LEAGUE OF PROVINCES OF THE
Confusion of the AMTC and nullified and cancelled the
PHILIPPINES vs. DENR
G.R. No. 175368               April 11, 2013
FACTS:
On March 28, 1996 - Golden Falcon
Mineral Exploration Corporation (Golden
Falcon) filed with the DENR Mines and
Geosciences Bureau Regional Office
(MGB RO) an Application for Financial and
Technical Assistance Agreement (FTAA)
covering an area of 61,136 hectares
situated in the Municipalities of San Miguel,
San Ildefonso, Norzagaray and San Jose
del Monte, Bulacan.  Subsequently, the Provincial Legal Officer
 
On April 29, 1998 - the MGB RO issued an
Order denying Golden Falcon's for failure
to secure area clearances. Golden Falcon
filed an appeal with the DENR.  RO’s order of denial), as MGB-CO’s order
 
On February 10, 2004 - while the appeal
was pending, Eduardo D. Mercado,
Benedicto S. Cruz, Gerardo R. Cruz and
Liberato Sembrano filed with the Provincial
Environment and Natural Resources Office
(PENRO) of Bulacan their respective
Applications for Quarry Permit which
covered the same area subject of Golden
Falcon's Application for Financial and
Technical Assistance Agreement.  of Bulacan.  action of all provinces through the League,
 
On July 16, 2004 - the MGB-Central Office
(MGB-CO) issued an Order denying
Golden Falcon's appeal. 
On September 13, 2004 - Atlantic Mines
and Trading Corporation (AMTC) filed with
the PENRO of Bulacan an Application for
Exploration Permit (AEP) area covered by
Golden Falcon's Application.
rights resulted from the overlapping
applications of AMTC and the persons
applying for quarry permits.  Director Ramos that the area was open to
On October 19, 2004 - upon query by
MGB-RO Director Cabantog, DENR-MGB
Director Ramos stated that the denial of
Golden Falcon’s application became final
on August 11, 2004, or fifteen days after
Golden Falcon received the order of denial
of its application. Hence, the area of
Golden Falcon’s application became open
to permit applications only on that date.
of Bulacan issued a legal opinion on the
issue, stating that the subject area became
open for new applications on the date of
the first denial on April 29, 1998 (MGB-
of denial on July 16, 2004 was a mere
reaffirmation of the MGB-RO’s April 29
order; hence, the reckoning period should
be April 29.
Based on this legal opinion, MGB-RO
Director Cabantog endorsed the
applications for quarry permit, now
apparently converted to applications for
small-scale mining permit, to the Governor
PENRO of Bulacan recommended to the
Governor the approval of said applications.
Eventually, the Governor issued the small-
scale mining permits.  ISSUES:
AMTC appealed to the DENR Secretary.
The DENR Secretary decided in favor of
governor’s issuance of small-scale mining
permits. It agreed with DENR-MGB
mining location only on August 11, 2004
(15 days after the MGB-CO denial). Hence,
the applications for quarry permit filed on
February 10, 2004 were null as these were
filed when the area was still closed to
mining location. 
On the other hand, AMTC filed its
application when the area was already
open to other mining applicants; hence, its
application was valid. The small-scale
mining permits were also issued in
violation of Section 4 of R.A. No. 7076 and
beyond the authority of the Governor
pursuant to Sec. 43 of RA 7942 because
the area was never proclaimed to be under
the small-scale mining program. 
Hence, petitioner League of Provinces filed
this petition. Petitioner is a duly organized
league of local governments incorporated
under R.A. No. 7160. Petitioner declares
that it is composed of 81 provincial
governments, including the Province of
Bulacan. It states that this is not an action
of one province alone, but the collective
as a favorable ruling will not only benefit
one province, but all provinces and all local
governments.
 
1. Whether or not section 17(b)(3)(iii)
of the, 1991 local government
code and section 24 of the
 people's small-scale mining act of
1991 are unconstitutional for
providing for executive control and
infringing upon the local autonomy
of provinces.
 
