THE POWER OF JUDICIAL REVIEW AND ECONOMIC POLICIES:

ACHIEVING CONSTITUTIONAL OBJECTIVES1

Prof. Ma. Lourdes A. Sereno2

The Problem and the Objective

in the Context of Economic Development

The objective of this study is to analyze and resolve the intellectual and legal
tension between those who are criticizing the judiciary for inappropriately using its power
of review over cases involving economic policies or projects and those who believe that
there is an appropriate exercise of this power.

It relates to the belief of the undersigned that the tension, if unresolved, can
continue to feed into the following situations

1. An executive that is unsure of its own powers, hesitant in its resolve, and
absorbed in second-guessing possible court action in response to its programs
and projects;
2. A legislature that believes that it is not protected by sufficient constitutional
guideposts, and without any certainty as to the finality of the policy debates
that properly should occur within its halls;
3. A court that will continually have to defend the exercise of its own powers,
against criticisms by the principal stakeholders in the process of economic
policy-formulation: the executive, the legislature and the constituencies
consulted on the particular economic issue at hand.

It may be argued that the above situations are not bad in themselves, and that the
tension will always exist in the very design of the balance of power among the three
branches of government and that this tension is the essence of democracy.

That may very well be true in the matter of the distribution of political power.
However, there is serious doubt whether this tension should exist in the area of economic
policies. It can be said that in an environment of uncertainty over the stability of
economic policies, effective economic planning, and much long-term business planning
cannot be done. Prevailing development literature is replete with doctrines and anecdotes
on the need for a stable policy environment for growth to take place. The most significant
effects of policy instability manifest themselves in higher costs of doing business and low
investment inputs into necessary public goods. Instead, there is a diversion towards quick
and speculative economic activities that cannot sustain long-term growth.

1
Submitted as part of the PHILJA PROJECT ON LAW AND ECONOMICS in cooperation with AGILE-
USAID.
2
Associate Professor, University of the Philippines College of Law; Member of the International Law
Department, Faculty of the Philippine Judicial Academy.
Resolving the Tension in the Light
of Constitutional Objectives

The task of this paper is far from academic. It is not to favor one economic model
over another, nor to diminish one constitutional value at the expense of another. Rather,
the theory proposed is that the Constitution itself, having clearly expressed economic
objectives for the nation, requires that the judiciary evaluate its role in the light of those
constitutional objectives. In other words, resolving the tension in a manner that is
compatible with those constitutional objectives is an important intermediate goal that
must be sought by the judiciary itself.

It can be counter-argued that the courts are not the guarantors, nor are they
responsible in any manner, for economic growth. This they have tried to emphasize in a
number of cases in which their lack of responsibity for the choice as well as the
implementation of economic policies was categorically expressed.3 However, this does
not seem to be borne by the language of their own decisions.

For one, the Supreme Court made several pronouncements on the economic
philosophy of the Constitution itself.4 By so defining what kinds of economic policies
had been rejected by the Constitution, despite the lack of categorical labels in the
Constitution itself, the Court practiced in that sense, judicial activism on behalf of the
executive, ushering in a strong wave of governmental intervention.

For another, the Supreme Court had pronounced some economic policies as
conducive to the economic welfare of Filipino citizens as against another, venturing
thereby, unintentionally perhaps, into the realm of economic evaluation.5

And then again, the Supreme Court had expressed strong displeasure over the
perceived economic impact of some policies and required the executive and the
legislature to mitigate or remedy the perceived impact by altering the manner of
implementation of a specific legislative policy.6 While in one case, this distress did not
move the Court to sufficiently override the executive department,7 in another, an entire
program had to be re-evaluated and re-legislated.8

The reason for this apparent discrepancy between the formal statement of the
Court on its lack of responsibity for economic policies and the practical impact of the
above instances on the choice by the other two branches of economic policies and the
manner of their implementation lies in the very nature of power.

3
The assumption of the political question doctrine is that the courts are not to be held responsible for
policy-formulation nor implementation. This has been the consistent belief held in the cases on economic
regulation to be discussed infra.
4
See discussion infra on laissez-faire, especially with Antamok and Edu v. Ericta, infra.
5
See discussion on King v. Hernaez, infra.
6
See discussion on Tatad v. Viray, infra.
7
See discussion on Maceda v. Energy Regulatory Board, infra.
8
Tatad v. Viray, infra.

2
 By the very nature of power, and especially government power, lives, including
economic fortunes, are directly affected by the manner and degree by which this power is
exercised.

This has been the position of scholars who believe that critics of the active
exercise of the power of judicial review do not sufficiently appreciate the history of the
United States Supreme Court in the evolution of the New Deal administration of
President Franklin Roosevelt. Their position is that before the ”court-packing” plan of the
Roosevelt administration succeeded, the Federal Supreme Court was dominated by
propertied justices who sought to defend, through the contracts and takings clause, strong
property rights in favor of their class. Thereafter, the role of these federal justices have
remained the same, only the economic and perhaps, the political causes, changed.9

While it is true that the judiciary may not always be solely responsible for the
direct effects of its decisions, the possibility that it may be unknowingly creating greater
effects on economic lives than it would have wanted demands that there be a way by
which the causal link between its decisions and the resultant economic effects can be
gauged, and to put a tag on the degree of responsibility implicit in such causality. This is
the most prudent way to ensure that the judiciary does not lose its focus on the
constitutional raison d’etre of the Philippine state – that the state exists for the
improvement of the present and future lives of its people, whom it has covenanted to
nurture and protect.

The Nature of Power

and Judicial Activism

There are those who propose that inasmuch the Supreme Court is the final arbiter
of the law, there is nothing that can be done but to accept the prevailing thought of the
court on the matter and to pursue only courses of action compatible with this thinking.
Such conclusion means that any inquiry into the appropriateness of the exercise of the
Supreme Court on the matter proceed no further than descriptions of the doctrines in the
court’s most important cases, and then to craft a policy agenda that conforms to such
thinking.

The problem with this proposed approach is that it assumes two things, which
may turn out to be wrong:
First, that there is in fact a clear prevalent thought by the Court on the matter, and
Second, that the Court itself is not inclined to review its thinking on the matter of
economic policy nor is it looking for an alternative way of articulating its role in the area
of economic development.

This paper will demonstrate that both assumptions are wrong. Within the Court
itself is serious discomfort with judicial intervention into economic policies. This can be
found in the various concurring and dissenting opinions especially of the most
9
See especially the scholarly papers of Dean Pacifico Agabin, in footnote 12 , infra.

3
controversial cases. While dissents are expected to be strong in controversial cases, there
is a quality in many of these opinions whereby the dangers of judicial intrusiveness were
set in the light of point-by-point criticisms of the court’s own competence, or rather lack
of it, to evaluate specific factual matters. The categorical and strong expression of these
disagreements is a sign that the judiciary, and especially, the Supreme Court, is confident
in its own stability and mature enough to allow for a public reflection by its members on
the nature and extent of its own powers. Thus, far from being offended by attempts to
contribute to the discussion on the extent of the judicial power, there is greater reason to
believe that the Court will welcome such efforts. In some of the most important cases,
even the ponencias possess an inner tension, beckoning for resolution, between the desire
to advocate the cause of certain economic interests whom the Court believes it is sworn
to defend, and the desire not to assume a responsibility for which it has been, by
constitutional design, not equipped for.10

The more recent decisions of the Court11 display a strong desire to move more
strongly, on behalf of the less-articulate members of society, such as “generations yet
unborn” and the common consumer, as well as confidence to craft completely novel
theories even in politically-difficult issues. It gives basis for the belief that the Court will
actively make its presence, more and not less, actively-felt. There is no reason to dissuade
them from the path of judicial activism, especially on questions involving Philippine
political structures, which in the light of what the past two decades demonstrated, is very
much on the evolutionary stage.

However, it is important to ask whether the same eager hand, will promote the
objectives of the national economy as articulated in the Constitution. It is also important
to ask whether the same hand, is as adept at evaluating an area for which lawyers have
hardly had any training: the strange, unromantic, and “dismal” world of economics.

The State of Literature on Judicial Review and Economic Policies

This paper reviewed and went beyond existing work on the issue of judicial
review and economic policies. The most important of these works are cited below.12 A
more complete list of the studies on the matter that were reviewed for this paper is
included in a separate reference list. This paper will avoid repeating most of the
arguments in the said four articles. Suffice it to say that the four important papers on the
issue have focused their inquiry on whether there has been a legal overstepping by the
Supreme Court of its constitutional bounds under the 1987 Constitution. The three papers
that criticize the so-called interventionist decisions of the Court do so on the ground that
there has been a misreading by the court of the meaning of judicial review under Article
10
See the discussion on the case of Manila Prince Hotel v. GSIS, infra.
11
Oposa v. Factoran, infra, Tatad v. Viray, infra, and the Arroyo Presidency case, for example.
12
Solomon R. B. Castro and Martin Israel L. Pison, ” Economic Policy Determining Function of the
Supreme Court in times of National Crisis”; 67 PLJ 1993; pp. 362-365; Ricardo Romulo, “The Supreme
Court and Economic Policy: A Plea for Judicial Abstinance”; 67 PLJ 1993; pp. 348-353; Perfecto V.
Fernandez, “ Judicial Overreaching in Supreme court Cases Affecting Economic Policy”; 67 PLJ 1993;
332; and Pacifico A. Agabin, Judicial Review of Economic Policy; 72 PLJ 1997, 186.

4
VIII, Section 1. Agabin’s paper which defends the exercise of said power in the
controversial cases focus his argument on the fact that courts have always intruded into
the policy arena anyway, and the Supreme Court, in the questioned cases, have merely
discharged what they saw as a constitutionally-mandated duty.

