Uanan, Claudine S.

Investment and Incentive Law

Assignment #1

1. KILOSBAYAN vs. MANUEL L. MORATO
G.R. No. 118910. November 16, 1995.

FACTS: 
Petitioners seek reconsideration of our decision in this case. They insist that the decision
in the first case has already settled (1) whether petitioner Kilosbayan, Inc. has a standing to sue
and (2) whether under its charter (R.A. No. 1169, as amended) the Philippine Charity
Sweepstakes Office can enter into any form of association or collaboration with any party in
operating an on-line lottery. Consequently, petitioners contend, these questions can no longer be
reopened.

The policies and principles of the Constitution invoked by petitioner read:

Art. II, §5. The maintenance of peace and order, the protection life, liberty, and
property, and the promotion of the general welfare are essential for the enjoyment
by all the people of the blessings of democracy.

Id., §12. The natural and primary right and duty of parents in the rearing of the
youth for civic efficiency and the development of moral character shall receive
the support of the Government.

Id., §13. The State recognizes the vital role of the youth in nation-building and
shall promote and protect their physical, moral, spiritual, intellectual, and social
well-being. It shall inculcate in the youth patriotism and nationalism, and
encourage their involvement in public and civic affairs.

Id., §17. The State shall give priority to education, science and technology, arts,
culture, and sports to foster patriotism and nationalism, accelerate social progress,
and promote total human liberation and development.

ISSUES: 
Whether or not the petitioners have standing?

HELD:
No, the petitioners do not have the standing in this case.
As already stated, however, these provisions are not self-executing. They do not confer
rights which can be enforced in the courts but only provide guidelines for legislative or executive
action. By authorizing the holding of lottery for charity, Congress has in effect determined that
consistently with these policies and principles of the Constitution, the PCSO may be given this
authority. That is why we said with respect to the opening by the PAGCOR of a casino in
Cagayan de Oro, "the morality of gambling is not a justiciable issue. Gambling is not illegal per
se. . . . It is left to Congress to deal with the activity as it sees fit." 

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It is noteworthy that petitioners do not question the validity of the law allowing lotteries.
It is the contract entered into by the PCSO and the PGMC which they are assailing. This case,
therefore, does not raise issues of constitutionality but only of contract law, which petitioners,
not being privies to the agreement, cannot raise.
Nor does Kilosbayan's status as a people's organization give it the requisite personality to
question the validity of the contract in this case. The Constitution provides that "the State shall
respect the role of independent people's organizations to enable the people to pursue and protect,
within the democratic framework, their legitimate and collective interests and aspirations through
peaceful and lawful means," that their right to "effective and reasonable participation at all levels
of social, political, and economic decision-making shall not be abridged."

NOTES:

STARE DECISIS cannot apply. The previous ruling sustaining the standing of the
petitioners is a departure from the settled rulings on real parties in interest because no
constitutional issues were actually involved.

LAW OF THE CASE cannot also apply. Since the present case is not the same one
litigated by the parties before in Kilosbayan vs. Guingona, Jr., the ruling cannot be in any sense
be regarded as the law of this case. The parties are the same but the cases are not.

RULE ON CONCLUSIVENESS cannot still apply. An issue actually and directly passed
upon and determine in a former suit cannot again be drawn in question in any future action
between the same parties involving a different cause of action. But the rule does not apply to
issues of law at least when substantially unrelated claims are involved. When the second
proceeding involves an instrument or transaction identical with, but in a form separable from the
one dealt with in the first proceeding, the Court is free in the second proceeding to make an
independent examination of the legal matters at issue.

Since ELA is a different contract, the previous decision does not preclude determination
of the petitioner's standing. STANDING is a concept in constitutional law and here no
constitutional question is actually involved. The more appropriate issue is whether the petitioners
are REAL PARTIES in INTEREST

2. Chavez v. PEA and AMARI

G.R. No. 133250, July 9, 2002

FACTS:

In 1973, the Comissioner on Public Highways entered into a contract to reclaim areas of
Manila Bay with the Construction and Development Corportion of the Philippines (CDCP).

PEA (Public Estates Authority) was created by President Marcos under P.D. 1084, tasked
with developing and leasing reclaimed lands. These lands were transferred to the care of PEA
under P.D. 1085 as part of the Manila Cavite Road and Reclamation Project (MCRRP). CDCP

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and PEA entered into an agreement that all future projects under the MCRRP would be funded
and owned by PEA.

By 1988, President Aquino issued Special Patent No. 3517 transferring lands to PEA. It
was followed by the transfer of three Titles (7309, 7311 and 7312) by the Register of Deeds of
Paranaque to PEA covering the three reclaimed islands known as the FREEDOM ISLANDS.

Subsequently, PEA entered into a joint venture agreement (JVA) with AMARI, a Thai-
Philippine corporation to develop the Freedom Islands. Along with another 250 hectares, PEA
and AMARI entered the JVA which would later transfer said lands to AMARI. This caused a stir
especially when Sen. Maceda assailed the agreement, claiming that such lands were part of
public domain (famously known as the “mother of all scams”).

Petitioner Frank J. Chavez filed case as a taxpayer praying for mandamus, a writ of
preliminary injunction and a TRO against the sale of reclaimed lands by PEA to AMARI and
from implementing the JVA. Following these events, under President Estrada’s admin, PEA and
AMARI entered into an Amended JVA and Mr. Chaves claim that the contract is null and void.

