The Lawphil Project - Arellano Law Foundation Philippine Jurisprudence Full text Republic of the Philippines SUPREME COURT

T Manila EN BANC G.R. No. 164978, October 13, 2005 AQUILINO Q. PIMENTEL, JR., EDGARDO J. ANGARA, JUAN PONCE ENRILE, LUISA P. EJERCITOESTRADA, JINGGOY E. ESTRADA, PANFILO M. LACSON, ALFREDO S. LIM, JAMBY A.S. MADRIGAL, and SERGIO R. OSMEA III, Petitioners, vs. EXEC. SECRETARY EDUARDO R. ERMITA, FLORENCIO B. ABAD, AVELINO J. CRUZ, JR., MICHAEL T. DEFENSOR, JOSEPH H. DURANO, RAUL M. GONZALEZ, ALBERTO G. ROMULO, RENE C. VILLA, and ARTHUR C. YAP, Respondents. DECISION CARPIO, J.: The Case This is a petition for certiorari and prohibition[1] with a prayer for the issuance of a writ of preliminary injunction to declare unconstitutional the appointments issued by President Gloria Macapagal-Arroyo ("President Arroyo") through Executive Secretary Eduardo R. Ermita ("Secretary Ermita") to Florencio B. Abad, Avelino J. Cruz, Jr., Michael T. Defensor, Joseph H. Durano, Raul M. Gonzalez, Alberto G. Romulo, Rene C. Villa, and Arthur C. Yap ("respondents") as acting secretaries of their respective departments. The petition also seeks to prohibit respondents from performing the duties of department secretaries. Antecedent Facts The Senate and the House of Representatives ("Congress") commenced their regular session on 26 July 2004. The Commission on Appointments, composed of Senators and Representatives, was constituted on 25 August 2004. Meanwhile, President Arroyo issued appointments[2] to respondents as acting secretaries of their respective departments. Appointee Department Date of Appointment Arthur C. Yap Agriculture 15 August 2004 Alberto G. Romulo Foreign Affairs 23 August 2004 Raul M. Gonzalez Justice 23 August 2004 Florencio B. Abad Education 23 August 2004 Avelino J. Cruz, Jr. National Defense 23 August 2004 Rene C. Villa

Agrarian Reform 23 August 2004 Joseph H. Durano Tourism 23 August 2004 Michael T. Defensor Environment and Natural Resources 23 August 2004 The appointment papers are uniformly worded as follows: Sir: Pursuant to the provisions of existing laws, you are hereby appointed ACTING SECRETARY, DEPARTMENT OF (appropriate department) vice (name of person replaced). By virtue hereof, you may qualify and enter upon the performance of the duties and functions of the office, furnishing this Office and the Civil Service Commission with copies of your Oath of Office. (signed) Gloria Arroyo Respondents took their oath of office and assumed duties as acting secretaries. On 8 September 2004, Aquilino Q. Pimentel, Jr. ("Senator Pimentel"), Edgardo J. Angara ("Senator Angara"), Juan Ponce Enrile ("Senator Enrile"), Luisa P. Ejercito-Estrada ("Senator Ejercito-Estrada"), Jinggoy E. Estrada ("Senator Estrada"), Panfilo M. Lacson ("Senator Lacson"), Alfredo S. Lim ("Senator Lim"), Jamby A.S. Madrigal ("Senator Madrigal"), and Sergio R. Osmea, III ("Senator Osmea") ("petitioners") filed the present petition as Senators of the Republic of the Philippines. Congress adjourned on 22 September 2004. On 23 September 2004, President Arroyo issued ad interim appointments[3] to respondents as secretaries of the departments to which they were previously appointed in an acting capacity. The appointment papers are uniformly worded as follows: Sir: Pursuant to the provisions of existing laws, you are hereby appointed SECRETARY [AD INTERIM], DEPARTMENT OF (appropriate department). By virtue hereof, you may qualify and enter upon the performance of the duties and functions of the office, furnishing this Office and the Civil Service Commission with copies of your oath of office. (signed) Gloria Arroyo Issue The petition questions the constitutionality of President Arroyos appointment o f respondents as acting secretaries without the consent of the Commission on Appointments while Congress is in session. The Courts Ruling The petition has no merit. Preliminary Matters On the Mootness of the Petition The Solicitor General argues that the petition is moot because President Arroyo had extended to respondents ad interim appointments on 23 September 2004 immediately after the recess of Congress. As a rule, the writ of prohibition will not lie to enjoin acts already done.[4] However, as an exception to the rule on mootness, courts will decide a question otherwise moot if it is capable of repetition yet evading review.[5] In the present case, the mootness of the petition does not bar its resolution. The question of the constitutionality of the Presidents appointment of department secretaries in an acting capacity while Congress is in session will arise in every such appointment. On the Nature of the Power to Appoint

The power to appoint is essentially executive in nature, and the legislature may not interfere with the exercise of this executive power except in those instances when the Constitution expressly allows it to interfere.[6] Limitations on the executive power to appoint are construed strictly against the legislature.[7] The scope of the legislatures interference in the executives power to appoint is limited to the power to prescribe the qualifications to an appointive office. Congress cannot appoint a person to an office in the guise of prescribing qualifications to that office. Neither may Congress impose on the President the duty to appoint any particular person to an office.[8] However, even if the Commission on Appointments is composed of members of Congress, the exercise of its powers is executive and not legislative. The Commission on Appointments does not legislate when it exercises its power to give or withhold consent to presidential appointments. Thus: xxx The Commission on Appointments is a creature of the Constitution. Although its membership is confined to members of Congress, said Commission is independent of Congress. The powers of the Commission do not come from Congress, but emanate directly from the Constitution. Hence, it is not an agent of Congress. In fact, the functions of the Commissioner are purely executive in nature. xxx[9] On Petitioners Standing The Solicitor General states that the present petition is a quo warranto proceeding because, with the exception of Secretary Ermita, petitioners effectively seek to oust respondents for unlawfully exercising the powers of department secretaries. The Solicitor General further states that petitioners may not claim standing as Senators because no power of the Commission on Appointments has been "infringed upon or violated by the President. xxx If at all, the Commission on Appointments as a body (rather than individual members of the Congress) may possess standing in this case."[10] Petitioners, on the other hand, state that the Court can exercise its certiorari jurisdiction over unconstitutional acts of the President.[11] Petitioners further contend that they possess standing because President Arroyos appointment of department secretaries in an acting capacity while Congress is in session impairs the powers of Congress. Petitioners cite Sanlakas v. Executive Secretary[12] as basis, thus: To the extent that the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exercise of the powers of that institution. An act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which can be questioned by a member of Congress. In such a case, any member of Congress can have a resort to the courts. Considering the independence of the Commission on Appointments from Congress, it is error for petitioners to claim standing in the present case as members of Congress. President Arroyos issuance of acting appointments while Congress is in session impairs no power of Congress. Among the petitioners, only the following are members of the Commission on Appointments of the 13th Congress: Senator Enrile as Minority Floor Leader, Senator Lacson as Assistant Minority Floor Leader, and Senator Angara, Senator Ejercito-Estrada, and Senator Osmea as members. Thus, on the impairment of the prerogatives of members of the Commission on Appointments, only Senators Enrile, Lacson, Angara, Ejercito-Estrada, and Osmea have standing in the present petition. This is in contrast to Senators Pimentel, Estrada, Lim, and Madrigal, who, though vigilant in protecting their perceived prerogatives as members of Congress, possess no standing in the present petition. The Constitutionality of President Arroyos Issuance of Appointments to Respondents as Acting Secretaries Petitioners contend that President Arroyo should not have appointed respondents as acting secretaries because "in case of a vacancy in the Office of a Secretary, it is only an Undersecretary who can be designated as Acting Secretary."[13] Petitioners base their argument on Section 10, Chapter 2, Book IV of Executive Order No. 292 ("EO 292"),[14] which enumerates the powers and duties of the undersecretary. Paragraph 5 of Section 10 reads: SEC. 10. Powers and Duties of the Undersecretary. - The Undersecretary shall:

xxx (5) Temporarily discharge the duties of the Secretary in the latters absence or inability to discharge his duties for any cause or in case of vacancy of the said office, unless otherwise provided by law. Where there are more than one Undersecretary, the Secretary shall allocate the foregoing powers and duties among them. The President shall likewise make the temporary designation of Acting Secretary from among them; and xxx Petitioners further assert that "while Congress is in session, there can be no appointments, whether regular or acting, to a vacant position of an office needing confirmation by the Commission on Appointments, without first having obtained its consent."[15] In sharp contrast, respondents maintain that the President can issue appointments in an acting capacity to department secretaries without the consent of the Commission on Appointments even while Congress is in session. Respondents point to Section 16, Article VII of the 1987 Constitution. Section 16 reads: SEC. 16. The President shall nominate and, with the consent of the Commission on Appointments, appoint the heads of the executive departments, ambassadors, other public ministers and consuls, or officers of the armed forces from the rank of colonel or naval captain, and other officers whose appointments are vested in him in this Constitution. He shall also appoint all other officers of the Government whose appointments are not otherwise provided for by law, and those whom he may be authorized by law to appoint. The Congress may, by law, vest the appointment of other officers lower in rank in the President alone, in the courts, or in the heads of departments, agencies, commissions, or boards. The President shall have the power to make appointments during the recess of the Congress, whether voluntary or compulsory, but such appointments shall be effective only until disapproval by the Commission on Appointments or until the next adjournment of the Congress. Respondents also rely on EO 292, which devotes a chapter to the Presidents power of appointment. Sections 16 and 17, Chapter 5, Title I, Book III of EO 292 read: SEC. 16. Power of Appointment. The President shall exercise the power to appoint such officials as provided for in the Constitution and laws. SEC. 17. Power to Issue Temporary Designation. (1) The President may temporarily designate an officer already in the government service or any other competent person to perform the functions of an office in the executive branch, appointment to which is vested in him by law, when: (a) the officer regularly appointed to the office is unable to perform his duties by reason of illness, absence or any other cause; or (b) there exists a vacancy[.] (2) The person designated shall receive the compensation attached to the position, unless he is already in the government service in which case he shall receive only such additional compensation as, with his existing salary, shall not exceed the salary authorized by law for the position filled. The compensation hereby authorized shall be paid out of the funds appropriated for the office or agency concerned. (3) In no case shall a temporary designation exceed one (1) year. (Emphasis supplied) Petitioners and respondents maintain two diametrically opposed lines of thought. Petitioners assert that the President cannot issue appointments in an acting capacity to department secretaries while Congress is in session because the law does not give the President such power. In contrast, respondents insist that the President can issue such appointments because no law prohibits such appointments. The essence of an appointment in an acting capacity is its temporary nature. It is a stop-gap measure intended to fill an office for a limited time until the appointment of a permanent occupant to the office.[16] In case of vacancy in an office occupied by an alter ego of the President, such as the office of a department secretary, the President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume office. Congress, through a law, cannot impose on the President the obligation to appoint automatically the undersecretary as her temporary alter ego. An alter ego, whether temporary or permanent, holds a

position of great trust and confidence. Congress, in the guise of prescribing qualifications to an office, cannot impose on the President who her alter ego should be. The office of a department secretary may become vacant while Congress is in session. Since a department secretary is the alter ego of the President, the acting appointee to the office must necessarily have the Presidents confidence. Thus, by the very nature of the office of a department secretary, the President must appoint in an acting capacity a person of her choice even while Congress is in session. That person may or may not be the permanent appointee, but practical reasons may make it expedient that the acting appointee will also be the permanent appointee. The law expressly allows the President to make such acting appointment. Section 17, Chapter 5, Title I, Book III of EO 292 states that "[t]he President may temporarily designate an officer already in the government service or any other competent person to perform the functions of an office in the executive branch." Thus, the President may even appoint in an acting capacity a person not yet in the government service, as long as the President deems that person competent. Petitioners assert that Section 17 does not apply to appointments vested in the President by the Constitution, because it only applies to appointments vested in the President by law. Petitioners forget that Congress is not the only source of law. "Law" refers to the Constitution, statutes or acts of Congress, municipal ordinances, implementing rules issued pursuant to law, and judicial decisions.[17] Finally, petitioners claim that the issuance of appointments in an acting capacity is susceptible to abuse. Petitioners fail to consider that acting appointments cannot exceed one year as expressly provided in Section 17(3), Chapter 5, Title I, Book III of EO 292. The law has incorporated this safeguard to prevent abuses, like the use of acting appointments as a way to circumvent confirmation by the Commission on Appointments. In distinguishing ad interim appointments from appointments in an acting capacity, a noted textbook writer on constitutional law has observed: Ad-interim appointments must be distinguished from appointments in an acting capacity. Both of them are effective upon acceptance. But ad-interim appointments are extended only during a recess of Congress, whereas acting appointments may be extended any time there is a vacancy. Moreover ad-interim appointments are submitted to the Commission on Appointments for confirmation or rejection; acting appointments are not submitted to the Commission on Appointments. Acting appointments are a way of temporarily filling important offices but, if abused, they can also be a way of circumventing the need for confirmation by the Commission on Appointments.[18] However, we find no abuse in the present case. The absence of abuse is readily apparent from President Arroyos issuance of ad interim appointments to respondents immediately upon the recess of Congress, way before the lapse of one year. WHEREFORE, we DISMISS the present petition for certiorari and prohibition. SO ORDERED. ANTONIO T. CARPIO Associate Justice WE CONCUR: HILARIO G. DAVIDE, JR. Chief Justice REYNATO S. PUNO Associate Justice ARTEMIO V. PANGANIBAN Associate Justice LEONARDO A. QUISUMBING Associate Justice CONSUELO YNARES-SANTIAGO Associate Justice

ANGELINA SANDOVAL-GUTIERREZ Associate Justice MA. ALICIA AUSTRIA-MARTINEZ Associate Justice RENATO C. CORONA Associate Justice CONCHITA CARPIO MORALES Associate Justice ROMEO J. CALLEJO, SR. Associate Justice ADOLFO S. AZCUNA Associate Justice DANTE O. TINGA Associate Justice MINITA V. CHICO-NAZARIO Associate Justice CANCIO C. GARCIA Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. HILARIO G. DAVIDE, JR. Chief Justice

-------------------------------------------------------------------------------[1] Under Rule 65 of the Rules of Court. [2] Rollo, pp. 21-28. [3] Rollo, pp. 45-60. [4] Tolentino v. Commission on Elections, G.R. No. 148334, 21 January 2004, 420 SCRA 438 citing Gil v. Benipayo, G.R. No. 148179, 26 June 2001 (minute resolution). [5] Tolentino v. Commission on Elections, G.R. No. 148334, 21 January 2004, 420 SCRA 438 citing Chief Supt. Acop v. Secretary Guingona, Jr., 433 Phil. 62 (2002); Viola v. Hon. Alunan III, 343 Phil. 184 (1997); Alunan III v. Mirasol, 342 Phil. 467 (1997). [6] See Joaquin G. Bernas, S.J., The 1987 Constitution of the Republic of the Philippines: A Commentary 768 (1996). [7] See Sarmiento III v. Mison, No. L-79974, 17 December 1987, 156 SCRA 549. [8] See Manalang v. Quitoriano, et al., 94 Phil. 903 (1954); Flores v. Drilon, G.R. No. 104732, 22 June 1993, 223 SCRA 568. [9] Cunanan v. Tan, Jr., G.R. No. L-19721, 10 May 1962, 5 SCRA 1. But see Justice Concepcions Concurring Opinion in Guevara v. Inocentes, 123 Phil. 201, 211 (1966). [10] Rollo, p. 38. [11] Ibid., p. 65. [12] G.R. No. 159085, 3 February 2004, 421 SCRA 656 citing Philippine Constitution Association v. Enriquez, G.R. No. 113105, 19 August 1994, 235 SCRA 506. [13] Rollo, p. 14. [14] Also known as the "Administrative Code of 1987." [15] Rollo, p. 12.

[16] See Marohombsar v. Alonto, Jr., G.R. No. 93711, 25 February 1991, 194 SCRA 390. [17] Article 8, Civil Code. See National Amnesty Commission v. Commission on Audit, G.R. No. 156982, 8 September 2004, 437 SCRA 655. [18] Joaquin G. Bernas, S.J., The 1987 Constitution of the Republic of the Philippines: A Commentary 772 (1996).

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PHILIPPINE JURISPRUDENCE FULL TEXT The Lawphil Project - Arellano Law Foundation G.R. No. 171396, 171409, 171485, 171483, 171400, 171489 & 171424 May 3, 2006 RANDOLF DAVID, ET AL. VS. GLORIA MACAPAGAL-ARROYO, ET AL. Republic of the Philippines SUPREME COURT Manila G.R. No. 171396 May 3, 2006 PROF. RANDOLF S. DAVID, LORENZO TAADA III, RONALD LLAMAS, H. HARRY L. ROQUE, JR., JOEL RUIZ BUTUYAN, ROGER R. RAYEL, GARY S. MALLARI, ROMEL REGALADO BAGARES, CHRISTOPHER F.C. BOLASTIG, Petitioners, vs. GLORIA MACAPAGAL-ARROYO, AS PRESIDENT AND COMMANDER-IN-CHIEF, EXECUTIVE SECRETARY EDUARDO ERMITA, HON. AVELINO CRUZ II, SECRETARY OF NATIONAL DEFENSE, GENERAL GENEROSO SENGA, CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, DIRECTOR GENERAL ARTURO LOMIBAO, CHIEF, PHILIPPINE NATIONAL POLICE, Respondents. x-------------------------------------x G.R. No. 171409 May 3, 2006 NIEZ CACHO-OLIVARES AND TRIBUNE PUBLISHING CO., INC., Petitioners, vs. HONORABLE SECRETARY EDUARDO ERMITA AND HONORABLE DIRECTOR GENERAL ARTURO C. LOMIBAO, Respondents. x-------------------------------------x G.R. No. 171485 May 3, 2006 FRANCIS JOSEPH G. ESCUDERO, JOSEPH A. SANTIAGO, TEODORO A. CASINO, AGAPITO A. AQUINO, MARIO J. AGUJA, SATUR C. OCAMPO, MUJIV S. HATAMAN, JUAN EDGARDO ANGARA, TEOFISTO DL. GUINGONA III, EMMANUEL JOSEL J. VILLANUEVA, LIZA L. MAZA, IMEE R. MARCOS, RENATO B. MAGTUBO, JUSTIN MARC SB. CHIPECO, ROILO GOLEZ, DARLENE ANTONINO-CUSTODIO, LORETTA ANN P. ROSALES, JOSEL G. VIRADOR, RAFAEL V. MARIANO, GILBERT C. REMULLA, FLORENCIO G. NOEL, ANA THERESIA HONTIVEROS-BARAQUEL, IMELDA C. NICOLAS, MARVIC M.V.F. LEONEN, NERI JAVIER COLMENARES, MOVEMENT OF CONCERNED CITIZENS FOR CIVIL LIBERTIES REPRESENTED BY AMADO GAT INCIONG, Petitioners, vs. EDUARDO R. ERMITA, EXECUTIVE SECRETARY, AVELINO J. CRUZ, JR., SECRETARY, DND RONALDO V. PUNO, SECRETARY, DILG, GENEROSO SENGA, AFP CHIEF OF STAFF, ARTURO LOMIBAO, CHIEF PNP, Respondents. x-------------------------------------x G.R. No. 171483 May 3, 2006 KILUSANG MAYO UNO, REPRESENTED BY ITS CHAIRPERSON ELMER C. LABOG AND SECRETARY GENERAL JOEL MAGLUNSOD, NATIONAL FEDERATION OF LABOR UNIONS KILUSANG MAYO UNO (NAFLU-KMU), REPRESENTED BY ITS NATIONAL PRESIDENT, JOSELITO V. USTAREZ, ANTONIO C. PASCUAL, SALVADOR T. CARRANZA, EMILIA P. DAPULANG, MARTIN CUSTODIO, JR., AND ROQUE M. TAN, Petitioners,

vs. HER EXCELLENCY, PRESIDENT GLORIA MACAPAGAL-ARROYO, THE HONORABLE EXECUTIVE SECRETARY, EDUARDO ERMITA, THE CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, GENEROSO SENGA, AND THE PNP DIRECTOR GENERAL, ARTURO LOMIBAO, Respondents. x-------------------------------------x G.R. No. 171400 May 3, 2006 ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner, vs. EXECUTIVE SECRETARY EDUARDO R. ERMITA, LT. GEN. GENEROSO SENGA, AND DIRECTOR GENERAL ARTURO LOMIBAO, Respondents. G.R. No. 171489 May 3, 2006 JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA, JOSE AMOR M. AMORADO, ALICIA A. RISOS-VIDAL, FELIMON C. ABELITA III, MANUEL P. LEGASPI, J.B. JOVY C. BERNABE, BERNARD L. DAGCUTA, ROGELIO V. GARCIA AND INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioners, vs. HON. EXECUTIVE SECRETARY EDUARDO ERMITA, GENERAL GENEROSO SENGA, IN HIS CAPACITY AS AFP CHIEF OF STAFF, AND DIRECTOR GENERAL ARTURO LOMIBAO, IN HIS CAPACITY AS PNP CHIEF, Respondents. x-------------------------------------x G.R. No. 171424 May 3, 2006 LOREN B. LEGARDA, Petitioner, vs. GLORIA MACAPAGAL-ARROYO, IN HER CAPACITY AS PRESIDENT AND COMMANDERIN-CHIEF; ARTURO LOMIBAO, IN HIS CAPACITY AS DIRECTOR-GENERAL OF THE PHILIPPINE NATIONAL POLICE (PNP); GENEROSO SENGA, IN HIS CAPACITY AS CHIEF OF STAFF OF THE ARMED FORCES OF THE PHILIPPINES (AFP); AND EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, Respondents. DECISION SANDOVAL-GUTIERREZ, J.: 1 All powers need some restraint; practical adjustments rather than rigid formula are necessary. Superior strength the use of force cannot make wrongs into rights. In this regard, the courts should be vigilant in safeguarding the constitutional rights of the citizens, specifically their liberty. Chief Justice Artemio V. Panganibans philosophy of liberty is thus most relevant. He said: "In cases involving liberty, the scales of justice should weigh heavily against government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak." Laws and actions that restrict fundamental rights come to the courts "with a heavy presumption against 2 their constitutional validity." These seven (7) consolidated petitions for certiorari and prohibition allege that in issuing Presidential Proclamation No. 1017 (PP 1017) and General Order No. 5 (G.O. No. 5), President Gloria Macapagal-Arroyo committed grave abuse of discretion. Petitioners contend that respondent officials of the Government, in their professed efforts to defend and preserve democratic institutions, are actually trampling upon the very freedom guaranteed and protected by the Constitution. Hence, such issuances are void for being unconstitutional. Once again, the Court is faced with an age-old but persistently modern problem. How does the Constitution of a free people combine the degree of liberty, without which, law becomes

tyranny, with the degree of law, without which, liberty becomes license? On February 24, 2006, as the nation celebrated the 20th Anniversary of the Edsa People Power I, President Arroyo issued PP 1017 declaring a state of national emergency, thus: NOW, THEREFORE, I, Gloria Macapagal-Arroyo, President of the Republic of the Philippines and Commander-in-Chief of the Armed Forces of the Philippines, by virtue of the powers vested upon me by Section 18, Article 7 of the Philippine Constitution which states that: "The President. . . whenever it becomes necessary, . . . may call out (the) armed forces to prevent or suppress. . .rebellion. . .," and in my capacity as their Commander-in-Chief, do hereby command the Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well as any act of insurrection or rebellion and to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction; and as provided in Section 17, Article 12 of the Constitution do hereby declare a State of National Emergency. She cited the following facts as bases: WHEREAS, over these past months, elements in the political opposition have conspired with authoritarians of the extreme Left represented by the NDF-CPP-NPA and the extreme Right, represented by military adventurists the historical enemies of the democratic Philippine State who are now in a tactical alliance and engaged in a concerted and systematic conspiracy, over a broad front, to bring down the duly constituted Government elected in May 2004; WHEREAS, these conspirators have repeatedly tried to bring down the President; WHEREAS, the claims of these elements have been recklessly magnified by certain segments of the national media; WHEREAS, this series of actions is hurting the Philippine State by obstructing governance including hindering the growth of the economy and sabotaging the peoples confidence in government and their faith in the future of this country; WHEREAS, these actions are adversely affecting the economy; WHEREAS, these activities give totalitarian forces of both the extreme Left and extreme Right the opening to intensify their avowed aims to bring down the democratic Philippine State; WHEREAS, Article 2, Section 4 of the our Constitution makes the defense and preservation of the democratic institutions and the State the primary duty of Government; WHEREAS, the activities above-described, their consequences, ramifications and collateral effects constitute a clear and present danger to the safety and the integrity of the Philippine State and of the Filipino people; On the same day, the President issued G. O. No. 5 implementing PP 1017, thus: WHEREAS, over these past months, elements in the political opposition have conspired with authoritarians of the extreme Left, represented by the NDF-CPP-NPA and the extreme Right, represented by military adventurists - the historical enemies of the democratic Philippine State and who are now in a tactical alliance and engaged in a concerted and systematic conspiracy, over a broad front, to bring down the duly-constituted Government elected in May 2004; WHEREAS, these conspirators have repeatedly tried to bring down our republican government; WHEREAS, the claims of these elements have been recklessly magnified by certain segments of the national media; WHEREAS, these series of actions is hurting the Philippine State by obstructing governance, including hindering the growth of the economy a nd sabotaging the peoples confidence in the government and their faith in the future of this country; WHEREAS, these actions are adversely affecting the economy;

