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POLITICAL LAW
Senate of the Philippines v. Eduardo R. Ermita, G.R. No. 169777, April 20, 2006
Respondents thus conclude that the petitions merely rest on an unfounded apprehension that the
President will abuse its power of preventing the appearance of officials before Congress, and that such
apprehension is not sufficient for challenging the validity of E.O. 464.
 
The Court finds respondents’ assertion that the President has not withheld her consent or prohibited
the appearance of the officials concerned immaterial in determining the existence of an actual case or
controversy insofar as E.O. 464 is concerned. For E.O. 464 does not require either a deliberate withholding of
consent or an express prohibition issuing from the President in order to bar officials from appearing before
Congress.
 
As the implementation of the challenged order has already resulted in the absence of officials invited
to the hearings of petitioner Senate of the Philippines, it would make no sense to wait for any further event
before considering the present case ripe for adjudication. Indeed, it would be sheer abandonment of duty if this
Court would now refrain from passing on the constitutionality of E.O. 464.
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The power of inquiry
The Congress power of inquiry is expressly recognized in Section 21 of Article VI of the Constitution
which reads:
SECTION 21. The Senate or the House of Representatives or any of its respective
committees may conduct inquiries in aid of legislation in accordance with its duly published
rules of procedure. The rights of persons appearing in or affected by such inquiries shall be
respected. (Underscoring supplied)
This provision is worded exactly as Section 8 of Article VIII of the 1973 Constitution except that, in the latter, it
vests the power of inquiry in the unicameral legislature established therein – the Batasang Pambansa – and its
committees.
The 1935 Constitution did not contain a similar provision. Nonetheless, in Arnault v. Nazareno, a case
decided in 1950 under that Constitution, the Court already recognized that the power of inquiry is inherent in the
power to legislate.
 
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Arnault involved a Senate investigation of the reportedly anomalous purchase of the Buenavista and
Tambobong Estates by the Rural Progress Administration. Arnault, who was considered a leading witness in
the controversy, was called to testify thereon by the Senate. On account of his refusal to answer the questions
of the senators on an important point, he was, by resolution of the Senate, detained for contempt. Upholding
the Senate’s power to punish Arnault for contempt, this Court held:
 
Although there is no provision in the Constitution expressly investing either House
of Congress with power to make investigations and exact testimony to the end that it may
exercise its legislative functions advisedly and effectively, such power is so far incidental to
the legislative function as to be implied. In other words, the power of inquiry – with process
to enforce it – is an essential and appropriate auxiliary to the legislative function. A
legislative body cannot legislate wisely or effectively in the absence of information
respecting the conditions which the legislation is intended to affect or change; and where
the legislative body does not itself possess the requisite information – which is not
infrequently true – recourse must be had to others who do possess it. Experience has
shown that mere requests for such information are often unavailing, and also that
information which is volunteered is not always accurate or complete; so some means of
compulsion is essential to obtain what is needed. . . (Emphasis and underscoring
supplied)
 
That this power of inquiry is broad enough to cover officials of the executive branch may be deduced
from the same case. The power of inquiry, the Court therein ruled, is co-extensive with the power to legislate.
The matters which may be a proper subject of legislation and those which may be a proper subject of
investigation are one. It follows that the operation of government, being a legitimate subject for legislation, is a
proper subject for investigation.
Thus, the Court found that the Senate investigation of the government transaction involved in Arnault
was a proper exercise of the power of inquiry. Besides being related to the expenditure of public funds of which
Congress is the guardian, the transaction, the Court held, “also involved government agencies created by
Congress and officers whose positions it is within the power of Congress to regulate or even abolish.”
Since Congress has authority to inquire into the operations of the executive branch, it would be
incongruous to hold that the power of inquiry does not extend to executive officials who are the most familiar
with and informed on executive operations.
As discussed in Arnault, the power of inquiry, “with process to enforce it,” is grounded on the
necessity of information in the legislative process. If the information possessed by executive officials on the
operation of their offices is necessary for wise legislation on that subject, by parity of reasoning, Congress has
the right to that information and the power to compel the disclosure thereof.
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From the above discussion on the meaning and scope of executive privilege, both in the United States and in
this jurisdiction, a clear principle emerges. Executive privilege, whether asserted against Congress, the courts,
or the public, is recognized only in relation to certain types of information of a sensitive character. While
executive privilege is a constitutional concept, a claim thereof may be valid or not depending on the ground
invoked to justify it and the context in which it is made. Noticeably absent is any recognition that executive
officials are exempt from the duty to disclose information by the mere fact of being executive officials. Indeed,
the extraordinary character of the exemptions indicates that the presumption inclines heavily against executive
secrecy and in favor of disclosure.
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A distinction was thus made between inquiries in aid of legislation and the question hour. While attendance was
meant to be discretionary in the question hour, it was compulsory in inquiries in aid of legislation. The reference
to Commissioner Suarez bears noting, he being one of the proponents of the amendment to make the
appearance of department heads discretionary in the question hour.
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The framers of the 1987 Constitution removed the mandatory nature of such appearance during the question
hour in the present Constitution so as to conform more fully to a system of separation of powers. To that extent,
the question hour, as it is presently understood in this jurisdiction, departs from the question period of the
parliamentary system. That department heads may not be required to appear in a question hour does not,
however, mean that the legislature is rendered powerless to elicit information from them in all circumstances. In
fact, in light of the absence of a mandatory question period, the need to enforce Congress’ right to executive
information in the performance of its legislative function becomes more imperative. As Schwartz observes:
Indeed, if the separation of powers has anything to tell us on the subject under
discussion, it is that the Congress has the right to obtain information from any source – even
from officials of departments and agencies in the executive branch. In the United States
there is, unlike the situation which prevails in a parliamentary system such as that in Britain,
a clear separation between the legislative and executive branches. It is this very separation
that makes the congressional right to obtain information from the executive so essential, if
the functions of the Congress as the elected representatives of the people are adequately to
be carried out. The absence of close rapport between the legislative and executive
branches in this country, comparable to those which exist under a parliamentary system,
and the nonexistence in the Congress of an institution such as the British question period
have perforce made reliance by the Congress upon its right to obtain information from the
executive essential, if it is intelligently to perform its legislative tasks. Unless the Congress
possesses the right to obtain executive information, its power of oversight of administration
in a system such as ours becomes a power devoid of most of its practical content, since it
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depends for its effectiveness solely upon information parceled out ex gratia by the
executive. (Emphasis and underscoring supplied)
 
Sections 21 and 22, therefore, while closely related and complementary to each other, should not be
considered as pertaining to the same power of Congress. One specifically relates to the power to conduct
inquiries in aid of legislation, the aim of which is to elicit information that may be used for legislation, while the
other pertains to the power to conduct a question hour, the objective of which is to obtain information in pursuit
of Congress’ oversight function.
 
When Congress merely seeks to be informed on how department heads are implementing the
statutes which it has issued, its right to such information is not as imperative as that of the President to whom,
as Chief Executive, such department heads must give a report of their performance as a matter of duty. In
such instances, Section 22, in keeping with the separation of powers, states that Congress may only request
their appearance. Nonetheless, when the inquiry in which Congress requires their appearance is “in aid of
legislation” under Section 21, the appearance is mandatory for the same reasons stated in Arnault.
In fine, the oversight function of Congress may be facilitated by compulsory process only to the extent
that it is performed in pursuit of legislation. This is consistent with the intent discerned from the deliberations of
the Constitutional Commission.
 
Ultimately, the power of Congress to compel the appearance of executive officials under Section 21
and the lack of it under Section 22 find their basis in the principle of separation of powers. While the executive
branch is a co-equal branch of the legislature, it cannot frustrate the power of Congress to legislate by refusing
to comply with its demands for information.
When Congress exercises its power of inquiry, the only way for department heads to exempt
themselves therefrom is by a valid claim of privilege. They are not exempt by the mere fact that they are
department heads. Only one executive official may be exempted from this power — the President on whom
executive power is vested, hence, beyond the reach of Congress except through the power of impeachment. It
is based on her being the highest official of the executive branch, and the due respect accorded to a co-equal
branch of government which is sanctioned by a long-standing custom.
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By the same token, members of the Supreme Court are also exempt from this power of inquiry. Unlike the
Presidency, judicial power is vested in a collegial body; hence, each member thereof is exempt on the basis not
only of separation of powers but also on the fiscal autonomy and the constitutional independence of the
judiciary. This point is not in dispute, as even counsel for the Senate, Sen. Joker Arroyo, admitted it during the
oral argument upon interpellation of the Chief Justice.
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Having established the proper interpretation of Section 22, Article VI of the Constitution, the Court now
proceeds to pass on the constitutionality of Section 1 of E.O. 464.
 
Section 1, in view of its specific reference to Section 22 of Article VI of the Constitution and the
absence of any reference to inquiries in aid of legislation, must be construed as limited in its application to
appearances of department heads in the question hour contemplated in the provision of said Section 22 of
Article VI. The reading is dictated by the basic rule of construction that issuances must be interpreted, as much
as possible, in a way that will render it constitutional.
 
The requirement then to secure presidential consent under Section 1, limited as it is only to
appearances in the question hour, is valid on its face. For under Section 22, Article VI of the Constitution, the
appearance of department heads in the question hour is discretionary on their part.
 
Section 1 cannot, however, be applied to appearances of department heads in inquiries in aid of
legislation. Congress is not bound in such instances to respect the refusal of the department head to appear in
such inquiry, unless a valid claim of privilege is subsequently made, either by the President herself or by the
Executive Secretary.
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In light, however, of Sec 2(a) of E.O. 464 which deals with the nature, scope and coverage of
executive privilege, the reference to persons being “covered by the executive privilege” may be read as an
abbreviated way of saying that the person is in possession of information which is, in the judgment of the head
of office concerned, privileged as defined in Section 2(a). The Court shall thus proceed on the assumption that
this is the intention of the challenged order.
 
Upon a determination by the designated head of office or by the President that an official is “covered
by the executive privilege,” such official is subjected to the requirement that he first secure the consent of the
President prior to appearing before Congress. This requirement effectively bars the appearance of the official
concerned unless the same is permitted by the President. The proviso allowing the President to give its consent
means nothing more than that the President may reverse a prohibition which already exists by virtue of E.O.
464.
 
Thus, underlying this requirement of prior consent is the determination by a head of office, authorized
by the President under E.O. 464, or by the President herself, that such official is in possession of information
that is covered by executive privilege. This determination then becomes the basis for the official’s not showing
up in the legislative investigation.
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In view thereof, whenever an official invokes E.O. 464 to justify his failure to be present, such
invocation must be construed as a declaration to Congress that the President, or a head of office authorized by
the President, has determined that the requested information is privileged, and that the President has not
reversed such determination. Such declaration, however, even without mentioning the term “executive
privilege,” amounts to an implied claim that the information is being withheld by the executive branch, by
authority of the President, on the basis of executive privilege. Verily, there is an implied claim of privilege.
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While there is no Philippine case that directly addresses the issue of whether executive privilege may be
invoked against Congress, it is gathered from Chavez v. PEA that certain information in the possession of the
executive may validly be claimed as privileged even against Congress. Thus, the case holds:
 
There is no claim by PEA that the information demanded by petitioner is privileged
information rooted in the separation of powers. The information does not cover Presidential
conversations, correspondences, or discussions during closed-door Cabinet meetings
which, like internal-deliberations of the Supreme Court and other collegiate courts, or
executive sessions of either house of Congress, are recognized as confidential. This kind of
information cannot be pried open by a co-equal branch of government. A frank exchange of
exploratory ideas and assessments, free from the glare of publicity and pressure by
interested parties, is essential to protect the independence of decision-making of those
tasked to exercise Presidential, Legislative and Judicial power. This is not the situation in
the instant case. (Emphasis and underscoring supplied)
Section 3 of E.O. 464, therefore, cannot be dismissed outright as invalid by the mere fact that it
sanctions claims of executive privilege. This Court must look further and assess the claim of privilege
authorized by the Order to determine whether it is valid.
 
While the validity of claims of privilege must be assessed on a case to case basis, examining the
ground invoked therefor and the particular circumstances surrounding it, there is, in an implied claim of privilege,
a defect that renders it invalid per se. By its very nature, and as demonstrated by the letter of respondent
Executive Secretary quoted above, the implied claim authorized by Section 3 of E.O. 464 is not accompanied by
any specific allegation of the basis thereof (e.g., whether the information demanded involves military or
diplomatic secrets, closed-door Cabinet meetings, etc.). While Section 2(a) enumerates the types of information
that are covered by the privilege under the challenged order, Congress is left to speculate as to which among
them is being referred to by the executive. The enumeration is not even intended to be comprehensive, but a
mere statement of what is included in the phrase “confidential or classified information between the President
and the public officers covered by this executive order.”
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Certainly, Congress has the right to know why the executive considers the requested information
privileged. It does not suffice to merely declare that the President, or an authorized head of office, has
determined that it is so, and that the President has not overturned that determination. Such declaration leaves
Congress in the dark on how the requested information could be classified as privileged. That the message is
couched in terms that, on first impression, do not seem like a claim of privilege only makes it more pernicious. It
threatens to make Congress doubly blind to the question of why the executive branch is not providing it with the
information that it has requested.
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Upon the other hand, Congress must not require the executive to state the reasons for the claim with such
particularity as to compel disclosure of the information which the privilege is meant to protect.
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The claim of privilege under Section 3 of E.O. 464 in relation to Section 2(b) is thus invalid per se. It is
not asserted. It is merely implied. Instead of providing precise and certain reasons for the claim, it merely
invokes E.O. 464, coupled with an announcement that the President has not given her consent. It is woefully
insufficient for Congress to determine whether the withholding of information is justified under the circumstances
of each case. It severely frustrates the power of inquiry of Congress.
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No infirmity, however, can be imputed to Section 2(a) as it merely provides guidelines, binding only on
the heads of office mentioned in Section 2(b), on what is covered by executive privilege. It does not purport to
be conclusive on the other branches of government. It may thus be construed as a mere expression of opinion
by the President regarding the nature and scope of executive privilege.
 
Petitioners, however, assert as another ground for invalidating the challenged order the alleged
unlawful delegation of authority to the heads of offices in Section 2(b). Petitioner Senate of the Philippines, in
particular, cites the case of the United States where, so it claims, only the President can assert executive
privilege to withhold information from Congress.
 
Section 2(b) in relation to Section 3 virtually provides that, once the head of office determines that a
certain information is privileged, such determination is presumed to bear the President’s authority and has the
effect of prohibiting the official from appearing before Congress, subject only to the express pronouncement of
the President that it is allowing the appearance of such official. These provisions thus allow the President to
authorize claims of privilege by mere silence.
Such presumptive authorization, however, is contrary to the exceptional nature of the privilege.
Executive privilege, as already discussed, is recognized with respect to information the confidential nature of
which is crucial to the fulfillment of the unique role and responsibilities of the executive branch, or in those
instances where exemption from disclosure is necessary to the discharge of highly important executive
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responsibilities. The doctrine of executive privilege is thus premised on the fact that certain informations must,
as a matter of necessity, be kept confidential in pursuit of the public interest. The privilege being, by definition,
an exemption from the obligation to disclose information, in this case to Congress, the necessity must be of
such high degree as to outweigh the public interest in enforcing that obligation in a particular case.
 
In light of this highly exceptional nature of the privilege, the Court finds it essential to limit to the
President the power to invoke the privilege. She may of course authorize the Executive Secretary to invoke the
privilege on her behalf, in which case the Executive Secretary must state that the authority is “By order of the
President,” which means that he personally consulted with her. The privilege being an extraordinary power, it
must be wielded only by the highest official in the executive hierarchy. In other words, the President may not
authorize her subordinates to exercise such power. There is even less reason to uphold such authorization in
the instant case where the authorization is not explicit but by mere silence. Section 3, in relation to Section 2(b),
is further invalid on this score.
 
It follows, therefore, that when an official is being summoned by Congress on a matter which, in his
own judgment, might be covered by executive privilege, he must be afforded reasonable time to inform the
President or the Executive Secretary of the possible need for invoking the privilege. This is necessary in order
to provide the President or the Executive Secretary with fair opportunity to consider whether the matter indeed
calls for a claim of executive privilege. If, after the lapse of that reasonable time, neither the President nor the
Executive Secretary invokes the privilege, Congress is no longer bound to respect the failure of the official to
appear before Congress and may then opt to avail of the necessary legal means to compel his appearance.
 
The Court notes that one of the expressed purposes for requiring officials to secure the consent of the
President under Section 3 of E.O. 464 is to ensure “respect for the rights of public officials appearing in inquiries
in aid of legislation.” That such rights must indeed be respected by Congress is an echo from Article VI Section
21 of the Constitution mandating that “[t]he rights of persons appearing in or affected by such inquiries shall be
respected.”
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There are, it bears noting, clear distinctions between the right of Congress to information which
underlies the power of inquiry and the right of the people to information on matters of public concern. For one,
the demand of a citizen for the production of documents pursuant to his right to information does not have the
same obligatory force as a subpoena duces tecum issued by Congress. Neither does the right to information
grant a citizen the power to exact testimony from government officials. These powers belong only to Congress
and not to an individual citizen.
Thus, while Congress is composed of representatives elected by the people, it does not follow, except
in a highly qualified sense, that in every exercise of its power of inquiry, the people are exercising their right to
information.
 