ISSUE:

Whether or not the transfer to AMARI lands reclaimed or to be reclaimed as part of the
stipulations in the (Amended) JVA between AMARI and PEA violate Sec. 3 Art. XII of the 1987
Constitution; and

Whether or not the court is the proper forum for raising the issue of whether the amended
joint venture agreement is grossly disadvantageous to the government.

HELD:

On the issue of Amended JVA as violating the constitution:

The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease
these lands to private corporations but may not sell or transfer ownership of these lands to private
corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership
limitations in the 1987 Constitution and existing laws.

The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
resources of the public domain until classified as alienable or disposable lands open to
disposition and declared no longer needed for public service. The government can make such
classification and declaration only after PEA has reclaimed these submerged areas. Only then
can these lands qualify as agricultural lands of the public domain, which are the only natural
resources the government can alienate. In their present state, the 592.15 hectares of submerged
areas are inalienable and outside the commerce of man.

Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of
77.34 hectares110 of the Freedom Islands, such transfer is void for being contrary to Section 3,

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Article XII of the 1987 Constitution which prohibits private corporations from acquiring any
kind of alienable land of the public domain.

Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares111 of still submerged areas of Manila Bay, such transfer is void for being contrary to
Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources
other than agricultural lands of the public domain.

PEA may reclaim these submerged areas. Thereafter, the government can classify the
reclaimed lands as alienable or disposable, and further declare them no longer needed for public
service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will
be void in view of Section 3, Article XII of the 1987Constitution which prohibits private
corporations from acquiring any kind of alienable land of the public domain.

3. SALVADOR H. LAUREL vs. RAMON GARCIA

G.R. No. 92013 July 25, 1990

FACTS:
The subject property is the Roppongi property, one of the properties acquired by the
Philippines from Japan pursuant to a Reparations Agreement. The Philippine Embassy was once
located in the said property, before it transferred to the Nampeidai property.
It was decided that the properties in Japan would be available to sale or disposition. One
of the first properties opened up for public auction was the Roppongi property, despite numerous
oppositions from different sectors through the issuance of Executive Order 296.

ISSUE:
Whether or not the sale of the Roppongi property is Constitutional

HELD:
Yes.

The Roppongi property was acquired together with the other properties through

reparation  agreements after World War II. They were assigned to the government sector and that
the Roppongi property was specifically designated under the agreement to house the Philippine
embassy.  The property is of public dominion unless it is convincingly shown that the property
has become patrimonial.  The respondents have failed to do so.
As property of public dominion, the Roppongi lot is outside the commerce of man and
cannot be alienated. Its ownership is a special collective ownership for general use and payment,
in application to the satisfaction of collective needs, and resides in the social group. The purpose
is not to serve the State as the juridical person but the citizens; it is intended for the common and
public welfare and cannot be the object of appropriation.
The fact that the Roppongi site has not been used for a long time for actual Embassy
service doesn’t automatically convert it to patrimonial property. Any such conversion happens
only if the property is withdrawn from public use. A property continues to be part of the public
domain, not available for private appropriation or ownership until there is a formal declaration
on the part of the government to withdraw it from being such.

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Investment and Incentive Law
Assignment #1

4. Miners Association v. Factoran, Jr.,

G.R. No. 98332, January 16, 1995

FACTS:

Former President Corazon Aquino issued Executive Order Nos 211 and 279 in the
exercise of her legislative powers. EO No. 211 prescribes the interim procedures in the
processing and approval of applications for the exploration, development and utilization of
minerals pursuant to Section 2, Article XII of the 1987 Constitution. EO No. 279 authorizes the
DENR Secretary to negotiate and conclude joint-venture, co-production, or production- sharing
agreements for the exploration, development, and utilization of mineral resources.

The issuance and the impeding implementation by the DENR of Administrative Order
Nos. 57 which declares that all existing mining leases or agreements which were granted after
the effectivity of the 1987 Constitution…shall be converted into production-sharing agreements
within one (1) year from the effectivity of these guidelines.” and Administrative Order No. 82
which provides that a failure to submit Letter of Intent and Mineral Production-Sharing
Agreement within 2 years from the effectivity of the Department Administrative Order No. 57
shall cause the abandonment of the mining, quarry, and sand and gravel claims, after their
respective effectivity dates compelled the Miners Association of the Philippines, Inc., an
organization composed of mining prospectors and claim owners and claim holders, to file the
instant petition assailing their validity and constitutionality before this Court.

ISSUE:

Are the two Department Administrative Orders valid?

HELD:

Yes.

Petitioner's insistence on the application of Presidential Decree No. 463, as amended, as the
governing law on the acceptance and approval of declarations of location and all other kinds of
applications for the exploration, development, and utilization of mineral resources pursuant to
Executive Order No. 211, is erroneous. Presidential Decree No. 463, as amended, pertains to the
old system of exploration, development and utilization of natural resources through "license,
concession or lease" which, however, has been disallowed by Article XII, Section 2 of the 1987
Constitution. By virtue of the said constitutional mandate and its implementing law, Executive
Order No. 279 which superseded Executive Order No. 211, the provisions dealing on "license,
concession or lease" of mineral resources under Presidential Decree No. 463, as amended, and
other existing mining laws are deemed repealed and, therefore, ceased to operate as the
governing law. In other words, in all other areas of administration and management of mineral
lands, the provisions of Presidential Decree No. 463, as amended, and other existing mining
laws, still govern. Section 7 of Executive Order No. 279 provides, thus:
Sec. 7. All provisions of Presidential Decree No. 463, as amended, other existing mining laws,

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and their implementing rules and regulations, or parts thereof, which are not inconsistent with the
provisions of this Executive Order, shall continue in force and effect.