2. Whether or not the act of
respondent [denr] in nullifying,
voiding and cancelling the small-
scale mining permits amounts to
executive control, not merely
supervision and usurps the
devolved powers of all provinces.  mining law by the provincial government is
HELD: Petition was denied.  review of the DENR. The LGC did not fully
1. NO. The Court held that
administrative autonomy may
involve devolution of powers,
but it is still subject to
limitations, like following
national policies or standards
and those provided by the Local
Government Code, as the
structuring of LGUs and the
allocation of
powers/responsibilities/resourc
es among the LGUs and local
officials are placed by the
Constitution to Congress under
Article X Section 3.
The Constitutional guarantee of local
autonomy in the Article X, Sec. 2 of the
Constitution refers to the administrative
autonomy of the LGUs or the
decentralization of government authority.  adjudication of their respective rights.
The control of the DENR over small-scale
mining in the provinces is granted by three
statutes: (1) R.A. 7061 or The Local
Government Code of 1991; (2) R.A. 7076
or the People's Small Scale Mining Act of
1991; and (3) R.A. No. 7942 or the
Philippine Mining Act of 1995.
It is the DENR which is incharge of
carrying out the State’s constitutional
mandate to control and supervise the
exploration, development and utilization of
the country’s natural resources, pursuant
to the provisions of Section 17, b(3)(III) of
the LGC.  NOTES:
Hence, the enforcement of the small-scale
subject to the supervision, control and
devolve to the provincial government the
enforcement of the small-scale mining law.
2. NO. The Court held that the DENR
Secretary was granted the power of
review in the PMRB’s resolution of
disputes under Sec. 24 of RA 7076 and
Section 22 of its IRR. The decision of the
DENR Secretary to nullify and cancel the
Governor’s issuance of permits emanated
from its power of review under RA 7076
and its IRR. Its power to review and decide
on the validity of the issuance of the Small-
Scale Mining Permits by the Provincial
Governor is a quasi-judicial function which
involves the determination of what the law
is and what the legal rights of the
contending parties are, with respect to the
matter in controversy and on the basis
thereof and the facts obtaining, the
Furthermore, the DENR Secretary
exercises quasi-judicial function under RA
7076 and its IRR to the extent necessary in
settling disputes, conflicts, or litigations
over conflicting claims. This quasi-judicial
power of the DENR can neither be equated
with “substitution of judgment” of the
Provincial Governor in issuing Small-Scale
Mining Permits nor “control” over the said
act of the Provincial Governor as it is a
determination of the rights of the AMTC
over conflicting claims based on the law.
 RA 7076 or the People’s Small-Scale
Mining program was established to be
implemented by the DENR Secretary
in coordination with other government
agencies (Section 4, RA 7076).
Section 24 of the law makes the
Provincial/ Mining Regulatory Board
under the direct supervision and
control of the Secretary, its powers and
functions subject to review by the
same.
 DENR Administrative Order No. 34
(1992) which contains the IRR of RA
7076 likewise provides that the DENR
Secretary shall exercise direct
supervision and control over the
People’s Small-Scale Mining Program,
and that the Provincial/City Mining
Regulatory Board’s (PMRB) powers
and functions shall be subject to review
by the DENR Secretary. 

Bacaltos Coal Mines v. Court of Appeals
G.R. No. 114091, June 29, 1995
Facts:
The case is a petition to seek reversal of
the decision of the Court of Appeals in the
case of San Miguel Corporation v. Bacaltos
Coal Mines, German Bacaltos and Rene R.
Savellon, which held that the petitioners
Bacaltos Coal Mines, German Bacaltos
and Savellon jointly and severally liable to
San Miguel Corporation under a Trip
Charter Party. The Trip Charter Party was
executed by Bacaltos Coal Mines,
represented by Savellon (Chief Operating
Officer), and San Miguel Corporation,
represented by Francisco Manzon Jr.
(SAVP and Director, Plants Operations-
Mandaue). SMC filed against the
petitioners and Savellon for specific
performance and damages because of
their failure to comply with the Trip Charter
Party which was supposed to be for three
round trips to Davao. Instead, it was only
able to make only one trip.  contract area. The authorization given to
The lower court assailed a decision in favor
of SMC and ordered the petitioners and
Savellon to pay the plaintiff. It ruled that the
authorization given to Savellon necessarily
included the authority to enter in a Trip
Charter Party. An appeal was made by the
petitioner asserting the negligence of the
SMC and the authority of Savellon. The CA
affirmed the judgement of the trial court
and held that SMC was not negligent made it possible for the wrong to be done
because their authority given to Savellon to should be the one to bear the resulting
enter into a Trip Charter Party.  loss. In the case, SMC is negligent of not
ascertaining the extent and limits of the
Issue: authority of Savellon.
WON Savellon is duly authorized by the
petitioners to enter into a Trip Charter The petition is granted, and the decision of
Party. the Court of Appeals is reserved. The
judgement is modified, held the defendant
Ruling: Rene Savellon solely liable for the amounts
NO. Savellon is not duly authorized by the and ordered the dismissal of the case
petitioners. The agency of Savellon is against the petitioners.      
based on the Authorization which is clear
that the scope of his agency is to use the
coal operating contract for any legitimate
purpose as it may serve. Had SMC
exercised due diligence and prudence, it
should have known that the authority to
enter into any Trip Charter Party is not
included in the Authorization. The five
prerogatives in the authorization relates on
the power to use the coal operating
contract. 
 A coal operating contract is governed in
P.D No. 972, as amended by P.D No.
1174, is one of the authorized ways of
active exploration, development, and
production of coal resources in a specified
Savellon required the use of a coal
operating contract, however, the Trip
Charter Party did not require him to do so.
Moreover, SMC made no attempts to verify
if Bacaltos Coal Mines owned a vessel. A
party to a charter must satisfy itself that the
other party is the owner of at least entitled
to its possession with power to lease or
charter the vessel. An equitable maxim
between two innocent parties, the one who