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To the extent that investigations in aid of legislation are generally conducted in public, however, any executive
issuance tending to unduly limit disclosures of information in such investigations necessarily deprives the people
of information which, being presumed to be in aid of legislation, is presumed to be a matter of public concern.
The citizens are thereby denied access to information which they can use in formulating their own opinions on
the matter before Congress — opinions which they can then communicate to their representatives and other
government officials through the various legal means allowed by their freedom of expression.
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Implementation of E.O. 464 prior to its publication
  While E.O. 464 applies only to officials of the executive branch, it does not follow that the same is
exempt from the need for publication. On the need for publishing even those statutes that do not directly apply
to people in general, Tañada v. Tuvera states:
 
The term “laws” should refer to all laws and not only to those of general
application, for strictly speaking all laws relate to the people in general albeit there are some
that do not apply to them directly. An example is a law granting citizenship to a particular
individual, like a relative of President Marcos who was decreed instant naturalization. It
surely cannot be said that such a law does not affect the public although it unquestionably
does not apply directly to all the people. The subject of such law is a matter of public
interest which any member of the body politic may question in the political forums or, if he is
a proper party, even in courts of justice. (Emphasis and underscoring supplied)
 
Although the above statement was made in reference to statutes, logic dictates that the challenged
order must be covered by the publication requirement. As explained above, E.O. 464 has a direct effect on the
right of the people to information on matters of public concern. It is, therefore, a matter of public interest which
members of the body politic may question before this Court. Due process thus requires that the people should
have been apprised of this issuance before it was implemented.
BAYAN, et al v. EDUARDO ERMITA, in his capacity as Executive Secretary, et al, G.R. No. 169838, April 25,
2006
Petitioners’ standing cannot be seriously challenged. Their right as citizens to engage in peaceful
assembly and exercise the right of petition, as guaranteed by the Constitution, is directly affected by B.P. No.
880 which requires a permit for all who would publicly assemble in the nation’s streets and parks. They have, in
fact, purposely engaged in public assemblies without the required permits to press their claim that no such
permit can be validly required without violating the Constitutional guarantee. Respondents, on the other hand,
have challenged such action as contrary to law and dispersed the public assemblies held without the permit.
 
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Section 4 of Article III of the Constitution provides:
SEC. 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or
the right of the people peaceably to assemble and petition the government for redress of grievances.
 
The first point to mark is that the right to peaceably assemble and petition for redress of grievances is, together
with freedom of speech, of expression, and of the press, a right that enjoys primacy in the realm of constitutional
protection. For these rights constitute the very basis of a functional democratic polity, without which all the other
rights would be meaningless and unprotected. As stated in Jacinto v. CA,
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It is very clear, therefore, that B.P. No. 880 is not an absolute ban of public assemblies but a restriction that
simply regulates the time, place and manner of the assemblies. This was adverted to in Osmeña v.
Comelec ,where the Court referred to it as a “content-neutral” regulation of the time, place, and manner of
holding public assemblies.
 
A fair and impartial reading of B.P. No. 880 thus readily shows that it refers to all kinds of public
assemblies that would use public places. The reference to “lawful cause” does not make it content-based
because assemblies really have to be for lawful causes, otherwise they would not be “peaceable” and entitled to
protection. Neither are the words “opinion,” “protesting” and “influencing” in the definition of public assembly
content based, since they can refer to any subject. The words “petitioning the government for redress of
grievances” come from the wording of the Constitution, so its use cannot be avoided. Finally, maximum
tolerance is for the protection and benefit of all rallyists and is independent of the content of the expressions in
the rally.
 
Furthermore, the permit can only be denied on the ground of clear and present danger to public order,
public safety, public convenience, public morals or public health. This is a recognized exception to the exercise
of the right even under the Universal Declaration of Human Rights and the International Covenant on Civil and
Political Rights…
 
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Not every expression of opinion is a public assembly. The law refers to “rally, demonstration, march, parade,
procession or any other form of mass or concerted action held in a public place.” So it does not cover any and
all kinds of gatherings.
 
Neither is the law overbroad. It regulates the exercise of the right to peaceful assembly and petition
only to the extent needed to avoid a clear and present danger of the substantive evils Congress has the right to
prevent.
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There is, likewise, no prior restraint, since the content of the speech is not relevant to the regulation.
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As to the delegation of powers to the mayor, the law provides a precise and sufficient standard – the clear and
present danger test stated in Sec. 6(a). The reference to “imminent and grave danger of a substantive evil” in
Sec. 6(c) substantially means the same thing and is not an inconsistent standard. As to whether respondent
Mayor has the same power independently under Republic Act No. 7160 is thus not necessary to resolve in
these proceedings, and was not pursued by the parties in their arguments.
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Considering that the existence of such freedom parks is an essential part of the law’s system of
regulation of the people’s exercise of their right to peacefully assemble and petition, the Court is constrained to
rule that after thirty (30) days from the finality of this Decision, no prior permit may be required for the exercise
of such right in any public park or plaza of a city or municipality until that city or municipality shall have complied
with Section 15 of the law. For without such alternative forum, to deny the permit would in effect be to deny the
right. Advance notices should, however, be given to the authorities to ensure proper coordination and orderly
proceedings.
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Furthermore, there is need to address the situation adverted to by petitioners where mayors do not act
on applications for a permit and when the police demand a permit and the rallyists could not produce one, the
rally is immediately dispersed. In such a situation, as a necessary consequence and part of maximum
tolerance, rallyists who can show the police an application duly filed on a given date can, after two days from
said date, rally in accordance with their application without the need to show a permit, the grant of the permit
being then presumed under the law, and it will be the burden of the authorities to show that there has been a
denial of the application, in which case the rally may be peacefully dispersed following the procedure of
maximum tolerance prescribed by the law.
In sum, this Court reiterates its basic policy of upholding the fundamental rights of our people,
especially freedom of expression and freedom of assembly. In several policy addresses, Chief Justice Artemio
V. Panganiban has repeatedly vowed to uphold the liberty of our people and to nurture their prosperity. He said
that “in cases involving liberty, the scales of justice should weigh heavily against the government and in favor of
the poor, the oppressed, the marginalized, the dispossessed and the weak. Indeed, laws and actions that
restrict fundamental rights come to the courts with a heavy presumption against their validity. These laws and
actions are subjected to heightened scrutiny.”
 