Well -settled is the rule, however, that regardless of the reservation clause, mining leases
or agreements granted by the State, such as those granted pursuant to Executive Order No. 211
referred to this petition, are subject to alterations through a reasonable exercise of the police
power of the State.

Accordingly, the State, in the exercise of its police power in this regard, may not be
precluded by the constitutional restriction on non-impairment of contract from altering,
modifying and amending the mining leases or agreements granted under Presidential Decree No.
463, as amended, pursuant to Executive Order No. 211. Police Power, being co-extensive with
the necessities of the case and the demands of public interest; extends to all the vital public
needs. The passage of Executive Order No. 279 which superseded Executive Order No. 211
provided legal basis for the DENR Secretary to carry into effect the mandate of Article XII,
Section 2 of the 1987 Constitution.

WHEREFORE, the petition is DISMISSED for lack of merit.

5. Director of Lands v. Intermediate Court of Appeals

146 SCRA 509 (1986)

FACTS:
Acme Plywood & Veneer Co., Inc., a corp. represented by Mr. Rodolfo Nazario, acquired
from Mariano and Acer Infiel, members of the Dumagat tribe. 5 parcels of land possession of
the Infiels over the land dates back before the Philippines was discovered by Magellan
The land sought to be registered is a private land pursuant to RA 3872 granting absolute
ownership to members of the non-Christian Tribes on land occupied by them or their
ancestral lands, whether with the alienable or disposable public land or within the public
domain

Acme Plywood & Veneer Co. Inc., has introduced more than P45M worth of
improvements. The ownership and possession of the land sought to be registered was duly
recognized by the government when the Municipal Officials of Maconacon, Isabela. Donated
part of the land as the townsite of Maconacon Isabela

IAC affirmed CFI.

ISSUES:
Whether or not the constitutional prohibition against their acquisition by private
corporations or associations applies.
HELD:
NO.
If it is accepted-as it must be-that the land was already private land to which the Infiels
had a legally sufficient and transferable title on October 29, 1962 when Acme acquired it from
said owners, it must also be conceded that Acme had a perfect right to make such acquisition.

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Investment and Incentive Law
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The only limitation then extant was that corporations could not acquire, hold or lease
public agricultural lands in excess of 1,024 hectares

6. Albano v. Reyes
175 SCRA 264 (1989)

FACTS:
The Philippine Ports Authority (PPA) board directed the PPA management to prepare for
the public bidding of the development, management and operation of the Manila International
Container Terminal (MICT) at the Port of Manila. A Bidding Committee was formed by the
DOTC for the public bidding. After evaluation of several bids, the Bidding Committee
recommended the award of the contract to respondent International Container Terminal Services,
Inc. (ICTSI). Accordingly, Rainerio Reyes, then DOTC secretary, declared the ICTSI consortium
as the winning bidder.
On May 18, 1988, the President of the Philippines approved the same with directives that
PPA shall still have the responsibility for planning, detailed engineering, construction,
expansion, rehabilitation and capital dredging of the port, as well as the determination of how the
revenues of the port system shall be allocated for future works; and the contractor shall not
collect taxes and duties except that in the case of wharfage or tonnage dues.
Petitioner Albano, as taxpayer and Congressman, assailed the legality of the award and claimed
that since the MICT is a public utility, it needs a legislative franchise before it can legally operate
as a public utility.

ISSUE: 
Whether a franchise is needed for the operation of the MICT?

Held:
 No. While the PPA has been tasked under E.O. No. 30 with the management and
operation of the MICT and to undertake the provision of cargo handling and port related services
thereat, the law provides that such shall be “in accordance with P.D. 857 and other applicable
laws and regulations”. P.D. 857 expressly empowers the PPA to provide services within Port
Districts “whether on its own, by contract, or otherwise”.

Even if the MICT is considered a public utility, its operation would not necessarily need a
franchise from the legislature because the law has granted certain administrative agencies the
power to grant licenses for or to authorize the operation of public utilities. Reading E.O. 30 and
P.D. 857 together, it is clear that the lawmaker has empowered the PPA to undertake by itself the
operation and management of the MICP or to authorize its operation and management by another
by contract or other means, at its option.

Doctrine: The law granted certain administrative agencies the power to grant licenses for the
operation of public utilities. Theory that MICT is a “wharf” or a “dock”, as contemplated under
the Public Service Act, would not necessarily call for a franchise from the Legislative Branch.

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Investment and Incentive Law
Assignment #1

7. TELEBAP vs COMELEC
G.R. No. 132922, April 21, 1998

Facts:

Petitioners challenge the validity of §92 of B.P. Blg. 881. on the ground (1) that it takes
property without due process of law and without just compensation; (2) that it denies radio and
television broadcast companies the equal protection of the laws; and (3) that it is in excess of the
power given to the COMELEC to supervise or regulate the operation of media of
communication or information during the period of election.
Issue: 
Whether is in excess of the power given to the COMELEC to supervise or regulate the
operation of media of communication or information during the period of election.

Held:
No. 
With the prohibition on media advertising by candidates themselves, the COMELEC
Time and COMELEC Space are about the only means through which candidates can advertise
their qualifications and programs of government. More than merely depriving candidates of time
for their ads, the failure of broadcast stations to provide air time unless paid by the government
would clearly deprive the people of their right to know. Art. III, §7 of the Constitution provides
that “the right of the people to information on matters of public concern shall be recognized,”
while Art. XII, §6 states that “the use of property bears a social function [and] the right to own,
establish, and operate economic enterprises [is] subject to the duty of the State to promote
distributive justice and to intervene when the common good so demands.”

