose is to question the amount of damages awarded by the Court of Appeals.
He neither disputes nor challenges the Court of Appeals Amended Decision on respondents' criminal
liability. He only intends to protect his interest in the civil aspect of the case. Accordingly, petitioner has
the legal standing to file this Petition even without the intervention of the Office of the Solicitor General.

II

Significantly, "[t]he issue on the amount of damages is a factual question that this [C]ourt may not
resolve in a Rule 45 petition."54 Settled is the rule that only questions of law may be raised in a petition
for review on certiorari.55 "[This] Court is not a trier of facts and it is not its duty to review, evaluate, and
weigh the probative value of the evidence adduced before the lower courts."56 Absent "any clear
showing that the trial court overlooked or misconstrued cogent facts and circumstances that would
justify altering or revising such findings and evaluation[,]"57 this Court will not disturb, let alone overturn
the lower courts' findings of fact and appreciation of the witnesses' testimonies.58

Nonetheless, jurisprudence has carved out certain exceptions to this rule:

144
(1) When the conclusion is a finding grounded entirely on speculation, surmises or conjectures . . .; (2)
When the inference made is manifestly mistaken, absurd or impossible . . .; (3) Where there is a grave
abuse of discretion . . .; (4) When the judgment is based on a misapprehension of facts . . .; (5) When the
findings of fact are conflicting . . .; (6) When the Court of Appeals, in making its findings, went beyond
the issues of the case and the same is contrary to the admissions of both appellant and appellee . . .; (7)
The findings of the Court of Appeals are contrary to those of the trial court . . .; (8) When the findings of
fact are conclusions without citation of specific evidence on which they are based . . .; (9) When the
facts set forth in the petition as well as in the petitioners' main and reply briefs are not disputed by the
respondents . . .; and (10) The finding of fact of the Court of Appeals is premised on the supposed
absence of evidence and is contradicted by the evidence on record . . . .59 (Emphasis supplied, citations
omitted)

Here, the Regional Trial Court awarded petitioner actual damages in the amount of ₱5,000,000.00 based
on his testimony that he could earn ₱50,000,000.00 in 10 years.60 Petitioner's testimony read:

COURT:

This is my problem. Now, Php50 Million is not a small amount of money and it has to be based on, for
example, the business standing. You did not give me any financial statement. Are you saying that you
are making PhP50 Million a year?

MR. GUY:

No, Your Honor. In my understanding, in moral damages, it is not only the amount of money for a
certain period of time. It also includes the sleepless nights. You do not know if there will be new articles
against you which are not true. So, I put them all together.

COURT:

So; it is clear. You do not make PhP50 Million a year?

MR. GUY:

No.

COURT:

Maybe in ten years, you can make that?

MR. GUY:

It is possible.61 (Emphasis in the original)

Actual damages are "compensation for an injury that will put the injured party in the position where it
was before the injury. They pertain to such injuries or losses that are actually sustained and susceptible
of measurement."62 Actual damages constitute compensation for sustained pecuniary loss. Nevertheless,
a party may only be awarded actual damages when the pecuniary loss he or she had suffered was duly
proven.63 Thus:

Except as provided by law or by stipulation, a party is entitled to adequate compensation only for such
pecuniary loss as is duly proven. Basic is the rule that to recover actual damages, not only must the
amount of loss be capable of proof; it must also be actually proven with a reasonable degree of certainty,
premised upon competent proof or the best evidence obtainable [.]

....

This Court has, time and again, emphasized that actual damages cannot be presumed and courts, in
making an award, must point out specific facts which could afford a basis for measuring whatever

145
compensatory or actual damages are borne. An award of actual damages is "dependent upon
competent proof of the damages suffered and the actual amount thereof. The award must be based on
the evidence presented, not on the personal knowledge of the court; and certainly not on flimsy, remote,
speculative and unsubstantial proof."64 (Emphasis supplied, citations omitted)

As the Court of Appeals correctly found, petitioner failed to substantiate the loss he had allegedly
sustained. Save for his testimony in court, he presented no evidence to support his claim. His allegation
of possibly earning ₱50,000,000.00 in 10 years is a mere assumption without any foundation. This bare
allegation is insufficient to prove that he has indeed lost ₱5,000,000.00 as earnings. As this Court has
previously held, "the award of unrealized profits cannot be based on the sole testimony of the party
claiming it."65

Notwithstanding the absence of any evidence on the amount of actual damages suffered,66 a party may
be awarded temperate damages should the court find that he or she has suffered some pecuniary loss
even if its amount cannot be determined with exact certainty.67

Unfortunately, petitioner failed to prove that he has suffered any pecuniary loss.68 While he testified
that he lost clients as a result of the libelous article, records reveal that he lost only one (1) client, Jayson
Mallari (Mallari). On cross-examination, Mallari even testified "that he was not immediately convinced
by the article and called [petitioner] before terminating his business with him[.]"69 Moreover, as the
records show, Mallari started transacting with petitioner again sometime in 2005.70

III

Moral damages are "compensatory damages awarded for mental pain and suffering or mental anguish
resulting from a wrong."71 They are awarded to the injured party to enable him to obtain means that will
ease the suffering he sustained from respondent's reprehensible act.72

"Moral damages are not punitive in nature,"73 but are instead a type of "award designed to compensate
the claimant for actual injury suffered[.]"74 As explained in Mangaliag v. Catubig-Pastoral:75

It must be remembered that moral damages, though incapable of pecuniary estimation, are designed to
compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly
caused a person. Moral damages are awarded to enable the injured party to obtain means, diversions or
amusements that will serve to alleviate the moral suffering he/she has undergone, by reason of the
defendant's culpable action. Its award is aimed at restoration, as much as possible, of the spiritual status
quo ante; thus, it must be proportionate to the suffering inflicted. Since each case must be governed by
its own peculiar circumstances, there is no hard and fast rule in determining the proper
amount.76 (Citations omitted)

Similarly, in Equitable Leasing Corporation v. Suyom:77

Moral damages are not punitive in nature, but are designed to compensate and alleviate in some way
the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury unjustly caused a person. Although incapable of
pecuniary computation, moral damages must nevertheless be somehow proportional to and in
approximation of the suffering inflicted. This is so because moral damages are in the category of an
award designed to compensate the claimant for actual injury suffered, not to impose a penalty on the
wrongdoer.78 (Citations omitted)

Unlike actual and temperate damages, moral damages may be awarded even if the injured party failed
to prove that he has suffered pecuniary loss. As long as it was established that complainant's injury was
the result of the offending party's action, the complainant may recover moral damages.79

Article 221980 of the Civil Code specifically states that moral damages may be recovered in cases of libel,
slander, or defamation. The amount of moral damages that courts may award depends upon the set of
circumstances for each case. There is no fixed standard to determine the amount of moral damages to

146
be given. Courts are given the discretion to fix the amount to be awarded in favor of the injured party,
so long as there is sufficient basis for awarding such amount.81

Here, petitioner insists that he is entitled to moral damages in the amount of ₱5,000,000.00. He argues
that he suffered social humiliation and anxiety from the libelous article. His 77-year-old mother
castigated him for disgracing their family. His children questioned him after they had been interrogated
in school for the article about their father.82 Finally, petitioner claims that the article tainted his
reputation, prompting his clients and business associates to refuse to transact with him.83

While this Court recognizes the embarrassment and unease suffered by petitioner, it must be
emphasized that moral damages may only be awarded when the claimant has sufficiently proved: (1)
the factual foundation of the award; and (2) the causal connection of petitioner's suffering to
respondents' act.84 In Kierulf v. Court of Appeals:85

This Court cannot remind the bench and the bar often enough that in order that moral damages may be
awarded, there must be pleading and proof of moral suffering, mental anguish, fright and the like. While
no proof of pecuniary loss is necessary in order that moral damages may be awarded, the amount of
indemnity being left to the discretion of the court, it is nevertheless essential that the claimant should
satisfactorily show the existence of the factual basis of damages and its causal connection to
defendant's acts. This is so because moral damages, though incapable of pecuniary estimation, are in
the category of an award designed to compensate the claimant for actual injury suffered and not to
impose a penalty on the wrongdoer. In Francisco vs. GSIS, the Court held that there must be clear
testimony on the anguish and other forms of mental suffering. Thus, if the plaintiff fails to take the
witness stand and testify as to his/her social humiliation, wounded feelings and anxiety, moral damages
cannot be awarded. In Cocoland Development Corporation vs. National Labor Relations Commission, the
Court held that "additional facts must be pleaded and proven to warrant the grant of moral damages
under the Civil Code, these being, . . . social humiliation, wounded feelings, grave anxiety, etc., that
resulted therefrom."86 (Emphasis supplied, citations omitted)

In Mendoza v. Spouses Gomez,87 this Court disallowed the award of moral damages to the respondents.
It ruled that they failed to allege and present "evidence of besmirched reputation or physical, mental[,]
or psychological suffering incurred by them."88

Similarly, in Quezon City Government v. Dacara,89 this Court deleted the award of moral damages after
finding that the respondent had failed to adduce proof of the emotional and mental sufferings he
experienced due to the petitioners' negligent act.90Here, other than his bare allegations of besmirched
reputation and loss of clientele, petitioner failed to present evidence supporting his assertions. He
submitted no evidence substantiating his claimed loss. He also failed to adduce proof to support his
claim that his reputation was tainted due to the libelous article. Moreover, he did not present in court
any testimony from the business associates who had allegedly lost faith in him. Indeed, as the Court of
Appeals found, the client, whom he had supposedly lost due to the libelous article, has been transacting
business with him again.91

Nonetheless, moral damages should still be awarded. As he had testified during trial, members of his
family were displeased with him for being accused of committing illegal and corrupt acts. He was
berated by his mother Tor having humiliated their family. His children were questioned at school. As
such, an award of ₱500,000.00 as moral damages is an adequate recompense to the mental anguish and
wounded feelings that petitioner had endured.

IV

The Court of Appeals deleted the award of exemplary damages and ruled that under Article 2230 of the
Civil Code, exemplary damages may be awarded only when the crime was committed with one (1) or
more aggravating circumstances.92

Contrary to the Court of Appeals' pronouncement, exemplary damages may be awarded even in the
absence of aggravating circumstances. It may be awarded "where the circumstances of the case show
the highly reprehensible or outrageous conduct of the offender."93

147
"Exemplary or corrective damages are imposed by way of example or correction for the public
good[.]"94 "It is imposed as a punishment for highly reprehensible conduct"95 and serves as a notice to
prevent the public from "the repetition of socially deleterious actions."96 "Such damages are required by
public policy, for wanton acts must be suppressed. They are an antidote so that the poison of
wickedness may not run through the body politic."97

Kierulf laid down the requirements that must be satisfied before exemplary damages may be awarded:

Exemplary damages are designed to permit the courts to mould behavior that has socially deleterious
consequences, and its imposition is required by public policy to suppress the wanton acts of an offender.
However, it cannot be recovered as a matter of right. It is based entirely on the discretion of the court.
Jurisprudence sets certain requirements before exemplary damages may be awarded, to wit:

(1) (T)hey may be imposed by way of example or correction only in addition, among others, to
compensatory damages, and cannot be recovered as a matter of right, their determination depending
upon the amount of compensatory damages that may be awarded to the claimant;

(2) the claimant must first establish his right to moral, temperate, liquidated or compensatory damages;
and

(3) the wrongful act must be accompanied by bad faith, and the award would be allowed only if the
guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.98 (Citations
omitted)

Here, respondents published the libelous article without verifying the truth of the allegations against
petitioner. As the Court of Appeals found, the Revenue Integrity Protection Service only investigates
officials of the Department of Finance and its attached agencies who are accused of corruption.
Petitioner, on the other hand, is no government official and, therefore, beyond the Revenue Integrity
Protection Service's jurisdiction. It only goes to show that respondents did not verify the information on
which the article was based.99

Thus, to ensure that such conduct will no longer be repeated, and considering their profession,
respondents are directed to pay petitioner exemplary damages in the amount of ₱1,000,000.00.

Among the advantages brought by modern technology is the ease by which news can be shared and
disseminated through different social media outlets. News matters are now simultaneously cascaded in
real-time. Society is swamped with a myriad of information involving a wide array of topics. News
dissemination has always been in a constant state of flux. Occurrences across the globe, or the lack
thereof, are immediately subject of the news written by journalists.

More often than not, journalists are at the forefront of information publication and
dissemination.1âшphi1 Owing to the nature of their work, they have the prerogative to shape the news
as they see fit. This Court does not turn a blind eye to some of them who twist the news to give an
ambiguous interpretation that is in reckless disregard of the truth.

Crafting inaccurate and misleading news is a blatant violation of the Society of Professional Journalists
Code of Ethics. The Society of Professional Journalists is a journalism organization dedicated toward
stimulating high standards of ethical behavior, promoting the free flow of information vital to a well-
informed citizenry, and inspiring and educating current and future journalists through professional
development.100 Its Code of Ethics espouses the practice that journalism should be accurate and fair,
and mandates accountability and transparency in the profession.101

As such, journalists should observe high standards expected from their profession. They must take
responsibility for the accuracy of their work, careful never to deliberately distort facts or context by
verifying information before releasing it for public consumption.102

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This case comes at a time when the credibility of journalists is needed more than ever; when their tried-
and-tested practice of adhering to their own code of ethics becomes more necessary, so that their truth
may provide a stronger bulwark against the recklessness in social media. Respondents, then, should
have been more circumspect in what they published. They are not media practitioners with a lack of
social following; their words reverberate. Thus, exemplary damages in the amount of ₱1,000,000.00 is
justifiable.

This Court can only hope that respondents appreciate the privilege their fame has brought them and, in
the future, become more circumspect in the exercise of their profession.

WHEREFORE, the Petition is PARTIALLY GRANTED. The June 13, 2014 Amended Decision of the Court of
Appeals in CA-G.R. CR No. 33256 is AFFIRMED WITH MODIFICATION. Respondents Raffy Tulfo, Allen
Macasaet, Nicolas V. Quijano, Jr., Janet Bay, Jesus P. Galang, Randy Hagos, Jean y Lacorte, and Venus
Tandoc are ORDERED to solidarity pay petitioner Michael C. Guy: (1) Five Hundred Thousand Pesos
(₱500,000.00) as moral damages; (2) One Million Pesos (₱1,000.000.00) as exemplary damages; and (3)
Two Hundred Eleven Thousand Two Hundred Pesos (₱211,200.00) as attorney's fees.

All damages awarded shall be subject to interest at the rate of six percent (6%) per annum from the
finality of this Decision until its full satisfaction.103

SO ORDERED.

Peralta, (Chairperson), A. Reyes, Jr., Hernando, and Carandang,* JJ., concur.

EN BANC

April 10, 2019

A.C. No. 5900

RE: ANONYMOUS COMPLAINT AGAINST ATTY. CRESENCIO P. CO UNTIAN, JR.,

RESOLUTION

REYES, J. JR., J.:

Subject of this Resolution is an Anonymous Complaint1 dated May 14, 2002 against Atty. Cresencio P. Co
Untian, Jr. (respondent) for his alleged sexual harassment of students of Xavier University, Cagayan de
Oro City (Xavier).

The May 14, 2002 Complaint requested the Court to investigate the alleged sexual harassments that
respondent had committed against students of Xavier, particularly Antoinette Toyco (Toyco ), Christina
Sagarbarria (Sagarbarria) and Lea Dal (Dal). The complaint was written in the local dialect and made by
an individual identifying himself or herself only as "law practitioner." In a September 26, 2002
Letter,2 the "law practitioner" sent copies of the complaint-affidavits3 of the victims of sexual
harassment and the Resolution of the Committee on Decorum and Investigation (Committee on
Decorum).

Toyco claimed that respondent initially expressed amorous interest when he sent her flowers
anonymously through another law student. She stated that thereafter, respondent would often text her
through the phone of another law student. Toyco noted eventually that respondent texted her through
his own phone where he would send romantic messages, poems, love notes and sweet nothings. She
said that respondent also invited her to go to Camiguin with another law student but she turned it down.
Toyco explained that while she was never sexually assaulted, respondent's unwelcome advances made
her feel degraded as she could not easily ignore respondent for fear of reprisal.

On the other hand, Sagarbarria narrated that respondent showed her a photograph revealing only the
face of a woman and asked her if she knew who the woman in the picture was. After she realized that

149
the woman in thr picture looked like her, respondent revealed the entire photograph revealin§, a naked
woman and teased her within hearing distance of other law students. Sagarbarria denied that she was
the woman because she had a distinctive mark on her back for the past six years. She averred that the
incident caused her depression, fearing what other law students may think of her. Sagarbarria
highlighted that she was tinable to participate in a scheduled moot court competition because she broke
down in the middle of practice and cried uncontrollably.

Meanwhile, Dal recounted that in one of her recitations during respondent's class, she clarified a
question propounded to her saying "Sir, come again?" Respondent retorted "What? You want me to
come again? I have not come the first time and don't you know that it took me five minutes to come,
and you want me to come again?" She later learned that respondent would narrate the said incident to
almost all of his classes. Dal felt offended that she was subjected to such sexually charged language and
the fact that her embarrassment was retold in other classes.

In its September 5, 2002 Resolution,4 the Committee on Decorum recommended that respondent's
teaching contract not be renewed on account of the accusations of sexual harassment against him. It
explained that respondent was guilty of violating Xavier's anti-sexual harassment guidelines. The
Committee on Decorum noted that respondent's unwanted sexual advances or innuendos caused
distress to the complaining students as it created a hostile or offensive environment.

Respondent's Position

Respondent lamented that the complaints for sexual harassment was made by disgruntled students who
failed their classes for the 2001-2002 school year as manifested by the fact that the incidents happened
years apart but the complaints were made all at the same time.

Respondent denied sending flowers and text messages with romantic undertones to Toyco. He
highlighted that it was in fact her who gave him gifts during Valentine's Day in 2002. Respondent added
that he texting "luv u" and "miss u" are friendly text messages sent without malice especially considering
that they were misspelled.

As to Sagarbarria's allegations, respondent countered that he confiscated the photograph from another
student and jokingly showed it to her in the spirit of their open and uninhibited relationship. He noted
that Sagarbarria is his niece and they were previously close as they would oftentimes exchange
discussions on sensitive and mature matters as adults without any malice. Respondent claimed that she
was never humiliated when he showed her the photograph because she even gamely lowered down her
pants to prove that it was not her in the photograph because unlike her, the naked woman did not have
any tattoo.

On the other hand, respondent explained that Dal answered disrespectfully when she was called for
recitation uttering "Come again?" He posited that to inject humor during class, he responded "Never use
slang language in my class because you might be misinterpreted. What do you mean by 'come again?' It
takes me several minutes before I come again." Respondent expounded that the joke was directed at
himself and that Dal never showed any resentment or showed any sign of humiliation as she even
laughed at the joke and continued to sit in front of the class.

IBP Proceedings

In his Report and Recommendation5 dated January 19, 2009, Commissioner Salvador B. Hababag
(Commissioner Hababag) recommended that respondent be suspended from the practice of law for two
years. He observed that respondent was given all the opportunity to explain his side in the investigation
that Xavier had conducted. Commissioner Hababag reminded that lawyers must be of good moral
character and must continue to possess it so long as he is part of the legal profession.

In its Resolution No. XIX-2010-2896 dated April 16, 2010, the Integrated Bar of the Philippines-Board of
Governors (IBP-BOG) affirmed with modification the recommendation of Commissioner Hababag. It
resolved to disbar respondent on the ground of gross immoral conduct.

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Respondent moved for reconsideration. In its Resolution No. XXII- 2017-8047 dated January 27, 2017,
the IBP-BOG partially granted his motion for reconsideration. It reduced the penalty to two years
suspension and directed the Director of the Commission on Bar Discipline to prepare an extended
resolution explaining its actions.

In his June 9, 2017 Extended Resolution,8 Director Ramon S. Esguerra (Director Esguerra) explained that
respondent was not guilty of sexual harassment as defined under Republic Act (R.A.) No. 7877 or the
"Anti-Sexual Harassment Law of 1995." He noted that there was no evidence to show that respondent
demanded or requested sexual favors from Toyco, Sagarbarria and Dal. Nevertheless, Director Esguerra
expounded that while respondent's actions do not constitute sexual harassment as defined by law, the
way he interacted with his students were unbecoming of a member of the legal profession. He stressed
that being a law professor, respondent should be worthy of emulation and should not have used his
position and stature to make offensive sexual insults on his students. Director Esguerra postulated that
the penalty of two years suspension is a sufficient sanction to protect the public and the legal profession.

The Court's Ruling

The Court modifies the recommended penalty of the IBP-BOG.

In the case at bench, some of respondent's students accused him of sexual harassment claiming that his
actions were sexual in nature and had offended or humiliated them.

R.A. No. 7877 defines education related sexual harassment as sexual harassment committed by a
teacher, instructor, professor, coach, trainer or any other person who, having authority, influence or
moral ascendancy over another in an education environment, demands, requests or otherwise requires
any sexual favor from the other, regardless of whether the same is accepted by the object of the act.9 In
particular, it is committed:

1. Against one who is under the care, custody or supervision of the offender;

2. Against one whose education, training, apprenticeship or tutorship is entrusted to the offender;

3. When the sexual favor is made a condition to the giving of a passing grade, or the granting of honors
and scholarships or the payment of a stipend, allowance or other benefits, privileges or considerations;
or

4. When the sexual advances result in an intimidating, hostile or offensive environment for the student,
trainee or apprentice. 10

The IBP-BOG opined that respondent was not guilty of violating R.A. No. 7877 because there was no
evidence to show that he demanded or requested sexual favors from the complainants. Nevertheless, it
found respondent's action unacceptable and conduct unbecoming of a member of the legal profession.

R.A. No. 7877 does not require that the victim had acceded to the sexual desires of the abuser. Further,
it is not necessary that a demand or request for sexual favor is articulated in a categorical manner as it
may be discerned from the acts of the offender. 11 In addition, sexual harassment is also committed in
an educational environment when the sexual advances result in an intimidating, hostile or offensive
environment. 12 In short, it is not necessary that there was an offer for sex for there to be sexual
harassment as a superior's conduct with sexual underpinnings, which offends the victim or creates a
hostile environment would suffice.

In Philippine Aeolus Automotive United Corporation v. National Labor Relations Commission, 13 the Court
explained that the essence of sexual harassment is not the violation of the victim's sexuality but the
abuse of power by the offender. In other words, what the law aims to punish is the undue exercise of
power and authority manifested through sexually charged conduct or one filled with sexual undertones.
In Domingo v. Rayala, 14 the Court clarified that R.A. No. 7877 speaks of the criminal infraction of sexual
harassment and without prejudice to any administrative charge which may be filed against one who
sexually harasses another.

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The Civil Service Commission (CSC) in CSC Resolution No. 01-0940 defined the administrative offense of
sexual harassment in an educational environment as existing when:

SEC. 3 x x x

(b) x x x

(1) submission to or rejection of the act or series of acts is used as a basis for any decision affecting the
complainant, including, but not limited to, the giving of a grade the granting of honors or a scholarship,
the payment of a stipend or allowance, or the giving of any benefit, privilege or consideration.

(2) the act or series of acts have the purpose or effect of interfering with the performance, or creating
an intimidating, hostile or offensive academic environment of the complainant; or

(3) the act or series of acts might reasonably be expected to cause discrimination, insecurity, discomfort,
offense or humiliation to a complainant who may be a trainee, apprentice, intern, tutee or ward of the
person complained of. 15

In addition, CSC Resolution No. 01-0940 provides examples of sexual harassment, to wit:

SEC. 5. The following are illustrative forms of sexual harassment:

(a) Physical

i. Malicious Touching

ii. Overt sexual advances

iii. Gestures with lewd insinuation

(b) Verbal, such as but not limited to, requests or demands for sexual favors, and lurid remarks

(c) Use of objects, pictures or graphics, letters or [written] notes with sexual underpinnings

(d) Other forms analogous to the [foregoing]. 16

Respondent's actions towards the students concerned definitely constitute sexual harassment as
defined by R.A. No. 7877 and the pertinent rules and regulation.

A reading of respondent's Answer would show that he substantially admitted the accusations against
him, although providing a justification for them. He stated that he showed a picture of a naked woman
to Sagarbarria only as a joke and after he had confiscated it from another student to prevent further
circulation in the school. Respondent narrated that he would text Toyco with "luv u" and "miss u" but
claimed that it was a common everyday text devoid of any romantic overtones as evidenced by its
informality. Meanwhile, he clarified that the statement he made to Dal was meant to inject humor in
the classroom and to teach her not to use slang language in class. Respondent assailed that these
accusations were due to them failing in his class and that none of the purported victims exhibited
embarrassment or discomfort during the incidents in question.

Respondent's conduct towards Sagarbarria, Dal and Toyco created a hostile and offensive environment
which has no place in a learning institution. He publicly showed a lewd picture to Sagarbarria in the
presence of other students. The incident deeply distressed her to the extent that she was unable to
continue with her Moot Court practice because she became emotional and cried uncontrollably. The
fact that Sagarbarria was bothered and humiliated was even supported by one of respondent's
witnesses who stated that respondent demanded that the photograph be surrendered to him because
Sagarbarria was disturbed by it.

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In addition, respondent's action was reprehensible regardless of Sagarbarria's reaction. He had the
audacity to show lewd images to one of his students in the hallway where other students were present.
Respondent's alleged close relationship with Sagarbarria is not an excuse as it does not detract from the
fact that he exhibited the indecent picture in a public place. It would have been different had he shown
the photograph privately to Sagarbarria especially since he claims that as uncle and niece, they could
talk about mature and sensitive topics without malice. Respondent could have saved Sagarbarria from
embarrassment in having to identify the naked woman as herself in public.

On the other hand, respondent should not brush aside his text messages to Toyco and his joke to Dal as
innocent remarks devoid of any impropriety. He readily admits that he would text "luv u" and "miss u"
but explains that these are sweet nothings and used in everyday ordinary text messages. These are not
harmless text messages especially since it appears that these were unwelcome flirtations which made
Toyco uncomfortable. In addition, they cast a cloud of impropriety considering that respondent was
Toyco's teacher when he sent them.

Meanwhile, respondent's statement to Dal during her recitation in class cannot be categorized as an
innocent joke only meant to lighten the mood of the class. When she was unable to comprehend the
question propounded to her, she asked him "to come again." In response, respondent said, "Never use
slang language in my class because you might be misinterpreted. What do you mean by 'come again'? It
takes me several minutes before I come again."

It is readily apparent that the remark is tasteless, vulgar and crude and has no place in any academic
setting. It is not a clever word play or a mere statement with sexual innuendos as its intended meaning
is obviously discernable. Respondent's attempt at humor miserably fails as his words clearly refer to him
needing five minutes to ejaculate again. Respondent's statements made Dal uncomfortable and
embarrassed in front of her classmates as it went beyond an innocent joke and was instead a gross
graphic and an insensitive remark.

Clearly, respondent abused the power and authority he possessed over the complainants. His sexually
laced conduct had created a hostile and offensive environment which deeply prejudiced his students. In
what was supposed to be a safe place for them to learn and develop, they were instead subjected to
unwarranted sexual advances.

What makes respondent's act of sexual harassment even more reprehensible is the fact that he is both a
professor and a member of the legal profession.

Lawyers carry the burden of living up to the ethical standards of the legal profession as embodied in the
Code of Professional Responsibility because public confidence in law and in lawyers may be tainted by
the irresponsible and improper conduct of members of the Bar.17 Those privileged to practice the legal
profession are expected to maintain not only a high standard of legal proficiency, but also of morality
considering that they are always under the watchful public eye scrutinizing them both in their public and
private lives. 18

Rule 1.01 of the Code of Professional Responsibility (CPR) provides that a lawyer shall not engage in an
unlawful, dishonest, immoral or deceitful conduct. On the other hand, Canon 7 mandates that lawyers
shall, at all times, uphold the integrity and dignity of the legal profession. Further, Rule 7 .03 of the CPR
commands lawyers not to engage in conduct that adversely reflects on his fitness to practice law, or
behave in a scandalous manner to the discredit of the legal profession. In Arnobit v. Atty. Arnobit, 19 the
Court emphasized on the primacy of maintaining a high sense of morality and decorum among lawyers,
to wit:

As this Court often reminds members of the bar, the requirement of good moral character is of much
greater import, as far as the general public is concerned, than the possession of legal learning. Good
moral character is not only a condition precedent for admission to the legal profession, but it must also
remain intact in order to maintain one's good standing in that exclusive and honored fraternity. Good
moral character is more than just the absence of bad character. Such character expresses itself in the
will to do the unpleasant thing if it is right and the resolve not to do the pleasant thing if it is

153
wrong. This must be so because "vast interests are committed to his care; he is the recipient of
unbounded _trust and confidence; he deals with his client's property, reputation, his life, his all."

xxxx

As officers of the court, lawyers must not only in fact be of good moral character but must also be
seen to be of good moral character and leading lives in accordance with the highest moral standards
of the community. A member of the bar and an officer of the court is not only required to refrain from
adulterous relationships or keeping a mistress but must also so behave himself as to avoid scandalizing
the public by creating the impression that he is flouting those moral standards. (Emphases supplied)

Much is expected of lawyers in that it does not suffice that they are persons of integrity and values, but
must also appear to be so in the eyes of the people, and of God. Notwithstanding the relativity of
morality, lawyers, as keepers of public faith, are burdened with a high degree of social responsibility -
they must handle their personal affairs with greater caution. 20 In other words, members of the bar are
measured in a more demanding light because their actions or inactions not only affect themselves, but
also the legal profession and the public's trust and respect for the law. As such, any errant behavior on
the part of the lawyer, whether in a public or private capacity, which tends to show deficiency in moral
character, honesty, probity or good demeanor, is sufficient to warrant suspension or disbarment.21

It must be remembered that lawyers are both preachers and stewards of law, justice, morals and
fairness in that they are duty-bound to propagate observance and deference thereto. It is not enough
that they know right from wrong, just from unjust, moral or immoral, because they must not only speak
of such ideals, but must also live by them. Lawyers, aside from being competent and adept in dealing
with the intricacies of the law, must also be individuals of honor and virtue. Legal knowledge and ability,
without the guidance of morals and justice, is a dangerous tool, which may harm, instead of uplift others.

Respondent's responsibilities and expectations are even more heightened because he is a law professor.
He should be a beacon of righteous and conscientious conduct. Respondent, as a molder of minds of
soon-to-be lawyers, should guide his students to behave and act in a manner consistent with the lofty
standards of the legal profession. Instead, he abused his position of authority creating an offensive and
uncomfortable atmosphere in school. Again, what should be a place of learning and growth had become
a place of fear and distrust for the affected students.

Further, it is even more disappointing that respondent fails to acknowledge the consequences of his
actions and disregard the hurt Sagarbarria, Toyco and Dal may have felt. He generally claimed that they
did not express any distress, embarrassment, or humiliation during the incidents complained of. It must
be stressed that as their law professor, respondent exercised moral ascendancy over them. Thus, it is
within reason that the concerned students could not have readily expressed disgust or annoyance over a
person in authority. It takes courage and strength to stand up and speak against any form of sexual
harassment. This is especially true considering that in most cases, the offender wields power, authority,
or influence over the victim.

WHEREFORE, respondent Atty. Cresencio P. Co Untian, Jr. is SUSPENDED from the practice of law for
five (5) years and ten (10) years from teaching law in any school effective upon the finality of this
Resolution, with a STERN WARNING that a repetition of the same or similar act will be dealt with more
severely.

Let copies of this Resolution be furnished the Office of the Bar Confidant to be reflected on the records
of respondent; the Integrated Bar of the Philippines for distribution to all its chapters; and the Office of
the Court Administrator for dissemination to all courts throughout the country.

SO ORDERED.

Bersamin (C.J.), Carpio, Peralta, Caguioa, A. Reyes, Jr., Gesmundo, Hernando, Carandang, and Lazaro-
Javier, JJ., concur.
Leonen, J., concur. See separate opinion.

154
Del Castillo and Jardeleza, JJ., on official leave.
Perlas-Bernabe, J., on leave.

SECOND DIVISION

April 10, 2019

G.R. No. 211435

RAMON CORPUS TAN, Petitioner

vs.
OFFICE OF THE LOCAL CIVIL REGISTRAR OF THE CITY OF MANILA, and THE REYES, J. JR., and LAZARO-
JAVIER, JJ NATIONAL STATISTICS Promulgated: OFFICE OF QUEZON CITY (now PHILIPPINE STATISTICS
AUTHORITY), Respondents

DECISION

REYES, J. JR., J.:

This is a Petition for Review on Certiorari1 which seeks to set aside the Decision2 dated September 27,
2013 and the Resolution3 dated February 24, 2014 of the Court of Appeals (CA) in CA-G.R. CV No. 98952,
which affirmed the Orders dated December 27, 20114 and May 18, 20125 of the Regional Trial Court of
Manila, Branch 27 (RTC) in Spec. Proc. No. 11-126383, a special proceeding for correction of entry in the
civil registry under Rule 108 of the Revised Rules of Court filed by herein petitioner.