WHEREAS, these activities give totalitarian forces; of both the extreme Left and extreme Right the opening to intensify their avowed aims to bring down the democratic Philippine State; WHEREAS, Article 2, Section 4 of our Constitution makes the defense and preservation of the democratic institutions and the State the primary duty of Government; WHEREAS, the activities above-described, their consequences, ramifications and collateral effects constitute a clear and present danger to the safety and the integrity of the Philippine State and of the Filipino people; WHEREAS, Proclamation 1017 date February 24, 2006 has been issued declaring a State of National Emergency; NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested in me under the Constitution as President of the Republic of the Philippines, and Commander-inChief of the Republic of the Philippines, and pursuant to Proclamation No. 1017 dated February 24, 2006, do hereby call upon the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), to prevent and suppress acts of terrorism and lawless violence in the country; I hereby direct the Chief of Staff of the AFP and the Chief of the PNP, as well as the officers and men of the AFP and PNP, to immediately carry out the necessary and appropriate actions and measures to suppress and prevent acts of terrorism and lawless violence. On March 3, 2006, exactly one week after the declaration of a state of national emergency and after all these petitions had been filed, the President lifted PP 1017. She issued Proclamation No. 1021 which reads: WHEREAS, pursuant to Section 18, Article VII and Section 17, Article XII of the Constitution, Proclamation No. 1017 dated February 24, 2006, was issued declaring a state of national emergency; WHEREAS, by virtue of General Order No.5 and No.6 dated February 24, 2006, which were issued on the basis of Proclamation No. 1017, the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), were directed to maintain law and order throughout the Philippines, prevent and suppress all form of lawless violence as well as any act of rebellion and to undertake such action as may be necessary; WHEREAS, the AFP and PNP have effectively prevented, suppressed and quelled the acts lawless violence and rebellion; NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, hereby declare that the state of national emergency has ceased to exist. In their presentation of the factual bases of PP 1017 and G.O. No. 5, respondents stated that the proximate cause behind the executive issuances was the conspiracy among some military officers, leftist insurgents of the New Peoples Army (NPA), and some members of the political 4 opposition in a plot to unseat or assassinate President Arroyo. They considered the aim to oust or assassinate the President and take-over the reigns of government as a clear and present danger. During the oral arguments held on March 7, 2006, the Solicitor General specified the facts leading to the issuance of PP 1017 and G.O. No. 5. Significantly, there was no refutation from petitioners counsels. The Solicitor General argued that the intent of the Constitution is to give full discretionary powers to the President in determining the necessity of calling out the armed forces. He emphasized that none of the petitioners has shown that PP 1017 was without factual bases. While he explained that it is not respondents task to state the facts behind the questioned Proclamation, however, they are presenting the same, narrated hereunder, for the elucidation

of the issues. On January 17, 2006, Captain Nathaniel Rabonza and First Lieutenants Sonny Sarmiento, Lawrence San Juan and Patricio Bumidang, members of the Magdalo Group indicted in the Oakwood mutiny, escaped their detention cell in Fort Bonifacio, Taguig City. In a public statement, they vowed to remain defiant and to elude arrest at all costs. They called upon the people to "show and proclaim our displeasure at the sham regime. Let us demonstrate our disgust, not only by going to the streets in protest, but also by wearing red bands on our left 5 arms." On February 17, 2006, the authorities got hold of a document entitled "Oplan Hackle I " which detailed plans for bombings and attacks during the Philippine Military Academy Alumni Homecoming in Baguio City. The plot was to assassinate selected targets including some 6 cabinet members and President Arroyo herself. Upon the advice of her security, President Arroyo decided not to attend the Alumni Homecoming. The next day, at the height of the celebration, a bomb was found and detonated at the PMA parade ground. On February 21, 2006, Lt. San Juan was recaptured in a communist safehouse in Batangas province. Found in his possession were two (2) flash disks containing minutes of the meetings between members of the Magdalo Group and the National Peoples Army (NPA), a tape 7 recorder, audio cassette cartridges, diskettes, and copies of subversive documents. Prior to his arrest, Lt. San Juan announced through DZRH that the "Magdalos D-Day would be on February 24, 2006, the 20th Anniversary of Edsa I." On February 23, 2006, PNP Chief Arturo Lomibao intercepted information that members of the PNP- Special Action Force were planning to defect. Thus, he immediately ordered SAF Commanding General Marcelino Franco, Jr. to "disavow" any defection. The latter promptly obeyed and issued a public statement: "All SAF units are under the effective control of responsible and trustworthy officers with proven integrity and unquestionable loyalty." On the same day, at the house of former Congressman Peping Cojuangco, President Cory Aquinos brother, businessmen and mid-level government officials plotted moves to bring down the Arroyo administration. Nelly Sindayen of TIME Magazine reported that Pastor Saycon, longtime Arroyo critic, called a U.S. government official about his groups plans if Preside nt Arroyo is ousted. Saycon also phoned a man code-named Delta. Saycon identified him as B/Gen. Danilo Lim, Commander of the Armys elite Scout Ranger. Lim said " it was all systems 8 go for the planned movement against Arroyo." B/Gen. Danilo Lim and Brigade Commander Col. Ariel Querubin confided to Gen. Generoso Senga, Chief of Staff of the Armed Forces of the Philippines (AFP), that a huge number of soldiers would join the rallies to provide a critical mass and armed component to the AntiArroyo protests to be held on February 24, 2005. According to these two (2) officers, there was no way they could possibly stop the soldiers because they too, were breaking the chain of command to join the forces foist to unseat the President. However, Gen. Senga has remained faithful to his Commander-in-Chief and to the chain of command. He immediately took custody of B/Gen. Lim and directed Col. Querubin to return to the Philippine Marines Headquarters in Fort Bonifacio. Earlier, the CPP-NPA called for intensification of political and revolutionary work within the military and the police establishments in order to forge alliances with its members and key officials. NPA spokesman Gregorio "Ka Roger" Rosal declared: "The Communist Party and revolutionary movement and the entire people look forward to the possibility in the coming year of accomplishing its immediate task of bringing down the Arroyo regime; of rendering it to 9 weaken and unable to rule that it will not take much longer to end it." On the other hand, Cesar Renerio, spokesman for the National Democratic Front (NDF) at

North Central Mindanao, publicly announced: "Anti-Arroyo groups within the military and police are growing rapidly, hastened by the economic difficulties suffered by the families of AFP officers and enlisted personnel who undertake counter-insurgency operations in the field." He claimed that with the forces of the national democratic movement, the anti-Arroyo conservative political parties, coalitions, plus the groups that have been reinforcing since June 2005, it is probable that the Presidents ouster is nearing its concluding stage in the first half of 2006. Respondents further claimed that the bombing of telecommunication towers and cell sites in Bulacan and Bataan was also considered as additional factual basis for the issuance of PP 1017 and G.O. No. 5. So is the raid of an army outpost in Benguet resulting in the death of three (3) soldiers. And also the directive of the Communist Party of the Philippines ordering its front organizations to join 5,000 Metro Manila radicals and 25,000 more from the provinces in 10 mass protests. By midnight of February 23, 2006, the President convened her security advisers and several cabinet members to assess the gravity of the fermenting peace and order situation. She directed both the AFP and the PNP to account for all their men and ensure that the chain of command remains solid and undivided. To protect the young students from any possible trouble that might break loose on the streets, the President suspended classes in all levels in the entire National Capital Region. For their part, petitioners cited the events that followed after the issuance of PP 1017 and G.O. No. 5. Immediately, the Office of the President announced the cancellation of all programs and activities related to the 20th anniversary celebration of Edsa People Power I; and revoked the permits to hold rallies issued earlier by the local governments. Justice Secretary Raul Gonzales stated that political rallies, which to the Presidents mind were organized for purposes of destabilization, are cancelled.Presidential Chief of Staff Michael Defensor announced that "warrantless arrests and take-over of facilities, including media, can already be 11 implemented." Undeterred by the announcements that rallies and public assemblies would not be allowed, groups of protesters (members of Kilusang Mayo Uno [KMU] and National Federation of Labor Unions-Kilusang Mayo Uno [NAFLU-KMU]), marched from various parts of Metro Manila with the intention of converging at the EDSA shrine. Those who were already near the EDSA site were violently dispersed by huge clusters of anti-riot police. The well-trained policemen used truncheons, big fiber glass shields, water cannons, and tear gas to stop and break up the marching groups, and scatter the massed participants. The same police action was used against the protesters marching forward to Cubao, Quezon City and to the corner of Santolan Street and EDSA. That same evening, hundreds of riot policemen broke up an EDSA 12 celebration rally held along Ayala Avenue and Paseo de Roxas Street in Makati City. According to petitioner Kilusang Mayo Uno, the police cited PP 1017 as the ground for the dispersal of their assemblies. During the dispersal of the rallyists along EDSA, police arrested (without warrant) petitioner Randolf S. David, a professor at the University of the Philippines and newspaper columnist. Also arrested was his companion, Ronald Llamas, president of party-list Akbayan. At around 12:20 in the early morning of February 25, 2006, operatives of the Criminal Investigation and Detection Group (CIDG) of the PNP, on the basis of PP 1017 and G.O. No. 5, raided the Daily Tribune offices in Manila. The raiding team confiscated news stories by reporters, documents, pictures, and mock-ups of the Saturday issue. Policemen from Camp Crame in Quezon City were stationed inside the editorial and business offices of the newspaper; while policemen from the Manila Police District were stationed outside the

building. A few minutes after the search and seizure at the Daily Tribune offices, the police surrounded the premises of another pro-opposition paper, Malaya, and its sister publication, the tabloid Abante. The raid, according to Presidential Chief of Staff Michael Defensor, is "meant to show a strong presence, to tell media outlets not to connive or do anything that would help the rebels in bringing down this government." The PNP warned that it would take over any media organization that would not follow "standards set by the government during the state of national emergency." Director General Lomibao stated that "if they do not follow the standards and the standards are - if they would contribute to instability in the government, or if they do not subscribe to what is in General Order No. 5 and Proc. No. 1017 we will recommend a takeover." National Telecommunications Commissioner Ronald Solis urged television and radio networks to "cooperate" with the government for the duration of the state of national emergency. He asked for "balanced reporting" from broadcasters when covering the events surrounding the coup attempt foiled by the government. He warned that his agency will not hesitate to recommend the closure of any broadcast outfit that violates rules set out for media 14 coverage when the national security is threatened. Also, on February 25, 2006, the police arrested Congressman Crispin Beltran, representing the Anakpawis Party and Chairman of Kilusang Mayo Uno (KMU), while leaving his farmhouse in Bulacan. The police showed a warrant for his arrest dated 1985. Beltrans lawyer explained that the warrant, which stemmed from a case of inciting to rebellion filed during the Marcos regime, had long been quashed. Beltran, however, is not a party in any of these petitions. When members of petitioner KMU went to Camp Crame to visit Beltran, they were told they could not be admitted because of PP 1017 and G.O. No. 5. Two members were arrested and detained, while the rest were dispersed by the police. Bayan Muna Representative Satur Ocampo eluded arrest when the police went after him during a public forum at the Sulo Hotel in Quezon City. But his two drivers, identified as Roel and Art, were taken into custody. Retired Major General Ramon Montao, former head of the Philippine Constabulary, was arrested while with his wife and golfmates at the Orchard Golf and Country Club in Dasmarias, Cavite. Attempts were made to arrest Anakpawis Representative Satur Ocampo, Representative Rafael Mariano, Bayan Muna Representative Teodoro Casio and Gabriela Representative Liza Maza. Bayan Muna Representative Josel Virador was arrested at the PAL Ticket Office in Davao City. Later, he was turned over to the custody of the House of Representatives where the "Batasan 5" decided to stay indefinitely. Let it be stressed at this point that the alleged violations of the rights of Representatives Beltran, Satur Ocampo, et al., are not being raised in these petitions. On March 3, 2006, President Arroyo issued PP 1021 declaring that the state of national emergency has ceased to exist. In the interim, these seven (7) petitions challenging the constitutionality of PP 1017 and G.O. No. 5 were filed with this Court against the above-named respondents. Three (3) of these petitions impleaded President Arroyo as respondent. In G.R. No. 171396, petitioners Randolf S. David, et al. assailed PP 1017 on the grounds that (1) it encroaches on the emergency powers of Congress; (2) itis a subterfuge to avoid the constitutional requirements for the imposition of martial law; and (3) it violates the constitutional guarantees of freedom of the press, of speech and of assembly. In G.R. No. 171409, petitioners Ninez Cacho-Olivares and Tribune Publishing Co., Inc.

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challenged the CIDGs act of raiding the Daily Tribune offices as a clear case of "censorship" or "prior restraint." They also claimed that the term "emergency" refers only to tsunami, typhoon, hurricane and similar occurrences, hence, there is "absolutely no emergency" that warrants the issuance of PP 1017. In G.R. No. 171485, petitioners herein are Representative Francis Joseph G. Escudero, and twenty one (21) other members of the House of Representatives, including Representatives Satur Ocampo, Rafael Mariano, Teodoro Casio, Liza Maza, and Josel Virador. They asserted that PP 1017 and G.O. No. 5 constitute "usurpation of legislative powers"; "violation of freedom of expression" and "a declaration of martial law." They alleged that President Arroyo "gravely abused her discretion in calling out the armed forces without clear and verifiable factual basis of the possibility of lawless violence and a showing that there is necessity to do so." In G.R. No. 171483,petitioners KMU, NAFLU-KMU, and their members averred that PP 1017 and G.O. No. 5 are unconstitutional because (1) they arrogate unto President Arroyo the power to enact laws and decrees; (2) their issuance was without factual basis; and (3) they violate freedom of expression and the right of the people to peaceably assemble to redress their grievances. In G.R. No. 171400, petitioner Alternative Law Groups, Inc. (ALGI) alleged that PP 1017 and 15 G.O. No. 5 are unconstitutional because they violate (a) Section 4 of Article II, (b) Sections 16 17 18 19 20 1, 2, and 4 of Article III, (c) Section 23 of Article VI, and (d) Section 17 of Article XII of the Constitution. In G.R. No. 171489, petitioners Jose Anselmo I. Cadiz et al., alleged that PP 1017 is an "arbitrary and unlawful exercise by the President of her Martial Law powers." And assuming that PP 1017 is not really a declaration of Martial Law, petitioners argued that "it amounts to an exercise by the President of emergency powers without congressional approval." In addition, petitioners asserted that PP 1017 "goes beyond the nature and function of a proclamation as defined under the Revised Administrative Code." And lastly, in G.R. No. 171424,petitionerLoren B. Legarda maintained that PP 1017 and G.O. No. 5 are "unconstitutional for being violative of the freedom of expression, including its cognate rights such as freedom of the press and the right to access to information on matters of public concern, all guaranteed under Article III, Section 4 of the 1987 Constitution." In this regard, she stated that these issuances prevented her from fully prosecuting her election protest pending before the Presidential Electoral Tribunal. In respondents Consolidated Comment, the Solicitor General countered that: first, the petitions should be dismissed for being moot; second,petitioners in G.R. Nos. 171400 (ALGI), 171424 (Legarda), 171483 (KMU et al.), 171485 (Escudero et al.) and 171489 (Cadiz et al.) have no legal standing; third, it is not necessary for petitioners to implead President Arroyo as respondent; fourth, PP 1017 has constitutional and legal basis; and fifth, PP 1017 does not violate the peoples right to free expression and redress of grievances. On March 7, 2006, the Court conducted oral arguments and heard the parties on the above interlocking issues which may be summarized as follows: A. PROCEDURAL: 1) Whether the issuance of PP 1021 renders the petitions moot and academic. 2) Whether petitioners in 171485 (Escudero et al.), G.R. Nos. 171400 (ALGI), 171483 (KMU et al.), 171489 (Cadiz et al.), and 171424 (Legarda) have legal standing. B. SUBSTANTIVE: 1) Whetherthe Supreme Court can review the factual bases of PP 1017. 2) Whether PP 1017 and G.O. No. 5 are unconstitutional. a. Facial Challenge

b. Constitutional Basis c. As Applied Challenge A. PROCEDURAL First, we must resolve the procedural roadblocks. I- Moot and Academic Principle One of the greatest contributions of the American system to this country is the concept of 21 judicial review enunciated in Marbury v. Madison. This concept rests on the extraordinary simple foundation -The Constitution is the supreme law. It was ordained by the people, the ultimate source of all political authority. It confers limited powers on the national government. x x x If the government consciously or unconsciously oversteps these limitations there must be some authority competent to hold it in control, to thwart its unconstitutional attempt, and thus to vindicate and preserve inviolate the will of the people as expressed in the Constitution. This power the courts 22 exercise. This is the beginning and the end of the theory of judicial review. 23 But the power of judicial review does not repose upon the courts a "self-starting capacity." Courts may exercise such power only when the following requisites are present: first, there must be an actual case or controversy; second, petitioners have to raise a question of constitutionality; third, the constitutional question must be raised at the earliest opportunity; and fourth, the decision of the constitutional question must be necessary to the determination of the 24 case itself. Respondents maintain that the first and second requisites are absent, hence, we shall limit our discussion thereon. An actual case or controversy involves a conflict of legal right, an opposite legal claims susceptible of judicial resolution. It is "definite and concrete, touching the legal relations of parties having adverse legal interest;" a real and substantial controversy admitting of specific 25 relief. The Solicitor General refutes the existence of such actual case or controversy, contending that the present petitions were rendered "moot and academic" by President Arroyos issuance of PP 1021. Such contention lacks merit. A moot and academic case is one that ceases to present a justiciable controversy by virtue of 26 27 supervening events, so that a declaration thereon would be of no practical use or value. 28 29 Generally, courts decline jurisdiction over such case or dismiss it on ground of mootness. The Court holds that President Arroyos issuance of PP 1021 did not render the present petitions moot and academic. During the eight (8) days that PP 1017 was operative, the police officers, according to petitioners, committed illegal acts in implementing it. Are PP 1017 and G.O. No. 5 constitutional or valid? Do they justify these alleged illegal acts? These are the vital issues that must be resolved in the present petitions. It must be stressed that "an unconstitutional act is not a law, it confers no rights, it imposes no duties, it affords no 30 protection; it is in legal contemplation, inoperative." The "moot and academic" principle is not a magical formula that can automatically dissuade the courts in resolving a case. Courts will decide cases, otherwise moot and academic, if: first, 31 there is a grave violation of the Constitution; second, the exceptional character of the 32 situation and the paramount public interest is involved; third, when constitutional issue raised 33 requires formulation of controlling principles to guide the bench, the bar, and the public; and 34 fourth, the case is capable of repetition yet evading review. All the foregoing exceptions are present here and justify this Courts assumption of jurisdiction over the instant petitions. Petitioners alleged that the issuance of PP 1017 and G.O. No. 5 violates the Constitution. There is no question that the issues being raised affect the publics

interest, involving as they do the peoples basic rights to freedom of expression, of assembly and of the press. Moreover, the Court has the duty to formulate guiding and controlling constitutional precepts, doctrines or rules. It has the symbolic function of educating the bench and the bar, and in the present petitions, the military and the police, on the extent of the 35 protection given by constitutional guarantees. And lastly, respondents contested actions are capable of repetition. Certainly, the petitions are subject to judicial review. In their attempt to prove the alleged mootness of this case, respondents cited Chief Justice 36 Artemio V. Panganibans Separate Opinion in Sanlakas v. Executive Secretary. However, they failed to take into account the Chief Justices very statement that an otherwise "moot" case may still be decided "provided the party raising it in a proper case has been and/or continues to be prejudiced or damaged as a direct result of its issuance." The present case falls right within this exception to the mootness rule pointed out by the Chief Justice. II- Legal Standing In view of the number of petitioners suing in various personalities, the Court deems it imperative to have a more than passing discussion on legal standing or locus standi. 37 Locus standi is defined as "a right of appearance in a court of justice on a given question." In private suits, standing is governed by the "real-parties-in interest" rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It provides that "every action must be prosecuted or defended in the name of the real party in interest." Accordingly, the "realparty-in interest" is "the party who stands to be benefited or injured by the judgment in the suit 38 or the party entitled to the avails of the suit." Succinctly put, the plaintiffs standing is based on his own right to the relief sought. The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a "public right" in assailing an allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected no differently from any other person. He could be suing as a "stranger," or in the category of a "citizen," or taxpayer." In either case, he has to adequately show that he is entitled to seek judicial protection. In other words, he has to make out a sufficient interest in the vindication of the public order and the securing of relief as a "citizen" or "taxpayer. Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in public 39 actions. The distinction was first laid down in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayers suit is in a different category from the plaintiff in a citizens suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York Supreme Court in People 40 ex rel Case v. Collins: "In matter of mere public right, howeverthe people are the real partiesIt is at least the right, if not the duty, of every citizen to interfere and see that a public offence be properly pursued and punished, and that a public grievance be remedied." With 41 respect to taxpayers suits, Terr v. Jordan held that "the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds to his injury cannot be denied." However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service, the United State Supreme Court laid down the more 42 43 stringent "direct injury" test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The same Court ruled that for a private individual to invoke the judicial power to determine the validity of an executive or legislative action, he must show that he has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest common to all members of the public.