To affirm the validity of §92 of B.P. Blg. 881 is to hold public broadcasters to their
obligation to see to it that the variety and vigor of public debate on issues in an election is
maintained. For while broadcast media are not mere common carriers but entities with free
speech rights, they are also public trustees charged with the duty of ensuring that the
people have access to the diversity of views on political issues. This right of the people is
paramount to the autonomy of broadcast media. To affirm the validity of §92, therefore, is
likewise to uphold the people’s right to information on matters of public concern. The use of
property bears a social function and is subject to the state’s duty to intervene for the common
good. Broadcast media can find their just and highest reward in the fact that whatever altruistic
service they may render in connection with the holding of elections is for that common good.

8. Espina v. Zamora Jr.,

631 SCRA 17 (2010)

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Investment and Incentive Law
Assignment #1
FACTS:
Pres. Estrada signed into law RA 8762, Retail Trade Liberalization Act. It repealed RA
1180, which absolutely prohibited foreign nationals from engaging in the retail trade business.
RA 8762 allows them to do so. The said Act allows natural-born Filipino citizens, who had lost
their citizenship and now reside in the Philippines, to engage in the retail trade business with the
same rights as Filipinos.
Petitioners, who are all members of the House of Representatives, filed the petition
assailing the constitutionality of the said Act on the following grounds: (a) afoul of Sec 9, 19, 20
of Art II of the Constitution; (b) the implementation of R.A. 8762 would lead to alien control of
the retail trade; (c) foreign retailers would crush Filipino retailers and sari-sari store vendors,
destroy self-employment, and bring about more unemployment; (d) World Bank-International
Monetary Fund had improperly imposed the passage of R.A. 8762 on the government as a
condition for the release of certain loans; (e) clear and present danger that the law would promote
monopolies or combinations in restraint of trade.
Respondents countered that petitioners have no legal standing; petition does not involve
any justifiable controversy; failed to overcome the presumption of constitutionality; and the
Constitution mandates the regulation but not the prohibition of foreign investments.
ISSUE:
Whether or not petitioners have legal standing to challenge the said Act
Whether or not the RA 8762 is unconstitutional
RULING:
As to the first issue, petitioners do not have legal standing.
The long settled rule is that he who challenges the validity of a law must have a standing
to do so. Legal standing or locus standi refers to the right of a party to come to a court of justice
and make such a challenge. More particularly, standing refers to his personal and substantial
interest in that he has suffered or will suffer direct injury as a result of the passage of that law.
Here, there is no clear showing that the implementation of the Retail Trade Liberalization
Act prejudices petitioners or inflicts damages on them, either as taxpayers or as legislators.
As to the second issue, while Section 19, Article II of the 1987 Constitution requires the
development of a self-reliant and independent national economy effectively controlled by
Filipino entrepreneurs, it does not impose a policy of Filipino monopoly of the economic
environment. The objective is simply to prohibit foreign powers or interests from maneuvering
our economic policies and ensure that Filipinos are given preference in all areas of development.
While the Constitution mandates a bias in favor of Filipino goods, services, labor and
enterprises, it also recognizes the need for business exchange with the rest of the world on the

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bases of equality and reciprocity and limits protection of Filipino enterprises only against foreign
competition and trade practices that are unfair.
The 1987 Constitution does not rule out the entry of foreign investments, goods, and
services. While it does not encourage their unlimited entry into the country, it does not prohibit
them either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only
on foreign competition that is unfair.10 The key, as in all economies in the world, is to strike a
balance between protecting local businesses and allowing the entry of foreign investments and
services.
Section 10, Article XII of the 1987 Constitution gives Congress the discretion to reserve
to Filipinos certain areas of investments upon the recommendation of the NEDA and when the
national interest requires. Thus, Congress can determine what policy to pass and when to pass it
depending on the economic exigencies. It can enact laws allowing the entry of foreigners into
certain industries not reserved by the Constitution to Filipino citizens. In this case, Congress has
decided to open certain areas of the retail trade business to foreign investments instead of
reserving them exclusively to Filipino citizens. The NEDA has not opposed such policy.
Here, to the extent that R.A. 8762, the Retail Trade Liberalization Act, lessens the
restraint on the foreigners’ right to property or to engage in an ordinarily lawful business, it
cannot be said that the law amounts to a denial of the Filipinos’ right to property and to due
process of law. Filipinos continue to have the right to engage in the kinds of retail business to
which the law in question has permitted the entry of foreign investors.
The law itself has provided strict safeguards on foreign participation in that business.
Thus –
First, aliens can only engage in retail trade business subject to the categories above-
enumerated; Second, only nationals from, or juridical entities formed or incorporated in
countries which allow the entry of Filipino retailers shall be allowed to engage in retail
trade business; and Third, qualified foreign retailers shall not be allowed to engage in
certain retailing activities outside their accredited stores through the use of mobile or
rolling stores or carts, the use of sales representatives, door-to-door selling, restaurants
and sari-sari stores and such other similar retailing activities.
Provision:
ART II
Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity
and independence of the nation and free the people from poverty through policies that provide
adequate social services, promote full employment, a rising standard of living, and an improved
quality of life for all.
Section 19. The State shall develop a self-reliant and independent national economy effectively
controlled by Filipinos.