The Facts

On September 7, 2011, petitioner filed a Petition for Correction of Entry6 before the RTC. Realizing that
he failed to implead the Office of the Local Civil Registrar of Manila (LCR Manila) and the National
Statistics Office (now Philippine Statistics Authority PSA), petitioner filed an Ex-Parte Motion to Admit
Amended Petition7 and an Amended Petition for Correction of Entry8 on September 30, 2011, this time
impleading the aforesaid offices as respondents.

In his Amended Petition, petitioner alleged that he was born on November 13, 1965 at St. Paul Hospital
in the City of Manila; that his birth was duly registered in the civil registry of Manila; that he had been
using his real name "Ramon Corpuz Tan" during his lifetime; that when he later secured a copy of his
Certificate of Live Birth, he discovered that his name was entered as "Ramon Corpus Tan Ko" instead of
his true and correct name which is "Ramon Corpuz Tan"; that the aforesaid material errors and mistakes
in the entries of his Certificate of Live Birth were due to inadvertence and error of the hospital personnel
who prepared the subject certificate; that "Ko," which was the first name of his father, was
inadvertently included in his last name; and that the mistake was not immediately rectified because he
only discovered the same, after having his own children.

In support of his claim and prayer, petitioner appended the following documents to his petition:, (a)
Diploma from the Philippine Chung Hua School; (b) Certification from the Philippine Chung Hua School
stating that petitioner completed his kindergarten course therein; (c) Secondary Report Card from the
Philippine Chung Hua School; (d) COMELEC Voter's Identification Card; (e) COMELEC Voter's Affidavit; (f)
BIR Tax Identification Number and Identification Card (g) Community Tax Certificate issued by Quezon
City; and (h) Certificate of Marriage to Maria Teresa Gatuz.

After finding the petition sufficient in form, the RTC set the case for hearing on November 23, 2011.

On November 23, 2011, petitioner and his counsel appeared for the hearing of the case for purposes of
the jurisdictional requirements of the petition. On the same day, petitioner testified through his judicial
affidavit.

The petitioner was also cross-examined by the prosecutor who was deputized by the Office of the
Solicitor General (OSG).

155
On November 24, 2011, petitioner, through counsel, filed a Formal Offer of Exhibits. Among the pieces
of evidence offered in evidence in support of petitioner's material allegations are: (1) Petitioner's
Judicial Affidavit;9 (2) Certificate of Live Birth indicating petitioner's name as "Ramon Corpus Tan
Ko";10 (3) BIR Identification Card indicating petitioner's name as "Tan Ramon Corpuz";11 (4) Firearm
License Card indicating petitioner's name as "Tan, Ramon Corpuz";12 (5) PhilHealth Identification Card
indicating petitioner's name as "Tan, Ramon Corpuz";13 (6) Certificate of Marriage;14 and (7) Certificates
of Live Birth of petitioner's children.15 The Republic of the Philippines (Republic) did not interpose any
objection to the offer.

On December 2, 2011, the RTC issued an Order16 admitting the pieces of evidence offered.

Ruling of the RTC

In its assailed Order dated December 27, 2011, the RTC dismissed the subject petition for correction of
entry. The RTC ratiocinated that the petitioner failed to comply with the requirements of an adversarial
proceeding noting that the correction sought for, is a substantial correction and is governed by Rule 108
of the Rules of Court, which is not summary, but an adversarial proceeding.

The trial court explained that Section 3, Rule 108, requires all interested persons who may be affected
by the petition to be made parties thereto. The trial court noted that aside from the fact that in Entry No.
3, petitioner's last name was indicated as "Tan Ko," the name of petitioner's father was also indicated as
"Tan Ko" in Entry No. 7. Moreover, in Entry No. 17, petitioner's mother, Trinidad Corpuz, signed as "T.C.
Tan Ko" over her printed name as informant. Thus, noting that petitioner claimed that his father was
already dead, the trial court declared that petitioner's mother should have been made a party to the
case. Since his mother was not impleaded as a party, petitioner failed to comply with the requirements
of an adversarial proceeding. The dispositive portion of the RTC Order states:

WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED.

SO ORDERED.17

Aggrieved, petitioner moved for reconsideration, but the same was denied by the RTC in its May 18,
2012 Order.

Not satisfied, the petitioner elevated an appeal to the CA.18

Ruling of the CA

In its Decision dated September 27, 2013, the CA affirmed the December 27, 2011 and May 18, 2012
Orders of the RTC. The appellate court concurred with the trial court that the error sought to be
corrected is a substantial one which requires an adversarial proceeding. It observed that the surname
"Tan Ko" consistently appeared in petitioner's Certificate of Live Birth, specifically in the entries of his
name, as well as in the names of both his parents. Thus, it opined that the alleged mistake was not only
a misspelled surname but involves a deletion of a word which entails a change in the surname. It then
stressed that the correction of petitioner's surname from "Tan Ko" to "Tan" would be an adjudication
that indeed his father's first name is "Ko" and his surname is "Tan." In effect, the correction prayed for
would entail not only a substantial change in his name, but would also affect the identity of his father.
Hence, an adversarial proceeding is required.

The appellate court ruled that the totality of the evidence presented by the petitioner is insufficient to
cause the change of his surname from "Tan Ko" to "Tan." It stated that while the documentary evidence
presented by the petitioner may show that he had been using the surname "Tan," they do not prove
that "Tan" is his correct surname.

The appellate court submitted that petitioner should have impleaded or at least presented his mother to
testify considering that she was the informant in his Certificate of Live Birth, and is, therefore, the best
person to testify on the details surrounding his birth. However, petitioner did not implead or present his
mother as a witness. Clearly, he failed to substantiate his claim that the "Ko" in his surname was

156
erroneously entered. The appellate court further noted that in petitioner's Certificate of Live Birth, it
was stated that his mother gave birth to three children prior to petitioner's birth. However, not one of
his siblings or even just their birth certificates were presented to bolster the claim that indeed their
surname is "Tan" and not "Tan Ko." The dispositive portion of the CA Decision provides:

WHEREFORE, in view of the foregoing premises, the appeal filed in this case is hereby DENIED and the
December 27, 2011 Order and the May 18, 2012 Order of the Regional Trial Court, Branch 27, stationed
in Manila in Spec. Proc. No. 11-126383 are hereby AFFIRMED.

SO ORDERED.19

Petitioner moved for reconsideration, but the same was denied by the CA in its February 24, 2014
Resolution.

Hence, this petition.

The Issue

WHETHER THE TRIAL AND APPELLATE COURTS ERRED WHEN THEY RULED THAT THE PETITIONER FAILED
TO OBSERVE THE REQUIREMENTS OF AN ADVERSARIAL PROCEEDING IN THIS CASE.

Petitioner insists that the error sought to be corrected is merely a clerical error which does not require a
material or substantial alteration so as to necessitate an adversarial proceeding. He argues that
changing his surname from "Tan Ko" to "Tan" would not materially affect his relationship with his
mother or his deceased father. The correction of his name would not involve an alteration on his
citizenship, legitimacy of paternity, filiation, or legitimacy of marriage.

Petitioner also claims that her mother could not be considered as a real party-in-interest in his petition
for correction of entry by the mere fact that she appears to be the informant in the subject Certificate of
Live Birth. After all, whatever happens to his petition, whether it be granted or denied, his mother
would not be affected as her surname would still remain as "Corpuz." He further states that he was not
even sure about the authenticity of the purported signature of his mother as appearing in his Certificate
of Live Birth. Thus, petitioner asserts, it is clear that the error in the entry of his name was committed by
other persons who prepared his Certificate of Live Birth, particularly, the personnel at St. Paul Hospital,
Manila where he was born.

Lastly, the petitioner claims that he properly impleaded the LCR Manila, and no other, considering that
no other person would be affected by his petition. He also stresses that the OSG, through the deputized
prosecutor, participated in the case. Thus, petitioner submits that the requirement of adversarial
proceeding, if any was required, has been substantially complied with. In sum, the petitioner prays for
the Court to issue an order directing the correction of his name to "RAMON CORPUS TAN."

In its Manifestation20 dated July 18, 2014, the Republic, through the OSG, adopted as its Comment the
Appellee's Brief21 it filed before the CA. In its Appellee's Brief/Comment, the Republic submits that the
petitioner has substantially complied with the procedural requirements of an adversary proceeding.
Nevertheless, it contends that petitioner failed to prove his cause of action by clear and substantial
evidence. That petitioner has shown reasonable cause and compelling reason for the correction of his
name, is immaterial to his case. The Republic points out that reasonable cause and compelling reason
are relevant only to a petition for change of name under Rule 103 of the Rules of Court, and not to a
petition for correction of entry under Rule 108. Thus, the dismissal of the subject petition for correction
of entry is correct.

The Court's Ruling

The petition utterly lacks merit.

157
The correction sought by petitioner
involves a substantial change, not a
mere clerical error.

At the onset, the Court notes that the change sought by petitioner in his Petition for Correction of Entry
before the RTC is inconsistent with the correction he prays for in the present petition. In his Petition for
Correction of Entry before the trial court, petitioner prayed that his name be corrected from "Ramon
Corpus Tan Ko" to "Ramon CORPUZ Tan." This is consistent with his government-issued identification
cards and other supporting documents he submitted.

In the present petition, however, he prays that his name be rectified from "Ramon Corpus Tan Ko" to
"Ramon CORPUS Tan." The Court considers this variance as a result of a typographical error due perhaps
to the ineptness of petitioner's counsel. Thus, for purposes of this petition, the Court considers the
correction to "Ramon CORPUZ Tan" as petitioner's proper prayer considering that it is the one
consistent with his supporting documents.

Rule 108 of the Revised Rules of Court governs the proceeding for the cancellation or correction of any
entry concerning the civil status of persons which has been recorded in the civil register.22

In Republic of the Philippines v. Valencia,23 the Court declared that a petition for correction of entry
under Rule 108 of the Rules of Court covers not only clerical errors, but also substantial changes. The
difference lies only on the procedure which would govern the correction sought. "If the correction is
clerical, then the procedure to be adopted is summary. If the rectification affects the civil status,
citizenship or nationality of a party, it is deemed substantial, and the procedure to be adopted is
adversary."24

A clerical error is one which is visible to the eyes or obvious to the understanding; an error made by a
clerk or a transcriber; a mistake in copying or writing, or a harmless change such as a correction of name
that is clearly misspelled or of a misstatement of the occupation of the parent. On the other hand,
substantial or contentious alterations may be allowed only in adversarial proceedings, in which all
interested parties are impleaded and due process is properly observed.25 Substantial and controversial
alterations include those which may affect the citizenship, legitimacy of paternity or filiation, or
legitimacy of marriage.26

Corrections in the name, whether of the owner of the Certificate of Live Birth or any of the parents
indicated therein, may also involve substantial and controversial matters which would require an
adversarial proceeding.

In Republic of the Philippines v. Benemerito (Benemerito),27 the respondent Petronio L. Benemerito filed
a petition for the correction of the entries in the Certificate of Live Birth of his son who was born on June
1, 1990. He claimed that his name was incorrectly entered in the Certificate of Live Birth as "Peter
Laurente Benemerito." He also sought to change the date of his marriage to his wife as entered in the
birth certificate from September 1, 1989 to January 25, 1998. The Republic argued that the changes
sought by respondent are substantial, and not innocuous. As such, an adversarial proceeding to fully
ventilate respondent's allegations is required.

The Court agreed with the Republic and declared that the corrections sought by the respondent could
hardly qualify as just clerical errors. The Court explained that in order to effect the desired changes, it
would be essential to establish that "Peter Laurente Benemerito" and the respondent Petronio L.
Benemerito refer to the same person. Further, the intended alteration on the date of the marriage from
September 1, 1989 to January 25, 1998 would, in effect, change the status of the child from legitimate
to illegitimate considering that his parents were not yet legally married at the time he was born on June
1, 1990.

In Republic of the Philippines v. Lugsanay Uy,28 the respondent sought the "correction" of her name in
her Certificate of Live Birth from "Anita Sy" to "Norma S. Lugsanay." She claimed that she was born on
February 8, 1952, and the illegitimate daughter of Sy Ton and Sotera Lugsanay. She argued that as an
illegitimate child, her surname should follow that of her mother's. She further alleged that she is known

158
to her family and friends as "Norma Lugsanay" and that her school records and other legal documents
bear the name "Norma S. Lugsanay." She also contended that she is a Filipino citizen and not Chinese,
and all her siblings bear the surname Lugsanay and are all Filipinos.

The Court noted that the entries sought to be corrected are substantial alterations, and not mere
clerical errors, as they touched upon respondent's filiation and citizenship. The Court reasoned that
changing respondent's surname from "Sy" to "Lugsanay" would change her status from legitimate to
illegitimate.

In this case, the alleged error could not be considered a clerical error or a readily apparent mistake.
Contrary to petitioner's claim, the correction sought would definitely have an effect on his filiation with
the persons named in his Certificate of Live Birth.

As aptly observed by the appellate court, the name "Tan Ko" has been consistently used not only in the
entries for petitioner's name, but also for that of his parents. In entry No. 7, the name of petitioner's
father was entered as "Tan Ko," while his mother's name was entered as "Trinidad Corpus Tan Ko" in
entry No. 12. Furthermore, his mother, as the informant for petitioner's birth certificate, signed as "T.C.
Tan Ko" in entry No. 17.

Verily, the "correction" of petitioner's name from "Ramon Corpus Tan Ko" to "Ramon Corpuz Tan"
would necessarily affect not only his name, but also the names of his parents as entered in his
Certificate of Live Birth.

As correctly explained by the appellate court, altering petitioner's surname from "Tan Ko" to "Tan"
would, in effect, be an adjudication that the first name of his father is indeed "Ko" and his surname
"Tan." Clearly, the correction would affect the identity of petitioner's father. Moreover, there would be
a need to correct his mother's name from "Trinidad Corpus Tan Ko" to "Trinidad Corpuz Tan." This would
require deleting the word "Ko" from "Tan Ko" and changing the letter "s" to "z" in "Corpus."
Following Benemerito, to effect the correction, it would be essential to establish that "Trinidad Corpus
Tan Ko" and "Trinidad Corpuz Tan" refer to the same person. A summary proceeding would certainly be
insufficient to effect such substantial corrections.

Petitioner failed to comply with the

procedural requirements of an
adversarial proceeding under Rule 108.

Petitioner claims that even if the correction sought involves a substantial change, he has substantially
complied with the requirement of appropriate adversarial proceeding when he impleaded LCR Manila
and after he caused the publication of the notice setting his petition for hearing in accordance with
Section 4, Rule 108 of the Rules of Court. The Republic, through the OSG, submits that indeed the
petitioner has substantially complied with the procedural requirement of an adversary proceeding. Both
the petitioner and the Republic mention the cases of Barco v. Court of Appeals (Barco)29 and Republic of
the Philippines v. Kho (Kho)30 as authorities in support of their submission that the failure to implead
indispensable parties could be cured by compliance with the publication requirement under Section 4 of
Rule 108.

Reliance on Barco and Kho is misplaced. These cases are inapplicable to the present petition.

Section 3, Rule 108 of the Rules of Court provides that the civil registrar and all persons who have or
claim any interest which would be affected by the cancellation or correction of an entry in the civil
register, shall be made parties to the proceeding.

In Barco, therein private respondent Nadina Maravilla (Nadina) filed a petition for correction of entry in
order to change the person named as the father in the birth certificate of her daughter. The local civil
registrar that recorded the subject birth certificate was impleaded along with Francisco Maravilla
(Francisco), the person originally named as the father, and Armando Gustilo (Armando), the person said
to be the real father. Notably, Francisco and Armando interposed no objection to the correction.
Eventually, the trial court granted the petition for correction of entry.

159
A petition was later filed before the CA seeking the annulment of the RTC Order. Milagros Barco
(Milagros) filed a petition-in-intervention before the CA arguing that she and her daughter have legal
interest in the annulment of the RTC Order. She explained that her daughter is also the child and heir of
Armando, the alleged real father in Nadina's petition for correction of entry. As such, she and her
daughter should have been impleaded therein, failing which, the trial court did not acquire jurisdiction.
The CA, however, dismissed the petition and petition-in-intervention.

The Court concurred with the CA's conclusion that the failure to implead an indispensable party, such as
Milagros, in the petition for correction of entry was cured by the compliance with the publication
requirement under Section 4 of Rule 108. The Court reasoned that it could not be established whether
Nadina knew of the existence of Milagros' daughter at the time the former filed the petition for
correction. The Court explained that doubt may always be cast as to whether a petitioner under Rule
108 would know of all the parties whose interests may be affected by the granting of a petition. The
Court stated, thus:

Undoubtedly, Barco is among the parties referred to in Section 3 of Rule 108. Her interest was affected
by the petition for correction, as any judicial determination that June was the daughter of Armando
would affect her ward's share in the estate of her father. It cannot be established whether Nadina knew
of Mary Joy's existence at the time she filed the petition for correction. Indeed, doubt may always be
cast as to whether a petitioner under Rule 108 would know of all the parties whose interests may be
affected by the granting of a petition. For example, a petitioner cannot be presumed to be aware of all
the legitimate or illegitimate offsprings of his/her spouse or paramour. The fact that Nadina amended
her petition to implead Francisco and Gustilo indicates earnest effort on her part to comply with Section
3 as quoted above.

Yet, even though Barco was not impleaded in the petition, the Court of Appeals correctly pointed out
that the defect was cured by compliance with Section 4, Rule 108, which requires notice by
publication[.] x x x31

xxxx

On the other hand, in Kho, the private respondents who were siblings filed a petition for correction of
the entries in their respective birth certificates. They prayed, among others, that the word "married"
opposite the phrase "Date of marriage of parents" be deleted because their parents were not legally
married. Private respondent Carlito Kho, one of the siblings, also sought the correction of the entries in
the birth certificates of his children, specifically, the correction of the date of marriage between him and
his wife from "April 27, 1989" to "January 21, 2000," the latter date being the date appearing in their
marriage certificate; and the correction of the name of his wife's first name from "Maribel" to "Marivel."

The Republic opposed the corrections and contended that since the changes prayed for were substantial
in nature, they could only be granted through an adversarial proceeding in which indispensable parties,
such as Marivel and the private respondents' parents, should have been notified or impleaded.

The Court, however, dismissed the Republic's contentions ruling that when all the procedural
requirements under Rule 108 are complied with, the appropriate adversary proceeding is satisfied. The
Court stressed that it is highly improbable that Marivel was unaware of the proceedings to correct the
entries in her children's birth certificates considering that the notices, orders, and decision of the trial
court were all sent to the residence she shared with Carlito and their children. With respect to the
private respondents' parents, the Court noted that their father died in 1959. On the other hand, their
mother was presented as a witness and testified as to the material allegations of the petition for
correction of entries.

From the foregoing, it is clear that there are circumstances which impelled the Court to excuse the
failure to implead indispensable parties in proceedings for cancellation or correction of entry. In Barco,
it is the supposed lack of knowledge or awareness of the petitioner of the existence of other persons
who would be affected by the corrections she sought. In Kho, it is the affected persons' inferred notice
and actual awareness of the proceedings for the correction of entries.

160
The circumstances in Barco and Kho are unavailing in this case.1âшphi1 It could not be said that
petitioner was unaware of the existence of other persons who may be affected by the corrections
sought. It is his own mother who would be affected by the proceeding for correction of entry which he
filed. As already discussed, his mother's name in the subject birth certificate would necessarily be
changed if the correction prayed for is granted. Further, petitioner's mother has neither been shown nor
alleged to have been living in the same residence with petitioner, unlike in Kho. Thus, there was no
showing or, at the very least, reason to believe that her mother was even aware of the subject
proceeding for correction of entry.

Contrary to the submissions by the parties, it is Lugsanay Uy32 which finds application to the present
petition. In said case, the private respondent sought the "correction" of her name in her Certificate of
Live Birth from "Anita Sy" to "Norma S. Lugsanay," impleading the Local Civil Registrar of Gingoog City as
respondent. The Court ruled that respondent should have impleaded her parents and siblings as the
persons who have interest, and are affected by the changes or corrections she wanted to make. Simply
put, impleading and notifying only the local civil registrar is not enough, to wit:

The fact that the notice of hearing was published in a newspaper of general circulation and notice
thereof was served upon the State will not change the nature of the proceedings taken. A reading of
Sections 4 and 5, Rule 108 of the Rules of Court shows that the Rules mandate two sets of notices to
different potential oppositors: one given to the persons named in the petition and another given to
other persons who are not named in the petition but nonetheless may be considered interested or
affected parties. Summons must, therefore, be served not for the purpose of vesting the courts with
jurisdiction but to comply with the requirements of fair play and due process to afford the person
concerned the opportunity to protect his interest if he so chooses.

While there may be cases where the Court held that the failure to implead and notify the affected or
interested parties may be cured by the publication of the notice of hearing, earnest efforts were made
by petitioners in bringing to court all possible interested parties. Such failure was likewise
excused where the interested parties themselves initiated the corrections proceedings; when there is no
actual or presumptive awareness of the existence of the interested parties; or when a party is
inadvertently left out.33 (Emphases supplied; citations omitted)

Petitioner failed to prove his cause

of action.

Even on the assumption that petitioner complied with the requirements of an adversarial proceeding
under Rule 108, the corrections prayed for could not be granted.

It is well to stress that as a public document, a registered birth certificate, duly recorded in the local civil
registry, is prima facie evidence of the facts stated therein.34 While it may be true that as a mere prima
facie evidence, the facts contained in a birth certificate are not conclusive and may still be rebutted, still,
a high degree of proof is needed to overthrow the presumption of the truth contained in such public
document.35

The petitioner utterly failed to overcome the presumption of truth contained in his birth certificate.

As correctly observed by the appellate court, the pieces of evidence presented by petitioner, consisting
of government-issued identification cards and other public documents, only prove that he had been
using the surname "Tan," but not the fact that his father's surname was indeed "Tan." Aside from being
insufficient for the purpose of rebutting the truth of the entries in his birth certificate, these
identification cards and documents are also immaterial to his cause of action. As argued by the Republic,
the evidence presented by petitioner and his plea on the ground of reasonable cause and compelling
reason, are relevant only to a petition for change of name under Rule 103, and not under a proceeding
for cancellation or correction of entry under Rule 108.The Court agrees with the observations of the
appellate court that petitioner's mother would be the best witness to testify on the alleged errors in her
son's birth certificate. In a similar vein, the birth certificates of petitioner's older siblings showing the
surname "Tan" instead of "Tan Ko" would greatly bolster his claim. However, for reasons known only to
petitioner, he refused to present his mother or the birth certificates of his siblings. Thus, there would be

161
no basis to sustain his claim that his surname should be "Tan" instead of "Tan Ko." Accordingly, the
present petition must be denied.

WHEREFORE, the present Petition for Review on Certiorari is DENIED for lack of merit. The Decision
dated September 27, 2013 and the Resolution dated February 24, 2014 of the Court of Appeals in CA-
G.R. CV No. 98952, are AFFIRMED.

SO ORDERED.

Carpio, Senior Associate Justice, (Chairperson), Caguioa, and Lazaro-Javier, JJ., concur.
Perlas-Bernabe, J., on leave.

THIRD DIVISION

April 10, 2019

G.R. No. 214081

P/INSP. II GILBERT C. SAN DIEG

vs.
FACT-FINDING INVESTIGATION COMMITTEE* (Under the Office of the DEPUTY OMBUDSMAN for Military and
Enforcement Officers), Represented by AGIO DON. A ESQUIVEL,, Respondent

DECISION

PERALTA, J.:

This is a Petition for Review on Certiorari seeking to reverse and set aside the Court of Appeals (CA) Decision1 dated Octo
and its Resolution2 dated August 28, 2014 in CA-G.R. SP No. 125147. The CA denied the petition for review of the Decisio
30, 2011 and the Order dated January 2, 2012 of the Office of the Deputy Ombudsman for the Military and Other Law
Officers (OMB-MOLEO) in OMB-P-A-09-0920-J. The OMB-MOLEO found petitioner P/Insp. II Gilbert C. San Diego guilty o
counts of Grave Misconduct and six (6) counts of Serious Dishonesty, and imposed upon him the penalty of dismissal from
including the accessory penalties of cancellation of eligibility, forfeiture of retirement benefits, and perpetual disqualifi
employment in the government service.

The factual antecedents are as follows:

On June 2, 2008, a formal request was filed before the Office of the Ombudsman for a lifestyle check upon Gilbert C
Special Investigator of the National Police Commission (NAPOLCOM), who was allegedly living a lifestyle not commen
salary.

San Diego has supposedly exhibited extravagant spending by giving out large parties and shopping without limits
establishments, and frequently traveled abroad with the use of several passports, bearing different middle names, i.e.,
"Careon." He also owns two (2) vehicles, i.e., a 2004-2005 Toyota Vios Sedan and a Nissan Safari Sports Utility Vehicle
₱2,000,000.00, as well as shares of stocks of A. Francisco Realty and Development Corporation worth ₱5,000,000.00.

On July 20, 2009, the OMB-MOLEO rendered a Fact-Finding Report,3 recommending that criminal and administrative cha
against San Diego, and referring the case to the Criminal Investigation, Prosecution and Administrative Adjudication Bure
for the conduct of preliminary investigation and administrative investigation.

On September 29, 2009, the Fact-Finding Investigation Bureau (FFIB) of OMB-MOLEO filed separate Affidavit-Comp
September 29, 2009, administratively charging San Diego with several counts of Grave Misconduct, Serious Dishones
Neglect of Duty, thus:

1. One (1) count for Grave Misconduct and Serious Dishonesty for falsely declaring in his 2006 Statement of Assets, Liabil
Worth [SALN] that he owns a Nissan Patrol SUV worth ₱2.4 million when in fact the registered owner thereof is A. Fra
and Development Corporation;5

162
2. One (1) count for Grave Misconduct and Serious Dishonesty for intentional failure to declare in his 2006 SALN his wife,
interest and financial connection of his wife and his own business interest and financial connection in A. Francisc
Development Corporation in the amount of ₱5 million pesos worth of stocks;6

3. One (1) count for Grave Misconduct and Dishonesty when he intentionally failed to declare a condominium unit he
2005 and his licensed firearms in his 2007 SALN;7

4. One (1) count for Grave Misconduct and Serious Dishonesty for falsely declaring in the Application for Marriage Licens
25, 2005 that Adalia B. Francisco is Adela Gloria B. Francisco and that her civil status is "Widow," the truth of the matt
both San Diego and Adalia B. Francisco knew that the latter's name is not Adalia Gloria B. Francisco and that her civil s
widow;8

5. One (1) count for Grave Misconduct and Serious Dishonesty for not declaring in his 2005 SALN his wife, the business
financial connection of his wife and his own business interest and financial connection in A. Francisco Realty and D
Corporation in the amount of ₱5 million pesos worth of stocks;9

6. Two (2) counts for Grave Misconduct and Serious Dishonesty for misrepresenting and falsely declaring that his mi
Careon in his passport application, hence, the Department of Foreign Affairs (DFA) issued to him Passport QQ027011
9,2005 and TT0400798 dated July 7, 2006, when, in fact, he knew fully well that his middle name is Carlos and not Careon

7. Ten (10) counts for Gross Neglect of Duty for not filing the requisite applications for leave relative to his foreign tra
(10) counts for Serious Dishonesty for his failure to comply with Memorandum Circular No. 304 dated November
amended by Executive Order No. 6 dated March 12, 1986, for not securing the necessary Authority to Travel in his foreig
in government service, considering that out of the 14 trips abroad, he was given only 5 travel authorities, thus:11

Date Destination Approved

Travel Authority
September 1-5, 2003 (USA)
1. March 19-21, 2004 Bangkok
2. July 15-18, 2004 Singapore
October 12 - November 18,
2004 (USA)
3. August 6-17, 2005 Bangkok
4. August 26-29, 2005 Hongkong
5. September 1, 2005 Hongkong
6. October 26-29, 2005 Tokyo
7. February 8-15, 2006 Dubai
8. March 3-6, 2006 Hong Kong
9. May 11-13, 2007 Hongkong
10. June 26-July 15, 2007 Dubai June 27-July 15, 2007 (England
and United Kingdom)

11. October 6-23, 2007 Doha

12. January 10-21, 2008 Not reflected January 16 - 31, 2008
(Australia) - Extension

13. February 29-March 3, 2008 Not reflected February 29 - March 4, 2008

(Vietnam)

163
 14. May 10-12, 2008 Not reflected

The FFIB of OMB-MOLEO also filed the corresponding Affidavit-Complaints dated September 29, 2009, criminally chargi
with six (6) counts of Falsification under Article 171 of the Revised Penal Code and violation of Republic Act (R.A.) N
Declaring Forfeiture In Favor of the State Any Property Found To Have Been Unlawfully Acquired By Any Public Officer or E
Providing the Proceedings Therefor).

Attached to the Affidavit-Complaints are the following pieces of documentary evidence: (a) San Diego's SALNs for the
2003, 2004, 2005, 2006 and 2007; (b) Certification from the Land Transportation Office on the Nissan Patrol registere
name of A. Francisco Realty and Development Corporation; (c) the General Information Sheet of the said corporation
2006; (d) the Certification of the Philippine National Police Firearms and Explosive Division on the guns registered unde
name; (e) the Certificate of Marriage and the Application for Marriage License of San Diego and Atty. Francisco; (f)
Contract dated October 28, 1955 between Noe Cangco Zarate and [Atty.] Adalia B. Francisco; (g) the Certificate of D
Enrique A. Agana, the supposed late husband of Atty. Francisco; (h) Certification from the National Statistics Office tha
have a record of Agana's death certificate; (i) the Certificate of Death of Atty. Francisco; (j) the photocopies of the P
Passport Applications of San Diego; (k) the Certification of the Bureau of Immigration on his foreign travels; and (
authorities from the National Police Commission.

In a Consolidated Counter-Affidavit,12 San Diego denied all the administrative and criminal charges against him, an
following defenses:

1. Anent his failure to declare his and his wife's business interests in A. Francisco Realty and Development Corporation in
2005 and 2006, San Diego claimed that he was merely a nominal stockholder in the corporation owned and controlled by
Atty. Francisco, and that he had very little participation in its business, as all the decisions were made by her. He insisted
of the mistaken belief, in good faith, that there was no need to disclose his being stockholder, thinking that such di
limited to that of his personal business interests, exclusive of that of his wife and family.

2. Regarding the misdeclaration of the Nissan Patrol SUV in his 2006 SALN, San Diego explained that he was of t
impression that he should declare it in his SALN because he, together with Atty. Francisco, used it for work and personal r

3. As for the non-disclosure in his 2007 SALN of the condominium unit in Libis, Quezon City, which was previously dis
2005 and 2006 SALNs, San Diego claimed that he was of the mistaken impression that he and his wife already owned it
property, but no longer declared it in his SALN upon being advised that title over the property had not yet been transferr
was purchased through a Contract to Sell, and had not yet been fully paid on installment basis.

4. As for his failure to disclose his firearms (Machine Pistol Uzi, Caliber 9mm and the Pistol Flag Caliber .38), San Diego e
he had already sold the former to his brother in 1999, while he was of the mistaken impression that the latter need
disclosed, considering that there was a change of format of the 2008 SALN form, and that, firearms are not similar to
category as that of cash on hand in banks, mutual funds, bonds, etc.

5. On his failure to secure the necessary leave to travel abroad, San Diego explained that he always applied for such leav
the periods in question (2003-2007), requests for leave were always processed at a relatively slow pace that results to
granted only after the targeted period to travel has already lapsed or expired. At any rate, he claimed to have informed h
supervisors of his trip prior to leaving abroad, and filed the requisite application for such leave. He also stressed tha
responsibilities as police investigator was compromised or neglected, and that all his personal trips were funded by
finances.