This paper reviewed the history of the three constitutions in relation to the wave
of policy epochs in the Philippines, compared it with all existing modern constitutions,
reviewed more than 100 Supreme Court decisions involving judicial review and or
economic policies. A shorter list of the cases on economic policies more carefully
reviewed is likewise appended.

Economic Philosophy of the Constitution

After reviewing the records and writings on the history of the 1935, 1973 and
1987 Constitutions,13 as well as the long line of cases involving economic policy, and
writings on constitutional law, there are several unavoidable conclusions that were made
by this author. Each of the following will in turn be discussed more extensively, in
subsequent sections of this study:

First, the Court pronounced that the Philippine constitution after 1935 soundly
rejected laissez faire even while it was the prevalent economic philosophy during the
American colonial period.14 One case interpreting the 1935 Constitution, went to the
13
Whether thru records of the proceedings, writings thereon (complete list of references to be included);
note that the 1973 Constitution, having been produced during martial law, does not have an independent
source of reference. The document was partly written after existing drafts of the aborted 1971
Constitutional Commission, the draft of the U.P. Law Center and originally-written provisions.
14
In Edu v. Ericta, the Court said:
The Constitutional Convention saw to it that the concept of laissez-faire was rejected. It entrusted
to our government the responsibility of coping with social and economic problems with the commensurate
power of control over economic affairs. Thereby it could live up to its commitment to promote the general
welfare through state action. No constitutional objection to regulatory measures adversely affecting
property rights, especially so when public safety is the aim, is likely to be heeded, unless on the clearest
and most satisfactory proof of invasion of rights guaranteed by the Constitution. On such a showing, there
maybe declaration of nullity, not because the laissez-faire principle was disregarded, but because the due
process, equal protection or non-impairment guarantees would call for vindication. This was reiterated in
Association of Rice & Corn Producers v. National Land Reform Council which states:
No constitutional objection to regulatory measures adversely affecting property rights, especially
so when public safety is the aim, is likely to be heeded, unless of course on the clearest and most
satisfactory proof of invasion of rights guaranteed by the Constitution. On such a showing, there may be a
declaration of nullity, but not because, the laissez-faire principle was disregarded but because the due
process, equal protection, or non-impairment guarantees would call for vindication. To repeat, our
Constitution which took effect in 1935 erased whatever doubts there might be on that score. Its philosophy
is a repudiation of laissez-faire.
Building along the same “redistributive or social function” theme, Alfanta v. Noe states:
Under the new Constitution, property ownership has been impressed with a social function. This implies
that the owner has the obligation to use his property not only to benefit himself but society as well. Hence,
it provides under section 6 of Article II thereof, that in the promotion of social justice, the State "shall
regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitable
diffuse property ownership and profits." The Constitution also ensures that the worker shall have a just and
living wage which should assure for himself and his family an existence worthy of human dignity and give
him opportunities for a better life (Sections 7, & 9, of Article II)

5
extent of saying that Philippine society never embraced laissez faire, even when
American industrial might was being built on it.

Second, the justices had defined the economic philosophy of the Constitution in
terms of the “social justice” clauses of the Constitution, which in their view has a strong
preference for redistributive and affirmative action legislation and programs.15

Third, that this social justice orientation of the Constitution empowers an

interventionist government, and that interventionism is the primary way by which the
problem of mass poverty can be addressed.16

Fourth, that the redistributive preference of the Constitution has been affirmed
and strengthened by the 1973 and 1987 Constitutions.17

Fifth, the Constitution has been invariably interpreted to be nationalist, as to

opportunities, licenses, and rights in the economic sphere. The history of Philippine
political economy would show that this long line of cases upholding the nationalist spirit
of the Constitution went alongside legislation and executive policies based on the import-
substituting model of development.

Sixth, since the Constitution is strongly nationalist, in the cases decided by the
Court, in effect, “nationality-indifferent” and “market-oriented” economic policies appear
to bear the burden of having to be proven as not contravening the Constitution.18

Seventh, although the above seems to be the prevailing trend, there are “seeds” of
thought in more recent jurisprudence which are open to a more market-oriented economic
system. There have been recent pronouncements that the 1987 Constitution has embraced
the “free enterprise system”19, a recognition of the constitutional protection to contracts in
a labor-related case,20 and a recognition of the resurgence of laissez faire-type market
mechanisms.21

COMPARATIVE ANALYSIS OF ALIEN “EQUITY AND MANAGEMENT”

PROVISIONS AMONG MODERN CONSTITUTIONS

See also ACCFA v. CUGCO (1969). As early as 1919, an American jurist writing for the
Philippine Supreme Court already warned that laissez faire was a discredited theory (Rubi v. Provincial
Board of Mindoro.
15
See Calalang v. Williams.
16
See Calalang v. Williams.
17
Cite cases and Agabin’s article on the matter.
18
This jived perfectly with the traditional way of looking at what investment opportunities are open to
foreigners. The legislative and executive interpretation of the Constitutional provisions, until the Foreign
Investments Act of 1992 (?) clarified that the issue was that unless there is express legislative fiat, then a
sector could not be engaged in by foreigners by more than 40% of the equity in a company. This was
contained both in investment registration and corporate registration requirements of the BOI and the SEC.
19
Majority opinion, Tatad v. Viray (1997).
20
Asian Alcohol v. NLRC (1999)
21
Garcia v. Corona (1999).

6
 Among modern constitutions in known democracies, and even in not entirely
democratic countries where the concept of private property is generally respected, the
Philippine constitution appears to be the most restrictive in terms of participation by
aliens in matters of economic life. This does not mean, however, that it also indicates that
the Philippines has one of the most closed economies in the world, for other countries
impose stringent statutory or administrative regulations and control over specific
economic activities. What it does mean, however, is that our Constitution appears, among
all modern existing constitutions, to have micro-managed the most, the question of alien
equity and management in economic activities. Whereas other constitutions entrust the
question to their legislature or executive, our constitution chooses to articulate, in detail,
nationality requirements in the matter of equity or management of the following
economic activities or in the matter of an expression of the first preference rule: land
ownership, exploitation and use of natural resources, education, the exercise of
professions, mass media, advertising and public utilities.

East Asian economies regulate foreign investment policies by legislative action

rather than by constitutional mandate. There are no provisions in their constitutions
prescribing specific citizenship or foreign investment equity ratios similar to those in the
Philippine Constitution, save for Thailand, whose constitution maintains only one
exception: a restriction against foreign ownership of mass media business entities.

Save for this, there are no constitutional restrictions on the development of natural
resources, on the operation of public utilities or the grant of congressional franchises, on
investments in advertising and education, on the practice of professions, nor even on land
ownership in countries where private ownership is recognized. Regulation is
accomplished through numerous laws and regulations limiting foreign investment.

OTHER CONSTITUTIONAL PROVISIONS DIRECTLY

IMPINGING ON ECONOMIC POLICIES

In addition to the provisions detailing equity, management and preferences in

specified areas of economic activity, there are provisions in the 1987 Constitution that
appear to spell out the direction that economic policy should take.

General Principles:

Article II, Section 9. The State shall promote a just and dynamic social order that will
ensure the prosperity and independence of the nation and free the people from poverty through
policies that provide adequate social services, promote full employment, a rising standard of
living, and an improved quality of life for all.

Article II, Section 19. The State shall develop a self-reliant and independent national
economy effectively controlled by Filipinos.

Article XII, Section 1. The goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and

7
 services produced by the nation for the benefit of the people; and an expanding productivity as the
key raising the quality of life for all, especially the underprivileged.
The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and efficient use
of human and natural resources, and which are competitive in both domestic and foreign markets.
However, the State shall protect Filipino enterprises against unfair foreign competition and trade
practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country
shall be given optimum opportunity to develop. Private enterprises, including corporations,
cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their
ownership.

Other provisions of the Constitution stamp property with a social function,22

advocate the preferential use of what is Filipino,23 grants franchise preferences to
Filipinos,24 requires an equitable trade policy,25 requires a national pool of talents to be
developed and states preference for Filipino professionals,26 requires the regulation or
even prohibition of monopolies,27 provides for national take-over of certain enterprises
during national emergencies,28 allows take-over of vital industries,29 in addition to the
provisions specifying minimum equity or management participation by Filipinos in
certain areas identified earlier.

The Constitution also provided the manner by which economic policies are to be
formulated and implemented, and the organization of private enterprise:
Article XII, Section 9. The Congress may establish an independent economic and
planning agency headed by the President, which shall, after consultations with the appropriate
22
Article XII, Section 6. The use of property bears a social function, and all economic agents shall
contribute to the common good. Individuals and private groups, including corporations, cooperatives, and
similar collective organizations, shall have the right to own, establish, and operate economic enterprises,
subject to the duty of the State to promote distributive justice and to intervene when the common good so
demands.
23
Article XII, Section 12. The State shall promote the preferential use of Filipino labor, domestic materials
and locally produced goods, and adopt measures that help them be competitive.
24
Art. II, sec. 10, second paragraph. In the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified Filipinos.
25
Article XII, Section 13. The State shall pursue a trade policy that serves the general welfare and utilizes
all forms and arrangements of exchange on the basis of equality and reciprocity.
26
Article XII, Section 14. The sustained development of a reservoir of national talents consisting of
Filipino scientists, entrepreneurs, professionals, managers, high-level technical manpower and skilled
workers and craftsmen in all fields shall be promoted by the State. The State shall encourage appropriate
technology and regulate its transfer for the national benefit.
The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases
prescribed by law.
27
Article XII, Section 19. The State shall regulate or prohibit monopolies when the public interest so
requires. No combinations in restraint of trade or unfair competition shall be allowed.
28
Article XII, Section 17. In times of national emergency, when the public interest so requires, 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.
29
Article XII, Section 18. The State may, in the interest of national welfare or defense, establish and
operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and
other private enterprises to be operated by the Government.