For this reason, the so-called calibrated preemptive response policy has no place in our legal
firmament and must be struck down as a darkness that shrouds freedom. It merely confuses our people and is
used by some police agents to justify abuses. On the other hand, B.P. No. 880 cannot be condemned as
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unconstitutional; it does not curtail or unduly restrict freedoms; it merely regulates the use of public places as to
the time, place and manner of assemblies. Far from being insidious, “maximum tolerance” is for the benefit of
rallyists, not the government. The delegation to the mayors of the power to issue rally “permits” is valid because
it is subject to the constitutionally-sound “clear and present danger” standard.
XXX
In this Decision, the Court goes even one step further in safeguarding liberty by giving local
governments a deadline of 30 days within which to designate specific freedom parks as provided under B.P. No.
880. If, after that period, no such parks are so identified in accordance with Section 15 of the law, all public
parks and plazas of the municipality or city concerned shall in effect be deemed freedom parks; no prior permit
of whatever kind shall be required to hold an assembly therein. The only requirement will be written notices to
the police and the mayor’s office to allow proper coordination and orderly activities.
Abakada Guro Party List, et al v. The Honorable Executive Secretary Eduardo Ermita, et al, G.R. No. 168056,
September 1, 2005
Under the “enrolled bill doctrine,” the signing of a bill by the Speaker of the House and the Senate President and
the certification of the Secretaries of both Houses of Congress that it was passed are conclusive of its due
enactment. A review of cases reveals the Court’s consistent adherence to the rule. The Court finds no reason
to deviate from the salutary rule in this case where the irregularities alleged by the petitioners mostly involved
the internal rules of Congress, e.g., creation of the 2nd or 3rd Bicameral Conference Committee by the House.
This Court is not the proper forum for the enforcement of these internal rules of Congress, whether House or
Senate. Parliamentary rules are merely procedural and with their observance the courts have no concern.
Whatever doubts there may be as to the formal validity of Rep. Act No. 9006 must be resolved in its favor. The
Court reiterates its ruling in Arroyo vs. De Venecia, viz.:
But the cases, both here and abroad, in varying forms of expression, all deny to the courts the power to inquire
into allegations that, in enacting a law, a House of Congress failed to comply with its own rules, in the absence
of showing that there was a violation of a constitutional provision or the rights of private individuals. In Osmeña
v. Pendatun, it was held: “At any rate, courts have declared that ‘the rules adopted by deliberative bodies are
subject to revocation, modification or waiver at the pleasure of the body adopting them.’ And it has been said
that “Parliamentary rules are merely procedural, and with their observance, the courts have no concern. They
may be waived or disregarded by the legislative body.” Consequently, “mere failure to conform to parliamentary
usage will not invalidate the action (taken by a deliberative body) when the requisite number of members have
agreed to a particular measure.”[21] (Emphasis supplied)
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R.A. No. 9337 Does Not Violate Article VI, Section 26(2) of the Constitution on the “No-Amendment Rule”
Article VI, Sec. 26 (2) of the Constitution, states:
No bill passed by either House shall become a law unless it has passed three readings on separate
days, and printed copies thereof in its final form have been distributed to its Members three days
before its passage, except when the President certifies to the necessity of its immediate enactment to
meet a public calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be
allowed, and the vote thereon shall be taken immediately thereafter, and the yeas and nays entered in
the Journal.
Petitioners’ argument that the practice where a bicameral conference committee is allowed to add or delete
provisions in the House bill and the Senate bill after these had passed three readings is in effect a
circumvention of the “no amendment rule” (Sec. 26 (2), Art. VI of the 1987 Constitution), fails to convince the
Court to deviate from its ruling in the Tolentino case that:
Nor is there any reason for requiring that the Committee’s Report in these cases must have
undergone three readings in each of the two houses. If that be the case, there would be no end to
negotiation since each house may seek modification of the compromise bill. . . .
Art. VI. § 26 (2) must, therefore, be construed as referring only to bills introduced for the first time in either
house of Congress, not to the conference committee report.[32] (Emphasis supplied)
The Court reiterates here that the “no-amendment rule” refers only to the procedure to be followed by each
house of Congress with regard to bills initiated in each of said respective houses, before said bill is transmitted
to the other house for its concurrence or amendment. Verily, to construe said provision in a way as to proscribe
any further changes to a bill after one house has voted on it would lead to absurdity as this would mean that the
other house of Congress would be deprived of its constitutional power to amend or introduce changes to said
bill. Thus, Art. VI, Sec. 26 (2) of the Constitution cannot be taken to mean that the introduction by the Bicameral
Conference Committee of amendments and modifications to disagreeing provisions in bills that have been acted
upon by both houses of Congress is prohibited.
XXX
Article VI, Section 24 of the Constitution reads:
Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of
local application, and private bills shall originate exclusively in the House of Representatives but the
Senate may propose or concur with amendments.
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In the present cases, petitioners admit that it was indeed House Bill Nos. 3555 and 3705 that initiated the move
for amending provisions of the NIRC dealing mainly with the value-added tax. Upon transmittal of said House
bills to the Senate, the Senate came out with Senate Bill No. 1950 proposing amendments not only to NIRC
provisions on the value-added tax but also amendments to NIRC provisions on other kinds of taxes. Is the
introduction by the Senate of provisions not dealing directly with the value- added tax, which is the only kind of
tax being amended in the House bills, still within the purview of the constitutional provision authorizing the
Senate to propose or concur with amendments to a revenue bill that originated from the House?
The foregoing question had been squarely answered in the Tolentino case, wherein the Court held, thus:
. . . To begin with, it is not the law – but the revenue bill – which is required by the Constitution to “originate
exclusively” in the House of Representatives. It is important to emphasize this, because a bill originating in the
House may undergo such extensive changes in the Senate that the result may be a rewriting of the whole. . . .
At this point, what is important to note is that, as a result of the Senate action, a distinct bill may be produced.
To insist that a revenue statute – and not only the bill which initiated the legislative process culminating in the
enactment of the law – must substantially be the same as the House bill would be to deny the Senate’s power
not only to “concur with amendments” but also to “propose amendments.” It would be to violate the coequality
of legislative power of the two houses of Congress and in fact make the House superior to the Senate.
…
…Given, then, the power of the Senate to propose amendments, the Senate can propose its own version even
with respect to bills which are required by the Constitution to originate in the House.
...
Indeed, what the Constitution simply means is that the initiative for filing revenue, tariff or tax bills, bills
authorizing an increase of the public debt, private bills and bills of local application must come from the House
of Representatives on the theory that, elected as they are from the districts, the members of the House can be
expected to be more sensitive to the local needs and problems. On the other hand, the senators, who are
elected at large, are expected to approach the same problems from the national perspective. Both views are
thereby made to bear on the enactment of such laws.[33] (Emphasis supplied)
Since there is no question that the revenue bill exclusively originated in the House of Representatives, the
Senate was acting within its constitutional power to introduce amendments to the House bill when it included
provisions in Senate Bill No. 1950 amending corporate income taxes, percentage, excise and franchise taxes.
Verily, Article VI, Section 24 of the Constitution does not contain any prohibition or limitation on the extent of the
amendments that may be introduced by the Senate to the House revenue bill.
Furthermore, the amendments introduced by the Senate to the NIRC provisions that had not been touched in
the House bills are still in furtherance of the intent of the House in initiating the subject revenue bills. The
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Explanatory Note of House Bill No. 1468, the very first House bill introduced on the floor, which was later
substituted by House Bill No. 3555, stated:
One of the challenges faced by the present administration is the urgent and daunting task of solving the
country’s serious financial problems. To do this, government expenditures must be strictly monitored and
controlled and revenues must be significantly increased. This may be easier said than done, but our fiscal
authorities are still optimistic the government will be operating on a balanced budget by the year 2009. In fact,
several measures that will result to significant expenditure savings have been identified by the administration. It
is supported with a credible package of revenue measures that include measures to improve tax administration
and control the leakages in revenues from income taxes and the value-added tax (VAT). (Emphasis supplied)
XXXX
The principle of separation of powers ordains that each of the three great branches of government has exclusive
cognizance of and is supreme in matters falling within its own constitutionally allocated sphere.[37] A logical
corollary to the doctrine of separation of powers is the principle of non-delegation of powers, as expressed in the
Latin maxim: potestas delegata non delegari potest which means “what has been delegated, cannot be
delegated.”[38] This doctrine is based on the ethical principle that such as delegated power constitutes not only
a right but a duty to be performed by the delegate through the instrumentality of his own judgment and not
through the intervening mind of another.[39]
With respect to the Legislature, Section 1 of Article VI of the Constitution provides that “the Legislative power
shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of
Representatives.” The powers which Congress is prohibited from delegating are those which are strictly, or
inherently and exclusively, legislative. Purely legislative power, which can never be delegated, has been
described as the authority to make a complete law – complete as to the time when it shall take effect and as to
whom it shall be applicable – and to determine the expediency of its enactment.[40] Thus, the rule is that in
order that a court may be justified in holding a statute unconstitutional as a delegation of legislative power, it
must appear that the power involved is purely legislative in nature – that is, one appertaining exclusively to the
legislative department. It is the nature of the power, and not the liability of its use or the manner of its exercise,
which determines the validity of its delegation.
Nonetheless, the general rule barring delegation of legislative powers is subject to the following recognized
limitations or exceptions:
(1) Delegation of tariff powers to the President under Section 28 (2) of Article VI of the Constitution;
(2) Delegation of emergency powers to the President under Section 23 (2) of Article VI of the Constitution;
(3) Delegation to the people at large;
(4) Delegation to local governments; and
(5) Delegation to administrative bodies.
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In every case of permissible delegation, there must be a showing that the delegation itself is valid. It is valid only
if the law (a) is complete in itself, setting forth therein the policy to be executed, carried out, or implemented by
the delegate;[41] and (b) fixes a standard — the limits of which are sufficiently determinate and determinable —
to which the delegate must conform in the performance of his functions.[42] A sufficient standard is one which
defines legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It
indicates the circumstances under which the legislative command is to be effected.[43] Both tests are intended
to prevent a total transference of legislative authority to the delegate, who is not allowed to step into the shoes
of the legislature and exercise a power essentially legislative.[44]
XXX
Clearly, the legislature may delegate to executive officers or bodies the power to determine certain facts or
conditions, or the happening of contingencies, on which the operation of a statute is, by its terms, made to
depend, but the legislature must prescribe sufficient standards, policies or limitations on their authority.[49]
While the power to tax cannot be delegated to executive agencies, details as to the enforcement and
administration of an exercise of such power may be left to them, including the power to determine the existence
of facts on which its operation depends.[50]
The rationale for this is that the preliminary ascertainment of facts as basis for the enactment of legislation is not
of itself a legislative function, but is simply ancillary to legislation. Thus, the duty of correlating information and
making recommendations is the kind of subsidiary activity which the legislature may perform through its
members, or which it may delegate to others to perform. Intelligent legislation on the complicated problems of
modern society is impossible in the absence of accurate information on the part of the legislators, and any
reasonable method of securing such information is proper.[51] The Constitution as a continuously operative
charter of government does not require that Congress find for itself every fact upon which it desires to base
legislative action or that it make for itself detailed determinations which it has declared to be prerequisite to
application of legislative policy to particular facts and circumstances impossible for Congress itself properly to
investigate.[52]
XXXX
The case before the Court is not a delegation of legislative power. It is simply a delegation of ascertainment of
facts upon which enforcement and administration of the increase rate under the law is contingent. The
legislature has made the operation of the 12% rate effective January 1, 2006, contingent upon a specified fact
or condition. It leaves the entire operation or non-operation of the 12% rate upon factual matters outside of the
control of the executive.
No discretion would be exercised by the President. Highlighting the absence of discretion is the fact that the
word shall is used in the common proviso. The use of the word shall connotes a mandatory order. Its use in a
statute denotes an imperative obligation and is inconsistent with the idea of discretion.[53] Where the law is
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clear and unambiguous, it must be taken to mean exactly what it says, and courts have no choice but to see to it
that the mandate is obeyed.[54]
Thus, it is the ministerial duty of the President to immediately impose the 12% rate upon the existence of any of
the conditions specified by Congress. This is a duty which cannot be evaded by the President. Inasmuch as the
law specifically uses the word shall, the exercise of discretion by the President does not come into play. It is a
clear directive to impose the 12% VAT rate when the specified conditions are present. The time of taking into
effect of the 12% VAT rate is based on the happening of a certain specified contingency, or upon the
ascertainment of certain facts or conditions by a person or body other than the legislature itself.
XXXX
When one speaks of the Secretary of Finance as the alter ego of the President, it simply means that as head of
the Department of Finance he is the assistant and agent of the Chief Executive. The multifarious executive and
administrative functions of the Chief Executive are performed by and through the executive departments, and
the acts of the secretaries of such departments, such as the Department of Finance, performed and
promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive,
presumptively the acts of the Chief Executive. The Secretary of Finance, as such, occupies a political position
and holds office in an advisory capacity, and, in the language of Thomas Jefferson, "should be of the
President's bosom confidence" and, in the language of Attorney-General Cushing, is “subject to the direction of
the President."[55]
In the present case, in making his recommendation to the President on the existence of either of the two
conditions, the Secretary of Finance is not acting as the alter ego of the President or even her subordinate. In
such instance, he is not subject to the power of control and direction of the President. He is acting as the agent
of the legislative department, to determine and declare the event upon which its expressed will is to take effect.
[56] The Secretary of Finance becomes the means or tool by which legislative policy is determined and
implemented, considering that he possesses all the facilities to gather data and information and has a much
broader perspective to properly evaluate them. His function is to gather and collate statistical data and other
pertinent information and verify if any of the two conditions laid out by Congress is present. His personality in
such instance is in reality but a projection of that of Congress. Thus, being the agent of Congress and not of the
President, the President cannot alter or modify or nullify, or set aside the findings of the Secretary of Finance
and to substitute the judgment of the former for that of the latter.
Congress simply granted the Secretary of Finance the authority to ascertain the existence of a fact, namely,
whether by December 31, 2005, the value-added tax collection as a percentage of Gross Domestic Product
(GDP) of the previous year exceeds two and four-fifth percent (24/5%) or the national government deficit as a
percentage of GDP of the previous year exceeds one and one-half percent (1½%). If either of these two
instances has occurred, the Secretary of Finance, by legislative mandate, must submit such information to the
President. Then the 12% VAT rate must be imposed by the President effective January 1, 2006. There is no
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undue delegation of legislative power but only of the discretion as to the execution of a law. This is
constitutionally permissible.[57] Congress does not abdicate its functions or unduly delegate power when it
describes what job must be done, who must do it, and what is the scope of his authority; in our complex
economy that is frequently the only way in which the legislative process can go forward.[58]
XXXX
As earlier stated, the input tax is the tax paid by a person, passed on to him by the seller, when he buys goods.
Output tax meanwhile is the tax due to the person when he sells goods. In computing the VAT payable, three
possible scenarios may arise:
First, if at the end of a taxable quarter the output taxes charged by the seller are equal to the input taxes that he
paid and passed on by the suppliers, then no payment is required;
Second, when the output taxes exceed the input taxes, the person shall be liable for the excess, which has to
be paid to the Bureau of Internal Revenue (BIR);and
Third, if the input taxes exceed the output taxes, the excess shall be carried over to the succeeding quarter or
quarters. Should the input taxes result from zero-rated or effectively zero-rated transactions, any excess over
the output taxes shall instead be refunded to the taxpayer or credited against other internal revenue taxes, at
the taxpayer’s option.
Section 8 of R.A. No. 9337 however, imposed a 70% limitation on the input tax. Thus, a person can credit his
input tax only up to the extent of 70% of the output tax. In layman’s term, the value-added taxes that a
person/taxpayer paid and passed on to him by a seller can only be credited up to 70% of the value-added taxes
that is due to him on a taxable transaction. There is no retention of any tax collection because the
person/taxpayer has already previously paid the input tax to a seller, and the seller will subsequently remit such
input tax to the BIR. The party directly liable for the payment of the tax is the seller.[71] What only needs to be
done is for the person/taxpayer to apply or credit these input taxes, as evidenced by receipts, against his output
taxes.
XXXX
The input tax is not a property or a property right within the constitutional purview of the due process clause. A
VAT-registered person’s entitlement to the creditable input tax is a mere statutory privilege.
The distinction between statutory privileges and vested rights must be borne in mind for persons have no vested
rights in statutory privileges. The state may change or take away rights, which were created by the law of the
state, although it may not take away property, which was vested by virtue of such rights.
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XXXX
Article VI, Section 28(1) of the Constitution reads:
The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system
of taxation.
Uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at the
same rate. Different articles may be taxed at different amounts provided that the rate is uniform on the same
class everywhere with all people at all times.[86]
In this case, the tax law is uniform as it provides a standard rate of 0% or 10% (or 12%) on all goods and
services. Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108, respectively, of the
NIRC, provide for a rate of 10% (or 12%) on sale of goods and properties, importation of goods, and sale of
services and use or lease of properties. These same sections also provide for a 0% rate on certain sales and
transaction.
Neither does the law make any distinction as to the type of industry or trade that will bear the 70% limitation on
the creditable input tax, 5-year amortization of input tax paid on purchase of capital goods or the 5% final
withholding tax by the government. It must be stressed that the rule of uniform taxation does not deprive
Congress of the power to classify subjects of taxation, and only demands uniformity within the particular class.
[87]
R.A. No. 9337 is also equitable. The law is equipped with a threshold margin. The VAT rate of 0% or 10% (or
12%) does not apply to sales of goods or services with gross annual sales or receipts not exceeding
P1,500,000.00.[88] Also, basic marine and agricultural food products in their original state are still not subject
to the tax,[89] thus ensuring that prices at the grassroots level will remain accessible. As was stated in
Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan:[90]
The disputed sales tax is also equitable. It is imposed only on sales of goods or services by persons engaged in
business with an aggregate gross annual sales exceeding P200,000.00. Small corner sari-sari stores are
consequently exempt from its application. Likewise exempt from the tax are sales of farm and marine products,
so that the costs of basic food and other necessities, spared as they are from the incidence of the VAT, are
expected to be relatively lower and within the reach of the general public.
It is admitted that R.A. No. 9337 puts a premium on businesses with low profit margins, and unduly favors those
with high profit margins. Congress was not oblivious to this. Thus, to equalize the weighty burden the law
entails, the law, under Section 116, imposed a 3% percentage tax on VAT-exempt persons under Section
109(v), i.e., transactions with gross annual sales and/or receipts not exceeding P1.5 Million. This acts as a
equalizer because in effect, bigger businesses that qualify for VAT coverage and VAT-exempt taxpayers stand
on equal-footing.
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Moreover, Congress provided mitigating measures to cushion the impact of the imposition of the tax on those
previously exempt. Excise taxes on petroleum products[91] and natural gas[92] were reduced. Percentage tax
on domestic carriers was removed.[93] Power producers are now exempt from paying franchise tax.[94]
Aside from these, Congress also increased the income tax rates of corporations, in order to distribute the
burden of taxation. Domestic, foreign, and non-resident corporations are now subject to a 35% income tax
rate, from a previous 32%.[95] Intercorporate dividends of non-resident foreign corporations are still subject to
15% final withholding tax but the tax credit allowed on the corporation’s domicile was increased to 20%.[96]
The Philippine Amusement and Gaming Corporation (PAGCOR) is not exempt from income taxes anymore.[97]
Even the sale by an artist of his works or services performed for the production of such works was not spared.
All these were designed to ease, as well as spread out, the burden of taxation, which would otherwise rest
largely on the consumers. It cannot therefore be gainsaid that R.A. No. 9337 is equitable.
XXXX
Progressive taxation is built on the principle of the taxpayer’s ability to pay. This principle was also lifted from
Adam Smith’s Canons of Taxation, and it states:
I. The subjects of every state ought to contribute towards the support of the government, as nearly
as possible, in proportion to their respective abilities; that is, in proportion to the revenue which
they respectively enjoy under the protection of the state.
II. Taxation is progressive when its rate goes up depending on the resources of the person affected.
The VAT is an antithesis of progressive taxation. By its very nature, it is regressive. The principle of
progressive taxation has no relation with the VAT system inasmuch as the VAT paid by the consumer or
business for every goods bought or services enjoyed is the same regardless of income. In other words, the
VAT paid eats the same portion of an income, whether big or small. The disparity lies in the income earned by
a person or profit margin marked by a business, such that the higher the income or profit margin, the smaller the
portion of the income or profit that is eaten by VAT. A converso, the lower the income or profit margin, the
bigger the part that the VAT eats away. At the end of the day, it is really the lower income group or businesses
with low-profit margins that is always hardest hit.
Nevertheless, the Constitution does not really prohibit the imposition of indirect taxes, like the VAT. What it
simply provides is that Congress shall "evolve a progressive system of taxation." The Court stated in the
Tolentino case, thus:
The Constitution does not really prohibit the imposition of indirect taxes which, like the VAT, are regressive.
What it simply provides is that Congress shall ‘evolve a progressive system of taxation.’ The constitutional
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provision has been interpreted to mean simply that ‘direct taxes are . . . to be preferred [and] as much as
possible, indirect taxes should be minimized.’ (E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES
221 (Second ed. 1977)) Indeed, the mandate to Congress is not to prescribe, but to evolve, a progressive tax
system. Otherwise, sales taxes, which perhaps are the oldest form of indirect taxes, would have been prohibited
with the proclamation of Art. VIII, §17 (1) of the 1973 Constitution from which the present Art. VI, §28 (1) was
taken. Sales taxes are also regressive.
Resort to indirect taxes should be minimized but not avoided entirely because it is difficult, if not impossible, to
avoid them by imposing such taxes according to the taxpayers' ability to pay. In the case of the VAT, the law
minimizes the regressive effects of this imposition by providing for zero rating of certain transactions (R.A. No.
7716, §3, amending §102 (b) of the NIRC), while granting exemptions to other transactions. (R.A. No. 7716, §4
amending §103 of the NIRC)[99]
Province of Rizal v. Executive Secretary et al and The Honorable Court Of Appeals, G.R. NO. 129546,
December 13, 2005
Were it not for the TRO, then President Estrada’s instructions would have been lawfully carried out, for as we
observed in Oposa v. Factoran, the freedom of contract is not absolute. Thus:
….. In Abe vs. Foster Wheeler Corp., this Court stated: "The freedom of contract, under our system of
government, is not meant to be absolute. The same is understood to be subject to reasonable legislative
regulation aimed at the promotion of public health, moral, safety and welfare. In other words, the constitutional
guaranty of non-impairment of obligations of contract is limited by the exercise of the police power of the State,
in the interest of public health, safety, moral and general welfare." The reason for this is emphatically set forth in
Nebia vs. New York, quoted in Philippine American Life Insurance Co. vs. Auditor General, to wit: "'Under our
form of government the use of property and the making of contracts are normally matters of private and not of
public concern. The general rule is that both shall be free of governmental interference. But neither property
rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his property to
the detriment of his fellows, or exercise his freedom of contract to work them harm. Equally fundamental with
the private right is that of the public to regulate it in the common interest.'" In short, the non-impairment clause
must yield to the police power of the state. (Citations omitted, emphasis supplied)
We thus feel there is also the added need to reassure the residents of the Province of Rizal that this is indeed a
final resolution of this controversy, for a brief review of the records of this case indicates two self-evident facts.
First, the San Mateo site has adversely affected its environs, and second, sources of water should always be
protected.
XXXXXXXX
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This brings us to the second self-evident point. Water is life, and must be saved at all costs. In Collado v. Court
of Appeals,[36] we had occasion to reaffirm our previous discussion in Sta. Rosa Realty Development
Corporation v. Court of Appeals,[37] on the primordial importance of watershed areas, thus: “The most
important product of a watershed is water, which is one of the most important human necessities. The
protection of watersheds ensures an adequate supply of water for future generations and the control of
flashfloods that not only damage property but also cause loss of lives. Protection of watersheds is an
“intergenerational” responsibility that needs to be answered now.[38]
Three short months before Proclamation No. 635 was passed to avert the garbage crisis, Congress had
enacted the National Water Crisis Act[39] to “adopt urgent and effective measures to address the nationwide
water crisis which adversely affects the health and well-being of the population, food production, and
industrialization process. One of the issues the law sought to address was the “protection and conservation of
watersheds.”[40]
In other words, while respondents were blandly declaring that “the reason for the creation of the Marikina
Watershed Reservation, i.e., to protect Marikina River as the source of water supply of the City of Manila, no
longer exists,” the rest of the country was gripped by a shortage of potable water so serious, it necessitated its
own legislation.
Respondents’ actions in the face of such grave environmental consequences defy all logic. The petitioners
rightly noted that instead of providing solutions, they have, with unmitigated callousness, worsened the problem.
It is this readiness to wreak irrevocable damage on our natural heritage in pursuit of what is expedient that has
compelled us to rule at length on this issue. We ignore the unrelenting depletion of our natural heritage at our
peril.
XXXXXXX
In Cruz v. Secretary of Environment and Natural Resources,[41] we had occasion to observe that “(o)ne of the
fixed and dominating objectives of the 1935 Constitutional Convention was the nationalization and conservation
of the natural resources of the country. There was an overwhelming sentiment in the convention in favor of the
principle of state ownership of natural resources and the adoption of the Regalian doctrine. State ownership of
natural resources was seen as a necessary starting point to secure recognition of the state’s power to control
their disposition, exploitation, development, or utilization.”[42]
The Regalian doctrine was embodied in the 1935 Constitution, in Section 1 of Article XIII on “Conservation and
Utilization of Natural Resources.” This was reiterated in the 1973 Constitution under Article XIV on the “National
Economy and the Patrimony of the Nation,” and reaffirmed in the 1987 Constitution in Section 2 of Article XII on
“National Economy and Patrimony,” to wit:
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Sec. 2. 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. The State may directly undertake such activities or
it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens,
or corporations or associations at least sixty per centum of whose capital is owned by such citizens.
Such agreements may be for a period not exceeding twenty-five years, renewable for not more than
twenty-five years, and under such terms and conditions as may be provided by law. In cases of water
rights for irrigation, water supply, fisheries, or industrial uses other than the development of water
power, beneficial use may be the measure and limit of the grant.[43]
Clearly, the state is, and always has been, zealous in preserving as much of our natural and national heritage
as it can, enshrining as it did the obligation to preserve and protect the same within the text of our fundamental
law.
XXX
In sum, the Administrative Code of 1987 and Executive Order No. 192 entrust the DENR with the guardianship
and safekeeping of the Marikina Watershed Reservation and our other natural treasures. However, although
the DENR, an agency of the government, owns the Marikina Reserve and has jurisdiction over the same, this
power is not absolute, but is defined by the declared policies of the state, and is subject to the law and higher
authority. Section 2, Title XIV, Book IV of the Administrative Code of 1987, while specifically referring to the
mandate of the DENR, makes particular reference to the agency’s being subject to law and higher authority,
thus:
SEC. 2. Mandate. - (1) The Department of Environment and Natural Resources shall be primarily
responsible for the implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional
mandate to control and supervise the exploration, development, utilization, and conservation of the
country's natural resources.
With great power comes great responsibility. It is the height of irony that the public respondents have vigorously
arrogated to themselves the power to control the San Mateo site, but have deftly ignored their corresponding
responsibility as guardians and protectors of this tormented piece of land.
XXXX
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The municipal mayors acted within the scope of their powers, and were in fact fulfilling their mandate, when they
did this. Section 16 allows every local government unit to “exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to the promotion of the general welfare,” which involve,
among other things, “promot(ing) health and safety, enhance(ing) the right of the people to a balanced ecology,
and preserv(ing) the comfort and convenience of their inhabitants.”
In Lina , Jr. v. Paño, we held that Section 2 (c), requiring consultations with the appropriate local government
units, should apply to national government projects affecting the environmental or ecological balance of the
particular community implementing the project. Rejecting the petitioners’ contention that Sections 2(c) and 27 of
the Local Government Code applied mandatorily in the setting up of lotto outlets around the country, we held
that:
From a careful reading of said provisions, we find that these apply only to national programs and/or projects
which are to be implemented in a particular local community. Lotto is neither a program nor a project of the
national government, but of a charitable institution, the PCSO. Though sanctioned by the national government, it
is far fetched to say that lotto falls within the contemplation of Sections 2 (c) and 27 of the Local Government
Code.
XXXX
Thus, the projects and programs mentioned in Section 27 should be interpreted to mean projects and programs
whose effects are among those enumerated in Section 26 and 27, to wit, those that: (1) may cause pollution; (2)
may bring about climatic change; (3) may cause the depletion of non-renewable resources; (4) may result in
loss of crop land, range-land, or forest cover; (5) may eradicate certain animal or plant species from the face of
the planet; and (6) other projects or programs that may call for the eviction of a particular group of people
residing in the locality where these will be implemented. Obviously, none of these effects will be produced by
the introduction of lotto in the province of Laguna. (emphasis supplied)