6. On the alleged falsification of his passports, San Diego claimed that as early as 1995 when he initially applied for a
error not of his own making was already committed when, despite stating that his middle name was "Carlos," it was
stated as "Careon." Upon seeking advice from the DFA and from several travel agencies on how to go about correcting s
was told to go to court to have it corrected, but he could not afford the services of a lawyer. Eventually, upon being ad
need not go to court to have his middle name corrected, he executed on January 10, 2007 an Affidavit of Discrepancy, f
DFA issued him a passport bearing his correct middle name, "Carlos."

7. On the alleged falsification of his application for marriage license, San Diego stressed that he and Atty. Francisco perso
their respective personal information in their application. He claimed that it is absurd to fault him for entries made pers

164
wife, and that he did not coerce or mislead his wife when she filled up her application. He insisted that there was mere
discrepancy on the part of his wife's official records. As explained by his late wife, her name as appearing in the Certi
Birth and Marriage License is ADELIA GLORIA BLAS FRANCISCO, but when she became of discerning age, she decided to
BLAS FRANCISCO. With respect to her birth date, the date October 7, 1932 as appearing in her Certificate of Live Birth,
October 7, 1946 stated in their marriage contract was a typographical error, as shown by Atty. Francisco's Sworn
Discrepancy dated July 3, 2009. As for her stating in the marriage license application that her civil status is "Widow", this
of the fact that her previous husband, Mr. Enrique A. Agana, had died in 1996.

On June 30, 2011, the OMB-MOLEO rendered a Decision,13 the dispositive portion of which reads:

WHEREFORE, premises considered, respondent P/INSP. II GILBERT C. SAN DIEGO is hereby found GUILTY
MISCONDUCT on SIXTEEN (16) COUNTS and SERIOUS DISHONESTY on SIX (6) COUNTS for which the penalty of DISMIS
service is hereby imposed, including the accessory penalties of cancellation of eligibility, forfeiture of retirement
perpetual disqualification for re-employment in the government service, pursuant to Paragraph A(3), Sections 52 and 58(
the Civil Service Commission Resolution No. 991936 otherwise known as the Uniform Rules on Administrative Case
Service.

ACCORDINGLY, the Secretary, DILG and the Director General of the Philippine National Police are hereby directed to im
subject Decision in accordance with law, with the request to promptly submit to this Office a Compliance Report there
the subject OMB Case Number.

Compliance is respectfully enjoined consistent with Section 15(3) of R.A. 6770, otherwise known as the Ombudsman Act o

SO ORDERED.14

On January 2, 2012, the OMB-MOLEO found no convincing reason to disturb the findings of the investigating prosecut
that the other grounds raised in San Diego's motion for reconsideration had been passed upon in its June 30, 2011 Decisio

Aggrieved, San Diego filed before the CA a petition for review under Rule 43 of the Rules of Court, raising two issues: (1
not the Office of the Ombudsman's Decision dated June SO, 2011 and Order dated January 2, 2012 violated petitioner
informed of the charges against him; and (2) Whether or not the Office of the Ombudsman's findings of guilt against
supported by substantial evidence.

In a Decision dated October 31, 2013, the CA denied San Diego's petition for review. In a Resolution dated August 28,
also denied his motion for reconsideration. Hence, this petition for review on certiorari.

San Diego argues that "[t]he assailed Decision and Resolution issued by the Court of Appeals run counter to the C
mandate of one's Right to be Informed of the charges made against him and of the principle of substantial evidence m
finding of guilty by the Ombudsman."15

The petition is partly meritorious, but a modification of the designation of the administrative offenses and the c
penalties imposed, is in order.

San Diego argues that he was found guilty of numerous offenses that were not even charged against him, in violation o
be informed of the accusations against him and his right to due process. Contrary to the findings of the CA, he submits th
be held guilty of grave misconduct for sixteen (16) counts when, in fact, he was only charged with six (6) counts there
that his being found guilty of Serious Dishonesty on 6 counts has no basis, as the acts constituting each count were neith
in the assailed CA Decision and Resolution, nor the reasons relied upon clearly explained.

San Diego's arguments have been raised and correctly passed upon by the CA. The Court finds no compelling reasons t
exhaustive ruling of the CA, to wit:

The variance in the number and nature of charges filed against San Diego and in the offenses for which he was found g
violates his right to due process nor warrants his exoneration from the said offenses.

The Supreme Court already ruled in Dadubo v. Civil Service Commission that the designation of the offense or offenses
person is charged in an administrative case is not controlling and one may be found guilty of another offense, where the
the allegations and evidence presented sufficiently proves one's guilt:

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xxxx

The ruling in the Dadubo case was reiterated in the recent case of PAGCOR v. Marquez, where the Supreme Court stre
failure to designate the offense specifically and with precision is of no moment in an administrative case. The essence of
in administrative proceedings is that a party be afforded a reasonable opportunity to be heard and to submit any evid
have in support of his defense: The law simply requires that the civil servant is informed of the nature and cause of accus
him in a clear and concise manner to give the person a chance to answer the allegations intelligently.

In this case, the records reveal that San Diego was more than informed of the charges against him and he was
opportunities to controvert each and every accusation through the filing of his consolidated counter-affidavit. He was a
chance to be heard on his motion for reconsideration; hence, he cannot rightfully assert violation of his right to due proce

It also bears stressing that the nature and cause of accusations against San Diego were presented in a clear and concise m
seven (7) affidavit-complaints filed against him. It gave us a clear picture of how San Diego violated R.A. No. 6713 and M
Circular No. 304. These allegations should be the controlling factors in determining his liabilities and not the designation
FFIB to each offense.16

San Diego contends that he cannot be found guilty of misconduct in relation to the misrepresentations in his SALNs fo
and 2007, because the alleged misrepresentations do not relate to his official function or performance as a police inv
asserts that to be considered misconduct under the purview of the law, such transgression must affect the performance
as an officer, and not only his character as a private individual. He points out that although required by law, the accom
SALNs by every government employee does not affect, nor has any relation to, the specific and divergent funct
government employee in their respective offices.

San Diego's argument is similar to that which was rejected by the Court in Remolona v. Civil Service Commission
petitioner insisted that his dismissal was a violation of his right to due process. Although the offense of Dishonesty
under the Civil Service Law, Remolona argued that such act must have been committed in the performance of his functio
Postmaster. Considering that the charge of dishonesty involves the falsification of the certificate of rating of his wife, the
bearing on his office and, hence, he is deemed not to have been dismissed for cause. Rejecting the foregoing argument,
Court ruled in Remolona, thus:

It cannot be denied that dishonesty is considered a grave offense punishable by dismissal for the first offense under Sec
XIV of the Rules Implementing Book V of Executive Order No. 292. And the rule is that dishonesty, in order to warrant di
not be committed in the course of the performance of duty by the person charged. The rationale for the rule is that if a
officer or employee is dishonest or is guilty of oppression or grave misconduct, even if said defects of character are no
with his office, they affect his right to continue in office. The Government cannot tolerate in its service a dishonest offic
performs his duties correctly and well, because by reason of his government position, he is given more and ample op
commit acts of dishonesty against his fellow men, even against offices and entities of the government other than the off
is employed; and by reason of his office, he enjoys and possesses a certain influence and power which renders the victim
misconduct, oppression and dishonesty less disposed and prepared to resist and to counteract his evil acts and ac
private life of an employee cannot be segregated from his public life. Dishonesty inevitably reflects on the fitness of t
employee to continue in office and the discipline and morale of the service.18

Contrary to San Diego's argument, the Court holds that if a government officer or employee is guilty of Dishone
Misconduct, even if such defect of character was not connected with his office, it affects his right to continue in office. B
that when an officer or employee is disciplined, the object sought is not the punishment of such officer or emplo
improvement of the public service and the preservation of the public's faith and confidence in the government.

San Diego further insists that he had satisfactorily explained in his Consolidated Counter-Affidavit that the omissions in
2005, 2006 and 2007 were caused by mere confusion and honest mistake, thus:

a) He failed to declare his and his wife's interest in A. Francisco Realty because he believed that it was no longer neces
has only a nominal interest in the corporation, and that he thought that the SALN is limited only to his personal business i

b) He included, in good faith, in his 2006 SALN a Nissan Patrol SUV due to the fact that he was of the mistaken impre
should declare it because he uses it for work and personal purposes;

c) He did not disclose in his 2007 SALN a condominium unit in Libis, Quezon City, because the property has not yet been f

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he cannot be considered to possess ownership thereof.

d) He did not fail to disclose certain firearms in his 2007 SALN because the Pistol Flag Caliber .38 has already been sold t
in 1999, and he was of the wrong impression that the Machine Pistol Uzi need not be included since it was similar w
indicated in the SALN like bonds, mutual funds, etc.

San Diego asserts that while his educational attainment goes beyond the average, he is still susceptible to committing m
as confusion as to the nature, ownership or benefits derived from the items he omitted to declare in good faith. He a
Ombudsman for failing to take into consideration his evidence when it concluded that he could not have committed su
accomplishing his SALN. He submits that it does not follow that if a government employee is well, educated, he can a
government forms with utmost accuracy because, even the simplest act of filling up a form may be complicated b
ambiguity, and lack of focus or simply a mistake.

San Diego's assertion fails to persuade.

San Diego is not just an ordinary rank-and-file employee. He is a Police Inspector II of the Inspection, Monitoring and
Service of the NAPOLCOM. He is not just an average college degree holder in Political Science; he also has post gradua
Public Administration and Law. San Diego cannot claim that he has just a nominal interest in A. Francisco Realty and D
Corporation, because the General Information Sheet shows that he is the Vice-President thereof with 50,000 common
₱5,000,000.00 in a corporation with a total subscribed shares of 56,500,000.00 and paid-up capital of ₱56,500,000.00. H
even equal to those of Atty. Francisco's four (4) children who are merely Directors of the corporation. Nevertheless, th
not find substantial evidence to prove that San Diego is guilty for Grave Misconduct and Serious Dishonesty for non-dis
shares in A. Francisco Realty Corp. There being no proof of intent to commit a wrong on his part, and considering that t
the "undisclosed wealth" is evidently his wife Atty. Francisco, San Diego cannot be adjudged guilty of the charge of Grave
and Serious Dishonesty, but is liable for Simple Negligence for failure to disclose his business interest in the SALN.

In Daplas v. Department of Finance,19 the Court held that the failure to file a truthful SALN puts in doubt the integrity
officer or employee, and would normally amount to dishonesty. However, mere non-declaration of the required data
does not automatically amount to such an offense. "Dishonesty requires malicious intent; to conceal the truth or to
statements. In addition, a public officer or a public officer or employee becomes susceptible to dishonesty only whe
declaration results in the accumulated wealth becoming manifestly disproportionate to his/her income, and income
sources, and he/she fails to properly account or explain these sources of acquisitions."20

The Court stressed in Daplas that the laws on SALN aim to curtail the acquisition of unexplained wealth. In several cas
source of the undisclosed wealth was properly accounted for, the Court deemed the undisclosed wealth as properly ac
and deemed the same as an "explained wealth" which the law does not penalize. Consequently, absent any intent to com
and having accounted for the source of the "undisclosed wealth," one cannot be adjudged guilty of the charge of Disho
the most, of mere negligence for having failed to accomplish one's SALN properly and accurately.

The Court further discussed in Daplas the distinction between simple and gross negligence. Negligence is the omission of
which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time
place. In the case of public officials, there is negligence when there is a breach of duty or failure to perform the obligatio
is gross negligence when a breach of duty is flagrant and palpable. An act done in good faith, which constitutes onl
judgment and for no ulterior motives and/or constitutes only an error of judgment and for no ulterior motives and/or
merely simple negligence.

In Casimiro v. Rigor,21 the Court explained the concept of Dishonesty and the rationale for filing SALN, in this wise:

Dishonesty, as juridically understood, implies the disposition to lie, cheat, deceive, or defraud; untrustworthiness; lack
lack of honesty or probity in principle; lack of fairness and straightforwardness; disposition to defraud, deceive or b
malevolent act that puts serious doubt on one's ability to perform duties with the integrity and uprightness demande
officer or employee. The requirement of filing a SALN is enshrined in the Constitution to promote transparency in the civ
serves as a deterrent against government officials bent on enriching themselves through unlawful means. By mandate
government official or employee must make a complete disclosure of his assets, liabilities and net worth in order to av
regarding questionable accumulation of wealth. The importance of requiring the submission of a complete, truthful, and
as a measure to defeat corruption in the bureaucracy cannot be gainsaid. Full disclosure of wealth in the SALN is
particularly minimize, if not altogether eradicate, the opportunities for official corruption, and maintain a standard of h
public service. Through the SALN, the public can monitor movement in the fortune of a public official; it serves as a va

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balance mechanism to verify undisclosed properties and wealth. The failure to file a truthful SALN reasonably puts i
integrity of the officer and normally amounts to dishonesty.

With respect to the non-disclosure of his ownership of common shares and his being a Vice-President in A. Francisco Rea
Diego explained in his Consolidated Counter-Affidavit22 that he had very little participation and was merely a nominal st
the corporation which was owned and controlled by his wife, Atty. Adalia Francisco, who was in a better position to mak
decisions. After a careful perusal of the Deed of Extra-Judicial Settlement of the Estate of Adalia Bias Francis
Agreement24 dated December 20, 2013 attached to his Supplemental Petition for Review25 dated May 11, 2015,
convinced that the provenance of the means to acquire the 50,000 common shares worth ₱5,000,000.00 under his
eponymous corporation is no less than San Diego's wife, Atty. Francisco, who, at the time of her demise, left wealth so s
terms of prime real estate and valuable personal properties, that would make the value of his common shares look like
Malicious intent to conceal the truth on the part of San Diego is also absent because he disclosed in his 2007 SALN that A
is his wife and is the President of A. Francisco Realty. With the source of his undisclosed wealth having been traced to th
of his wife, the Court rules that San Diego cannot be held liable for Serious Dishonesty or Grave Misconduct, but on
Negligence due to his failure to disclose his financial interest in the corporation of his wife.

As to the false declaration in his 2006 SALN of the Nissan Patrol SUV with plate number GNA-88, registered under th
Francisco Realty Corp., San Diego cannot be held liable with Grave Misconduct and Serious Dishonesty, but onl
Negligence. There is no substantial evidence of an intent to commit a wrong, to deceive the authorities, and to conceal th
under the name of San Diego. What San Diego did was to erroneously declare in his 2006 SALN the Nissan Patrol SUV regi
the name of A. Francisco Realty Corp., for the simple reason that he uses it for work and other personal purposes. Such
his 2006 SALN is not a sufficient badge of dishonesty in the absence of bad faith, or any malicious intent to conceal the t
false statements. Bad faith does not simply connote bad judgment or negligence, but contemplates a state of mind
operating with furtive design or some motive of self-interest or ill-will for ulterior purposes.26 What would const
Dishonesty on the part of San Diego would be if a luxury vehicle were found to be registered under his name, but he fail
it: in his SALN and to explain how he acquired such wealth.

San Diego cannot also be faulted with Serious Dishonesty or Gross Misconduct for the non-disclosure in his 200
condominium unit in Libis, Quezon City. As noted by the OMB-MOLEO, he has been consistently declaring the same pr
2005 and 2006 SALNs, and had admitted in his counter-affidavit that it was purchased through a Contract to Sell and wa
paid on installment basis. The OMB-MOLEO, nonetheless, correctly pointed out that the fact that the property was
purchased on installment basis, does not preclude its non-disclosure in his 2007 SALN. The proper recourse under the ci
which San Diego failed to take, is to make the necessary correction and explanation as to the nature of his acquisitio
property. For this, San Diego can only be held liable for Simple Negligence.

San Diego asserts that he cannot be held liable with Serious Dishonesty or Gross Misconduct for failure to disclose certa
his 2007 SALN. He states that the Pistol Flag Caliber .38 (issued/approved on October 16, 1998) has already been sold to h
1999. He also claims of having the mistaken impression that his Machine Pistol Uzi need not be included, considering tha
not similar to, or of the same category as that of, cash on hand/in banks, mutual funds, bonds, etc. According to him, the
SALN at that time were changed, and that said forms listed down in detail the list of "Investments, other personal pro
liabilities of Declarant/Spouse/Declarant's Children Below 18 years of Age x x x" which included the cash on hand in b
mutual funds, trust funds, time deposits, pre-need plans, etc.

San Diego's explanations are untenable. Aside from his bare and self-serving claim, there is nothing in the records to subs
he sold his Pistol Flag Caliber .38 to his brother in 1999. Against the Certification27 dated March 12, 2009 issued by t
National Police Firearms and Explosives Division, stating that he is the registered owner of said firearm, San Diego faile
proof of sale or registration of the said firearm under the name of his brother. Meanwhile, the omission of the Machine
San Diego's 2007 SALN is also unacceptable, because there are spaces in the said SALN form where details about "Ot
Property" and "Acquisition Cost" thereof may be provided, but he hardly filled them up without justifiable reason. F
declaration of personal properties in his SALN, he can be held liable for Simple Negligence, but not for Dishonesty, becaus
showing that such omission resulted in the accumulated wealth becoming manifestly disproportionate to his incom
investigator, or that he failed to properly account or explain the sources of acquiring the said firearms.

For the omissions in his SALNs, San Diego seeks relief from administrative liabilities by invoking Pleyto v. PNP-CIDG28 whe
that "the petitioner's candid admission of his shortcomings in properly and completely filling out his SALN, his endeavor
entries therein and provide all other necessary information, and submission of supporting documents as to the a
properties in his and his wife's names, negate any intention on his part to conceal his properties." San Diego's relianc
misplaced. He cannot claim good faith for his failure to properly declare personal and real properties in his SALNs

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defenses raised in his Consolidated Counter-Affidavit are merely uncorroborated and self-serving denial, and his lame
non-compliance only show lack of regard for the importance of filing SALNs. To recall, it was only when he filed his S
Petition for Review dated May 11, 2015, together with the Deed of Extra-Judicial Settlement of the Estate of Adalia Bias F
the Agreement dated December 20, 2013, that the Court gathered that the source of his undisclosed financial interest in
Realty Corp. is none other than his wife.

With respect to the alleged falsification of his passport applications, San Diego claimed that, as early as 1995 when he in
for a Philippine Passport, it was erroneously stated that his middle name was "Careon" despite the fact that he used "
passport application. When he sought advice from the DFA and from several travel agencies on how to correct such err
deferred the correction of such error because he was told to go to court, and he cannot afford the services of a lawyer. U
that he need not go to court to effect such correction, San Diego executed an Affidavit of Discrepancy29 on January 10, 2
able to secure from the DFA a passport stating his correct middle name "Carlos."

The CA upheld the findings of the OMB-MOLEO that San Diego was guilty of Serious Dishonesty when he made false de
his passport applications by using "Careon" as his middle name instead of his real middle name "Carlos." Having giv
erroneous information twice and belatedly taking action to correct said errors, the CA held that San Diego really intende
appear that his middle name is "Careon." The CA further noted that the presumption of authenticity enjoyed by hi
Discrepancy was destroyed by the Certification issued by Clerk of Court Perlita Vitan-Ele, stating that the document numb
on the said affidavit allegedly notarized by Atty. Donato C. Manguiat refers to an Extrajudicial Settlement of Estate
individual.

The Court disagrees with the ruling of the CA. In Del Rosario v. Pascua,30 it was held that dishonesty means "the concealm
in a matter of fact relevant to one's office or connected with the performance of his duties. It is an absence of integrity, a
betray, cheat, deceive or defraud, bad faith." The Rules on Administrative Offense of Dishonesty considers dishonesty as
it "causes serious damage and grave prejudice to the government."31 After a careful review of the passport applications3
the Affidavit-Complaint, the Court finds no substantial evidence to prove deliberate intent to mislead, deceive or de
causes such serious damage or grave prejudice to the government.

Included in the passport application dated April 26, 2005 is a checklist of documents that may be submitted to establish
of the applicant and to comply with the requirements for securing passport. The same passport application reveals th
secured and submitted an authenticated birth certificate, which shows that "Gilbert Carlos San Diego" was born on Nove
to spouses Melencio del Rosario San Diego and Corazon Alarilla Carlos.33 While it was wrong for San Diego to indicate in
applications that his" middle name is "Careon," such act alone does not constitute Dishonesty, because the vera
information ought to have been verified by the DFA from his birth certificate before issuing him a new passport. If it we
intention of San Diego to conceal his real middle name, he would have submitted a fake birth certificate, and he would n
both his passport applications his correct date of birth [November 1, 1973], his exact office address [Napolcom, Makati]
names of his parents [Melencio and Corazon San Diego].

Besides, San Diego's erroneous statement of his middle name in his passport application is not a fact directly relevant to
and qualifications to office, or connected with the performance of his duties as police investigator. Even if San Diego'
Discrepancy was not entered in the notarial register, such circumstance may give rise to a different administrative or crim
but does negate the fact that he was able to correct his middle name in his passport in 2007, even prior to the filing
affidavit-complaints against him by the OMB-MOLEO in September 29, 2009:

Anent the charge of falsification of application for marriage license, San Diego was accused of falsely declaring in the Ap
Marriage License34 dated April 25, 2005 that "Adalia B. Francisco" is "Adela Gloria B. Francisco," and that her civil status
San Diego explained that both he and his wife personally filled up their respective personal information in their applicati
absurd that he should be faulted for entries made personally by his wife. As supposedly explained to San Diego by his wi
as appearing in the Certificate of Live Birth and Marriage License is ADELIA GLORIA BLAS FRANCISCO, but when sh
discerning age, she decided to use ADALIA BLAS FRANCISCO. Citing the Affidavit of Discrepancy executed by Atty. Francisc
further claimed that her date of birth is "October 7, 1932" as appearing in her Certificate of Live Birth, and that the date
1946" stated in the marriage contract was a mere typographical error. As for her stating in the application of marriage lic
civil status was "Widow," such was the result of the fact that her previous husband, Mr. Enrique A. Agana, had died in 199

The Court finds no substantial evidence that San Diego was the one who gave false information on the personal circumsta
Francisco in their application for marriage license. It is disputably presumed that a person is innocent of a wrong, and
ordinary consequences of her voluntary act, as well as takes ordinary care of her concerns.35 Presumption of regularity
Atty. Francisco herself provided her complete name, birth date and civil status in the said application, because such ma

169
based on her personal knowledge or based on authentic records at her disposal. The OMB-MOLEO failed to prese
convincing evidence to overturn the foregoing disputable presumptions, let alone controvert the Affidavit of Discrepancy
3, 2009 executed by Atty. Francisco. Hence, San Diego cannot be held responsible for the incorrect entries in the persona
of Atty. Francisco in their application for marriage license dated April 25, 2005, even if it was unclear who between the
was just thirty-one (31) years old — and her — who was then seventy-two (72) — was in a rush to solemnize their un
Municipal Trial Court of Meycauayan, Bulacan, on May 5, 2005.

Regarding the ten (10) counts of Serious Dishonesty for failure to secure authority for his foreign travels charged in
Complaint37 dated September 29, 2009, San Diego insists that he always applied for leave to travel abroad, but points ou
the periods in question (2003-2007), requests for leave to travel abroad were always processed at a relatively slow pac
to leaves being granted only after the target period to travel has already lapsed or expired. Constrained to travel witho
Diego insists that he informed his immediate supervisors about his trips, which were all funded by his personal finan
none of his responsibilities as police investigator was neglected or compromised while he was on official leave.

In affirming the finding of the OMB-MOLEO, the CA gave credence to the certification issued by the Bureau of Immigra
Diego had fourteen (14) foreign trips between 2003 to 2007, and copies of his purported authorities to travel do not per
these 14 trips. The CA noted that San Diego admitted that he left the country without securing the required autho
because its processing would take time. The CA ruled that such excuse clearly shows his willful intent to violate the
Memorandum Circular No. 304, series of 1969 that every public employee must secure authority to travel for his foreign
government service, and that his repeated violation constitutes Gross Misconduct.

The Court agrees with the finding of the CA that San Diego travelled abroad without proper approval as required by the
but holds that he can only be held liable for as many counts of Simple Misconduct, but not for Serious Dishonesty.

In Civil Service Commission v. Ledesma,38 the Court held that "misconduct is a transgression of some established and de
action, more particularly, unlawful behavior or gross negligence by a public officer. The misconduct is grave if it involv
additional elements of corruption, willful intent to violate the law or to disregard established rules, which must b
substantial evidence. Otherwise, the misconduct is only simple. A person charged with grave misconduct may be held liab
misconduct if the misconduct does not involve any of the additional elements to qualify the misconduct as grave."

No substantial evidence was presented by the OMB-MOLEO to show that elements of corruption, willful intent to violate
disregard established rules were present on the part of San Diego. While the OMB-MOLEO does not deny the fact tha
foreign travel authority takes a snail's pace, and admits that there were at least five (5) instances when he secured
authority,39 the Court considers that such attempts to comply with the Circular negates willful intent to violate establis
the part of San Diego.

Meanwhile, San Diego cannot be held liable for Serious Dishonesty, which means the concealment of truth in a matter of
to one's office or connected with the performance of his duties, that causes serious damage and grave prejudice to the
This is because the OMB-MOLEO failed to present proof that he failed to file the required leave of absences during the t
undertook his questioned foreign travels, and that his said absences caused serious damage or prejudice to the governme

Be that as it may, San Diego cannot be excused from seeking such prior approval despite being then granted belatedly, b
requirement is still provided for by reasonable rules and regulations. Issued in view of the need to pursue more vigoro
conserving foreign exchange and the imperativeness of redoubling efforts in the public service towards nation
Memorandum Circular No. 30440 is explicit that even those who intended to travel abroad while on leave of absence
prior approval, inasmuch as vacation leave must be contingent upon the exigencies of the service. Since he does n
allegation of having travelled abroad eleven (11) times41 without such prior approval, the Court holds San Diego for
Simple Misconduct.

In sum, the Court finds that the CA erred in denying the petition for review under Rule 43 of the Rules of Court,
upholding the Decision of the OMB-MOLEO, finding San Diego liable for sixteen (16) counts of Serious Dishonesty a
counts of Grave Misconduct, with the corresponding penalty of dismissal from service, plus the accessory penalties of ca
eligibility, forfeiture of retirement benefits and perpetual disqualification for re-employment in the government service.

Instead, the Court holds that San Diego is liable for four (4) counts of Simple Negligence for violation of the law on
Statement of Assets, Liabilities and Net Worth (SALN) with regard to the non-disclosure of (a) his financial interest in
Realty, Corp.; (b) of his ownership of two firearms; (c) his conjugal ownership of a condominium unit; and (d) for misdecl
SALN of the Nissan Patrol SUV registered under the name of said corporation. Moreover, San Diego is liable for eleven (

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Simple Misconduct for admittedly failing to secure prior approval to travel abroad pursuant to Memorandum Circular N
of 1969.

Section 55 of the Uniform Rules on Administrative Cases in the Civil Service42 (URACCS) states that if the respondent is fo
two or more charges or counts, the penalty to be imposed should be that corresponding to the most serious charge or co
rest shall be considered as aggravating circumstances.

In Daplas,43 the Court held that omission to include the subject properties in petitioner's SALNs, by itself, does not amo
Misconduct, in the absence of showing that such omission had, in some way, hindered the rendition of sound public serv
is no direct relation or connection between the two. The Court found no reason to hold petitioner liable for the charges o
and Grave Misconduct, but declared her guilty, instead of Simple Negligence, which is akin to Simple Neglect of Duty —
offense punishable with suspension without pay for one (1) month and one (1) day to six (6) months, for the first offense.

In this case, while there are four (4) counts for violation of the laws on filing SALN45 which arose from separa
Complaints46 dated September 29, 2009 filed by the OMB-MOLEO, this is the first time that San Diego is being held to
Simple Negligence. Considering the quadruple count of his violation of the SALN Law, and the fact that he is just a first-ti
the Court finds the penalty of suspension for four (4) months without pay to be reasonable. Meanwhile, considering th
actually 11 counts for which San Diego was charged in the Affidavit-Complaint dated September 29, 2009 for admitte
abroad without prior approval, and since this is, likewise, the first time that he is being held liable for Simple Miscond
grave offense under the URACCS punishable with suspension without pay for 1 month and 1 day to 6 months for the fir
the Court finds it proper to sentence San Diego to a penalty of suspension for three (3) months without pay.

Considering further that the penalty imposed upon San Diego is reduced from dismissal from service to a mere suspens
period of seven (7) months without pay, the Court finds it reasonable to rule as follows: (1) to deem the period during w
is pending appeal as service of his penalty of suspension, (2) to immediately reinstate him to his original position wi
seniority rights, and (3) to restore all of his rights and benefits under the laws without payment of back salaries.

Records show that San Diego has already been preventively suspended for six (6) months without pay in an Order o
Suspension47 dated March 8, 2010, which was immediately executory pursuant to Section 27, paragraph 1 of R.A.
the Ombudsman Act of 1989. Aggrieved, San Diego elevated the OMB-MOLEO's Decision and Resolution on a petitio
under Rule 43 before the CA. Dissatisfied with the denial of his petition by the CA, San Diego filed before the Court a
review on certiorari under Rule 45. It is well settled under jurisprudence48 that the Ombudsman's decision, even if
imposed is dismissal from the service, is immediately executory despite the pendency of a motion for reconsideration
and cannot be stayed by mere filing of such motion or appeal.

Section 7, Rule III of the OMB Rules of Procedure, as amended by Administrative Order No. 17 dated September 15, 20
provides:

Section, 7. Finality and execution of decision. - Where the respondent is absolved of the charge, and in case of convictio
penalty imposed is public censure or reprimand, suspension of not more than one month, or a fine equivalent to one m
the decision shall be final, executory and unappealable. In all other cases, the decision may be appealed to the Court of
verified petition for review under the requirements and conditions set forth in Rule 43 of the Rules of Court, within fifte
from receipt of the written Notice of the Decision or Order denying the Motion for Reconsideration.

An appeal shall not stop the decision from being executory. In case the penalty is suspension or removal and the resp
such appeal, he shall be considered as having been under preventive suspension and shall be paid the salary and
emoluments that he did not receive by reason of the suspension or removal.

A decision of the Office of the Ombudsman in administrative cases shall be executed as a matter of course. The
Ombudsman shall ensure that the decision shall be strictly enforced and properly implemented. The refusal or failure b
without just cause to comply with an order of the Office of the Ombudsman to remove, suspend, demote, fine, or censu
ground for disciplinary action against said officer.

Also, Memorandum Circular (MC) No. 01, Series of 2006, of the OMB states:

Section 7, Rule III of Administrative Order No. 07, otherwise known as, the "Ombudsman Rules of Procedure" prov
decision of the Office of the Ombudsman in administrative cases shall be executed as a matter of course."

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In order that the foregoing rule may be strictly observed, all concerned are hereby enjoined to implement all Ombudsm
orders or resolutions in administrative disciplinary cases, immediately upon receipt thereof by their respective offices.

The filing of a motion for reconsideration or a petition for review before the Office of the Ombudsman does not operat
immediate implementation of the foregoing Ombudsman decisions, orders or resolutions.

Since San Diego was dismissed from service by the OMB-MOLEO, and his petition for review under Rule 43 was later d
CA, the filing of his petition for review on certiorari before the Court did not stay the immediate implementation of the O
order of dismissal. Because a decision of the Ombudsman in administrative cases shall be executed as a matter of cour
afore-quoted Section 7, and inasmuch as he also prays for reinstatement and restoration of his rights and benefits under
safe to state that San Diego has been out of government service from the time the Ombudsman ordered his dismi
pendency of his appeal. Thus, the Court rules that San Diego should be immediately reinstated to his original position w
seniority rights, and be, henceforth, restored of all his rights and benefits under the law without payment of back s
stressed that San Diego did not prevail in his appeal, and the Court hardly exonerated him, but only corrected the desig
administrative offenses he committed, and reduced the corresponding penalties. This is in light of his ready admis
travelled abroad without prior approval because of the delay in securing the same, and in view of the Deed of
Settlement of the Estate of Adalia Bias Francisco49 and the Agreement[50] dated December 20, 2013 submitted for t
before the Court, which traced the origin of his undeclared wealth to that of his wife.

WHEREFORE, the Petition for Review on Certiorari is PARTLY GRANTED. The assailed Court of Appeals Decision dated
2013 and its Resolution dated August 28, 2014 in CA-G.R. SP No. 125147 are MODIFIED in that petitioner P/Insp. II G
Diego is found guilty of the following:

1. Four (4) counts of Simple Negligence for violation of the law on the filing of Statement of Assets, Liabilities and Net W
with regard to the non-disclosure of his financial interest in A. Francisco Realty, Corp., of his ownership of a Pistol Flag .3
a Machine Pistol Uzi caliber 9mm, and of his conjugal ownership of a condominium unit in Libis, Quezon City,
misdeclaration in his SALN of the Nissan Patrol SUV with Plate No. GNA-88 registered under the name of said Corporation

2. Eleven (11) counts of Simple Misconduct for failure to secure the prior approval to travel abroad, pursuant to M
Circular No. 304, series of 1969.