8
 public agencies, various public sectors, and local government units, recommend to Congress, and
implement continuing integrated and coordinated programs and policies for national development.
Until the Congress provides otherwise, the National Economic and Development
Authority shall function as the independent planning agency of the government.
Article XII, Section 10. The Congress shall, upon recommendation of the economic and
planning agency, when the national interest dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of whose capital is owned by such citizens,
or such higher percentage as Congress may prescribe, certain areas of investments. The Congress
shall enact measures that will encourage the formation and operation of enterprises whose capital
is wholly owned by Filipinos.
...
The State shall regulate and exercise authority over foreign investments within its
national jurisdiction and in accordance with its national goals and priorities.
Article XII, Section 15. The Congress shall create an agency to promote the viability and
growth of cooperatives as instruments for social justice and economic development.
Article XII, Section 16. The Congress shall not, except by general law, provide for the
formation, organization, or regulation of private corporations. Government-owned or controlled
corporations may be created or established by special charters in the interest of the common good
and subject to the test of economic viability.
Article XII, Section 20. The Congress shall establish an independent central monetary
authority, the members of whose governing board must be natural-born Filipino citizens, of known
integrity, and patriotism, the majority of whom shall come from the private sector. They shall also
be subject to such other qualifications and disabilities as may be prescribed by law. The authority
shall provide policy direction in the areas of money, banking, and credit. It shall have supervision
over the operations of banks and exercise such regulatory powers as may be provided by law over
the operations of finance companies and other institutions performing similar functions.
Until the Congress otherwise provides, the Central Bank of the Philippines, operating
under existing laws, shall function as the central monetary authority.
Article XII, Section 21. Foreign loans may only be incurred in accordance with law and
the regulation of the monetary authority. Information on foreign loans obtained or guaranteed by
the Government shall be made available to the public.

The impression given by the above sections, together with the detailed nationality
requirements or preferences earlier referred to, is that the Philippines has a constitution
that requires affirmative action on behalf of Philippine citizens, with preference for
redistribution mechanisms, to achieve the three-fold goal of the national economy. While
there is nothing objectionable to any of the above sections, it is important to answer the
question of whether the court will be sufficiently guided by constitutional parameters in
the area of economic policy.

The Committee on Competition and Trade Policy of the 1999 Preparatory

Commission on Constitutional Reform doubts that there is sufficient clarity in the
hierarchy of the Constitution’s economic goals:

The first conclusion arising from the discussions of the Committee is that
both scholars and the public sector have identified a problem in the philosophy
and style adopted by the 1987 Constitution, which has been described as an
extended code of laws.

In respect of the substance of the Constitution, the Supreme Court is

required to operate under a basic environment that includes a long list of
entitlements, without any hierarchical guide to address competing claims within

9
 that list. As a matter of style, there is a general observation of prolixity in the
Constitution, gleaned in provisions on areas better left to legislation. This has led
to a problematic legal environment arising from confusion between declaratory or
hortatory provisions and those with a mandatory character. The problem has
raised alarm among constitutionalists, as well as from those responsible for
coming up with a rational economic management system in the country.30

There is a serious perception that the goals of the national economy, as applied to
specific economic projects, may not be simultaneously applicable. There is a belief that
redistribution goals, in the context of an undeveloped economy, follows expansion of the
gross national product and productivity. In other words, there is a sequence to growth.
The same Committee opines:

… Perusal of § 1 of Article XII mentions three goals of the national

economy, to wit: first, equitable redistribution of wealth, income and
opportunities; second, increasing the gross national product, and; third, expanding
productivity.
The first problem is the presence of the second goal, which need not be
stated, it being quite obvious that every nation desires and acts to increase its total
Gross National Product (GNP).
The second problem relates to the hierarchy of these goals, since the
redistribution of wealth, income and opportunities precedes the goal of expanding
productivity. Obviously, this presents a dilemma for economic managers who are
being asked to pursue two conflicting goals quite incapable of simultaneous
accomplishment. Upon the other hand, redistribution can be effected after there is
an expansion of productivity. . .
There is good reason to delete the second paragraph of § 1 Article XIIl,
providing for protectionism exclusively favoring Filipinos. Unless our laws
ensure a level playing field, there is no incentive for foreign investors to become
committed to the Philippine economy.
The second paragraph also presents the agro-industrial model of
development, out of step with the rapid world-wide trend of restructuring towards
knowledge-based economies. The choice of an economic model is a matter that
should be decided by government and the political arena.31

Considering the serious difficulty of choosing, what is the constitutional basis for
this intervention by the government in the market?

GOVERNMENT INTERVENTION IN THE ECONOMY

In the early 1900’s, the American interpretation of the powers of government

divided such power into ministrant and constituent functions. This allowed suits that

30
Report of the Committee on Trade and Policy, Presidential Commission on Constitutional Reform.
31
Ibid.

10
prevented intervention by the government into many spheres of economic activity where
there were private sector presence in the activity. This division of activities, together with
the laissez faire doctrine and the non-impairment of contracts clause in the constitution
inhibited more active governmental regulation of economic activities. In the United
States, the country had to await the success of President Roosevelt’s court-packing plan,
before the country had a federal Supreme Court that was willing to respect the decision of
the Executive to venture into more radical economic engineering.

The Philippines, on the other hand, did not have to wait for an economic recession
or a New Deal administration for the laissez faire doctrine to be rejected. In the view of
legal historians, principally the Philippine Supreme Court, the 1935 Constitution
markedly departed from the pattern of the U.S. Constitution in writing into the
Constitution a mandated approach to economic policy, by specifying the philosophy as
well as the governmental mechanism by which that philosophy was to be planned and
implemented. This, in their view, was deliberate. The nationalist provisions, for example,
was born in reaction to the perceived ill-effects of allowing continued dominance of
foreign interests in the economy. Thus, the economic nationalist clauses in the
Constitution were not meaningless, but were intended precisely to preserve Philippine
patrimony for the near-exclusive enjoyment of Filipino citizens (save only with respect to
the American parity amendments).

The full embrace of the social justice clause meant that the traditional definition
of the scope of police power was nearly comprehensive and related to everything that
could affect the well-being of the people. This authorized heavy government intrusion
even into private transactions, rendering unappealing non-impairment claims against the
government. Invariably, the Court would legitimize specific government interventions
into different spheres of economic activity.

The Constitution, to a large extent, defined how this intervention was to take
place. The principal organ that could decide areas for government intervention was the
legislature. Subject only to constitutional constraints, the power of the legislature was
plenary, and implementation of the mandate for intervention was to be done by the
executive.

The 1973 Constitution, unlike the 1935 Constitution, specified the manner by
which economic planning and policy formulation was to be undertaken. Economic
planning was to be inititated at the highest levels of government, through a national
economic planning agency. By law, this became the National Economic Development
Authority. 32 That this was unique as a constitutional provision is testament to the
particular attention which the framers of the 1973 Constitution wanted to pay even to the
process of economic planning, by designing a central planning authority at which
sufficient representation by all sectors, including local government units were to be
consulted.

32
Presidential Decree No.107.

11
 No other mechanism by which a specific governmental activity is to be carried
out has merited this detailed attention. It defined for all intents and purposes, the
character of economic policy-formulation. To go by the traditional definition of the
legislative power is to say that even the formulation of economic policies will have to
emanate from the legislature. However, the particular formulation of the economic
planning provisions of the Constitution meant that Congress could not claim sole
initiative over central or general economic planning, rather, that it would be a joint
activity by the leadership of both the executive and legislative. Of course, technically, it
was still the legislature that would determine economic policy through the process of
formal legislation.

The implications of this joint effort at economic planning by the legislature and
the executive is not merely a matter of form or procedure. The implication of the chosen
mechanism is that this exercise was to be conducted by the two politically-accountable
branches of government – the executive and the legislature. Decisions reached through
such a mechanism carried the collective wisdom of both, and no area of policy-making
warns of the danger of judicial intrusion as the area of economic planning and policy-
formulation by sheer implication of the constitutional design.

With the increased complexity of governmental activity that would be allowed to

be undertaken, the necessity of more and more delegation being made by the legislature
to the executive came to be judicially-recognized, subject only to two basic constitutional
requirements for permissible legislative delegation: completeness in the law that
delegates powers to the executive, and specificity in the kind of powers that the President
could exercise. More and more areas of economic policy-setting and regulation came to
fall within the direct sphere of Presidential or executive initiative and control, including
the power to set tariffs,33 to set fees and rates which public utilities may charge, to set
prices, and greater leeway to set the tone and direction of a legislated policy through
implementing rules and regulations.

In the first place, the judiciary recognized that the legislature itself cannot attend
to the many details required for a fully fleshed-out law. For another, the legislature had
to allow flexibility on the part of the executive to adapt and respond to changing
circumstances. It was enough, the Court said, that the constitutional parameters for
allowable legislative delegation was met.

That the Court recognized limitations of technical competence, feasibility as well

as practicality as reasons to allow the legislature to delegate some of its powers is not
without significance. For it is the same reason that the Court would use in majority of the
cases where it refused to review the action of the legislature or the executive due to a
very realistic admission of lack of expertise on the Court’s part. This would always be the
first reason the Court would use in availing of the doctrine of primary jurisdiction,
whereby the judiciary should refuse to review the ruling of a quasi-judicial body or to

33
Sec. 402, Tariff and Customs Code of the Philippines. See however, the most recent decision of the
legislature to directly set tariffs for certain agricultural products, through Republic Act No. 8182.