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Section 20. The State recognizes the indispensable role of the private sector, encourages private
enterprise, and provides incentives to needed investments.

ART XII
Section 10. The Congress shall, upon recommendation of the economic and planning agency,
when the national interest dictates, reserve to citizens of the Philippines or to corporations or
associations at least sixty per centum of whose capital is owned by such citizens, or such higher
percentage as Congress may prescribe, certain areas of investments. The Congress shall enact
measures that will encourage the formation and operation of enterprises whose capital is wholly
owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national
jurisdiction and in accordance with its national goals and priorities.
Section 12. The State shall promote the preferential use of Filipino labor, domestic materials and
locally produced goods, and adopt measures that help make them competitive.
Section 13. The State shall pursue a trade policy that serves the general welfare and utilizes all
forms and arrangements of exchange on the basis of equality and reciprocity
9. SOUTHERN CROSS CEMENT CORPORATION vs. THE PHILIPPINE CEMENT
MANUFACTURERS CORP., THE SECRETARY OF THE DEPARTMENT OF TRADE
& INDUSTRY, THE SECRETARY OF THE DEPARTMENT OF FINANCE, and THE
COMMISSIONER OF THE BUREAU OF CUSTOMS
G.R. No. 158540, July 8, 2004

FACTS:

The Philippines, enacted laws soon after it joined the General Agreement on Tariff and
Trade (GATT) and the World Trade Organization (WTO) Agreement. One of these laws is Rep.
Act No. 8800, also known as the Safeguard Measures Act ("SMA"). The SMA provides the
structure and mechanics for the imposition of emergency measures, including tariffs, to protect
domestic industries and producers from increased imports which inflict or could inflict serious
injury on them.

Petitioner Southern Cross Cement Corporation ("Southern Cross") is a domestic

corporation engaged in the business of cement manufacturing, production, importation and
exportation. Its principal stockholders are Taiheiyo Cement Corporation and Tokuyama
Corporation, purportedly the largest cement manufacturers in Japan. Private respondent, on the
other hand, Philippine Cement Manufacturers Corporation ("Philcemcor") is an association of

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domestic cement manufacturers. It has eighteen (18) members. However, it appears that
considerable equity holdings, if not controlling interests in at least twelve (12) of its member-
corporations, were acquired by the three largest cement manufacturers in the world, 

On 22 May 2001, respondent Department of Trade and Industry accepted an application

from Philcemcor, alleging that the importation of gray Portland cement in increased quantities
has caused declines in domestic production, capacity utilization, market share, sales and
employment; as well as caused depressed local prices. Accordingly, Philcemcor sought the
imposition a definitive safeguard measures on the import of cement pursuant to the Safeguard
Measures Act.
After preliminary investigation, the Bureau of Import Services of the DTI, determined
that critical circumstances existed justifying the imposition of provisional measures. On 7
November 2001, the DTI issued an Order, imposing a provisional measure equivalent to Twenty
Pesos and Sixty Centavos (P20.60) per forty (40) kilogram bag on all importations of gray
Portland cement for a period not exceeding two hundred (200) days from the date of issuance by
the Bureau of Customs (BOC) of the implementing Customs Memorandum Order.
The Tariff Commission, on 19 November 2001, received a request from the DTI for a
formal investigation to determine whether or not to impose a definitive safeguard measure on
imports of gray Portland cement, pursuant to Section 9 of the SMA and its Implementing Rules
and Regulations. The Tariff Commission after arriving at their conclusions, made a
recommendation that the elements of serious injury and imminent threat of serious injury
not having been established, it is hereby recommended that no definitive general safeguard
measure be imposed on the importation of gray Portland cement.
After reviewing the report, then DTI Secretary Manuel Roxas II disagreed with the
conclusion of the Tariff Commission. In view of this disagreement, the DTI requested an opinion
from the Department of Justice (DOJ) on the DTI Secretary’s scope of options in acting on the
Commission’s recommendations. DOJ Secretary Hernando Perez rendered an opinion stating
that Section 13 of the SMA precluded a review by the DTI Secretary of the Tariff Commissions
negative finding, or finding that a definitive safeguard measure should not be imposed. Hence,
DTI then denied application for safeguard measures against the importation of gray Portland
cement.
Philcemcor filed with the Court of Appeals a Petition for Certiorari, Prohibition and
Mandamus seeking to set aside the DTI Decision, as well as the Tariff Commissions Report. On
the other hand, Southern Cross filed its Comment arguing that the Court of Appeals had no
jurisdiction over Philcemcors Petition, for it is on the Court of Tax Appeals (CTA) that the SMA
conferred jurisdiction to review rulings of the Secretary in connection with the imposition of a
safeguard measure.
COURT OF APPEALS RULING
The appellate court ruled that it had jurisdiction over the petition for certiorari since it
alleged grave abuse of discretion. It refused to annul the findings of the Tariff Commission,

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citing the rule that factual findings of administrative agencies are binding upon the courts and its
corollary, that courts should not interfere in matters addressed to the sound discretion and
coming under the special technical knowledge and training of such agencies. Nevertheless, it
held that the DTI Secretary is not bound by the factual findings of the Tariff Commission
since such findings are merely recommendatory and they fall within the ambit of the
Secretary's discretionary review. It determined that the legislative intent is to grant the
DTI Secretary the power to make a final decision on the Tariff Commission's
recommendation.
Southern Cross filed the present petition, assailing the appellate court's Decision for
departing from the accepted and usual course of judicial proceedings, and not deciding the
substantial questions in accordance with law and jurisprudence. The timely filing of Southern
Cross's petition before this Court necessarily prevented the Court of Appeals Decision from
becoming final.
On 25 June 2003, the DTI Secretary issued a new Decision, He made a determination
that, contrary to the findings of the Tariff Commission, the local cement industry had suffered
serious injury as a result of the import surges. Accordingly, he imposed a definitive safeguard
measure on the importation of gray Portland cement, in the form of a definitive safeguard duty in
the amount of P20.60/40 kg. bag for three years on imported gray Portland Cement.