Appellant San Diego is hereby sentenced to suffer the penalty of suspension of four (4) months for all four (4) coun
Negligence, and suspension of three (3) months for all eleven (11) counts of Simple Misconduct, or a total of seven
suspension without pay, and with a warning that a repetition of the same or similar offenses would be dealt with more se

Considering that appellant San Diego is deemed to have served the foregoing period of suspension during the time tha
for review is pending before the Court of Appeals and this Court, he is hereby immediately reinstated to his original pos
loss of seniority rights, and is, henceforth, restored of all of his rights and benefits under the law without payment of back

SO ORDERED.

Leonen, A. Reyes, Jr., Hernando, and Carandang,** JJ., concur.

EN BANC

April 10, 2019

G.R. No. 199802

CONGRESSMAN HERMILANDO I. MANDANAS; MAYOR EFREN B. DION A; MAYOR ANTONINO AURELIO; KAGA WAD MA
BARANGAY CHAIR PERLITO MANALO; BARANGA Y CHAIR MEDEL MEDRANO;BARANGAY KAGA WAD CRIS RAMOS;
KAGA WAD ELISA D. BALBAGO, and ATTY. JOSE MALVAR VILLEGAS
vs.
EXECUTIVE SECRETARY PAQUITO OCHOA; SECRETARY CESAR PURISIMA, Department of Finance; SECRETARY FLORENC
Department of Budget and Management; COMMISSIONER KIM JACINTO-HENARES, Bureau of Internal Revenue; an
TREASURER ROBERTO TAN, Bureau of the Treasury, Respondents

x-----------------------x

172
G.R. No. 208488

HONORABLE ENRIQUE T. GARCIA, JR., in his personal and official capacity as Representative of the 2nd District of the
Bataan, Petitioners
vs.
HONORABLE [PAQUITO] N. OCHOA, Executive Secretary; HONORABLE CESAR V. PURISIMA, Secretary, Department
HONORABLE FLORENCIO H. ABAD, Secretary, Department of Budget and Management; HONORABLE KIM JACINTO
Commissioner, Bureau of Internal Revenue; and HONORABLE ROZZANO RUFINO B. BIAZON, Commissioner, Bureau
Respondents

RESOLUTION

BERSAMIN, C.J.:

On July 3, 2018, the Court promulgated its decision, disposing -

WHEREFORE, the petitions in G.R. No. 199802 and G.R. No. 208488 are PARTIALLY GRANTED, and, ACCORDINGLY, the C

1. DECLARES the phrase "internal revenue" appearing in Section 284 of Republic Act No. 7160 (Local
Code) UNCONSTITUTIONAL, and DELETES the phrase from Section 284.

Section 284, as hereby modified, shall henceforth read as follows:

Section 284. Allotment of Taxes. — Local government units shall have a share in the national taxes based on the coll
third fiscal year preceding the current fiscal year as follows:

(a) On the first year of the effectivity of this Code, thirty percent (30%);

(b) On the second year, thirty-five percent (35%); and

(c) On the third year and thereafter, forty percent (40%).

Provided, That in the event that the national government incurs an unmanageable public sector deficit, the Pres
Philippines is hereby authorized, upon the recommendation of Secretary of Finance, Secretary of Interior and Local
and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of C
the presidents of the "liga," to make the necessary adjustments in the allotment of local government units but in no c
allotment be less than thirty percent (30%) of the collection of national taxes of the third fiscal year preceding the c
year; Provided, further, That in the first year of the effectivity of this Code, the local government units shall, in ad
thirty percent (30%) allotment which shall include the cost of devolved functions for essential public services, be entitl
the amount equivalent to the cost of devolved personal services.

The phrase "internal revenue" is likewise hereby DELETED from the related sections of Republic Act No. 7160 (Local
Code), specifically Section 285, Section 287, and Section 290, which provisions shall henceforth read as follows:

Section 285. Allocation to Local Government Units. — The share of local government units in the allotment shall be co
following manner:

(a) Provinces — Twenty-three percent (23%);

(b) Cities — Twenty-three percent (23%);

(c) Municipalities — Thirty-four percent (34%); and

(d) Barangays — Twenty percent (20%)

Provided, however, That the share of each province, city, and municipality shall be determined on the basis of t
formula:

173
(a) Population — Fifty percent (50%);

(b) Land Area — Twenty-five percent (25%); and

(c) Equal sharing — Twenty-five percent (25%)

Provided, further, That the share of each barangay with a population of not less than one hundred (100) inhabitants
less than Eighty thousand (P80,000.00) per annum chargeable against the twenty percent (20%) share of the barang
allotment, and the balance to be allocated on the basis of the following formula:

(a) On the first year of the effectivity of this Code:

(1) Population — Forty percent (40%); and

(2) Equal sharing — Sixty percent (60%) (b)

On the second year:

(1) Population — Fifty percent (50%); and

(2) Equal sharing — Fifty percent (50%)

(c) On the third year and thereafter:

(1) Population — Sixty percent (60%); and

(2) Equal sharing — Forty percent (40%).

Provided, finally, That the financial requirements of barangays created by local government units after the effectivity
shall be the responsibility of the local government unit concerned.

xxx xxx xxx

Section 287. Local Development Projects. — Each local government unit shall appropriate in its annual budget no less
percent (20%) of its annual allotment for development projects. Copies of the development plans of local governme
be furnished the Department of the Interior and Local Government.

xxx xxx xxx

Section 290. Amount of Share of Local Government Units. — Local government units shall, in addition to the allotm
share of forty percent (40%) of the gross collection derived by the national government from the preceding fiscal year
taxes, royalties, forestry and fishery charges, and such other taxes, fees, or charges, including related surcharges,
fines, and from its share in any co-production, joint venture or production sharing agreement in the utilization and dev
the national wealth within their territorial jurisdiction.

Article 378, Article 379, Article 380, Article 382, Article 409, Article 461, and related provisions of the Implementin
Regulations of R.A. No. 7160 are hereby MODIFIED to reflect the deletion of the phrase "internal revenue" as directed

Henceforth, any mention of "Internal Revenue Allotment" or "IRA" in Republic Act No. 7160 (Local Government C
Implementing Rules and Regulations shall be understood as pertaining to the allotment of the Local Government U
from the national taxes;

2. ORDERS the SECRETARY OF THE DEPARTMENT OF FINANCE; the SECRETARY OF THE DEPARTMENT OF B
MANAGEMENT; the COMMISSIONER OF INTERNAL REVENUE; the COMMISSIONER OF CUSTOMS; and the NATIONAL TR
include ALL COLLECTIONS OF NATIONAL TAXES in the computation of the base of the just share of the Local Gover
according to the ratio provided in the now-modified Section 284 of Republic Act No. 7160 (Local Government Code)
accruing to special purpose funds and special allotments for the utilization and development of the national wealth.

174
For this purpose, the collections of national taxes for inclusion in the base of the just share the Local Governmen
include, but shall not be limited to, the following:

(a) The national internal revenue taxes enumerated in Section 21 of the National Internal Revenue Code, as amended,
the Bureau of Internal Revenue and the Bureau of Customs;

(b) Tariff and customs duties collected by the Bureau of Customs;

(c) 50% of the value-added taxes collected in the Autonomous Region in Muslim Mindanao, and 30% of all other
collected in the Autonomous Region in Muslim Mindanao.

The remaining 50% of the collections of value-added taxes and 70% of the collections of the other national
Autonomous Region in Muslim Mindanao shall be the exclusive share of the Autonomous Region in Muslim Mindanao
Section 9 and Section 15 of Republic Act No. 9054.

(d) 60% of the national taxes collected from the exploitation and development of the national wealth.

The remaining 40% of the national taxes collected from the exploitation and development of the national wealth sha
accrue to the host Local Government Units pursuant to Section 290 of Republic Act No. 7160 (Local Government Code);

(e) 85% of the excise taxes collected from locally manufactured Virginia and other tobacco products.

The remaining 15% shall accrue to the special purpose funds created by Republic Act No. 7171 and Republic Act No. 72

(f) The entire 50% of the national taxes collected under Sections 106, 108 and 116 of the NIRC as provided under Sectio
NIRC; and

(g) 5% of the 25% franchise taxes given to the National Government under Section 6 of Republic Act No. 6631 and
Republic Act No. 6632.

3. DECLARES that:

(a) The apportionment of the 25% of the franchise taxes collected from the Manila Jockey Club and Philippine Racing
that is, five percent (5%) to the National Government; five percent (5%) to the host municipality or city; seven percen
Philippine Charity Sweepstakes Office; six percent (6%) to the Anti-Tuberculosis Society; and two percent (2%) to the
pursuant to Section 6 of Republic Act No. 6631 and Section 8 of Republic Act No. 6632 — is VALID;

(b) Section 8 and Section 12 of Republic Act No. 7227 are VALID; and, ACCORDINGLY, the proceeds from the sale o
military bases converted to alienable lands thereunder are EXCLUDED from the computation of the national tax alloc
Local Government Units; and

(c) Section 24 (3) of Presidential Decree No. 1445, in relation to Section 284 of the National Internal Revenue Code,
one-half of one percent (1/2 of 1%) of national tax collections as the auditing fee of the Commission on Audit is VALID;

4. DIRECTS the Bureau of Internal Revenue and the Bureau of Customs and their deputized collecting agents to certify
tax collections, pursuant to Article 378 of the Implementing Rules and Regulations of R.A. No. 7160;

5. DISMISSES the claims of the Local Government Units for the settlement by the National Government of arrear
share on the ground that this decision shall have PROSPECTIVE APPLICATION; and

6. COMMANDS the AUTOMATIC RELEASE WITHOUT NEED OF FURTHER ACTION of the just shares of the Local Governm
the national taxes, through their respective provincial, city, municipal, or barangay treasurers, as the case may be, on
basis but not beyond five (5) days from the end of each quarter, as directed in Section 6, Article X of the 1987 Con
Section 286 of Republic Act No. 7160 (Local Government Code), and operationalized by Article 383 of the Implementi
Regulations of RA 7160.

Let a copy of this decision be furnished to the President of the Republic of the Philippines, the President of the Sen

175
Speaker of the House of Representatives for their information and guidance.

SO ORDERED.

The Office of the Solicitor General (OSG), representing all the respondents, has filed a motion for reconsideratio
therein the following errors, to wit:

I.

THE HONORABLE COURT ERRED IN RULING THAT ARTICLE X, SECTION 6 OF THE CONSTITUTION REQUIRES THAT AL
TAXES SHALL BE THE BASE IN COMPUTING THE INTERNAL REVENUE ALLOTMENT (IRA) OF THE LOCAL GOVERNMENT UN

II.

THE HONORABLE COURT ERRED IN DELETING THE PHRASE "INTERNAL REVENUE" IN SECTIONS 284, 285, 287, AND
LOCAL GOVERNMENT CODE (LGC) AND IN ARTICLES 378, 379, 380, 382, 409, 461 AND RELATED PROVISIO
IMPLEMENTING RULES AND REGULATIONS OF THE LGC. THIS DELETION AMOUNTS TO AN ENCROACHMENT ON TH
POWER OF CONGRESS TO DETERMINE THE LGUs' JUST SHARE IN NATIONAL TAXES.

III.

THE HONORABLE COURT ERRED IN RULING THAT THE FOLLOWING TAXES SHOULD STILL BE INCLUDED IN THE BASE
COMPUTATION OF THE IRA: (A) TARRIFF AND CUSTOMS DUTIES COLLECTED BY THE BUREAU OF CUSTOMS; (B) 50%
ADDED TAXES COLLECTED IN THE AUTONOMOUS REGION IN MUSLIM MINDANAO(ARMM); (C) 30% OF ALL OTHE
TAXES COLLECTED IN THE ARMM; (D) 60% OF THE NATIONAL TAXES COLLECTED FROM THE EXPLOITATION AND DEVEL
NATIONAL WEALTH; (E) FROM LOCALLY MANUFACTURED VIRGINIA AND OTHER TOBACCO PRODUCTS; (F) THE ENTIRE
NATIONAL TAXES UNDER SECTIONS 106, 108, AND 116 OF REPUBLIC ACT NO. 8424; AND (G) 5% OF THE 25% FRAN
GIVEN THE NATIONAL GOVERNMENT UNDER SECTION 6 OF R.A. NO. 0631 AND SECTION 8 OF R.A. NO. 6632.

IV.

IN THE EVENT THE HONORABLE COURT WILL MAINTAIN ITS DECISION, THE PROSPECTIVE APPLICATION OF THE DECIS
BE CLARIFIED TO MEAN THAT THE LGUs WILL BEGIN RECEIVING THE ADJUSTED IRA IN 2022.[[1]]

In substantiation, the OSG contends that the affected provisions of the Local Government Code (LGC) are not contrary
Article X of the Constitution, under which the plenary power of Congress extends nut only to the determination
share of local government units (LGUs) but also to the determination of which national taxes serve as base for the com
such just share.

The OSG premises its contention on the fact that the article "the" immediately precedes the phrase "national taxes"
thereby manifesting the intent to give Congress the discretion to determine which national taxes the just share will
considering that the qualifier "the" signals that the succeeding phrase "national taxes" is a specific class of taxes; that
intention of the framers to include all national taxes, the Constitution should have so stated; that the ph
revenue should be restored in the affected provisions of the LGC considering that the deletion of the phrase constitut
encroachment on the power of Congress to determine the LGUs' just share; that the effect of broadening the base fo
the just share is to modify Congress' internal revenue allocations (IRA) in favor of the LGUs, which the Court cannot
imposing the new base was not intended by Congress; that it is more prudent for the Court to nullify Section 284 of t
entirety and to allow Congress to make the necessary adjustments; that, indeed, the Court, its awesome powers notw
cannot supplant Congress' discretion to determine the amount of the just share the LGUs are entitled to; that certai
those under Republic Act No. 9054, Republic Act No. 6631, and Republic Act No. 6632) that the Court has ordered to b
the reckoning of the base amount of the fair share of the LGUs should be excluded because including them will resu
sharing on the part of host LGUs which are already given particular shares by virtue of the Court's directive to include
the national government share; that the double sharing is not intended by Congress; that the inclusion of the
particularly the taxes under Republic Act No. 7171 and Republic Act No. 8240, the national taxes on utilization and dev
the national wealth under Section 289 of the LGC, the value added tax (VAT) collections under Section 106, Section 108
116 of the National Internal Revenue Code (NIRC) will deprive the National Government of much needed funds
services; and that the collections of the Bureau of Customs should be excluded from the base amount because of t

176
tariffs as being for the regulation of goods coming in and going out of the country instead of being just for income gene

The OSG interposes that should the Court nonetheless affirm the decision of July 3, 2018, it should expressly declare t
the decision to be prospective following the operative fact doctrine, resulting in the base amount decreed herein to
Fiscal Year 2022.

On his part, petitioner Garcia seeks partial reconsideration to pray that all the arrears from 1992 resulting fro
computation of the base amount of the fair share be given to the LGUs.2

Ruling of the Court

The Court denies both motions for their lack of merit.

In the July 3, 2018 decision, the Court has held that the Constitution itself set national taxes as the base amount fr
reckon the just share of the LGUs, viz.:

Section 6, Article X the 1987 Constitution textually commands the allocation to the LGUs of a just share in the national

Section 6. Local government units shall have a just share, as determined by law, in the national taxes which shall be a
released to them.

Section 6, when parsed, embodies three mandates, namely: (1) the LGUs shall have a just share in the national taxes
share shall be determined by law; and (3) the just share shall be automatically released to the LGUs.

Congress has sought to carry out the second mandate of Section 6 by enacting Section 284, Title III (Shares of Local
Units in the Proceeds of National taxes), of the LGC, which is again quoted for ready reference:

Section 284. Allotment of Internal Revenue Taxes. — Local government units shall have a share in the national inte
taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:

(a) On the first year of the effectivity of this Code, thirty percent (30%);

(b) On the second year, thirty-five percent (35%); and

(c) On the third year and thereafter, forty percent (40%).

Provided, That in the event that the national government incurs an unmanageable public sector deficit, the Pres
Philippines is hereby authorized, upon the recommendation of Secretary of Finance, Secretary of Interior and Local
and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of C
the presidents of the "liga," to make the necessary adjustments in the internal revenue allotment of local governmen
no case shall the allotment be less than thirty percent (30%) of the collection of national internal revenue taxes of th
year preceding the current fiscal year: Provided, further, That in the first year of the effectivity of this Code, the local
units shall, in addition to the thirty percent (30%) internal revenue allotment which shall include the cost of devolved
essential public services, be entitled to receive the amount equivalent to the cost of devolved personal services.

There is no issue as to what constitutes the LGUs' just share expressed in percentages of the national taxes (i.e., 30%, 3
stipulated in subparagraphs (a), (b), and (c) of Section 284). Yet, Section 6, supra, mentions national taxes as the sour
share of the LGUs while Section 284 ordains that the share of the LGUs be taken from national internal revenue taxes i

Has not Congress thereby infringed the constitutional provision?

Garcia contends that Congress has exceeded its constitutional boundary by limiting to the NIRTs the base from which
the just share of the LGUs.

We agree with Garcia's contention.

Although the power of Congress to make laws is plenary in nature, congressional lawmaking remains subject to th
stated in the 1987 Constitution. The phrase national internal revenue taxes engrafted in Section 284 is undou

177
restrictive than the term national taxes written in Section 6. As such, Congress has actually departed from the letter
Constitution stating that national taxes should be the base from which the just share of the LGU comes. Such
impermissible. Verba legis non est recedendum (from the words of a statute there should be no departure). Equally im
is that Congress has also thereby curtailed the guarantee of fiscal autonomy in favor of the LGUs under the 1987 Consti

Taxes are the enforced proportional contributions exacted by the State from persons and properties pursuant to its so
order to support the Government and to defray all the public needs. Every tax has three elements, namely: (a) it is
proportional contribution from persons and properties; (b) it is imposed by the State by virtue of its sovereignty; and (
for the support of the Government. Taxes are classified into national and local. National taxes are those levied by
Government, while local taxes are those levied by the LGUs.

What the phrase national internal revenue taxes as used in Section 284 included are all the taxes enumerated in Sect
National Internal Revenue Code (NIRC), as amended by R.A. No. 8424, viz.:

Section 21. Sources of Revenue. — The following taxes, fees and charges are deemed to be national internal revenue ta

(a) Income tax;

(b) Estate and donor's taxes;

(c) Value-added tax;

(d) Other percentage taxes;

(e) Excise taxes;

(f) Documentary stamp taxes; and

(g) Such other taxes as are or hereafter may be imposed and collected by the Bureau of Internal Revenue.

In view of the foregoing enumeration of what are the national internal revenue taxes, Section 284 has effectively
LGUs from deriving their just share from other national taxes, like the customs duties.

Strictly speaking, customs duties are also taxes because they are exactions whose proceeds become public fund
to Garcia v. Executive Secretary, customs duties is the nomenclature given to taxes imposed on the importation and ex
commodities and merchandise to or from a foreign country. Although customs duties have either or both the g
revenue and the regulation of economic or social activity as their moving purposes, it is often difficult to say which
the principal objective in a particular instance, for, verily, customs duties, much like internal revenue taxes, are rarely
achieve only one policy objective. We further note that Section 102 (oo) of R.A. No. 10863 (Customs Modernization an
expressly includes all fees and charges imposed under the Act under the blanket term of taxes.

It is clear from the foregoing clarification that the exclusion of other national taxes like customs duties from t
determining the just share of the LGUs contravened the express constitutional edict in Section 6, Article X the 1987 Con

Still, the OSG posits that Congress can manipulate, by law, the base of the allocation of the just share in the national
LGUs.

The position of the OSG cannot be sustained. Although it has the primary discretion to determine and fix the just share
in the national taxes (e.g., Section 284 of the LGC), Congress cannot disobey the express mandate of Section 6, Article X
Constitution for the just share of the LGUs to be derived from the national taxes. The phrase as determined by law
follows and qualifies the phrase just share, and cannot be construed as qualifying the succeeding phrase in the nation
intent of the people in respect of Section 6 is really that the base for reckoning the just share of the L
includes all national taxes. To read Section 6 differently as requiring that the just share of LGUs in the national ta
determined by law is tantamount to the unauthorized revision of the 1987 Constitution. [Bold emphasis supplie
portions are part of the original text]

We reiterate that Congress, in limiting the base amount to national internal revenue taxes, gravely abused its discretio
Constitution extended to Congress was the power to determine, by law, the just share. The Constitution did n

178
Congress to determine the just share and the base amount other than national taxes.

The respondents' construction of Section 6, Article X of the Constitution can lead to empowering Congress to chan
amount despite the Constitution having already pegged it to national taxes. We should remember that between
interpretations one of which will be free from constitutional infirmity and the other tainted by such grave defect, the
be preferred. A construction that will save rather than one that will affix the seal of doom certainly commends itself.3
is a rule in statutory construction that every part of the law must be interpreted with reference to the context, i.e.,
the law must be considered together with the other parts, and kept subservient to the general intent of the whole ena
law must not be read in truncated parts; its provisions must be read in relation to its entirety. The particular words,
phrases should not be studied as detached and isolated expressions, but the whole and every part of the stat
considered in fixing the meaning of any of its parts and in order to produce a harmonious whole.4 Accordingly,
Court's construction that is consistent with the constitutional policy on local autonomy and decentralization, on one h
OSG's construction that seemingly rejects the constitutional policy, the former is to be desired.

Conformably with the foregoing, the Court sees no reason to exclude the national taxes mentioned in the July 3, 20
Indeed, Section 6, Article X of the Constitution expressly states that national taxes shall constitute the base amount
the just share shall be computed. Without the Constitution itself excluding such national taxes from the computation
amount, the rule will be that such national taxes are to be included. This has been made clear in the decision, whe
explains -

Garcia submits that even assuming that the present version of Section 284 of the LGC is constitutionally valid, the imp
thereof has been erroneous because Section 284 does not authorize any exclusion or deduction from the collections
for purposes of the computation of the allocations to the LGUs. He further submits that the exclusion of certain NIRT
the fiscal autonomy granted to the LGUs. He claims that the following NIRTs have been illegally excluded from
determining the fair share of the LGUs in the IRA, to wit:

(1) NIRTs collected by the cities and provinces and divided exclusively among the LGUs of the Autonomous Region
Mindanao (ARMM), the regional government and the central government, pursuant to Section 15 in relation to Section
of R.A. No. 9054 (An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, a
the purpose Republic Act No. 6734, entitled An Act providing for an Organic Act for the Autonomous Region in Muslim

(2) The shares in the excise taxes on mineral products of the different LGUs, as provided in Section 287 of the NIRC i
Section 290 of the LGC;

(3) The shares of the relevant LGUs in the franchise taxes paid by Manila Jockey Club, Inc. and Philippine Racing Club, In

(4) The shares of various municipalities in VAT collections under R.A. No. 7643 (An Act to Empower the Commissione
Revenue to Require the Payment of the Value Added Tax Every Month and to Allow Local Government Units to S
Revenue, Amending for this Purpose Certain Sections of the National Internal Revenue Code) as embodied in Sectio
NIRC;

(5) The shares of relevant LGUs in the proceeds of the sale and conversion of former military bases in accordance w
7227 (Bases Conversion and Development Act of 1992);

(6) The shares of different LGUs in the excise taxes imposed on locally manufactured Virginia tobacco products as
Section 3 of R.A. No. 7171 (An Act to Promote the Development of the Farmers in the Virginia Tobacco Producing Pro
as now provided in Section 289 of the NIRC;

(7) The shares of different LGUs in the incremental revenues from Burley and native tobacco products under Section
8240 (An Act Amending Sections 138, 140 and 142 of the National Internal Revenue Code as Amended and for Other P
as now provided in Section 288 of the NIRC; and

(8) The share of the Commission on Audit (COA) in the NIRTs as provided in Section 24(3) of P.D. No. 1445 (Governm
Code of the Philippines) in relation to Section 284 of the NIRC.

Garcia insists that the foregoing taxes and revenues should have been included by Congress and, by extension, the BI
for computing the IRA on the strength of the cited provisions; that the LGC did not authorize such exclusion; a

179
continued exclusion has undermined the fiscal autonomy guaranteed by the 1987 Constitution.

The insistence of Garcia is valid to an extent.

An examination of the above-enumerated laws confirms that the following have been excluded from the base for r
just share of the LGUs as required by Section 6, Article X of the 1987 Constitution, namely:

(a) The share of the affected LGUs in the proceeds of the sale and conversion of former military bases in accordance w
7227;

(b) The share of the different LGUs in the excise taxes imposed on locally manufactured Virginia tobacco products as
in Section 3, R.A. No. 7171, and as now provided in Section 289 of the NIRC;

(c) The share of the different LGUs in incremental revenues from Burley and native tobacco products under Section
8240, and as now provided for in Section 288 of the NIRC;

(d) The share of the COA in the NIRTs as provided in Section 24(3) of P.D. No. 1445 in relation to Section 284 of the NIR

(e) The shares of the different LGUs in the excise taxes on mineral products, as provided in Section 287 of the NIRC i
Section 290 of the LGC;

(f) The NIRTs collected by the cities and provinces and divided exclusively among the LGUs of the ARMM, the regional
and the central government, pursuant to Section 15 in relation to Section 9, Article IX of R.A. No. 9054; and

(g) The shares of the relevant LGUs in the franchise taxes paid by Manila Jockey Club, Inc., and the Philippine Racing Clu

Anent the share of the affected LGUs in the proceeds of the sale and conversion of the former military bases pursuan
7227, the exclusion is warranted for the reason that such proceeds do not come from a tax, fee or exaction imposed
and conversion.

As to the share of the affected LGUs in the excise taxes imposed on locally manufactured Virginia tobacco products un
7171 (now Section 289 of the NIRC); the share of the affected LGUs in incremental revenues from Burley and na
products under Section 8, R.A. No. 8240 (now Section 288 of the NIRC); the share of the COA in the NIRTs pursuant to S
of P.D. No. 1445 in relation to Section 284 of the NIRC; and the share of the host LGUs in the franchise taxes paid b
Jockey Club, Inc., and Philippine Racing Club, Inc., under Section 6 of R.A. No. 6631 and Section 8 of R.A. No. 6632, resp
exclusion is also justified. Although such shares involved national taxes as defined under the NIRC, Congress had the
exclude them by virtue of their being taxes imposed for special purposes. A reading of Section 288 and Section 289 of t
Section 24 (3) of P.D. No. 1445 in relation to Section 284 of the NIRC reveals that all such taxes are levied and collected
purpose. The same is true for the franchise taxes paid under Section 6 of R.A. No. 6631 and Section 8 of R.A. No. 6632,
certain percentages of the franchise taxes go to different beneficiaries. The exclusion conforms to Section 29 (3), Art
1987 Constitution, which states:

Section 29. x x x

xxxx

(3) All money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for such p
If the purpose for which a special fund was created has been fulfilled or abandoned, the balance, if any, shall be trans
general funds of the Government. [Bold emphasis supplied]

The exclusion of the share of the different LGUs in the excise taxes imposed on mineral products pursuant to Sectio
NIRC in relation to Section 290 of the LGC is premised on a different constitutional provision. Section 7, Article X
Constitution allows affected LGUs to have an equitable share in the proceeds of the utilization of the nation's nat
"within their respective areas," to wit:

Section 7. Local governments shall be entitled to an equitable share in the proceeds of the utilization and develop
national wealth within their respective areas, in the manner provided by law, including sharing the same with the in

180
way of direct benefits.

This constitutional provision is implemented by Section 287 of the NIRC and Section 290 of the LGC thusly:

SEC. 287. Shares of Local Government Units in the Proceeds from the Development and Utilization of the National We
Government units shall have an equitable share in the proceeds derived from the utilization and development of
wealth, within their respective areas, including sharing the same with the inhabitants by way of direct benefits.

(A) Amount of Share a Local Government Units. — Local government units shall, in addition to the internal revenue allo
a share of forty percent (40%) of the gross collection derived by the national government from the preceding fiscal yea
taxes on mineral products, royalties, and such other taxes, fees or charges, including related surcharges, interests
from its share in any co-production, joint venture or production sharing agreement in the utilization and develop
national wealth within their territorial jurisdiction.

(B) Share of the Local Governments from Any Government Agency or Government-owned or -Controlled Corporat
Government Units shall have a share, based on the preceding fiscal year, from the proceeds derived by any governme
government-owned or controlled corporation engaged in the utilization and development of the national wealth b
following formula, whichever will produce a higher share for the local government unit:

(1) One percent (1%) of the gross sales or receipts of the preceding calendar year, or

(2) Forty percent (40%) of the excise taxes on mineral products, royalties, and such other taxes, fees or charges, inclu
surcharges, interests or fines the government agency or government-owned or -controlled, corporations would have p
not otherwise exempt. [Bold emphasis supplied]

SEC. 290. Amount of Share of Local Government Units. — Local government units shall, in addition to the inter
allotment, have a share of forty percent (40%) of the gross collection derived by the national government from the pre
year from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees, or charges, including related
interests, or fines, and from its share in any co-production, joint venture or production sharing agreement in the ut
development of the national wealth within their territorial jurisdiction. [Bold emphasis supplied]

Lastly, the NIRTs collected by the provinces and cities within the ARMM whose portions are distributed to the ARMM
city and regional governments are also properly excluded for such taxes are intended to truly enable a sustainable
autonomous region as guaranteed by the 1987 Constitution. The mandate under Section 15 to Section 21, Article X
Constitution is to allow the separate development of peoples with distinctive cultures and traditions in the autonomou
grant of autonomy to the autonomous regions includes the right of self-determination — which in turn ensures the
peoples residing therein to the necessary level of autonomy that will guarantee the support of their own cultural id
establishment of priorities by their respective communities' internal decision-making processes and the management
matters by themselves. As such, the NIRTs collected by the provinces and cities within the ARMM will ensure local au
their very existence with a continuous supply of funding sourced from their very own areas. The ARMM will becom
and dynamic consistent with the dictates of the 1987 Constitution.

The shares of the municipalities in the VATs collected pursuant to R.A. No. 7643 should be included in determining
computing the just share because such VATs are national taxes, and nothing can validly justify their exclusion.

In recapitulation, the national taxes to be included in the base for computing the just share the LGUs shall henceforth
not be limited to, the following:

1. The NIRTs enumerated in Section 21 of the NIRC, as amended, to be inclusive of the VATs, excise taxes, and DSTs col
BIR and the BOC, and their deputized agents;

2. Tariff and customs duties collected by the BOC;

3. 50% of the VATs collected in the ARMM, and 30% of all other national taxes collected in the ARMM; the remainin
VATs and 70% of the collections of the other national taxes in the ARMM shall be the exclusive share of the ARMM
Section 9 and Section 15 of R.A. No. 9054;

4. 60% of the national taxes collected from the exploitation and development of the national wealth; the remain

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exclusively accrue to the host LGUs pursuant to Section 290 of the LGC;

5. 85% of the excise taxes collected from locally manufactured Virginia and other tobacco products; the remaining 15%
to the special purpose funds pursuant created in R.A. No. 7171 and R.A. No. 7227;

6. The entire 50% of the national taxes collected under Section 106, Section 108 and Section 116 of the NIRC in e
increase in collections for the immediately preceding year; and

7. 5% of the franchise taxes in favor of the national government paid by franchise holders in accordance with Section
6631 and Section 8 of R.A. No. 6632.

While the Court understands the financial implications that may result from the July 3, 2018 decision, it is not within t
the Court to adjust the purportedly exorbitant rate of the fair share of the LGUs. In striking down the affected prov
LGC, the Court is only exercising and discharging its constitutional duty of judicial review. The duty does not allow
mark time and await the rectification to be made by Congress of the unconstitutional situation, as the OSG seem
considering that the Court has to intervene and act once its power of judicial review has been properly and duly invoke

Lastly, petitioner Garcia argues that because portions of Section 284 of the LGC are found and declared to be unconst
LGUs are entitled to recover the arrears in their just share. In contrast, the OSG wants the ruling to have a prospective

Both positions have been fully considered and settled by the decision of July 3, 2018, as borne out by the following ex
relevant portions of the decision, viz.:

The petitioners' prayer for the payment of the arrears of the LGUs' just share on the theory that the

computation of the base amount had been unconstitutional all along cannot be granted.