                                    
Industrial Enterprises Inc v. CA  transferred to the Bureau of Energy
Facts:
Petitioner Industrial Enterprises Inc. (IEI)
was granted a coal operating contract by
the Government through the Bureau of
Energy Development (BED) for the
exploration of two coal blocks in Eastern
Samar IEI also applied with the then
Ministry of Energy for another coal
operating contract for the exploration of
three additional coal blocks which, together
with the original two blocks, comprised the
so-called "Giporlos Area."
IEI was later on advised that in line with the
objective of rationalizing the country's over-
all coal supply-demand balance . . . the
logical coal operator in the area should be
the Marinduque Mining and Industrial
Corporation (MMIC), which was already
developing the coal deposit in another area
(Bagacay Area) and that the Bagacay and
Giporlos Areas should be awarded to
MMIC
IEI filed an action for rescission of the
Memorandum of Agreement with damages
against MMIC and the then Minister of
Energy Geronimo Velasco before the
Regional Trial Court of Makati
In a summary judgment, the Trial Court exploitation, development and extraction of
ordered the rescission of the Memorandum mineral resources like coal.
of Agreement
This is furthered through the reading of PD
In reversing the Trial Court, the Court of No. 1206
Appeals held that the rendition of the
summary judgment was not proper since Sec. 12 – the powers and functions
there were genuine issues in controversy
between the parties, and more importantly, Development are:
that the Trial Court had no jurisdiction over (1) Undertake by itself or through
the action considering that, under other arrangements, such as
Presidential Decree No. 1206, it is the BED service contracts, the active
that has the power to decide controversies exploration, exploitation,
relative to the exploration, exploitation and development, and extraction of
development of coal blocks energy resources . . .
Hence this petition (2) Regulate all activities relative to
the exploration, exploitation,
Issues:
development, and extraction of
Whether or not the Trial court has fossil and nuclear fuels . . .
jurisdiction to heaer and decide the suit for
recission of the MOA concerning a coal
operating contract over coal blocks.
Held:
No. the doctrine of primary jurisdiction finds
application in this case since the question
of what coal areas should be exploited and
developed and which entity should be
granted coal operating contracts over said
areas involves a technical determination by
the BED as the administrative agency in
possession of the specialized expertise to
act on the matter.
The Trial Court does not have the
competence to decide matters concerning
activities relative to the exploration,

Comm. of Customs v. ESSO Standard
Eastern
FACTS:
This is an appeal from the decision of the
Court of Tax Appeals reversing the
Commissioner of Customs’ decision
holding respondent ESSO Standard
Eastern, Inc. liable of import tax on certain
articles imported by the latter under
Republic Act No. 387, otherwise known as
the Petroleum Act of 1949.
Respondent ESSO is the holder of
Refining Concession issued by the
Secretary of Agriculture and Natural
Resources and operates a petroleum
refining plant in Limay, Bataan. Under
Article 103 of Republic Act No. 387 which
provides: "During the five years following
the granting of any concession, the
concessionaire may import free of customs
duty, all equipment, machinery, material,
instruments, supplies and accessories."
Respondent imported and was assessed
the special import tax which it paid under
protest.
Petitioner contends that the special import
tax under Republic Act No. 1394 is
separate and distinct from the customs
duty prescribed by the Tariff and Customs
Code, and that the exemption enjoyed by
respondent ESSO from the payment of
customs duties under the Petroleum Act of
1949 does not include exemption from the
payment of the special import tax provided
in R.A. No. 1394.  d etre for the generous grant of tax
The Collector of held that respondent
ESSO was subject to the payment of the
special import tax provided in Republic Act
No. 1394, as amended by R.A. No. 2352,
and dismissed the protests. Commissioner
of Customs affirmed the said decision of
Collector.
Respondent ESSO elevated the case to
the CTA which reversed the decision of
petitioner Commissioner of Customs and
ordered refund to respondent ESSO which
the latter had paid under protest. The CTA
held that being a charge upon importation,
the special import tax is essentially a
customs duty, or at least partakes of the
character thereof. It sees the special import
tax as nothing but an impost or a charge
on the importation or bringing into the
Philippines of goods, articles or products.
ISSUE:
Whether or not the exemption enjoyed by
respondent ESSO from customs duties
granted by the Petroleum Act should
embrace or include the special import tax
imposed by R.A. No. 1394, or the Special
Import Tax Law?
RULING / DOCTRINE:
YES. The Petroleum Act of 1949, was
intended to encourage the exploitation,
exploration and development of the
petroleum resources of the country by
giving it the necessary incentive in the
form of tax exemptions. This is the raison
exemptions to those who would invest their
financial resources towards the
achievement of this national economic
goal.
Under the Petroleum Act, art. 103 reads:
"ART. 103. Customs duties. — During the
five years following the granting of any
concessions, the concessionaire may
import free of customs duty, all equipment,
machinery, material, instruments, supplies
and accessories.”
Art. 102 of the same law provides: "ART.
102. Work obligations, taxes, royalties not
to be charged. — . . .; nor shall any other
special taxes or levies be applied to such
concessions, nor shall concessionaires
under this Act be subjected to any
provincial, municipal, or other local taxes or
levies nor shall any sales tax be charged
on any petroleum produced from the
concession or portion thereof,
manufactured by the concessionaire and
used in the working of his
concession. . . . ."
Art. 104, still of the same Act, reads: “ART.
104. No export tax to be imposed. — No
export tax shall be levied upon petroleum
produced from concessions granted under
this Act."
The title of Republic Act No. 387 and the incentives for the continuing development
provisions of its three articles just cited of the petroleum industry.
give a clue to the intent of the Philippine
legislature, which is to encourage the It is not amiss to mention that contrary to
exploitation and development of the the theory of the petitioner, R.A. No. 387
petroleum resources of the country.  had not been repealed by R.A. No. 2352
which expressly abrogated Section 6 of
Through the instrumentality of said law, it R.A. No. 1394 but did not repeal any part
declared in no uncertain terms that the of R.A. No. 387. Therefore, the exemption
intensification of the exploration for granted by Republic Act No. 387 still
petroleum must be carried on unflinchingly stands. 
even if, for the time being, no taxes, both
national and local, may be collected from Petition denied.
the industry. This is the unequivocal
intention of the Philippine Congress when
the language of the Petroleum Act is
examined. Until this law or any substantial
portion thereof is clearly amended or
repealed by subsequent statutes, the
intention of the legislature must be upheld.

