KILOSBAYAN V.

MORATO

FACTS:

This suit was filed seeking to declare the Equipment Lease Agreement (ELA) invalid on
the ground that it is substantially the same as the Contract of Lease nullified in the first
case invalidating the Contract of Lease between the Philippine Charity Sweepstakes
Office (PCSO) and the Philippine Gaming Management Corp. (PGMC)]. Petitioners
maintain (1) that the Equipment Lease Agreement (ELA) is a different lease contract
with none of the vestiges of a joint venture which were found in the Contract of Lease
nullified in the prior case; (2) that the ELA did not have to be submitted to a public
bidding because it fell within the exception provided in E.O. No. 301; (3) that the power
to determine whether the ELA is advantageous to the government is vested in the
Board of Directors of the PCSO; (4) that for lack of funds the PCSO cannot purchase its
own on-line lottery equipment and has had to enter into a lease contract; (5) that what
petitioners are actually seeking in this suit is to further their moral crusade and political
agenda, using the Court as their forum.

ISSUE:

Whether or not the ELA between the Philippine Charity Sweepstakes Office and the
Philippine Gaming Management Corp. is invalid.

RULING:

E.O. No. 301, applies only to contracts for the purchase of supplies, materials and
equipment. It does not refer to contracts of lease of equipment like the ELA. The
provisions on lease are found in §§ 6 and 7 but they refer to the lease of privately-
owned buildings or spaces for government use or of government-owned buildings or
spaces for private use, and these provisions do not require public bidding. It is thus
difficult to see how E.O. No. 301 can be applied to the ELA when the only feature of the
ELA that may be thought of as close to a contract of purchase and sale is the option to
buy given to the PCSO. An option to buy is not of course a contract of purchase and
sale.