It is true that with our declaration today that the IRA is not in accordance with the constitutional determination of the
the LGUs in the national taxes, logic demands that the LGUs should receive the difference between the just share they
received had the LGC properly reckoned such just share from all national taxes, on the one hand, and the share — rep
the IRA — the LGUs have actually received since the effectivity of the IRA under the LGC, on the other. This puts
Government in arrears as to the just share of the LGUs. A legislative or executive act declared void for being unc
cannot give rise to any right or obligation.

Yet, the Court has conceded in Araullo v. Aquino III that:

x x x the generality of the rule makes us ponder whether rigidly applying the rule may at times be impracticable
Should we not recognize the need to except from the rigid application of the rule the instances in which the void law
act produced an almost irreversible result?

The need is answered by the doctrine of operative fact. The doctrine, definitely not a novel one, has been exhaustive
in De Agbayani v. Philippine National Bank:

The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter an executiv
municipal ordinance likewise suffering from that infirmity, cannot be the source of any legal rights or duties. Nor can
official act taken under it. Its repugnancy to the fundamental law once judicially declared results in its being to all
purposes a mere scrap of paper. As the new Civil Code puts it: 'When the courts declare a law to be inconsiste
Constitution, the former shall be void and the latter shall govern.' Administrative or executive acts, orders and regulat
valid only when they are not contrary to the laws of the Constitution. It is understandable why it should be so, the
being supreme and paramount. Any legislative or executive act contrary to its terms cannot survive.

Such a view has support in logic and possesses the merit of simplicity. It may not however be sufficiently realistic. It do
of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force a
complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to ob
respect. Parties may have acted under it and may have changed their positions. What could be more fitting th
subsequent litigation regard be had to what has been done while such legislative or executive act was in operation an
to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must
with. This is merely to reflect awareness that precisely because the judiciary is the governmental organ which has the

182
whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise t
judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and ju
there be no recognition of what had transpired prior to such adjudication.

In the language of an American Supreme Court decision: 'The actual existence of a statute, prior to such a deter
unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cann
erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considere
aspects, with respect to particular relations, individual and corporate, and particular conduct, private and official.'

The doctrine of operative fact recognizes the existence of the law or executive act prior to the determin
unconstitutionality as an operative fact that produced consequences that cannot always be erased, ignored or dis
short, it nullifies the void law or executive act but sustains its effects. It provides an exception to the general rule th
unconstitutional law produces no effect. But its use must be subjected to great scrutiny and circumspection, and
invoked to validate an unconstitutional law or executive act, but is resorted to only as a matter of equity and fair pl
only to cases where extraordinary circumstances exist, and only when the extraordinary circumstances have met t
conditions that will permit its application.

Conformably with the foregoing pronouncements in Araullo v. Aquino III, the effect of our declaration through this de
unconstitutionality of Section 284 of the LGC and its related laws as far as they limited the source of the just share of
the NIRTs is prospective. It cannot be otherwise. (Bold underscoring is part of the original)

As the foregoing excerpts indicate, the Court has expressly mandated the prospective application of its ruling.

It becomes unavoidable to ask when the adjusted amounts will be granted in favor of LGUs. The OSG suggests that
amounts be given to the LGUs starting with the 2022 budget cycle.

The suggestion of the OSG is well taken.

The adjusted amounts can be deemed effective only after this ruling has lapsed into finality, which is procedurally to
only from the denial of the OSG's motion for reconsideration through this resolution. From then onwards, and as r
the just share should be based on all national taxes collected on "the third fiscal year preceding." In the abs
amendment by Congress, the rates fixed in Section 284 of the LGC, as herein modified, shall control.

WHEREFORE, the Court DENIES the motion for reconsideration of the respondents, and the motion for partial recon
the petitioner in G.R. No. 208488.

SO ORDERED.

Carpio, Peralta, Gesmundo, J. Reyes, Jr., Hernando, Carandang, and Lazaro-Javier ,

Leonen, J., dissent. See separate
Caguioa, J., maintain his
A. Reyes, Jr., J., join the dissent of J.
Del Castillo, J., on official
Jardeleza, J., on official leave and took no
Perlas-Bernabe, J., on leave.

EN BANC

April 2, 2019

G.R. No. 210500

KILUSANG MAYO UNO, represented by its Secretary General ROGELIO SOLUTA; REP. FERNANDO
HICAP for himself and as representative of the ANAKPAWIS PARTY-LIST; CENTER FOR TRADE UNION
AND HUMAN RIGHTS, represented by its Executive Director DAISY ARAGO; JOSELITO USTAREZ and
SALVADOR CARRANZA, for themselves and in representation of the NATIONAL FEDERATION OF
LABOR UNIONS-KMU; NENITA GONZAGA, PRESCILA A. MANI QUIZ, RED EN ALCANTARA,, Petitioners
vs.

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Hon. BENIGNO SIMEON C. AQUINO III, Hon. PAQUITO N. OCHOA, JR., SOCIAL SECURITY COMMISSION,
SOCIAL SECURITY SYSTEM, AND EMILIO S. DE QUIROS, JR., Respondents

DECISION

LEONEN, J.:

This Court is called to determine the validity of the Social Security System premium hike, which took
effect in January 2014. The case also involves the application of doctrines on judicial review, valid
delegation of powers, and the exercise of police power.

This resolves a Petition for Certiorari and Prohibition,1 praying that a temporary restraining order and/or
writ of preliminary injunction be issued to annul the Social Security System premium hike embodied in
the following issuances: (1) Resolution No. 262-s. 2013 dated April 19, 2013;2 (2) Resolution No. 711-s.
2013 dated September 20, 2013;3 and (3) Circular No. 2013-0104 dated October 2, 2013 (collectively, the
assailed issuances). Kilusang Mayo Uno, together with representatives from recognized labor centers,
labor federations, party-list groups, and Social Security System members (collectively, Kilusang Mayo
Uno, et al.), filed the case against government officials and agencies involved in issuing the assailed
issuances.

On April 19, 2013, the Social Security Commission issued Resolution No. 262-s. 2013,5 which provided an
increase in: (1) the Social Security System members' contribution rate from 10.4% to 11%; and (2) the
maximum monthly salary credit from ₱15,000.00 to ₱16,000.00. The increase was made subject to the
approval of the President of the Philippines.6

In a September 6, 2013 Memorandum, the President approved the increase.7

On September 20, 2013, the Social Security Commission issued Resolution No. 711-s. 2013,8 which
approved, among others, the increase in contribution rate and maximum monthly salary credit.

On October 2, 2013, the Social Security System, through President and Chief Executive Officer Emilio S.
De Quiros, Jr., issued Circular No. 2013-010,9 which provided the revised schedule of contributions that
would be in effect in January 2014. Per the circular, the employer and the employee
shall equally shoulder the 0.6% increase in contributions. Thus, the employer would pay a contribution
rate of 7.37% (from 7.07%); the employee, 3.63% (from 3.33%).

On January 10, 2014, Kilusang Mayo Uno, et al. filed this Petition for Certiorari and
Prohibition,10 questioning the validity of the assailed issuances.

Maintaining that a majority of them are Social Security System members directly affected by the
premium hike, petitioners assert having the requisite locus standi to file the Petition.11 Citing David v.
Macapagal-Arroyo,12 they further argue that the other petitioners' legal personality arises from the
transcendental importance of the Petition's issues.13

Petitioners claim that the assailed issuances were issued per an unlawful delegation of power to
respondent Social Security Commission based on Republic Act No. 8282, or the Social Security Act. In
particular, Section 1814 allegedly offers vague and unclear standards, and are incomplete in its terms and
conditions. This provision, they claim, has allowed respondent Social Security Commission to fix
contribution rates from time to time, subject to the President's approval. Petitioners claim that the
delegation of the power had no adequate legal guidelines to map out the boundaries of the delegate's
authority.15

In addition, petitioners claim that the increase in contribution rate violates Section 4(b)(2) of the Social
Security Act,16 which states that the "increases in benefits shall not require any increase in the rate of
contribution[.]" They argue that this proviso prohibits the increase in contributions if there was no
corresponding increase in benefits.17

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Petitioners then argue that the increase in contributions is an invalid exercise of police power for not
being reasonably necessary for the attainment of the purpose sought, as well as for being unduly
oppressive on the labor sector.18 According to them, the Social Security System can extend actuarial life
and decrease its unfunded liability without increasing the premiums they pay.19

Petitioners further insist that the revised ratio of contributions between employers and employees, per
the assailed issuances, is grossly unjust to the working class and is beyond respondents' powers. They
claim that for the purposes of justice and consistency, respondents should have maintained the 70%-
30% ratio in the premium increase. Changing it, they add, is grossly unfair and detrimental to
employees.20

Petitioners further emphasize that the State is required to protect the rights of workers and promote
their welfare under the Constitution.21

Lastly, petitioners pray that a temporary restraining order and/or writ of preliminary injunction be
issued to stop the implementation of the increase in contributions. They aver that stopping it is
necessary to protect their substantive rights and interests. They point out that their earnings for food
and other basic needs would be reduced and allocated instead to defraying the amount needed for
contributions.22

The issues for this Court's resolution are:

First, whether or not this Court can exercise its power of judicial review;

Second, whether or not there is an actual case or controversy;

Third, whether or not the doctrine of exhaustion of administrative remedies applies;

Fourth, whether or not petitioners have legal standing to file the Petition; and

Finally, whether or not the assailed issuances were issued in violation of laws and with grave abuse of
discretion.

In connection with the fifth issue, this Court further resolves:

First, whether or not the assailed issuances are void for having been issued under vague and unclear
standards contained in the Social Security Act;

Second, whether or not the increase in Social Security System contributions is reasonably necessary for
the attainment of the purpose sought and is unduly oppressive upon the labor sector; and

Finally, whether or not the revised ratio of contributions between employers and employees is grossly
unjust to the working class and beyond respondent Social Security Commission's power to enact.

This Court denies the Petition for lack of merit.

Procedural infirmities attend the filing of this Petition. To begin with, former President Benigno Simeon
C. Aquino III, as President of the Philippines, is improperly impleaded here.

The president is the head of the executive branch,23 a co-equal of the judiciary under the Constitution.
His or her prerogative is entitled to respect from other branches of government.24 Inter-branch
courtesy25 is but a consequence of the doctrine of separation of powers.26

As such, the president cannot be charged with any suit, civil or criminal in nature, during his or her
incumbency in office. This is in line with the doctrine of the president's immunity from suit.27

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In David,28 this Court explained why it is improper to implead the incumbent President of the Philippines.
The doctrine has both policy and practical considerations:

Settled is the doctrine that the President, during his tenure of office or actual incumbency, may not be
sued in any civil or criminal case, and there is no need to provide for it in the Constitution or law. It will
degrade the dignity of the high office of the President, the Head of State, if he can be dragged into court
litigations while serving as such. Furthermore, it is important that he be freed from any form of
harassment, hindrance or distraction to enable him to fully attend to the performance of his official
duties and functions. Unlike the legislative and judicial branch, only one constitutes the executive
branch and anything which impairs his usefulness in the discharge of the many great and important
duties imposed upon him by the Constitution necessarily impairs the operation of the Government.
However, this does not mean that the President is not accountable to anyone. Like any other official, he
remains accountable to the people but he may be removed from office only in the mode provided by
law and that is by impeachment.29 (Emphasis in the original, citations omitted)

As to the propriety of seeking redress from this Court, it is best to be guided by the power of judicial
review as provided in Article VIII, Section 1 of the 1987 Constitution:

ARTICLE VIII

Judicial Department

SECTION 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and 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. (Emphasis supplied)

This Court has discussed in several cases how the 1987 Constitution has expanded the scope of judicial
power from its traditional understanding. As such, courts are not only expected to "settle actual
controversies involving rights which are legally demandable and enforceable[,]"30 but are also
empowered to determine if any government branch or instrumentality has acted beyond the scope of
its powers, such that there is grave abuse of discretion.31

This development of the courts' judicial power arose from the use and abuse of the political question
doctrine during the martial law era under former President Ferdinand Marcos. In Association of Medical
Clinics for Overseas Workers, Inc. v. GCC Approved Medical Centers Association, Inc.,32 this Court held:

In Francisco v. The House of Representatives, we recognized that this expanded jurisdiction was meant
"to ensure the potency of the power of judicial review to curb grave abuse of discretion by 'any branch
or instrumentalities of government.'" Thus, the second paragraph of Article VIII, Section 1 engraves, for
the first time in its history, into black letter law the "expanded certiorari jurisdiction" of this Court,
whose nature and purpose had been provided in the sponsorship speech of its proponent, former Chief
Justice Constitutional Commissioner Roberto Concepcion[:]

....

The first section starts with a sentence copied from former Constitutions. It says:

The judicial power shall be vested in one Supreme Court and in such lower courts as may be established
by law.

I suppose nobody can question it.

The next provision is new in our constitutional law. I will read it first and explain.

186
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and 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.

Fellow Members of this Commission, this is actually a product of our experience during martial law. As a
matter of fact, it has some antecedents in the past, but the role of the judiciary during the deposed
regime was marred considerably by the circumstance that in a number of cases against the government,
which then had no legal defense at all, the solicitor general set up the defense of political question and
got away with it. As a consequence, certain principles concerning particularly the writ of habeas corpus,
that is, the authority of courts to order the release of political detainees, and other matters related to
the operation and effect of martial law failed because the government set up the defense of political
question. And the Supreme Court

said: "Well, since it is political, we have no authority to pass upon it." The Committee on the Judiciary
feels that this was not a proper solution of the questions involved. It did not merely request an
encroachment upon the rights of the people, but it, in effect, encouraged further violations thereof
during the martial law regime.

....

Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on the
question whether or not a branch of government or any of its officials has acted without jurisdiction or
in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to excess of
jurisdiction or lack of jurisdiction. This is not only a judicial power but a duty to pass judgment on
matters of this nature.

This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter evade
the duty to settle matters of this nature, by claiming that such matters constitute a political
question.33 (Emphasis in the original, citations omitted)

Rule 65, Sections 1 and 2 of the Rules of Court provides remedies to address grave abuse of discretion
by any government branch or instrumentality, particularly through petitions for certiorari and
prohibition:

SECTION 1. Petition for Certiorari. — When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition
in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject
thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification
of non-forum shopping as provided in the paragraph of Section 3, Rule 46.

SECTION 2. Petition for Prohibition. — When the proceedings of any tribunal, corporation, board, officer
or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of
its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and
there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty
and praying that judgment be rendered commanding the respondent to desist from further proceedings
in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice
may require.

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The petition shall likewise be accompanied by a certified true copy of the judgment, order or resolution
subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn
certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46.

While these provisions pertain to a tribunal's, board's, or an officer's exercise of discretion in judicial,
quasi-judicial, or ministerial functions, Rule 65 still applies to invoke the expanded scope of judicial
power. In Araullo v. Aquino III,34 this Court differentiated certiorari from prohibition, and clarified that
Rule 65 is the remedy to "set right, undo[,] and restrain any act of grave abuse of discretion amounting
to lack or excess of jurisdiction by any branch or instrumentality of the Government, even if the latter
does not exercise judicial, quasi-judicial[J or ministerial functions."35

This Court further explained:

The present Rules of Court uses two special civil actions for determining and correcting grave abuse of
discretion amounting to lack or excess of jurisdiction. These are the special civil actions for certiorari and
prohibition, and both are governed by Rule 65. . . .

The ordinary nature and function of the writ of certiorari in our present system are aptly explained
in Delos Santos v. Metropolitan Bank and Trust Company:

....

The sole office of the writ of certiorari is the correction of errors of jurisdiction, which includes the
commission of grave abuse of discretion amounting to lack of jurisdiction. In this regard, mere abuse of
discretion is not enough to warrant the issuance of the writ. The abuse of discretion must be grave,
which means either that the judicial or quasi-judicial power was exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, or that the respondent judge, tribunal or board
evaded a positive duty, or virtually refused to perform the duty enjoined or to act in contemplation of
law, such as when such judge, tribunal or board exercising judicial or quasi-judicial powers acted in a
capricious or whimsical manner as to be equivalent to lack of jurisdiction.

Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is to be
distinguished from prohibition by the fact that it is a corrective remedy used for the re-examination of
some action of an inferior tribunal, and is directed to the cause or proceeding in the lower court and not
to the court itself, while prohibition is a preventative remedy issuing to restrain future action, and is
directed to the court itself. The Court expounded on the nature and function of the writ of prohibition
in Holy Spirit Homeowners Association, Inc. v. Defensor:

A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a quasi-
legislative function. Prohibition is an extraordinary writ directed against any tribunal, corporation, board,
officer or person, whether exercising judicial, quasi-judicial or ministerial functions, ordering said entity
or person to desist from further proceedings when said proceedings are without or in excess of said
entity's or person's jurisdiction, or are accompanied with grave abuse of discretion, and there is no
appeal or any other plain, speedy and adequate remedy in the ordinary course of law. Prohibition lies
against judicial or ministerial functions, but not against legislative or quasi-legislative functions.
Generally, the purpose of a writ of prohibition is to keep a lower court within the limits of its jurisdiction
in order to maintain the administration of justice in orderly channels. Prohibition is the proper remedy
to afford relief against usurpation of jurisdiction or power by an inferior court, or when, in the exercise
of jurisdiction in handling matters clearly within its cognizance the inferior court transgresses the
bounds prescribed to it by the law, or where there is no adequate remedy available in the ordinary
course of law by which such relief can be obtained. Where the principal relief sought is to invalidate an
IRR, petitioners' remedy is an ordinary action for its nullification, an action which properly falls under
the jurisdiction of the Regional Trial Court. In any case, petitioners' allegation that "respondents are
performing or threatening to perform functions without or in excess of their jurisdiction" may
appropriately be enjoined by the trial court through a writ of injunction or a temporary restraining order.

With respect to the Court, however, the remedies of certiorari and prohibition are necessarily broader in
scope and reach, and the writ of certiorari or prohibition may be issued to correct errors of jurisdiction

188
committed not only by a tribunal, corporation, board or officer exercising judicial, quasi-judicial or
ministerial functions but also to set right, undo and restrain any act of grave abuse of discretion
amounting to lack or excess of jurisdiction by any branch or instrumentality of the Government, even if
the latter does not exercise judicial, quasi-judicial or ministerial functions. This application is expressly
authorized by the text of the second paragraph of Section 1, . . . .

Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues and
to review and/or prohibit or nullify the acts of legislative and executive officials.36 (Emphasis in the
original, citations omitted)

Here, petitioners filed a Petition for both certiorari and prohibition to determine whether respondents
Social Security System and Social Security Commission committed grave abuse of discretion in releasing
the assailed issuances. According to them, these issuances violated the provisions of the Constitution on
the protection of workers, promotion of social justice, and respect for human rights.37 They further claim
that the assailed issuances are void for having been issued based on vague and unclear standards. They
also argue that the increase in contributions is an invalid exercise of police power as it is not reasonably
necessary and, thus, unduly oppressive to the labor sector. Lastly, they insist that the revised ratio in
contributions is grossly unjust to the working class.38

Petitioners must, thus, comply with the requisites for the exercise of the power of judicial review: (1)
there must be an actual case or justiciable controversy before this Court; (2) the question before this
Court must be ripe for adjudication; (3) the person challenging the act must be a proper party; and (4)
the issue of constitutionality must be raised at the earliest opportunity and must be the very litis
mota of the case.39

I (A)

Most important in this list of requisites is the existence of an actual case or controversy. 40 In every
exercise of judicial power, whether in the traditional or expanded sense, this is an absolute necessity.

There is an actual case or controversy if there is a "conflict of legal right, an opposite legal claims
susceptible of judicial resolution."41 A petitioner bringing a case before this Court must establish that
there is a legally demandable and enforceable right under the Constitution. There must be a real and
substantial controversy, with definite and concrete issues involving the legal relations of the parties, and
admitting of specific relief that courts can grant.42

This requirement goes into the nature of the judiciary as a co-equal branch of government. It is bound
by the doctrine of separation of powers, and will not rule on any matter or cause the invalidation of any
act, law, or regulation, if there is no actual or sufficiently imminent breach of or injury to a right. The
courts interpret laws, but the ambiguities may only be clarified in the existence of an actual situation.

In Lozano v. Nograles,43 the petitions assailing House Resolution No. 1109 were dismissed due to the
absence of an actual case or controversy. This Court held that the "determination of the nature, scope[,]
and extent of the powers of government is the exclusive province of the judiciary, such that any
mediation on the part of the latter for the allocation of constitutional boundaries would amount, not to
its supremacy, but to its mere fulfillment of its 'solemn and sacred obligation' under the
Constitution."44The judiciary's awesome power of review is limited in application.45

Jurisprudence lays down guidelines in determining an actual case or controversy. In Information

Technology Foundation of the Philippines v. Commission on Elections,46 this Court required that "the
pleadings must show an active antagonistic assertion of a legal right, on the one hand, and a denial
thereof on the other; that is, it must concern a real and not a merely theoretical question or
issue."47 Further, there must be "an actual and substantial controversy admitting of specific relief
through a decree conclusive in nature, as distinguished from an opinion advising what the law would be
upon a hypothetical state of facts."48

Courts, thus, cannot decide on theoretical circumstances. They are neither advisory bodies, nor are they
tasked with taking measures to prevent imagined possibilities of abuse.

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Hence, in Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism Council,49 this Court ruled:

Without any justiciable controversy, the petitions have become pleas for declaratory relief, over which
the Court has no original jurisdiction. Then again, declaratory actions characterized by "double
contingency," where both the activity the petitioners intend to undertake and the anticipated reaction
to it of a public official are merely theorized, lie beyond judicial review for lack of ripeness.

The possibility of abuse in the implementation of RA 9372 does not avail to take the present petitions out
of the realm of the surreal and merely imagined, . . . Allegations of abuse must be anchored on real
events before courts may step in to settle actual controversies involving rights which are legally
demandable and enforceable.50 (Emphasis supplied, citations omitted)

In Republic v. Roque,51 this Court further qualified the meaning of a justiciable controversy. In dismissing
the Petition for declaratory relief before the Regional Trial Court, which assailed several provisions of
the Human Security Act, we explained that justiciable controversy or ripening seeds refer to:

. . . an existing case or controversy that is appropriate or ripe for judicial determination, not one that is
conjectural or merely anticipatory. Corollary thereto, by "ripening seeds" it is meant, not that sufficient
accrued facts may be dispensed with, but that a dispute may be tried at its inception before it has
accumulated the asperity, distemper, animosity, passion, and violence of a full blown battle that looms
ahead. The concept describes a state of facts indicating imminent and inevitable litigation provided that
the issue is not settled and stabilized by tranquilizing declaration.52 (Emphasis supplied, citations
omitted)

The existence of an actual case or controversy depends on the allegations pleaded.53

Here, petitioners allege that the premium hike, through the assailed issuances, violates their rights as
workers whose welfare is mandated to be protected under the Constitution.54 They further allege that
the issuances are grossly unjust to the working class and were issued beyond the scope of constitutional
powers.55

Thus, petitioners' allegations present violations of rights provided for under the Constitution on the
protection of workers, and promotion of social justice.56 They likewise assert that respondents Social
Security Commission and Social Security System acted beyond the scope of their powers.

This Court, however, notes that petitioners failed to prove how the assailed issuances violated workers'
constitutional rights such that it would warrant a judicial review. Petitioners cannot merely cite and rely
on the Constitution without specifying how these rights translate to being legally entitled to a fixed
amount and proportion of Social Security System contributions.

Moreover, an actual case or controversy requires that the right must be enforceable and legally
demandable. A complaining party's right is, thus, affected by the rest of the requirements for the
exercise of judicial power: (1) the issue's ripeness and prematurity; (2) the moot and academic principle;
and (3) the party's standing.57

I (B)

A case is ripe for adjudication when the challenged governmental act is a completed action such that
there is a direct, concrete, and adverse effect on the petitioner.58 It is, thus, required that something had
been performed by the government branch or instrumentality before the court may step in, and the
petitioner must allege the existence of an immediate or threatened injury to itself as a result of the
challenged action.59

In connection with acts of administrative agencies, ripeness is ensured under the doctrine of exhaustion
of administrative remedies. Courts may only take cognizance of a case or controversy if the petitioner
has exhausted all remedies available to it under the law. The doctrine ensures that the administrative
agency exercised its power to its full extent, including its authority to correct or reconsider its actions. It
would, thus, be premature for courts to take cognizance of the case prior to the exhaustion of remedies,

190
not to mention it would violate the principle of separation of powers. Thus, in Rule 65 petitions, it is
required that no other plain, speedy, or adequate remedy is available to the party. In Association of
Medical Clinics for Overseas Workers, Inc.:

The doctrine of exhaustion of administrative remedies applies to a petition for certiorari, regardless of
the act of the administrative agency concerned, i.e., whether the act concerns a quasi-judicial, or quasi-
legislative function, or is purely regulatory.

Consider in this regard that once an administrative agency has been empowered by Congress to
undertake a sovereign function, the agency should be allowed to perform its function to the full extent
that the law grants. This full extent covers the authority of superior officers in the administrative
agencies to correct the actions of subordinates, or for collegial bodies to reconsider their own decisions
on a motion for reconsideration. Premature judicial intervention would interfere with this administrative
mandate, leaving administrative action incomplete; if allowed, such premature judicial action through a
writ of certiorari, would be a usurpation that violates the separation of powers principle that underlies
our Constitution.

In every case, remedies within the agency's administrative process must be exhausted before external
remedies can be applied. Thus, even if a governmental entity may have committed a grave abuse of
discretion, litigants should, as a rule, first ask reconsideration from the body itself, or a review thereof
before the agency concerned. This step ensures that by the time the grave abuse of discretion issue
reaches the court, the administrative agency concerned would have fully exercised its jurisdiction and
the court can focus its attention on the questions of law presented before it.

Additionally, the failure to exhaust administrative remedies affects the ripeness to adjudicate the
constitutionality of a governmental act, which in turn affects the existence of the need for an actual
case or controversy for the courts to exercise their power of judicial review. The need for ripeness —
an aspect of the timing of a case or controversy — does not change regardless of whether the issue of
constitutionality reaches the Court through the traditional means, or through the Court's expanded
jurisdiction. In fact, separately from ripeness, one other concept pertaining to judicial review is
intrinsically connected to it: the concept of a case being moot and academic.

Both these concepts relate to the timing of the presentation of a controversy before the Court —
ripeness relates to its prematurity, while mootness relates to a belated or unnecessary judgment on the
issues. The Court cannot preempt the actions of the parties, and neither should it (as a rule) render
judgment after the issue has already been resolved by or through external developments.

The importance of timing in the exercise of judicial review highlights and reinforces the need for an
actual case or controversy — an act that may violate a party's right. Without any completed action or a
concrete threat of injury to the petitioning party, the act is not yet ripe for adjudication. It is merely a
hypothetical problem. The challenged act must have been accomplished or performed by either branch
or instrumentality of government before a court may come into the picture, and the petitioner must
allege the existence of an immediate or threatened injury to itself as a result of the challenged action.

In these lights, a constitutional challenge, whether presented through the traditional route or through
the Court's expanded jurisdiction, requires compliance with the ripeness requirement. In the case of
administrative acts, ripeness manifests itself through compliance with the doctrine of exhaustion of
administrative remedies.60 (Emphasis in the original, citations omitted)

Here, it is clear that petitioners failed to exhaust their administrative remedies.

Petitioners allege that they "have no appeal nor any plain, speedy[,] and adequate remedy under the
ordinary course of law except through the instant Petition."61

However, Sections 4 and 5 of the Social Security Act are clear that the Social Security Commission has
jurisdiction over any dispute arising from the law regarding coverage, benefits, contributions, and
penalties. The law further provides that the aggrieved party must first exhaust all administrative
remedies available before seeking review from the courts:

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SECTION 4. Powers and Duties of the Commission and SSS. — (a) The Commission. — For the attainment
of its main objectives as set forth in Section 2 hereof, the Commission shall have the following powers
and duties:

(1) To adopt, amend and rescind, subject to the approval of the President of the Philippines, such rules
and regulations as may be necessary to carry out the provisions and purposes of this Act;

....

SECTION 5. Settlement of Disputes. — (a) Any dispute arising under this Act with respect to coverage,
benefits, contributions and penalties thereon or any other matter related thereto, shall be cognizable by
the Commission, and any case filed with respect thereto shall be heard by the Commission, or any of its
members, or by hearing officers duly authorized by the Commission and decided within the mandatory
period of twenty (20) days after the submission of the evidence. The filing, determination and
settlement of disputes shall be governed by the rules and regulations promulgated by the Commission.

(b) Appeal to Courts. — Any decision of the Commission, in the absence of an appeal therefrom as
herein provided, shall become final and executory fifteen (15) days after the date of notification,
and judicial review thereof shall be permitted only after any party claiming to be aggrieved thereby has
exhausted his remedies before the Commission. The Commission shall be deemed to be a party to any
judicial action involving any such decision and may be represented by an attorney employed by the
Commission, or when requested by the Commission, by the Solicitor General or any public prosecutor.
(Emphasis supplied)

In Luzon Stevedoring Corporation v. Social Security Commission,62 this Court upheld the jurisdiction and
competence of the Social Security Commission with regard to the grant of authority under the
unambiguous provisions of the Republic Act No. 8282.63 This Court stated:

Section 5 of the Social Security Act . . . on its face, would show that any dispute arising therein "with
respect to coverage entitlement to benefits, collection and settlement of premium contributions and
penalties thereon, or any other matter related thereto, shall be cognizable by the Commission . . . ." On
its face, support for the competence of respondent Commission to decide . . . would thus seem to be
evident.64 (Emphasis supplied, citations omitted)

In Enorme v. Social Security System,65 this Court categorically sustained the Social Security Commission's
exclusive power and jurisdiction to take cognizance of all disputes covered under the Social Security
Act.66 Consequently, plaintiffs must first exhaust all administrative remedies before judicial recourse is
allowed.67

In Social Security Commission v. Court of Appeals,68 this Court upheld the rules of procedure of the Social
Security Commission with regard to the rule on exhaustion of administrative remedies before a resort to
the courts may be permitted:

It now becomes apparent that the permissive nature of a motion for reconsideration with the SSC must
be read in conjunction with the requirements for judicial review, or the conditions sine qua non before a
party can institute certain civil actions. A combined reading of Section 5 of Rule VI, quoted earlier, and
Section 1 of Rule VII of the SSC's 1997 Revised Rules of Procedure reveals that the petitioners are correct
in asserting that a motion for reconsideration is mandatory in the sense that it is a precondition to the
institution of an appeal or a petition for review before the Court of Appeals. Stated differently, while
Rago certainly had the option to file a motion for reconsideration before the SSC, it was nevertheless
mandatory that he do so if he wanted to subsequently avail of judicial remedies.

....

The policy of judicial bodies to give quasi-judicial agencies, such as the SSC, an opportunity to correct its
mistakes by way of motions for reconsideration or other statutory remedies before accepting appeals
therefrom finds extensive doctrinal support in the well-entrenched principle of exhaustion of
administrative remedies.

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The reason for the principle rests upon the presumption that the administrative body, if given the
chance to correct its mistake or error, may amend its decision on a given matter and decide it properly.
The principle insures orderly procedure and withholds judicial interference until the administrative
process would have been allowed to duly run its course. This is but practical since availing of
administrative remedies entails lesser expenses and provides for a speedier disposition of controversies.
Even comity dictates that unless the available administrative remedies have been resorted to and
appropriate authorities given an opportunity to act and correct the errors committed in the
administrative forum, judicial recourse must be held to be inappropriate, impermissible, premature, and
even unnecessary.69 (Emphasis supplied, citations omitted)

Furthermore, jurisdiction is determined by laws enacted by Congress. The doctrine of exhaustion of

administrative remedies ensures that this legislative power is respected by courts. Courts cannot ignore
Congress' determination that the Social Security Commission is the entity with jurisdiction over any
dispute arising from the Social Security Act with respect to coverage, benefits, contributions, and
penalties.