The Congress of the Philippine saw fit

to preserve the privileges granted under
the Petroleum Law of 1949 in order to
keep the door open to the exploitation
and development of the petroleum
resources of the country with such
incentives as are given under that law.

Congress lined up for revocation by

Republic Act No. 1394 six statutes dealing
with the imposition of special imposts or
levies or the granting of exemptions from
special import taxes. Yet, considering the
tremendous amount of revenues it was
losing under the Petroleum Law of 1949, it
failed to include the latter statute among
those it chose to bury by the Special Import
Tax Law. The reason for this is very clear:
The legislature wanted to continue the

PETRON CORPORATION v. MAYOR
TOBIAS M. TIANGCO  contractors
G.R. 158881           16 April 2006
While local government units are
authorized to burden all such other class of
goods with “taxes, fees and charges,”
excepting excise taxes, a specific
prohibition is imposed barring the levying
of any other type of taxes with respect to
petroleum products.
FACTS:
In accordance to the New Navotas
Revenue Code or Ordinance 92-03,
petitioner Petron Corporation was
assessed a total tax of P6,259,087.62.
Petron filed a letter protest arguing that it is
exempt from paying local business taxes
as provided by Article 232 (h) of the
Implementing Rules of the Local
Government Code.
The letter-protest was denied. A Complaint
for Cancellation of Assessment was filed
before the Regional Trial Court (RTC) of
Malabon. The RTC dismissed the
Complaint and required Petron to pay the
assessed tax. A Motion for
Reconsideration was filed but it was later
denied by the court. Hence, the filing of this
petition.
ISSUE:
Whether or not a local government unit is
empowered under the Local Government
Code (LGC) to impose business taxes on
persons or entities engaged in the sale of
petroleum
HELD: Petition GRANTED.
Yes. The Court held that the LGU is
empowered under the LGC to impose
business taxes on persons or entities
engaged in the sale of petroleum.
The power of a municipality to impose
business taxes is provided for in Section
143 of the LGC. Under the provision, a
municipality is authorized to impose
business taxes on a whole host of
business activities. Suffice it to say, unless
there is another provision of law which
states otherwise, Section 143, broad in
scope as it is, would undoubtedly cover the
business of selling diesel fuels, or any
other petroleum product for that matter.
Section 133(h) provides two kinds of taxes
which cannot be imposed by local
government units: “excise taxes on articles
enumerated” under the NIRC, as
amended; and “taxes, fees or charges on
petroleum products.” There is no doubt that
among the excise taxes on articles
enumerated under the NIRC are those
levied on petroleum products, per Section
148 of the NIRC.
The power of a municipality to impose
business taxes derives from Section 143 of
the Code that specifically enumerates
several types of business on which it may
impose taxes, including manufacturers,
wholesalers, distributors, dealers of any
article of commerce of whatever nature;
those engaged in the export or commerce
of essential commodities; retailers;
and other independent
contractors; banks and financial
institutions; and peddlers engaged in the
sale of any merchandise or article of
commerce. This obviously broad power is
further supplemented by paragraph (h) of
Section 143 which authorizes the
sanggunian to impose taxes on any other
businesses not otherwise specified under
Section 143 which the sanggunian
concerned may deem proper to tax.
This ability of local government units to
impose business or other local taxes is
ultimately rooted in the 1987
Constitution. Section 5, Article X
assures that “[e]ach local government
unit shall have the power to create its
own sources of revenues and to levy
taxes, fees and charges,” though the
power is “subject to such guidelines
and limitations as the Congress may
provide.” There is no doubt that following
the 1987 Constitution and the Code, the
fiscal autonomy of local government units
has received greater affirmation than ever.
Previous decisions that have been
skeptical of the viability, if not the wisdom
of reposing fiscal autonomy to local
government units have fallen by the
wayside.
Section 5(a) of the Code states that “[a]ny
provision on a power of a local government
unit shall be liberally interpreted in its favor,
and in case of doubt, any question thereon
shall be resolved in favor of devolution of
powers and of the lower local government
unit.” But somewhat conversely, Section
5(b) then proceeds to assert that “[i]n case
of doubt, any tax ordinance or revenue
measure shall be construed strictly against
the local government unit enacting it, and
liberally in favor of the taxpayer.” And this
latter qualification has to be respected as a
constitutionally authorized limitation which
Congress has seen fit to provide.
Evidently, local fiscal autonomy should not
necessarily translate into abject deference
to the power of local government units to
impose taxes.
Section 133(h) states that local
government units “shall not extend to the
levy of xxx taxes, fees or charges on
petroleum products.” Respondents assert
that the phrase “taxes, fees or charges on
petroleum products” pertains to the
imposition of direct or excise taxes on
petroleum products, and not business
taxes. If the phrase actually pertains to
excise taxes, then it would be an exercise
in utter redundancy, since the preceding
phrase already prohibits the imposition of comprehends a wider range of subjects of
excise taxes on articles already subject to taxation: all articles already covered by
such taxes under the NIRC, such as excise taxation under the NIRC, such as
petroleum products. There would be no alcohol products, tobacco products,
sense on the part of the legislature to twice mineral products, automobiles, and such
emphasize in the same sentence that non-essential goods as jewelry, goods
excise taxes on petroleum products are made of precious metals, perfumes, and
beyond the pale of local government yachts and other vessels intended for
taxation. pleasure or sports. In contrast, the later
reference to “taxes, fees and charges”
The Court concedes that a tax on a pertains only to one class of articles of the
business is distinct from a tax on the article many subjects of excise taxes, specifically,
itself, or for that matter, that a business tax “petroleum products”. While local
is distinct from an excise tax. However, government units are authorized to burden
such distinction is immaterial insofar as the all such other class of goods with “taxes,
latter part of Section 133(h) is concerned, fees and charges,” excepting excise taxes,
for the phrase “taxes, fees or charges on a specific prohibition is imposed barring the
petroleum products” does not qualify the levying of any other type of taxes with
kind of taxes, fees or charges that could respect to petroleum products.
withstand the absolute prohibition imposed
by the provision. It would have been a
different matter had Congress, in crafting
Section 133(h), barred “excise taxes” or
“direct taxes,” or any category of taxes
only, for then it would be understood that
only such specified taxes on petroleum
products could not be imposed under the
prohibition. The absence of such a
qualification leads to the conclusion that all
sorts of taxes on petroleum products,
including business taxes, are prohibited by
Section 133(h). Where the law does not
distinguish, we should not distinguish.
The language of Section 133(h) makes
plain that the prohibition with respect to
petroleum products extends not only to
excise taxes thereon, but all “taxes, fees
and charges.” The earlier reference in
paragraph (h) to excise taxes