This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera, it held that the person who impugns the validity of a statute must have "a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result." The Vera doctrine 45 was upheld in a litany of cases, such as, Custodio v. President of the Senate, Manila Race 46 47 Horse Trainers Association v. De la Fuente, Pascual v. Secretary of Public Works and Anti48 Chinese League of the Philippines v. Felix. However, being a mere procedural technicality, the requirement of locus standi may be waived by the Court in the exercise of its discretion. This was done in the 1949 Emergency Powers 49 Cases, Araneta v. Dinglasan, where the "transcendental importance" of the cases prompted the Court to act liberally. Such liberality was neither a rarity nor accidental. In Aquino v. 50 Comelec, this Court resolved to pass upon the issues raised due to the "far-reaching implications" of the petition notwithstanding its categorical statement that petitioner therein had no personality to file the suit. Indeed, there is a chain of cases where this liberal policy has been observed, allowing ordinary citizens, members of Congress, and civic organizations to 51 prosecute actions involving the constitutionality or validity of laws, regulations and rulings. Thus, the Court has adopted a rule that even where the petitioners have failed to show direct injury, they have been allowed to sue under the principle of "transcendental importance." Pertinent are the following cases: 52 (1) Chavez v. Public Estates Authority, where the Court ruled that the enforcement of the constitutional right to information and the equitable diffusion of natural resources are matters of transcendental importance which clothe the petitioner with locus standi; 53 (2) Bagong Alyansang Makabayan v. Zamora, wherein the Court held that "given the transcendental importance of the issues involved, the Court may relax the standing requirements and allow the suit to prosper despite the lack of direct injury to the parties seeking judicial review" of the Visiting Forces Agreement; 54 (3) Lim v. Executive Secretary, while the Court noted that the petitioners may not file suit in their capacity as taxpayers absent a showing that "Balikatan 02-01" involves the exercise of Congress taxing or spending powers, it reiterated its ruling in Bagong 55 Alyansang Makabayan v. Zamora, that in cases of transcendental importance, the cases must be settled promptly and definitely and standing requirements may be relaxed. By way of summary, the following rules may be culled from the cases decided by this Court. Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue, provided that the following requirements are met: (1) the cases involve constitutional issues; (2) for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax measure is unconstitutional; (3) for voters, there must be a showing of obvious interest in the validity of the election law in question; (4) for concerned citizens, there must be a showing that the issues raised are of transcendental importance which must be settled early; and (5) for legislators, there must be a claim that the official action complained of infringes upon their prerogatives as legislators. Significantly, recent decisions show a certain toughening in the Courts attitude toward legal standing. 56 In Kilosbayan, Inc. v. Morato, the Court ruled that the status of Kilosbayan as a peoples organization does not give it the requisite personality to question the validity of the on-line lottery contract, more so where it does not raise any issue of constitutionality. Moreover, it

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cannot sue as a taxpayer absent any allegation that public funds are being misused. Nor can it sue as a concerned citizen as it does not allege any specific injury it has suffered. 57 In Telecommunications and Broadcast Attorneys of the Philippines, Inc. v. Comelec, the Court reiterated the "direct injury" test with respect to concerned citizens cases involving constitutional issues. It held that "there must be a showing that the citizen personally suffered some actual or threatened injury arising from the alleged illegal official act." 58 In Lacson v. Perez, the Court ruled that one of the petitioners, Laban ng Demokratikong Pilipino (LDP), is not a real party-in-interest as it had not demonstrated any injury to itself or to its leaders, members or supporters. 59 In Sanlakas v. Executive Secretary, the Court ruled that only the petitioners who are members of Congress have standing to sue, as they claim that the Presidents declaration of a state of rebellion is a usurpation of the emergency powers of Congress, thus impairing their legislative powers. As to petitioners Sanlakas, Partido Manggagawa, and Social Justice Society, the Court declared them to be devoid of standing, equating them with the LDP in Lacson. Now, the application of the above principles to the present petitions. The locus standi of petitioners in G.R. No. 171396, particularly David and Llamas, is beyond doubt. The same holds true with petitioners in G.R. No. 171409, Cacho-Olivares and Tribune Publishing Co. Inc. They alleged "direct injury" resulting from "illegal arrest" and "unlawful search" committed by police operatives pursuant to PP 1017. Rightly so, the Solicitor General does not question their legal standing. In G.R. No. 171485, the opposition Congressmen alleged there was usurpation of legislative powers. They also raised the issue of whether or not the concurrence of Congress is necessary whenever the alarming powers incident to Martial Law are used. Moreover, it is in the interest of justice that those affected by PP 1017 can be represented by their Congressmen in bringing to the attention of the Court the alleged violations of their basic rights. 60 In G.R. No. 171400, (ALGI), this Court applied the liberality rule in Philconsa v. Enriquez, 61 Kapatiran Ng Mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan, Association of Small 62 Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, Basco v. Philippine 63 64 Amusement and Gaming Corporation, and Taada v. Tuvera, that when the issue concerns a public right, it is sufficient that the petitioner is a citizen and has an interest in the execution of the laws. In G.R. No. 171483, KMUs assertion that PP 1017 and G.O. No. 5 violated its right to peaceful assembly may be deemed sufficient to give it legal standing. Organizations may be granted 65 standing to assert the rights of their members. We take judicial notice of the announcement by the Office of the President banning all rallies and canceling all permits for public assemblies following the issuance of PP 1017 and G.O. No. 5. In G.R. No. 171489, petitioners, Cadiz et al., who are national officers of the Integrated Bar of the Philippines (IBP) have no legal standing, having failed to allege any direct or potential injury which the IBP as an institution or its members may suffer as a consequence of the 66 issuance of PP No. 1017 and G.O. No. 5. In Integrated Bar of the Philippines v. Zamora, the Court held that the mere invocation by the IBP of its duty to preserve the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it with standing in this case. This is too general an interest which is shared by other groups and the whole citizenry. However, in view of the transcendental importance of the issue, this Court declares that petitioner have locus standi. In G.R. No. 171424, Loren Legarda has no personality as a taxpayer to file the instant petition

as there are no allegations of illegal disbursement of public funds. The fact that she is a former Senator is of no consequence. She can no longer sue as a legislator on the allegation that her prerogatives as a lawmaker have been impaired by PP 1017 and G.O. No. 5. Her claim that she is a media personality will not likewise aid her because there was no showing that the enforcement of these issuances prevented her from pursuing her occupation. Her submission that she has pending electoral protest before the Presidential Electoral Tribunal is likewise of no relevance. She has not sufficiently shown that PP 1017 will affect the proceedings or result of her case. But considering once more the transcendental importance of the issue involved, this Court may relax the standing rules. It must always be borne in mind that the question of locus standi is but corollary to the bigger question of proper exercise of judicial power. This is the underlying legal tenet of the "liberality doctrine" on legal standing. It cannot be doubted that the validity of PP No. 1017 and G.O. No. 5 is a judicial question which is of paramount importance to the Filipino people. To paraphrase Justice Laurel, the whole of Philippine society now waits with bated breath the ruling of this Court on this very critical matter. The petitions thus call for the application of the "transcendental importance" doctrine, a relaxation of the standing requirements for the petitioners in the "PP 1017 cases."1avvphil.net This Court holds that all the petitioners herein have locus standi. Incidentally, it is not proper to implead President Arroyo as respondent. Settled is the doctrine 67 that the President, during his tenure of office or actual incumbency, may not be sued in any civil or criminal case, and there is no need to provide for it in the Constitution or law. It will degrade the dignity of the high office of the President, the Head of State, if he can be dragged into court litigations while serving as such. Furthermore, it is important that he be freed from any form of harassment, hindrance or distraction to enable him to fully attend to the performance of his official duties and functions. Unlike the legislative and judicial branch, only one constitutes the executive branch and anything which impairs his usefulness in the discharge of the many great and important duties imposed upon him by the Constitution necessarily impairs the operation of the Government. However, this does not mean that the President is not accountable to anyone. Like any other official, he remains accountable to the 68 people but he may be removed from office only in the mode provided by law and that is by 69 impeachment. B. SUBSTANTIVE I. Review of Factual Bases Petitioners maintain that PP 1017 has no factual basis. Hence, it was not "necessary" for President Arroyo to issue such Proclamation. The issue of whether the Court may review the factual bases of the Presidents exercise of his Commander-in-Chief power has reached its distilled point - from the indulgent days of Barcelon 70 71 72 v. Baker and Montenegro v. Castaneda to the volatile era of Lansang v. Garcia, Aquino, 73 74 Jr. v. Enrile, and Garcia-Padilla v. Enrile. The tug-of-war always cuts across the line defining "political questions," particularly those questions "in regard to which full discretionary 75 authority has been delegated to the legislative or executive branch of the government." Barcelon and Montenegro were in unison in declaring that the authority to decide whether an exigency has arisen belongs to the President and his decision is final and conclusive on the courts. Lansang took the opposite view. There, the members of the Court were unanimous in the conviction that the Court has the authority to inquire into the existence of factual bases in order to determine their constitutional sufficiency. From the principle of separation of powers, it shifted the focus to the system of checks and balances, "under which the President is supreme, x x x only if and when he acts within the sphere allotted to him by the Basic Law, and

the authority to determine whether or not he has so acted is vested in the Judicial Department, 76 which in this respect, is, in turn, constitutionally supreme." In 1973, the unanimous Court of 77 Lansang was divided in Aquino v. Enrile. There, the Court was almost evenly divided on the issue of whether the validity of the imposition of Martial Law is a political or justiciable 78 question. Then came Garcia-Padilla v. Enrile which greatly diluted Lansang. It declared that there is a need to re-examine the latter case, ratiocinating that "in times of war or national emergency, the President must be given absolute control for the very life of the nation and the government is in great peril. The President, it intoned, is answerable only to his conscience, 79 the People, and God." 80 The Integrated Bar of the Philippines v. Zamora -- a recent case most pertinent to these cases at bar -- echoed a principle similar to Lansang. While the Court considered the Presidents "calling-out" power as a discretionary power solely vested in his wisdom, it stressed that "this does not prevent an examination of whether such power was exercised within permissible constitutional limits or whether it was exercised in a manner constituting grave abuse of discretion."This ruling is mainly a result of the Courts reliance on Section 1, Article VIII of 1987 Constitution which fortifies the authority of the courts to determine in an appropriate action the validity of the acts of the political departments. Under the new definition of judicial power, the courts are authorized not only "to settle actual controversies involving rights which are legally demandable and enforceable," but also "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government." The latter part of the authority represents a broadening of judicial power to enable the courts of justice to review what was before a forbidden territory, to wit, the discretion of the political departments of the 81 82 government. It speaks of judicial prerogative not only in terms of power but also of duty. As to how the Court may inquire into the Presidents exercise of power, Lansang adopted the test that "judicial inquiry can go no further than to satisfy the Court not that the Presidents decision is correct," but that "the President did not act arbitrarily." Thus, the standard laid down 83 is not correctness, but arbitrariness. In Integrated Bar of the Philippines, this Court further ruled that "it is incumbent upon the petitioner to show that the Presidents decision is totally bereft of factual basis" and that if he fails, by way of proof, to support his assertion, then "this Court cannot undertake an independent investigation beyond the pleadings." Petitioners failed to show that President Arroyos exercise of the calling-out power, by issuing PP 1017, is totally bereft of factual basis. A reading of the Solicitor Generals Consolidated Comment and Memorandum shows a detailed narration of the events leading to the issuance of PP 1017, with supporting reports forming part of the records. Mentioned are the escape of the Magdalo Group, their audacious threat of the Magdalo D-Day, the defections in the military, particularly in the Philippine Marines, and the reproving statements from the communist leaders. There was also the Minutes of the Intelligence Report and Security Group of the Philippine Army showing the growing alliance between the NPA and the military. Petitioners presented nothing to refute such events. Thus, absent any contrary allegations, the Court is convinced that the President was justified in issuing PP 1017 calling for military aid. Indeed, judging the seriousness of the incidents, President Arroyo was not expected to simply fold her arms and do nothing to prevent or suppress what she believed was lawless violence, invasion or rebellion. However, the exercise of such power or duty must not stifle liberty. II. Constitutionality of PP 1017 and G.O. No. 5 Doctrines of Several Political Theorists on the Power of the President in Times of Emergency This case brings to fore a contentious subject -- the power of the President in times of

emergency. A glimpse at the various political theories relating to this subject provides an adequate backdrop for our ensuing discussion. John Locke, describing the architecture of civil government, called upon the English doctrine of prerogative to cope with the problem of emergency. In times of danger to the nation, positive law enacted by the legislature might be inadequate or even a fatal obstacle to the promptness of action necessary to avert catastrophe. In these situations, the Crown retained a prerogative "power to act according to discretion for the public good, without the proscription of the law and 84 sometimes even against it." But Locke recognized that this moral restraint might not suffice to avoid abuse of prerogative powers. Who shall judge the need for resorting to the prerogative and how may its abuse be avoided? Here, Locke readily admitted defeat, suggesting that "the people have no other remedy in this, as in all other cases where they have no judge on earth, 85 but to appeal to Heaven." Jean-Jacques Rousseau also assumed the need for temporary suspension of democratic processes of government in time of emergency. According to him: The inflexibility of the laws, which prevents them from adopting themselves to circumstances, may, in certain cases, render them disastrous and make them bring about, at a time of crisis, the ruin of the State It is wrong therefore to wish to make political institutions as strong as to render it impossible to suspend their operation. Even Sparta allowed its law to lapse... If the peril is of such a kind that the paraphernalia of the laws are an obstacle to their preservation, the method is to nominate a supreme lawyer, who shall silence all the laws and suspend for a moment the sovereign authority. In such a case, there is no doubt about the 86 general will, and it clear that the peoples first intention is that the State shall not perish. Rosseau did not fear the abuse of the emergency dictatorship or "supreme magistracy" as he termed it. For him, it would more likely be cheapened by "indiscreet use." He was unwilling to rely upon an "appeal to heaven." Instead, he relied upon a tenure of office of prescribed 87 duration to avoid perpetuation of the dictatorship. John Stuart Mill concluded his ardent defense of representative government: "I am far from condemning, in cases of extreme necessity, the assumption of absolute power in the form of a 88 temporary dictatorship." Nicollo Machiavellis view of emergency powers, as one element in the whole scheme of limited government, furnished an ironic contrast to the Lockean theory of prerogative. He recognized and attempted to bridge this chasm in democratic political theory, thus: Now, in a well-ordered society, it should never be necessary to resort to extra constitutional measures; for although they may for a time be beneficial, yet the precedent is pernicious, for if the practice is once established for good objects, they will in a little while be disregarded under that pretext but for evil purposes. Thus, no republic will ever be perfect if she has not by law 89 provided for everything, having a remedy for every emergency and fixed rules for applying it. Machiavelli in contrast to Locke, Rosseau and Mill sought to incorporate into the constitution a regularized system of standby emergency powers to be invoked with suitable checks and controls in time of national danger. He attempted forthrightly to meet the problem of combining a capacious reserve of power and speed and vigor in its application in time of 90 emergency, with effective constitutional restraints. Contemporary political theorists, addressing themselves to the problem of response to emergency by constitutional democracies, have employed the doctrine of constitutional 91 dictatorship. Frederick M. Watkins saw "no reason why absolutism should not be used as a means for the defense of liberal institutions," provided it "serves to protect established institutions from the danger of permanent injury in a period of temporary emergency and is

followed by a prompt return to the previous forms of political life." He recognized the two (2) key elements of the problem of emergency governance, as well as all constitutional governance: increasing administrative powers of the executive, while at the same time 93 "imposing limitation upon that power." Watkins placed his real faith in a scheme of constitutional dictatorship. These are the conditions of success of such a dictatorship: "The period of dictatorship must be relatively shortDictatorship should always be strictly legitimate in characterFinal authority to determine the need for dictatorship in any given case must 94 never rest with the dictator himself" and the objective of such an emergency dictatorship should be "strict political conservatism." 95 Carl J. Friedrich cast his analysis in terms similar to those of Watkins. "It is a problem of concentrating power in a government where power has consciously been divided to cope with situations of unprecedented magnitude and gravity. There must be a broad grant of powers, subject to equally strong limitations as to who shall exercise such powers, when, for 96 how long, and to what end." Friedrich, too, offered criteria for judging the adequacy of any of scheme of emergency powers, to wit: "The emergency executive must be appointed by constitutional means i.e., he must be legitimate; he should not enjoy power to determine the existence of an emergency; emergency powers should be exercised under a strict time limitation; and last, the objective of emergency action must be the defense of the constitutional 97 order." Clinton L. Rossiter, after surveying the history of the employment of emergency powers in Great Britain, France, Weimar, Germany and the United States, reverted to a description of a scheme of "constitutional dictatorship" as solution to the vexing problems presented by 98 emergency. Like Watkins and Friedrich, he stated a priori the conditions of success of the "constitutional dictatorship," thus: 1) No general regime or particular institution of constitutional dictatorship should be initiated unless it is necessary or even indispensable to the preservation of the State and its constitutional order 2) the decision to institute a constitutional dictatorship should never be in the hands of the man or men who will constitute the dictator 3) No government should initiate a constitutional dictatorship without making specific provisions for its termination 4) all uses of emergency powers and all readjustments in the organization of the government should be effected in pursuit of constitutional or legal requirements 5) no dictatorial institution should be adopted, no right invaded, no regular procedure altered any more than is absolutely necessary for the conquest of the particular crisis . . . 6) The measures adopted in the prosecution of the a constitutional dictatorship should never be permanent in character or effect 7) The dictatorship should be carried on by persons representative of every part of the citizenry interested in the defense of the existing constitutional order. . . 8) Ultimate responsibility should be maintained for every action taken under a constitutional dictatorship. . . 9) The decision to terminate a constitutional dictatorship, like the decision to institute one should never be in the hands of the man or men who constitute the dictator. . . 10) No constitutional dictatorship should extend beyond the termination of the crisis for which it was instituted 11) the termination of the crisis must be followed by a complete return as possible to the political and governmental conditions existing prior to the initiation of the

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constitutional dictatorship Rossiter accorded to legislature a far greater role in the oversight exercise of emergency powers than did Watkins. He would secure to Congress final responsibility for declaring the existence or termination of an emergency, and he places great faith in the effectiveness of 100 congressional investigating committees. Scott and Cotter, in analyzing the above contemporary theories in light of recent experience, were one in saying that, "the suggestion that democracies surrender the control of government to an authoritarian ruler in time of grave danger to the nation is not based upon sound constitutional theory." To appraise emergency power in terms of constitutional dictatorship serves merely to distort the problem and hinder realistic analysis. It matters not whether the term "dictator" is used in its normal sense (as applied to authoritarian rulers) or is employed to embrace all chief executives administering emergency powers. However used, "constitutional dictatorship" cannot be divorced from the implication of suspension of the processes of constitutionalism. Thus, they favored instead the "concept of constitutionalism" articulated by Charles H. McIlwain: A concept of constitutionalism which is less misleading in the analysis of problems of emergency powers, and which is consistent with the findings of this study, is that formulated by Charles H. McIlwain. While it does not by any means necessarily exclude some indeterminate limitations upon the substantive powers of government, full emphasis is placed upon procedural limitations, and political responsibility. McIlwain clearly recognized the need to repose adequate power in government. And in discussing the meaning of constitutionalism, he insisted that the historical and proper test of constitutionalism was the existence of adequate processes for keeping government responsible. He refused to equate constitutionalism with the enfeebling of government by an exaggerated emphasis upon separation of powers and substantive limitations on governmental power. He found that the really effective checks on despotism have consisted not in the weakening of government but, but rather in the limiting of it; between which there is a great and very significant difference. In associating constitutionalism with "limited" as distinguished from "weak" government, McIlwain meant government limited to the orderly procedure of law as opposed to the processes of force. The two fundamental correlative elements of constitutionalism for which all lovers of liberty must yet fight are the legal limits to arbitrary power and a complete political responsibility of government 101 to the governed. In the final analysis, the various approaches to emergency of the above political theorists from Locks "theory of prerogative," to Watkins doctrine of "constitutional dictatorship" and, eventually, to McIlwains "principle of constitutionalism" --- ultimately aim to solve one real problem in emergency governance, i.e., that of allotting increasing areas of discretionary power to the Chief Executive, while insuring that such powers will be exercised with a sense of political responsibility and under effective limitations and checks. Our Constitution has fairly coped with this problem. Fresh from the fetters of a repressive regime, the 1986 Constitutional Commission, in drafting the 1987 Constitution, endeavored to 102 create a government in the concept of Justice Jacksons "balanced power structure." Executive, legislative, and judicial powers are dispersed to the President, the Congress, and the Supreme Court, respectively. Each is supreme within its own sphere. But none has the monopoly of power in times of emergency. Each branch is given a role to serve as limitation or check upon the other. This system does not weaken the President, it just limits his power, using the language of McIlwain. In other words, in times of emergency, our Constitution reasonably demands that we repose a certain amount of faith in the basic integrity and wisdom of the Chief Executive but, at the same time, it obliges him to operate within carefully