Here, nothing in the records shows that petitioners filed a case before the Social Security Commission or
asked for a reconsideration of the assailed issuances. Moreover, petitioners did not even try to show
that their Petition falls under one (1) of the exceptions to the doctrine of exhaustion of administrative
remedies:

However, we are not unmindful of the doctrine that the principle of exhaustion of administrative
remedies is not an ironclad rule. It may be disregarded (1) when there is a violation of due process, (2)
when the issue involved is purely a legal question, (3) when the administrative action is patently illegal
amounting to lack or excess of jurisdiction, (4) when there is estoppel on the part of the administrative
agency concerned, (5) when there is irreparable injury, (6) when the respondent is a department
secretary whose acts as an alter ego of the President bears the implied and assumed approval of the
latter, (7) when to require exhaustion of administrative remedies would be unreasonable, (8) when it
would amount to a nullification of a claim, (9) when the subject matter is a private land in land case
proceedings, (10) when the rule does not provide a plain, speedy and adequate remedy, (11) when
there are circumstances indicating the urgency of judicial intervention, (12) when no administrative
review is provided by law, (13) where the rule of qualified political agency applies, and (14) when the
issue of non-exhaustion of administrative remedies has been rendered moot.70 (Emphasis in the original,
citations omitted)

The doctrine of exhaustion of administrative remedies is settled in jurisprudence.71 As early as 1967, this
Court has recognized the requirement that parties must exhaust all administrative remedies available
before the Social Security Commission.72 The Social Security Commission, then, must be given a chance
to render a decision on the issue, or to correct any alleged mistake or error, before the courts can
exercise their power of judicial review. This Court ruled:

In the case at bar, plaintiff has not exhausted its remedies before the Commission. The Commission has
not even been given a chance to render a decision on the issue raised by plaintiff herein, because the
latter has not appealed to the Commission from the action taken by the System in insisting upon the
enforcement of Circular No. 34.73 (Emphasis in the original)

Thus, petitioners have prematurely invoked this Court's power of judicial review in violation of the
doctrine of exhaustion of administrative remedies.

Notably, petitioners failed to abide by the principle of primary administrative jurisdiction. This principle
states that:

. . . courts cannot or will not determine a controversy involving a question which is within the
jurisdiction

of the administrative tribunal prior to the resolution of that question by the administrative tribunal,
where the question demands the exercise of sound administrative discretion requiring the special

193
knowledge, experience and services of the administrative tribunal to determine technical and intricate
matters of fact.74

In Republic v. Gallo:75

[U]nder the doctrine of primary administrative jurisdiction, if an administrative tribunal has jurisdiction
over a controversy, courts should not resolve the issue even if it may be within its proper jurisdiction.
This is especially true when the question involves its sound discretion requiring special knowledge,
experience, and services to determine technical and intricate matters of fact.

In Republic v. Lacap:

Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction;
that is, courts cannot or will not determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative
tribunal, where the question demands the exercise of sound administrative discretion requiring the
special knowledge, experience and services of the administrative tribunal to determine technical and
intricate matters of fact. . . .

Thus, the doctrine of primary administrative jurisdiction refers to the competence of a court to take
cognizance of a case at first instance. Unlike the doctrine of exhaustion of administrative remedies, it
cannot be waived.76 (Emphasis in the original, citations omitted)

Here, respondent Social Security Commission qualifies as an administrative tribunal, given sound
administrative discretion requiring the special knowledge, experience, and services of the administrative
tribunal to determine technical and intricate matters of fact. This is evident from the qualifications of its
members and its powers and duties under Sections 3 and 4 of the Social Security Act:

SECTION 3. Social Security System. — (a) . . . The SSS shall be directed and controlled by a Social Security
Commission, hereinafter referred to as 'Commission', composed of the Secretary of Labor and
Employment or his duly designated undersecretary, the SSS president and seven (7) appointive
members, three (3) of whom shall represent the workers' group, at least one (1) of whom shall be a
woman; three (3), the employers' group, at least one (1) of whom shall be a woman; and one (1), the
general public whose representative shall have adequate knowledge and experience regarding social
security, to be appointed by the President of the Philippines. The six (6) members representing workers
and employers shall be chosen from among the nominees of workers' and employers' organizations,
respectively. . . .

(b) The general conduct of the operations and management functions of the SSS shall be vested in the
SSS President who shall serve as the chief executive officer immediately responsible for carrying out the
program of the SSS and the policies of the Commission. The SSS President shall be a person who has had
previous experience in technical and administrative fields related to the purposes of this Act. . . .

(c) The Commission, upon the recommendation of the SSS President, shall appoint an actuary and such
other personnel as may be deemed necessary; fix their reasonable compensation, allowances and other
benefits; prescribe their duties and establish such methods and procedures as may be necessary to
insure the efficient, honest and economical administration of the provisions and purposes of this
Act: . . . Provided, further, That the personnel of the SSS shall be selected only from civil service eligibles
and be subject to civil service rules and regulations:. . .

SECTION 4. Powers and Duties of the Commission and SSS. — (a) The Commission. — For the attainment
of its main objectives as set forth in Section 2 hereof, the Commission shall have the following powers
and duties:

(1) To adopt, amend and rescind, subject to the approval of the President of the Philippines, such rules
and regulations as may be necessary to carry out the provisions and purposes of this Act;

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(2) To establish a provident fund for the members which will consist of voluntary contributions of
employers and/or employees, self-employed and voluntary members and their earnings, for the
payment of benefits to such members or their beneficiaries, subject to such rules and regulations as it
may promulgate and approved by the President of the Philippines;

(3) To maintain a Provident Fund which consists of contributions made by both the SSS and its officials
and employees and their earnings, for the payment of benefits to such officials and employees or their
heirs under such terms and conditions as it may prescribe;

(4) To approve restructuring proposals for the payment of due but unremitted contributions and unpaid
loan amortizations under such terms and conditions as it may prescribe;

(5) To authorize cooperatives registered with the cooperative development authority or associations
registered with the appropriate government agency to act as collecting agents of the SSS with respect to
their members: Provided, That the SSS shall accredit the cooperative or association: Provided,
further, That the persons authorized to collect are bonded;

(6) To compromise or release, in whole or in part any interest, penalty or any civil liability to SSS in
connection with the investments authorized under Section 26 hereof, under such terms and conditions
as it may prescribe and approved by the President of the Philippines; and

(7) To approve, confirm, pass upon or review any and all actions of the SSS in the proper and necessary
exercise of its powers and duties hereinafter enumerated. (Emphasis supplied)

Thus, under the doctrine of primary administrative jurisdiction, petitioners should have first filed their
case before respondent Social Security Commission.

I (C)

As for mootness, as earlier mentioned, moot cases prevent the actual case or controversy from
becoming justiciable. Courts cannot render judgment after the issue has already been resolved by or
through external developments. This entails that they can no longer grant or deny the relief prayed for
by the complaining party.77

This is consistent with this Court's deference to the powers of the other branches of government. This
Court must be wary that it is ruling on existing facts before it invalidates any act or rule.78

Nonetheless, this Court has enumerated circumstances when it may still rule on moot issues. In David:

Courts will decide cases, otherwise moot and academic, if: first, there is a grave violation of the
Constitution; second, the exceptional character of the situation and the paramount public interest is
involved; third, when constitutional issue raised requires formulation of controlling principles to guide
the bench, the bar, and the public; and fourth, the case is capable of repetition yet evading
review.79 (Emphasis in the original, citations omitted)

The third exception is corollary to this Court's power under Article VIII, Section 5(5) of the 1987
Constitution.80 This Court has the power to promulgate rules and procedures for the protection and
enforcement of constitutional rights, pleading, practice, and procedure in all courts. It applies where
there is a clear need to clarify principles and processes for the protection of rights.

As for the rest of the exceptions, however, all three (3) circumstances must be present before this Court
may rule on a moot issue. There must be an issue raising a grave violation of the Constitution, involving
an exceptional situation of paramount public interest that is capable of repetition yet evading review.

Here, since respondent Social Security Commission is set to issue new resolutions for the Social Security
System members' contributions, the issue on the assailed issuances' validity may be rendered moot.
Nonetheless, all the discussed exceptions are present: (1) petitioners raise violations of constitutional
rights; (2) the situation is of paramount public interest; (3) there is a need to guide the bench, the bar,

195
and the public on the power of respondent Social Security Commission to increase the contributions;
and (4) the matter is capable of repetition yet evading review, as it involves a question of law that can
recur. Thus, this Court may rule on this case.

I (D)

Petitioners argue that they have the legal standing to file the Petition since: (1) a majority of them are
Social Security System members and are directly affected by the increase in contributions; 81 and (2)
other petitioners argue that the standing requirement must be relaxed since the issues they raise are of
transcendental importance.82

On the contrary, not all petitioners have shown the requisite legal standing to bring the case before this
Court.

Legal standing is the personal and substantial interest of a party in a case "such that the party has
sustained or will sustain direct injury as a result of the governmental act that is being challenged,
alleging more than a generalized grievance."83

Petitioners Joselito Ustarez, Salvador T. Carranza, Nenita Gonzaga, Prescila A. Maniquiz, Reden R.
Alcantara, and Anakpawis Party-List Representative Fernando Hicap, for himself, are Social Security
System members who stand to suffer direct and material injury from the assailed issuances'
enforcement. They are, thus, clothed with legal personality to assail the imposed increase in
contribution rates and maximum monthly salary credit.

On the other hand, petitioners Kilusang Mayo Uno, Anakpawis Party-List, Center for Trade Union and
Human Rights, and National Federation of Labor Unions-Kilusang Mayo Uno all failed to show how they
will suffer direct and material injury from the enforcement of the assailed issuances.

However, jurisprudence is replete with instances when a liberal approach to determining legal standing
was adopted. This has allowed "ordinary citizens, members of Congress, and civic organizations to
prosecute actions involving the constitutionality or validity of laws, regulations[,] and rulings."84

This Court has provided instructive guides to determine whether a matter is of transcendental
importance: "(1) the character of the funds or other assets involved in the case; (2) the presence of a
clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or
instrumentality of the government; and (3) the lack of any other party with a more direct and specific
interest in the questions being raised."85

Here, the assailed issuances set the new contribution rate and its date of effectivity. The increase in
contributions has been in effect since January 2014. As such, the issue of the validity of increase in
contributions is of transcendental importance. The required legal standing for petitioners must be
relaxed.

It is worth noting that this issue affects millions of Filipinos working here and abroad. A substantial
portion of members' salaries goes to the Social Security System fund. To delay the resolution of such an
important issue would be a great disservice to this Court's duty enshrined in the Constitution.

For all these reasons, and despite the technical infirmities in this Petition, this Court reviews the assailed
issuances.

II

Petitioners' attack on the increase in contribution rate and maximum monthly salary credit is two (2)-
tiered: (1) they assail the validity of the exercise of respondents Social Security System and Social
Security Commission's power under the law; and (2) they assail the validity of the delegation of power to
respondent Social Security Commission.

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Petitioners argue that the assailed issuances are void for being issued under vague and unclear
standards under the Social Security Act. They admit that Section 18 allows the Social Security
Commission to fix the contribution rate subject to several conditions. However, petitioners claim that
the term "actuarial calculations" is too vague and general, and the relationship between the rate of
benefits and actuarial calculations is not clearly defined. Thus, they conclude that the delegation of
power to fix the contribution rate is incomplete in all its terms and conditions.

Petitioners' argument lacks merit.

Petitioners are putting in issue not only the validity of the exercise of the delegated power, but also the
validity of the delegation itself. They are, thus, collaterally attacking the validity of the Social Security
Act's provisions.

Collateral attacks on a presumably valid law are not allowed. Unless a law, rule, or act is annulled in a
direct proceeding, it is presumed valid.86

Furthermore, the "delegation of legislative power to various specialized administrative agencies is

allowed in the face of increasing complexity of modern life."87 In Equi-Asia Placement, Inc. v. Department
of Foreign Affairs:88

Given the volume and variety of interactions involving the members of today's society, it is doubtful if
the legislature can promulgate laws dealing with the minutiae aspects of everyday life. Hence, the need
to delegate to administrative bodies, as the principal agencies tasked to execute laws with respect to
their specialized fields, the authority to promulgate rules and regulations to implement a given statute
and effectuate its policies.89

For a valid exercise of delegation, this Court enumerated the following requisites:

All that is required for the valid exercise of this power of subordinate legislation is that the regulation
must be germane to the objects and purposes of the law; and that the regulation be not in contradiction
to, but in conformity with, the standards prescribed by the law. Under the first test or the so-called
completeness test, the law must be complete in all its terms and conditions when it leaves the
legislature such that when it reaches the delegate, the only thing he will have to do is to enforce it. The
second test or the sufficient standard test, mandates that there should be adequate guidelines or
limitations in the law to determine the boundaries of the delegate's authority and prevent the
delegation from running riot.90

Simply put, what are needed for a valid delegation are: (1) the completeness of the statute making the
delegation; and (2) the presence of a sufficient standard.91

To determine completeness, all of the terms and provisions of the law must leave nothing to the
delegate except to implement it. "What only can be delegated is not the discretion to determine what
the law shall be but the discretion to determine how the law shall be enforced."92

More relevant here, however, is the presence of a sufficient standard under the law. Enforcement of a
delegated power may only be effected in conformity with a sufficient standard, which is used "to map
out the boundaries of the delegate's authority and thus 'prevent the delegation from running
riot.'"93 The law must contain the limitations or guidelines to determine the scope of authority of the
delegate.

Not only is the Social Security Act complete in its terms; it also contains a sufficient standard for the
Social Security Commission to fix the monthly contribution rate and the minimum and maximum
monthly salary credits.

Section 18 states:

SECTION 18. Employee's Contribution. — (a) Beginning as of the last day of the calendar month when an
employee's compulsory coverage takes effect and every month thereafter during his employment, the

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employer shall deduct and withhold from such employee's monthly salary, wage, compensation or
earnings, the employee's contribution in an amount corresponding to his salary, wage, compensation or
earnings during the month in accordance with the following schedule:

SALARY RANGE OF MONTHLY MONTHLY CONTRIBUTION

BRACKET COMPENSATION SALARY
EMPLOYER EMPLOYEE TOTAL
CREDIT
I 1,000.00- 1000 50.70 33.30 84.00
1,249.99
II 1,250.00- 1500 76.00 50.00 126.00
1,749.99
III 1,750.00- 2000 101.30 66.70 168.00
2,249.99
IV 2,25.00-2,749.99 2500 126.70 83.30 210.00
V 2,750.00- 3000 152.00 100.00 252.00
3,249.99
VI 3,250.00- 3500 177.30 116.70 294.00
3,749.99
VII 3,750.00- 4000 202.70 133.30 336.00
4,249.99
VIII 4,250.00- 4500 228.00 150.00 378.00
4,749.99
IX 4,750.00- 5000 253.30 166.70 420.00
5,249.99
X 5,250.00- 5500 278.70 183.70 462.40
5,749.99
XI 5,750.00- 6000 304.00 200.00 504.00
6,249.99
XII 6,250.00- 6500 329.30 216.70 546.00
6,749.99
XIII 6,750.00- 7000 354.70 233.30 588.00
7,249.99
XIV 7,250.00- 7500 380.00 250.00 630.00
7,749.99
XV 7,750.00- 8000 405.30 266.70 672.00
8,249.99
XVI 8,250.00- 8500 430.70 283.30 714.00
8,749.99
XVII 8,750.00-OVER 9000 456.00 300.00 756.00

The foregoing schedule of contribution shall also apply to self-employed and voluntary members.

The maximum monthly salary credit shall be Nine thousand pesos (P9,000.00) effective January
Nineteen hundred and ninety six (1996): Provided, That it shall be increased by One thousand pesos
(P1,000.00) every year thereafter until it shall have reached Twelve thousand pesos (P12,000.00) by
Nineteen hundred and ninety nine (1999): Provided, further, That the minimum and maximum monthly
salary credits as well as the rate of contributions may be fixed from time to time by the Commission

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through rules and regulations taking into consideration actuarial calculations and rate of benefits,
subject to the approval of the President of the Philippines. (Emphasis supplied)

In relation to Section 18, Section 4(a) prescribes the powers and duties of the Social Security
Commission. It provides:

SECTION 4. Powers and Duties of the Commission and SSS. — (a) The Commission. — For the attainment
of its main objectives as set forth in Section 2 hereof, the Commission shall have the following powers
and duties:

(1) To adopt, amend and rescind, subject to the approval of the President of the Philippines, such rules
and regulations as may be necessary to carry out the provisions and purposes of this Act;

....

(7) To approve, confirm, pass upon or review any and all actions of the SSS in the proper and necessary
exercise of its powers and duties hereinafter enumerated.

It is evident from these provisions that the legislature has vested the necessary powers in the Social
Security Commission to fix the minimum and maximum amounts of monthly salary credits and the
contribution rate. The agency does not have to do anything except implement the provisions based on
the standards and limitations provided by law.

In fixing the contribution rate and the minimum and maximum amounts of monthly salary credits, the
legislature specified the factors that should be considered: "actuarial calculations and rate of
benefits"94 as an additional limit to the Social Security Commission's rate fixing power under Section 18,
the legislature required the approval of the President of the Philippines.

The Social Security Act clearly specifies the limitations and identifies when and how the Social Security
Commission will fix the contribution rate and the monthly salary credits.

Actuarial science is derived from the concepts of utilitarianism and risk aversion. Thus:

Just as economic systems are the realm of the economist, social systems are the realm of the sociologist,
and electrical systems are the realm of the electrical engineer, financial security systems have become
the realm of the actuary. The uniqueness of the actuarial profession lies in the actuary's understanding
of financial security systems in general, and the inner workings of the many different types in particular.
The role of the actuary is that of the designer, the adaptor, the problem solver, the risk estimator, the
innovator, and the technician of the continually changing field of financial security systems.

....

Utilitarianism as a philosophy, and risk aversion as a feature of human psychology, lead to the evolution
of financial security systems as a means of reducing the financial consequences of unfavorable events.
Actuaries are those professionals with a deep understanding of, and training in, financial security
systems; their reason for being, their complexity, their mathematics, and the way they work.95 (Emphasis
supplied)

Actuarial science is "primarily concerned with the study of consequences of events that involve risk and
uncertainty. Actuarial practice identifies, analyzes and assists in the management of the outcomes—
including costs and benefits—associated with events that involve risk and uncertainty."96

Actuarial science is relevant to the operation of a social security system, in that "the actuary plays a
crucial role in analysing [the system's] financial status and recommending appropriate action to ensure
its viability. More specifically, the work of the actuary includes assessing the financial implications of
establishing a new scheme, regularly following up its financial status and estimating the effect of various
modifications that might have a bearing on the scheme during its existence."97

199
The application of actuarial calculations in the operation of a social system scheme requires the
determination of benefits.98 To question the use of "actual calculations" as factor for fixing rates is to
question the policy or wisdom of the legislature, which is a co-equal branch of government.

As a component of the doctrine of separation of powers, courts must never go into the question of the
wisdom of the policy of the law.99 In Magtajas v. Pryce Properties Corporation, Inc.,100 where this Court
resolved the issue of the morality of gambling, this Court held:

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally
considered inimical to the interests of the people, there is nothing in the Constitution categorically
proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress to
deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit
gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow
others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but
permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its own
wisdom, which this Court has no authority to review, much less reverse. Well has it been said that courts
do no[t] sit to resolve the merits of conflicting theories. That is the prerogative of the political
departments. It is settled that questions regarding the wisdom, morality, or practicibility of statutes are
not addressed to the judiciary but may be resolved only by the legislative and executive departments, to
which the function belongs in our scheme of government. That function is exclusive. Whichever way
these branches decide, they are answerable only to their own conscience and the constituents who will
ultimately judge their acts, and not to the courts of justice.101 (Emphasis supplied, citation omitted)

Recently, in Garcia v. Drilon,102 this Court has upheld the long-settled principle that courts do not go into
the wisdom of the law:

It is settled that courts are not concerned with the wisdom, justice, policy, or expediency of a statute.
Hence, we dare not venture into the real motivations and wisdom of the members of
Congress . . . Congress has made its choice and it is not our prerogative to supplant this judgment. The
choice may be perceived as erroneous but even then, the remedy against it is to seek its amendment or
repeal by the legislative. By the principle of separation of powers, it is the legislative that determines the
necessity, adequacy, wisdom and expediency of any law. We only step in when there is a violation of the
Constitution.103 (Emphasis supplied, citations omitted)

Hence, the Social Security Act has validly delegated the power to fix the contribution rate and the
minimum and maximum amounts for the monthly salary credits. It is within the scope of the Social
Security Commission's power to fix them, as clearly laid out in the law.

III

On the question of the validity of the exercise of respondents Social Security Commission and Social
Security System's powers, this Court disagrees with petitioners' argument that the increase in
contribution rate is prohibited by Section 4(b)(2) of the Social Security Act. The provision states:

SECTION 4. Powers and Duties of the Commission and SSS. . . .

(b) The Social Security System. — Subject to the provision of Section four (4), paragraph seven (7) hereof,
the SSS shall have the following powers and duties:

....

(2) To require the actuary to submit a valuation report on the SSS benefit program every four (4) years,
or more frequently as may be necessary, to undertake the necessary actuarial studies and calculations
concerning increases in benefits taking into account inflation and the financial stability of the SSS, and to
provide for feasible increases in benefits every four (4) years, including the addition of new ones, under
such rules and regulations as the Commission may adopt, subject to the approval of the President of the
Philippines: Provided, That the actuarial soundness of the reserve fund shall be guaranteed: Provided,

200
further, That such increases in benefits shall not require any increase in the rate of contribution[.]
(Emphasis supplied)

However, an examination of the provision and the assailed issuances reveals that the questioned
increase in contribution rate was not solely for the increase in members' benefits, but also to extend
actuarial life.

Social Security Commission Resolution No. 262-s.2013 provides:

RESOLVED, That the Commission approve and confirm, as it hereby approves and confirms, the SSS 2013
Reform Agenda, the effectivity of which shall be as approved by the President of the Philippines, which
aims to address SSS' unfunded liability, extend SSS' fund life to a more secure level and provide
improved benefits for current and future generations of SSS members, consisting of the following:

1. Increase in the contribution rate from 10.4% to 11%; and

2. Increase in the maximum monthly salary credit (MSC) from ₱15,000 to ₱16,000.

The above is based on the recommendation of the President and CEO in his memorandum dated 19
November 2012.104

The provisos in Section 4(b)(2) must not be read in isolation, but within the context of the provision, as
well as the policy of the law.

The two (2) provisos refer to the last part of Section 4(b)(2), or on the System's duty to "provide for
feasible increases in benefits every four (4) years, including the addition of new ones[.]" Section 4(b)(2)
states that the "actuarial soundness of the reserve fund shall be guaranteed" in providing any increase
in benefits. As established earlier, Congress has expressly provided the Social Security System, through
the Social Security Commission, power to fix the minimum and maximum monthly salary credits and the
contribution rate.

To disregard actuarial soundness of the reserves would be to go against the policy of the law on
maintaining a sustainable social security system:

SECTION 2. Declaration of Policy. — It is the policy of the State to establish, develop, promote and
perfect a sound and viable tax-exempt social security system suitable to the needs of the people
throughout the Philippines which shall promote social justice and provide meaningful protection to
members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death,
and other contingencies resulting in loss of income or financial burden. Towards this end, the State shall
endeavor to extend social security protection to workers and their beneficiaries. (Emphasis supplied)

Petitioners' argument is, thus, bereft of merit.

In arguing that the increase in contributions is unduly oppressive upon the labor sector, petitioners are
again asking this Court to inquire into the wisdom of the policy behind the issuances made by the
executive branch. This, as earlier said, we cannot and will not do.105

Furthermore, this Court is not persuaded by petitioners' argument that the increase in contributions
constitutes an unlawful exercise of police power.

Police power has been defined as:

. . . state authority to enact legislation that may interfere with personal liberty or property in order to
promote the general welfare. Persons and property could thus "be subjected to all kinds of restraints
and burdens in order to secure the general comfort, health and prosperity of the state." [It is] "the
power to prescribe regulations to promote the health, morals, peace, education, good order or safety,
and general welfare of the people."106

201
To be a valid exercise of police power, there must be a lawful subject and the power is exercised
through lawful means.107 The second requisite requires a reasonable relation between the purpose and
the means.108

Using the parameters above, we hold that the increases reflected in the issuances of respondents are
reasonably necessary to observe the constitutional mandate of promoting social justice under the Social
Security Act. The public interest involved here refers to the State's goal of establishing, developing,
promoting, and perfecting a sound and viable tax-exempt social security system. To achieve this, the
Social Security System and the Social Security Commission are empowered to adjust from time to time
the contribution rate and the monthly salary credits. Given the past increases since the inception of the
law, the contribution rate increase of 0.6% applied to the corresponding monthly salary credit does not
scream of unreasonableness or injustice.

Moreover, this Court will not delve into petitioners' argument that the revised ratio of contributions was
supposedly inconsistent with previous schemes.109 Nothing in the law requires that the ratio of
contributions must be set at a 70%-30% sharing in favor of the employee. Supplanting the executive
branch's determination of the proper ratio of contribution would result in judicial legislation, which is
beyond this Court's power.

A parameter of judicial review is determining who can read the Constitution. Interpreting its text has
never been within the exclusive province of the courts. Other branches of government are equally able
to provide their own interpretation of the provisions of our organic law, especially on the powers
conferred by the Constitution and those delegated by Congress to administrative agencies.

However, other departments' reading or interpretation is limited only to a preliminary determination.

Only this Court can read the text of the Constitution with finality.

In People v. Vera,110 Associate Justice Jose Laurel elucidated on how laws must be accorded presumption
of constitutionality due to the premise that the Constitution binds all three (3) branches of government.
He explained:

Under a doctrine peculiarly American, it is the office and duty of the judiciary to enforce the
Constitution. This court, by clear implication from the provisions of section 2, subsection 1, and section
10, of Article VIII of the Constitution, may declare an act of the national legislature invalid because in
conflict with the fundamental law. It will not shirk from its sworn duty to enforce the Constitution. And,
in clear cases, it will not hesitate to give effect to the supreme law by setting aside a statute in conflict
therewith. This is of the essence of judicial duty.

This court is not unmindful of the fundamental criteria in cases of this nature that all reasonable doubts
should be resolved in favor of the constitutionality of a statute. An act of the legislature approved by the
executive, is presumed to be within constitutional limitations. The responsibility of upholding the
Constitution rests not on the courts alone but on the legislature as well. "The question of the validity of
every statute is first determined by the legislative department of the government itself." . . . And a
statute finally comes before the courts sustained by the sanction of the executive. The members of the
Legislature and the Chief Executive have taken an oath to support the Constitution and it must be
presumed that they have been true to this oath and that in enacting and sanctioning a particular law
they did not intend to violate the Constitution. The courts cannot but cautiously exercise its power to
overturn the solemn declarations of two of the three grand departments of the government. . . . Then,
there is that peculiar political philosophy which bids the judiciary to reflect the wisdom of the people as
expressed through an elective Legislature and an elective Chief Executive. It follows, therefore, that the
courts will not set aside a law as violative of the Constitution except in a clear case. This is a proposition
too plain to require a citation of authorities.111 (Emphasis supplied, citations omitted)

As such, courts, in exercising judicial review, should also account for the concept of "pragmatic
adjudication."112 As another parameter of judicial review, adjudicative pragmatism entails deciding a
case with regard to the "present and the future, unchecked by any felt duty to secure consistency in
principle with what other officials have done in the past[.]"113 The pragmatist judge is:

202
. . . not uninterested in past decisions, in statutes, and so forth.1âшphi1 Far from it. For one thing, these
are repositories of knowledge, even, sometimes, of wisdom, and so it would be folly to ignore them
even if they had no authoritative significance. For another, a decision that destabilized the law by
departing too abruptly from precedent might have, on balance, bad results. There is often a trade-off
between rendering substantive justice in the case under consideration and maintaining the law's
certainty and predictability. This trade-off, which is perhaps clearest in cases in which a defense of
statute of limitations is raised, will sometimes justify sacrificing substantive justice in the individual case
to consistency with previous cases or with statutes or, in short, with well-founded expectations
necessary to the orderly management of society's business. Another reason not to ignore the past is
that often it is difficult to determine the purpose and scope of a rule without tracing the rule to its
origins.

The pragmatist judge thus regards precedent, statutes, and constitutions both as sources of potentially
valuable information about the likely best result in the present case and as signposts that must not be
obliterated or obscured gratuitously, because people may be relying upon them.114

Going into the validity of respondents' actions, petitioners must show that the assailed issuances were
made without any reference to any law, or that respondents knowingly issued resolutions in excess of
the authority granted to them under the Social Security Act to constitute grave abuse of discretion.

Grave abuse of discretion denotes a "capricious, arbitrary[,] and whimsical exercise of power. The abuse
of discretion must be patent and gross as to amount to an evasion of positive duty or to a virtual refusal
to perform a duty enjoined by law, as not to act at all in contemplation of law, or where the power is
exercised in an arbitrary and despotic manner by reason of passion or hostility."115

Any act of a government branch, agency, or instrumentality that violates a statute or a treaty is grave
abuse of discretion.116 However, grave abuse of discretion pertains to acts of discretion exercised in
areas outside an agency's granted authority and, thus, abusing the power granted to it.117 Moreover, it is
the agency's exercise of its power that is examined and adjudged, not whether its application of the law
is correct.118

Here, respondents were only complying with their duties under the Social Security Act when they issued
the assailed issuances. There is no showing that respondents went beyond the powers under the law
that amounts to lack of or in excess of their jurisdiction. Petitioners' claims are unsubstantiated and, as
such, merit no finding of grave abuse of discretion.

IV

Petitioners have failed to show that there was an invasion of a material and substantial right, or that
they were entitled to such a right. Moreover, they failed to show that "there is an urgent and
paramount necessity for the writ to prevent serious and irreparable damage."119 Accordingly,
petitioners' prayer for the issuance of a temporary restraining order and/or writ of preliminary
injunction is denied.

WHEREFORE, the Petition is DENIED for lack of merit. Resolution Nos. 262-s. 2013 and 711-s. 2013
issued by the Social Security Commission, as well as Circular No. 2013-010 issued by the Social Security
System, are valid. The prayer for the issuance of a temporary restraining order and/or writ of
preliminary injunction is also DENIED.

SO ORDERED.

Bersamin (C.J.), Carpio, Peralta, Del Castillo, Perlas-Bernabe, Caguioa, A. Reyes, Jr., Gesmundo,
Carandang and Lazaro-Javier, JJ., concur.
Jardeleza, J., no part and on official business.
J. Reyes, Jr., J., on official leave.
Hernando, J., on leave.

EN BANC

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May 3. 2019

G.R. No. 227670

ALYANSA PARA SA BAGONG PILIPINAS, INC. (ABP), represented by Evelyn V. Jallorina and Noel
Villones, Petitioner
vs.
ENERGY REGULATORY COMMISSION, represented by its Chairman, JOSE VICENTE B. SALAZAR,
DEPARTMENT OF ENERGY, represented by Secretary ALFONSO G. CUSI, MERALCO, CENTRAL LUZON
PREMIERE POWER CORPORATION, ST. RAPHAEL POWER GENERATION CORPORATION, PANAY ENERGY
DEVELOPMENT CORPORATION, MARIVELES POWER GENERATION CORPORATION, GLOBAL LUZON
ENERGY DEVELOPMENT CORPORATION, ATIMONAN ONE ENERGY, INC., REDONDO PENINSULA
ENERGY, INC., and PHILIPPINE COMPETITION COMMISSION, Respondents

DECISION

CARPIO, J.:

The outcome of this case will greatly affect, for the next two decades, all consumers of electricity in the
Philippines, which include the over 95 million Filipinos living in the Philippines as well as the millions of
business enterprises operating in the Philippines.

Section 19, Article XII of the 1987 Constitution provides: "The State shall regulate or prohibit
monopolies when the public interest so requires. No combinations in restraint of trade or unfair
competition shall be allowed."

The State grants electricity distribution utilities, through legislative franchises, a regulated monopoly
within their respective franchise areas. Competitors are legally barred within the franchise areas of
distribution utilities. Facing no competition, distribution utilities can easily dictate the price of electricity
that they charge consumers. To protect the consuming public from exorbitant or unconscionable
charges by distribution utilities, the State regulates the acquisition cost of electricity that distribution
utilities can pass on to consumers.

As part of its regulation of this monopoly, the State requires distribution utilities to subject
to competitive public bidding their purchases of electricity from power generating companies.
Competitive public bidding is essential since the power cost purchased by distribution utilities is entirely
passed on to consumers, along with other operating expenses of distribution utilities. Competitive
public bidding is the most efficient, transparent, and effective guarantee that there will be no price
gouging by distribution utilities.

Indeed, the requirement of competitive public bidding for power purchases of distribution utilities has
been adopted in the United States, Europe, Latin America, India, and many developing countries. 1 This
requirement is primarily aimed at ensuring a fair, reasonable, and least-cost generation charge to
consumers, under a transparent power sale mechanism between the generation companies and the
distribution utilities.