Tadtad v. Secretary of DOE
G.R. No. 124360, November 5, 1997
Prior to 1971, there was no government
agency regulating the oil industry other
than those dealing with ordinary
commodities. Oil companies were free to
enter and exit the market without any
government interference. Due to the oil
crisis and the importance of petroleum and
its products to national security essential to
the general welfare, the government
enacted the Oil Industry Commission Act
which created the Oil Industry Commission
to regulate the business of crude oil,
gasoline, kerosene and other refined
petroleum products. The government saw
the need for a more active role of Filipinos
in the oil industry. All the oil refineries and
marketing companies were owned by
foreigners whose economic interests did
not always coincide with the interest of the
Filipino. In 1973, Marcos created Philippine
National Oil Corporation (PNOC) to break
the control by foreigners and engaged in
the business of refining, marketing,
shipping, transporting and storing
petroleum. PNOC operated under the
business name PETRON Corporation and
became the first Filipino presence in the
Philippine oil market. In 1984, through Sec.
8 of P.D No. 1956, the Oil Price
Stabilization Fund (OPSF) was created to
cushion effects of frequent changes in the
price of oil. The fund is used to reimburse
the oil companies for cost increases in
crude oil and imported petroleum products
resulting from exchange rate adjustment
and to reimburse oil companies for cost
underrecovery incurred as a result of the
reduction of domestic prices of petroleum
products. Only three oil companies were
operating in the country, Caltex, Shell and
the government-owned PNOC. In 1987,
Aquino enacted Executive Order No. 172
creating the Energy Regulatory Board.
1992 which created the Department of
Energy and encouraged the active
participation by the private sector in all
energy activities.
The Congress enacted R.A. No. 8180 or
the “Downstream Oil Deregulation Act of
1996” which provides that any person or
entity may import or purchase any quantity
of crude oil and petroleum products from a
foreign or domestic source, lease or own
and operate refineries and other
downstream oil facilities and market such
crude oil. Petitioner seeks the annulment of
Section 5(b) of R.A. No. 8180.
Issues:
1. WON Sec. 5(b) of R.A 8180
violates the one title- one subject
requirement of the Constitution
2. WON R.A. 8180 violates the
constitutional prohibition against
monopolies, combinations in
restraint of trade and unfair
competition.
Ruling:
1. NO. Sec. 5(b) of R.A 8180 does
not violate the one title-one subject
requirement in the constitution.
The Court has adopted a liberal
construction of the one title-one
subject rule. A law having a single
general subject in the title may
contain any number of provisions,
so long as they are not
inconsistent with or foreign to the
general subject and may be
considered in furtherance of such
subject. 
2. YES. R.A 8180 violates the
constitutional prohibition against
monopolies, combinations in
restrains of trade and unfair
competition. It cannot be denied
that the downstream oil industry is
operated and controlled by an
oligopoly. The 4% tariff differential
and the inventory requirement are
 significant barriers which
discourage new players to enter
the market. With this and the lack
of players with the comparable
clout of PETRON, Shell and
Caltex, the temptation for a
dominant player to engage in
predatory pricing and succeed is a
reality. The act needs provisions to
assure a vouchsafe free and fair
competition However, with the
separability clause provided in
Sec. 23 provided that, if for any
reason any section or provision of
this Act is declared
unconstitutional or invalid, such
parts not affected thereby shall
remain in full force and effect. The
court held that the offending
provisions of R.A. 8180 so
permeate its essence that the
entire law has to be struck down.
Contrary to their intent, the
provisions on tariff differential,
inventory and predatory pricing
inhibit fair competition but
encourages monopolistic power
and interfere with the interaction of
market forces.
The petitions are granted. R.A.
8180 is declared unconstitutional
as it is violative of the
constitutional prohibition against
monopolies, combinations in
restraint of trade and unfair
competition.
Perez v LPG Refillers Association
G.R. No. 159149, 26 June 2006
Facts:
BP. 33 as amended, penalizes illegal
trading, hoarding, overpricing, adulteration,
underdelivery, and underfilling of petroleum
products, as well as possession for trade of
adulterated petroleum products and of
underfilled liquefied petroleum gas (LPG)
cylinders.3 The said law sets the monetary
penalty for violators to a minimum of
P20,000 and a maximum of P50,000
On June 9, 2000, Circular No. 2000-06-010
was issued by the DOE to implement B.P.
Blg. 33. Respondent LPG Refillers
Association then asked the DOE to set
aside the circular for being contrary to law.  lists the various modes by which the said
The DOE, however, denied the request for
lack of merit. Respondent then filed a
petition for prohibition and annulment with
prayer for temporary restraining order
and/or writ of preliminary injunction before
the trial court.
trial court nullified the Circular on the
ground that it introduced new offenses not
included in the law, that the Circular, in
providing penalties on a per cylinder basis
for each violation, might exceed the
maximum penalty under the law.
Issues:
1. Whether circular No. 2000-06-010
is contrary to law in providing a per
cylinder penalty for each violation  based were specifically intended to provide
Ruling/Doctrine:
The circular is valid. The assailed Circular
No. 2000-06-010 of DOE is declared valid.
For an administrative regulation, such as