We reiterated this doctrine in the recent case of Bangus Fry Fisherfolk v. Lanzanas,[50] where we held that
there was no statutory requirement for the sangguniang bayan of Puerto Galera to approve the construction of a
mooring facility, as Sections 26 and 27 are inapplicable to projects which are not environmentally critical.
XXX
Under the Local Government Code, therefore, two requisites must be met before a national project that affects
the environmental and ecological balance of local communities can be implemented: prior consultation with the
affected local communities, and prior approval of the project by the appropriate sanggunian. Absent either of
these mandatory requirements, the project’s implementation is illegal.
XXXX
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Central Bank (now Bangko Sentral ng Pilipinas) Employees Association, INC., v. BSP and the Executive
Secretary, G.R. No. 148208, December 15, 2004
Congress is allowed a wide leeway in providing for a valid classification. The equal protection clause is not
infringed by legislation which applies only to those persons falling within a specified class. If the groupings are
characterized by substantial distinctions that make real differences, one class may be treated and regulated
differently from another. The classification must also be germane to the purpose of the law and must apply to all
those belonging to the same class.
In the case at bar, it is clear in the legislative deliberations that the exemption of officers (SG 20 and
above) from the SSL was intended to address the BSP’s lack of competitiveness in terms of attracting
competent officers and executives. It was not intended to discriminate against the rank-and-file. If the end-result
did in fact lead to a disparity of treatment between the officers and the rank-and-file in terms of salaries and
benefits, the discrimination or distinction has a rational basis and is not palpably, purely, and entirely arbitrary in
the legislative sense.
That the provision was a product of amendments introduced during the deliberation of the Senate Bill does not
detract from its validity. As early as 1947 and reiterated in subsequent cases, this Court has subscribed to the
conclusiveness of an enrolled bill to refuse invalidating a provision of law, on the ground that the bill from which
it originated contained no such provision and was merely inserted by the bicameral conference committee of
both Houses.
Moreover, it is a fundamental and familiar teaching 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. To justify the nullification of a law, there must be a clear and unequivocal breach of the
Constitution, not a doubtful and equivocal breach.
B. THE ENACTMENT, HOWEVER, OF SUBSEQUENT LAWS - EXEMPTING ALL OTHER RANK-AND-
FILE EMPLOYEES OF GFIs FROM THE SSL - RENDERS THE CONTINUED APPLICATION OF THE
CHALLENGED PROVISION A VIOLATION OF THE EQUAL PROTECTION CLAUSE.
While R.A. No. 7653 started as a valid measure well within the legislature’s power, we hold that the
enactment of subsequent laws exempting all rank-and-file employees of other GFIs leeched all validity out of the
challenged proviso.
1. The concept of relative constitutionality.
The constitutionality of a statute cannot, in every instance, be determined by a mere comparison of its
provisions with applicable provisions of the Constitution, since the statute may be constitutionally valid as
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applied to one set of facts and invalid in its application to another.
A statute valid at one time may become void at another time because of altered circumstances. Thus, if a
statute in its practical operation becomes arbitrary or confiscatory, its validity, even though affirmed by a former
adjudication, is open to inquiry and investigation in the light of changed conditions.
XXXX
Masikip v. The City of Pasig et al, G.R. No. 136349, January 23, 2006
The power of eminent domain is lodged in the legislative branch of the government. It delegates the
exercise thereof to local government units, other public entities and public utility corporations, subject only to
Constitutional limitations. Local governments have no inherent power of eminent domain and may exercise it
only when expressly authorized by statute. Section 19 of the Local Government Code of 1991 (Republic Act No.
7160) prescribes the delegation by Congress of the power of eminent domain to local government units and lays
down the parameters for its exercise, thus:
“SEC. 19. Eminent Domain. – A local government unit may, through its chief executive and
acting pursuant to an ordinance, exercise the power of eminent domain for public use, purpose or
welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to
the provisions of the Constitution and pertinent laws: Provided, however, That, the power of eminent
domain may not be exercised unless a valid and definite offer has been previously made to the owner
and such offer was not accepted: Provided, further, That, the local government unit may immediately
take possession of the property upon the filing of expropriation proceedings and upon making a
deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property
based on the current tax declaration of the property to be expropriated: Provided, finally, That, the
amount to be paid for expropriated property shall be determined by the proper court, based on the fair
market value at the time of the taking of the property.”
Judicial review of the exercise of eminent domain is limited to the following areas of concern: (a) the
adequacy of the compensation, (b) the necessity of the taking, and (c) the public use character of the purpose of
the taking.
In this case, petitioner contends that respondent City of Pasig failed to establish a genuine necessity
which justifies the condemnation of her property. While she does not dispute the intended public purpose,
nonetheless, she insists that there must be a genuine necessity for the proposed use and purposes. According
to petitioner, there is already an established sports development and recreational activity center at Rainforest
Park in Pasig City, fully operational and being utilized by its residents, including those from Barangay Caniogan.
Respondent does not dispute this. Evidently, there is no “genuine necessity” to justify the expropriation.
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The right to take private property for public purposes necessarily originates from “the necessity” and the
taking must be limited to such necessity. In City of Manila v. Chinese Community of Manila, we held that the
very foundation of the right to exercise eminent domain is a genuine necessity and that necessity must be of a
public character. Moreover, the ascertainment of the necessity must precede or accompany and not follow, the
taking of the land. In City of Manila v. Arellano Law College, we ruled that “necessity within the rule that the
particular property to be expropriated must be necessary, does not mean an absolute but only a reasonable or
practical necessity, such as would combine the greatest benefit to the public with the least inconvenience and
expense to the condemning party and the property owner consistent with such benefit.”
Applying this standard, we hold that respondent City of Pasig has failed to establish that there is a genuine
necessity to expropriate petitioner’s property. Our scrutiny of the records shows that the Certification[14] issued
by the Caniogan Barangay Council dated November 20, 1994, the basis for the passage of Ordinance No. 42 s.
1993 authorizing the expropriation, indicates that the intended beneficiary is the Melendres Compound
Homeowners Association, a private, non-profit organization, not the residents of Caniogan. It can be gleaned
that the members of the said Association are desirous of having their own private playground and recreational
facility. Petitioner’s lot is the nearest vacant space available. The purpose is, therefore, not clearly and
categorically public. The necessity has not been shown, especially considering that there exists an alternative
facility for sports development and community recreation in the area, which is the Rainforest Park, available to
all residents of Pasig City, including those of Caniogan.
The right to own and possess property is one of the most cherished rights of men. It is so
fundamental that it has been written into organic law of every nation where the rule of law prevails. Unless the
requisite of genuine necessity for the expropriation of one’s property is clearly established, it shall be the duty of
the courts to protect the rights of individuals to their private property. Important as the power of eminent domain
may be, the inviolable sanctity which the Constitution attaches to the property of the individual requires not only
that the purpose for the taking of private property be specified. The genuine necessity for the taking, which
must be of a public character, must also be shown to exist.
Sps. Constantino, et al v. Hon. Cuisia, et al, G.R. No. 106064, October 13, 2005
First Issue: The Scope of Section 20, Article VII
For their first constitutional argument, petitioners submit that the buyback and bond-conversion schemes do not
constitute the loan “contract” or “guarantee” contemplated in the Constitution and are consequently prohibited.
Sec. 20, Art. VII of the Constitution provides, viz:
The President may contract or guarantee foreign loans in behalf of the Republic of the Philippines with the prior
concurrence of the Monetary Board and subject to such limitations as may be provided under law. The
Monetary Board shall, within thirty days from the end of every quarter of the calendar year, submit to the
Congress a complete report of its decisions on applications for loans to be contracted or guaranteed by the
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government or government-owned and controlled corporations which would have the effect of increasing the
foreign debt, and containing other matters as may be provided by law.
On Bond-conversion
Loans are transactions wherein the owner of a property allows another party to use the property and where
customarily, the latter promises to return the property after a specified period with payment for its use, called
interest.[34] On the other hand, bonds are interest-bearing or discounted government or corporate securities
that obligate the issuer to pay the bondholder a specified sum of money, usually at specific intervals, and to
repay the principal amount of the loan at maturity.[35] The word “bond” means contract, agreement, or
guarantee. All of these terms are applicable to the securities known as bonds. An investor who purchases a
bond is lending money to the issuer, and the bond represents the issuer’s contractual promise to pay interest
and repay principal according to specific terms. A short-term bond is often called a note.[36]
The language of the Constitution is simple and clear as it is broad. It allows the President to contract and
guarantee foreign loans. It makes no prohibition on the issuance of certain kinds of loans or distinctions as to
which kinds of debt instruments are more onerous than others. This Court may not ascribe to the Constitution
meanings and restrictions that would unduly burden the powers of the President. The plain, clear and
unambiguous language of the Constitution should be construed in a sense that will allow the full exercise of the
power provided therein. It would be the worst kind of judicial legislation if the courts were to misconstrue and
change the meaning of the organic act.
The only restriction that the Constitution provides, aside from the prior concurrence of the Monetary Board, is
that the loans must be subject to limitations provided by law. In this regard, we note that Republic Act (R.A.) No.
245 as amended by Pres. Decree (P.D.) No. 142, s. 1973, entitled An Act Authorizing the Secretary of Finance
to Borrow to Meet Public Expenditures Authorized by Law, and for Other Purposes, allows foreign loans to be
contracted in the form of, inter alia, bonds. Thus:
Sec. 1. In order to meet public expenditures authorized by law or to provide for the purchase,
redemption, or refunding of any obligations, either direct or guaranteed of the Philippine Government,
the Secretary of Finance, with the approval of the President of the Philippines, after consultation with
the Monetary Board, is authorized to borrow from time to time on the credit of the Republic of the
Philippines such sum or sums as in his judgment may be necessary, and to issue therefor evidences
of indebtedness of the Philippine Government."
Such evidences of indebtedness may be of the following types:
....
c. Treasury bonds, notes, securities or other evidences of indebtedness having maturities of one year or more
but not exceeding twenty-five years from the date of issue. (Emphasis supplied.)
Under the foregoing provisions, sovereign bonds may be issued not only to supplement government
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expenditures but also to provide for the purchase,[37] redemption,[38] or refunding[39] of any obligation, either
direct or guaranteed, of the Philippine Government.
Petitioners, however, point out that a supposed difference between contracting a loan and issuing bonds is that
the former creates a definite creditor-debtor relationship between the parties while the latter does not.[40] They
explain that a contract of loan enables the debtor to restructure or novate the loan, which benefit is lost upon the
conversion of the debts to bearer bonds such that “the Philippines surrenders the novatable character of a loan
contract for the irrevocable and unpostponable demandability of a bearer bond.”[41] Allegedly, the Constitution
prohibits the President from issuing bonds which are “far more onerous” than loans.[42]
This line of thinking is flawed to say the least. The negotiable character of the subject bonds is not mutually
exclusive with the Republic’s freedom to negotiate with bondholders for the revision of the terms of the debt.
Moreover, the securities market provides some flexibility–if the Philippines wants to pay in advance, it can buy
out its bonds in the market; if interest rates go down but the Philippines does not have money to retire the
bonds, it can replace the old bonds with new ones; if it defaults on the bonds, the bondholders shall organize
and bring about a re-negotiation or settlement.[43] In fact, several countries have restructured their sovereign
bonds in view either of inability and/or unwillingness to pay the indebtedness.[44] Petitioners have not presented
a plausible reason that would preclude the Philippines from acting in a similar fashion, should it so opt.
This theory may even be dismissed in a perfunctory manner since petitioners are merely expecting that the
Philippines would opt to restructure the bonds but with the negotiable character of the bonds, would be
prevented from so doing. This is a contingency which petitioners do not assert as having come to pass or even
imminent. Consummated acts of the executive cannot be struck down by this Court merely on the basis of
petitioners’ anticipatory cavils.
On the Buyback Scheme
In their Comment, petitioners assert that the power to pay public debts lies with Congress and was deliberately
withheld by the Constitution from the President.[45] It is true that in the balance of power between the three
branches of government, it is Congress that manages the country’s coffers by virtue of its taxing and spending
powers. However, the law-making authority has promulgated a law ordaining an automatic appropriations
provision for debt servicing[46] by virtue of which the President is empowered to execute debt payments without
the need for further appropriations. Regarding these legislative enactments, this Court has held, viz:
Congress … deliberates or acts on the budget proposals of the President, and Congress in the exercise of its
own judgment and wisdom formulates an appropriation act precisely following the process established by the
Constitution, which specifies that no money may be paid from the Treasury except in accordance with an
appropriation made by law.
Debt service is not included in the General Appropriation Act, since authorization therefor already exists under
RA Nos. 4860 and 245, as amended, and PD 1967. Precisely in the light of this subsisting authorization as
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embodied in said Republic Acts and PD for debt service, Congress does not concern itself with details for
implementation by the Executive, but largely with annual levels and approval thereof upon due deliberations as
part of the whole obligation program for the year. Upon such approval, Congress has spoken and cannot be
said to have delegated its wisdom to the Executive, on whose part lies the implementation or execution of the
legislative wisdom.[47]
Specific legal authority for the buyback of loans is established under Section 2 of Republic Act (R.A.) No. 240,
viz:
Sec. 2. The Secretary of Finance shall cause to be paid out of any moneys in the National Treasury not
otherwise appropriated, or from any sinking funds provided for the purpose by law, any interest falling due, or
accruing, on any portion of the public debt authorized by law. He shall also cause to be paid out of any such
money, or from any such sinking funds the principal amount of any obligations which have matured, or which
have been called for redemption or for which redemption has been demanded in accordance with terms
prescribed by him prior to date of issue: Provided, however, That he may, if he so chooses and if the holder is
willing, exchange any such obligation with any other direct or guaranteed obligation or obligations of the
Philippine Government of equivalent value. In the case of interest-bearing obligations, he shall pay not less than
their face value; in the case of obligations issued at a discount he shall pay the face value at maturity; or, if
redeemed prior to maturity, such portion of the face value as is prescribed by the terms and conditions under
which such obligations were originally issued. (Emphasis supplied.)
The afore-quoted provisions of law specifically allow the President to pre-terminate debts without further action
from Congress.
Petitioners claim that the buyback scheme is neither a guarantee nor a loan since its underlying intent is to
extinguish debts that are not yet due and demandable.[48] Thus, they suggest that contracts entered pursuant
to the buyback scheme are unconstitutional for not being among those contemplated in Sec. 20, Art. VII of the
Constitution.
Buyback is a necessary power which springs from the grant of the foreign borrowing power. Every statute is
understood, by implication, to contain all such provisions as may be necessary to effectuate its object and
purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral
and subsidiary consequences as may be fairly and logically inferred from its terms.[49] The President is not
empowered to borrow money from foreign banks and governments on the credit of the Republic only to be left
bereft of authority to implement the payment despite appropriations therefor.
Even petitioners concede that “[t]he Constitution, as a rule, does not enumerate–let alone enumerate all–the
acts which the President (or any other public officer) may not do,”[50] and “[t]he fact that the Constitution does
not explicitly bar the President from exercising a power does not mean that he or she does not have that
power.”[51] It is inescapable from the standpoint of reason and necessity that the authority to contract foreign
loans and guarantees without restrictions on payment or manner thereof coupled with the availability of the
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corresponding appropriations, must include the power to effect payments or to make payments unavailing by
either restructuring the loans or even refusing to make any payment altogether.
More fundamentally, when taken in the context of sovereign debts, a buyback is simply the purchase by the
sovereign issuer of its own debts at a discount. Clearly then, the objection to the validity of the buyback scheme
is without basis.
XXXX
Second Issue: Delegation of Power
Petitioners stress that unlike other powers which may be validly delegated by the President, the power to incur
foreign debts is expressly reserved by the Constitution in the person of the President. They argue that the
gravity by which the exercise of the power will affect the Filipino nation requires that the President alone must
exercise this power. They submit that the requirement of prior concurrence of an entity specifically named by the
Constitution–the Monetary Board–reinforces the submission that not respondents but the President “alone and
personally” can validly bind the country.
Petitioners’ position is negated both by explicit constitutional and legal imprimaturs, as well as the doctrine of
qualified political agency.
The evident exigency of having the Secretary of Finance implement the decision of the President to execute the
debt-relief contracts is made manifest by the fact that the process of establishing and executing a strategy for
managing the government’s debt is deep within the realm of the expertise of the Department of Finance, primed
as it is to raise the required amount of funding, achieve its risk and cost objectives, and meet any other
sovereign debt management goals.
If, as petitioners would have it, the President were to personally exercise every aspect of the foreign borrowing
power, he/she would have to pause from running the country long enough to focus on a welter of time-
consuming detailed activities–the propriety of incurring/guaranteeing loans, studying and choosing among the
many methods that may be taken toward this end, meeting countless times with creditor representatives to
negotiate, obtaining the concurrence of the Monetary Board, explaining and defending the negotiated deal to the
public, and more often than not, flying to the agreed place of execution to sign the documents. This sort of
constitutional interpretation would negate the very existence of cabinet positions and the respective expertise
which the holders thereof are accorded and would unduly hamper the President’s effectivity in running the
government.
Necessity thus gave birth to the doctrine of qualified political agency, later adopted in Villena v. Secretary of the
Interior[55] from American jurisprudence, viz:
With reference to the Executive Department of the government, there is one purpose which is crystal-
clear and is readily visible without the projection of judicial searchlight, and that is the establishment of
a single, not plural, Executive. The first section of Article VII of the Constitution, dealing with the
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Executive Department, begins with the enunciation of the principle that "The executive power shall be
vested in a President of the Philippines." This means that the President of the Philippines is the
Executive of the Government of the Philippines, and no other. The heads of the executive
departments occupy political positions and hold office in an advisory capacity, and, in the language of
Thomas Jefferson, "should be of the President's bosom confidence" (7 Writings, Ford ed., 498), and,
in the language of Attorney-General Cushing (7 Op., Attorney-General, 453), "are subject to the
direction of the President." Without minimizing the importance of the heads of the various
departments, their personality is in reality but the projection of that of the President. Stated otherwise,
and as forcibly characterized by Chief Justice Taft of the Supreme Court of the United States, "each
head of a department is, and must be, the President's alter ego in the matters of that department
where the President is required by law to exercise authority" (Myers vs. United States, 47 Sup. Ct.
Rep., 21 at 30; 272 U. S., 52 at 133; 71 Law. ed., 160).[56]
As it was, the backdrop consisted of a major policy determination made by then President Aquino that sovereign
debts have to be respected and the concomitant reality that the Philippines did not have enough funds to pay
the debts. Inevitably, it fell upon the Secretary of Finance, as the alter ego of the President regarding “the sound
and efficient management of the financial resources of the Government,”[57] to formulate a scheme for the
implementation of the policy publicly expressed by the President herself.
Nevertheless, there are powers vested in the President by the Constitution which may not be delegated to or
exercised by an agent or alter ego of the President. Justice Laurel, in his ponencia in Villena, makes this clear:
Withal, at first blush, the argument of ratification may seem plausible under the circumstances, it
should be observed that there are certain acts which, by their very nature, cannot be validated by
subsequent approval or ratification by the President. There are certain constitutional powers and
prerogatives of the Chief Executive of the Nation which must be exercised by him in person and no
amount of approval or ratification will validate the exercise of any of those powers by any other
person. Such, for instance, in his power to suspend the writ of habeas corpus and proclaim martial law
(PAR. 3, SEC. 11, Art. VII) and the exercise by him of the benign prerogative of mercy (par. 6, sec.
11, idem).[58]
These distinctions hold true to this day. There are certain presidential powers which arise out of exceptional
circumstances, and if exercised, would involve the suspension of fundamental freedoms, or at least call for the
supersedence of executive prerogatives over those exercised by co-equal branches of government. The
declaration of martial law, the suspension of the writ of habeas corpus, and the exercise of the pardoning power
notwithstanding the judicial determination of guilt of the accused, all fall within this special class that demands
the exclusive exercise by the President of the constitutionally vested power. The list is by no means exclusive,
but there must be a showing that the executive power in question is of similar gravitas and exceptional import.
We cannot conclude that the power of the President to contract or guarantee foreign debts falls within the same
exceptional class. Indubitably, the decision to contract or guarantee foreign debts is of vital public interest, but
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only akin to any contractual obligation undertaken by the sovereign, which arises not from any extraordinary
incident, but from the established functions of governance.
Another important qualification must be made. The Secretary of Finance or any designated alter ego of the
President is bound to secure the latter’s prior consent to or subsequent ratification of his acts. In the matter of
contracting or guaranteeing foreign loans, the repudiation by the President of the very acts performed in this
regard by the alter ego will definitely have binding effect. Had petitioners herein succeeded in demonstrating
that the President actually withheld approval and/or repudiated the Financing Program, there could be a cause
of action to nullify the acts of respondents. Notably though, petitioners do not assert that respondents pursued
the Program without prior authorization of the President or that the terms of the contract were agreed upon
without the President’s authorization. Congruent with the avowed preference of then President Aquino to honor
and restructure existing foreign debts, the lack of showing that she countermanded the acts of respondents
leads us to conclude that said acts carried presidential approval.
With constitutional parameters already established, we may also note, as a source of suppletory guidance, the
provisions of R.A. No. 245. The afore-quoted Section 1 thereof empowers the Secretary of Finance with the
approval of the President and after consultation[59] of the Monetary Board, “to borrow from time to time on the
credit of the Republic of the Philippines such sum or sums as in his judgment may be necessary, and to issue
therefor evidences of indebtedness of the Philippine Government.” Ineluctably then, while the President wields
the borrowing power it is the Secretary of Finance who normally carries out its thrusts.
In our recent rulings in Southern Cross Cement Corporation v. The Philippine Cement Manufacturers Corp .,[60]
this Court had occasion to examine the authority granted by Congress to the Department of Trade and Industry
(DTI) Secretary to impose safeguard measures pursuant to the Safeguard Measures Act. In doing so, the Court
was impelled to construe Section 28(2), Article VI of the Constitution, which allowed Congress, by law, to
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.”[61]
While the Court refused to uphold the broad construction of the grant of power as preferred by the DTI
Secretary, it nonetheless tacitly acknowledged that Congress could designate the DTI Secretary, in his capacity
as alter ego of the President, to exercise the authority vested on the chief executive under Section 28(2), Article
VI.[62] At the same time, the Court emphasized that since Section 28(2), Article VI authorized Congress to
impose limitations and restrictions on the authority of the President to impose tariffs and imposts, the DTI
Secretary was necessarily subjected to the same restrictions that Congress could impose on the President in
the exercise of this taxing power.
Similarly, in the instant case, the Constitution allocates to the President the exercise of the foreign borrowing
power “subject to such limitations as may be provided under law.” Following Southern Cross, but in line with the
limitations as defined in Villena, the presidential prerogative may be exercised by the President’s alter ego, who
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in this case is the Secretary of Finance.
It bears emphasis that apart from the Constitution, there is also a relevant statute, R.A. No. 245, that establishes
the parameters by which the alter ego may act in behalf of the President with respect to the borrowing power.
This law expressly provides that the Secretary of Finance may enter into foreign borrowing contracts. This law
neither amends nor goes contrary to the Constitution but merely implements the subject provision in a manner
consistent with the structure of the Executive Department and the alter ego doctrine. In this regard, respondents
have declared that they have followed the restrictions provided under R.A. No. 245, [63] which include the
requisite presidential authorization and which, in the absence of proof and even allegation to the contrary,
should be regarded in a fashion congruent with the presumption of regularity bestowed on acts done by public
officials.
Moreover, in praying that the acts of the respondents, especially that of the Secretary of Finance, be nullified as
being in violation of a restrictive constitutional interpretation, petitioners in effect would have this Court declare
R.A. No. 245 unconstitutional. We will not strike down a law or provisions thereof without so much as a direct
attack thereon when simple and logical statutory construction would suffice.
Petitioners also submit that the unrestricted character of the Financing Program violates the framers’ intent
behind Section 20, Article VII to restrict the power of the President. This intent, petitioners note, is embodied in
the proviso in Sec. 20, Art. VII, which states that said power is “subject to such limitations as may be provided
under law.” However, as previously discussed, the debt-relief contracts are governed by the terms of R.A. No.
245, as amended by P.D. No. 142 s. 1973, and therefore were not developed in an unrestricted setting.
XXX
Third Issue: Grave Abuse of Discretion and
Violation of Constitutional Policies
We treat the remaining issues jointly, for in view of the foregoing determination, the general allegation of grave
abuse of discretion on the part of respondents would arise from the purported violation of various state policies
as expressed in the Constitution.
Petitioners allege that the Financing Program violates the constitutional state policies to promote a social order
that will “ensure the prosperity and independence of the nation” and free “the people from poverty, [64] foster
“social justice in all phases of national development,”[65] and develop a self-reliant and independent national
economy effectively controlled by Filipinos;”[66] thus, the contracts executed or to be executed pursuant thereto
were or would be tainted by a grave abuse of discretion amounting to lack or excess of jurisdiction.
Respondents cite the following in support of the propriety of their acts:[67] (1) a Department of Finance study
showing that as a result of the implementation of voluntary debt reductions schemes, the country’s debt stock
was reduced by U.S. $4.4 billion as of December 1991;[68] (2) revelations made by independent individuals
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made in a hearing before the Senate Committee on Economic Affairs indicating that the assailed agreements
would bring about substantial benefits to the country;[69] and (3) the Joint Legislative-Executive Foreign Debt
Council’s endorsement of the approval of the financing package containing the debt-relief agreements and
issuance of a Motion to Urge the Philippine Debt Negotiating Panel to continue with the negotiation on the
aforesaid package.[70]
Even with these justifications, respondents aver that their acts are within the arena of political questions which,
based on the doctrine of separation of powers,[71] the judiciary must leave without interference lest the courts
substitute their judgment for that of the official concerned and decide a matter which by its nature or law is for
the latter alone to decide.[72]
On the other hand, in furtherance of their argument on respondents’ violation of constitutional policies,
petitioners cite an article of Jude Esguerra, The 1992 Buyback and Securitization Agreement with Philippine
Commercial Bank Creditors,[73] in illustrating a best-case scenario in entering the subject debt-relief
agreements. The computation results in a yield of $218.99 million, rather than the $2,041.00 million claimed by
the debt negotiators.[74] On the other hand, the worst-case scenario allegedly is that a net amount of $1.638
million will flow out of the country as a result of the debt package.[75]
Assuming the accuracy of the foregoing for the nonce, despite the watered-down parameters of petitioners’
computations, we can make no conclusion other than that respondents’ efforts were geared towards debt-relief
with marked positive results and towards achieving the constitutional policies which petitioners so hastily
declare as having been violated by respondents. We recognize that as with other schemes dependent on
volatile market and economic structures, the contracts entered into by respondents may possibly have a net
outflow and therefore negative result. However, even petitioners call this latter event the worst-case scenario.
Plans are seldom foolproof. To ask the Court to strike down debt-relief contracts, which, according to
independent third party evaluations using historically-suggested rates would result in “substantial debt-
relief,”[76] based merely on the possibility of petitioners’ worst-case scenario projection, hardly seems
reasonable.
Moreover, the policies set by the Constitution as litanized by petitioners are not a panacea that can annul every
governmental act sought to be struck down. The gist of petitioners’ arguments on violation of constitutional
policies and grave abuse of discretion boils down to their allegation that the debt-relief agreements entered into
by respondents do not deliver the kind of debt-relief that petitioners would want. Petitioners cite the
aforementioned article in stating that that “the agreement achieves little that cannot be gained through less
complicated means like postponing (rescheduling) principal payments,”[77] thus:
[T]he price of success in putting together this “debt-relief package” (indicates) the possibility that a simple
rescheduling agreement may well turn out to be less expensive than this comprehensive “debt-relief” package.
This means that in the next six years the humble and simple rescheduling process may well be the lesser evil
because there is that distinct possibility that less money will flow out of the country as a result.
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Note must be taken that from these citations, petitioners submit that there is possibly a better way to go about
debt rescheduling and, on that basis, insist that the acts of respondents must be struck down. These are rather
tenuous grounds to condemn the subject agreements as violative of constitutional principles.
XXXXXXXXXX
Lagcao et al v. Judge. Labra and the City Of Cebu, G.R. No. 155746, October 13, 2004
Under Section 48 of RA 7160,[9] otherwise known as the Local Government Code of 1991,[10] local
legislative power shall be exercised by the Sangguniang Panlungsod of the city. The legislative acts of the
Sangguniang Panlungsod in the exercise of its lawmaking authority are denominated ordinances.
Local government units have no inherent power of eminent domain and can exercise it only when
expressly authorized by the legislature.[11] By virtue of RA 7160, Congress conferred upon local government
units the power to expropriate. Ordinance No. 1843 was enacted pursuant to Section 19 of RA 7160:
SEC. 19. Eminent Domain. − A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the
benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the
Constitution and pertinent laws xxx. (italics supplied).
Ordinance No. 1843 which authorized the expropriation of petitioners’ lot was enacted by the SP of Cebu
City to provide socialized housing for the homeless and low-income residents of the City.
However, while we recognize that housing is one of the most serious social problems of the country, local