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prescribed procedural limitations. a. "Facial Challenge" Petitioners contend that PP 1017 is void on its face because of its "overbreadth." They claim that its enforcement encroached on both unprotected and protected rights under Section 4, Article III of the Constitution and sent a "chilling effect" to the citizens. A facial review of PP 1017, using the overbreadth doctrine, is uncalled for. First and foremost, the overbreadth doctrine is an analytical tool developed for testing "on their faces" statutes in free speech cases, also known under the American Law as First Amendment 103 cases. A plain reading of PP 1017 shows that it is not primarily directed to speech or even speechrelated conduct. It is actually a call upon the AFP to prevent or suppress all forms of lawless 104 violence. In United States v. Salerno, the US Supreme Court held that "we have not recognized an overbreadth doctrine outside the limited context of the First Amendment" (freedom of speech). Moreover, the overbreadth doctrine is not intended for testing the validity of a law that "reflects legitimate state interest in maintaining comprehensive control over harmful, constitutionally unprotected conduct." Undoubtedly, lawless violence, insurrection and rebellion are considered 105 "harmful" and "constitutionally unprotected conduct." In Broadrick v. Oklahoma, it was held: It remains a matter of no little difficulty to determine when a law may properly be held void on its face and when such summary action is inappropriate. But the plain import of our cases is, at the very least, that facial overbreadth adjudication is an exception to our traditional rules of practice and that its function, a limited one at the outset, attenuates as the otherwise unprotected behavior that it forbids the State to sanction moves from pure speech t oward conduct and that conduct even if expressive falls within the scope of otherwise valid criminal laws that reflect legitimate state interests in maintaining comprehensive controls over harmful, constitutionally unprotected conduct. Thus, claims of facial overbreadth are entertained in cases involving statutes which, by their terms, seek to regulate only "spoken words" and again, that "overbreadth claims, if entertained at all, have been curtailed when invoked against ordinary criminal laws that are sought to be 106 applied to protected conduct." Here, the incontrovertible fact remains that PP 1017 pertains to a spectrum of conduct, not free speech, which is manifestly subject to state regulation. Second, facial invalidation of laws is considered as "manifestly strong medicine," to be used 107 "sparingly and only as a last resort," and is "generally disfavored;" The reason for this is obvious. Embedded in the traditional rules governing constitutional adjudication is the principle that a person to whom a law may be applied will not be heard to challenge a law on the ground that it may conceivably be applied unconstitutionally to others, i.e., in other situations not 108 before the Court. A writer and scholar in Constitutional Law explains further: The most distinctive feature of the overbreadth technique is that it marks an exception to some of the usual rules of constitutional litigation. Ordinarily, a particular litigant claims that a statute is unconstitutional as applied to him or her; if the litigant prevails, the courts carve away the unconstitutional aspects of the law by invalidating its improper applications on a case to case basis. Moreover, challengers to a law are not permitted to raise the rights of third parties and can only assert their own interests. In overbreadth analysis, those rules give way; challenges are permitted to raise the rights of third parties; and the court invalidates the entire statute "on its face," not merely "as applied for" so that the overbroad law becomes unenforceable until a properly authorized court construes it more narrowly. The factor that motivates courts to depart from the normal adjudicatory rules is the concern with the "chilling;" deterrent effect of the overbroad statute on third parties not courageous enough to bring suit. The Court assumes

that an overbroad laws "very existence may cause others not before the court to refrain from constitutionally protected speech or expression." An overbreadth ruling is designed to remove that deterrent effect on the speech of those third parties. In other words, a facial challenge using the overbreadth doctrine will require the Court to examine PP 1017 and pinpoint its flaws and defects, not on the basis of its actual operation to petitioners, but on the assumption or prediction that its very existence may cause others not before the Court to refrain from constitutionally protected speech or expression. In Younger v. 109 Harris, it was held that: [T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The combination of the relative remoteness of the controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the required line-by-line analysis of detailed statutes,...ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional questions, whichever way they might be decided. And third, a facial challenge on the ground of overbreadth is the most difficult challenge to mount successfully, since the challenger must establish that there can be no instance when the assailed law may be valid. Here, petitioners did not even attempt to show whether this situation exists. Petitioners likewise seek a facial review of PP 1017 on the ground of vagueness. This, too, is unwarranted. Related to the "overbreadth" doctrine is the "void for vagueness doctrine" which holds that "a law is facially invalid if men of common intelligence must necessarily guess at its meaning and 110 differ as to its application." It is subject to the same principles governing overbreadth doctrine. For one, it is also an analytical tool for testing "on their faces" statutes in free speech cases. And like overbreadth, it is said that a litigant may challenge a statute on its face only if it is vague in all its possible applications. Again, petitioners did not even attempt to show that PP 1017 is vague in all its application. They also failed to establish that men of common intelligence cannot understand the meaning and application of PP 1017. b. Constitutional Basis of PP 1017 Now on the constitutional foundation of PP 1017. The operative portion of PP 1017 may be divided into three important provisions, thus: First provision: "by virtue of the power vested upon me by Section 18, Artilce VII do hereby command the Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well any act of insurrection or rebellion" Second provision: "and to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction;" Third provision: "as provided in Section 17, Article XII of the Constitution do hereby declare a State of National Emergency." First Provision: Calling-out Power The first provision pertains to the Presidents calling-out power. In Sanlakas v. Executive 111 Secretary, this Court, through Mr. Justice Dante O. Tinga, held that Section 18, Article VII of the Constitution reproduced as follows: Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or

suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law. Within forty-eight hours from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a report in person or in writing to the Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it. The Congress, if not in session, shall within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without need of a call. The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual bases of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof, and must promulgate its decision thereon within thirty days from its filing. A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the writ. The suspension of the privilege of the writ shall apply only to persons judicially charged for rebellion or offenses inherent in or directly connected with invasion. During the suspension of the privilege of the writ, any person thus arrested or detained shall be judicially charged within three days, otherwise he shall be released. grants the President, as Commander-in-Chief, a "sequence" of graduated powers. From the most to the least benign, these are: the calling-out power, the power to suspend the privilege of the writ of habeas corpus, and the power to declare Martial Law. Citing Integrated Bar of the 112 Philippines v. Zamora, the Court ruled that the only criterion for the exercise of the callingout power is that "whenever it becomes necessary," the President may call the armed forces "to prevent or suppress lawless violence, invasion or rebellion." Are these conditions present in the instant cases? As stated earlier, considering the circumstances then prevailing, President Arroyo found it necessary to issue PP 1017. Owing to her Offices vast intelligence network, she is in the best position to determine the actual condition of the country. Under the calling-out power, the President may summon the armed forces to aid him in suppressing lawless violence, invasion and rebellion. This involves ordinary police action. But every act that goes beyond the Presidents calling-out power is considered illegal or ultra vires. For this reason, a President must be careful in the exercise of his powers. He cannot invoke a greater power when he wishes to act under a lesser power. There lies the wisdom of our Constitution, the greater the power, the greater are the limitations. It is pertinent to state, however, that there is a distinction between the Presidents authority to declare a "state of rebellion" (in Sanlakas) and the authority to proclaim a state of national emergency. While President Arroyos authority to declare a "state of rebellion" emanates from her powers as Chief Executive, the statutory authority cited in Sanlakas was Section 4, Chapter 2, Book II of the Revised Administrative Code of 1987, which provides: SEC. 4. Proclamations. Acts of the President fixing a date or declaring a status or condition of public moment or interest, upon the existence of which the operation of a specific law or regulation is made to depend, shall be promulgated in proclamations which shall have the force of an executive order.

President Arroyos declaration of a "state of rebellion" was merely an act declaring a status or condition of public moment or interest, a declaration allowed under Section 4 cited above. Such declaration, in the words of Sanlakas, is harmless, without legal significance, and deemed not written. In these cases, PP 1017 is more than that. In declaring a state of national emergency, President Arroyo did not only rely on Section 18, Article VII of the Constitution, a provision calling on the AFP to prevent or suppress lawless violence, invasion or rebellion. She also relied on Section 17, Article XII, a provision on the States extraordinary power to take over privately-owned public utility and business affected with public interest. Indeed, PP 1017 calls for the exercise of an awesome power. Obviously, such Proclamation cannot be deemed harmless, without legal significance, or not written, as in the case of Sanlakas. Some of the petitioners vehemently maintain that PP 1017 is actually a declaration of Martial Law. It is no so. What defines the character of PP 1017 are its wordings. It is plain therein that what the President invoked was her calling-out power. The declaration of Martial Law is a "warn[ing] to citizens that the military power has been called upon by the executive to assist in the maintenance of law and order, and that, while the emergency lasts, they must, upon pain of arrest and punishment, not commit any acts which 113 will in any way render more difficult the restoration of order and the enforcement of law." In his "Statement before the Senate Committee on Justice" on March 13, 2006, Mr. Justice 114 Vicente V. Mendoza, an authority in constitutional law, said that of the three powers of the President as Commander-in-Chief, the power to declare Martial Law poses the most severe threat to civil liberties. It is a strong medicine which should not be resorted to lightly. It cannot be used to stifle or persecute critics of the government. It is placed in the keeping of the President for the purpose of enabling him to secure the people from harm and to restore order so that they can enjoy their individual freedoms. In fact, Section 18, Art. VII, provides: A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the writ. Justice Mendoza also stated that PP 1017 is not a declaration of Martial Law. It is no more than a call by the President to the armed forces to prevent or suppress lawless violence. As such, it cannot be used to justify acts that only under a valid declaration of Martial Law can be done. Its use for any other purpose is a perversion of its nature and scope, and any act done contrary to its command is ultra vires. Justice Mendoza further stated that specifically, (a) arrests and seizures without judicial warrants; (b) ban on public assemblies; (c) take-over of news media and agencies and press censorship; and (d) issuance of Presidential Decrees, are powers which can be exercised by the President as Commander-in-Chief only where there is a valid declaration of Martial Law or suspension of the writ of habeas corpus. Based on the above disquisition, it is clear that PP 1017 is not a declaration of Martial Law. It is merely an exercise of President Arroyos calling-out power for the armed forces to assist her in preventing or suppressing lawless violence. Second Provision: "Take Care" Power The second provision pertains to the power of the President to ensure that the laws be faithfully executed. This is based on Section 17, Article VII which reads: SEC. 17. The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that the laws be faithfully executed. 115 As the Executive in whom the executive power is vested, the primary function of the President is to enforce the laws as well as to formulate policies to be embodied in existing

laws. He sees to it that all laws are enforced by the officials and employees of his department. Before assuming office, he is required to take an oath or affirmation to the effect that as 116 President of the Philippines, he will, among others, "execute its laws." In the exercise of such function, the President, if needed, may employ the powers attached to his office as the 117 Commander-in-Chief of all the armed forces of the country, including the Philippine National 118 119 Police under the Department of Interior and Local Government. Petitioners, especially Representatives Francis Joseph G. Escudero, Satur Ocampo, Rafael Mariano, Teodoro Casio, Liza Maza, and Josel Virador argue that PP 1017 is unconstitutional as it arrogated upon President Arroyo the power to enact laws and decrees in violation of Section 1, Article VI of the Constitution, which vests the power to enact laws in Congress. They assail the clause "to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction." \ Petitioners contention is understandable. A reading of PP 1017 operative clause shows that it 120 was lifted from Former President Marcos Proclamation No. 1081, which partly reads: NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines by virtue of the powers vested upon me by Article VII, Section 10, Paragraph (2) of the Constitution, do hereby place the entire Philippines as defined in Article 1, Section 1 of the Constitution under martial law and, in my capacity as their Commander-in-Chief, do hereby command the Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well as any act of insurrection or rebellion and to enforce obedience to all the laws and decrees, orders and regulations promulgated by me personally or upon my direction. We all know that it was PP 1081 which granted President Marcos legislative power. Its enabling clause states: "to enforce obedience to all the laws and decrees, orders and regulations promulgated by me personally or upon my direction." Upon the other hand, the enabling clause of PP 1017 issued by President Arroyo is: to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction." Is it within the domain of President Arroyo to promulgate "decrees"? PP 1017 states in part: "to enforce obedience to all the laws and decrees x x x promulgated by me personally or upon my direction." The President is granted an Ordinance Power under Chapter 2, Book III of Executive Order No. 292 (Administrative Code of 1987). She may issue any of the following: Sec. 2. Executive Orders. Acts of the President providing for rules of a general or permanent character in implementation or execution of constitutional or statutory powers shall be promulgated in executive orders. Sec. 3. Administrative Orders. Acts of the President which relate to particular aspect of governmental operations in pursuance of his duties as administrative head shall be promulgated in administrative orders. Sec. 4. Proclamations. Acts of the President fixing a date or declaring a status or condition of public moment or interest, upon the existence of which the operation of a specific law or regulation is made to depend, shall be promulgated in proclamations which shall have the force of an executive order. Sec. 5. Memorandum Orders. Acts of the President on matters of administrative detail or of subordinate or temporary interest which only concern a particular officer or office of the Government shall be embodied in memorandum orders. Sec. 6. Memorandum Circulars. Acts of the President on matters relating to internal administration, which the President desires to bring to the attention of all or some of the

departments, agencies, bureaus or offices of the Government, for information or compliance, shall be embodied in memorandum circulars. Sec. 7. General or Special Orders. Acts and commands of the President in his capacity as Commander-in-Chief of the Armed Forces of the Philippines shall be issued as general or special orders. President Arroyos ordinance power is limited to the foregoing issuances. She cannot issue decrees similar to those issued by Former President Marcos under PP 1081. Presidential Decrees are laws which are of the same category and binding force as statutes because they were issued by the President in the exercise of his legislative power during the period of 121 Martial Law under the 1973 Constitution. This Court rules that the assailed PP 1017 is unconstitutional insofar as it grants President Arroyo the authority to promulgate "decrees." Legislative power is peculiarly within the province of the Legislature. Section 1, Article VI categorically states that "[t]he legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of Representatives." To be sure, neither Martial Law nor a state of rebellion nor a state of emergency can justify President Arroyos exercise of legislative power by issuing decrees. Can President Arroyo enforce obedience to all decrees and laws through the military? As this Court stated earlier, President Arroyo has no authority to enact decrees. It follows that these decrees are void and, therefore, cannot be enforced. With respect to "laws," she cannot call the military to enforce or implement certain laws, such as customs laws, laws governing family and property relations, laws on obligations and contracts and the like. She can only order the military, under PP 1017, to enforce laws pertinent to its duty to suppress lawless violence. Third Provision: Power to Take Over The pertinent provision of PP 1017 states: x x x and to enforce obedience to all the laws and to all decrees, orders, and regulations promulgated by me personally or upon my direction; and as provided in Section 17, Article XII of the Constitution do hereby declare a state of national emergency. The import of this provision is that President Arroyo, during the state of national emergency under PP 1017, can call the military not only to enforce obedience "to all the laws and to all decrees x x x" but also to act pursuant to the provision of Section 17, Article XII which reads: Sec. 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. What could be the reason of President Arroyo in invoking the above provision when she issued PP 1017? The answer is simple. During the existence of the state of national emergency, PP 1017 purports to grant the President, without any authority or delegation from Congress, to take over or direct the operation of any privately-owned public utility or business affected with public interest. This provision was first introduced in the 1973 Constitution, as a product of the "martial law" 122 thinking of the 1971 Constitutional Convention. In effect at the time of its approval was President Marcos Letter of Instruction No. 2 dated September 22, 1972 instructing the Secretary of National Defense to take over "the management, control and operation of the Manila Electric Company, the Philippine Long Distance Telephone Company, the National Waterworks and Sewerage Authority, the Philippine National Railways, the Philippine Air Lines, Air Manila (and) Filipinas Orient Airways . . . for the successful prosecution by the Government

of its effort to contain, solve and end the present national emergency." Petitioners, particularly the members of the House of Representatives, claim that President Arroyos inclusion of Section 17, Article XII in PP 1017 is an encroachment on the legislatures emergency powers. This is an area that needs delineation. A distinction must be drawn between the Presidents authority to declare "a state of national emergency" and to exercise emergency powers. To the first, as elucidated by the Court, Section 18, Article VII grants the President such power, hence, no legitimate constitutional objection can be raised. But to the second, manifold constitutional issues arise. Section 23, Article VI of the Constitution reads: SEC. 23. (1) The Congress, by a vote of two-thirds of both Houses in joint session assembled, voting separately, shall have the sole power to declare the existence of a state of war. (2) In times of war or other national emergency, the Congress may, by law, authorize the President, for a limited period and subject to such restrictions as it may prescribe, to exercise powers necessary and proper to carry out a declared national policy. Unless sooner withdrawn by resolution of the Congress, such powers shall cease upon the next adjournment thereof. It may be pointed out that the second paragraph of the above provision refers not only to war but also to "other national emergency." If the intention of the Framers of our Constitution was to withhold from the President the authority to declare a "state of national emergency" pursuant to Section 18, Article VII (calling-out power) and grant it to Congress (like the declaration of the existence of a state of war), then the Framers could have provided so. Clearly, they did not intend that Congress should first authorize the President before he can declare a "state of national emergency." The logical conclusion then is that President Arroyo could validly declare the existence of a state of national emergency even in the absence of a Congressional enactment. But the exercise of emergency powers, such as the taking over of privately owned public utility or business affected with public interest, is a different matter. This requires a delegation from Congress. Courts have often said that constitutional provisions in pari materia are to be construed together. Otherwise stated, different clauses, sections, and provisions of a constitution which relate to the same subject matter will be construed together and considered in the light of each 123 other. Considering that Section 17 of Article XII and Section 23 of Article VI, previously quoted, relate to national emergencies, they must be read together to determine the limitation of the exercise of emergency powers. Generally, Congress is the repository of emergency powers. This is evident in the tenor of Section 23 (2), Article VI authorizing it to delegate such powers to the President. Certainly, a body cannot delegate a power not reposed upon it. However, knowing that during grave emergencies, it may not be possible or practicable for Congress to meet and exercise its powers, the Framers of our Constitution deemed it wise to allow Congress to grant emergency powers to the President, subject to certain conditions, thus: (1) There must be a war or other emergency. (2) The delegation must be for a limited period only. (3) The delegation must be subject to such restrictions as the Congress may prescribe. (4) The emergency powers must be exercised to carry out a national policy declared 124 by Congress. Section 17, Article XII must be understood as an aspect of the emergency powers clause. The taking over of private business affected with public interest is just another facet of the emergency powers generally reposed upon Congress. Thus, when Section 17 states that the

"the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public utility or business affected with public interest," it refers to Congress, not the President. Now, whether or not the President may exercise such power is dependent on whether Congress may delegate it to him pursuant to a law prescribing the reasonable terms thereof. Youngstown Sheet & Tube Co. et 125 al. v. Sawyer, held: It is clear that if the President had authority to issue the order he did, it must be found in some provision of the Constitution. And it is not claimed that express constitutional language grants this power to the President. The contention is that presidential power should be implied from the aggregate of his powers under the Constitution. Particular reliance is placed on provisions in Article II which say that "The executive Power shall be vested in a President . . . .;" that "he shall take Care that the Laws be faithfully executed;" and that he "shall be Commander-inChief of the Army and Navy of the United States. The order cannot properly be sustained as an exercise of the Presidents military power as Commander-in-Chief of the Armed Forces. The Government attempts to do so by citing a number of cases upholding broad powers in military commanders engaged in day-to-day fighting in a theater of war. Such cases need not concern us here. Even though "theater of war" be an expanding concept, we cannot with faithfulness to our constitutional system hold that the Commander-in-Chief of the Armed Forces has the ultimate power as such to take possession of private property in order to keep labor disputes from stopping production. This is a job for the nations lawmakers, not for its military authorities. Nor can the seizure order be sustained because of the several constitutional provisions that grant executive power to the President. In the framework of our Constitution, the Presidents power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. The first section of the first article says that "All legislative Powers herein granted shall be vested in a Congress of the 126 United States. . ." Petitioner Cacho-Olivares, et al. contends that the term "emergency" under Section 17, Article XII refers to "tsunami," "typhoon," "hurricane"and"similar occurrences." This is a limited view of "emergency." Emergency, as a generic term, connotes the existence of conditions suddenly intensifying the degree of existing danger to life or well-being beyond that which is accepted as normal. Implicit 127 in this definitions are the elements of intensity, variety, and perception. Emergencies, as perceived by legislature or executive in the United Sates since 1933, have been occasioned by 128 a wide range of situations, classifiable under three (3) principal heads: a) economic, b) 129 130 natural disaster, and c) national security. "Emergency," as contemplated in our Constitution, is of the same breadth. It may include rebellion, economic crisis, pestilence or epidemic, typhoon, flood, or other similar catastrophe 131 of nationwide proportions or effect. This is evident in the Records of the Constitutional Commission, thus: MR. GASCON. Yes. What is the Committees definition of "national emergency" which appears in Section 13, page 5? It reads: When the common good so requires, the State may temporarily take over or direct the operation of any privately owned public utility or business affected with public interest. MR. VILLEGAS. What I mean is threat from external aggression, for example, calamities or natural disasters.

MR. GASCON. There is a question by Commissioner de los Reyes. What about strikes and riots? MR. VILLEGAS. Strikes, no; those would not be covered by the term "national emergency." MR. BENGZON. Unless they are of such proportions such that they would paralyze 132 government service. xxxxxx MR. TINGSON. May I ask the committee if "national emergency" refers to military national emergency or could this be economic emergency?" MR. VILLEGAS. Yes, it could refer to both military or economic dislocations. 133 MR. TINGSON. Thank you very much. It may be argued that when there is national emergency, Congress may not be able to convene and, therefore, unable to delegate to the President the power to take over privatelyowned public utility or business affected with public interest. 134 In Araneta v. Dinglasan, this Court emphasized that legislative power, through which extraordinary measures are exercised, remains in Congress even in times of crisis. "x x x After all the criticisms that have been made against the efficiency of the system of the separation of powers, the fact remains that the Constitution has set up this form of government, with all its defects and shortcomings, in preference to the commingling of powers in one man or group of men. The Filipino people by adopting parliamentary government have given notice that they share the faith of other democracy-loving peoples in this system, with all its faults, as the ideal. The point is, under this framework of government, legislation is preserved for Congress all the time, not excepting periods of crisis no matter how serious. Never in the history of the United States, the basic features of whose Constitution have been copied in ours, have specific functions of the legislative branch of enacting laws been surrendered to another department unless we regard as legislating the carrying out of a legislative policy according to prescribed standards; no, not even when that Republic was fighting a total war, or when it was engaged in a life-and-death struggle to preserve the Union. The truth is that under our concept of constitutional government, in times of extreme perils more than in normal circumstances the various branches, executive, legislative, and judicial, given the ability to act, are called upon to perform the duties and discharge the responsibilit ies committed to them respectively." Following our interpretation of Section 17, Article XII, invoked by President Arroyo in issuing PP 1017, this Court rules that such Proclamation does not authorize her during the emergency to temporarily take over or direct the operation of any privately owned public utility or business affected with public interest without authority from Congress. Let it be emphasized that while the President alone can declare a state of national emergency, however, without legislation, he has no power to take over privately-owned public utility or business affected with public interest. The President cannot decide whether exceptional circumstances exist warranting the take over of privately-owned public utility or business affected with public interest. Nor can he determine when such exceptional circumstances have ceased. Likewise, without legislation, the President has no power to point out the types of businesses affected with public interest that should be taken over. In short, the President has no absolute authority to exercise all the powers of the State under Section 17, Article VII in the absence of an emergency powers act passed by Congress. c. "AS APPLIED CHALLENGE" One of the misfortunes of an emergency, particularly, that which pertains to security, is that military necessity and the guaranteed rights of the individual are often not compatible. Our

history reveals that in the crucible of conflict, many rights are curtailed and trampled upon. Here, the right against unreasonable search and seizure; the right against warrantless arrest; and the freedom of speech, of expression, of the press, and of assembly under the Bill of Rights suffered the greatest blow. Of the seven (7) petitions, three (3) indicate "direct injury." In G.R. No. 171396, petitioners David and Llamas alleged that, on February 24, 2006, they were arrested without warrants on their way to EDSA to celebrate the 20th Anniversary of People Power I. The arresting officers cited PP 1017 as basis of the arrest. In G.R. No. 171409, petitioners Cacho-Olivares and Tribune Publishing Co., Inc. claimed that on February 25, 2006, the CIDG operatives "raided and ransacked without warrant" their office. Three policemen were assigned to guard their office as a possible "source of destabilization." Again, the basis was PP 1017. And in G.R. No. 171483, petitioners KMU and NAFLU-KMU et al. alleged that their members were "turned away and dispersed" when they went to EDSA and later, to Ayala Avenue, to celebrate the 20th Anniversary of People Power I. A perusal of the "direct injuries" allegedly suffered by the said petitioners shows that they resulted from the implementation, pursuant to G.O. No. 5, of PP 1017. Can this Court adjudge as unconstitutional PP 1017 and G.O. No 5 on the basis of these illegal acts? In general, does the illegal implementation of a law render it unconstitutional? Settled is the rule that courts are not at liberty to declare statutes invalid although they may be 135 abused and misabused and may afford an opportunity for abuse in the manner of 136 application. The validity of a statute or ordinance is to be determined from its general purpose and its efficiency to accomplish the end desired, not from its effects in a particular 137 case. PP 1017 is merely an invocation of the Presidents calling-out power. Its general purpose is to command the AFP to suppress all forms of lawless violence, invasion or rebellion. It had accomplished the end desired which prompted President Arroyo to issue PP 1021. But there is nothing in PP 1017 allowing the police, expressly or impliedly, to conduct illegal arrest, search or violate the citizens constitutional rights. Now, may this Court adjudge a law or ordinance unconstitutional on the ground that its implementor committed illegal acts? The answer is no. The criterion by which the validity of the statute or ordinance is to be measured is the essential basis for the exercise of power, and not 138 a mere incidental result arising from its exertion. This is logical. Just imagine the absurdity of situations when laws maybe declared unconstitutional just because the officers implementing them have acted arbitrarily. If this were so, judging from the blunders committed by policemen in the cases passed upon by the Court, majority of the provisions of the Revised Penal Code would have been declared unconstitutional a long time ago. President Arroyo issued G.O. No. 5 to carry into effect the provisions of PP 1017. General orders are "acts and commands of the President in his capacity as Commander-in-Chief of the Armed Forces of the Philippines." They are internal rules issued by the executive officer to his subordinates precisely for the proper and efficient administration of law. Such rules and regulations create no relation except between the official who issues them and the official who 139 receives them. They are based on and are the product of, a relationship in which power is 140 their source, and obedience, their object. For these reasons, one requirement for these rules to be valid is that they must be reasonable, not arbitrary or capricious. G.O. No. 5 mandates the AFP and the PNP to immediately carry out the "necessary and appropriate actions and measures to suppress and prevent acts of terrorism and lawless violence." Unlike the term "lawless violence" which is unarguably extant in our statutes and the