12
take jurisdiction over a controversy which is already pending before an administrative or
quasi-judicial body with primary expertise over the issue.

This self-limitation recognized by the Court is due in part to constitutional design.

By design, the Constitution required the court to be expert in none other than application
and interpretation of the law in justiciable cases, the rules on pleading, practice and
admission to the bar, and supervision of its own ranks (by the Supreme Court). By
design, the Constitution prohibited the judiciary from involving itself in any other activity
other than those specified by the Constitution, even though the mandate may have come
from independently-crafted legislation.34 Inasmuch as the constitution designed the
judiciary not to be involved in any activity other than those specified above, the
constitution does not expect the judiciary to be involved in the business of policy-
formulation, other than those required for its internal governance or for the discharge of
its core functions.

Beyond the constitutional design, however, self-limitation by the Court grew out
of its own traditions and precepts. By the tradition of deferment to co-equal branches of
government, anything that had to do with the wisdom or efficacy of a law is a political
question, and this tradition was justified by the legal theory of separation of powers
enshrined in the Constitution. By tradition, anything that calls for specialized expertise
and which expertise was available in another body was more wisely deferred to that body
under the doctrine of primary jurisdiction. This self-limitation was implied to be
necessary to ensure self-preservation of the judiciary as an institution; as in the words of
one justice, to refuse self-limitation when appropriate would be to subject the people to
the danger of judicial abuse of discretion, and hence to open the possibility of loss of
credibility by the judiciary.35

INAPPROPRIATE INJUNCTIONS AS INAPPROPRIATE INTERVENTION

Decisions by the Court wherein the Court refrained from reviewing the wisdom of
legislative or executive acts in technical or economic matters referred to the Court’s own
lack of expertise as a reason for desisting. The dangers of inappropriate intervention as a
result of this lack of expertise in the said areas was never expressly articulated in any of
the decisions. The first official recognition of the dangers of inappropriate judicial
intervention in economic policies or in the implementation of economic projects, to the
knowledge of this author, only surfaced in Presidential Decree No. 1818, and it reads.

“WHEREAS, Presidential Decree No. 605 prohibits the issuance by the courts of
restraining orders or injunctions in cases involving concessions, licenses, and
other permits issued by administrative officials or bodies for the exploitation,
development and utilization of natural resources of the country;

34
Meralco, infra.
35
Dissent, Tatad v. Viray.

13
 “WHEREAS, it is in the public interest to adopt a similar prohibition against the
issuance of such restraining orders or injunctions in other areas of activity equally
critical to the economic development effort of the nation, in order not to disrupt or
hamper the pursuit of essential government projects.”

“Sec. 1. No court in the Philippines shall have jurisdiction to issue

any restraining order, preliminary injunction, or preliminary mandatory
injunction in any case, dispute, or controversy involving an infrastructure
project, or a mining, fishery, forest or other natural resource development
project of the government, or any public utility operated by the
government, including among others public utilities for the transport of
goods or commodities, stevedoring and arrastre contracts, to prohibit any
person or persons, entity or government official from proceeding with, or
continuing the execution or implementation of any such project, or the
operation of such public utility, or pursuing any lawful activity necessary
for such execution, implementation or operation.”

Despite the clear language of the decree, trial courts still continued to issue
injunctive remedies against government infrastructure projects. The popular suspicion for
the continuance of this practice was that the issuance of injunctions was the most
lucrative component in the corruption suspected in the judiciary.

The Supreme Court recognized this problem, so in a series of circulars, and one as
recent as 1999, it reminded all lower courts to observe Presidential Decree No. 1818, as
well as the series of circulars issued on the matter.

This legislative prohibition was affirmed in July 2000, under Republic Act No.
89751 that reads in part:

SECTION 1. Declaration of Policy - Article XII Section 6 of the Constitution states that the use of
property bears a social function and all economic agents shall contribute to the common good.
Towards this end, the State shall ensure the expeditious and efficient implementation and completion
of government infrastructure projects to avoid unnecessary increase in construction, maintenance
and/or repair costs and to immediately enjoy the social and economic benefits therefrom.
…
SEC. 3. Prohibition on the Issuance of Temporary Restraining Orders. Preliminary Injunctions and
Preliminary Mandatory Injunction. - No court except the Supreme Court, shall issue any temporary
restraining order, preliminary injunction or preliminary mandatory injunction against the government,
or any of its subdivisions, officials or any person or entity, whether public or private, acting under the
government's direction to restrain, prohibit or compel the following acts:

(a) Acquisition, clearance, and development of the right-of-way and/or site or location of any national
government project;

(b) Bidding or awarding of contract/project of the national government as defused under Section 2
hereof;

(c) Commencement, prosecution, execution, implementation, operation of any such contract or

project;

14
 (d) Termination or rescission of any such contract/project; and

(e) The undertaking or authorization of any other lawful activity necessary for such contract/project.

This prohibition shall apply in all cases, disputes or controversies instituted by a private party,
including but not limited to cases filed by bidders or those claiming to have rights through such
bidders involving such contract/project. This prohibition shall not apply when the matter is of
extreme urgency involving a constitutional issue, such that unless a temporary worker restraining
order is issued, grave injustice and irreparable injury will arise. The applicant shall file a bond, in an
amount to be fixed by the court, which bond shall accrue in favor of the government if the court
should finally decide that the applicant was not entitled to the relief sought.

If after due hearing the court finds that the award of the contract is null and void, the court may,
if appropriate under the circumstances, award the contract to the qualified and winning bidder or order
a rebidding of the same, without prejudice to any liability that the guilty party may incur under
existing laws.

SEC. 4. Nullity of Writs and Orders. - Any temporary restraining order, preliminary
injunction or preliminary mandatory injunction issued in violation of Section 3 hereof is void and of
no force and effect.

First point of observation: an injunctive relief, that is not permanent, is not a

disposition of the issue in the main. However, it is quite obvious that it can have the same
damaging effect on an economic project as a disposition of the main case.

Second, there are civil, criminal and even administrative remedies available for
the economic correction of the wrongs cited in injunction petitions. The legal doctrines
on damages in the Philippines are sufficient both as to access to damages and even as to
the kind of damages may be allowed.

Third, the bar before any injunctive relief can be had from courts is quite high.
Although government and private sector projects that do not fall within the description of
Section 1 of Presidential Decree No. 1818 and Section 3 of Republic Act No. 89751 are
not protected by the immunity from injunction rule, nevertheless the Rules of Court make
the hurdle for entitlement to relief very high. Should there be in fact, a remedy available
in law to the petitioner, the court will require him to address himself to this remedy.

In the context of the above observations, what is the basis for the concern for
excessive judicial intervention?

OVER-REACHING REVIEW AS EXCESSIVE INTERVENTION

Prior to the case filed by Congressman Enrique Garcia against the Board of
Investments, courts had steered clear of the arena of reviewing economic policy. Even in
the more recent decades before the 1990’s this tradition of deference was largely
followed.

From the cases of Chamber of Agriculture and Natural Resources v. Central Bank
(1965), Caltex, Inc. vs. Commissioner of Customs (1968), Philippine Ports Authority v.

15
Mendoza (1985), Pernito Arrastre Services v. Mendoza (1986), La Union Electric
Cooperative, Inc. v. Yaranon (1989), Maceda v. Energy Regulatory Board (1991), the
Supreme Court in effect stated a consistent doctrine; that it is best left for the executive
department to determine the factual situation when economic regulatory measures are to
be established or maintained.36 In both cases of Chamber of Agriculture and Caltex, it
bears mentioning that the Court reinforced its affirmance of the executive action by citing
Philippine obligations under the Bretton Woods Agreement. In King v. Hernaez (1962)
and C & C Commercial Corporation v. NAWASA (1967), in which the question of
preferences to Filipino citizens and employment had been questioned, the Court found
such preferences in keeping with the nationalist character of the Constitution and could
only have been to guarantee the right to pursuit of happiness that is granted its citizens
but not necessarily all others.

This reticence was seen as late as Maceda v. Energy Regulatory Board (1991),
when the Court lamented the effects of the provisional price increase of gasoline but
nevertheless upheld the ex-parte action of the ERB, though it remarked that the conduct
of an actual hearing could have been more ideal. Nevertheless, despite the lack of
substantial evidence to support the provisional price increase, the Court took judicial
notice of market events, among others.As to the absence of substantial evidence to
support the provisional relief, the SC noted that it had previously taken judicial notice of
matters and events related to the oil industry. Among the pieces of evidence considered
by ERB in the grant of the contested provisional relief were: (1) certified copies of bills
of lading issued by crude oil suppliers to the private respondents; (2) reports of the
Bankers Association of the Philippines on the peso-dollar exchange rate at the BAP oil
pit; and (3) OPSF status reports of the Office of Energy Affairs. The ERB was likewise
guided in the determination of international crude oil prices by traditional authoritative
sources of information on crude oil and petroleum products, such as Platt's Oilgram and
Petroleum Intelligence Weekly.

In a stunning reversal of its previous hesitance in delving into economic policy

and of its own pronouncement in the predecessor case, the Court did just that in 1990.
All the usual arguments on political question, separation of powers were raised against a
court review of the decision of the Board of Investments to allow the amendment of the
certificate of registration of private respondent, Luzon Petrochemical Corporation, to no
avail. The Court decided that the issue was justiciable, and this justiciable issue was put
forth in the following manner:
There is before us an actual controversy whether the petrochemical plant should remain
in Bataan or should be transferred to Batangas, and whether its feedstock originally of naphtha
only should be changed to naphtha and or liquefied petroleum gas as the approved amended
application of the BPC, now Luzon Petrochemical Corporation (LPC), shows. And in the light of
the categorical admission of the BOI that it is the investor who has the final choice of the site and
the decision on the feedstock, whether or not it constitutes a grave abuse of discretion for the BOI
to yield to the wishes of the investor, national interest notwithstanding.