Section 6, Article XII of the 1987 Constitution provides: "The use of property bears a social function, and
all economic agents shall contribute to the common good. Individuals and private groups, including
corporations, cooperatives, and similar collective organizations, shall have the right to own, establish,
and operate economic enterprises, subject to the duty of the State to promote distributive justice and
to intervene when the common good so demands."

Indisputably, the use of electricity bears a vital social function. The State, in requiring competitive public
bidding in the purchase of power by distribution utilities, has exercised its constitutional "duty x x x to
intervene when the common good so demands."2

The breakdown of charges in a Manila Electric Company (Meralco) bill contains the
following: Generation Charge, Transmission Charge, System Loss Charge, Distribution Charge (Meralco),

204
Subsidies, Government Taxes, Universal Charges, FiT-All Charge (Renewable), and Other Charges. The
Power Supply Agreements (PSAs) involved in the present case were executed in April 2016 and have
terms that range from 20 to 21 years.

Section 43 of Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA), includes
a description, in broad strokes, of the functions of the Energy Regulatory Commission (ERC): "The ERC
shall promote competition, encourage market development, ensure customer choice
and discourage/penalize abuse of market power in the restructured electricity industry." Moreover,
Section 2 of the EPIRA declares it a state policy to "ensure the x x x affordability of the supply of
electric power." Further, Section 45 of the EPIRA mandates the ERC to enforce safeguards to "promote
true market competition and prevent harmful monopoly and market power abuse." If the ERC violates
its statutory functions, this Court, as mandated by Section 1, Article VIII of the 1987 Constitution,3 has
the duty to strike down the acts of ERC whenever these are performed with grave abuse of discretion
amounting to lack or excess of jurisdiction.

The Case

Alyansa para sa Bagong Pilipinas, Inc. (ABP), represented by Evelyn V. Jallorina and Noel Villones, filed
G.R. No. 227670, a petition for certiorari and prohibition4 with an application for a temporary restraining
order and/or writ of preliminary injunction. Named as respondents are the ERC, the Department of
Energy (DOE), Meralco, Central Luzon Premiere Power Corporation (CLPPC), St. Raphael Power
Generation Corporation (SRPGC), Panay Energy Development Corporation (PEDC), Mariveles Power
Generation Corporation (MPGC), Global Luzon Energy Development Corporation (GLEDC), Atimonan
One Energy, Inc. (AlE), Redondo Peninsula Energy, Inc. (RPE), and the Philippine Competition
Commission (PCC).

The petition seeks to declare as void ERC Resolution No. 1, Series of 2016 (ERC Clarificatory Resolution).
The petition also seeks that this Court direct the ERC to disapprove the Power Supply Agreements (PSAs)
of the Distribution Utilities (DUs) submitted after 7 November 2015 for failure to conduct Competitive
Selection Process (CSP). The petition further asks the Court to order ERC to implement CSP in
accordance with the Department of Energy (DOE) Circular No. DC2015-06-0008 (2015 DOE Circular) and
ERC Resolution No. 13, Series of 2015 (CSP Guidelines).5

The Facts

On 11 June 2015, the DOE issued the 2015 DOE Circular entitled "Mandating All Distribution Utilities to
Undergo Competitive Selection Process (CSP) in Securing Power Supply Agreements (PSA)." Sections 3
and 10 of the 2015 DOE Circular provide:

Section 3. Standard Features in the Conduct of the CSP. After the effectivity of this Circular, all DUs
shall procure PSAs only through CSP conducted through a Third Party duly recognized by the ERC and
the DOE. In the case of [Electric Cooperatives (ECs)], the Third Party shall also be duly recognized by the
National Electrification Administration (NEA).

Under this Circular, CSPs for the procurement of PSAs of all DUs shall observe the following:

(a) Aggregation for un-contracted demand requirements of DUs;

(b) Annually conducted; and

(c) Uniform template for the terms and conditions in the PSA to be issued by the ERC in coordination
with the DOE.

Within one hundred twenty (120) days from the effectivity of this Circular, the ERC and [the] DOE shall
jointly issue the guidelines and procedures for the aggregation of the un-contracted demand
requirements of the DUs and the process for the recognition or accreditation of the Third Party that
conducts the CSP as hereto provided. For clarity, the term aggregation as used in this Circular refers to

205
the wholesale demand and energy requirements of DUs, and not of the Contestable Markets under
Retail Competition and Open Access (RCOA) regime.

As used in this section, the un-contracted demand or energy requirements of the DUs shall refer to the
energy and demand not yet procured individually or collectively by the DUs, excluding those energy and
capacity covered by PSAs that have been filed for approval before the ERC.

xxxx

Section 10. Effectivity. This Circular shall take effect immediately upon its publication in two (2)
newspapers of general circulation and shall remain in effect until otherwise revoked. (Boldfacing
added)

Section 3 of the 2015 DOE Circular expressly and categorically mandates CSP, or competitive public
bidding, whenever DUs secure PSAs. The 2015 DOE Circular took effect on 30 June 2015 upon its
publication in two newspapers of general circulation. Section 3 expressly states that "[a]fter the
effectivity of this Circular, all DUs shall procure PSAs only through CSP

x x x."

On 20 October 2015, Joint Resolution No. 1 (Joint Resolution), executed by the DOE and the ERC,
reiterated the need to adopt a "regime of transparent process in securing Power Supply
Agreements." The fifth Whereas clause of the Joint Resolution provides:

WHEREAS, the DOE and ERC recognize the adoption of competitive selection as a policy that will
encourage investments in the power generation business thereby ensuring electric power supply
availability in a regime of transparent process in securing Power Supply Agreements (PSAs), which is an
integral part of the power sector reform agenda. (Boldfacing added)

Under the Joint Resolution, the DOE and the ERC agreed that ERC shall issue the appropriate
regulation to implement CSP. Section 1 of the Joint Resolution states:

Section 1. Competitive Selection Process. Consistent with their respective mandates, the DOE and ERC
recognize that Competitive Selection Process (CSP) in the procurement of Power Supply Agreements
(PSAs) by the DUs engenders transparency, enhances security of supply, and ensures stability of
electricity prices to captive electricity end-users in the long-term. Consequently, by agreement of the
DOE and ERC, the ERC shall issue the appropriate regulation to implement the same. (Boldfacing and
italicization added)

On the same date, 20 October 2015, the ERC issued the CSP Guidelines, which directed all DUs to
conduct CSP in the procurement of their power supply for their captive markets.

The CSP Guidelines fixed a new date of effectivity for compliance with CSP. This is the first instance that
the ERC unilaterally fixed a different date from 30 June 2015, effectively postponing the date of
effectivity of CSP from 30 June 2015 to 7 November 2015 or by 130 days:

Section 4. Applicability. The CSP requirement herein mandated shall not apply to PSAs already filed
with the ERC as of the effectivity of this Resolution. For PSAs already executed but are not yet filed or
for those that are still in the process of negotiation, the concerned DUs are directed to comply with
the CSP requirement before their PSA applications will be accepted by the ERC.

This Resolution shall take effect immediately following its publication in a newspaper of general
circulation in the Philippines.

x x x x (Boldfacing and italicization added)

Based on its provisions, the CSP Guidelines took effect on 7 November 2015, following its publication in
the Philippine Daily Inquirer and the Philippine Star. Section 4 of the CSP Guidelines expressly provides

206
that CSP "shall not apply to PSAs already filed with the ERC as of the effectivity of this
Resolution." Thus, the ERC no longer required CSP for all PSAs already filed with the ERC on or before 7
November 2015. Section 4 of the CSP Guidelines further states that "[f]or PSAs already executed but are
not yet filed or for those that are still in the process of negotiation, the concerned DUs are directed to
comply with the CSP requirement before their PSA applications will be accepted by the ERC."

On 15 March 2016, however, the ERC, for the second time, unilaterally postponed the date of
effectivity of CSP. The ERC issued the ERC Clarificatory Resolution, which restated the date of
effectivity of the CSP Guidelines from 7 November 2015 to 30 April 2016. Paragraph 1 of the ERC
Clarificatory Resolution reads:

1. The effectivity of the CSP [Guidelines] is hereby restated to be 30 April 2016. All PSAs executed on or
after the said date shall be required, without exception, to comply with the provisions of the CSP
[Guidelines]. (Boldfacing added)

The second postponement of the effectivity of CSP from 7 November 2015 to 30 April 2016, or by 175
days, allowed DUs to enter into contracts during the period of postponement to avoid the mandatory
CSP.

The table below shows that the following PSAs between Meralco and its power suppliers were executed
and submitted to the ERC within 10 days prior the restated 30 April 2016 deadline. According to the
ERC Clarificatory Resolution, these PSAs are not required to comply with CSP.

Power Power Amount of Term of Start of Date of Date of

Supplier Purchaser Power Agreement Negotiations PSA Submission
Purchased Execution of
Application
to ERC
Redondo Manila 225 20 years7 19 July 20 April 28 April
Peninsula Electric Megawatts 20128 20169 2016 10
Energy, Inc. Company (MW)6
(RPE) (Meralco)
Atimonan Meralco 2 x 600 20 years 3rd or 4th 26 April 28 April
One Energy, MW (net) 11 and six quarter of 201614 201615
Inc. (AlE) months 12 201413

St. Raphael Meralco Up to 400 20 years Latter part 26 April 28 April

Power MW16 and four of 2014 18 201619 201620
Generation months17
Corporation
(SRPGC)
Panay Energy Meralco Up to 70 20 years 21 May 26 April 27 April
Development MW21 22
2014 23
2016 24
2016 25

Corporation
(PEDC)

Global Luzon Meralco 600 MW26 20 years 9 December 27 April 29 April

27
Energy 201428 201629 201630
Development
Corporation
(GLEDC)

207
 Central Meralco Up to 528 21 years 32 18 March 26 April 29 April
Luzon MW31 201533 201634 201635
Premiere
Power
Corporation
(CLPPC)
Mariveles Meralco Up to 528 21 years 11 February 26 April 29 April
Power MW36 37
201538 201639 201640
Generation
Corporation
(MPGC)

AlE and RPE are subsidiaries or affiliates of Meralco.41 In paragraph 3. 71 of its Comment, Meralco
stated that "[a]t the time of the signing of the AlE PSA, AlE was wholly-owned by Meralco PowerGen
Corporation ('PowerGen'), a wholly-owned subsidiary of Meralco. On the other hand, at the time of the
signing of the RPE PSA, forty-seven percent (47%) of the total subscribed capital of RPE was owned by
PowerGen, and three percent (3%) of its total subscribed capital was owned by the Meralco Pension
Fund."42

CLPPC and MPGC are subsidiaries of SMC Global Power Holdings Corp. (SMC Global), the subsidiary of
San Miguel Corporation (SMC) engaged in the construction and operation of various power projects.43

In its Comment, Meralco admitted that "no actual bidding is conducted,"44 and that "the PSAs entered
into by Meralco undergo competitive selection and thorough negotiations, taking into consideration its
specific and unique requirements."45 In short, no CSP was conducted through a third party recognized by
the ERC as mandated in the 2015 DOE Circular.

Meralco also stated that, apart from the seven (7) PSAs between Meralco and its power suppliers, there
are eighty-three (83) other PSAs filed with the ERC during the period from 16 April 2016 to 29 April
2016, bringing the total PSAs excluded from CSP to ninety (90) PSAs.

DATE NO. OF PSAS GENERATION

COMPANIES
16 to 24 April 2016 4 PSAs Mineral Power, Palm Concepcion,
Astroenergy, GNPower Kauswagan
25 April 2016 5 PSAs GNPower Dinginin
26 April 2016 5 PSAs GNPower Dinginin, Astroenergy
27 April 2016 4 PSAs GNPower Dinginin
28 April 2016 10 PSAs A. Brown, GNPower Dinginin,
Southern Philippines Power,
SMCPC, Surepep, Total Power,
Upper Manupali Hydro
29 April 2016 55 PSAs SMEC, MPGC, SCPC, SMCPC, LPPC,
PEDC, GLEDC, CLPPC, A. Brown,
A1E, Anda, Astronenergy, Delta P,
GNPower Dinginin, GPower,
Isabela Power, Levan Marketing,
Mapalad Power, Minergy, RPE,
SRPGC, Sunasia Energy, TeaM
Energy, Trans-Asia, Unified Leyte
Geothennal Energy, Western
Power Mindanao46

208
Meralco further stated in its Comment:

1.41. Furthermore, apart from MERALCO, the following DUs and electric cooperatives also filed more
than one PSA with the ERC during the second (2nd) half of April 2016: (a) Agusan del Sur Electric
Cooperative, Inc.; (b) Bukidnon Second Electric Cooperative, Inc.; (c) Cagayan Electric Power & Light
Company, Inc.; (d) Cotabato Light and Power Company; (e) Davao del Sur Electric Cooperative; (t) Iloilo 1
Electric Cooperative; (g) Ilocos Sur Electric Cooperative Incorporation; (h) Isabela I Electric Cooperative,
Inc.; (i) Isabela II Electric Cooperative; (j) Leyte III Electric Cooperative, Inc.; (k) La Union Electric
Cooperative, Inc.; (1) Pangasinan Electric Cooperative III; (m) Peninsula Electric Cooperative, Inc.; (n)
Tarlac II Electric Cooperative, Inc.; (o) Zamboanga City Electric Cooperative, Inc.; and (p) Zamboanga del
Sur Electric Cooperative, Inc.47

The Issues

ABP raised the following issues:

1. Whether or not the ERC committed grave abuse of discretion in issuing the [ERC Clarificatory
Resolution].

2. Whether or not the separate PSAs of Meralco with respondent generation companies should be
disapproved for their failure to comply with the requirements of the [2015 DOE Circular] and the [CSP
Guidelines].48

ABP's petition thus presents a purely legal issue: Does ERC have the statutory authority to postpone the
date of effectivity of CSP, thereby amending the 2015 DOE Circular which required CSP to take effect on
30 June 2015?

The determination of the extent of the ERC's statutory authority in the present case is a purely legal
question and can be resolved without making any finding of fact. The affirmative or negative resolution
of this purely legal question will necessarily result in legal consequences, thus:

(a) If the Court rules affirmatively (that is, the ERC has the statutory authority to postpone the date of
effectivity of CSP, and thereby ERC can amend the 2015 DOE Circular), then the legal consequence is
that the 90 PSAs submitted to the ERC before the amended effectivity of CSP (30 April 2016) will serve
as basis to pass on the power cost to consumers for the duration of the PSAs, whatever the duration of
these PSAs.

(b) If the Court rules negatively (that is, the ERC does not have the statutory authority to postpone the
date of effectivity of CSP, and thereby cannot amend the 2015 DOE Circular), then the legal
consequence is that the 90 PSAs submitted to the ERC after the effectivity of CSP on or after 30 June
2015 cannot serve as basis to pass on the power cost to consumers. In such a case, the ERC will have to
conduct CSP on all PSA applications submitted on or after 30 June 2015.

Clearly, there is no factual issue in dispute in the present case, and no factual issue has been raised by
any of the parties. Thus, the present case can be resolved purely on the legal issue raised by ABP even as
the resolution of this purely legal issue will necessarily result in legal consequences either way.
The Court's Ruling

We GRANT ABP's petition. The ERC does not have the statutory authority to postpone the date of
effectivity of CSP, and thereby cannot amend the 2015 DOE Circular. As a result, the 90 PSAs submitted
to the ERC after the effectivity of CSP on or after 30 June 2015 cannot serve as basis to pass on the
power cost to consumers. The ERC must require CSP on all PSA applications submitted on or after 30
June 2015.

Certiorari and Prohibition

As Remedy

Petitioner ABP correctly filed a petition for certiorari and prohibition before this Court.

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[T]he remedies of certiorari and prohibition are necessarily broader in scope and reach, and the writ
of certiorari or prohibition may be issued to correct errors of jurisdiction committed not only by a
tribunal, corporation, board or officer exercising judicial, quasi-judicial or ministerial functions but also
to set right, undo and restrain any act of grave abuse of discretion amounting to lack or excess of
jurisdiction by any branch or instrumentality of the Government, even if the latter does not exercise
judicial, quasi-judicial or ministerial functions. This application is expressly authorized by the text of the
second paragraph of Section 1, [Article 8 of the 1987 Constitution].49 (Boldfacing and italicization added)

Not every abuse of discretion can be occasion for this Court to exercise its jurisdiction. Grave abuse of
discretion means "such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction, or, in other words where 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 or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.
It is not sufficient that a tribunal, in the exercise of its power, abused its discretion, such abuse must be
grave."50

The Dissenting Opinion of Justice Andres B. Reyes, Jr. would rather have this Court dismiss the petition.
Justice Reyes asserts that the ERC, in issuing the ERC Clarificatory Resolution, acted within its
jurisdiction51 and did not act with grave abuse of discretion amounting to lack or excess of
jurisdiction.52 Justice Reyes claims that the ERC was exercising its quasi-legislative power, as granted by
Sections 43 and 45 of the EPIRA and as defined in Sections 3 and 4 of the 2015 DOE Circular, when the
ERC issued the ERC Clarificatory Resolution. Justice Reyes advances three reasons to justify his assertion
that the ERC did not act with grave abuse of discretion amounting to lack or excess of jurisdiction.

First, the implementation of ERC Resolution No. 13 caused an avalanche of concerns and confusion from
the stakeholders of the industry regarding the actual implementation of the provisions of the resolution,
so much so that a multitude of [Distribution Utilities] DUs, mostly electric cooperatives, sought for an
exemption from the guidelines in the resolution. xxx.
xxxx

Second, ERC did not "evade" its positive duty as provided for in the Constitution, the EPIRA, [the 2015
DOE Circular], or [the CSP Guidelines] as the petitioners would like the Court to believe.xx x.
xxxx

xx x ERC's action on merely "restating" the date of effectivity of [the ERC Clarificatory Resolution] - its
own resolution that has been in effect since April, 2016 - has not been shown to have been promulgated
with grave abuse of discretion amounting to lack or excess of jurisdiction.

Third, it must also be emphasized that [the ERC Clarificatory Resolution] enjoys a strong presumption of
its validity. x x x. 53

Justice Reyes's Dissenting Opinion also finds no problem with the issuance and the contents of the ERC
Clarificatory Resolution.1âшphi1 According to Justice Reyes, under the Joint Resolution executed by the
DOE and the ERC on 20 October 2015, the DOE and the ERC agreed that the ERC shall issue the
appropriate regulation to implement CSP. "54

Justice Reyes is correct - consistent with their respective mandates under EPIRA, the DOE and the ERC
agreed that the ERC shall issue the appropriate regulation to implement CSP in accordance with the
2015 DOE Circular. 55 However, the ERC's delegated authority is limited to implementing or
executing CSP in accordance with the 2015 DOE Circular, not postponing CSP so as to freeze CSP for at
least 20 years, effectively suspending CSP for one entire generation of Filipinos. The delegated authority
to implement CSP does not include the authority to postpone or suspend CSP for 20 years, beyond the
seven-year terms of office56 of the ERC Commissioners postponing or suspending the CSP, and beyond
the seven-year terms of office of their next successors, as well as beyond the six-year terms of office of
three Presidents of the Republic.

The ERC's exercise of its quasi-legislative power, which took the form of the issuance of the ERC
Clarificatory Resolution, was done in excess of its jurisdiction. The postponement of the effectivity of

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CSP was without the approval, and even without coordination with the DOE, in clear and blatant
violation of Section 4 of the 2015 DOE Circular mandating CSP. The ERC has no power to postpone the
effectivity of the 2015 DOE Circular. Under the 2015 DOE Circular, the ERC can only issue supplemental
guidelines, which means guidelines to implement the 2015 DOE Circular, and not to amend it.
Postponing the effectivity of CSP amends the 2015 DOE Circular, and does not constitute issuance of
mere supplemental guidelines.

The issuance of the ERC Clarificatory Resolution was attended with grave abuse of discretion
amounting to lack or excess of jurisdiction for the following reasons:

(1) Postponing the effectivity of CSP from 30 June 2015 to 7 November 2015, and again postponing the
effectivity of CSP from 7 November 2015 to 30 April 2016, or a total of 305 days, allowed DUs
nationwide to avoid the mandatory CSP;

(2) Postponing the effectivity of CSP effectively freezes for at least 20 years the DOE-mandated CSP to
the great prejudice of the public. The purpose of CSP is to compel DUs to purchase their electric power
at a transparent, reasonable, and least-cost basis, since this cost is entirely passed on to consumers.
The ERC's postponement unconscionably placed this public purpose in deep freeze for at least 20
years.

Indisputably, the ERC committed grave abuse of discretion amounting to lack or excess of jurisdiction
when the ERC postponed the effectivity of CSP. The postponement effectively prevented for at least
20 years the enforcement of a mechanism intended to ensure "transparent and reasonable prices in a
regime of free and fair competition," as mandated by law under EPIRA, a mechanism implemented in
the 2015 DOE Circular which took effect on 30 June 2015.

In short, in the absence of CSP, there is no transparency in the purchase by DUs of electric power, and
thus there is no assurance of the reasonableness of the power rates charged to consumers. As a
consequence, all PSA applications submitted to the ERC on or after 30 June 2015 should be deemed
not submitted and should be made to comply with CSP.

Why the ERC Acted in Excess of its Jurisdiction:

Purpose of CSP and Significance of the
Postponement of the CSP Deadline

The EPIRA was enacted on 8 June 2001. Among the EPIRA's declared State policies are, as stated in its
Section 2:57

xxxx

(b) To ensure the quality, reliability, security and affordability of the supply of electric power;

(c) To ensure transparent and reasonable prices of electricity in a regime of free and fair
competition and full public accountability to achieve greater operational and economic efficiency and
enhance the competitiveness of Philippine products in the global market; [and]
xxxx

(f) To protect the public interest as it is affected by the rates and services of electric utilities and other
providers of electric power;

x x x x (Boldfacing and italicization added)

The EPIRA mandates the DOE to "supervise the restructuring of the electricity industry."58 The EPIRA
amended Section 5 of Republic Act No. 7638, or "The Department of Energy Act of 1992," to allow the
DOE to fulfill this new mandate under the EPIRA.

More importantly, Section 37 of the EPIRA includes the following in its enumeration of the DOE's
powers and functions:

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(a) Formulate policies for the planning and implementation of a comprehensive program for the
efficient supply and economical use of energy consistent with the approved national economic plan x
x x and provide a mechanism for the integration, rationalization, and coordination of the various energy
programs of the Government;
xxxx

(d) Ensure the reliability, quality and security of supply of electric power;
xxxx

(e) x x x [T]he DOE shall, among others,

xxxx

(ii) Facilitate and encourage reforms in the structure and operations of distribution utilities for greater
efficiency and lower costs;
xxxx

(h) Exercise supervision and control over all government activities relative to energy projects in order
to attain the goals embodied in Section 2 of RA 7638;
xxxx

(p) Formulate such rules and regulations as may be necessary to implement tile objectives of this Act; x
xx

x x x x (Boldfacing and italicization added)

Under the EPIRA, it is the DOE that issues the rules and regulations to implement the EPIRA, including
the implementation of the policy objectives stated in Section 259 of the EPIRA. Rules and regulations
include circulars that have the force and effect of rules or regulations. Thus, pursuant to its powers
and functions under the EPIRA, the DOE issued the 2015 DOE Circular mandating the conduct of CSP.

The 2015 DOE Circular, as stated in its very provisions, was issued pursuant to the DOE's power to
"formulate such rules and regulations as may be necessary to implement the objectives of the
EPIRA,"60 where the State policy is to "[p]rotect the public interest as it is affected by the rates and
services of electric utilities and other providers of electric power."61 Under the EPIRA, it is also the
State policy to "ensure the x x x affordability of the supply of electric power."62 The purpose of the
2015 DOE Circular is to implement the State policies prescribed in the EPIRA. Clearly, the 2015 DOE
Circular constitutes a rule or regulation issued by the DOE pursuant to its rule-making power under
Section 37(p) of the EPIRA.

The EPIRA also provides for the powers and functions of the ERC. Section 43 of the EPIRA mandates that
the ERC "shall be responsible for the following key functions in the restructured industry:"

(a) Enforce the implementing rules and regulations of this Act.

xxxx

(o) Monitor the activities in the generation and supply of the electric power industry with the end in
view of promoting free market competition and ensuring that the allocation or pass through of bulk
purchase cost by distributors is transparent, non-discriminatory and that any existing subsidies shall
be divided pro-rata among all retail suppliers;

x x x x (Boldfacing and italicization added)

Thus, the very first mandate of the ERC under its charter, the EPIRA, is to "[e]nforce the implementing
rules and regulations" of the EPIRA as formulated and adopted by DOE. Clearly, under the EPIRA, it is
the DOE that formulates the policies, and issues the rules and regulations, to implement the
EPIRA. The function of the ERC is to enforce and implement the policies formulated, as well as the rules
and regulations issued, by the DOE. The ERC has no power whatsoever to amend the implementing
rules and regulations of the EPIRA as issued by the DOE. The ERC is further mandated under EPIRA to

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ensure that the "pass through of bulk purchase cost by distributors is transparent [and] non-
discriminatory."63

Despite the ERC's characterization as an "independent, quasi-judicial regulatory body,"64 it is incorrect to

conclude, as Justice Alfredo Benjamin S. Caguioa holds, that the ERC exercises "inherent and sufficient
power,"65 and "sufficient power, as the independent regulator of the industry,"66 to supplant or change,
as it did in the present case, policies, rules, and regulations prescribed by the DOE. The power involved
in the ERC's implementation of the 2015 DOE Circular is not quasi-judicial but executive. There are no
adverse parties involved in the implementation by the ERC of the 2015 DOE Circular. The ERC does not
adjudicate rights and obligations of adverse parties in the present case. The issue presented here
involves the propriety of the exercise of the ERC's executive implementation of the policies, as well as
the rules and regulations of the EPIRA as issued by the DOE.

Moreover, the nature of the power involved in the ERC's postponement of the effectivity of CSP as
mandated in the 2015 DOE Circular is not quasi-judicial but delegated legislative power. Justice Caguioa
states that "the ERC could solely issue"67 any resolution changing the dates of effectivity of CSP as set by
the CSP Guidelines and the ERC Clarificatory Resolution "because it was empowered by the law, i.e.,
the EPIRA."68

We quote below the entirety of Section 43 of the EPIRA, prescribing the functions of the ERC, and
there is absolutely nothing whatsoever in this complete enumeration of the ERC's functions that
grants the ERC rule-making power to supplant or change the policies, rules, regulations, or circulars
prescribed by the DOE. The ERC's functions, as granted by the EPIRA, are limited, inter alia, to the
enforcement of the implementing rules and regulations of the EPIRA, and not to amend or revoke them.
At most, as stated in paragraph (m) of Section 43, the ERC may only take any other action delegated to it
pursuant to EPIRA. The ERC may not exceed its delegated authority. Section 43 of the EPIRA provides as
follows:

Section 43. Functions of the ERC. - The ERC shall promote competition, encourage market development,
ensure customer choice and discourage/penalize abuse of market power in the restructured electricity
industry. In appropriate cases, the ERC is authorized to issue cease and desist order after due notice and
hearing. Towards this end, it shall be responsible for the following key functions in the restructured
industry:

(a) Enforce the implementing rules and regulations of this Act;

(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in accordance with
law, a National Grid Code and a Distribution Code which shall include, but not limited to, the following:

(i) Performance standards for TRANSCO O & M Concessionaire, distribution utilities and
suppliers: Provided, That in the establishment of the performance standards, the nature and function of
the entities shall be considered; and

(ii) Financial capability standards for the generating companies, the TRANSCO, distribution utilities and
suppliers: Provided, That in the formulation of the financial capability standards, the nature and function
of the entity shall be considered: Provided, further, That such standards are set to ensure that the
electric power industry participants meet the minimum financial standards to protect the public interest.
Determine, fix, and approve, after due notice and public hearings the universal charge, to be imposed on
all electricity end-users pursuant to Section 34 hereof;

(c) Enforce the rules and regulations governing the operations of the electricity spot market and the
activities of the spot market operator and other participants in the spot market, for the purpose of
ensuring a greater supply and rational pricing of electricity;

(d) Determine the level of cross subsidies in the existing retail rate until the same is removed pursuant
to Section 7 4 hereof;

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(e) Amend or revoke, after due notice and hearing, the authority to operate of any person or entity
which fails to comply with the provisions hereof, the IRR or any order or resolution of the ERC. In the
event a divestment is required, the ERC shall allow the affected party sufficient time to remedy the
infraction or for an orderly disposal, but shall in no case exceed twelve (12) months from the issuance of
the order;

(t) In the public interest, establish and enforce a methodology for setting transmission and distribution
wheeling rates and retail rates for the captive market of a distribution utility, taking into account all
relevant considerations, including the efficiency or inefficiency of the regulated entities. The rates must
be such as to allow the recovery of just and reasonable costs and a reasonable return on rate base
(RORB) to enable the entity to operate viably. The ERC may adopt alternative forms of internationally
accepted rate-resetting methodology as it may deem appropriate. The rate-setting methodology so
adopted and applied must ensure a reasonable price of electricity. The rates prescribed shall be
nondiscriminatory. To achieve this objective and to ensure the complete removal of cross subsidies, the
cap on the recoverable rate of system losses prescribed in Section 10 of Republic Act No. 7832, is hereby
amended and shall be replaced by caps which shall be determined by the ERC based on load density,
sales mix, cost of service, delivery voltage and other technical considerations it may promulgate. The
ERC shall determine such form of rate-setting methodology, which shall promote efficiency. In case the
rate setting methodology used is RORB, it shall be subject to the following guidelines:

(i) For purposes of determining the rate base, the TRANSCO or any distribution utility may be allowed to
revalue its eligible assets not more than once every three (3) years by an independent appraisal
company: Provided, however, That ERC may give an exemption in case of unusual devaluation: Provided,
further, That the ERC shall exert efforts to minimize price shocks in order to protect the consumers;

(ii) Interest expenses are not allowable deductions from permissible return on rate base;

(iii) In determining eligible cost of services that will be passed on to the end-users, the ERC shall
establish minimum efficiency performance standards for the TRANSCO and distribution utilities
including systems losses, interruption frequency rates, and collection efficiency;

(iv) Further, in determining rate base, the TRANSCO or any distribution utility shall not be allowed to
include management inefficiencies like cost of project delays not excused by force majeure, penalties
and related interest during construction applicable to these unexcused delays; and

(v) Any significant operating costs or project investments of TRANSCO and distribution utilities which
shall become part of the rate base shall be subject to verification by the ERC to ensure that the
contracting and procurement of the equipment, assets and services have been subjected to transparent
and accepted industry procurement and purchasing practices to protect the public interest.