Constitution, and which is invariably associated with "invasion, insurrection or rebellion," the phrase "acts of terrorism" is still an amorphous and vague concept. Congress has yet to enact a law defining and punishing acts of terrorism. In fact, this "definitional predicament" or the "absence of an agreed definition of terrorism" confronts not only our country, but the international community as well. The following observations are quite apropos: In the actual unipolar context of international relations, the "fight against terrorism" has become one of the basic slogans when it comes to the justification of the use of force against certain states and against groups operating internationally. Lists of states "sponsoring terrorism" and of terrorist organizations are set up and constantly being updated according to criteria that are not always known to the public, but are clearly determined by strategic interests. The basic problem underlying all these military actions or threats of the use of force as the most recent by the United States against Iraq consists in the absence of an agreed definition of terrorism. Remarkable confusion persists in regard to the legal categorization of acts of violence either by states, by armed groups such as liberation movements, or by individuals. The dilemma can by summarized in the saying "One countrys terrorist is another countrys freedom fighter." The apparent contradiction or lack of consistency in the use of the term "terrorism" may further be demonstrated by the historical fact that leaders of national liberation movements such as Nelson Mandela in South Africa, Habib Bourgouiba in Tunisia, or Ahmed Ben Bella in Algeria, to mention only a few, were originally labeled as terrorists by those who controlled the territory at the time, but later became internationally respected statesmen. What, then, is the defining criterion for terrorist acts the differentia specifica distinguishing those acts from eventually legitimate acts of national resistance or self-defense? Since the times of the Cold War the United Nations Organization has been trying in vain to reach a consensus on the basic issue of definition. The organization has intensified its efforts recently, but has been unable to bridge the gap between those who associate "terrorism" with any violent act by non-state groups against civilians, state functionaries or infrastructure or military installations, and those who believe in the concept of the legitimate use of force when resistance against foreign occupation or against systematic oppression of ethnic and/or religious groups within a state is concerned. The dilemma facing the international community can best be illustrated by reference to the contradicting categorization of organizations and movements such as Palestine Liberation Organization (PLO) which is a terrorist group for Israel and a liberation movement for Arabs and Muslims the Kashmiri resistance groups who are terrorists in the perception of India, liberation fighters in that of Pakistan the earlier Contras in Nicaragua freedom fighters for the United States, terrorists for the Socialist camp or, most drastically, the Afghani Mujahedeen (later to become the Taliban movement): during the Cold War period they were a group of freedom fighters for the West, nurtured by the United States, and a terrorist gang for the Soviet Union. One could go on and on in enumerating examples of conflicting categorizations that cannot be reconciled in any way because of opposing political interests that are at the roots of those perceptions. How, then, can those contradicting definitions and conflicting perceptions and evaluations of one and the same group and its actions be explained? In our analysis, the basic reason for these striking inconsistencies lies in the divergent interest of states. Depending on whether a state is in the position of an occupying power or in that of a rival, or adversary, of an occupying power in a given territory, the definition of terrorism will "fluctuate" accordingly. A state may eventually see itself as protector of the rights of a certain ethnic group outside its territory and

will therefore speak of a "liberation struggle," not of "terrorism" when acts of violence by this group are concerned, and vice-versa. The United Nations Organization has been unable to reach a decision on the definition of terrorism exactly because of these conflicting interests of sovereign states that determine in each and every instance how a particular armed movement (i.e. a non-state actor) is labeled in regard to the terrorists-freedom fighter dichotomy. A "policy of double standards" on this vital issue of international affairs has been the unavoidable consequence. This "definitional predicament" of an organization consisting of sovereign states and not of peoples, in spite of the emphasis in the Preamble to the United Nations Charter! has become even more serious in the present global power constellation: one superpower exercises the decisive role in the Security Council, former great powers of the Cold War era as well as medium powers are increasingly being marginalized; and the problem has become even more 141 acute since the terrorist attacks of 11 September 2001 I the United States. The absence of a law defining "acts of terrorism" may result in abuse and oppression on the part of the police or military. An illustration is when a group of persons are merely engaged in a drinking spree. Yet the military or the police may consider the act as an act of terrorism and immediately arrest them pursuant to G.O. No. 5. Obviously, this is abuse and oppression on their part. It must be remembered that an act can only be considered a crime if there is a law defining the same as such and imposing the corresponding penalty thereon. So far, the word "terrorism" appears only once in our criminal laws, i.e., in P.D. No. 1835 dated January 16, 1981 enacted by President Marcos during the Martial Law regime. This decree is entitled "Codifying The Various Laws on Anti-Subversion and Increasing The Penalties for Membership in Subversive Organizations." The word "terrorism" is mentioned in the following provision: "That one who conspires with any other person for the purpose of overthrowing the Government of the Philippines x x x by force, violence, terrorism, x x x shall be punished by reclusion temporal x x x." P.D. No. 1835 was repealed by E.O. No. 167 (which outlaws the Communist Party of the Philippines) enacted by President Corazon Aquino on May 5, 1985. These two (2) laws, however, do not define "acts of terrorism." Since there is no law defining "acts of terrorism," it is President Arroyo alone, under G.O. No. 5, who has the discretion to determine what acts constitute terrorism. Her judgment on this aspect is absolute, without restrictions. Consequently, there can be indiscriminate arrest without warrants, breaking into offices and residences, taking over the media enterprises, prohibition and dispersal of all assemblies and gatherings unfriendly to the administration. All these can be effected in the name of G.O. No. 5. These acts go far beyond the calling-out power of the President. Certainly, they violate the due process clause of the Constitution. Thus, this Court declares that the "acts of terrorism" portion of G.O. No. 5 is unconstitutional. Significantly, there is nothing in G.O. No. 5 authorizing the military or police to commit acts beyond what are necessary and appropriate to suppress and prevent lawless violence, the limitation of their authority in pursuing the Order. Otherwise, such acts are considered illegal. We first examine G.R. No. 171396 (David et al.) The Constitution provides that "the right of the people to be secured in their persons, houses, papers and effects against unreasonable search and seizure of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing 142 the place to be searched and the persons or things to be seized." The plain import of the language of the Constitution is that searches, seizures and arrests are normally unreasonable

unless authorized by a validly issued search warrant or warrant of arrest. Thus, the fundamental protection given by this provision is that between person and police must stand the protective authority of a magistrate clothed with power to issue or refuse to issue search 143 warrants or warrants of arrest. 144 In the Brief Account submitted by petitioner David, certain facts are established: first, he was arrested without warrant; second, the PNP operatives arrested him on the basis of PP 1017; third, he was brought at Camp Karingal, Quezon City where he was fingerprinted, photographed and booked like a criminal suspect; fourth,he was treated brusquely by policemen who "held his head and tried to push him" inside an unmarked car; fifth, he was 145 charged with Violation of Batas Pambansa Bilang No. 880 and Inciting to Sedition; sixth, he was detained for seven (7) hours; and seventh,he was eventually released for insufficiency of evidence. Section 5, Rule 113 of the Revised Rules on Criminal Procedure provides: Sec. 5. Arrest without warrant; when lawful. - A peace officer or a private person may, without a warrant, arrest a person: (a) When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense. (b) When an offense has just been committed and he has probable cause to believe based on personal knowledge of facts or circumstances that the person to be arrested has committed it; and x x x. Neither of the two (2) exceptions mentioned above justifies petitioner Davids warrantless arrest. During the inquest for the charges of inciting to sedition and violation of BP 880, all that the arresting officers could invoke was their observation that some rallyists were wearing tshirts with the invective "Oust Gloria Now" and their erroneous assumption that petitioner 146 David was the leader of the rally. Consequently, the Inquest Prosecutor ordered his immediate release on the ground of insufficiency of evidence. He noted that petitioner David was not wearing the subject t-shirt and even if he was wearing it, such fact is insufficient to charge him with inciting to sedition. Further, he also stated that there is insufficient evidence for the charge of violation of BP 880 as it was not even known whether petitioner David was the 147 leader of the rally. But what made it doubly worse for petitioners David et al. is that not only was their right against warrantless arrest violated, but also their right to peaceably assemble. Section 4 of Article III guarantees: No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances. "Assembly" means a right on the part of the citizens to meet peaceably for consultation in respect to public affairs. It is a necessary consequence of our republican institution and complements the right of speech. As in the case of freedom of expression, this right is not to be limited, much less denied, except on a showing of a clear and present danger of a substantive evil that Congress has a right to prevent. In other words, like other rights embraced in the freedom of expression, the right to assemble is not subject to previous restraint or censorship. It may not be conditioned upon the prior issuance of a permit or authorization from the government authorities except, of course, if the assembly is intended to be held in a public place, a permit for the use of such place, and not for the assembly itself, may be validly required. The ringing truth here is that petitioner David, et al. were arrested while they were exercising

their right to peaceful assembly. They were not committing any crime, neither was there a showing of a clear and present danger that warranted the limitation of that right. As can be gleaned from circumstances, the charges of inciting to sedition and violation of BP 880 were mere afterthought. Even the Solicitor General, during the oral argument, failed to justify the 148 arresting officers conduct. In De Jonge v. Oregon, it was held that peaceable assembly cannot be made a crime, thus: Peaceable assembly for lawful discussion cannot be made a crime. The holding of meetings for peaceable political action cannot be proscribed. Those who assist in the conduct of such meetings cannot be branded as criminals on that score. The question, if the rights of free speech and peaceful assembly are not to be preserved, is not as to the auspices under which the meeting was held but as to its purpose; not as to the relations of the speakers, but whether their utterances transcend the bounds of the freedom of speech which the Constitution protects. If the persons assembling have committed crimes elsewhere, if they have formed or are engaged in a conspiracy against the public peace and order, they may be prosecuted for their conspiracy or other violations of valid laws. But it is a different matter when the State, instead of prosecuting them for such offenses, seizes upon mere participation in a peaceable assembly and a lawful public discussion as the basis for a criminal charge. On the basis of the above principles, the Court likewise considers the dispersal and arrest of the members of KMU et al. (G.R. No. 171483) unwarranted. Apparently, their dispersal was done merely on the basis of Malacaangs directive canceling all permits previously issued by local government units. This is arbitrary. The wholesale cancellation of all permits to rally is a blatant disregard of the principle that "freedom of assembly is not to be limited, much less denied, except on a showing of a clear and present danger of a substantive evil that the State 149 has a right to prevent." Tolerance is the rule and limitation is the exception. Only upon a showing that an assembly presents a clear and present danger that the State may deny the citizens right to exercise it. Indeed, respondents failed to show or convince the Court that the rallyists committed acts amounting to lawless violence, invasion or rebellion. With the blanket revocation of permits, the distinction between protected and unprotected assemblies was eliminated. Moreover, under BP 880, the authority to regulate assemblies and rallies is lodged with the local government units. They have the power to issue permits and to revoke such permits after due notice and hearing on the determination of the presence of clear and present danger. 150 Here, petitioners were not even notified and heard on the revocation of their permits. The first time they learned of it was at the time of the dispersal. Such absence of notice is a fatal defect. When a persons right is restricted by government action, it behooves a democratic government to see to it that the restriction is fair, reasonable, and according to procedure. G.R. No. 171409, (Cacho-Olivares, et al.) presents another facet of freedom of speech i.e., the freedom of the press. Petitioners narration of facts, which the Solicitor General failed to refute, established the following: first, the Daily Tribunes offices were searched without warrant;second, the police operatives seized several materials for publication; third, the search was conducted at about 1:00 o clock in the morning of February 25, 2006; fourth, the search was conducted in the absence of any official of the Daily Tribune except the security guard of the building; and fifth, policemen stationed themselves at the vicinity of the Daily Tribune offices. Thereafter, a wave of warning came from government officials. Presidential Chief of Staff Michael Defensor was quoted as saying that such raid was "meant to show a strong presence, to tell media outlets not to connive or do anything that would help the rebels in bringing down this government." Director General Lomibao further stated that "if they do not

follow the standards and the standards are if they would contribute to instability in the government, or if they do not subscribe to what is in General Order No. 5 and Proc. No. 1017 we will recommend a takeover." National Telecommunications Commissioner Ronald Solis urged television and radio networks to "cooperate" with the government for the duration of the state of national emergency. He warned that his agency will not hesitate to recommend the closure of any broadcast outfit that violates rules set out for media coverage during times when 151 the national security is threatened. The search is illegal. Rule 126 of The Revised Rules on Criminal Procedure lays down the steps in the conduct of search and seizure. Section 4 requires that a search warrant be issued upon probable cause in connection with one specific offence to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce. Section 8 mandates that the search of a house, room, or any other premise be made in the presence of the lawful occupant thereof or any member of his family or in the absence of the latter, in the presence of two (2) witnesses of sufficient age and discretion residing in the same locality. And Section 9 states that the warrant must direct that it be served in the daytime, unless the property is on the person or in the place ordered to be searched, in which case a direction may be inserted that it be served at any time of the day or night. All these rules were violated by the CIDG operatives. Not only that, the search violated petitioners freedom of the press. The best gauge of a free and democratic society rests in the degree of freedom enjoyed by its media. In the Burgos v. 152 Chief of Staff this Court held that -As heretofore stated, the premises searched were the business and printing offices of the "Metropolitan Mail" and the "We Forum" newspapers. As a consequence of the search and seizure, these premises were padlocked and sealed, with the further result that the printing and publication of said newspapers were discontinued. Such closure is in the nature of previous restraint or censorship abhorrent to the freedom of the press guaranteed under the fundamental law, and constitutes a virtual denial of petitioners' freedom to express themselves in print. This state of being is patently anathematic to a democratic framework where a free, alert and even militant press is essential for the political enlightenment and growth of the citizenry. While admittedly, the Daily Tribune was not padlocked and sealed like the "Metropolitan Mail" and "We Forum" newspapers in the above case, yet it cannot be denied that the CIDG operatives exceeded their enforcement duties. The search and seizure of materials for publication, the stationing of policemen in the vicinity of the The Daily Tribune offices, and the arrogant warning of government officials to media, are plain censorship. It is that officious functionary of the repressive government who tells the citizen that he may speak only if allowed to do so, and no more and no less than what he is permitted to say on pain of 153 punishment should he be so rash as to disobey. Undoubtedly, the The Daily Tribune was subjected to these arbitrary intrusions because of its anti-government sentiments. This Court cannot tolerate the blatant disregard of a constitutional right even if it involves the most defiant of our citizens. Freedom to comment on public affairs is essential to the vitality of a representative democracy. It is the duty of the courts to be watchful for the constitutional rights of the citizen, and against any stealthy encroachments thereon. The motto should always be 154 obsta principiis. Incidentally, during the oral arguments, the Solicitor General admitted that the search of the Tribunes offices and the seizure of its materials for publication and other papers are illegal; and that the same are inadmissible "for any purpose," thus: JUSTICE CALLEJO:

You made quite a mouthful of admission when you said that the policemen, when inspected the Tribune for the purpose of gathering evidence and you admitted that the policemen were able to get the clippings. Is that not in admission of the admissibility of these clippings that were taken from the Tribune? SOLICITOR GENERAL BENIPAYO: Under the law they would seem to be, if they were illegally seized, I think and I know, Your 155 Honor, and these are inadmissible for any purpose. xxxxxxxxx SR. ASSO. JUSTICE PUNO: These have been published in the past issues of the Daily Tribune; all you have to do is to get those past issues. So why do you have to go there at 1 oclock in the morning and without any search warrant? Did they become suddenly part of the evidence of rebellion or inciting to sedition or what? SOLGEN BENIPAYO: Well, it was the police that did that, Your Honor. Not upon my instructions. SR. ASSO. JUSTICE PUNO: Are you saying that the act of the policeman is illegal, it is not based on any law, and it is not based on Proclamation 1017. SOLGEN BENIPAYO: It is not based on Proclamation 1017, Your Honor, because there is nothing in 1017 which says that the police could go and inspect and gather clippings from Daily Tribune or any other newspaper. SR. ASSO. JUSTICE PUNO: Is it based on any law? SOLGEN BENIPAYO: As far as I know, no, Your Honor, from the facts, no. SR. ASSO. JUSTICE PUNO: So, it has no basis, no legal basis whatsoever? SOLGEN BENIPAYO: Maybe so, Your Honor. Maybe so, that is why I said, I dont know if it is premature to say this, we do not condone this. If the people who have been injured by this would want to sue them, 156 they can sue and there are remedies for this. Likewise, the warrantless arrests and seizures executed by the police were, according to the Solicitor General, illegal and cannot be condoned, thus: CHIEF JUSTICE PANGANIBAN: There seems to be some confusions if not contradiction in your theory. SOLICITOR GENERAL BENIPAYO: I dont know whether this will clarify. The acts, the supposed illegal or unlawful acts committed on the occasion of 1017, as I said, it cannot be condoned. You cannot blame the President for, as you said, a misapplication of the law. These are acts of the police officers, that is their 157 responsibility. The Dissenting Opinion states that PP 1017 and G.O. No. 5 are constitutional in every aspect and "should result in no constitutional or statutory breaches if applied according to their letter." The Court has passed upon the constitutionality of these issuances. Its ratiocination has been exhaustively presented. At this point, suffice it to reiterate that PP 1017 is limited to the calling out by the President of the military to prevent or suppress lawless violence, invasion or rebellion. When in implementing its provisions, pursuant to G.O. No. 5, the military and the police committed acts which violate the citizens rights under the Constitution, this Court has to

declare such acts unconstitutional and illegal. In this connection, Chief Justice Artemio V. Panganibans concurring opinion, attached hereto, is considered an integral part of this ponencia. SUMMATION In sum, the lifting of PP 1017 through the issuance of PP 1021 a supervening event would have normally rendered this case moot and academic. However, while PP 1017 was still operative, illegal acts were committed allegedly in pursuance thereof. Besides, there is no guarantee that PP 1017, or one similar to it, may not again be issued. Already, there have been media reports on April 30, 2006 that allegedly PP 1017 would be reimposed "if the May 1 rallies" become "unruly and violent." Consequently, the transcendental issues raised by the parties should not be "evaded;" they must now be resolved to prevent future constitutional aberration. The Court finds and so holds that PP 1017 is constitutional insofar as it constitutes a call by the President for the AFP to prevent or suppress lawless violence. The proclamation is sustained by Section 18, Article VII of the Constitution and the relevant jurisprudence discussed earlier. However, PP 1017s extraneous provisions giving the President express or implied power (1) to issue decrees; (2) to direct the AFP to enforce obedience to all laws even those not related to lawless violence as well as decrees promulgated by the President; and (3) to impose standards on media or any form of prior restraint on the press, are ultra vires and unconstitutional. The Court also rules that under Section 17, Article XII of the Constitution, the President, in the absence of a legislation, cannot take over privately-owned public utility and private business affected with public interest. In the same vein, the Court finds G.O. No. 5 valid. It is an Order issued by the President acting as Commander-in-Chief addressed to subalterns in the AFP to carry out the provisions of PP 1017. Significantly, it also provides a valid standard that the military and the police should take only the "necessary and appropriate actions and measures to suppress and prevent acts of lawless violence."But the words "acts of terrorism" found in G.O. No. 5 have not been legally defined and made punishable by Congress and should thus be deemed deleted from the said G.O. While "terrorism" has been denounced generally in media, no law has been enacted to guide the military, and eventually the courts, to determine the limits of the AFPs authority in carrying out this portion of G.O. No. 5. On the basis of the relevant and uncontested facts narrated earlier, it is also pristine clear that (1) the warrantless arrest of petitioners Randolf S. David and Ronald Llamas; (2) the dispersal of the rallies and warrantless arrest of the KMU and NAFLU-KMU members; (3) the imposition of standards on media or any prior restraint on the press; and (4) the warrantless search of the Tribune offices and the whimsical seizures of some articles for publication and other materials, are not authorized by the Constitution, the law and jurisprudence. Not even by the valid provisions of PP 1017 and G.O. No. 5. Other than this declaration of invalidity, this Court cannot impose any civil, criminal or administrative sanctions on the individual police officers concerned. They have not been individually identified and given their day in court. The civil complaints or causes of action and/or relevant criminal Informations have not been presented before this Court. Elementary due process bars this Court from making any specific pronouncement of civil, criminal or administrative liabilities. It is well to remember that military power is a means to an end and substantive civil rights are ends in themselves. How to give the military the power it needs to protect the Republic without unnecessarily trampling individual rights is one of the eternal balancing tasks of a democratic state.During emergency, governmental action may vary in breadth and intensity from normal

times, yet they should not be arbitrary as to unduly restrain our peoples liberty. Perhaps, the vital lesson that we must learn from the theorists who studied the various competing political philosophies is that, it is possible to grant government the authority to cope with crises without surrendering the two vital principles of constitutionalism: the maintenance of 158 legal limits to arbitrary power, and political responsibility of the government to the governed. WHEREFORE, the Petitions are partly granted. The Court rules that PP 1017 is CONSTITUTIONAL insofar as it constitutes a call by President Gloria Macapagal-Arroyo on the AFP to prevent or suppress lawless violence. However, the provisions of PP 1017 commanding the AFP to enforce laws not related to lawless violence, as well as decrees promulgated by the President, are declared UNCONSTITUTIONAL. In addition, the provision in PP 1017 declaring national emergency under Section 17, Article VII of the Constitution is CONSTITUTIONAL, but such declaration does not authorize the President to take over privately-owned public utility or business affected with public interest without prior legislation. G.O. No. 5 is CONSTITUTIONAL since it provides a standard by which the AFP and the PNP should implement PP 1017, i.e. whatever is "necessary and appropriate actions and measures to suppress and prevent acts of lawless violence." Considering that "acts of terrorism" have not yet been defined and made punishable by the Legislature, such portion of G.O. No. 5 is declared UNCONSTITUTIONAL. The warrantless arrest of Randolf S. David and Ronald Llamas; the dispersal and warrantless arrest of the KMU and NAFLU-KMU members during their rallies, in the absence of proof that these petitioners were committing acts constituting lawless violence, invasion or rebellion and violating BP 880; the imposition of standards on media or any form of prior restraint on the press, as well as the warrantless search of the Tribune offices and whimsical seizure of its articles for publication and other materials, are declared UNCONSTITUTIONAL. No costs. SO ORDERED. ANGELINA SANDOVAL-GUTIERREZ Associate Justice WE CONCUR: ARTEMIO V. PANGANIBAN Chief Justice (On leave) REYNATO S. PUNO Associate Justice