the Circular in this case, to have the force
of penal law, (1) the violation of the
administrative regulation must be made a
crime by the delegating statute itself; and
(2) the penalty for such violation must be
provided by the statute itself
The Circular satisfies the first requirement.
B.P. Blg. 33, as amended, criminalizes
illegal trading, adulteration, underfilling,
hoarding, and overpricing of petroleum
products. Under this general description of
what constitutes criminal acts involving
petroleum products, the Circular merely
criminal acts may be perpetrated
As for the second requirement, we find that
the Circular is in accord with the law.
Under B.P. Blg. 33, as amended, the
monetary penalty for any person who
commits any of the acts aforestated is
limited to a minimum of P20,000 and a
maximum of P50,000. Under the Circular,
the maximum pecuniary penalty for retail
outlets is P20,000,17 an amount within the
range allowed by law. However, for the
refillers, marketers, and dealers, the
Circular is silent as to any maximum
monetary penalty. This mere silence,
nonetheless, does not amount to violation
of the aforesaid statutory maximum limit.
the enabling laws on which the Circular is
the DOE with increased administrative and
penal measures with which to effectively
curtail rampant adulteration and
shortselling, as well as other acts involving
petroleum products, which are inimical to
public interest. To nullify the Circular in this
case would be to render inutile government
efforts to protect the general consuming
public against the nefarious practices of
some unscrupulous LPG traders.
National Power Corporation vs.
Philippine Electric Plant Owners
Association
FACTS:  The decision was affirmed by the CA.
The NPC is a government-owned and -
controlled corporation, existing by virtue of
Commonwealth Act No. 120 and Republic
Act No. 6395. Philippine Electric Plant
Owners Association (PEPOA), Inc., is a
non-stock corporation composed of private
electric plant operators. Some members of
PEPOA purchase electric power from
petitioner to service power requirements in
their respective franchise areas.
On 1995, PEPOA filed before the Energy
Regulatory Board (ERB) a Complaint
against the NPC for alleged unauthorized
collection of rates in the guise of penalty
for 1) excess consumption, double or triple
the existing rates; or 2) unused
consumption, as if fully availed of.
The penalties were being charged
pursuant to the NPC's Rules on the Sale of
Electricity (under Minimum Charges and
Penalty for Consumption in Excess of the
Allowable Limit of the Contract
Demand/Energy) of the Schedule of
Charges.
The ERB ordered the NPC to cease and
desist from collecting the penalties pending
resolution of the case. Ultimately, the order
became permanent and NPC was directed
to refund or correspondingly credit to the
complainants (affected electric distribution
utilities) the total amount of said charges
as penalties for excess consumption over
the maximum allowable demand energy
and consumption below the contracted
demand/energy. 
Petitioner challenges the ERB's order
which directed it to cease and desist from
collecting the penalties, pending resolution
of the case. The NPC contends that the
provisional relief required notice and
hearing prior to being granted, similar to
the requirement of the rule on preliminary
injunction. Petitioner adds that PEPOA did
not submit any supporting documents or
affidavits to show the great or irreparable
injury that would justify the provisional
relief.
ISSUE:
Whether or not the Energy Regulatory
Board had jurisdiction over the subject
matter of this case?
RULING/DOCTRINE:
YES. The supply of electricity is a public
service that affects national security,
economic growth and public interest.
To achieve coherent and effective
policy formulation, coordination,
implementation and monitoring within
the energy sector, it became necessary
to entrust in one body the regulatory
functions covering the energy sector.
Thus, the Energy Regulatory Board
(ERB) was created. The ERB was given
the power to determine, fix and
prescribe the rates - - including penalty
charges - - of all energy providers,
including the National Power
Corporation (NPC).
The power to determine, fix and
prescribe rates being charged
customers is vested in the ERB.
Therefore, unless it gives prior approval,
the penalties cannot be imposed by the
NPC. While petitioner may issue rules and
regulations consistent with its corporate
objectives, provisions that have a bearing
on the impositions of rates must be
approved by the ERB.
Jurisdiction over penalties is
necessarily part of the ERB's regulatory
functions; and is in line with the intent of
achieving a coherent and effective policy
formulation, coordination, implementation
and monitoring within the energy sector.  Spinning Reserve (SR). Arguing these are
Also, the ERB has the authority to issue
provisional relief 1) upon motion or on its
own initiative; 2) without notice and
hearing; and 3) after the filing of an
application, a petition or a complaint.
If supported by substantial evidence, the
factual finding of the ERB - - an
administrative body charged with a specific
field of expertise - - is conclusive and
should not be disturbed. Administrative
bodies are given wide latitude in the
evaluation of evidence, including the
authority to take judicial notice of facts
within their special competence. The ERB
is presumed to have performed its duty of
studying the available evidence, prior to
the issuance of the provisional relief.  are not making use of NPC transmission
The ERB issued the cease and desist
order in recognition of the fact that end
consumers would ultimately pay for the
penalties imposed by the NPC. The
petition was denied.
National Power Corporation vs. East
Asia Utilities Corporation, G.R. No.
170934,
23 July 2008
 