government units do not possess unbridled authority to exercise their power of eminent domain in seeking
solutions to this problem.
There are two legal provisions which limit the exercise of this power: (1) no person shall be deprived of life,
liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws;
[12] and (2) private property shall not be taken for public use without just compensation.[13] Thus, the exercise
by local government units of the power of eminent domain is not absolute. In fact, Section 19 of RA 7160 itself
explicitly states that such exercise must comply with the provisions of the Constitution and pertinent laws.
The exercise of the power of eminent domain drastically affects a landowner’s right to private property,
which is as much a constitutionally-protected right necessary for the preservation and enhancement of personal
dignity and intimately connected with the rights to life and liberty.[14] Whether directly exercised by the State or
by its authorized agents, the exercise of eminent domain is necessarily in derogation of private rights.[15] For
this reason, the need for a painstaking scrutiny cannot be overemphasized.
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The due process clause cannot be trampled upon each time an ordinance orders the expropriation of a
private individual’s property. The courts cannot even adopt a hands-off policy simply because public use or
public purpose is invoked by an ordinance, or just compensation has been fixed and determined. In De Knecht
vs. Bautista,[16] we said:
It is obvious then that a land-owner is covered by the mantle of protection due process affords. It is a
mandate of reason. It frowns on arbitrariness, it is the antithesis of any governmental act that smacks of whim
or caprice. It negates state power to act in an oppressive manner. It is, as had been stressed s7o often, the
embodiment of the sporting idea of fair play. In that sense, it stands as a guaranty of justice. That is the
standard that must be met by any governmental agency in the exercise of whatever competence is entrusted to
it. As was so emphatically stressed by the present Chief Justice, “Acts of Congress, as well as those of the
Executive, can deny due process only under pain of nullity. xxx.
The foundation of the right to exercise eminent domain is genuine necessity and that necessity must be of
public character.[17] Government may not capriciously or arbitrarily choose which private property should be
expropriated. In this case, there was no showing at all why petitioners’ property was singled out for
expropriation by the city ordinance or what necessity impelled the particular choice or selection. Ordinance No.
1843 stated no reason for the choice of petitioners’ property as the site of a socialized housing project.
Condemnation of private lands in an irrational or piecemeal fashion or the random expropriation of small lots to
accommodate no more than a few tenants or squatters is certainly not the condemnation for public use
contemplated by the Constitution. This is depriving a citizen of his property for the convenience of a few without
perceptible benefit to the public.[18]
RA 7279 is the law that governs the local expropriation of property for purposes of urban land reform and
housing. Sections 9 and 10 thereof provide:
SEC 9. Priorities in the Acquisition of Land. − Lands for socialized housing shall be acquired in the
following order:
(a) Those owned by the Government or any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations and their
subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas or Priority Development, Zonal Improvement Program
sites, and Slum Improvement and Resettlement Program sites which have not yet been
acquired;
(e) Bagong Lipunan Improvement of Sites and Services or BLISS which have not yet been
acquired; and
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(f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to the beneficiaries, the
priorities mentioned in this section shall not apply. The local government units shall give budgetary priority to on-
site development of government lands. (Emphasis supplied).
SEC. 10. Modes of Land Acquisition. − The modes of acquiring lands for purposes of this Act shall
include, among others, community mortgage, land swapping, land assembly or consolidation, land banking,
donation to the Government, joint venture agreement, negotiated purchase, and expropriation: Provided,
however, That expropriation shall be resorted to only when other modes of acquisition have been exhausted:
Provided further, That where expropriation is resorted to, parcels of land owned by small property owners shall
be exempted for purposes of this Act: xxx. (Emphasis supplied).
In the recent case of Estate or Heirs of the Late Ex-Justice Jose B.L. Reyes et al. vs. City of Manila,[19] we
ruled that the above-quoted provisions are strict limitations on the exercise of the power of eminent domain by
local government units, especially with respect to (1) the order of priority in acquiring land for socialized housing
and (2) the resort to expropriation proceedings as a means to acquiring it. Private lands rank last in the order of
priority for purposes of socialized housing. In the same vein, expropriation proceedings may be resorted to only
after the other modes of acquisition are exhausted. Compliance with these conditions is mandatory because
these are the only safeguards of oftentimes helpless owners of private property against what may be a
tyrannical violation of due process when their property is forcibly taken from them allegedly for public use.
XXXX
David, et al v. GMA, G.R. No. 171396, May 3, 2006
The “moot and academic” principle is not a magical formula that can automatically dissuade the courts in
resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there is a grave violation of
the Constitution;[31] second, the exceptional character of the situation and the paramount public interest is
involved;[32] third, when constitutional issue raised requires formulation of controlling principles to guide the
bench, the bar, and the public;[33] and fourth, the case is capable of repetition yet evading review.[34]
XXXX
Locus standi is defined as “a right of appearance in a court of justice on a given question.” [37] In private suits,
standing is governed by the “real-parties-in interest” rule as contained in Section 2, Rule 3 of the 1997 Rules of
Civil Procedure, as amended. It provides that “every action must be prosecuted or defended in the name of the
real party in interest.” Accordingly, the “real-party-in interest” is “the party who stands to be benefited or injured
by the judgment in the suit or the party entitled to the avails of the suit.”[38] Succinctly put, the plaintiff’s
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standing is based on his own right to the relief sought.
The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a “public right” in
assailing an allegedly illegal official action, does so as a representative of the general public. He may be a
person who is affected no differently from any other person. He could be suing as a “stranger,” or in the
category of a “citizen,” or ‘taxpayer.” In either case, he has to adequately show that he is entitled to seek judicial
protection. In other words, he has to make out a sufficient interest in the vindication of the public order and the
securing of relief as a “citizen” or “taxpayer.
XXX
Case law in most jurisdictions now allows both “citizen” and “taxpayer” standing in public actions. The distinction
was first laid down in Beauchamp v. Silk,[39] where it was held that the plaintiff in a taxpayer’s suit is in a
different category from the plaintiff in a citizen’s suit. In the former, the plaintiff is affected by the expenditure of
public funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York
Supreme Court in People ex rel Case v. Collins:[40] “In matter of mere public right, however…the people are the
real parties…It is at least the right, if not the duty, of every citizen to interfere and see that a public offence be
properly pursued and punished, and that a public grievance be remedied.” With respect to taxpayer’s suits, Terr
v. Jordan[41] held that “the right of a citizen and a taxpayer to maintain an action in courts to restrain the
unlawful use of public funds to his injury cannot be denied.”
However, to prevent just about any person from seeking judicial interference in any official policy or act with
which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service,
the United State Supreme Court laid down the more stringent “direct injury” test in Ex Parte Levitt,[42] later
reaffirmed in Tileston v. Ullman.[43] The same Court ruled that for a private individual to invoke the judicial
power to determine the validity of an executive or legislative action, he must show that he has sustained a direct
injury as a result of that action, and it is not sufficient that he has a general interest common to all members of
the public.
This Court adopted the “direct injury” test in our jurisdiction. In People v. Vera,[44] it held that the person who
impugns the validity of a statute must have “a personal and substantial interest in the case such that he has
sustained, or will sustain direct injury as a result.” The Vera doctrine was upheld in a litany of cases, such as,
Custodio v. President of the Senate ,[45] Manila Race Horse Trainers’ Association v. De la Fuente ,[46] Pascual
v. Secretary of Public Works[47] and Anti-Chinese League of the Philippines v. Felix. [48]
However, being a mere procedural technicality, the requirement of locus standi may be waived by the Court in
the exercise of its discretion. This was done in the 1949 Emergency Powers Cases, Araneta v. Dinglasan,[49]
where the “transcendental importance” of the cases prompted the Court to act liberally. Such liberality was
neither a rarity nor accidental. In Aquino v. Comelec,[50] this Court resolved to pass upon the issues raised due
to the “far-reaching implications” of the petition notwithstanding its categorical statement that petitioner therein
had no personality to file the suit. Indeed, there is a chain of cases where this liberal policy has been observed,
allowing ordinary citizens, members of Congress, and civic organizations to prosecute actions involving the
constitutionality or validity of laws, regulations and rulings.[51]
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Thus, the Court has adopted a rule that even where the petitioners have failed to show direct injury, they have
been allowed to sue under the principle of “transcendental importance.” Pertinent are the following cases:
(1) Chavez v. Public Estates Authority,[52] where the Court ruled that the enforcement of the constitutional right
to information and the equitable diffusion of natural resources are matters of transcendental importance which
clothe the petitioner with locus standi;
(2) Bagong Alyansang Makabayan v. Zamora,[53] wherein the Court held that “given the transcendental
importance of the issues involved, the Court may relax the standing requirements and allow the suit to prosper
despite the lack of direct injury to the parties seeking judicial review” of the Visiting Forces Agreement;
(3) Lim v. Executive Secretary,[54] while the Court noted that the petitioners may not file suit in their capacity as
taxpayers absent a showing that “Balikatan 02-01” involves the exercise of Congress’ taxing or spending
powers, it reiterated its ruling in Bagong Alyansang Makabayan v. Zamora, [55] that in cases of transcendental
importance, the cases must be settled promptly and definitely and standing requirements may be relaxed.
By way of summary, the following rules may be culled from the cases decided by this Court. Taxpayers, voters,
concerned citizens, and legislators may be accorded standing to sue, provided that the following requirements
are met:
(1) the cases involve constitutional issues;
(2) for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax measure is
unconstitutional;
(3) for voters, there must be a showing of obvious interest in the validity of the election law in question;
(4) for concerned citizens, there must be a showing that the issues raised are of transcendental importance
which must be settled early; and
(5) for legislators, there must be a claim that the official action complained of infringes upon their prerogatives
as legislators.
XXXX
It must always be borne in mind that the question of locus standi is but corollary to the bigger question of proper
exercise of judicial power. This is the underlying legal tenet of the “liberality doctrine” on legal standing. It cannot
be doubted that the validity of PP No. 1017 and G.O. No. 5 is a judicial question which is of paramount
importance to the Filipino people. To paraphrase Justice Laurel, the whole of Philippine society now waits with
bated breath the ruling of this Court on this very critical matter. The petitions thus call for the application of the
“transcendental importance” doctrine, a relaxation of the standing requirements for the petitioners in the “PP
1017 cases.”
XXX
The Integrated Bar of the Philippines v. Zamora [80] -- a recent case most pertinent to these cases at bar --
echoed a principle similar to Lansang. While the Court considered the President’s “calling-out” power as a
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discretionary power solely vested in his wisdom, it stressed that “this does not prevent an examination of
whether such power was exercised within permissible constitutional limits or whether it was exercised in a
manner constituting grave abuse of discretion.” This ruling is mainly a result of the Court’s reliance on Section 1,
Article VIII of 1987 Constitution which fortifies the authority of the courts to determine in an appropriate action
the validity of the acts of the political departments. Under the new definition of judicial power, the courts are
authorized not only “to settle actual controversies involving rights which are legally demandable and
enforceable,” but also “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.” The latter part of
the authority represents a broadening of judicial power to enable the courts of justice to review what was before
a forbidden territory, to wit, the discretion of the political departments of the government. [81] It speaks of judicial
prerogative not only in terms of power but also of duty.[82]
As to how the Court may inquire into the President’s exercise of power, Lansang adopted the test that “judicial
inquiry can go no further than to satisfy the Court not that the President’s decision is correct,” but that “the
President did not act arbitrarily.” Thus, the standard laid down is not correctness, but arbitrariness.[83] In
Integrated Bar of the Philippines, this Court further ruled that “it is incumbent upon the petitioner to show that the
President’s decision is totally bereft of factual basis” and that if he fails, by way of proof, to support his assertion,
then “this Court cannot undertake an independent investigation beyond the pleadings.”
XXXX
It is pertinent to state, however, that there is a distinction between the President’s authority to declare a “state of
rebellion” (in Sanlakas) and the authority to proclaim a state of national emergency. While President Arroyo’s
authority to declare a “state of rebellion” emanates from her powers as Chief Executive, the statutory authority
cited in Sanlakas was Section 4, Chapter 2, Book II of the Revised Administrative Code of 1987, which
provides:
SEC. 4. – Proclamations. – Acts of the President fixing a date or declaring a status or condition of
public moment or interest, upon the existence of which the operation of a specific law or regulation is
made to depend, shall be promulgated in proclamations which shall have the force of an executive
order.
President Arroyo’s declaration of a “state of rebellion” was merely an act declaring a status or condition of public
moment or interest, a declaration allowed under Section 4 cited above. Such declaration, in the words of
Sanlakas, is harmless, without legal significance, and deemed not written. In these cases, PP 1017 is more than
that. In declaring a state of national emergency, President Arroyo did not only rely on Section 18, Article VII of
the Constitution, a provision calling on the AFP to prevent or suppress lawless violence, invasion or rebellion.
She also relied on Section 17, Article XII, a provision on the State’s extraordinary power to take over privately-
owned public utility and business affected with public interest. Indeed, PP 1017 calls for the exercise of an
awesome power. Obviously, such Proclamation cannot be deemed harmless, without legal significance, or not
written, as in the case of Sanlakas.
XXXX
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This Court rules that the assailed PP 1017 is unconstitutional insofar as it grants President Arroyo the authority
to promulgate “decrees.” Legislative power is peculiarly within the province of the Legislature. Section 1, Article
VI categorically states that “[t]he legislative power shall be vested in the Congress of the Philippines which shall
consist of a Senate and a House of Representatives.” To be sure, neither Martial Law nor a state of rebellion
nor a state of emergency can justify President Arroyo’s exercise of legislative power by issuing decrees.
XXXX
Can President Arroyo enforce obedience to all decrees and laws through the military ?
As this Court stated earlier, President Arroyo has no authority to enact decrees. It follows that these decrees are
void and, therefore, cannot be enforced. With respect to “laws,” she cannot call the military to enforce or
implement certain laws, such as customs laws, laws governing family and property relations, laws on obligations
and contracts and the like. She can only order the military, under PP 1017, to enforce laws pertinent to its duty
to suppress lawless violence.
XXXX
A distinction must be drawn between the President’s authority to declare “a state of national emergency” and to
exercise emergency powers. To the first, as elucidated by the Court, Section 18, Article VII grants the President
such power, hence, no legitimate constitutional objection can be raised. But to the second, manifold
constitutional issues arise.
Section 23, Article VI of the Constitution reads:
SEC. 23. (1) The Congress, by a vote of two-thirds of both Houses in joint session assembled, voting
separately, shall have the sole power to declare the existence of a state of war.
(2) In times of war or other national emergency, the Congress may, by law, authorize the President, for a limited
period and subject to such restrictions as it may prescribe, to exercise powers necessary and proper to carry out
a declared national policy. Unless sooner withdrawn by resolution of the
Congress, such powers shall cease upon the next adjournment thereof.
It may be pointed out that the second paragraph of the above provision refers not only to war but also to “ other
national emergency.” If the intention of the Framers of our Constitution was to withhold from the President the
authority to declare a “state of national emergency” pursuant to Section 18, Article VII (calling-out power) and
grant it to Congress (like the declaration of the existence of a state of war), then the Framers could have
provided so. Clearly, they did not intend that Congress should first authorize the President before he can
declare a “state of national emergency.” The logical conclusion then is that President Arroyo could validly
declare the existence of a state of national emergency even in the absence of a Congressional enactment.
But the exercise of emergency powers, such as the taking over of privately owned public utility or business
affected with public interest, is a different matter. This requires a delegation from Congress.
Courts have often said that constitutional provisions in pari materia are to be construed together. Otherwise
stated, different clauses, sections, and provisions of a constitution which relate to the same subject matter will
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be construed together and considered in the light of each other.[123] Considering that Section 17 of Article XII
and Section 23 of Article VI, previously quoted, relate to national emergencies, they must be read together to
determine the limitation of the exercise of emergency powers.
Generally, Congress is the repository of emergency powers. This is evident in the tenor of Section 23 (2), Article
VI authorizing it to delegate such powers to the President. Certainly, a body cannot delegate a power not
reposed upon it. However, knowing that during grave emergencies, it may not be possible or practicable for
Congress to meet and exercise its powers, the Framers of our Constitution deemed it wise to allow Congress to
grant emergency powers to the President, subject to certain conditions, thus:
(1) There must be a war or other emergency.
(2) The delegation must be for a limited period only.
(3) The delegation must be subject to such restrictions as the Congress may prescribe.
(4) The emergency powers must be exercised to carry out a national policy declared by Congress.[124]
Section 17, Article XII must be understood as an aspect of the emergency powers clause. The taking over of
private business affected with public interest is just another facet of the emergency powers generally reposed
upon Congress. Thus, when Section 17 states that the “the State may, during the emergency and under
reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public
utility or business affected with public interest,” it refers to Congress, not the President. Now, whether or not the
President may exercise such power is dependent on whether Congress may delegate it to him pursuant to a law
prescribing the reasonable terms thereof. Youngstown Sheet & Tube Co. et al. v. Sawyer, [125] held:
It is clear that if the President had authority to issue the order he did, it must be found in some provision of the
Constitution. And it is not claimed that express constitutional language grants this power to the President. The
contention is that presidential power should be implied from the aggregate of his powers under the Constitution.
Particular reliance is placed on provisions in Article II which say that “The executive Power shall be vested in a
President . . . .;” that “he shall take Care that the Laws be faithfully executed;” and that he “shall be
Commander-in-Chief of the Army and Navy of the United States.
The order cannot properly be sustained as an exercise of the President’s military power as Commander-in-Chief
of the Armed Forces. The Government attempts to do so by citing a number of cases upholding broad powers in
military commanders engaged in day-to-day fighting in a theater of war. Such cases need not concern us here.
Even though “theater of war” be an expanding concept, we cannot with faithfulness to our constitutional system
hold that the Commander-in-Chief of the Armed Forces has the ultimate power as such to take possession of
private property in order to keep labor disputes from stopping production. This is a job for the nation’s
lawmakers, not for its military authorities.
Nor can the seizure order be sustained because of the several constitutional provisions that grant executive
power to the President. In the framework of our Constitution, the President’s power to see that the laws are
faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the
lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the
Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. The
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first section of the first article says that “All legislative Powers herein granted shall be vested in a Congress of
the United States. . .”[126]
XXX
Emergency, as a generic term, connotes the existence of conditions suddenly intensifying the degree of existing
danger to life or well-being beyond that which is accepted as normal. Implicit in this definitions are the elements
of intensity, variety, and perception.[127] Emergencies, as perceived by legislature or executive in the United
Sates since 1933, have been occasioned by a wide range of situations, classifiable under three (3) principal
heads: a) economic,[128] b) natural disaster,[129] and c) national security.[130]
“Emergency,” as contemplated in our Constitution, is of the same breadth. It may include rebellion, economic
crisis, pestilence or epidemic, typhoon, flood, or other similar catastrophe of nationwide proportions or effect.
XXXX
Following our interpretation of Section 17, Article XII, invoked by President Arroyo in issuing PP 1017, this Court
rules that such Proclamation does not authorize her during the emergency to temporarily take over or direct the
operation of any privately owned public utility or business affected with public interest without authority from
Congress.
Let it be emphasized that while the President alone can declare a state of national emergency, however, without
legislation, he has no power to take over privately-owned public utility or business affected with public interest.
The President cannot decide whether exceptional circumstances exist warranting the take over of privately-
owned public utility or business affected with public interest. Nor can he determine when such exceptional
circumstances have ceased. Likewise, without legislation, the President has no power to point out the types of
businesses affected with public interest that should be taken over. In short, the President has no absolute
authority to exercise all the powers of the State under Section 17, Article VII in the absence of an emergency
powers act passed by Congress.
XXXX
“Assembly” means a right on the part of the citizens to meet peaceably for consultation in respect to public
affairs. It is a necessary consequence of our republican institution and complements the right of speech. As in
the case of freedom of expression, this right is not to be limited, much less denied, except on a showing of a
clear and present danger of a substantive evil that Congress has a right to prevent. In other words, like other
rights embraced in the freedom of expression, the right to assemble is not subject to previous restraint or
censorship. It may not be conditioned upon the prior issuance of a permit or authorization from the government
authorities except, of course, if the assembly is intended to be held in a public place, a permit for the use of
such place, and not for the assembly itself, may be validly required.
The ringing truth here is that petitioner David, et al. were arrested while they were exercising their right to
peaceful assembly. They were not committing any crime, neither was there a showing of a clear and present
danger that warranted the limitation of that right. As can be gleaned from circumstances, the charges of inciting
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to sedition and violation of BP 880 were mere afterthought. Even the Solicitor General, during the oral
argument, failed to justify the arresting officers’ conduct. In De Jonge v. Oregon,[148] it was held that peaceable
assembly cannot be made a crime, thus:
Peaceable assembly for lawful discussion cannot be made a crime. The holding of meetings for peaceable
political action cannot be proscribed. Those who assist in the conduct of such meetings cannot be branded as
criminals on that score. The question, if the rights of free speech and peaceful assembly are not to be
preserved, is not as to the auspices under which the meeting was held but as to its purpose; not as to the
relations of the speakers, but whether their utterances transcend the bounds of the freedom of speech which the
Constitution protects. If the persons assembling have committed crimes elsewhere, if they have formed or are
engaged in a conspiracy against the public peace and order, they may be prosecuted for their conspiracy or
other violations of valid laws. But it is a different matter when the State, instead of prosecuting them for such
offenses, seizes upon mere participation in a peaceable assembly and a lawful public discussion as the basis
for a criminal charge.
XXX
On the basis of the above principles, the Court likewise considers the dispersal and arrest of the members of
KMU et al. (G.R. No. 171483) unwarranted. Apparently, their dispersal was done merely on the basis of
Malacañang’s directive canceling all permits previously issued by local government units. This is arbitrary. The
wholesale cancellation of all permits to rally is a blatant disregard of the principle that “freedom of assembly is
not to be limited, much less denied, except on a showing of a clear and present danger of a substantive evil that
the State has a right to prevent.”[149] Tolerance is the rule and limitation is the exception. Only upon a showing
that an assembly presents a clear and present danger that the State may deny the citizens’ right to exercise it.
Indeed, respondents failed to show or convince the Court that the rallyists committed acts amounting to lawless
violence, invasion or rebellion. With the blanket revocation of permits, the distinction between protected and
unprotected assemblies was eliminated.
Moreover, under BP 880, the authority to regulate assemblies and rallies is lodged with the local government
units. They have the power to issue permits and to revoke such permits after due notice and hearing on the
determination of the presence of clear and present danger. Here, petitioners were not even notified and heard
on the revocation of their permits.[150] The first time they learned of it was at the time of the dispersal. Such
absence of notice is a fatal defect. When a person’s right is restricted by government action, it behooves a
democratic government to see to it that the restriction is fair, reasonable, and according to procedure.
XXXX
THE SUPREME COURT, through Justice Minita V. Chico-Nazario, recently upheld the issuance of a writ of
preliminary injunction by a trial court stopping the National Power Corporation (Napocor) from activating its high
tension wires that passed through a residential area.
Reversing the Court of Appeals and in effect upholding the Makati Regional Trial Court’s injunction, the Court’s
First Division ruled that PD 1818, which prohibits courts from issuing restraining orders or preliminary injunctions
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in cases involving infrastructure and natural resource development projects of the government and public
utilities operated by the government, was not meant to be a blanket prohibition so as to disregard the
fundamental right to health, safety, and well-being of a community guaranteed by the fundamental law of the
land.
“[W]hat Presidential Decree No. 1818 aims to avert is the untimely frustration of government infrastructure
projects, particularly by provisional remedies, to the detriment of the greater good by disrupting the pursuit of
essential government projects or frustrate the economic development effort of the nation,” the Court said. “[T]he
far reaching irreversible effects to human safety should be the primordial concerns over presumed economic
benefits per se as alleged by Napocor,” ruled the Court First Division.
In 1996, Napocor began the construction of 29 decagon-shaped steel poles or towers with a height of 53.4
meters to support overhead high tension cables in connection with its 230 Kilovolt Sucat-Araneta-Balintawak
Power Transmission Project. Said transmission line passes through the Sergio Osmeña, Sr. Highway (South
Superhighway), the perimeter of Fort Bonifacio, and Dasmariñas Village proximate to Tamarind Road, where
petitioners’ homes are located.
The Court noted that despite conflicting results on studies commissioned by both parties as to whether or not
the transmission lines are safe, the possibility that the exposure to electromagnetic radiation causes cancer and
other disorders is still within the realm of scientific scale of probability. (Hernandez, et al. v. Napocor , GR No.
145328, March 23, 2006)
CIVIL LAW
JUANITA CARATING-SIAYNGCO v. MANUEL SIAYNGCO, G.R. NO. 158896, October 27, 2004
As aforementioned, the presumption is always in favor of the validity of marriage. Semper praesumitur pro
matrimonio. In the case at bar, respondent Manuel failed to prove that his wife’s lack of respect for him, her
jealousies and obsession with cleanliness, her outbursts and her controlling nature (especially with respect to
his salary), and her inability to endear herself to his parents are grave psychological maladies that paralyze her
from complying with the essential obligations of marriage. Neither is there any showing that these “defects”
were already present at the inception of the marriage or that they are incurable. In fact, Dr. Maaba, whose
expertise as a psychiatrist was admitted by respondent Manuel, reported that petitioner was psychologically
capacitated to comply with the basic and essential obligations of marriage.
The psychological report of respondent Manuel’s witness, Dr. Garcia, on the other hand, does not help his case
any. Nothing in there supports the doctor’s conclusion that petitioner Juanita is psychologically incapacitated.
On the contrary, the report clearly shows that the root cause of petitioner Juanita’s behavior is traceable – not
from the inception of their marriage as required by law – but from her experiences during the marriage, e.g., her
in-laws’ disapproval of her as they wanted their son to enter the priesthood, her husband’s philandering,
admitted no less by him, and her inability to conceive. Dr. Garcia’s report paints a story of a husband and wife
who grew professionally during the marriage, who pursued their individual dreams to the hilt, becoming busier
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and busier, ultimately sacrificing intimacy and togetherness as a couple. This was confirmed by respondent
Manuel himself during his direct examination.
Thus, from the totality of the evidence adduced by both parties, we have been allowed a window into the
Siayngcos’s life and have perceived therefrom a simple case of a married couple drifting apart, becoming
strangers to each other, with the husband consequently falling out of love and wanting a way out.
An unsatisfactory marriage, however, is not a null and void marriage. Mere showing of “irreconcilable
differences” and “conflicting personalities” in no wise constitutes psychological incapacity.
The Municipality of San Juan, Metro Manila v. The hon. Court of Appeals, Laura Biglang-Awa, Metropolitan
Waterworks and Sewerage System (MWSS), and Kwok Cheung, G.R. No. 121920, August 9, 2005
We must emphasize that under paragraph [1][bb] of Section 149, supra, of the Local Government Code, the
phrases “regulate the drilling and excavation of the ground for the laying of gas, water, sewer, and other pipes”,
and “adopt measures to ensure public safety against open canals, manholes, live wires and other similar
hazards to life and property”, are not modified by the term “municipal road”. And neither can it be fairly inferred
from the same provision of Section 149 that petitioner’s power of regulation vis-à-vis the activities therein
mentioned applies only in cases where such activities are to be performed in municipal roads. To our mind, the
municipality’s liability for injuries caused by its failure to regulate the drilling and excavation of the ground for the
laying of gas, water, sewer, and other pipes, attaches regardless of whether the drilling or excavation is made
on a national or municipal road, for as long as the same is within its territorial jurisdiction.
xxxx
Neither is the [petitioner] relieved of liability based on its purported lack of knowledge of the excavation
and the condition of the road during the period from May 20, 1988 up to May 30, 1988 when the accident
occurred. It must be borne in mind that the obligation of the [petitioner] to maintain the safe condition of the
road within its territory is a continuing one which is not suspended while a street is being repaired (Corpus Juris
Secundum, Municipal Corporations, page 120). Knowledge of the condition of the road and the defects and/or
obstructions on the road may be actual or constructive. It is enough that the authorities should have known of
the aforesaid circumstances in the exercise of ordinary care (City of Louiseville versus Harris, 180 Southwestern
Reporter. page 65). In the present recourse, Santolan Road and the Greenhills area coming from Ortigas
Avenue going to Pinaglabanan, San Juan, Metro Manila is a busy thoroughfare. The gaping hole in the middle
of the road of Santolan Road could not have been missed by the authorities concerned. After all, the [petitioner]
San Juan is mandated to effect a constant and unabated monitoring of the conditions of the roads to insure the
safety of motorists. Persuasive authority has it that:
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It is the duty of the municipal authorities to exercise an active vigilance over the streets; to see that they are kept
in a reasonably safe condition for public travel. They cannot fold their arms and shut their eyes and say they
have no notice. (Todd versus City of Troy, 61 New York 506). (Words in bracket supplied).
Nor can petitioner seek shelter on Section 8 of Ordinance 82-01 of the Metropolitan Manila Commission.
Concededly, Section 8 of the Ordinance makes the permittee/excavator liable for death, injury and/or
damages caused by the non-completion of works and/or failure of the one undertaking the works to adopt the
required precautionary measures for the protection of the general public. Significantly, however, nowhere can it
be found in said Ordinance any provision exempting municipalities in Metro Manila from liabilities caused by
their own negligent acts. Afortiori, nothing prevents this Court from applying other relevant laws concerning
petitioner’s liability for the injuries sustained by Biglang-awa on that fateful rainy evening of 31 May 1988.
LEONILO ANTONIO v. MARIE IVONNE F. REYES, G.R. No. 155800, March 10, 2006
Legal Guides to Understanding Article 36
 