LEONARDO A. QUISUMBING Asscociate Justice

CONSUELO YNARES-SANTIAGO Associate Justice

ANTONIO T. CARPIO Asscociate Justice

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

RENATO C. CORONA Asscociate Justice

CONCHITA CARPIO MORALES Associate Justice

ROMEO J. CALLEJO, SR. Asscociate Justice

ADOLFO S. AZCUNA Associate Justice

DANTE O. TINGA Asscociate Justice

MINITA V. CHICO-NAZARIO Associate Justice

CANCIO C. GARCIA Asscociate Justice

PRESBITERO J. VELASCO, JR. Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. ARTEMIO V. PANGANIBAN Chief Justice Footnotes 1 Law and Disorder, The Franklin Memorial Lectures, Justice Tom C. Clark Lecturer, Volume XIX, 1971, p. 29. 2 Chief Justice Artemio V. Panganiban, Liberty and Prosperity, February 15, 2006. 3 Articulated in the writings of the Greek philosopher, Heraclitus of Ephesus, 540-480 B.C., who propounded universal impermanence and that all things, notably opposites are interrelated. 4 Respondents Comment dated March 6, 2006. 5 Ibid. 6 Ibid. 7 Minutes of the Intelligence Report and Security Group, Philippine Army, Annex "I" of Respondents Consolidated Comment. 8 Respondents Consolidated Comment. 9 Ibid. 10 Ibid. 11 Petition in G.R. No. 171396, p. 5. 12 Police action in various parts of Metro Manila and the reactions of the huge crowds being dispersed were broadcast as "breaking news" by the major television stations of this country. 13 Petition in G.R. No. 171400, p. 11. 14 Ibid. 15 The prime duty of the Government is to serve and protect the people. The Government may call upon the people to defend the State and, in the fulfillment thereof, all citizens may be required, under conditions provided by law, to render personal military or civil service. 16 No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. 17 The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly

describing the place to be searched and the persons or things to be seized. 18 No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the Government for redress of grievances. 19 (1) The Congress, by a vote of two-thirds of both Houses in joint session assembled, voting separately, shall have the sole power to declare the existence of a state of war. (2) In times of war or other national emergency, the Congress may, by law, authorize the President, for a limited period and subject to such restrictions as it may prescribe, to exercise powers necessary and proper to carry out a declared national policy. Unless sooner withdrawn by resolution of the Congress, such powers shall cease upon the next adjournment thereof. 20 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. 21 1 Cranch 137 [1803]. 22 Howard L. MacBain, "Some Aspects of Judicial Review," Bacon Lectures on the Constitution of the United States (Boston: Boston University Heffernan Press, 1939), pp. 376-77. 23 The Court has no self-starting capacity and must await the action of some litigant so aggrieved as to have a justiciable case. (Shapiro and Tresolini, American Constitutional Law, Sixth Edition, 1983, p. 79). 24 Cruz, Philippine Political Law, 2002 Ed., p. 259. 25 Ibid. 26 Province of Batangas v. Romulo, G.R. No. 152774, May 27, 2004, 429 SCRA 736. 27 Banco Filipino Savings and Mortgage Bank v. Tuazon, Jr., G.R. No. 132795, March 10, 2004, 425 SCRA 129; Vda. De Dabao v. Court of Appeals, G.R. No. 1165, March 23, 2004, 426 SCRA 91; and Paloma v. Court of Appeals, G.R. No. 145431, November 11, 2003, 415 SCRA 590. 28 Royal Cargo Corporation v. Civil Aeronautics Board, G.R. Nos. 103055-56, January 26, 2004, 421 SCRA 21; Vda. De Dabao v. Court of Appeals, supra. 29 Lacson v. Perez, G.R. No. 147780, May 10, 2001, 357 SCRA 756. 30 Cruz, Philippine Political Law, 2002, p. 268 citing Norton v. Shelby, 118 U.S. 425. 31 Province of Batangas v. Romulo, supra. 32 Lacson v. Perez, supra. 33 Province of Batangas v. Romulo, supra. 34 Albaa v. Commission on Elections, G.R. No. 163302, July 23, 2004, 435 SCRA 98, Acop v. Guingona, Jr., G.R. No. 134855, July 2, 2002, 383 SCRA 577, Sanlakas v. Executive Secretary, G.R. No. 159085, February 3, 2004, 421 SCRA 656. 35 Salonga v. Cruz Pao, et al., No. L- 59524, February 18, 1985, 134 SCRA 438. 36 G.R. No. 159085, February 3, 2004, 421 SCRA 656. 37 Blacks Law Dictionary, 6th Ed. 1991, p. 941. 38 Salonga v. Warner Barnes & Co., 88 Phil. 125 (1951). 39 275 Ky 91, 120 SW2d 765 (1938). 40 19 Wend. 56 (1837). 41 232 NC 48, 59 SE2d 359 (1950). 42 302 U.S. 633. 43 318 U.S. 446.

44 45

65 Phil. 56 (1937). G.R. No. 117, November 7, 1945 (Unreported). 46 G.R. No. 2947, January 11, 1959 (Unreported). 47 110 Phil. 331 (1960). 48 77 Phil. 1012 (1947). 49 84 Phil. 368 (1949) The Court held: "Above all, the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." 50 L-No. 40004, January 31, 1975, 62 SCRA 275. 51 Taada v. Tuvera, G.R. No. 63915, April 24, 1985, 136 SCRA 27, where the Court held that where the question is one of public duty and the enforcement of a public right, the people are the real party in interest, and it is sufficient that the petitioner is a citizen interested in the execution of the law; Legaspi v. Civil Service Commission, G.R. No. 72119, May 29, 1987, 150 SCRA 530, where the Court held that in cases involving an assertion of a public right, the requirement of personal interest is satisfied by the mere fact that the petitioner is a citizen and part of the general public which possesses the right. Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan, L. No. 81311, June 30, 1988, 163 SCRA 371, where the Court held that objections to taxpayers lack of personality to sue may be disregarded in determining the validity of the VAT law; Albano v. Reyes, G.R. No. 83551, July 11, 1989, 175 SCRA 264, where the Court held that while no expenditure of public funds was involved under the questioned contract, nonetheless considering its important role in the economic development of the country and the magnitude of the financial consideration involved, public interest was definitely involved and this clothed petitioner with the legal personality under the disclosure provision of the Constitution to question it. Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform, G.R. No. 78742, July 14, 1989, 175 SCRA 343, where the Court ruled that while petitioners are strictly speaking, not covered by the definition of a "proper party," nonetheless, it has the discretion to waive the requirement, in determining the validity of the implementation of the CARP. Gonzales v. Macaraig, Jr., G.R. No. 87636, November 19, 1990, 191 SCRA 452, where the Court held that it enjoys the open discretion to entertain taxpayers suit or not and that a member of the Senate has the requisite personality to bring a suit where a constitutional issue is raised. Maceda v. Macaraig, Jr., G.R. No. 88291, May 31, 1991, 197 SCRA 771, where the Court held that petitioner as a taxpayer, has the personality to file the instant petition, as the issues involved, pertains to illegal expenditure of public money; Osmea v. Comelec, G.R. No. 100318, 100308, 100417,100420, July 30, 1991, 199 SCRA 750, where the Court held that where serious constitutional questions are involved, the "transcendental importance" to the public of the cases involved demands that they be settled promptly and definitely, brushing aside technicalities of procedures; De Guia v. Comelec, G.R. No. 104712, May 6, 1992, 208 SCRA 420, where

the Court held that the importance of the issues involved concerning as it does the political exercise of qualified voters affected by the apportionment, necessitates the brushing aside of the procedural requirement of locus standi. 52 G.R. No. 133250, July 9, 2002, 384 SCRA 152. 53 G.R. Nos. 138570, 138572, 138587, 138680, 138698, October 10, 2000, 342 SCRA 449. 54 G.R. No. 151445, April 11, 2002, 380 SCRA 739. 55 Supra. 56 G.R. No. 118910, November 16, 1995, 250 SCRA 130. 57 G.R. No. 132922, April 21, 1998, 289 SCRA 337. 58 G.R. No. 147780, 147781, 147799, 147810, May 10, 2001, 357 SCRA 756. 59 G.R. No. 159085, February 3, 2004, 421 SCRA 656. 60 235 SCRA 506 (1994). 61 Supra. 62 Supra. 63 197 SCRA 52, 60 (1991). 64 Supra. 65 See NAACP v. Alabama, 357 U.S. 449 (1958). 66 G.R. No. 141284, August 15, 2000, 338 SCRA 81. 67 From the deliberations of the Constitutional Commission, the intent of the framers is clear that the immunity of the President from suit is concurrent only with his tenure and not his term. (De Leon, Philippine Constitutional Law, Vol. 2, 2004 Ed., p. 302). 68 Section 1, Article XI of the Constitution provides: Public Office is a public trust. Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice, and lead modest lives. 69 Ibid., Sec. 2. 70 No. 2908, September 30, 2005, 471 SCRA 87. 71 91 Phil. 882 (1952). 72 No. L-33964, December 11, 1971, 42 SCRA 448. 73 No. L-35546, September 17, 1974, 59 SCRA 183. 74 No. L-61388, April 20, 1983, 121 SCRA 472. 75 Taada v. Cuenco, 103 Phil. 1051 (1957). 76 Lansang v. Garcia, supra, pp. 473 and 481. 77 Supra. 78 "Five Justices Antonio, Makasiar, Esguerra, Fernandez, and Aquino took the position that the proclamation of martial law and the arrest and detention orders accompanying the proclamation posed a "political question" beyond the jurisdiction of the Court. Justice Antonio, in a separate opinion concurred in by Makasiar, Fernandez, and Aquino, argued that the Constitution had deliberately set up a strong presidency and had concentrated powers in times of emergency in the hands of the President and had given him broad authority and discretion which the Court was bound to respect. He made reference to the decision in Lansang v. Garcia but read it as in effect upholding the "political question" position. Fernandez, in a separate opinion, also argued Lansang, even understood as giving a narrow scope of review authority to the Court, affirmed the impossible task of checking the action taken by the President. Hence, he advocated a return to Barcelon v. Baker. Similarly, Esguerra advocated the abandonment of Lansang and a return to Barcelon. And, although Justices Castro,

Fernando, Muoz- Palma, and, implicitly, Teehankee, lined up on the side of justiciability as enunciated in Lansang, x x x Barredo, however, wanted to have the best of both worlds and opted for the view that "political questions are not per se beyond the Courts jurisdiction ... but that as a matter of policy implicit in the Constitution itself the Court should abstain from interfering with the Executives Proclamation." (Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary, 1996 Edition, p. 794.) 79 See Separate Opinion of J. Puno in Integrated Bar of the Philippines v. Zamora, supra. 80 Supra. 81 Cruz, Philippine Political Law, 2002 Ed., p. 247. 82 Santiago v. Guingona, Jr., G.R. No. 134577, November 18, 1998, 298 SCRA 756. 83 Supra, 481-482. 84 Smith and Cotter, Powers of the President during Crises, 1972, p. 6. 85 Ibid. 86 The Social Contract (New York: Dutton, 1950), pp. 123-124. 87 Smith and Cotter, Powers of the President during Crises, 1972, pp. 6-7. 88 Representative Government, New York, Dutton, 1950, pp. 274, 277-78. 89 The Discourses, Bk. 1, Ch. XXXIV. 90 Smith and Cotter, Powers of the President During Crises, 1972. p. 8. 91 Ibid. 92 See The Problem of Constitutional Dictatorship, p. 328. 93 Ibid., p. 353. 94 Ibid., pp. 338-341. 95 Smith and Cotter, Powers of the President During Crises, 1972, p. 9. 96 Constitutional Government and Democracy, Ch. XXVI, rev. ed., Boston: Ginn & Co., 1949, p. 580. 97 Ibid, pp. 574-584. 98 Smith and Cotter, Powers of the President During Crises, 1972, p. 10. 99 Rossiter, Constitutional Dictatorship, Princeton: Princeton University Press, 1948, pp. 298-306. 100 Smith and Cotter, Powers of the President During Crises, 1972, p. 11. 101 Smith and Cotter, Powers of the President During Crises, 1972, p. 12. 102 Youngstown Sheet and Tube Co. v. Sawyer, 343 U.S. 579; 72 Sup. Ct. 863; 96 L. Ed. 1153 (1952), See Concurring Opinion J. Jackson. 103 See Concurring Opinion of Justice Mendoza in Estrada v. Sandiganbayan, G.R. No. 148560, November 19, 2001, 369 SCRA 393. 104 481 U.S. 739, 95 L. Ed. 2d 697 (1987). 105 Supra. 106 See Concurring Opinion of Justice Mendoza in Estrada v. Sandiganbayan, supra. 107 Broadrick v. Oklahoma, 413 U.S. 601 (1973). 108 Ibid. 109 401 U.S. 37, 52-53, 27 L.Ed.2d 669, 680 (1971), United States v. Raines, 362 U.S. 17, 4 L.Ed.2d 524 (1960); Board of Trustees, State Univ. of N.Y v. Fox, 492 U.S. 469, 106 L.Ed.2d 388 (1989). 110 Ermita-Malate Hotel and Motel Operators Association v. City Mayor, No. L-24693, July 31, 1967, 20 SCRA 849 (1967). 111 G.R. No. 159085, February 3, 2004, 421 SCRA 656, wherein this Court sustained

President Arroyos declaration of a "state of rebellion" pursuant to h er calling-out power. 112 Supra. 113 Westel Willoughby, Constitutional Law of the United States 1591 [2d Ed. 1929, quoted in Aquino v. Ponce Enrile, 59 SCRA 183 (1974), (Fernando, J., concurring)]. 114 Retired Associate Justice of the Supreme Court. 115 Section 1, Article VII of the Constitution. 116 Section 5, Article VII of the Constitution. 117 Section 18, Article VII of the Constitution. 118 Section 6, Article XVI of the Constitution. 119 See Republic Act No. 6975. 120 Ironically, even the 7th Whereas Clause of PP 1017 which states that "Article 2, Section 4 of our Constitution makes the defense and preservation of the democratic institutions and the State the primary duty of Government" replicates more closely Section 2, Article 2 of the 1973 Constitution than Section 4, Article 2 of the 1987 Constitution which provides that, "[t[he prime duty of the Government is to serve and protect the people." 121 Agpalo, Statutory Construction, Fourth Edition, 1998, p. 1, citing Legaspi v. Ministry of Finance, 115 SCRA 418 (1982); Garcia-Padilla v. Ponce-Enrile, supra. Aquino v. Commission on Election, supra. 122 Section 17, Article XIV of the 1973 Constitution reads: "In times of national emergency when the public interest so requires, the State may temporarily take over or direct the operation of any privately owned public utility or business affected with public interest." 123 Antieau, Constitutional Construction, 1982, p.21. 124 Cruz, Philippine Political Law, 1998, p. 94. 125 343 U.S. 579; 72 Sup. Ct. 863; 96 L. Ed. 1153 (1952). 126 Tresolini, American Constitutional Law, 1959, Power of the President, pp. 255-257. 127 Smith and Cotter, Powers of the President During Crises, 1972, p. 14 128 The Federal Emergency Relief Act of 1933 opened with a declaration that the economic depression created a serious emergency, due to wide-spread unemployment and the inadequacy of State and local relief funds, . . . making it imperative that the Federal Government cooperate more effectively with the several States and Territories and the District of Columbia in furnishing relief to their needy and distressed people. President Roosevelt in declaring a bank holiday a few days after taking office in 1933 proclaimed that "heavy and unwarranted withdrawals of gold and currency from banking institutions for the purpose of hoarding; ... resulting in "sever drains on the Nations stocks of gold have created a national emerge ncy," requiring his action. Enacted within months after Japans attack on Pearl Harbor, the Emergency Price Control Act of 1942 was designed to prevent economic dislocations from endangering the national defense and security and the effective prosecution of the war. (Smith and Cotter, Powers of the President During Crises, 1972, p.18) 129 The Emergency Appropriation Act for Fiscal 1935 appropriated fund to meet the emergency and necessity for relief in stricken agricultural areas and in another section referred to "the present drought emergency."[129] The India Emergency Food Aid Act of 1951 provided for emergency shipments of food to India to meet famine conditions then ravaging the great Asian sub-continent. The Communication Act of 1934 and its 1951 amendment grant the President certain powers in time of "public peril or

disaster." The other statutes provide for existing or anticipated emergencies attributable to earthquake, flood, tornado, cyclone, hurricane, conflagration an landslides.[129] There is also a Joint Resolution of April 1937. It made "funds available for the control of incipient or emergency outbreaks of insect pests or plant diseases, including grasshoppers, Mormon crickets, and chinch bugs. (66 Stat 315, July 1, 1952, Sec. 2 [a]) Supra. 130 National Security may be cataloged under the heads of (1) Neutrality, (2) Defense, (3) Civil Defense, and (4) Hostilities or War. (p. 22) The Federal Civil Defense Act of 1950 contemplated an attack or series of attacks by an enemy of the United States which conceivably would cause substantial damage or injury to civilian property or persons in the United States by any one of several means; sabotage, the use of bombs, shellfire, or atomic, radiological, chemical, bacteriological means or other weapons or processes. Such an occurrence would cause a "National Emergency for Civil Defense Purposes," or "a state of civil defense emergency," during the term which the Civil Defense Administrator would have recourse to extraordinary powers outlined in the Act. The New York-New Jersey Civil Defense Compact supplies an illustration in this context for emergency cooperation. "Emergency" as used in this compact shall mean and include invasion, or other hostile action, disaster, insurrection or imminent danger thereof. ( Id., p.15-16) 131 Cruz, Philippine Political Law, 1998, p. 95. 132 Record of the Constitutional Commission, Vol. III, pp. 266-267. 133 Record of the Constitutional Convention, pp. 648-649. 134 84 Phil. 368 (1949). 135 Uren v Bagley, 118 Or 77, 245 P 1074, 46 ALR 1173. 136 Gutierrez v. Middle Rio Grande Conservancy Dist., 34 NM 346, 282 P 1, 70 ALR 1261, cert den 280 US 610, 74 L ed 653, 50 S Ct 158. 137 Sanitation Dist. V. Campbell (Ky), 249 SW 2d 767; Rochester v. Gutberlett, 211 NY 309, 105 NE 548. 138 Hammond Packing Co. v. Arkansas, 212 US 322, 53 L ed 530, 29 S Ct 370. 139 De Leon and De Leon Jr., Administrative Law, Text and Cases, 2001 Ed., p. 115. 140 Ibid. 141 In a Lecture delivered on March 12, 2002 as part of the Supreme Court Centenary Lecture Series, Hans Koechler, Professor of Philosophy at the University of Innsbruck (Austria) and President of the International Progress Organization, speaking on "The United Nations, The International Rule of Law and Terrorism" cited in the Dissenting Opinion of Justice Kapunan in Lim v. Executive Secretary, G.R. No. 151445, April 11, 2002, 380 SCRA 739. 142 Section 2, Article III of the 1987 Constitution. 143 Bernas, The 1987 Constitution of the Republic of the Philippines, A ReviewerPrimer, p. 51. 144 Annex "A" of the Memorandum in G.R. No. 171396, pp. 271-273. 145 An Act Ensuring the Free Exercise by the People of their Right Peaceably to Assemble and Petition the Government for Other Purposes. 146 Annex "A" of the Memorandum in G.R. No. 171396, pp. 271-273. 147 Ibid. 148 299 U.S. 353, 57 S. Ct. 255, 81 L. Ed. 278. 149 Reyes v. Bagatsing, No. L-65366, November 9, 1983, 125 SCRA 553. 150 Section 5. Application requirements - All applications for a permit shall comply with

the following guidelines: xxxxxx (c) If the mayor is of the view that there is imminent and grave danger of a substantive evil warranting the denial or modification of the permit, he shall immediately inform the applicant who must be heard on the matter. 151 Petition in G.R. No. 171400, p. 11. 152 No. L-64161, December 26, 1984, 133 SCRA 816. 153 Dissenting Opinion, J. Cruz, National Press Club v. Commission on Elections, G.R. Nos. 102653, 102925 & 102983, March 5, 1992, 207 SCRA 1. 154 Boyd v. United States, 116 U.S. 616 (1886). 155 Transcript of Stenographic Notes, Oral Arguments, March 7, 2006, p. 470. 156 Ibid., pp. 432-433. 157 Ibid, pp. 507-508. 158 Smith and Cotter, Powers of the President During Crisis, 1972, p. 146. SUMMARY OF THE VOTING IN THE PP 1017 DECISION Fourteen of the 15 SC justices participated in the decision. Senior Associate Justice Reynato S. Puno was on leave. Justice Angelina Sandoval Gutierrezs 78-page ponencia was concurred in by 10 Justices: Chief Justice Artemio V. Panganiban and Justices Leonardo A. Quisumbing, Consuelo Ynares Santiago, Antonio T. Carpio, Ma. Alicia Austria-Martinez, Conchita Carpio Morales, Romeo J. Callejo, Sr., Adolfo S. Azcuna, Minita V. Chico-Nazario, and Cancio C. Garcia. Both the Chief Justice and Justice Ynares-Santiago wrote separate concurring opinions. The Chief Justices concurring opinion was joined by Justices Carpio, Carpio Morales, and Callejo, Sr. Justice Dante O. Tingas dissenting opinion was joined by Justices Renato C. Corona and Presbitero J. Velasco, Jr. EN BANC G.R. No. 171396 DAVID et al. v. ARROYO, etc., et al. and related cases (G.R. Nos. 171409, 171483, 171485, 171400, 171424 and 171489) Promulgated on: May 3, 2006 x --------------------------------------------------------------------------- x CONCURRING OPINION CJ: I was hoping until the last moment of our deliberations on these consolidated cases that the Court would be unanimous in its Decision. After all, during the last two weeks, it decided with one voice two equally contentious and nationally significant controversies involving Executive 1 2 Order No. 464 and the so-called Calibrated Preemptive Response policy. However, the distinguished Mr. Justice Dante O. Tingas Dissenting Opinion has made that hope an impossibility. I now write, not only to express my full concurrence in the thorough and elegantly written ponencia of the esteemed Mme. Justice Angelina Sandoval-Gutierrez, but more urgently to express a little comment on Justice Tingas Dissenting Opinion (DO). The Dissent dismisses all the Petitions, grants no reliefs to petitioners, and finds nothing wrong with PP 1017. It labels the PP a harmless pronouncement -- "an utter superfluity" -- and denounces the ponencia as an "immodest show of brawn" that "has imprudently placed the Court in the business of defanging paper tigers." Under this line of thinking, it would be perfectly legal for the President to reissue PP 1017

under its present language and nuance. I respectfully disagree. Let us face it. Even Justice Tinga concedes that under PP 1017, the police -- "to some minds" - "may have flirted with power." With due respect, this is a masterful understatement. PP 1017 may be a paper tiger, but -- to borrow the colorful words of an erstwhile Asian leader -- it has nuclear teeth that must indeed be defanged. Some of those who drafted PP 1017 may be testing the outer limits of presidential prerogatives and the perseverance of this Court in safeguarding the peoples constitutionally enshrined liberty. They are playing with fire, and unless prudently restrained, they may one day wittingly or unwittingly burn down the country. History will never forget, much less forgive, this Court if it allows such misadventure and refuses to strike down abuse at its inception. Worse, our people will surely condemn the misuse of legal hocus pocus to justify this trifling with constitutional sanctities. And even for those who deeply care for the President, it is timely and wise for this Court to set down the parameters of power and to make known, politely but firmly, its dogged determination to perform its constitutional duty at all times and against all odds. Perhaps this country would never have had to experience the wrenching pain of dictatorship; and a past President would not have fallen into the precipice of authoritarianism, if the Supreme Court then had the moral courage to remind him steadfastly of his mortality and the inevitable historical damnation of despots and tyrants. Let not this Court fall into that same rut. ARTEMIO V. PANGANIBAN Chief Justice Footnotes 1 Senate v. Ermita, GR No. 169777, April 20, 2006. 2 Bayan v. Ermita, GR No. 169838, April 25, 2006. EN BANC G.R. No. 171396 --- Professor Randolf S. David, et al., Petitioners, versus Gloria MacapagalArroyo, as President and Commander-in-Chief, et al, Respondents. G.R. No. 171409 --- Ninez Cacho-Olivares and Tribune Publishing Co., Inc., Petitioners, versus Honorable Secretary Eduardo Ermita and Honorable Director General Arturo C. Lomibao, Respondents. G.R. No. 171485 --- Francis Joseph G. Escudero, et al. Petitioners, versus Eduardo R. Ermita, et al., Respondents. G.R. No. 171483 --- Kilusang Mayo Uno, represented by its Chairperson Elmer C. Labog and Secretary General Joel Maglunsod, et al., Petitioners, versus Her Excellency President Gloria Macapagal Arroyo, et al., Respondents. G.R. No. 171400 --- Alternative Law Groups, Inc.. (ALG), Petitioners, versus Executive Secretary, Eduardo Ermita, et al., Respondents. G.R. No. 171489 Jose Anselmo I. Cadiz, et al., Petitioners, versus Hon. Executive Secretary Eduardo Ermita, et al., Respondents. G.R. No. 171424 --- Loren B. Legarda, Petitioner, versus President Gloria Macapagal-Arroyo, in her capacity as President and Commander-in-Chief, et al., Respondents; Promulgated: May 3, 2006 x ---------------------------------------------------------------------------------------- x CONCURRING OPINION YNARES-SANTIAGO, J.:

The only real security for social well-being is the free exercise of mens minds. -Harold J. Laski, Professor of Government and Member of the British Labor Party, in his book, Authority in the Modern State (1919). The ideals of liberty and equality, the eminent U.S. Supreme Court Justice Benjamin Cardozo once wrote, are preserved against the assaults of opportunism, the expediency of the passing hour, the erosion of small encroachments, the scorn and derision of those who have no 1 patience with general principles. In an open and democratic society, freedom of thought and 2 expression is the matrix, the indispensable condition, of nearly every other form of freedom. I share the view that Presidential Proclamation No. 1017 (PP 1017) under which President Gloria Macapagal Arroyo declared a state of national emergency, and General Order No. 5 (GO No. 5), issued by the President pursuant to the same proclamation are both partly unconstitutional. I fully agree with the pronouncement that PP 1017 is no more than the exercise by the President, as the Commander-in-Chief of all armed forces of the Philippines, of her power to call out such armed forces whenever it becomes necessary to prevent or suppress lawless violence, invasion or rebellion. This is allowed under Section 18, Article VII of the Constitution. However, such "calling out" power does not authorize the President to direct the armed forces or the police to enforce laws not related to lawless violence, invasion or rebellion. The same does not allow the President to promulgate decrees with the force and effect similar or equal to laws as this power is vested by the Constitution with the legislature. Neither is it a license to conduct searches and seizures or arrests without warrant except in cases provided in the Rules of Court. It is not a sanction to impose any form of prior restraint on the freedom of the press or expression or to curtail the freedom to peaceably assemble or frustrate fundamental constitutional rights. 3 In the case of Bayan v. Ermita this Court thru Justice Adolfo S. Azcuna emphasized that the right to peaceably assemble and petition for redress of grievances is, together with freedom of speech, of expression, and of the press, a right that enjoys primacy in the realm of constitutional protection. These rights constitute the very basis of a functional democratic polity, without which all the other rights would be meaningless and unprotected. On the other hand, the direct reference to Section 17, Article XII of the Constitution as the constitutional basis for the declaration of a state of national emergency is misplaced. This provision can be found under the article on National Economy and Patrimony which presupposes that "national emergency" is of an economic, and not political, nature. Moreover, the said provision refers to the temporary takeover by the State of any privately-owned public utility or business affected with public interest in times of national emergency. In such a case, the takeover is authorized when the public interest so requires and subject to "reasonable terms" which the State may prescribe. The use of the word "State" as well as the reference to "reasonable terms" under Section 17, Article XII can only pertain to Congress. In other words, the said provision is not self-executing as to be validly invoked by the President without congressional authorization. The provision merely declares a state economic policy during times of national emergency. As such, it cannot be taken to mean as authorizing the President to exercise "takeover" powers pursuant to a declaration of a state of national emergency. The President, with all the powers vested in her by Article VII, cannot arrogate unto herself the power to take over or direct the operation of any privately owned public utility or business affected with public interest without Congressional authorization. To do so would constitute an ultra vires act on the part of the Chief Executive, whose powers are limited to the powers vested in her by Article VII, and cannot extend to Article XII without the approval of Congress.

Thus, the Presidents authority to act in times of national emergency is still subject to the limitations expressly prescribed by Congress. This is a featured component of the doctrine of separation of powers, specifically, the principle of checks and balances as applicable to the political branches of government, the executive and the legislature. With regard to GO No. 5, I agree that it is unconstitutional insofar as it mandates the armed forces and the national police "to prevent and suppress acts of terrorism and lawless violence in the country." There is presently no law enacted by Congress that defines terrorism, or classifies what acts are punishable as acts of terrorism. The notion of terrorism, as well as acts constitutive thereof, is at best fraught with ambiguity. It is therefore subject to different interpretations by the law enforcement agencies. As can be gleaned from the facts, the lack of a clear definition of what constitutes "terrorism" have led the law enforcement officers to necessarily guess at its meaning and differ as to its application giving rise to unrestrained violations of the fundamental guarantees of freedom of peaceable assembly and freedom of the press. 4 In Kolender v. Lawson, the United States Supreme Court nullified a state statute requiring persons who loitered or wandered on streets to provide "credible and reliable" identification and to account for their presence when requested to do so by a police officer. Writing for the majority, Justice Sandra Day OConnor noted that the most important aspect of vagueness doctrine was the imposition of guidelines that prohibited arbitrary, selective enforcement on constitutionally suspect basis by police officers. This rationale for invocation of that doctrine was of special concern in this case because of the potential for arbitrary suppression of the fundamental liberties concerning freedom of speech and expression, as well as restriction on the freedom of movement. Thus, while I recognize that the President may declare a state of national emergency as a 5 statement of a factual conditionpursuant to our ruling in Sanlakas v. Executive Secretary, I wish to emphasize that the same does not grant her any additional powers. Consequently, while PP 1017 is valid as a declaration of a factual condition, the provisions which purport to vest in the President additional powers not theretofore vested in her must be struck down. The provision under GO No. 5 ordering the armed forces to carry out measures to prevent or suppress "acts of terrorism" must be declared unconstitutional as well. Finally, it cannot be gainsaid that government action to stifle constitutional liberties guaranteed under the Bill of Rights cannot be preemptive in meeting any and all perceived or potential threats to the life of the nation. Such threats must be actual, or at least gravely imminent, to warrant government to take proper action. To allow government to preempt the happening of any event would be akin to "putting the cart before the horse," in a manner of speaking. State action is proper only if there is a clear and present danger of a substantive evil which the state has a right to prevent. We should bear in mind that in a democracy, constitutional liberties must always be accorded supreme importance in the conduct of daily life. At the heart of these liberties lies freedom of speech and thought not merely in the propagation of ideas we love, but more importantly, in the advocacy of ideas we may oftentimes loathe. As succinctly articulated by Justice Louis D. Brandeis: Fear of serious injury cannot alone justify suppression of free speech and assembly. x x x It is the function of speech to free men from the bondage of irrational fears. To justify suppression of free speech there must be reasonable ground to believe that the danger apprehended is imminent. There must be reasonable ground to believe that the evil to be prevented is a serious one. x x x But even advocacy of violation, however reprehensible morally, is not a justification for denying free speech where the advocacy falls short of incitement and there is nothing to indicate that the advocacy would be immediately acted on. The wide difference

between advocacy and incitement, between preparation and attempt, between assembling and conspiracy, must be borne in mind. In order to support a finding of clear and present danger it must be shown either that immediate serious violence was to be expected or was advocated, or that the past conduct furnished reason to believe that such advocacy was then 6 contemplated. IN VIEW OF THE FOREGOING, I vote to PARTLY GRANT the petitions. CONSUELO YNARES-SANTIAGO Associate Justice Footnotes 1 Cardozo, B. Nature of Judicial Process, 1921. 2 Palko v. State of Connecticut, 302 U.S. 319 (1937). 3 G.R. Nos. 169838, 169848, 169881, April 25, 2006. 4 461 U.S. 352 (1983). 5 G.R. Nos. 159085, 159103, 159185 & 159196, February 3, 2004, 421 SCRA 656. 6 Brandeis, J. , joined by Holmes, J., concurring in Whitney v. California, 274 U.S. 357 (1927). G.R. No. 171396 (Prof. Randolf S. David, Lorenzo Taada III, Ronald Llamas, H. Harry L. Roque, Jr., Joel Ruiz Butuyan, Roger R. Rayel, Gary S. Mallari, Romel Regalado Bagares, Christopher F.C. Bolastig, petitioners, v. Gloria Macapagal-Arroyo, as President and Commander-in-Chief, Executive Secretary Eduardo Ermita, Hon. Avelino Cruz II, Secretary of National Defense, General Generoso Senga, Chief of Staff, Armed Forces of the Philippines, Director General Arturo Lomibao, Chief, Philippine National Police, respondents.) G.R. No. 171409 (Niez Cacho-Olivares and Tribune Publishing Co., Inc., petitioner, v. Honorable Secretary Eduardo Ermita and Honorable Director General Arturo Lomibao, respondents.) G.R. No. 171485 (Francis Joseph G. Escudero, Joseph A. Santiago, Teodoro A. Casino, Agapito A. Aquino, Mario G. Aguja, Satur C. Ocampo, Mujiv S. Hataman, Juan Edgardo Angara, Teofisto DL. Guingona III, Emmanuel Josel J. Villanueva, Liza L. Maza, Imee R. Marcos, Renato B. Magtubo, Justin Marc SB. Chipeco, Roilo Golez, Darlene Antonio-Custudio, Loretta Ann P. Rosales, Josel G. Virador, Rafael V. Mariano, Gilbert C. Remulla, Florencio G. Noel, Ana Theresa Hontiveros-Baraquel, Imelda C. Nicolas, Marvic M.V.F. Leonenen, Neri Javier Colmenares, Movement of Concerned Citizens for Civil Liberties, represented by Amado Gat Inciong, petitioners, v. Eduardo R. Ermita, Executive Secretary, Avelino J. Cruz, Jr., Secretary, DND Ronaldo V. Puno, Secretary, DILG, Generoso Senga, AFP Chief of Staff, Arturo Lumibao, Chief PNP, respondents.) G.R. No. 171483 (Kilusang Mayo Uno, represented by its Chairperson Elmer C. Labog and Secretary General Joel Maglunsod, National Federation of Labor Unions-Kilusang Mayo Uno (NAFLU-KMU), represented by its National President, Joselito v. Ustarez, Antonio C. Pascual, Salvador t. Carranza, Emilia P. Dapulang, Martin Custodio, Jr., and Roque M. Tan, petitioners, v. Her Excellency, President Gloria Macapagal-Arroyo, The Honorable Executive Secretary, Eduardo Ermita, The Chief of Staff, Armed Forces of the Philippines, Generoso Senga, and the PNP Director General, Arturo Lomibao, respondents.) G.R. No. 171400 (Alternative Law Groups, Inc. v. (ALG), petitioner, v. Executive Secretary Eduardo L. Ermita. Lt. Gen. Generoso Senga, and Director General Arturo Lomibao, respondents.) G.R. No. 171489 (Jose Anselmo I. Cadiz, Feliciano M. Bautista, Romulo R. Rivera, Jose Amor

M. Amorado, Alicia A. Risos-Vidal, Felimon C. Abelita III, Manuel P. Legaspi, J.B., Jovy C. Bernabe, Bernard L. Dagcuta, Rogelio V. Garcia and Integrated Bar of the Philippines (IBP), petitioners, v. Hon. Executive Secretary Eduardo Ermita, General Generoso Senga, in his capacity as AFP Chief of Staff, and Direcotr General Arturo Lomibao, in his capacity as PNP Chief, respondents.) G.R. No. 171424 (Loren B. Legarda, petitioner, v. Gloria Macapagal-Arroyo, in her capacity as President and Commander-in-Chief; Arturo Lomibao, in his capacity as Director-General of the Philippine National Police (PNP); Generoso Senga, in his capacity as Chief of Staff of the Armed Forces of the Philippine (AFP); and Eduardo Ermita, in his capacity as Executive Secretary, respondents.) x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DISSENTING OPINION TINGA, J: I regret to say that the majority, by its ruling today, has imprudently placed the Court in the business of defanging paper tigers. The immodest show of brawn unfortunately comes at the expense of an exhibition by the Court of a fundamental but sophisticated understanding of the extent and limits of executive powers and prerogatives, as well as those assigned to the judicial branch. I agree with the majority on some points, but I cannot join the majority opinion, as it proceeds to rule on non-justiciable issues based on fears that have not materialized, departing as they do from the plain language of the challenged issuances to the extent of second-guessing the Chief Executive. I respectfully dissent. The key perspective from which I view these present petitions is my own ponencia in Sanlakas 1 v. Executive Secretary, which centered on Presidential Proclamation No. 427 (PP 427), declaring a "state of rebellion" in 2003. The Court therein concluded that while the declaration was constitutional, such declaration should be regarded as both regarded as "an utter superfluity", which "only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress it", and "devoid of any legal significance", and "cannot diminish or violate constitutionally protected rights." I submit that the same conclusions should be reached as to Proclamation No. 1017 (PP 1017). Following the cardinal precept that the acts of the executive are presumed constitutional is the equally important doctrine that to warrant unconstitutionality, there must be a clear and unequivocal breach of the Constitution, 2 not a doubtful and argumentative implication. Also well-settled as a rule of construction is that where thee are two possible constructions of law or executive issuance one of which is in 3 harmony with the Constitution, that construction should be preferred. The concerns raised by the majority relating to PP 1017 and General Order Nos. 5 can be easily disquieted by applying this well-settled principle. I. PP 1017Has No Legal Binding Effect; Creates No Rights and Obligations; and Cannot Be Enforced or Invoked in a Court< Of Law First, the fundamentals. The President is the Chief of State and Foreign Relations, the chief of 4 5 the Executive Branch, and the Commander-in-Chief of the Armed Forces. The Constitution 6 vests on the President the executive power. The President derives these constitutional mandates from direct election from the people. The President stands as the most recognizable representative symbol of government and of the Philippine state, to the extent that foreign leaders who speak with the President do so with the understanding that they are speaking to the Philippine state. Yet no matter the powers and prestige of the presidency, there are significant limitations to the 7 office of the President. The President does not have the power to make or legislate laws, or

disobey those laws passed by Congress. Neither does the President have to power to create rights and obligations with binding legal effect on the Filipino citizens, except in the context of entering into contractual or treaty obligations by virtue of his/her position as the head of State. The Constitution likewise imposes limitations on certain powers of the President that are normally inherent in the office. For example, even though the President is the administrative 9 head of the Executive Department and maintains executive control thereof, the President is precluded from arbitrarily terminating the vast majority of employees in the civil service whose 10 right to security of tenure is guaranteed by the Constitution. 11 The President has inherent powers, powers expressly vested by the Constitution, and powers expressly conferred by statutes. The power of the President to make proclamations, while confirmed by statutory grant, is nonetheless rooted in an inherent power of the presidency and not expressly subjected to constitutional limitations. But proclamations, as they are, are a species of issuances of extremely limited efficacy. As defined in the Administrative Code, proclamations are merely "acts of the President fixing a date or declaring a status or condition of public moment or interest upon the existence of which the operation of a specific law or 12 regulation is made to depend". A proclamation, on its own, cannot create or suspend any constitutional or statutory rights or obligations. There would be need of a complementing law or regulation referred to in the proclamation should such act indeed put into operation any law or regulation by fixing a date or declaring a status or condition of a public moment or interest related to such law or regulation. And should the proclamation allow the operationalization of such law or regulation, all subsequent resultant acts cannot exceed or supersede the law or regulation that was put into effect. Under Section 18, Article VII of the Constitution, among the constitutional powers of the President, as Commander-in-Chief, is to "call out such armed forces to prevent or suppress 13 lawless violence, invasion or rebellion". The existence of invasion or rebellion could allow the President to either suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law, but there is a fairly elaborate constitutional procedure to be observed in such a case, including congressional affirmation or revocation of such suspension or declaration, as well as the availability of judicial review. However, the existence of lawless violence, invasion or rebellion does not ipso facto cause the "calling out" of the armed forces, the suspension of habeas corpus or the declaration of martial law it remains within the discretion of the President to engage in any of these three acts should said conditions arise. Sanlakas involved PP 427, which declared the existence of a "state of rebellion." Such declaration could ostensibly predicate the suspension of the privilege of the writ of habeas corpus or the declaration of martial law, but the President did not do so. Instead, PP 427, and the accompanying General Order No. 4, invoked the "calling out" of the Armed Forces to prevent lawless violence, invasion and rebellion. Appreciably, a state of lawless violence, invasion or rebellion could be variable in scope, magnitude and gravity; and Section 18, Article VII allows for the President to respond with the appropriate measured and proportional response. Indeed, the diminution of any constitutional rights through the suspension of the privilege of the writ or the declaration of martial law is deemed as "strong medicine" to be used sparingly and only as a last resort, and for as long as only truly necessary. Thus, the mere invocation of the "calling out" power stands as a balanced means of enabling a heightened alertness in dealing with the armed threat, but without having to suspend any constitutional or statutory rights or cause the creation of any new obligations. For the utilization of the "calling out" power alone cannot vest unto the President any new constitutional or statutory powers, such as the

enactment of new laws. At most, it can only renew emphasis on the duty of the President to execute already existing laws without extending a corresponding mandate to proceed extraconstitutionally or extra-legally. Indeed, the "calling out" power does not authorize the President or the members of the Armed Forces to break the law. These were the premises that ultimately informed the Courts decision in Sanlakas, which affirmed the declaration of a "state of rebellion" as within the "calling out" power of the President, but which emphasized that for legal intents and purposes, it should be both regarded as "an utter superfluity", which "only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress it," and "devoid of any legal significance," as it could not "cannot diminish or violate constitutionally protected rights." The same premises apply as to PP 1017. A comparative analysis of PP 427 and PP 1017, particularly their operative clauses, is in order. PP 427 PP 1017 NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested in me by law, hereby confirm the existence of an actual and on-going rebellion, compelling me to declare a state of rebellion. In view of the foregoing, I am issuing General Order No. 4 in accordance with Section 18, Article VII of the Constitution, calling out the Armed Forces of the Philippines and the Philippine National Police to immediately carry out the necessary actions and measures to suppress and quell the rebellion with due regard to constitutional rights. NOW, THEREFORE, I Gloria Macapagal-Arroyo, President of the Republic of the Philippines and Commander-in-Chief of the Armed Forces of the Philippines, by virtue of the powers vested upon me by Section 18, Article 7 of the Philippine Constitution which states that: "The President. . . whenever it becomes necessary, . . . may call out (the) armed forces to prevent or suppress. . . rebellion. . .," and in my capacity as their Commander-in-Chief, do hereby command the Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well any act of insurrection or rebellion and to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction; and as provided in Section 17, Article 12 of the Constitution do hereby declare a State of National Emergency.

Let us begin with the similarities. Both PP 427 and PP 1017 are characterized by two distinct phases. The first is the declaration itself of a status or condition, a "state of rebellion" in PP 437, and a "state of national emergency" under PP 1017. Both "state of rebellion" and "state of national emergency" are terms within constitutional contemplation. Under Section 18, Article VII, the existence of a "state of rebellion" is sufficient premise for either the suspension of the privilege of the writ of habeas corpus or the declaration of martial law, though in accordance with the strict guidelines under the same provision. Under Section 17, Article XII, the existence of a state of national emergency is sufficient ground for the State, during the emergency, under

reasonable terms prescribed by it, and when the public interest so requires, to temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest. Under Section 23(2), Article VI, the existence of a state of national emergency may also allow Congress to authorize the President, for a limited period and subject to such restrictions as it may prescribe, to exercise powers necessary and proper to carry out a declared national policy. Certainly, the declaration could stand as the first step towards constitutional authorization for the exercise by the President, the Congress or the State of extraordinary powers and prerogatives. However, the declaration alone cannot put into operation these extraordinary powers and prerogatives, as the declaration must be followed through with a separate act providing for the actual utilization of such powers. In the case of the "state of rebellion," such act involves the suspension of the writ or declaration of martial law. In the case of the "state of national emergency," such act involves either an order for the takeover or actual takeover by the State of public utilities or businesses imbued with public interest or the authorization by Congress for the President to exercise emergency powers. In PP 427, the declaration of a "state of rebellion" did not lead to the suspension of the writ or the declaration of martial law. In PP 1017, the declaration of a "state of national emergency" did not lead to an authorization for the takeover or actual takeover of any utility or business, or the grant by Congress to the President of emergency powers. Instead, both declarations led to the invocation of the calling out power of the President under Section 18, Article VII, which the majority correctly characterizes as involving only "ordinary police action." I agree with the ponencias holding that PP 1017 involves the exercise by the President of the 14 "calling out" power under Section 18, Article VII. In Integrated Bar v. Zamora, the Court was beseeched upon to review an order of President Estrada commanding the deployment of the 15 Marines in patrols around Metro Manila, in view of an increase in crime. The Court, speaking through Justice Santiago Kapunan, affirmed the Presidents order, asserting that "it is the unclouded intent of the Constitution to vest upon the President, as Commander-in-Chief of the Armed Forces, full discretion to call forth the military when in his judgment it is necessary to do so in order to prevent or suppress lawless violence, invasion or rebellion. Unless the petitioner can show that the exercise of such discretion was gravely abused, the Presidents exercise of 16 judgment deserves to be accorded respect from this Court." Tellingly, the order of deployment by President Estrada was affirmed by the Court even though we held the view that the power then involved was not the "calling out" power, but "the power involved may be no 17 more than the maintenance of peace and order and promotion of the general welfare." It was also maintained in Integrated Bar that while Section 18, Article VII mandated two conditions actual rebellion or invasion and the requirement of public safety before the suspension of the privilege of the writ of habeas corpus or the declaration of martial law could be declared, "these conditions are not required in the case of the power to call out the armed forces. The only criterion is that whenever it becomes necessary, the President may call the 18 armed forces to suppress lawless violence, invasion or rebellion." The Court concluded that the implication was "that the President is given full discretion and wide latitude in the exercise 19 of the power to call as compared to the two other powers." These propositions were affirmed in Sanlakas, wherein the invocation of the calling out power was expressly made by President Arroyo. The Court noted that for the purpose of exercising the calling out power, the Constitution did not require the President to make a declaration of a 20 state of rebellion. At the same time, the Court in Sanlakas acknowledged that "the Presidents authority to declare a state of rebellion springs in the main from her powers as 21 chief executive and, at the same time, draws strength from her Commander-in-Chief powers."