ISSUE:
Whether or not the DTI Secretary is bound to adopt the negative recommendation of the
Tariff Commission on the application for safeguard measure.

HELD:

YES.

Undoubtedly, Section 13 prescribes certain limitations and restrictions before general safeguard
measures may be imposed. However, the most fundamental restriction on the DTI
Secretary's power in that respect is contained in Section 5 of the SMA that there should
first be a positive final determination of the Tariff Commission.

Sec. 5. Conditions for the Application of General Safeguard Measures. – The

Secretary shall apply a general safeguard measure upon a positive final
determination of the [Tariff] Commission that a product is being imported into the
country in increased quantities, whether absolute or relative to the domestic production,
as to be a substantial cause of serious injury or threat thereof to the domestic industry;
however, in the case of non-agricultural products, the Secretary shall first establish that
the application of such safeguard measures will be in the public interest. (emphasis
supplied)

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The plain meaning of Section 5 shows that it is the Tariff Commission that has the power
to make a "positive final determination." This power lodged in the Tariff Commission, must be
distinguished from the power to impose the general safeguard measure which is properly vested
on the DTI Secretary.

All in all, there are two condition precedents that must be satisfied before the DTI
Secretary may impose a general safeguard measure on grey Portland cement. First, there must
be a positive final determination by the Tariff Commission that a product is being imported into
the country in increased quantities, as to be a substantial cause of serious injury or threat to the
domestic industry. Second, in the case of non-agricultural products the Secretary must establish
that the application of such safeguard measures is in the public interest.

Section 5 plainly evinces legislative intent to restrict the DTI Secretary's power to impose a
general safeguard measure by preconditioning such imposition on a positive determination
by the Tariff Commission. Section 28(2), Article VI of the 1987 Constitution confirms the
delegation of legislative power, yet ensures that the prerogative of Congress to impose
limitations and restrictions on the executive exercise of this power:

The Congress may, by law, authorize the President to fix within specified limits, and
subject to such limitations and restrictions as it may impose, tariff rates, import and
export quotas, tonnage and wharfage dues, and other duties or imposts within the
framework of the national development program of the Government.

This delegation of the taxation power by the legislative to the executive is authorized by
the Constitution itself. At the same time, the Constitution also grants the delegating authority
(Congress) the right to impose restrictions and limitations on the taxation power delegated to the
President. The restrictions and limitations imposed by Congress take on the mantle of a
constitutional command, which the executive branch is obliged to observe.

The SMA empowered the DTI Secretary, as alter ego of the President, to impose
definitive general safeguard measures, which basically are tariff imposts of the type spoken of in
the Constitution. However, the law did not grant him full, uninhibited discretion to impose such
measures. The DTI Secretary authority is derived from the SMA; it does not flow from any
inherent executive power. Thus, the limitations imposed by Section 5 are absolute, warranted as
they are by a constitutional fiat.

Moreover, the DTI Secretary does not have the power to review the findings of the Tariff
Commission for it is not subordinate to the Department of Trade and Industry, but of
the National Economic Development Authority, an independent planning agency of the
government of co-equal rank as the DTI. DTI Secretary generally cannot exercise review
authority over actions of the Tariff Commission. Neither does the SMA specifically authorize the
DTI Secretary to alter, amend or modify in any way the determination made by the Tariff
Commission. The most that the DTI Secretary could do to express displeasure over the Tariff
Commission's actions is to ignore its recommendation, but not its determination.

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Investment and Incentive Law
Assignment #1
The Court of Appeals erred in remanding the case back to the DTI Secretary, with the
instruction that the DTI Secretary may impose a general safeguard measure even if there is no
positive final determination from the Tariff Commission. More crucially, the Court of Appeals
could not have acquired jurisdiction over Philcemcor's petition for certiorari in the first place, as
Section 29 of the SMA properly vests jurisdiction on the CTA. Consequently, the
assailed Decision is an absolute nullity, and we declare it as such. It is clear then that the 25 June
2003 Decision of the DTI Secretary is a product of the void Decision, it being an attempt to carry
out such null judgment.

10.
MARINE RADIO COMMUNICATIONS ASSOCIATION OF THE PHILIPPINES, INC.
(MARCAPI), vs. RAINERIO O. REYES
G.R. No. 86953
FACTS:
The petitioners are Filipino entrepreneurs deeply involved in the business of marine radio
communications in the country. They are also operators of "shore-to-ship and ship-to-shore
public marine coastal radio stations”, and are holders of certificates of public convenience issued
by the NTC. Among other things, they handle correspondence between vessel passengers or
crew and the public.
Sometime in 1988, in light of the tragic incident of the sinking of MV Dona Paz, the
DOTC designed an P880-million maritime coastal communications system project, designed to
provide, among other things, ship-to-shore and shore-to-ship public corresponding, free of
charge.
After a failed “appeal” letter addressed to then-DOTC Secretary Reyes, the petitioners
brought the instant suit, alleging that Secretary Reyes had been guilty of grave abuse of
discretion. The petitioners hold that the Department cannot compete in the business of public
correspondence, and rely on the provisions of Section 20, of Article II, of the Constitution, which
states:
Sec. 20. The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed investments.
ISSUE:
WoN Section 20, Article II of the Constitutional operates to prohibit the government
from entering the industry of marine radio communications.
RULING:
NO. The duty of the State is predominantly "to serve the people”, and to "promote a just
and dynamic social order” through policies that provide adequate social services and an
improved quality of life for all.