36
The Chamber of Agriculture case and the Caltex case are instances when the failure to effect foreign
currency decontrol and the imposition of a margin fee for foreign-exchange denominated transactions were
respectively questioned.

16
 We rule that the Court has a constitutional duty to step into this controversy and
determine the paramount issue. We grant the petition.

The Court gave six reasons why it believed the advantages weighed in favor of
locating the petrochemical plant in Bataan and not to allow the locator to change it to
Batangas, as it had requested the Board of Investments to allow it to do so. Said the
Court:
In the light of all the clear advantages manifest in the plant's remaining in Bataan,
practically nothing is shown to justify the transfer to Batangas except a near-absolute discretion
given by BOI to investors not only to freely choose the site but to transfer it from their own first
choice for reasons which remain murky to say the least.

Those six reasons were:

First, Bataan was the original choice as the plant site of the BOI to which the BPC
agreed. That is why it organized itself into a corporation bearing the name Bataan. There is
available 576 hectares of public land precisely reserved as the petrochemical zone in Limay,
Bataan under P.D. No. 1803. There is no need to buy expensive real estate for the site unlike in the
proposed transfer to Batangas. The site is the result of careful study long before any covetous
interests intruded into the choice. The site is ideal. It is not unduly constricted and allows for
expansion. The respondents have not shown nor reiterated that the alleged peace and order
situation in Bataan or unstable labor situation warrant a transfer of the plant site to Batangas.
Certainly, these were taken into account when the firm named itself Bataan Petrochemical
Corporation. Moreover, the evidence proves the contrary.
Second, the BRC, a government owned Filipino corporation, located in Bataan produces
60% of the national output of naphtha which can be used as feedstock for the plant in Bataan. It
can provide the feedstock requirement of the plant. On the other hand, the country is short of LPG
and there is need to import the same for use of the plant in Batangas The local production thereof
by Shell can hardly supply the needs of the consumers for cooking purposes. Scarce dollars will be
diverted, unnecessarily, from vitally essential projects in order to feed the furnaces of the
transferred petrochemical plant.
Third, naphtha as feedstock has been exempted by law from the ad valorem tax by the
approval of Republic Act No. 6767 by President Aquino but excluding LPG from exemption from
ad valorem tax. The law was enacted specifically for the petrochemical industry. The policy
determination by both Congress and the President is clear. Neither BOI nor a foreign investor
should disregard or contravene expressed policy by shifting the feedstock from naphtha to LPG.
Third, naphtha as feedstock has been exempted by law from the ad valorem tax by the approval of
Republic Act No. 6767 by President Aquino but excluding LPG from exemption from ad valorem
tax. The law was enacted specifically for the petrochemical industry. The policy determination by
both Congress and the President is clear. Neither BOI nor a foreign investor should disregard or
contravene expressed policy by shifting the feedstock from naphtha to LPG.
Fourth, under Section 10, Article XII of the 1987 Constitution, it is the duty of the State
to "regulate and exercise authority over foreign investments within its national jurisdiction and in
accordance with its national goals and priorities." The development of a self-reliant and
independent national economy effectively controlled by Filipinos is mandated in Section 19,
Article II of the Constitution. In Article 2 of the Omnibus Investments Code of 1987 "the sound
development of the national economy in consonance with the principles and objectives of
economic nationalism" is the set goal of government.
Fifth, with the admitted fact that the investor is raising the greater portion of the capital
for the project from local sources by way of loan which led to the so-called "petroscam scandal",
the capital requirements would be greatly minimized if LPC does not have to buy the land for the
project and its feedstock shall be limited to naphtha which is certainly more economical, more
readily available than LPG, and does not have to be imported.

17
 Sixth, if the plant site is maintained in Bataan, the PNOC shall be a partner in the venture
to the great benefit and advantage of the government which shall have a participation in the
management of the project instead of a firm which is a huge multinational corporation.

Among the six reasons given by the Court, five are judgment calls on the
following: (1) the suitability of the designated land in Bataan versus the land in Batangas;
(2) the more prudent use by the locator of naphtha as feedstock instead of a mixed use of
naphtha and liquefied petroleum gas (LPG); (3) the preferability of naphtha as feedstock
due to the former’s tax-exempt status; (4) less use of capital inasmuch as locating in
Bataan would exempt the locator from the necessity of purchasing land with the added
advantage of using naphtha which is cheaper than LPG; and (5) benefit to the government
by way of PNOC participation in the management of the project. The other reason given
appears to be out of place in the series of reasons given.

The Court then enumerated the incentives the Philippine government had given
the Luzon Petrochemical Corporation. By this reasoning, the court said, the investor
cannot dictate his location and the Board of Investments committed grave abuse of
discretion in permitting him to so change his location:

Themajority decision elicited strong reaction from Justices Carolina Grino-

Aquino and Ameurfina Melencio-Herrera. In the words of the former:

There is no provision in the 1987 Investments Code prohibiting the amendment of the
investor's application for registration of its project, such as, in this case, its plant site, the feedstock
to be used, and the capitalization of the project. Neither does the law prohibit the BOI from
approving the amended application.
Since the investor may amend its application and the BOI may approve or disapprove the
amendments, when may the BOI be deemed to have made a "final choice" regarding those aspects
of the project which have been changed?
Only the BOI or the Chief Executive is competent to answer that question, for the matter
of choosing an appropriate site for the investor's project is a political and economic decision
which, under our system of separation of powers, only the executive branch, as implementor of
policy formulated by the legislature (in this case, the policy of encouraging and inviting foreign
investments into our country), is empowered to make. It is not for this Court to determine what is,
or should be, the BOI's "final choice" of plant site and feedstock, for, as we said in our decision in
G.R. No. 88637:
"This Court . . . does not possess the necessary technology and scientific expertise to
determine whether the transfer of the proposed BPC (now LPC) petrochemical complex from
Bataan to Batangas and the change of fuel from naphtha only to 'naphtha and/or LPG') will be best
for the project and for our country. This Court is not about to delve into the economics and politics
of this case. It is concerned simply with the alleged violation of due process and the alleged extra
limitation of power and discretion on the part of the public respondents in approving the transfer
of the project to Batangas without giving due notice and an opportunity to be heard to the vocal
opponents of that move."

In the words of Justice Herrera:

…(T)he majority has actually imposed its own views on matters falling within the competence of
a policy-making body of the Government. It decided upon the wisdom of the transfer of the site of
the proposed project (pp. 8-9); the reasonableness of the feedstock to be used (pp. 8-9); the
undesirability of the capitalization aspect of the project (p. 10), and injected its own concept of the

18
 national interest as regards the establishment of a basic industry of strategic importance to the
country (p. 13).
It is true that the judicial power embodied in Article VIII of the 1987 Constitution speaks
of the duty of Courts of justice to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality
of the Government. By no means, however, does it vest in the Courts the power to enter the realm
of policy considerations under the guise of the commission of grave abuse of discretion.
But this is exactly what the majority Decision has resulted in. It has made a sweeping
policy determination and has unwittingly transformed itself into what might be termed a
"government by the Judiciary," something never intended by the framers of the Constitution when
they provided for separation of powers among the three co-equal branches of government and
excluded the Judiciary from policy-making.

In 1992, this departure was followed by the case of PLDT v. Eastern Telecoms,
where deference to an executive decision was not observed due to the strict construction
by the Court of the terms of the legislative franchise of Eastern Telecoms.

The Uncharted Waters of Manila Prince Hotel v. GSIS (1997)

In Manila Prince Hotel v. GSIS, the Court expressed its reluctance to step into the
fray of two fiercely-competitive bidders, but found itself compelled to do so:

While it is no business of the Court to intervene in contracts of the kind referred to or set itself up
as the judge of whether they are viable or attainable, it is its bounden duty to make sure that they
do not violate the Constitution or the laws, or are not adopted or implemented with grave abuse of
discretion amounting to lack or excess of jurisdiction. Indeed, the Court will always defer to the
Constitution in the proper governance of a free society; after all, there is nothing so sacrosanct in
any economic policy as to draw itself beyond judicial review when the Constitution is involved.

Under the doctrine of constitutional supremacy, since the Constitution is the fundamental,
paramount and supreme law of the nation, it is deemed written in every statute and contract.

In case of doubt, the Constitution should be considered self-executing rather than non-
self-executing. Unless the contrary is clearly intended, the provisions of the Constitution should be
considered self-executing, as a contrary rule would give the legislature discretion to determine
when, or whether, they shall be effective. Quite apparently, Sec. 10, second par., of Art. XII is
couched in such a way as not to make it appear that it is non-self-executing but simply for
purposes of style. But, certainly, the legislature is not precluded from enacting further laws to
enforce the constitutional provision so long as the contemplated statute squares with the
Constitution. The omission from a constitution of any express provision for a remedy for
enforcing a right or liability is not necessarily an indication that it was not intended to be self-
executing. The rule is that a self-executing provision of the constitution does not necessarily
exhaust legislative power on the subject, but any legislation must be in harmony with the
constitution, further the exercise of constitutional right and make it more available.

Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art.
XII is implied from the tenor of the first and third paragraphs of the same section which
undoubtedly are not self-executing. The argument is flawed. If the first and third paragraphs are
not self-executing because Congress is still to enact measures to encourage the formation and
operation of enterprises fully owned by Filipinos, as in the first paragraph, and the State still needs
legislation to regulate and exercise authority over foreign investments within its national
jurisdiction, as in the third paragraph, then a fortiori, by the same logic, the second paragraph can
only be self-executing as it does not by its language require any legislation in order to give

19
 preference to qualified Filipinos in the grant of rights, privileges and concessions covering the
national economy and patrimony. A constitutional provision may be self-executing in one part and
non-self-executing in another.

Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command
which is complete in itself and which needs no further guidelines or implementing laws or rules
for its enforcement. From its very words the provision does not require any legislation to put it in
operation. It is per se judicially enforceable. Where there is a right there is a remedy.

The Supreme Court found itself in the eye of the storm with its decision in the
Manila Hotel case. Among the criticisms against the decision was its encouragement of
entitlements arising from the Constitution’s Declaration of State Policies and Principles.
Even without a legislative enactment by which a factual determination can be made on
whether a site belongs to the national heritage, the Court was willing to make a factual
declaration, despite the fact that it is not designed to undertake factual inquiries, that a
site is part of the national heritage with the very vague language that the Constitution
provided. Critics lamented that as against a surprise factual determination, which no party
to the bidding for Manila Hotel could have anticipated, that Manila Hotel is a historic
site, the rules of fair play required that all parties should have been apprised of the
conditions and contingencies which could affect the outcome of the bidding.

Despite the stinging criticisms, the Court found itself explaining that it was
constitutionally bound to render such a decision.

The Tatad v. Viray Puzzler (1997)

Tatad v. Viray created another dilemma on the boundaries of judicial review of

economic policies. In determining the existence of a justiciable dispute, the Court said:
In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the
Constitution, the petition no doubt raises a justiciable controversy. Where an action of the
legislative branch is seriously alleged to have infringed the Constitution, it becomes not only the
right but in fact the duty of the judiciary to settle the dispute. The question thus posed is judicial
rather than political. The duty to adjudicate remains to assure that the supremacy of the
Constitution is upheld. Once a controversy as to the application or interpretation of a constitutional
provision is raised before this Court, it becomes a legal issue which the Court is bound by
constitutional mandate to decide."

The reasons for nullifying the first Oil Deregulation Law are as follows:
(1) … the Executive department failed to follow faithfully the standards set by R.A. No. 8180
when it considered the extraneous factor of depletion of the OPSF fund. The misappreciation
of this extra factor cannot be justified on the ground that the Executive department considered
anyway the stability of the prices of crude oil in the world market and the stability of the
exchange rate of the peso to the dollar. By considering another factor to hasten full
deregulation, the Executive department rewrote the standards set forth in R.A. 8180.
(2) Monopolistic or oligopolistic markets deserve our careful scrutiny and laws which barricade
the entry points of new players in the market should be viewed with suspicion. … Prescinding
from these baseline propositions, we shall proceed to examine whether the provisions of R.A.
No. 8180 on tariff differential, inventory reserves, and predatory prices imposed substantial
barriers to the entry and exit of new players in our downstream oil industry. If they do, they
have to be struck down for they will necessarily inhibit the formation of a truly competitive

20
 market. … our downstream oil industry is operated and controlled by an oligopoly, a foreign
oligopoly at that. Petron, Shell and Caltex stand as the only major league players in the oil
market. All other players belong to the lilliputian league. As the dominant players, Petron,
Shell and Caltex boast of existing refineries of various capacities. The tariff differential of 4%
therefore works to their immense benefit. Yet, this is only one edge of the tariff differential….
The provision on inventory widens the balance of advantage of Petron, Shell and Caltex
against prospective new players. Petron, Shell and Caltex can easily comply with the
inventory requirement of R.A. No. 8180 in view of their existing storage facilities.
Prospective competitors again will find compliance with this requirement difficult as it will
entail a prohibitive cost. The construction cost of storage facilities and the cost of inventory
can thus scare prospective players. Their net effect is to further occlude the entry points of
new players, dampen competition and enhance the control of the market by the three (3)
existing oil companies…. Considering these significant barriers established by R.A. No. 8180
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 chilling
reality. Petitioners' charge that this provision on predatory pricing is anti-competitive is not
without reason.

The Court proceeded to say:

The fall out effects of the defects of R.A. No. 8180 on our people have not escaped Congress. A
lot of our leading legislators have come out openly with bills seeking the repeal of these odious
and offensive provisions in R.A. No. 8180.
…
With this Decision, some circles will chide the Court for interfering with an economic decision of
Congress. Such criticism is charmless for the Court is annulling R.A. No. 8180 not because it
disagrees with deregulation as an economic policy but because as cobbled by Congress in its
present form, the law violates the Constitution. The right call therefor should be for Congress to
write a new oil deregulation law that conforms with the Constitution and not for this Court to shirk
its duty of striking down a law that offends the Constitution. Striking down R.A. No. 8180 may
cost losses in quantifiable terms to the oil oligopolists. But the loss in tolerating the tampering of
our Constitution is not quantifiable in pesos and centavos. More worthy of protection than the
supra-normal profits of private corporations is the sanctity of the fundamental principles of the
Constitution.

In a concurring opinion, Justice Artemio Panganiban said:

By annulling RA 8180, this Court is not making a policy statement against deregulation.
Quite the contrary, it is simply invalidating a pseudo deregulation law which in reality restrains
free trade and perpetuates a cartel, an oligopoly. The Court is merely upholding constitutional
adherence to a truly competitive economy that releases the creative energy of free enterprise. It
leaves to Congress, as the policy-setting agency of the government, the speedy crafting of a
genuine, constitutionally justified oil deregulation law.

I can understand foreign investors who see these price adjustments as necessary
consequences of the country's adherence to the free market, for that, in the first place, is the
magnet for their presence here. Understandably, their concern is limited to bottom lines and
market share. But in all these mega companies, there are also Filipino entrepreneurs and managers.
I am sure there are patriots among them who realize that, in times of economic turmoil, the poor
and the underprivileged proportionately suffer more than any other sector of society.

The dissent was equally spirited. Led by the lengthy and thorough opinion of
Justice Francisco, it disputed point-by-point the ponencia.

21
 …if the noble and laudable objective of this enactment is not accomplished, as to date oil prices
continue to rise, can this Court be called upon to declare the statute unconstitutional or must the
Court desist from interfering in a matter which is best left to the other branches of government?

A careful scrutiny of the arguments proffered against the constitutionality of Republic

Act No. 8180 betrays the petitioners' underlying motive of calling upon this Court to determine the
wisdom and efficacy of the enactment rather than its adherence to the Constitution.

The contention that tariff "does not foster a truly competitive market" and therefore
restrains trade and does not help achieve the purpose of deregulation is an issue not within the
power of the Court to resolve.

The dissent of Justice Melo demonstrated, point-by-point, the opposite judgment

regarding the individual and cumulative effects of the provisions of the law on the 4%
tariff differential, the 40-day inventory requirement, and the definition of predatory
pricing. Ultimately, his point was that both the executive and legislative department had
determined that the three contested features of the law were in fact, necessary to preserve
the competitive environment by allowing both new and old players to incur, on the
whole, the same level of costs.

Tatad v. Viray provides the most important clue on the possibly dominant
thinking of the Court. It reveals a number of things:

First, that the Court does not trust the two branches of government to do their jobs
correctly. Contrary to the claim of the Court that they were not intruding into the domain
of the legislature, the fact is that they were. 37
Second, it will undertake a factual evaluation on the effects on the market of legal
mechanisms provided in a statute. However, this factual evaluation is bereft of any
econometric analysis on the implication on relative costs brought about by the tariff
differential, it did not evaluate the security problem sought to be addressed by the 40-day
inventory requirement, and the rule against predatory pricing was not evaluated on its
capability in fact to minimize strong-arm tactics which could have been launched by the
big three oil companies.
The decision is replete with strong language against the simultaneous increase in
prices by the three oil companies. Apparently, it was the successive rounds of increases
and the lack of a government mechanism to stop market forces that justified the increases
that served as the principal motive for the decision.

37
This has been a direct partial result of losing legislators’ propensity to file a taxpayers’ suit upon losing
their legislative battle in either house of Congress. The government has sought to invariably disqualify
them on the ground that the legislators are merely redebating the issue. Since Kilosbayan, however, the
locus standi of legislators has been accepted when brought in the capacity of taxpayers, or when there are
non-legislators who are also petitioners in the suit. The question is still troubling, however, inasmuch as the
Constitution expressly prohibits legislators from appearing as counsel in courts or quasi-judicial
proceedings on the fear of undue influence on the proceedings. (cite Consti. Here) The limitation was later
clarified to cover only personal appearances, the legislator being thereby allowed to still retain participation
in a professional partnership that represents parties to these proceedings. In allowing legislators to be
petitioners in these actions, is not the intent of the Constitution to prevent undue influence on litigated
proceedings being violated. Note that the legislators who are suing as taxpayers are still referred to in the
decisions by the honorific titles of Senators or Congressmen, indicating a recognition that they are parties
principally in their legislative capacities.

22
 Third, the Court does not mind in any manner, the fact that legislators turn out to
be the most active litigants against laws the passage of which they fought against in
Congress. There is therefore no stopping the policy debate in Congress until it reaches the
halls of the Supreme Court

The Danger in the Oposa Doctrine

Although the Oposa case has been lauded as promoting the international goal of
sustainable development, hence, a politically “progressive”, case, its pronouncements is
not without dangers. One simply has to look at the ponencia of Chief Justice Davide to
realize the possibilities:
It must, nonetheless, be emphasized that the political question doctrine is no longer the
insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects
executive and legislative actions from judicial inquiry or review. The second paragraph of section
1, Article VIII of the Constitution states that: "Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government."
Commenting on this provision in his book, Philippine Political Law, Mr. Justice Isagani A. Cruz, a
distinguished member of this Court, says: "The first part of the authority represents the traditional
concept of judicial power, involving the settlement of conflicting rights as conferred by law. The
second part of the authority represents a broadening of judicial power to enable the courts of
justice to review what was before forbidden territory, to wit, the discretion of the political
departments of the government. As worded, the new provision vests in the judiciary, and
particularly the Supreme Court, the power to rule upon even the wisdom of the decisions of the
executive and the legislature and to declare their acts invalid for lack or excess of jurisdiction
because tainted with grave abuse of discretion. The catch, of course, is the meaning of 'grave
abuse of discretion,' which is a very elastic phrase that can expand or contract according to the
disposition of the judiciary."