Article 36 of the Family Code states that “[a] marriage contracted by any party who, at the time of the
celebration, was psychologically incapacitated to comply with the essential marital obligations of marriage, shall
likewise be void even if such incapacity becomes manifest only after its solemnization." The concept of
psychological incapacity as a ground for nullity of marriage is novel in our body of laws, although mental
incapacity has long been recognized as a ground for the dissolution of a marriage.
 
The Spanish Civil Code of 1889 prohibited from contracting marriage persons “who are not in the full
enjoyment of their reason at the time of contracting marriage.” Marriages with such persons were ordained as
void, [ in the same class as marriages with underage parties and persons already married, among others. A
party’s mental capacity was not a ground for divorce under the Divorce Law of 1917, but a marriage where
“either party was of unsound mind” at the time of its celebration was cited as an “annullable marriage” under the
Marriage Law of 1929. Divorce on the ground of a spouse’s incurable insanity was permitted under the divorce
law enacted during the Japanese occupation. Upon the enactment of the Civil Code in 1950, a marriage
contracted by a party of “unsound mind” was classified under Article 85 of the Civil Code as a voidable
marriage. The mental capacity, or lack thereof, of the marrying spouse was not among the grounds for declaring
a marriage void ab initio. Similarly, among the marriages classified as voidable under Article 45 (2) of the Family
Code is one contracted by a party of unsound mind.
 