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Investment and Incentive Law
Assignment #1
The petitioners cannot legitimately rely on the provisions of Section 20, of Article II, of
the Constitution to defeat the act complained of. The mandate recognizing the indispensable
role of the private sector is no more than an acknowledgment of the importance of private
initiative in building the nation. However, it is not a call for official abdication of duty to
citizenry.
The novel provisions of the Charter prescribing private sector participation, especially in
the field of economic activity, come, indeed, no more as responses to State monopoly of
economic forces which has unfairly kept individual initiative from the economic processes and
has held back competitiveness in the market. The Constitution does not bar, however, the
Government from undertaking its own initiatives, especially in the domain of public service,
and neither does it repudiate its primacy as chief economic caretaker of the nation.
The petition is dismissed.
ADDITIONAL NOTES: The Court is not of the thinking that the act complained of is equivalent
to a taking without just compensation. While it is true that when the owner is deprived of the
ordinary and beneficial use of his property or of its value by its being diverted to public use,
there is taking within the constitutional sense, it does not seem to mean that the DOTC, by
providing for free public correspondence, is guilty of an uncompensated taking. Rather, the
Government merely built a bridge that made the boat obsolete, although not entirely useless.
Certainly, the owner of the boat cannot charge the builder of the bridge for lost income. And
certainly, the Government has all the right to build the bridge.

11. SANTA ROSA MINING COMPANY, INC., petitioner, vs. HON. MINISTER OF

NATURAL RESOURCES JOSE J. LEIDO, JR. AND DIRECTOR OF MINES JUANITO
C. FERNANDEZ,

G.R. No. L-49109 December 1, 1987

FACTS:

On 14 October 1977, Presidential Decree No. 1214 was issued, requiring holders of
subsisting and valid patentable mining claims located under the provisions of the Philippine Bill
of 1902 to file a mining lease application within one (1) year from the approval of the Decree.
Petitioner accordingly filed a mining lease application, but "under protest," on 13 October 1978,
with a reservation annotated on the back of its application that it is not waiving its rights over its
mining claims until the validity of Presidential Decree No. 1214 shall have been passed upon by
this Court. Three (3) days before filing the disputed mining lease application, petitioner filed this
special civil action for certiorari and prohibition. Petitioner assails

Petitioner avers that its fifty (50) mining claims had already been declared as its own
private and exclusive property in final judgments rendered by the CFI of Camarines Norte in
land registration proceedings initiated by third persons, such as:

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Investment and Incentive Law
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1. September 1951 land title application by a certain Gervacio Liwanag, where the
Director of Mines opposed the grant of said application because petitioners had
already located and perfected its mining claims over the area applied for.

2. LRC Case No. 240, filed 11 July 1960, by one Antonio Astudillo and decided in 1974
against said applicant, in which, petitioner's mining claims were described as vested
property outside the jurisdiction of the Director of Mines. 

Respondent: Petitioner has no standing to file the instant petition as it failed to fully exhaust
administrative remedies. There is a pending appeal of the petitioner at the Office of the
President, of the ruling of the respondent Secretary of Natural Resources in a DNR Case, which
upheld the decision that forty four (44) out of petitioner's fifty (50) mining claims were void for
lack of valid "tie points" as required under the Philippine Bill of 1902, and that all the mining
claims had already been abandoned and cancelled, for petitioner's non-compliance with the legal
requirements of the same Phil. Bill of 1902 and Executive Order No. 141. Respondents further
contend that, even assuming arguendo that petitioner's mining claims were valid at the outset, if
they are deemed abandoned and cancelled due to non-compliance with the legal requirements for
maintaining a perfected mining claim, under the provisions of the Philippine Bill of 1902.

Petitioner, on the other hand, would rebut respondents' argument by declaring that it already had
a vested right over its mining claims even before Presidential Decree No. 1214, following the
rulings in McDaniel v. Apacible 7 and Gold Creek Mining Corp. v. Rodriguez. 

ISSUE:

Whether Presidential Decree No. 1214 is unconstitutional in that it amounts to a

deprivation of property without due process of law.

RULING:

Certiorari: It is premature for the Court to now make a finding on the matter of whether
petitioner had abandoned its mining claims. Until petitioner's appeal shall have been decided by
the Office of the President, where it is pending, petitioner's attempt to seek judicial recognition
of the continuing validity of its mining claims, cannot be entertained by the Court.

Mining Claims:  The decisions of the Court of First Instance of Camarines Norte, relied
upon by petitioner, do not foreclose a proceeding, such as DNR Case No. 4140, to determine
whether petitioner's unpatented mining claims have remained valid and subsisting.

cases cited by petitioner, true enough, recognize the right of a locator of a mining claim
as a property right. This right, however, is not absolute. It is merely a possessory right, more so,
in this case, where petitioner's claims are still unpatented. They can be lost through abandonment
or forfeiture or they may be revoked for valid legal grounds.