(g) Three (3) years after the imposition of the universal charge, ensure that the charges of the TRANSCO
or any distribution utility shall bear no cross subsidies between grids, within grids, or between classes of
customers, except as provided herein;

(h) Review and approve any changes on the terms and conditions of service of the TRANSCO or any
distribution utility;

(i) Allow TRANSCO to charge user fees for ancillary services to all electric power industry participants or
self-generating entities connected to the grid. Such fees shall be fixed by the ERC after due notice and
public hearing;

(j) Set a lifeline rate for the marginalized end-users;

(k) Monitor and take measures in accordance with this Act to penalize abuse of market power,
cartelization, and anti-competitive or discriminatory behavior by any electric power industry participant;

(l) Impose fines or penalties for any non-compliance with or breach of this Act, the IRR of this Act and
the rules and regulations which it promulgates or administers;

214
(m) Take any other action delegated to it pursuant to this Act;

(n) Before the end of April of each year, submit to the Office of the President of the Philippines and
Congress, copy furnished the DOE, an annual report containing such matters or cases which have been
filed before or referred to it during the preceding year, the actions and proceedings undertaken and its
decision or resolution in each case. The ERC shall make copies of such reports available to any interested
party upon payment of a charge which reflects the printing costs. The ERC shall publish all its decisions
involving rates and anti-competitive cases in at least one (1) newspaper of general circulation, and/or
post electronically and circulate to all interested electric power industry participants copies of its
resolutions to ensure fair and impartial treatment;

(o) Monitor the activities of the generation and supply of the electric power industry with the end in
view of promoting free market competition and ensuring that the allocation or pass through of bulk
purchase cost by distributors is transparent, non-discriminatory and that any existing subsidies shall be
divided pro-rata among all retail suppliers;

(p) Act on applications for or modifications of certificates of public convenience and/or necessity,
licenses or permits of franchised electric utilities in accordance with law and revoke, review and modify
such certificates, licenses or permits in appropriate cases, such as in cases of violations of the Grid Code,
Distribution Code and other rules and regulations issued by the ERC in accordance with law;

(q) Act on applications for cost recovery and return on demand side management projects;

(r) In the exercise of its investigative and quasi-judicial powers, act against any participant or player in
the energy sector for violations of any law, rule and regulation governing the same, including the rules
on cross-ownership, anti-competitive practices, abuse of market positions and similar or related acts by
any participant in the energy sector or by any person, as may be provided by law, and require any
person or entity to submit any report or data relative to any investigation or hearing conducted
pursuant to this Act;

(s) Inspect, on its own or through duly authorized representatives, the premises, books of accounts and
records of any person or entity at any time, in the exercise of its quasi-judicial power for purposes of
determining the existence of any anti-competitive behavior and/or market power abuse and any
violation of rules and regulations issued by the ERC;

(t) Perform such other regulatory functions as are appropriate in order to ensure the successful
restructuring and modernization of the electric power industry, such as, but not limited to, the rules and
guidelines under which generation companies, distribution utilities which are not publicly listed shall
offer and sell to the public a portion not less than fifteen percent ( 15%) of their common shares of
stocks: Provided, however, That generation companies, distribution utilities or their respective holding
companies that are already listed in the PSE are deemed in compliance. For existing companies, such
public offering shall be implemented not later than five (5) years from the effectivity of this Act. New
companies shall implement their respective public offerings not later than five (5) years from the
issuance of their certificate of compliance; and

(u) The ERC shall have the original and exclusive jurisdiction over all cases contesting rates, fees, fines
and penalties imposed by the ERC in the exercise of the abovementioned powers, functions and
responsibilities and over all cases involving disputes between and among participants or players in the
energy sector.

All notices of hearings to be conducted by the ERC for the purpose of fixing rates or fees shall be
published at least twice for two successive weeks in two (2) newspapers of nationwide circulation.

In the present case, where there is no exercise of the ERC's quasijudicial powers, the ERC is legally
bound to enforce the rules and regulations of the DOE as authorized under the EPIRA. The ERC has no
independence or discretion to ignore, waive, amend, postpone, or revoke the rules and regulations of
the DOE pursuant to the EPIRA, as it is horn book doctrine that rules and regulations issued pursuant
to law by administrative agencies, like the DOE, have the force and effect of law.69 In fact, the first duty

215
and function of the ERC under its charter is to "enforce the implementing rules and regulations" of the
EPIRA as issued by the DOE. Certainly, the ERC has no power to ignore, waive, amend, postpone, or
revoke the policies, rules, regulations, and circulars issued by the DOE pursuant to the EPIRA.

In any event, even in quasi-judicial cases, the ERC is bound to apply the policies, rules, regulations,
and circulars issued by the DOE as the ERC has no power to ignore, waive, amend, postpone, or
revoke the policies, rules, regulations, and circulars issued by the DOE pursuant to the EPIRA. To
repeat, the DOE's rules, regulations, and circulars issued pursuant to the DOE's rule-making power
under the EPIRA have the force and effect of law which the ERC is legally bound to follow, whether the
ERC is exercising executive, quasi-legislative, or quasi-judicial powers.

Pursuant to the DOE's mandate under the EPIRA,70 the 2015 DOE Circular required all DUs to undergo
CSP in procuring PSAs. The DOE issued on 11 June 2015 the 2015 DOE Circular which took effect upon
its publication on 30 June 2015.

The 2015 DOE Circular recognized that under the EPIRA, the DOE has the mandate to "formulate such
rules and regulations as may be necessary to implement the objectives of the EPIRA,"71 where the
State policy is to "[p]rotect the public interest as it is affected by the rates and services of electric
utilities and other providers of electric power."72 The 2015 DOE Circular reiterated the EPIRA's mandate
that "all Distribution Utilities (DUs) shall have the obligation to supply electricity in the least-cost
manner to their Captive Market, subject to the collection of retail rate du[l]y approved by the [ERC]."73

The 2015 DOE Circular mandated that DUs, including electric cooperatives, obtain their PSAs through
CSP. Section 1 of the 2015 DOE Circular states the principles behind CSP:

Section 1. General Principles. Consistent with its mandate, the DOE recognizes that Competitive
Selection Process (CSP) in the procurement of PSAs by the DUs ensures security and certainty of
electricity prices of electric power to end-users in the long-term. Towards this end, all CSPs undertaken
by the DUs shall be guided by the following principles:

(a) Increase the transparency needed in the procurement process to reduce risks;

(b) Promote and instill competition in the procurement and supply of electric power to all end-users;

(c) Ascertain least-cost outcomes that are unlikely to be challenged in the future as the political and
institutional scenarios should change; and

(d) Protect the interest of the general public. (Boldfacing added)

In sum, the raison d'etre of CSP is to ensure transparency and competition in the procurement of power
supply by DUs so as to provide the least-cost electricity to the consuming public.

The clear text of Section 3 of the 2015 DOE Circular mandates the conduct of CSP after the Circular's
effectivity on 30 June 2015.

Section 3. Standard Features in the Conduct of CSP. After the effectivity of this Circular, all DUs shall
procure PSAs only through CSP conducted through a Third Party duly recognized by the ERC and the
DOE. In case of the [Electric Cooperatives (ECs)], the Third Party shall also be duly recognized by the
National Electrification Administration (NEA).

x x x x (Boldfacing and italicization added)

Section 5 of the 2015 DOE Circular states the non-retroactivity of the Circular's effect.

Section 5. Non-Retroactivity. This Circular shall have prospective application and will not apply to PSAs
with tariff rates already approved and/or have been filed for approval by the ERC before the effectivity
of this Circular. (Boldfacing added)

216
Clearly, PSAs filed with the ERC after the effectivity of the 2015 DOE Circular must comply with CSP as
only PSAs filed "before the effectivity" of the Circular are excluded from CSP.

Section 10 of the 2015 DOE Circular provides for its effectivity:

Section 10. Effectivity. This Circular shall take effect immediately upon its publication in two (2)
newspapers of general circulation and shall remain in effect until otherwise revoked. (Boldfacing added)

The 2015 DOE Circular took effect upon its publication on 30 June 2015 in the Philippine Daily
Inquirer and the Philippine Star.74 Section 10 expressly declares that the "Circular x x x shall remain in
effect until otherwise revoked." Indisputably, CSP became mandatory as of 30 June 2015. Taking all
these provisions together, all PSAs submitted to the ERC after the effectivity of the 2015 DOE Circular,
on or after 30 June 2015, are required to undergo CSP.

Since the 2015 DOE Circular was issued solely by the DOE, it is solely the DOE that can amend, postpone,
or revoke the 2015 DOE Circular unless a higher authority, like the Congress or the President, amends or
revokes it. Certainly, the ERC has no authority to amend, postpone, or revoke the 2015 DOE Circular,
including its date of effectivity.

The Joint Resolution executed by DOE and the ERC on 20 October 2015 reiterated that the ERC shall
issue the appropriate regulation to implement CSP. The Joint Resolution did not authorize the ERC to
change the date of effectivity of the mandatory CSP. The Joint Resolution expressly mandated that the
"ERC shall issue the appropriate regulation to implement" CSP. The power "to implement" CSP does
not include the power to postpone the date of effectivity of CSP, which is expressly mandated in the
2015 DOE Circular to take effect upon the publication of the Circular. In fact, to postpone is the opposite
of "to implement."

On the same date, 20 October 2015, the ERC issued the CSP Guidelines, which directed all DUs to
conduct CSP in the procurement of their power supply for their captive markets. While the 2015 DOE
Circular mandated CSP to take effect on 30 June 2015, the ERC under the CSP Guidelines unilaterally
postponed the date of effectivity of CSP from 30 June 2015 to 7 November 2015 or by 130 days. This
marks the first postponement by ERC of the effectivity of the mandatory CSP.

On 15 March 2016, however, the ERC, for the second time, unilaterally postponed the date of
effectivity of the mandatory CSP. On this date the ERC issued the ERC Clarificatory Resolution, which
restated the date of effectivity of CSP from 7 November 2015 to 30 April 2016. The second
postponement of the effectivity of CSP from 7 November 2015 to 30 April 2016, or by 175 days,
allowed DUs to enter into contracts during the period of postponement to avoid the mandatory CSP.

Why the ERC Acted in Excess of its Jurisdiction:

Required Coordination Between
the DOE and the ERC

The 2015 DOE Circular explicitly stated the instances that required joint action of the DOE and the ERC:

1. Recognition of the Third Party that will conduct the CSP for the procurement of PSAs by the DUs;

2. Issuance of guidelines and procedures for the aggregation of the un-contracted demand requirements
of the DUs;

3. Issuance of guidelines and procedures for the recognition or accreditation of the Third Party that
conducts the CSP; and

4. Issuance of supplemental guidelines and procedures to properly guide the DUs and the Third Party in
the design and execution of the CSP.

These instances are in Sections 3 and 4 of the 2015 DOE Circular:

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Section 3. Standard Features in the Conduct of CSP. After the effectivity of this Circular, all DUs shall
procure PSAs only through CSP conducted through a Third Party duly recognized by the ERC and the
DOE. In case of the [Electric Cooperatives (ECs)], the Third Party shall also be duly recognized by the
National Electrification Administration (NEA).
xxxx

Within one hundred twenty (120) days from the effectivity of this Circular, the ERC and [the] DOE shall
jointly issue guidelines and procedures for the aggregation of the un-contracted demand
requirements of the DUs and the process for the recognition or accreditation of the Third Party that
conducts the CSP as hereto provided. x x x.
xxxx

Section 4. Supplemental Guidelines. To ensure efficiency and transparency of the CSP Process [sic], the
ERC, upon its determination and in coordination with the DOE shall issue supplemental guidelines and
procedures to properly guide the DUs and the Third Party in the design and execution of the CSP. The
supplemental guidelines should ensure that any CSP and its outcome shall redound to greater
transparency in the procurement of electric supply, and promote greater private sector participation in
the generation and supply sectors, consistent with the declared policies under EPIRA. (Boldfacing and
italicization added)

In all the foregoing instances, the ERC is mandated to act jointly with the DOE. All these instances merely
implement CSP, and do not postpone CSP or amend the 2015 DOE Circular, which are beyond mere
implementation of CSP. If the ERC cannot act by itself on certain instances in the mere implementation
of CSP, then the ERC certainly cannot act by itself in the postponement of CSP or in the amendment of
the 2015 DOE Circular.

We reiterate that the ERC unilaterally postponed the effectivity of the mandatory CSP twice. The ERC
made the first unilateral postponement on 20 October 2015, when it stated that PSAs already filed with
the ERC on or before 7 November 2015 were not required to undergo CSP. This first unilateral
postponement was from 30 June 2015 to 7 November 2015, or a period of postponement of 130 days.
The ERC made a second unilateral postponement on 15 March 2016, when it restated the effectivity of
the CSP Guidelines from 7 November 2015 to 30 April 2016, or a postponement of 175 days. All in all,
the ERC, by itself and without authorization from or coordination with the DOE, postponed the
effectivity of the mandatory CSP for 305 days.

The ERC thus amended, and not merely supplemented, the "guidelines and procedures to properly
guide the DUs and the Third Party in the design and execution of the CSP."75 This is contrary to what the
2015 DOE Circular clearly intended - that CSP shall take effect upon the Circular's publication on 30 June
2015.

In its Comment to the present petition, 76 the DOE denied any responsibility in the ERC's restatement
of the effective date in the ERC Clarificatory Resolution. The DOE stated:

15. DOE is not aware of the cut-off date shift. There is nothing on record that shows that ERC, contrary
to Section 4 of the [2015] DOE Circular, coordinated with DOE in "restating" the date of effectivity to a
later date, or from 7 November 2015 to 30 April 2016 for a period of one-hundred and seventy-five
(175) days. 77 (Boldfacing added)

In contrast, there is nothing in the ERC's 60-page Comment78 which disavowed DOE's allegation of non-
coordination. If anything, the ERC's Comment underscored its assertion that the ERC Clarificatory
Resolution was solely issued by the ERC supposedly as "a legitimate exercise of its quasi-legislative
powers granted by law."79

We do not doubt that the ERC has the power to issue the appropriate regulation to implement CSP. This
is clear from the EPIRA and the 2015 DOE Circular. Indeed, Justice Reyes in his Dissenting Opinion
belabored this delegated power by underscoring the existence of the Joint Resolution. Justice Reyes
misunderstood the delegation of power to mean that the Joint Resolution, by itself, is the required
"coordination" in the implementation of CSP. Under this theory of Justice Reyes, the required

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"coordination" could take place only once upon the issuance of the Joint Resolution, and there can be
no other coordination required in the future even if the ERC issues additional guidelines or regulations
to implement CSP. This interpretation is obviously erroneous.

Moreover, the ERC's power is neither absolute nor unbridled. The ERC can only promulgate rules, but
only insofar as it is authorized. Section 4(b) of Rule 3 of the Implementing Rules and Regulations of the
EPIRA states:

Pursuant to Sections 43 and 45 of the Act, the ERC shall promulgate such rules and regulations as
autltorized tltereby, including but not limited to Competition Rules and limitations on recovery of
system losses, and shall impose fines or penalties for any non-compliance with or breach of the Act,
these Rules and the rules and regulations which it promulgates or administers. (Boldfacing and
italicization added)

The 2015 DOE Circular specifically stated that the ERC's power to issue CSP guidelines and procedures
should be exercised "in coordination with the DOE." The purpose of such coordination was "to ensure
efficiency and transparency in the CSP." In short, the ERC could not issue CSP guidelines and procedures
without coordination with DOE. The DOE has expressly declared that the ERC did not coordinate with
DOE in issuing the ERC Clarificatory Resolution. The ERC's unilateral postponement of CSP for 305 days,
allowing DUs to avoid the mandatory CSP to the great prejudice of the public, was clearly without
authority and manifestly constituted grave abuse of discretion. Moreover, the ERC's unilateral
postponement of CSP egregiously prevented "transparency" and resulted in inefficiency by delaying the
implementation of CSP.

In their Dissenting Opinions, Justice Reyes80 and Justice Caguioa81 both use the DOE's letter dated 18
January 2016,82 which requested the ERC to allow an electric cooperative (Abra Electric Cooperative, Inc.
[ABRECO]) to directly negotiate with a power supplier despite the mandatory CSP, to justify the ERC's
alleged power to amend the 2015 DOE Circular.

First, Justice Reyes overlooks the direction of the exercise of power in this instance: instead of the ERC
acting alone, the DOE directed the ERC to take action on the matter. This letter proves that the power to
amend the 2015 DOE Circular belongs to the DOE, not to the ERC. There is clearly a necessity for the ERC
to coordinate with the DOE with regard to CSP matters.

Second, the DOE's endorsement to the ERC, as expressly stated in the DOE's letter dated 18 January
2016, "does not preclude the ERC from exercising its authority to evaluate ABRECO's PSAs and require
further action, such as subjecting ABRECO's PSA to a Swiss challenge." A Swiss challenge is "a hybrid
mechanism between the direct negotiation approach and the competitive bidding route."83 It is a system
where "[a] third party can bid on a project during a designated period but the original proponent can
counter match any superior offer."84 In short, a Swiss challenge is a form of public bidding, and is
recognized in the implementing rules of laws such as Republic Act No. 6957, "An Act Authorizing the
Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector and
for Other Purposes," as amended by Republic Act No. 7718,85 and Executive Order No.
146,86 "Delegating to the National Economic and Development Authority (NEDA) Board the Power of the
President to Approve Reclamation Projects."87

Third, even assuming that the DOE letter exempted one specific DU from CSP, it did not authorize ERC to
postpone the effectivity of the mandatory CSP for 305 days for all other DUs nationwide.

Fourth, the term of exemption for ABRECO was only for three years, or from 2016 to 2018. The PSAs
executed during ERC's unilateral 305-day postponement had terms that range from 20 to 21 years.

In view of the DOE's explicit assertion that the ERC did not coordinate with the DOE regarding the
issuance of the ERC Clarificatory Resolution, and the ERC's corresponding silence on the same matter,
we hold that the ERC's issuance of the ERC Clarificatory Resolution is void, because it was issued with
grave abuse of discretion and in excess of its rule-making authority.

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Why the ERC Gravely Abused its Discretion:
Effective Twenty- Year Freeze
of the Mandatory CSP

The PSAs between Meralco and its power suppliers were executed and submitted to the ERC within 10
days prior to the restated 30 April 2016 deadline. The data collated in the above-mentioned tables are,
as indicated in the footnotes, found in the pleadings submitted by the pertinent parties. These are
judicial admissions, and are not findings of fact. According to the ERC Clarificatory Resolution, these
PSAs are not required to comply with CSP.

Obviously, the rationale behind CSP - to ensure transparency in the purchase by DUs of bulk power
supply so as to provide the consuming public affordable electricity rates - acquires greater force and
urgency when the DU or its parent company holds a significant equity interest in the bulk power
supplier. Such a parent-subsidiary relationship, or even a significant equity interest in the bulk power
supplier, does not lend itself to fair and arms-length transactions between the DU and the bulk power
supplier.

From Meralco's Comment, we see that the effect of the non-implementation of CSP is more widespread
and far-reaching than what petitioners initially presented. Non-implementation of CSP affects various
areas of the country and not just Meralco's extensive service areas. Postponement of the effectivity of
the mandatory CSP resulted in the exemption from CSP of a total of ninety (90) PSAs covering various
areas of the country. Under the ERC Clarificatory Resolution, the dates of submission put these PSAs
outside the ambit of the mandatory CSP for at least 20 years based on the contract terms of these PSAs.

In effect, the ERC Clarificatory Resolution signaled to DUs to rush the negotiations and finalize their PSAs
with power generation companies. Meeting the extended deadline would then render the 2015 DOE
Circular mandating CSP inutile for at least 20 years. We cannot, in conscience, allow this to happen. To
validate the ERC's postponement of CSP under the CSP Guidelines and the ERC Clarificatory Resolution
means to validate ERC's arbitrary and unauthorized act of putting into deep freeze, for at least 20
years, the principles behind CSP to the great prejudice of the public.88

Why the ERC Gravely Abused its Discretion:

The Whereas Clauses of the
CSP Guidelines and of the ERC Clarificatory Resolution

The ERC's Comment states: "It must be emphasized that the considerable amount of time, money, and
effort it took to enter into a PSA would have been wasted if the CSP [Guidelines] took effect
immediately."89 Granting that negotiations for the PSAs took considerable time, the issuance of the 2015
DOE Circular and of the CSP Guidelines was not conjured on a whim. We find that ERC's Comment fails
to consider the efforts of both the DOE and the ERC prior to the issuance of the 2015 DOE Circular as
well as the CSP Guidelines.

As early as 5 December 2003, the DOE issued Department Circular No. 2003-12-011, entitled "Enjoining
All Distribution Utilities to Supply Adequate, Affordable, Quality and Reliable Electricity," which
reiterated the state policy that "all DUs must x x x take cognizance and assume full responsibility to
forecast, assure and contract for the supply of electric power within their respective franchise areas to
meet their obligations as a DU particularly to their Captive Market."90 Moreover, the DOE had
conducted a series of nationwide public consultations on the proposed policy on competitive
procurement of electric power for all electricity end-users.91 The dates and manner of consultations, as
well as the acts of the DOE and the ERC, were specifically mentioned in the Whereas Clauses of the CSP
Guidelines, thus:

xxxx

WHEREAS, on February 19, 2013, the ERC issued a Notice in ERC Case No. 2013-005 RM, entitled "In the
Matter of the Promulgation of the Rules Governing the Execution, Review and Evaluation of Power
Supply Agreements Entered Into by Distribution Utilities for the Supply of Electricity to their Captive

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Market" (PSA Rules), which was posted on the ERC's website, directing all interested parties to submit
their respective comments on the first draft of the PSA Rules, not later than March 22, 2013;

WHEREAS, on various dates, the ERC received comments on the first draft of the PSA Rules from
interested parties, namely: a) Cagayan Electric Power and Light Co., Inc. (CEPALCO); b) Visayan Electric
Company, Inc. (VECO); c) Quezon Power (Philippines) Ltd. Co. (QPL); d) Power Source Philippines, Inc.
(PSPI); e) National Grid Corporation of the Philippines (NGCP); t) Philippine Independent Power
Producers Association, Inc. (PIPPA); g) Next Power Consortium, Inc.; h) SN Aboitiz Power Group (SNAP);
i) Aboitiz Power Corporation (APC); j) Philippine Electricity Market Corporation (PEMC); k) Manila
Electric Company (MERALCO); 1) Department of Energy (DOE); m) Philippine Rural Electric Cooperatives
Associations, Inc. (PHILRECA); and n) National Rural Electric Cooperative Association (NRECA);

WHEREAS, on October 16, 2013, the ERC issued a Notice of Posting and Publication in the
aforementioned case, which was posted on the ERC's website, directing all interested parties to submit
their respective comments on the second draft of the PSA Rules and setting the same for public
consultations on December 2, 2013 in Pasig City for the Luzon stakeholders and on December 5, 2013 in
Cebu City for the Visayas and Mindanao stakeholders;

WHEREAS, on various dates, the ERC received comments on the second draft of the PSA Rules from
interested parties, namely: a) PHILRECA; b) CEPALCO; c) VECO; d) QPL; e) PSPI; t) NGCP; g) PIPPA; h)
Next Power Consortium, Inc.; i) SNAP; j) APC; k) PEMC; 1) MERALCO; m) DOE; and n) NRECA;

WHEREAS, on January 27, 2014, the ERC issued a Notice of Posting and Public Consultation setting the
second draft of the PSA Rules for public consultations on February 18, 20 and 24, 2014 in Davao City,
Cebu City and Pasig City for the Mindanao, Visayas and Luzon stakeholders, respectively;

WHEREAS, on February 18, 20 and 24, 2014, the ERC conducted public consultations wherein the
comments of the interested partied were discussed;

WHEREAS, the ERC, likewise, conducted Focus Group Discussions (FGDs) with the stakeholders on April
22 to 24, 2014 in Pasig City, May 6 to 8, 2014 in Cebu City, May 13 to 14, 2014 in Cagayan De Oro City
and May 20 to 22, 2014 in Pasig City, to thoroughly discuss major issues in relation to the draft PSA
Rules, such as: a) the requirement of Competitive Selection Process (CSP); b) the proposed PSA
template; c) the joint filing of PSA applications by the DUs and generation companies (GenCos); and d)
the "walk-away" provision in the PSA, and the ERC likewise set the deadline for the submission of
additional comments or position papers for May 30, 2014;

WHEREAS, on various dates, the ERC received position papers/additional comments from interested
parties, namely: a) PIPPA; b) APC; c) Mindanao Coalition of Power Consumers; and d) Association of
Mindanao Rural Electric Cooperatives, Inc. (AMRECO);

WHEREAS, Article III of the draft PSA Rules requires the DU to undertake a transparent and
competitive selection process before contracting for the supply of electricity to its captive market;

WHEREAS, in October 2014, the DOE issued for comments its draft Circular on the proposed Demand
Aggregation and Supply Auctioning Policy (DASAP);

WHEREAS, in the proposed DASAP, all DUS will be mandated to comply with the auction
requirement prescribed therein and other rules and guidelines as may be prescribed in the
implementation of the DASAP;

WHEREAS, by reason of the issuance of the DASAP and pending the finalization thereof, the ERC held in
abeyance its action on ERC Case No. 2013-005 RM and final approval of the draft PSA Rules;

WHEREAS, on June 11, 2015, the Department of Energy (DOE) issued Department Circular No. DC2015-
06-008, Mandating All Distribution Utilities to Undergo Competitive Selection Process (CSP) in Securing
Power Supply Agreements (PSA);

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WHEREAS, the ERC and the DOE are convinced that there is an advantage to be gained by having a CSP
in place, in terms of ensuring transparency in the DUs' supply procurement and providing opportunities
to elicit the best price offers and other PSA terms and conditions from suppliers[.]92 (Boldfacing and
italicization added)

In stark contrast to the extensive consensus-building which attended the drafting of the 2015 DOE
Circular and the CSP Guidelines, the ERC Clarificatory Resolution explicitly admitted that its issuance
was not accompanied by any public consultation or focus group discussion. Rather, the ERC
Clarificatory Resolution was unilaterally issued by the ERC, without coordinating with DOE, on the
basis of "several letters from stakeholders." The stakeholders had no way of knowing the concerns of
their peers as there was no interaction or discussion among the stakeholders.

WHEREAS, since the publication of the CSP [Guidelines] on 06 November 2015, the [ERC] has received
several letters from stakeholders which raised issues on the constitutionality of the effectivity of the CSP
[Guidelines], sought clarification on the implementation of the CSP and its applicability to the renewal
and extension of PSAs, requested a determination of the accepted forms of CSP, and submitted grounds
for exemption from its applicability, among others.

WHEREAS, after judicious study and due consideration of the different perspectives raised in the
aforementioned letters, with the end in view of ensuring the successful implementation of the CSP for
the benefit of consumers, DUs, and GenCos, the [ERC] has resolved to allow a period of transition for the
full implementation of the CSP [Guidelines] and, as such, restates the effectivity date of the CSP
[Guidelines] to a later date[.]93

The CSP Guidelines did not, in the words of the OSG, "take effect immediately." Rather, it was the
product of years of negotiation. The stakeholders were aware of the contents and the eventual
implementation of CSP. Moreover, the CSP Guidelines, although signed on 20 October 2015, took effect
on 7 November 2015, or 18 days after signing.

Why the ERC Gravely Abused its Discretion:

Obligations of a Distribution Utility in the
Electric Power Industry

The EPIRA divided the electric power industry into four sectors, namely: generation, transmission,
distribution, and supply.94 The distribution of electricity to end-users is a regulated common carrier
business requiring a franchise.95 We reiterate that the EPIRA mandates that a distribution utility has the
obligation to supply electricity in the least-cost manner to its captive market, subject to the collection of
distribution retail supply rate duly approved by the ERC.96

Republic Act No. 9209 granted Meralco a congressional franchise to construct, operate, and maintain a
distribution system for the conveyance of electric power to the end-users in the cities and municipalities
of Metro Manila, Bulacan, Cavite, and Rizal, and certain cities, municipalities, and barangays in Batangas,
Laguna, Quezon, and Pampanga. Meralco's franchise is in the nature of a monopoly because it does
not have any competitor in its designated areas. The actual monopolistic nature of Meralco's franchise
was recognized and addressed by the framers of our Constitution, thus:

MR. DAVIDE: xx x

Under Section 15 on franchise, certificate, or any other form of authorization for the operation of a
public utility, we notice that the restriction, provided in the 1973 Constitution that it should not be
exclusive in character, is no longer provided. Therefore, a franchise, certificate or any form of
authorization for the operation of a public utility may be exclusive in character.

MR. VILLEGAS: I think, yes.

MR. DAVIDE: It may be "yes." But would it not violate precisely the thrust against monopolies?

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MR. VILLEGAS: The question is, we do not include the provision about the franchise being exclusive in
character.

MR. SUAREZ: This matter was taken up during the Committee meetings. The example of the public
utility given was the MERALCO. If there is a proliferation of public utilities engaged in the servicing of
the needs of the public for electric current, this may lead to more problems for the nation. That is why
the Commissioner is correct in saying that that will constitute an exemption to the general rule that
there must be no monopoly of any kind, but it could be operative in the case of public utilities.

MR. DAVIDE: Does not the Commissioner believe that the other side of the coin may also be conducive
to more keen competition and better public service?

MR. SUAREZ: The Commissioner may be right.

MR. DAVIDE: Does not the Commissioner believe that we should restore the qualification that it should
not be exclusive in character?

MR. SUAREZ: In other words, under the Commissioner's proposal, Metro Manila, for example, could be
serviced by two or more public utilities similar to or identical with what MERALCO is giving to the public?

MR. DAVIDE: That is correct.

MR. SUAREZ: The Commissioner feels that that may create or generate improvement in the services?

MR. DAVIDE: Yes, because if we now allow an exclusive grant of a franchise, that might not be
conducive to public service.

MR. SUAREZ: We will consider that in the committee level

MR. MONSOD: With the Commissioner's permission, may I just amplify this.

MR. VILLEGAS: Commissioner Monsod would like to make a clarification.

MR. MONSOD: I believe the Commissioner is addressing himself to a situation where it lends itself to
more than one franchise. For example, electric power, it is possible that within a single grid, we may
have different distribution companies. So the Commissioner is right in that sense that perhaps in
some situations, non-exclusivity may be good for the public. But in the case of power generation, this
may be a natural activity that can only be generated by one company, in which case, prohibiting
exclusive franchise may not be in the public interest.97 (Boldfacing added)

Section 5 of Republic Act No. 9209 provides that "[t]he retail rates to [Meralco's] captive market and
charges for the distribution of electric power by [Meralco] to its end-users shall be regulated by and
subject to the approval of the ERC." As the holder of a distribution franchise, Meralco is obligated to
provide electricity at the least cost to its consumers. The ERC, as Meralco's rate regulator, approves the
retail rates - comprising of power and distribution costs - to be charged to end-users. As we have
demonstrated above, both Meralco and the ERC have been remiss in their obligations. Going through
competitive public bidding as prescribed in the 2015 DOE Circular is the only way to ensure a
transparent and reasonable cost of electricity to consumers.

Lest we forget, the ERC is expressly mandated in Section 43(o) of the EPIRA of "ensuring that the x x x
pass through of bulk purchase cost by distributors is transparent." The ERC's postponement of CSP
twice, totaling 305 days and enabling 90 PSAs in various areas of the country to avoid CSP for at least 20
years, directly and glaringly violates this express mandate of the ERC, resulting in the non-transparent,
secretive fixing of prices for bulk purchases of electricity, to the great prejudice of the 95 million Filipinos
living in this country as well as the millions of business enterprises operating in this country. This ERC
action is a most extreme instance of grave abuse of discretion, amounting to lack or excess of
jurisdiction, warranting the strong condemnation by this Court and the annulment of the ERC's action.

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Absent compliance with CSP in accordance with the 2015 DOE Circular, the PSAs shall be valid only as
between the DUs and the power generation suppliers, and shall not bind the DOE, the ERC, and the
public for purposes of determining the transparent and reasonable power purchase cost to be passed on
to consumers.

On 1 February 2018, the DOE issued Circular No. DC2018-02-0003 entitled "Adopting and Prescribing the
Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power
Supply Agreements for the Captive Market" (2018 DOE Circular). The DOE prescribed, in Annex "A" of
this 2018 DOE Circular, the DOE's own CSP Policy in the procurement of power supply by DUs for their
captive market (2018 DOE CSP Policy). Section 16.1 of the 2018 DOE CSP Policy expressly repealed
Section 4 of the 2015 DOE Circular authorizing ERC to issue supplemental guidelines to implement CSP.

In short, the DOE revoked the authority it delegated to the ERC to issue supplemental guidelines to
implement CSP, and the DOE itself issued its own guidelines, the 2018 DOE CSP Policy, to implement CSP
under the 2015 DOE Circular. This means that the CSP Guidelines issued by the ERC have
become functus officio and have been superseded by the 2018 DOE CSP Policy. Under its Section 15, the
2018 DOE CSP Policy is expressly made to apply to "all prospective PSAs." The 2018 DOE Circular,
including its Annex "A," took effect upon its publication on 9 February 2018. Thus, the 90 PSAs
mentioned in this present case must undergo CSP in accordance with the 2018 DOE Circular, in
particular the 2018 DOE CSP Policy prescribed in Annex "A" of the 2018 DOE Circular.

WHEREFORE, the petition for certiorari and prohibition is GRANTED. The first paragraph of Section 4 of
Energy Regulatory Commission Resolution No. 13, Series of 2015 (CSP Guidelines), and Energy
Regulatory Commission Resolution No. 1, Series of 2016 (ERC Clarificatory Resolution), are hereby
declared VOID ab initio. Consequently, all Power Supply Agreement applications submitted by
Distribution Utilities to the Energy Regulatory Commission on or after 30 June 2015 shall comply with
the Competitive Selection Process in accordance with Department of Energy Circular No. DC2018-02-
0003 (2018 DOE Circular) and its Annex "A." Upon compliance with the Competitive Selection Process,
the power purchase cost resulting from such compliance shall retroact to the date of effectivity of the
complying Power Supply Agreement, but in no case earlier than 30 June 2015, for purposes of passing
on the power purchase cost to consumers.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

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