Such cause for the annulment of marriage is recognized as a vice of consent, just like insanity
impinges on consent freely given which is one of the essential requisites of a contract. The initial common
consensus on psychological incapacity under Article 36 of the Family Code was that it did not constitute a
specie of vice of consent. Justices Sempio-Diy and Caguioa, both members of the Family Code revision
committee that drafted the Code, have opined that psychological incapacity is not a vice of consent, and
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conceded that the spouse may have given free and voluntary consent to a marriage but was nonetheless
incapable of fulfilling such rights and obligations. Dr. Tolentino likewise stated in the 1990 edition of his
commentaries on the Family Code that this “psychological incapacity to comply with the essential marital
obligations does not affect the consent to the marriage.”
 
There were initial criticisms of this original understanding of Article 36 as phrased by the Family Code
committee. Tolentino opined that “psychologically incapacity to comply would not be juridically different from
physical incapacity of consummating the marriage, which makes the marriage only voidable under Article 45 (5)
of the Civil Code x x x [and thus] should have been a cause for annulment of the marriage only.” At the same
time, Tolentino noted “[it] would be different if it were psychological incapacity to understand the essential
marital obligations, because then this would amount to lack of consent to the marriage.” These concerns though
were answered, beginning with Santos v. Court of Appeals, wherein the Court, through Justice Vitug,
acknowledged that “psychological incapacity should refer to no less than a mental (not physical) incapacity that
causes a party to be truly incognitive of the basic marital covenants that concomitantly must be assumed and
discharged by the parties to the marriage.”
 
The notion that psychological incapacity pertains to the inability to understand the obligations of
marriage, as opposed to a mere inability to comply with them, was further affirmed in the Molina case. Therein,
the Court, through then Justice (now Chief Justice) Panganiban observed that “[t]he evidence [to establish
psychological incapacity] must convince the court that the parties, or one of them, was mentally or psychically ill
to such extent that the person could not have known the obligations he was assuming, or knowing them, could
not have given valid assumption thereto.” Jurisprudence since then has recognized that psychological
incapacity “is a malady so grave and permanent as to deprive one of awareness of the duties and
responsibilities of the matrimonial bond one is about to assume.”
 
It might seem that this present understanding of psychological incapacity deviates from the literal
wording of Article 36, with its central phase reading “psychologically incapacitated to comply with the
essential marital obligations of marriage.” At the same time, it has been consistently recognized by this Court
that the intent of the Family Code committee was to design the law as to allow some resiliency in its application,
by avoiding specific examples that would limit the applicability of the provision under the principle of ejusdem
generis. Rather, the preference of the revision committee was for “the judge to interpret the provision on a case-
to-case basis, guided by experience, in the findings of experts and researchers in psychological disciplines, and
by decisions of church tribunals which, although not binding on the civil courts, may be given persuasive
effect since the provision was taken from Canon Law.”
Xxx
Now is also opportune time to comment on another common legal guide utilized in the adjudication of
petitions for declaration of nullity under Article 36. All too frequently, this Court and lower courts, in denying
petitions of the kind, have favorably cited Sections 1 and 2, Article XV of the Constitution, which respectively
state that “[t]he State recognizes the Filipino family as the foundation of the nation. Accordingly, it shall
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strengthen its solidarity and actively promote its total developmen[t],” and that “[m]arriage, as an inviolable
social institution, is the foundation of the family and shall be protected by the State.” These provisions highlight
the importance of the family and the constitutional protection accorded to the institution of marriage.
 
But the Constitution itself does not establish the parameters of state protection to marriage as a social
institution and the foundation of the family. It remains the province of the legislature to define all legal aspects of
marriage and prescribe the strategy and the modalities to protect it, based on whatever socio-political influences
it deems proper, and subject of course to the qualification that such legislative enactment itself adheres to the
Constitution and the Bill of Rights. This being the case, it also falls on the legislature to put into operation the
constitutional provisions that protect marriage and the family. This has been accomplished at present through
the enactment of the Family Code, which defines marriage and the family, spells out the corresponding legal
effects, imposes the limitations that affect married and family life, as well as prescribes the grounds for
declaration of nullity and those for legal separation. While it may appear that the judicial denial of a petition for
declaration of nullity is reflective of the constitutional mandate to protect marriage, such action in fact merely
enforces a statutory definition of marriage, not a constitutionally ordained decree of what marriage is. Indeed, if
circumstances warrant, Sections 1 and 2 of Article XV need not be the only constitutional considerations to be
taken into account in resolving a petition for declaration of nullity.
 
Indeed, Article 36 of the Family Code, in classifying marriages contracted by a psychologically
incapacitated person as a nullity, should be deemed as an implement of this constitutional protection of
marriage. Given the avowed State interest in promoting marriage as the foundation of the family, which in turn
serves as the foundation of the nation, there is a corresponding interest for the State to defend against
marriages ill-equipped to promote family life. Void ab initio marriages under Article 36 do not further the
initiatives of the State concerning marriage and family, as they promote wedlock among persons who, for
reasons independent of their will, are not capacitated to understand or comply with the essential obligations of
marriage.
Xxx
It should be noted that the lies attributed to respondent were not adopted as false pretenses in order
to induce petitioner into marriage. More disturbingly, they indicate a failure on the part of respondent to
distinguish truth from fiction, or at least abide by the truth. Petitioner’s witnesses and the trial court were
emphatic on respondent’s inveterate proclivity to telling lies and the pathologic nature of her mistruths, which
according to them, were revelatory of respondent’s inability to understand and perform the essential obligations
of marriage. Indeed, a person unable to distinguish between fantasy and reality would similarly be unable to
comprehend the legal nature of the marital bond, much less its psychic meaning, and the corresponding
obligations attached to marriage, including parenting. One unable to adhere to reality cannot be expected to
adhere as well to any legal or emotional commitments.
 
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The Court of Appeals somehow concluded that since respondent allegedly tried her best to effect
reconciliation, she had amply exhibited her ability to perform her marital obligations. We are not convinced.
Given the nature of her psychological condition, her willingness to remain in the marriage hardly banishes nay
extenuates her lack of capacity to fulfill the essential marital obligations. Respondent’s ability to even
comprehend what the essential marital obligations are is impaired at best. Considering that the evidence
convincingly disputes respondent’s ability to adhere to the truth, her avowals as to her commitment to the
marriage cannot be accorded much credence.
At this point, it is worth considering Article 45(3) of the Family Code which states that a marriage may
be annulled if the consent of either party was obtained by fraud, and Article 46 which enumerates the
circumstances constituting fraud under the previous article, clarifies that “no other misrepresentation or deceit
as to character, health, rank, fortune or chastity shall constitute such fraud as will give grounds for action for the
annulment of marriage.” It would be improper to draw linkages between misrepresentations made by
respondent and the misrepresentations under Articles 45 (3) and 46. The fraud under Article 45(3) vitiates the
consent of the spouse who is lied to, and does not allude to vitiated consent of the lying spouse. In this case,
the misrepresentations of respondent point to her own inadequacy to cope with her marital obligations, kindred
to psychological incapacity under Article 36.
Xxx
From the totality of the evidence, can it be definitively concluded that respondent’s condition is
incurable? It would seem, at least, that respondent’s psychosis is quite grave, and a cure thereof a remarkable
feat. Certainly, it would have been easier had petitioner’s expert witnesses characterized respondent’s condition
as incurable. Instead, they remained silent on whether the psychological incapacity was curable or incurable.
 
But on careful examination, there was good reason for the experts’ taciturnity on this point.
 
The petitioner’s expert witnesses testified in 1994 and 1995, and the trial court rendered its decision
on 10 August 1995. These events transpired well before Molina was promulgated in 1997 and made explicit the
requirement that the psychological incapacity must be shown to be medically or clinically permanent or
incurable. Such requirement was not expressly stated in Article 36 or any other provision of the Family Code.
On the other hand, the Court in Santos, which was decided in January 1995, began its discussion by
first citing the deliberations of the Family Code committee, then the opinion of canonical scholars, before
arriving at its formulation of the doctrinal definition of psychological incapacity. Santos did refer to Justice
Caguioa’s opinion expressed during the deliberations that “psychological incapacity is incurable,” and the view
of a former presiding judge of the Metropolitan Marriage Tribunal of the Archdiocese of Manila that
psychological incapacity must be characterized “by (a) gravity, (b) juridical antecedence, and (c) incurability.”
However, in formulating the doctrinal rule on psychological incapacity, the Court in Santos omitted any
reference to incurability as a characteristic of psychological incapacity.
 
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This disquisition is material as Santos was decided months before the trial court came out with its own
ruling that remained silent on whether respondent’s psychological incapacity was incurable. Certainly, Santos
did not clearly mandate that the incurability of the psychological incapacity be established in an action for
declaration of nullity. At least, there was no jurisprudential clarity at the time of the trial of this case and the
subsequent promulgation of the trial court’s decision that required a medical finding of incurability. Such
requisite arose only with Molina in 1997, at a time when this case was on appellate review, or after the reception
of evidence.
We are aware that in Pesca v. Pesca, the Court countered an argument that Molina and Santos
should not apply retroactively with the observation that the interpretation or construction placed by the courts of
a law constitutes a part of that law as of the date the statute in enacted. Yet we approach this present case from
utterly practical considerations. The requirement that psychological incapacity must be shown to be medically or
clinically permanent or incurable is one that necessarily cannot be divined without expert opinion. Clearly in this
case, there was no categorical averment from the expert witnesses that respondent’s psychological incapacity
was curable or incurable simply because there was no legal necessity yet to elicit such a declaration and the
appropriate question was not accordingly propounded to him. If we apply Pesca without deep reflection, there
would be undue prejudice to those cases tried before Molina or Santos, especially those presently on appellate
review, where presumably the respective petitioners and their expert witnesses would not have seen the need
to adduce a diagnosis of incurability. It may hold in those cases, as in this case, that the psychological
incapacity of a spouse is actually incurable, even if not pronounced as such at the trial court level.
 