McDaniel v. Apacible: It confirms that a valid mining claim may still be lost through
abandonment or forfeiture.

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Investment and Incentive Law
Assignment #1
Gold Creek Mining Corp. v. Rodriguez: In that case, what was in issue was Gold
Creek's right to a patent over its mining claim, after compliance with all legal requirements for a
patent. In the present case, no application for patent is in issue, although as a holder
of patentable mining claims petitioner could have applied for one during all these years but
inexplicably did not do so. In Gold Creek, no finding of abandonment was ever made against the
mining claimant as to deprive it of the initial privilege given by virtue of its location; on the other
hand, such a finding has been made in petitioner's case.

Constitutionality: Presidential Decree No. 1214 is not unconstitutional. It is a valid

exercise of the sovereign power of the State, as owner, over lands of the public domain, of which
petitioner's mining claims still form a part, and over the patrimony of the nation, of which
mineral deposits are a valuable asset. It may be underscored, in this connection, that the Decree
does not cover all mining claims located under the Phil. Bill of 1902, but only those claims over
which their locators had failed to obtain a patent. And even then, such locators may still avail of
the renewable twenty-five year (25) lease prescribed by Pres. Decree No. 463, the Mineral
Development Resources Decree of 1974.

Mere location does not mean absolute ownership over the affected land or the mining
claim. It merely segregates the located land or area from the public domain by barring other
would-be locators from locating the same and appropriating for themselves the minerals found
therein. To rule otherwise would imply that location is all that is needed
to acquire and maintain rights over a located mining claim. Presidential Decree No. 1214 is in
accord with Sec. 8, Art. XIV of the 1973 Constitution which states:

All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, wildlife, and other natural
resources of the Philippines belong to the State. With the exception of
agricultural, industrial or commercial, residential and resettlement lands of the
public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or utilization
of any of the natural resources shall be granted for a period exceeding twenty-five
years, renewable for not more than twenty-five years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the development of
water power, in which cases, beneficial use may be the measure and the limit of
the grant.

The same constitutional mandate is found in Sec. 2, Art. XII of the 1987 Constitution,
which declares:

All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife,
flora and fauna. and other natural resources are owned by the State. With the
exception of agricultural lands, all other natural resources shall not be alienated.
The exploration, development, and utilization of natural resources shall be under
the full control and supervision of the State.

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Investment and Incentive Law
Assignment #1
WHEREFORE, premises considered, the petition is hereby DISMISSED.

12. SAN MIGUEL CORPORATION v. COURT OF APPEALS and DIRECTOR OF

LANDS
G.R. No. 57667. May 28, 1990
FACTS: This is a petition for review on certiorari where petitioner San Miguel Corporation who
purchased Lot 684 from Silverio Perez, seeks the reversal of the decision of the Court of Appeals
denying its application for registration of the said land in view of its failure to show entitlement
thereto.
The Solicitor General opposed and appealed the application contending that the land in
question is part of public domain and that petitioner being a private corporation, under Section
11, Article XIV of the Constitution, is disualified from holding alienable lands of the public
domain.
The lower court rendered a decision granting the application for registration and
adjudicating the property in favor of SMC. The Solicitor General appealed to the Court of
Appeals. In its decision of March 23, 1981, said court reversed the decision of the lower court
and declared the parcel of land involved as public land. Hence, the instant petition with SMC
submitting the following alleged "grave errors" of the Court of Appeals for this Court’s
resolution: (1) the Court of Appeals’ failure to hold that "prescription is a mode of acquiring title
or ownership of land and that the title thus acquired is registrable" ; (2) the Court of Appeals’
disregard of SMC’s evidence "not on the basis of controverting evidence but on the basis of
unfounded suppositions and conjectures," and (3) the Court of Appeals’ reversal of the factual
findings of the trial court which had the opportunity of observing the demeanor and sincerity of
the witnesses.
Petitioner claims that its predecessor-in-interest had open, exclusive and undisputed
possession of the land in question based on documentary evidence of tax declarations and
receipts, and testimonial evidence of vendor Silverio Perez.
ISSUE:
(1) Whether or not tax declarations and receipts are conclusive evidence of ownership or
right of possession over a piece of land.

(2) Whether or not the factual findings of the trial courts may be reversed by the Court of
Appeals.

(3) What is the period prescribed by law to prove the conclusive ownership over an alienable
public land.
HELD:
(1) No, documentary evidence of tax declarations and receipts are not conclusive evidence of
ownership or right of possession over a piece of land but mere indicia of a claim of

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Investment and Incentive Law
Assignment #1
ownership. They only become strong evidence of ownership of land acquired by
prescription when accompanied by proof of actual possession. Also, the testimony of
vendor Silverio Perez as proof of actual possession is weak and was not corroborated by
other witnesses.

(2) Yes. Suffice it to state that while trial courts may have the right to observe the demeanor
of the witnesses, their factual findings may nonetheless be reversed by the Court of
Appeals, the appellate court vested by law to resolve both the legal and factual issues, if,
by the evidence on record, it appears that the trial court involved erred.

(3) Open, exclusive and undisputed possession of alienable public land for the period
prescribed by law creates the legal fiction whereby the land, upon completion of the
requisite period ipso jure and without the need of judicial or other sanction, ceases to be
public land and becomes private property. Such open, continuous, exclusive and
notorious occupation of the disputed properties for more than 30 years must, however, be
conclusively established. This quantum of proof is necessary to avoid the erroneous
validation of actually fictitious claims of possession over the property in dispute.