Justice Feliciano was sufficiently alarmed by the majority decision in Oposa that
he gave a serious warning about its possible consequences:
Two (2) points are worth making in this connection. Firstly, neither petitioners nor the
Court has identified the particular provision or provisions (if any) of the Philippine Environment
Code which give rise to a specific legal right which petitioners are seeking to enforce. Secondly,
the Philippine Environment Code identifies with notable care the particular government agency
charged with the formulation and implementation of guidelines and programs dealing with each of
the headings and sub-headings mentioned above. The Philippine Environment Code does not, in
other words, appear to contemplate action on the part of private persons who are beneficiaries of
implementation of that Code.
As a matter of logic, by finding petitioners' cause of action as anchored on a legal right
comprised in the constitutional statements above noted, the Court is in effect saying that Section
15 (and Section 16) of Article II of the Constitution are self-executing and judicially enforceable
even in their present form. The implications of this doctrine will have to be explored in future
cases; those implications are too large and far-reaching in nature even to be hinted at here.
My suggestion is simply that petitioners must, before the trial court, show a more specific legal
right — a right cast in language of a significantly lower order of generality than Article II (15) of
the Constitution — that is or may be violated by the actions, or failures to act, imputed to the
public respondent by petitioners so that the trial court can validly render judgment granting all or

23
 part of the relief prayed for. To my mind, the Court should be understood as simply saying that
such a more specific legal right or rights may well exist in our corpus of law, considering the
general policy principles found in the Constitution and the existence of the Philippine
Environment Code, and that the trial court should have given petitioners an effective opportunity
so to demonstrate, instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a cause
of action be a specific, operable legal right, rather than a constitutional or statutory policy, for at
least two (2) reasons. One is that unless the legal right claimed to have been violated or
disregarded is given specification in operational terms, defendants may well be unable to defend
themselves intelligently and effectively; in other words, there are due process dimensions to this
matter.
The second is a broader-gauge consideration — where a specific violation of law or
applicable regulation is not alleged or proved, petitioners can be expected to fall back on the
expanded conception of judicial power in the second paragraph of Section 1 of Article VIII of the
Constitution which reads:
"Section 1. Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government." (Emphases supplied)
When substantive standards as general as "the right to a balanced and healthy ecology"
and "the right to health" are combined with remedial standards as broad ranging as "a grave abuse
of discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully
submitted, to propel courts into the uncharted ocean of social and economic policy making. At
least in respect of the vast area of environmental protection and management, our courts have no
claim to special technical competence and experience and professional qualifications. Where no
specific, operable norms and standards are shown to exist, then the policy making departments —
the legislative and executive departments — must be given a real and effective opportunity to
fashion and promulgate those norms and standards, and to implement them before the courts
should intervene.

OUTLINE OF A SOLUTION

The Promise of Tanada v. Angara

Justice Panganiban, who in Tatad v. Viray, lambasted businessmen for apparently

making indecent profits at the expense of the ordinary consumers seemed to have a
different perspective in his ponencia in this case of Tanada v. Angara, written just six
months before he wrote a concurrence in Tatad v. Viray:
”The emergence on January 1, 1995 of the World Trade Organization, abetted by the
membership thereto of the vast majority of countries, has revolutionized international business and
economic relations amongst states. It has irreversibly propelled the world towards trade
liberalization and economic globalization. Liberalization, globalization, deregulation and
privatization, the third-millennium buzz words, are ushering in a new borderless world of business
by sweeping away as mere historical relics the heretofore traditional modes of promoting and
protecting national economies like tariffs, export subsidies, import quotas, quantitative
restrictions, tax exemptions and currency controls. Finding market niches and becoming the best
in specific industries in a market-driven and export-oriented global scenario are replacing age-old
"beggar-thy-neighbor" policies that unilaterally protect weak and inefficient domestic producers of
goods and services. In the words of Peter Drucker, the well-known management guru, "Increased
participation in the world economy has become the key to domestic economic growth and
prosperity."
…That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent
to the WTO Agreement thereby making it "a part of the law of the land" is a legitimate exercise of

24
 its sovereign duty and power. We find no "patent and gross" arbitrariness or despotism "by reason
of passion or personal hostility" in such exercise. It is not impossible to surmise that this Court, or
at least some of its members, may even agree with petitioners that it is more advantageous to the
national interest to strike down Senate Resolution No. 97. But that is not a legal reason to attribute
grave abuse of discretion to the Senate and to nullify its decision. To do so would constitute grave
abuse in the exercise of our own judicial power and duty. Ineludably, what the Senate did was a
valid exercise of its authority. As to whether such exercise was wise, beneficial or viable is outside
the realm of judicial inquiry and review. That is a matter between the elected policy makers and
the people. As to whether the nation should join the worldwide march toward trade liberalization
and economic globalization is a matter that our people should determine in electing their policy
makers.

It was a unanimous decision by a Court that decided that the Constitution could
not be deemed to preclude changes that would not have been expected to transpire in the
economic landscape when the Constitution was written.

The Desistance in Garcia v. Corona

Garcia v. Corona was brought by the petitioner to prevent the deregulation of the
oil industry through the lifting of price controls under the second Oil Deregulation Law.
The Court unanimously voted to reject the petition and the reason for the non-cognizance
of the petition is interestingly worded:

The Department of Energy Act of 1992 expressly mandates that the development and
updating of the existing Philippine energy program "shall include a policy direction towards
deregulation of the power and energy industry."
Be that as it may, we are not concerned with whether or not there should be deregulation.
This is outside our jurisdiction. The judgment on the issue is a settled matter and only Congress
can reverse it. Rather, the question that we should address here is — are the method and the
manner chosen by Government to accomplish its cherished goal offensive to the Constitution? Is
indefinite price control in the manner proposed by petitioner the only feasible and legal way to
achieve it?

The Court emphasized the policy function of Congress and the Executive over
which it would not transgress and it was only in instances of clear violations of
constitutional imperatives that the judiciary would step in.

The Recognition of Private Transactions in Asian Alcohol v. NLRC and the Free
Enterprise System (not Laissez Faire) in Association of Coconut Producers Case

It has been widely accepted that Philippine jurisprudence and all interpretations of
law on the matter are strongly pro-labor. It was thus a new direction that the Court took,
when in upholding the validity of a quitclaim issued in consideration of generous
separation benefits, the Court recognized the importance of guaranteeing once more the
sanctity of contracts. The Court said:

It is true that this Court has generally held that quitclaims and releases are contrary to
public policy and therefore, void. Nonetheless, voluntary agreements that represent a reasonable
settlement are binding on the parties and should not later be disowned. It is only where there is
clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of

25
 the settlement are unconscionable, that the law will step in to bail out the employee. While it is our
duty to prevent the exploitation of employees, it also behooves us to protect the sanctity of
contracts that do not contravene our laws.
In the case at bar, there is no showing that the quitclaims, waivers and voluntary
resignation letters were executed by the private respondents under force or duress. In truth, the
documents embodied separation benefits that were well beyond what the company was legally
required to give private respondents.38

In Association of Philippine Coconut Desiccators v. Philippine Coconut Authority

(1998), the Court said that while the Constitutions, beginning with the 1935 document,
have repudiated laissez-faire as an economic principle, it nevertheless recognizes free
enterprise, but reserving to the government the power to intervene whenever necessary to
promote the general welfare.

The Warning and Compromise Solution of Justice Feliciano in Oposa v. Factoran

Justice Feliciano has warned against the danger of an overly broad construction of
general statements in the Constitution, such as those found in the Article on Declaration
of State Policies and Principles, together with a liberal construction of the power of
judicial review under Article XII, sec. 1. He has spoken of the implications of having
read more into the general statements in the Constitution as: “too large and far-reaching
in nature even to be hinted at here.”

He requests the Court to give room for effective policy-formulation by the two
political departments of government. This call was reaffirmed by other justices in the
case of Garcia v. Corona. Justice Feliciano would have wanted a thorough fact-finding by
the lower court based on specific, operable, rights embodied in statutes. In other words,
the factual nexus between the right sought to be protected and the harm feared should be
tightly established.

The formula can very well apply in economic cases. When the right, such as the
right of a losing party in a bidding for a government project is sought to be protected
through court litigation, then the nexus must be tightly drawn, and always within the
context of allowing the legislature and the executive more room within which to draw up
policy.

Judicial Self-Interest and the Benefits of Self-Limitation

Justice Panganiban, in Tanada v. Angara, and Justice Santiago, in Garcia v.

Corona, spoke of the danger of judicial abuse of discretion. The danger to the institution
arises from a legitimate self-interest to protect the court’s credibility in the eyes of the
38
As late as 1986, of course, the contracts clause was very clearly placed in a lower rung than the due
process clause. In Pernito Arrastre Services v. Mendoza (1986), the Court said: Neither can petitioners
argue that their right to non-impairment of contract had been violated. It is settled that the contract clause is
subservient to the police power enacting public regulations intended for the general welfare of the
community.

26
public. This credibility can be seriously damaged if the court will venture into “the
uncharted waters of policy-making”, over which it has no claimed expertise.