We stated earlier that Molina is not set in stone, and that the interpretation of Article 36 relies heavily
on a case-to-case perception. It would be insensate to reason to mandate in this case an expert medical or
clinical diagnosis of incurability, since the parties would have had no impelling cause to present evidence to that
effect at the time this case was tried by the RTC more than ten (10) years ago. From the totality of the evidence,
we are sufficiently convinced that the incurability of respondent’s psychological incapacity has been established
by the petitioner. Any lingering doubts are further dispelled by the fact that the Catholic Church tribunals, which
indubitably consider incurability as an integral requisite of psychological incapacity, were sufficiently convinced
that respondent was so incapacitated to contract marriage to the degree that annulment was warranted.
BPI V. SPS VELOSO
The general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire to
do so. The statement of intention must be accompanied by an actual and simultaneous tender of payment.
This constitutes the exercise of the right to
repurchase.
In several cases decided by the Court where the right to repurchase was held to have been properly exercised,
there was an unequivocal tender of payment for the full amount of the repurchase price. Otherwise, the offer to
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redeem is ineffectual.[8] Bona fide redemption necessarily implies a reasonable and valid tender of the entire
repurchase price, otherwise the rule on the redemption period fixed by law can easily be circumvented.
x x x the existence of the right of redemption operates to depress the market value of the land until the period
expires, and to render that period indefinite by permitting the tenant to file a suit for redemption, with either party
unable to foresee when final judgment will terminate the action, would render nugatory the period of two years
fixed by the statute for making the redemption and virtually paralyze any efforts of the landowner to realize the
value of his land. No buyer can be expected to acquire it without any certainty as to the amount for which it may
be redeemed, so that he can recover at least his investment in case of redemption. In the meantime, the
landowner’s
needs and obligations cannot be met. It is doubtful if any such result was intended by the statute, absent clear
wording to that effect.
Consequently, in this case, the offer by respondents on July 24, 1986 to redeem the foreclosed properties for
P1,872,935 and the subsequent consignation in court of P1,500,000 on August 27, 1986, while made within the
period[10] of redemption, was ineffective since the amount offered and actually consigned not only did not
include the interest but was in fact also way below the P2,782,554.66 paid by the highest bidder/purchaser of
the properties during the auction sale.
In Bodiongan vs. Court of Appeals,[11] we held:
In order to effect a redemption, the judgment debtor must pay the purchaser the redemption price composed of
the following: (1) the price which the purchaser paid for the property; (2) interest of 1% per month on the
purchase price; (3) the amount of any assessments or taxes which the purchaser may have paid on the property
after the purchase; and (4) interest of 1% per month on such assessments and taxes x x x.
Furthermore, Article 1616 of the Civil Code of the Philippines provides:
The vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the sale x
x x.
It is not difficult to understand why the redemption price should either be fully offered in legal tender or else
validly consigned in court. Only by such means can the auction winner be assured that the offer to redeem is
being made in good faith.
XXX
The law granted respondents the right of redemption. But in so granting that right, the law intended that their
offer to redeem be valid and effective, accompanied by an actual tender of the redemption price. Fixing a
definite term within which the property should be redeemed is meant to avoid prolonged economic uncertainty
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over the ownership of the thing sold. In the case at bar, the offer was not a legal and effective exercise of the
right of redemption contemplated by law, hence, refusal of the offer by petitioner was completely justified.
An equitable mortgage is defined as one which although lacking in some formality, or form or words, or other
requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as
security for a debt, and contains nothing impossible or contrary to law. For the presumption of an equitable
mortgage to arise, two requisites must concur: (1) that the parties entered into a contract denominated as a
sale; and (2) that their intention was to secure an existing debt by way of a mortgage.
SPS. TITO ALVARO and Maria Valelo v. SPS. OSMUNDO TERNIDA and JULITA RETURBAN, Court of
Appeals, G.R. No. 166183, January 20, 2006
Consequently, the nonpayment of the debt when due gives the mortgagee the right to foreclose the mortgage,
sell the property and apply the proceeds of the sale to the satisfaction of the loan obligation.
We find no merit in petitioners’ contention that in the Deed of Absolute Sale executed between them and Julita,
the latter totally conveyed her ownership over the disputed property. We have consistently decreed that the
nomenclature used by the contracting parties to describe a contract does not determine its nature. The decisive
factor is the intention of the parties to the contract – as shown by their conduct, words, actions and deeds – prior
to, during and after executing the agreement.
While there is no single conclusive test to determine whether a deed absolute on its face is really a simple loan
accommodation secured by a mortgage, however, the Civil Code enumerates several instances when a contract
is clothed with the presumption that it is an equitable mortgage, to wit:
Article 1602. The contract shall be presumed to be an equitable mortgage, in any of the following
cases:
(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument extending the
period of redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the parties is that the
transaction shall secure the payment of a debt or the performance of any other obligation.
In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee as rent or
otherwise shall be considered as interest which shall be subject to the usury laws. (Emphasis added)
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It is an established rule that the presence of even one of the circumstances set forth in Article 1602 is sufficient
to declare a contract of sale with right to repurchase an equitable mortgage. Thus, under the wise, just and
equitable presumption in Article 1602, a document which appears on its face to be a sale – absolute or with
pacto de retro – may be proven by the vendor or vendor-a-retro to be one of a loan with mortgage. In such
case, parol evidence becomes competent and admissible to prove that the instrument was in truth and in fact
given merely as a security for the payment of a loan. And upon proof of the truth of such allegations, the court
will enforce the agreement or understanding in consonance with the true intent of the parties at the time of the
execution of the contract.
Applying the foregoing considerations to the instant case, we find that the true intention of the parties in the
execution of the Deed of Absolute Sale was never to convey the ownership of the disputed property but merely
to secure the loan obtained by Julita.
REMEDIAL LAW
Agustin v. CA, G.R. No. 162571, June 15, 2005
The assailed resolution and order did not convert the action for support into one for recognition but merely
allowed the respondents to prove their cause of action against petitioner who had been denying the authenticity
of the documentary evidence of acknowledgement. But even if the assailed resolution and order effectively
integrated an action to compel recognition with an action for support, such was valid and in accordance with
jurisprudence. In Tayag v. Court of Appeals,[20] we allowed the integration of an action to compel recognition
with an action to claim one’s inheritance:
…In Paulino, we held that an illegitimate child, to be entitled to support and successional rights from the putative
or presumed parent, must prove his filiation to the latter. We also said that it is necessary to allege in the
complaint that the putative father had acknowledged and recognized the illegitimate child because such
acknowledgment is essential to and is the basis of the right to inherit. There being no allegation of such
acknowledgment, the action becomes one to compel recognition which cannot be brought after the death of the
putative father. The ratio decidendi in Paulino, therefore, is not the absence of a cause of action for failure of
the petitioner to allege the fact of acknowledgment in the complaint, but the prescription of the action.
Applying the foregoing principles to the case at bar, although petitioner contends that the complaint filed
by herein private respondent merely alleges that the minor Chad Cuyugan is an illegitimate child of the
deceased and is actually a claim for inheritance, from the allegations therein the same may be considered as
one to compel recognition. Further, that the two causes of action, one to compel recognition and the other to
claim inheritance, may be joined in one complaint is not new in our jurisprudence.
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XXXX
Deoxyribonucleic Acid, or DNA, is a molecule that encodes the genetic information in all living organisms. A
person’s DNA is the same in each cell and it does not change throughout a person’s lifetime; the DNA in a
person’s blood is the same as the DNA found in his saliva, sweat, bone, the root and shaft of hair, earwax,
mucus, urine, skin tissue, and vaginal and rectal cells. Most importantly, because of polymorphisms in human
genetic structure, no two individuals have the same DNA, with the notable exception of identical twins.
xxx xxx xxx
In assessing the probative value of DNA evidence, courts should consider, inter alia, the following factors: how
the samples were collected, how they were handled, the possibility of contamination of the samples, the
procedure followed in analyzing the samples, whether proper standards and procedures were followed in
conducting the tests, and the qualification of the analyst who conducted the tests.
XXXXXXXXXX
Deoxyribonucleic Acid, or DNA, is a molecule that encodes the genetic information in all living organisms. A
person’s DNA is the same in each cell and it does not change throughout a person’s lifetime; the DNA in a
person’s blood is the same as the DNA found in his saliva, sweat, bone, the root and shaft of hair, earwax,
mucus, urine, skin tissue, and vaginal and rectal cells. Most importantly, because of polymorphisms in human
genetic structure, no two individuals have the same DNA, with the notable exception of identical twins.
xxx xxx xxx
In assessing the probative value of DNA evidence, courts should consider, inter alia, the following factors: how
the samples were collected, how they were handled, the possibility of contamination of the samples, the
procedure followed in analyzing the samples, whether proper standards and procedures were followed in
conducting the tests, and the qualification of the analyst who conducted the tests.
HERRERA v. ALBA, et al, G.R. No. 148220 June 15, 2005
While we agree with the trial court that forensic DNA typing has gained general acceptance in the scientific
community, we hold that admissibility of specific test results in a particular case hinges on the laboratory’s
compliance with appropriate standards and controls, and the availability of their testing data and results.[44]
XXXXXXXX
We now determine the applicability in this jurisdiction of these American cases. Obviously, neither the
Frye-Schwartz standard nor the Daubert-Kumho standard is controlling in the Philippines.[47] At best,
American jurisprudence merely has a persuasive effect on our decisions. Here, evidence is admissible when it
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is relevant to the fact in issue and is not otherwise excluded by statute or the Rules of Court.[48] Evidence is
relevant when it has such a relation to the fact in issue as to induce belief in its existence or non-existence.[49]
Section 49 of Rule 130, which governs the admissibility of expert testimony, provides as follows:
The opinion of a witness on a matter requiring special knowledge, skill, experience or training which he is shown
to possess may be received in evidence.
This Rule does not pose any legal obstacle to the admissibility of DNA analysis as evidence. Indeed, even
evidence on collateral matters is allowed “when it tends in any reasonable degree to establish the probability or
improbability of the fact in issue.”[50]
XXXXX
DNA Analysis as Evidence
Despite our relatively liberal rules on admissibility, trial courts should be cautious in giving credence to
DNA analysis as evidence. We reiterate our statement in Vallejo:
In assessing the probative value of DNA evidence, therefore, courts should consider, among other things, the
following data: how the samples were collected, how they were handled, the possibility of contamination of the
samples, the procedure followed in analyzing the samples, whether the proper standards and procedures were
followed in conducting the tests, and the qualification of the analyst who conducted the tests.[51]
We also repeat the trial court’s explanation of DNA analysis used in paternity cases:
In [a] paternity test, the forensic scientist looks at a number of these variable regions in an individual to produce
a DNA profile. Comparing next the DNA profiles of the mother and child, it is possible to determine which half of
the child’s DNA was inherited from the mother. The other half must have been inherited from the biological
father. The alleged father’s profile is then examined to ascertain whether he has the DNA types in his profile,
which match the paternal types in the child. If the man’s DNA types do not match that of the child, the man is
excluded as the father. If the DNA types match, then he is not excluded as the father.[52]
It is not enough to state that the child’s DNA profile matches that of the putative father. A complete match
between the DNA profile of the child and the DNA profile of the putative father does not necessarily establish
paternity. For this reason, following the highest standard adopted in an American jurisdiction,[53] trial courts
should require at least 99.9% as a minimum value of the Probability of Paternity (“W”) prior to a paternity
inclusion. W is a numerical estimate for the likelihood of paternity of a putative father compared to the
probability of a random match of two unrelated individuals. An appropriate reference population database, such
as the Philippine population database, is required to compute for W. Due to the probabilistic nature of paternity
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inclusions, W will never equal to 100%. However, the accuracy of W estimates is higher when the putative
father, mother and child are subjected to DNA analysis compared to those conducted between the putative
father and child alone.[54]
DNA analysis that excludes the putative father from paternity should be conclusive proof of non-paternity.
If the value of W is less than 99.9%, the results of the DNA analysis should be considered as corroborative
evidence. If the value of W is 99.9% or higher, then there is refutable presumption of paternity.[55] This
refutable presumption of paternity should be subjected to the Vallejo standards.
TAXATION
CIR v. Toshiba Inc., G.R. No. 150154, August 9, 2005
Since respondent Toshiba is a PEZA-registered enterprise, it is subject to the five percent (5%) preferential tax
rate imposed under Chapter III, Section 24 of Republic Act No. 7916, otherwise known as The Special
Economic Zone Act of 1995, as amended. According to the said section, “[e]xcept for real property taxes on
land owned by developers, no taxes, local and national, shall be imposed on business establishments operating
within the ECOZONE. In lieu thereof, five percent (5%) of the gross income earned by all business enterprises
within the ECOZONE shall be paid…” The five percent (5%) preferential tax rate imposed on the gross income
of a PEZA-registered enterprise shall be in lieu of all national taxes, including VAT. Thus, petitioner CIR
contends that respondent Toshiba is VAT-exempt by virtue of a special law, Rep. Act No. 7916, as amended.
XXXX
An exempt transaction, on the one hand, involves goods or services which, by their nature, are specifically listed
in and expressly exempted from the VAT under the Tax Code, without regard to the tax status – VAT-exempt or
not – of the party to the transaction…
An exempt party, on the other hand, is a person or entity granted VAT exemption under the Tax Code, a special
law or an international agreement to which the Philippines is a signatory, and by virtue of which its taxable
transactions become exempt from VAT…
XXXX
This Court agrees, however, that PEZA-registered enterprises, which would necessarily be located within
ECOZONES, are VAT-exempt entities, not because of Section 24 of Rep. Act No. 7916, as amended, which
imposes the five percent (5%) preferential tax rate on gross income of PEZA-registered enterprises, in lieu of all
taxes; but, rather, because of Section 8 of the same statute which establishes the fiction that ECOZONES are
foreign territory.
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It is important to note herein that respondent Toshiba is located within an ECOZONE. An ECOZONE or a
Special Economic Zone has been described as –
. . . [S]elected areas with highly developed or which have the potential to be developed into agro-
industrial, industrial, tourist, recreational, commercial, banking, investment and financial centers
whose metes and bounds are fixed or delimited by Presidential Proclamations. An ECOZONE may
contain any or all of the following: industrial estates (IEs), export processing zones (EPZs), free trade
zones and tourist/recreational centers.[21]
The national territory of the Philippines outside of the proclaimed borders of the ECOZONE shall be referred to
as the Customs Territory.[22]
XXXX
The Philippine VAT system adheres to the Cross Border Doctrine, according to which, no VAT shall be imposed
to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority .
Hence, actual export of goods and services from the Philippines to a foreign country must be free of VAT; while,
those destined for use or consumption within the Philippines shall be imposed with ten percent (10%) VAT.[25]
XXXX
Indubitably, no output VAT may be passed on to an ECOZONE enterprise since it is a VAT-exempt entity. The
VAT treatment of sales to it, however, varies depending on whether the supplier from the Customs Territory is
VAT-registered or not.
Sales of goods, properties and services by a VAT-registered supplier from the Customs Territory to an
ECOZONE enterprise shall be treated as export sales. If such sales are made by a VAT-registered supplier,
they shall be subject to VAT at zero percent (0%). In zero-rated transactions, the VAT-registered supplier shall
not pass on any output VAT to the ECOZONE enterprise, and at the same time, shall be entitled to claim tax
credit/refund of its input VAT attributable to such sales. Zero-rating of export sales primarily intends to benefit
the exporter (i.e., the supplier from the Customs Territory), who is directly and legally liable for the VAT, making
it internationally competitive by allowing it to credit/refund the input VAT attributable to its export sales.
Meanwhile, sales to an ECOZONE enterprise made by a non-VAT or unregistered supplier would only be
exempt from VAT and the supplier shall not be able to claim credit/refund of its input VAT.
Even conceding, however, that respondent Toshiba, as a PEZA-registered enterprise, is a VAT-exempt entity
that could not have engaged in a VAT-taxable business, this Court still believes, given the particular
circumstances of the present case, that it is entitled to a credit/refund of its input VAT.
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XXXXX
… the VAT-registered person who can avail as tax credit or refund of the input tax on his purchases of goods,
services or properties is the seller whose sale is zero-rated. Applying the foregoing provision to the case at
bench, the VAT-registered supplier, whose sale of goods and services to respondent is zero-rated, can avail as
tax credit or refund the input taxes on its (supplier) own purchases of goods and services related to its zero-
rated sale of goods and services to respondent. On the other hand, respondent, as the buyer in such zero-rated
sale of goods and services, could not have paid input taxes for which it can claim as tax credit or refund.[27]
xxxx
THE CITY GOVERNMENT OF QUEZON CITY v. BAYANTEL , G.R. No. 162015, March 6, 2006
Bayantel’s posture is well-taken. While the system of local government taxation has changed with the
onset of the 1987 Constitution, the power of local government units to tax is still limited. As we explained in
Mactan Cebu International Airport  Authority:
The power to tax is primarily vested in the Congress; however, in our jurisdiction,
it may be exercised by local legislative bodies, no longer merely be virtue of a valid
delegation as before, but pursuant to direct authority conferred by Section 5, Article X of the
Constitution.  Under the latter, the exercise of the power may be subject to such guidelines
and limitations as the Congress may provide which, however, must be consistent with the
basic policy of local autonomy. (at p. 680; Emphasis supplied.)
Clearly then, while a new slant on the subject of local taxation now prevails in the sense that the
former doctrine of local government units’ delegated power to tax had been effectively modified with  Article X,
Section 5 of the 1987 Constitution now in place, .the basic doctrine on local taxation remains essentially the
same. For as the Court stressed in Mactan, “the power to tax is [still] primarily vested in the Congress.” 
This new perspective is best articulated by Fr. Joaquin G. Bernas, S.J., himself a Commissioner of the
1986 Constitutional Commission which crafted the 1987 Constitution, thus:
What is the effect of Section 5 on the fiscal position of municipal corporations? 
Section 5 does not change the doctrine that municipal corporations do not possess inherent
powers of taxation.  What it does is to confer municipal corporations a general power to levy
taxes and otherwise create sources of revenue.  They no longer have to wait for a statutory
grant of these powers.  The power of the legislative authority relative to the fiscal powers of
local governments has been reduced to the authority to impose limitations on municipal
powers.  Moreover, these limitations must be “consistent with the basic policy of local
autonomy.”  The important legal effect of Section 5 is thus to reverse the principle that
doubts are resolved against municipal corporations.  Henceforth, in interpreting statutory
provisions on municipal fiscal powers, doubts will be resolved in favor of municipal
corporations.  It is understood, however, that taxes imposed by local government must be
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UNC College of Law
for a public purpose, uniform within a locality, must not be confiscatory, and must be within provider with respect to the generation, transmission and supply of electric service,” said the Court. (Meralco v.
the jurisdiction of the local unit to pass. (Emphasis supplied). ERC and Ti, GR No. 145399, March 17, 2006)
In net effect, the controversy presently before the Court involves, at bottom, a clash between the
inherent taxing power of the legislature, which necessarily includes the power to exempt, and the local
government’s delegated power to tax under the aegis of the 1987 Constitution.
Now to go back to the Quezon City Revenue Code which imposed real  estate  taxes  on  all  real
properties  within  the  city’s territory and removed exemptions theretofore “previously granted to,  or  presently
enjoyed  by all persons, whether natural or juridical ….,” there can really be no dispute that the power of the
Quezon City Government to tax is limited by Section 232 of the LGC which expressly provides that “a province
or city or municipality within the Metropolitan Manila Area may levy an annual ad valorem tax on real property
such as land, building, machinery, and other improvement not hereinafter specifically exempted.”   Under this
law, the Legislature highlighted its power to thereafter exempt certain realties from the taxing power of local
government units. An interpretation denying Congress such power to exempt would reduce the phrase “ not
hereinafter specifically exempted” as a pure jargon, without meaning whatsoever. Needless to state, such
absurd situation is unacceptable.
For sure, in Philippine Long Distance Telephone Company, Inc. (PLDT) vs. City of Davao , this Court
has upheld the power of Congress to grant exemptions over the power of local government units to impose
taxes. There, the Court wrote:
Indeed,  the  grant  of  taxing  powers  to  local government units   under   the
Constitution   and   the  LGC  does  not  affect the power  of  Congress  to  grant
exemptions to certain persons, pursuant to  a  declared  national policy.  The  legal  effect of
the constitutional grant  to  local  governments  simply  means  that  in  interpreting 
statutory  provisions  on  municipal taxing powers, doubts must be resolved in favor of
municipal corporations. (Emphasis supplied.)
CRIMINAL LAW
THE SUPREME COURT has affirmed the authority of the then Energy Regulatory Board (ERB), now Energy
Regulatory Commission (ERC), to order the reconnection of a disconnected electric service, even if the
disconnection is due to alleged power pilferage, pending resolution of the complaint filed by a consumer against
an electric firm.
In a decision penned by Justice Cancio C. Garcia, the Court’s Second Division affirmed the Court of Appeals in
affirming ERB’s order for the reconnection of the electric service to the business establishments of one Edgar L.
Ti in Little Baguio, San Juan City.
The Court said that under ERB rules, the Board “is endowed with the authority to hear and adjudicate
complaints for reconnection of electric service and to grant provisional or ancillary relief during the pendency of
the main action.” It pointed out “while a complaint for reconnection of a consumer’s electric service is inter-
related to the criminal action for violation of RA 7832 (Electricity Anti-Pilferage Law), the determination of the
propriety of the reconnection remains distinct and independent from the criminal action.”
“The dominant and primordial objective of a criminal prosecution is the punishment of the offender, while a
complaint for reconnection is intended merely to address a consumer’s grievance against an electric service

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