Facts: Petitioner NPC, charges Power
Delivery Service charges to EAUC and
Cebu power to ancillary services,
associated with Load Following and
Frequency Regulation (LFFR) and
applicable to transmission customers
which are embedded generators not for
transfer of power and energy from the
generating resources to the load but for the
delivery to the generation-based ancillary
services being provided by it. That the
liability of respondents arises from the fact
that they are continuously connected to the
whole grid which must be maintained to
prevent its collapse or rapid decay.
The respondents are PSGF which are
embedded in the distribution network of
VECO. The ERB believes they are not
liable to pay PDS corresponding to the
Ancillary Services purchased by the, or the
Transmission for Internal Generation.
Because in serving the load of VECO, they
facilities.
 
Issue: Whether or not the respondents are
not subject to power delivery services
charges for ancillary services
 
Ruling. The ancillary services availed of by
PSGFs from the NPC (LFFR and Spinning
Reserve) are intended to maintain the
integrity and reliability of the grid. The rates
for these services are separate and distinct
from the basic transmission service or PDS
even though such services are a
necessary adjunct to the basic
transmission service or PDS. The rates for
ancillary service have been unbundled
from NPC’s rates for basic transmission
and sub-transmission service,
notwithstanding the fact that such services
are necessary adjunct to the basic
transmission and sub-transmission service.
The ERC further found that there is not
such things as PDS for LFFR and SR,
once this reserve is utilized, it is
automatically delivered and registered as
an added demand and not as a reserve.
The actual power that flows thru the line is
equal to the supply or power generated
and is also equal to the demand or load.
This is the principle used in the design of
the PDS, to recover the transmission cost
based on peak demand only and not to
recover transmission cost based on peak
demand plus LFFR and SR
Additional, the NPC charges two separate
tariffs for transmission and AS. PDS
(actual usage of the line in transport) and
AS Charges (maintenance of grid
reliability). PDS charges are only
applicable to IPPs using the transmission
facilities in transporting power while AS are
required in maintaining grid reliability.
Hence, an IPP need not pay PDS charges
if its facilities are embedded in the
distribution network but must, however,
pay for AS necessary for maintaining grid
reliability. To charge respondents both
would be tantamount to double charging.
FREEDOM FROM DEBT COALITION v..
ENERGY REGULATORY COMMISSION,
G.R. NO. 161113, JUNE 15, 2004
FACTS:
The Petition assails the Order of
respondent Energy Regulatory
Commission (ERC), provisionally
authorizing respondent Manila Electric
Company (MERALCO) to increase its rates
by an average amount of 12 centavos per
kilowatt hour.  Kadamay, Agham, Gabriela Women’s
MERALCO filed with the ERC an
Application for an increase in rates and
also prayed ex parte for the grant of a
provisional authority to implement the
increase according to the schedule
attached to its Application. National
Association of Electricity Consumers for
Reforms, Inc. (NASECORE), Mr. Genaro
Lualhati (Lualhati) and Freedom from Debt
Coalition (FDC) assailed separately, in a
letter addressed to the ERC Chairman
Manuel R. Sanchez (Sanchez), informed
him of their intention to file an Opposition
to MERALCO’s Application, seeking the
dismissal of MERALCO’s Application and
expressed its intention to file an opposition
to MERALCO’s Application, respectively.  Reform Act of 2001" (EPIRA)
ERC directed FDC, NASECORE and
Lualhati to file their respective comments
on the Application within 15 days from their
receipt thereof. NASECORE filed a Motion
for Production of Documents to enable it to
evaluate MERALCO’s Application. ERC
directed MERALCO to file its comment on
NASECORE’s Motion for Production of
Documents. ERC issued an Order directing
MERALCO to submit certain documents in
connection with the evaluation of its
Application. However, ERC, without first
resolving the Motions for Production of
Documents of NASECORE and FDC and
apparently without considering Lualhati’s
Opposition, issued an Order provisionally
approving MERALCO’s ex parte
application for rate increases. 
Bayan Muna, Bayan,  KMU, Gabriela,
Party and Anak Pawis argued that the
Order is void for having been issued by
ERC with manifest bias in favor of
MERALCO and without due regard for the
rights of consumers, so they filed their
Motion to Intervene and attached thereto
their Petition-in-Intervention. Hence, this
Instant Petition and Petition-in-Intervention.
ISSUES:
1. Whether or not the ERC has legal
authority to grant provisional rate
adjustments under Republic Act
(R.A.) No. 9136, otherwise known
as the "Electric Power Industry
HELD:
Statutory Authority To Grant
Provisional Increase
           