Another aspect of self-interest has to do with a more practical consideration. The

dockets of courts, including that of the Supreme Court has not been at all relieved, even
with the series of reform measures the judiciary has undertaken. A most effective way of
relieving this congestion is by deliberately limiting the judiciary’s involvement in
economic policies. There must be an examination of whether the human resource
capability as well as the physical infrastructure of the courts can still justify cognizance
of cases involving economic policies.

Anticipating Judicial Contests: Designing Uncontestable Processes

When the court in Tatad v. Viray, decided to determine on its own the effects of
the three questioned provisions on the conditions of the oil market, it effectively
substituted its evaluative processes for that of Congress and the Executive. Apparently, it
was not impressed by the amount of work put in by both departments.

Knowing that in this case as well as in the case of Garcia v. Board of Investments,
the Court did not hesitate to take cost and benefit analysis, the government must appeal to
the doctrine in Garcia v. Corona, by demonstrating the thoroughness by which the
process of policy-formulation was undertaken, and demonstrate convincingly, that the
complainants were heard, their inputs were seriously evaluated, and that the economic
goals of the Constitution were always observed as parameters in the process of decision-
making. There appears to be a failure on the part of the government to appreciate the fact
that the majority of the Supreme Court has long abandoned the traditional definition of
the political question doctrine. Rather, the Court is more willing to engage in debates
over more progressive economic ideas. This was personally observed by this author in the
debates surrounding Tanada v. Angara, as well as Tatad v. Viray.

CONCLUSIONS

The Court itself, far from showing a distaste for the messy task of finding the
breadth and contours of the parameters within which it will review cases where the
remedy sought is a reversal or amendment of an economic policy or program, has shown
much intellectual fortitude in continuing the search. In the light of the various debates it
has had on the matter, there are threads of common logic and values that run through
them:

First, it must be presumed that the Court will fully support the goals of the
national economy as defined by Art. __, sec. 1, and hence it will not consciously sanction
any situation where the result is a nullification of those goals;
Second, the Court has identified certain economic participants whom it is sworn
to defend, some of which are:
-local producers and businessmen from unfair foreign competition;

27
 -local entities’ preference in the grant of franchises;
-consumer welfare as against recovery of large capital investments;
Third, the Court recognizes the primacy of the legislature and the executive over
the matter of economic policies and will still attempt to defer to their wisdom;
Fourth, there is a recognition by the Court of the complexity which globalization
has inevitably brought on the Filipino nation, and
Fifth, there are attempts by the Court, to perform factual evaluation of economic
data and projections, and it has come under very heavy criticism every time it does this,
even from among its own members.

If the Court were to approach economic cases as observed in the above five items,
it is possible that the basic requirement of economic planning, which requires making
“temporal trade-offs” will not be sufficiently factored in. In the world of economic
development, one stage of development can only be attained by trading-off temporary
benefits for a longer and greater yield in the long run.

The uniform assessment on the Philippine economy, however, is that there are
serious “structural weaknesses” in our economy that prevents our constitution’s economic
goals from being achieved. The assessment can be found in all the most important
documents issued by the national government, by economic academia, as well as
international financial and development institutions. For example, “rising productivity” is
directly impaired by weak labor productivity, poor delivery infrastructure and high input
costs. Sadly, all the prescriptions to solve these “structural weaknesses” are deeply
painful to almost all sectors, including the poor and already-marginalized. To service the
latter and build sufficient infrastructure to maintain even a mediocre level of growth will
compel government to either borrow heavily or open up investment opportunities for
those who have more capital39 Until credible economic studies show that the present rate
of growth, low as it is can be maintained without further liberalizing the investment
environment, then government economic planners, to achieve the constitution’s
objectives, may be required to undertake programs that in the eyes and tradition of
economic nationalists, are not acceptable. There may, however, be little choice.

The Court may also not have considered sufficiently the doctrine of “political
accountability”. Since it is the executive and the legislature that are responsible for
formulating and implementing economic policies, in the absence of clear showing that
there is grave abuse of discretion, the Court could leave it to the political process to
decide whether the people believe that their government has fulfilled its constitutional
mandate or not. Unless, however, the Court, does not believe that the electorate should be
left with this decision. In which case, there is a serious question on whether the Court
properly sees the line to which the people, through the Constitution, bound it. Unless the
Court believes that the people should be spared from the lack of wisdom of the two other
branches. Unless the Court believes that judicial abuse of discretion is a better fate than
legislative foolishness.

39
See Report of the Preparatory Commission on Constitutional Reform, supra.

28
 If the above were to be accepted as the perspective from which a review of
economic policies may be held, then the following approach is proposed:

Heeding the advice in Oposa v. Factoran, the power of judicial review should not
be read overly-broad as to intrude into the “uncharted ocean of policy-making.” The
declaration of principles and other provisions in the Constitution that have been identified
in this paper as having an economic impact, should not be read liberally to avoid the
danger warned against. In other words, there must be a lower-level, or a more specific
level from which rights and causes of actions can arise. The availability of a cause of
action in Oposa v. Factoran should therefore be read narrowly to apply in the unique
context in which it was written;

Heeding the warning of Garcia v. Executive Secretary on judicial abuse of

discretion, it is proposed that the Court should refrain from intruding even when it
believes that there is folly in a legislative or executive policy choice. One evil is not to be
preferred over the other;

Heeding the advice in the Luzon Petrochemical case, it is proposed that the Court
restrain itself from making any factual evaluation, analysis or even scenario-projections
on the economic or business wisdom of any government action, and in the absence of
evident malice, the evaluation of the duly-authorized office of government should be
given sufficient credence;

Heeding the warnings in Tatad v. Viray, issues which have been sufficiently
debated in the halls of Congress and in the drawing rooms of the executive, assuming the
legal requirements for hearings and consultations have been complied with, should
perhaps not be re-debated in the courts. Errors in policy choices must be corrected
through political and not judicial means. The moment that compliance with the formal
due process requirements have been shown, then only a clear showing of a violation of a
constitutional prohibition should embolden the court to step forward and declare the act
of the other two branches unconstitutional.

Lastly, from a position of institutional self-interest, the judiciary can preserve its
human resources and its societal role by discharging more effectively the duties for which
it has been adequately trained: that of adjudicating clearly contestable disputes. The
science of economics, on the other hand, is founded on the making of assumptions and
projections, a most dangerous task that the constitution has declared the executive and the
legislature, but not the courts, must practice.

29
 APPENDIX A
(Partial List of Cases)

U.S. v. Ang Tang Ho (1922)

PEOPLE V. POMAR (1924)

KING, ET AL. VS. HERNAEZ, ET AL., [G.R. No. L-14859. March 31, 1962.]

CHAMBER OF AGRICULTURE AND NATURAL RESOURCES OF THE PHILIPPINES, ET AL. vs.

Central Bank [G.R. No. L-23244. June 30, 1965]

UNIVERSAL CORN PRODUCTS, INC., ET AL. VS. RICE AND CORN BOARD, ET AL. [G.R. No.
L-21013. August 17, 1967.]

C & C COMMERCIAL CORPORATION VS. NAWASA [G.R. No. L-27275. November 18,
1967.]

ACCFA V. CUGCO (1969)

CALTEX (PHILIPPINES) INC. VS. ACTING COMMISSIONER OF CUSTOMS [G.R. No. L-

24619. February 26, 1968.]

EDU VS. ERICTA [G.R. No. L-32096. October 24, 1970.]

ALFANTA vs. NOE [G.R. No. L-32362. September 19, 1973.]

ASSOCIATION OF RICE & CORN PRODUCERS OF THE PHILIPPINES, INC. VS. NATIONAL
LAND REFORM COUNCIL [G.R. No. L-29007. April 30, 1982.]

REPARATIONS COMMISSION VS. MORFE [G.R. No. L-35796. January 31, 1983.]

PHILIPPINE PORTS AUTHORITY VS. MENDOZA [G.R. No. L-48304. September 11, 1985.]

PERNITO ARRASTRE SERVICES, INC. VS. MENDOZA [G.R. No. L-53492. December 29,
1986.]

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC. VS. SECRETARY OF

AGRARIAN REFORM [G.R. No. 78742. July 14, 1989.]

GARCIA VS. BOARD OF INVESTMENTS [G.R. No. 88637. September 7, 1989.]

LA UNION ELECTRIC COOPERATIVE, INC. (LUELCO) VS. YARANON [G.R. No. 87001.
December 4, 1989.]

30
LAUREL VS. GARCIA [G.R. No. 92013. July 25, 1990.]

GARCIA VS. BOARD OF INVESTMENTS (BOI) [G.R. No. 92024. November 9, 1990.]

BASCO VS. PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR) [G.R. No.
91649. May 14, 1991.]

MACEDA VS. ENERGY REGULATORY BOARD [G.R. No. 96266. July 18, 1991.]

GARCIA VS. THE EXECUTIVE SECRETARY [G.R. No. 100883. December 2, 1991.]

PLDT Co. vs. EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. [G.R. No.

94374. August 27, 1992.]

KILOSBAYAN, INC. VS. GUINGONA, JR. [G.R. No. 113375. May 5, 1994.]

TATAD VS. GARCIA, JR. [G.R. No. 114222. April 6, 1995.]

MANILA PRINCE HOTEL vs. GSIS (G.R. No. 122156. February 3, 1997)

TAÑADA vs. ANGARA (G.R. No. 118295. May 2, 1997)

TATAD vs. THE SECRETARY OF THE DEPARTMENT OF ENERGY ET AL. (G.R. No. G.R. No.
124360. November 5, 1997)

ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS VS. PHILIPPINE COCONUT

AUTHORITY (G.R. No. 110526. February 10, 1998)

31