            FDC posits that the ERC has no
power to issue provisional orders
because the EPIRA repealed
Commonwealth Act No. 146 (The Public
Service Act) and E.O. No. 172 (creating
the ERB), which laws expressly granted
upon the precursors of ERC the power
to grant provisional orders. It argues
further that while Section 44 of the EPIRA
provides for the transfer of the powers and
functions of the ERB to the ERC, such
transfer cannot be deemed to include the
power to issue provisional orders because
such power is inconsistent with the policies
ordained in Section 2 of the EPIRA to
protect the public interest insofar as it is
affected by the rates and services of
electric utilities and other providers of
electric power and to ensure transparency
and full accountability in rate-fixing.
Considering that the EPIRA itself does not
confer upon the ERC the power to issue
provisional orders, Section 4(e), Rule 3 of
the law’s Implementing Rules, which refers
to the grant of provisional authority by the
ERC, constitutes an undue delegation of
legislative power.
Legislative history supports ERC’s
power to grant provisional rate
adjustments.
            The provisions of Public Service
Act and E.O. No. 172 which relate to the
power of the regulatory body to approve
provisional rates continue to have full force
and effect, and the power was transferred
to ERC by virtue of Section 80 in relation to
Section 44 of EPIRA. Said provisions
aren’t inconsistent with EPIRA except the
directives therein dispensing with the need
for prior hearing. They are deemed
modified to the extent that EPIRA imposes
a publication requirement and, through
IRR, assures the customers affected the
opportunity to oppose or comment on the
application for provisional rate adjustment
before it is acted upon by ERC.Indeed,
both the letter and spirit of the law require
that the authority of the ERC to grant
provisional power rate adjustments should
be upheld. The law is so clear that it
cannot be misread.
NOTES:
On the issue WON there was a grave
abuse:
            The FDC contends that the
issuance of the Order provisionally
approving MERALCO’s application for rate
increase is void because, among others,
the affected sectors were not afforded the
opportunity to be heard. Since the
issuance of provisional orders is quasi-
judicial in character, the ERC cannot
dispense with the requirements of notice
and hearing. It likewise claims that the
ERC based the provisional increase only
on MERALCO’s bare allegation that it was
in dire financial straits, as there was no
proof of MERALCO’s actual financial
condition. It is settled that there is grave
abuse of discretion when an act is done
contrary to the Constitution, the law or
jurisprudence, or when executed
whimsically, capriciously or arbitrarily out of
malice, ill will or personal bias.
            The infirmities which attended the
issuance of the Nov. 27, 2003 Order,
particularly: (1) the failure of MERALCO to
publish its Application or at least a
summary thereof; (2) the failure of the ERC
to resolve the Motions for Production of
Documents filed by the oppositors to
MERALCO’s Application before acting on
the motion for provisional rate adjustment;
and (3) the failure of the ERC to consider
the arguments raised by the oppositors in
their respective pleadings prior to the
issuance of the assailed Order; the Court
declares void the November 27, 2003
Order of the ERC for having been issued
with grave abuse of discretion.
            Thus, should the case be simply
remanded to the ERC without further
action by the Court, the defects would not
be cleansed and they would retain their
potency and still serve as solid basis to
nullify the challenged Order and all other
issuances of the ERC which would be
infected by the infirmities. Indeed, such a
denouement would be inescapable once
the application is elevated again to this
Court in connection with the infirm
issuances. Clearly then, a remand is not in
the best interest of MERALCO and the
ERC. Rather, it is to their advantage, same
as with the consumers, that they begin
again on a clean slate.