For still unclear reasons, the majority attempts to draw a distinction between Sanlakas and the present petitions by that the statutory authority to declare a "state of rebellion" emanates from the Administrative Code of 1987, particularly the provision authorizing the President to make proclamations. As such, the declaration of a "state of rebellion," pursuant to statutory authority, "was merely an act declaring a status or condition of public moment or interest." The majority grossly misreads Sanlakas, which expressly roots the declaration of a state of rebellion from the wedded powers of the Chief Executive, under Section 1, Article VII, and as Commander-inChief, under Section 18, Article VII. Insofar as PP 1017 is concerned, the calling out power is definitely involved, in view of the directive to the Armed Forces of the Philippines to "suppress all forms of lawless violence". But there are nuances to the calling out power invoked in PP 1017 which the majority does not discuss. The directive "to suppress all forms of lawless violence" is addressed not only to the Armed Forces but to the police as well. The "calling out" of the police does not derive from Section 17, Article VII, or the commander-in-chief clause, our national police being civilian in character. Instead, the calling out of the police is sourced from the power of the President as Chief Executive under Section 1, Article VII, and the power of executive control under Section 18, Article VII. Moreover, while the permissible scope of military action is limited to acts in furtherance of suppressing lawless violence, rebellion, invasion, the police can be commanded by the President to execute all laws without distinction in light of the presidential duty to 22 execute all laws. Still, insofar as Section 17, Article VII is concerned, wide latitude is accorded to the discretion of the Chief Executive in the exercise of the "calling out" power due to a recognition that the said power is of limited import, directed only to the Armed Forces of the Philippines, and incapable of imposing any binding legal effect on the citizens and other branches of the Philippines. Indeed, PP 1017 does not purport otherwise. Nothing in its operative provisions authorize the President, the Armed Forces of the Philippines, or any officer of the law, to perform any extra-constitutional or extra-legal acts. PP 1017 does not dictate the suspension of any of the peoples guarantees under the Bill of Rights. If it cannot be made more clear, neither the declaration of a state of emergency under PP 1017 nor the invocation of the calling out power therein authorizes warrantless arrests, searches or seizures; the infringement of the right to free expression, peaceable assembly and association and other constitutional or statutory rights. Any public officer who nonetheless engaged or is engaging in such extra-constitutional or extra-legal acts in the name of PP 1017 may be subjected to the appropriate civil, criminal or administrative liability. To prove this point, let us now compare PP 1017 with a different presidential issuance, one that was intended to diminish constitutional and civil rights of the people. The said issuance, Presidential Proclamation No. 1081, was issued by President Marcos in 1972 as the instrument of declaring martial law. The operative provisions read: PD. 1081 PP 1017 Now, thereof, I, Ferdinand E. Marcos, President Of the Philippines, by virtue of the powers vested upon me by article VII, Section 10, Paragraph (2) of the Constitution, do hereby place the entire Philippines as defined in the article I, Section 1, of the Constitution under NOW, THEREFORE, I Gloria Macapagal-Arroyo, President of the Republic of the Philippines and Commander-in-Chief of the Armed Forces of the Philippines, by virtue of the powers vested upon me by Section 18, Article 7 of the Philippine

martial law, and in my capacity as their commander-in-chief, do hereby command the arned forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well as any act of insurrection or rebellion and to enforce obedience to all the laws and decrees, orders and regulations promulgated by me personally or upon my direction. In addition, I do hereby order that all persons presently detained, as well as others who may hereafter be similarly detained for the crimes of insurrection or rebellion, and all other crimes and offenses committed in furtherance or on the occasion thereof, or incident thereto, or in connection therewith, for crimes against national security and the law of nations, crimes, against the fundamental laws of the state, crimes against public order, crimes involving usurpation of authority, rank, title and improper use of names, uniforms and insignia, crimes committed by public officers, and for such other crimes as will be enumerated in Orders that I shall subsequently promulgate, as well as crimes as a consequence of any violation of any decree, order or regulation promulgated by me personally or promulgated upon my direction shall be kept under detention until otherwise ordered released by me or by my duly designated representative. (emphasis supplied)

Constitution which states that: "The President. . . whenever it becomes necessary, . . . may call out (the) armed forces to prevent or suppress. . . rebellion. . .," and in my capacity as their Commander-in-Chief, do hereby command the Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well any act of insurrection or rebellion and to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction; and as provided in Section 17, Article 12 of the Constitution do hereby declare a State of National Emergency.

Let us examine the differences between PP No. 1081 and PP 1017. First, while PP 1017 merely declared the existence of a state of rebellion, an act ultimately observational in 23 character, PP 1081 "placed the entire Philippines under martial law," an active implement that, by itself, substituted civilian governmental authority with military authority. Unlike in the 1986 Constitution, which was appropriately crafted with an aversion to the excesses of Marcosian martial rule, the 1935 Constitution under which PP 1081 was issued left no intervening safeguards that tempered or limited the declaration of martial law. Even the contrast in the verbs used, "place" as opposed to "declare," betrays some significance. To declare may be simply to acknowledge the existence of a particular condition, while to place

ineluctably goes beyond mere acknowledgement, and signifies the imposition of the actual condition even if it did not exist before. Both PP 1081 and PP 1017 expressly invoke the calling out power. However, the contexts of such power are wildly distaff in light of PP 1081s accompanying declaration of martial law. Since martial law involves the substitution of the military in the civilian functions of government, the calling out power involved in PP 1081 is significantly greater than the one involved in PP 1017, which could only contemplate the enforcement of existing laws in relation to the suppression of lawless violence, rebellion or invasion and the maintenance of general peace and order. Further proof that PP 1081 intended a wholesale suspension of civil liberties in the manner that PP 1017 does not even ponder upon is the subsequent paragraph cited, which authorizes the detention and continued detention of persons for a plethora of crimes not only directly related to the rebellion or lawless violence, but of broader range such as those "against national security," or "public order." The order of detention under PP 1081 arguably includes every crime in the statute book. And most alarmingly, any person detained by virtue of PP 1081 could remain in perpetual detention unless otherwise released upon order of President Marcos or his duly authorized representative. Another worthy point of contrast concerns how the Supreme Court, during the martial law era, dealt with the challenges raised before it to martial law rule and its effects on civil liberties. While martial law stood as a valid presidential prerogative under the 1935 Constitution, a ruling committed to safeguard civil rights and liberties could have stood ground against even the most fundamental of human rights abuses ostensibly protected under the 1935 and 1973 constitutions and under international declarations and conventions. Yet a perusal of Aquino v. 24 Enrile, the case that decisively affirmed the validity of martial law rule, shows that most of the Justices then sitting exhibited diffidence guised though as deference towards the declaration of martial law. Note these few excerpts from the several opinions submitted in that case which stand as typical for those times: The present state of martial law in the Philippines is peculiarly Filipino and fits into no traditional patterns or judicial precedents. xxx In the first place I am convinced (as are the other Justices), without need of receiving evidence as in an ordinary adversary court proceeding, that a state of rebellion existed in the country when Proclamation No. 1081 was issued. It was a matter of contemporary history within the cognizance not only of the courts but of all observant people residing here at that time. xxx The state of rebellion continues up to the present. The argument that while armed hostilities go on in several provinces in Mindanao there are none in other regions except in isolated pockets in Luzon, and that therefore there is no need to maintain martial law all over the country, ignores the sophisticated nature and ramifications of rebellion in a modern setting. It does not consist simply of armed clashes between organized and identifiable groups on fields of their own choosing. It includes subversion of the most subtle kind, necessarily clandestine and operating precisely where there is no actual fighting. Underground propaganda, through printed newssheets or rumors disseminated in whispers; recruiting of armed and ideological adherents, raising of funds, procurement of arms and materiel, fifth-column activities including sabotage and intelligence all these are part of the rebellion which by their nature are usually conducted far from the battle fronts. They cannot be counteracted effectively unless recognized and dealt with in that 25 context. xxx [T]he fact that courts are open cannot be accepted as proof that the rebellion and insurrection, which compellingly called for the declaration of martial law, no longer imperil the public safety.

Nor are the many surface indicia adverted to by the petitioners (the increase in the number of tourists, the choice of Manila as the site of international conferences and of an international beauty contest) to be regarded as evidence that the threat to public safety has abated. There is actual armed combat, attended by the somber panoply of war, raging in Sulu and Cotabato, not to mention the Bicol region and Cagayan Valley. I am hard put to say, therefore, that the Governments claim is baseless. I am not insensitive to the plea made here in the name of individual liberty. But to paraphrase Ex parte Moyer, if it were the liberty alone of the petitioner Diokno that is in issue we would probably resolve the doubt in his favor and grant his application. But the Solicitor General, who must be deemed to represent the President and the Executive Department in this case, has manifested that in the Presidents judgment peace and tranquility cannot be speedily restored in the country unless the petitioners and others like them meantime remain in military custody. For, indeed, the central matter involved is not merely the liberty of isolated individuals, but the 26 collective peace, tranquility and security of the entire nation. xxx It may be that the existence or non-existence or imminence of a rebellion of the magnitude that would justify the imposition of martial law is an objective fact capable of judicial notice, for a rebellion that is not of general knowledge to the public cannot conceivably be dangerous to public safety. But precisely because it is capable of judicial notice, no inquiry is needed to determine the propriety of the Executives action. Again, while the existence of a rebellion may be widely known, its real extent and the dangers it may actually pose to the public safety are not always easily perceptible to the unpracticed eye. In the present day practices of rebellion, its inseparable subversion aspect has proven to be more effective and important than "the rising (of persons) publicly and taking arms against the Government" by which the Revised Penal Code characterizes rebellion as a crime under its sanction. Subversion is such a covert kind of anti-government activity that it is very difficult even for army intelligence to determine its exact area of influence and effect, not ot mention the details of its forces and resources. By subversion, the rebels can extend their field of action unnoticed even up to the highest levels of the government, where no one can always be certain of the political complexion of the man next to him, and this does not exclude the courts. Arms, ammunition and all kinds of war equipment travel and are transferred in deep secrecy to strategic locations, which can be ones neighborhood without him having any idea of what is going on. There are so many insidious ways in which subversives act, in fact too many to enumerate, but the point that immediately suggests itself is that they are mostly incapable of being proven in court, so how are We to make a judicial inquiry about them that can satisfy our judicial conscience. The Constitution definitely commits it to the Executive to determine the factual bases and to forthwith act as promptly as possible to meet the emergencies of rebellion and invasion which may be crucial to the life of the nation. He must do this with unwavering conviction, or any hesitancy or indecision on his part will surely detract from the needed precision in his choice of the means he would employ to repel the aggression. The apprehension that his decision might be held by the Supreme Court to be a transgression of the fundamental law he has sworn to defend and preserve would deter him from acting when precisely it is most urgent and critical 27 that he should act, since the enemy is about to strike the mortal blow. xxx To start with, Congress was not unaware of the worsening conditions of peace and order and of, at least, evident insurgency, what with the numerous easily verifiable reports of open rebellious activities in different parts of the country and the series of rallies and

demonstrations, often bloody, in Manila itself and other centers of population, including those that reached not only the portals but even the session hall of the legislature, but the legislators seemed not to be sufficiently alarmed or they either were indifferent or did not know what to do under the circumstances. Instead of taking immediate measures to alleviate the conditions denounced and decried by the rebels and the activists, they debated and argued long on palliatives without coming out with anything substantial much less satisfactory in the eyes of those who were seditiously shouting for reforms. In any event, in the face of the inability of Congress to meet the situation, and prompted by his appraisal of a critical situation that urgently called for immediate action, the only alternative open to the President was to resort to 28 the other constitutional source of extraordinary powers, the Constitution itself. xxx Proclamation 1081 is in no sense any more constitutionally offensive. In fact, in ordering detention of persons, the Proclamation pointedly limits arrests and detention only to those "presently detained, as well as others who may hereafter be similarly detained for the crimes of insurrection or rebellion, and all other crimes and offences committed in furtherance or on the occasion thereof, or incident thereto, or in connection therewith, for crimes against national security and the law of nations, crimes, against the fundamental laws of the state, crimes against public order, crimes involving usurpation of authority, rank, title and improper use of names, uniforms and insignia, crimes committed by public officers, and for such other crimes as will be enumerated in Orders that I shall subsequently promulgate, as well as crimes as a consequence of any violation of any decree, order or regulation promulgated by me personally or promulgated upon my direction." Indeed, even in the affected areas, the Constitution has not been really suspended much less discarded. As contemplated in the fundamental law itself, it is merely in a state of anaesthesia, to the end that the much needed major surgery to save the 29 nations life may be successfully undertaken. xxx The quoted lines of reasoning can no longer be sustained, on many levels, in these more enlightened times. For one, as a direct reaction to the philosophy of judicial inhibition so frequently exhibited during the Marcos dictatorship, our present Constitution has explicitly mandated judicial review of the acts of government as part of the judicial function. As if to rebuff Aquino, the 1987 Constitution expressly allows the Supreme Court to review the sufficiency of the factual basis of the proclamation of martial law and decide the same within 30 30 days from the filing of the appropriate case. The Constitution also emphasizes that a state of martial law did not suspend the operation of the Constitution or supplant the functioning of the 31 judicial and legislative branches. The expediency of hiding behind the political question doctrine can no longer be resorted to. For another, the renewed emphasis within domestic and international society on the rights of people, as can be seen in worldwide democratic movements beginning with our own in 1986, makes it more difficult for a government established and governed under a democratic constitution, to engage in official acts that run contrary to the basic tenets of democracy and civil rights. If a government insists on proceeding otherwise, the courts will stand in defense of the basic constitutional rights of the people. Still, the restoration of rule under law, the establishment of national governmental instrumentalities, and the principle of republicanism all ensure that the constitutional government retains significant powers and prerogatives, for it is through such measures that it can exercise sovereign will in behalf of the people. Concession to those presidential privileges and prerogatives should be made if due. The abuses of past executive governments should not detract from these basic governmental powers, even as they may warrant a greater degree

of wariness from those institutions that balance power and the people themselves. And the rule of law should prevail above all. The damage done by martial rule was not merely personal but institutional, and the proper rebuke to the caprices and whims of the iniquitous past is to 32 respect the confines of the restored rule of law. Nothing in PP 1017, or any issuance by any President since Aquino, comes even close to matching PP 1081. It is a rank insult to those of us who suffered or stood by those oppressed under PP 1081 to even suggest that the innocuous PP 1017 is of equivalent import. PP 1017 Does Not Purport or Pretend that the President Has The Power to Issue Decrees There is one seeming similarity though in the language of PP 1017 and PP 1081, harped upon by some of the petitioners and alluded to by the majority. PP 1017 contains a command to the Armed Forces "to enforce obedience to all the laws and to all decrees, orders and regulations by [the President]". A similar command was made under PP 1081. That in itself should not be a cause of surprise, since both PP 1017 and PP 1081 expressly invoked the "calling out" power, albeit in different contexts. The majority however considers that since the President does not have the power to issue decrees, PP 1017 is unconstitutional insofar as it enforces obedience "to all decrees." For one, it should be made clear that the President currently has no power to issue decrees, and PP 1017 by no measure seeks to restore such power to the President. Certainly, not even a single decree was issued by President Arroyo during the several days PP 1017 was in effect, or during her term thus far for that matter. At the same time, such power did once belong to the President during the Marcos era and was extensively utilized by President Marcos. It has to be remembered that chafed as we may have under some of the Marcos decrees, per the 1987 Constitution they still remain as part of the law of the land unless particularly stricken down or repealed by subsequent enactments. Indeed, when the President calls upon the Armed Forces to enforce the laws, those subsisting presidential decrees issued by President Marcos in the exercise of his legislative powers are included in the equation. This view is supported by the rules of statutory construction. The particular passage in PP 1017 reads ""to enforce obedience to all the laws and to all decrees, orders and regulations," with the phrases "all the laws and to all decrees" separated by a comma from "orders and regulations promulgated by me." Inherently, laws and those decrees issued by President Marcos in the exercise of his legislative powers, and even those executive issuances of President Aquino in the exercise of her legislative powers, belong to the same class, superior in the hierarchy of laws than "orders and regulations." The use of the conjunction "and" 33 denotes a joinder or union, "relating the one to the other." The use of "and" establishes an association between laws and decrees distinct from orders and regulations, thus permitting the application of the doctrine of noscitur a sociis to construe "decrees" as those decrees which at present have the force of law. The dividing comma further signifies the segregation of concepts between "laws and decrees" on one hand, and "orders and regulations" on the other. Further proof that "laws and decrees" stand as a class distinct from "orders and regulations" is the qualifying phrase "promulgated by me," which necessarily refers only to orders and regulations. Otherwise, PP 1017 would be ridiculous in the sense that the obedience to be enforced only relates to laws promulgated by President Arroyo since she assumed office in 2001. "Laws and decrees" do not relate only to those promulgated by President Arroyo, but other laws enacted by past sovereigns, whether they be in the form of the Marcos presidential decrees, or acts enacted by the American Governor-General such as the Revised Penal Code. Certainly then, such a qualification sufficiently addresses the fears of the majority that PP 1017 somehow empowers or recognizes the ability of the current President to promulgate decrees.

Instead, the majority pushes an interpretation that, if pursued to its logical end, suggests that the President by virtue of PP 1017 is also arrogating unto herself, the power to promulgate laws, which are in the mold of enactments from Congress. Again, in this respect, the grouping of "laws" and "decrees" separately from "orders" and "regulations" signifies that the President has not arrogated unto herself the power to issue decrees in the mold of the infamous Marcos decrees. Moreover, even assuming that PP 1017 was intended to apply to decrees which the current President could not very well issue, such intention is of no consequence, since the proclamation does not intend or pretend to grant the President such power in the first place. By no measure of contemplation could PP 1017 be interpreted as reinstating to the President the power to issue decrees. I cannot see how the phrase "enforce obedience to decrees" can be the source of constitutional mischief, since the implementation of PP 1017 will not vest on the President the power to issue such decrees. If the Court truly feels the need to clarify this point, it can do so with the expediency of one sentence or even a footnote. A solemn declaration that the phrase is unconstitutional would be like killing a flea with dynamite when insect powder would do. PP 1017 A Valid Exercise of Prerogatives Inherent and Traditional in the Office of The Presidency Thus far, I have dwelt on the legal effects of PP 1017, non-existent as they may be in relation to the citizenry, the courts or on Congress. Still, there is another purpose and dimension behind PP 1017 that fall within the valid prerogatives of the President. The President, as head of state, is cast in a unique role in our polity matched by no other individual or institution. Apart from the constitutional powers vested on the President lie those powers rooted in the symbolic functions of the office. There is the common expectation that the President should stand as the political, moral and social leader of the nation, an expectation not referred to in of the oath of office, but expected as a matter of tradition. In fact, a President may be cast in crisis even if the Chief Executive has broken no law, and faithfully executed those laws that exist, simply because the President has failed to win over the hearts and minds of the citizens. As a Princeton academic, Woodrow Wilson once observed that with the People, the President is everything, and without them nothing, and the sad decline of his own eventual presidency is no better proof of the maxim. Such are among the vagaries of the political office, and generally beyond judicial relief or remedy. 34 Justice Robert Jacksons astute observation in Youngstown Sheet & Tube Co. v. Sawyer on the unique nature of the presidency, has been widely quoted: Executive power has the advantage of concentration in a single head in whose choice the whole Nation has a part, making him the focus of public hopes and expectations. In drama, magnitude, and finality, his decisions so far overshadow any others that almost alone he fills the public eye and ear. No other personality in public life can begin to compete with him in access to the public mind through modern methods of communications. By his prestige as head of state and his influence upon public opinion he exerts a leverage upon those who are 35 supposed to check and balance his power which often cancels their effectiveness. Correspondingly, the unique nature of the office affords the President the opportunity to profoundly influence the public discourse, not necessarily through the enactment or enforcement of laws, but specially by the mere expediency of taking a stand on the issues of the day. Indeed, the President is expected to exercise leadership not merely through the proposal and enactment of laws, but by making such vital stands. U.S. President Theodore Roosevelt popularized the notion of the presidency as a "bully pulpit", in line with his belief that the President was the steward of the people limited only by the specific restrictions and

prohibitions appearing in the Constitution, or impleaded by Congress under its constitutional powers. Many times, the President exercises such prerogative as a responsive measure, as after a mass tragedy or calamity. Indeed, when the President issues a declaration or proclamation of a state of national mourning after a disaster with massive casualties, while perhaps de rigeur, is not the formalistic exercise of tradition, but a statement that the President, as the representative of the Filipino people, grieves over the loss of life and extends condolences in behalf of the people to the bereaved. This is leadership at its most solemn. Yet the President is not precluded, in the exercise of such role, to be merely responsive. The popular expectation in fact is of a pro-active, dynamic chief executive with an ability to identify problems or concerns at their incipience and to respond to them with all legal means at the earliest possible time. The President, as head of state, very well has the capacity to use the office to garner support for those great national quests that define a civilization, as President Kennedy did when by a mere congressional address, he put America on track to the goal of placing a man on the moon. Those memorable presidential speeches memorized by schoolchildren may have not, by themselves, made operative any law, but they served not only merely symbolic functions, but help profoundly influence towards the right direction, the public opinion in the discourse of the times. Perhaps there was no more dramatic example of the use of the "bully pulpit" for such noble purposes than in 1964, when an American President from Texas stood before a Congress populated by many powerful bigots, and fully committed himself as no other President before to the cause of civil rights with his intonation of those lines from the civil rights anthem, "we shall overcome." From an earlier era in American history, Lincolns Emancipation Proclamation stands out as a presidential declaration which clearly staked American polity on the side of the democratic ideal, even though the proclamation itself was of dubitable legal value. The proclamation, in short form, "freed the slaves", but was not itself free of legal questions. For one, the notion that the President could, by himself, alter the civil and legal status of an entire class of persons was dubious then and now, although President Lincoln did justify his action as in the exercise of his powers as commander-in-chief during wartime, "as a fit and necessary war measure for suppressing [the] rebellion." Moreover, it has been pointed out that the Proclamation only freed those slaves in those states which were then in rebellion, and it eventually took the enactment 36 of the Thirteenth Amendment of the U.S. Constitution to legally abolish involuntary servitude. Notwithstanding the legal haze surrounding it, the Emancipation Proclamation still stands as a defining example not only of the Lincoln Presidency, but of American democratic principles. It may be remembered to this day not exactly as an operational means by which slaves were actually freed, but as a clear rhetorical statement that slavery could no longer thenceforth stand. The President as Chief Government Spokesperson of the democratic ideals is entrusted with a heady but comfortable pursuit. But no less vital, if somewhat graver, is the role of the President as the Chief Defender of the democratic way of life. The "calling out" power assures the President such capability to a great extent, yet it will not fully suffice as a defense of democracy. There is a need for the President to rally the people to defend the Constitution which guarantees the democratic way of life, through means other than coercive. I assert that the declaration of a state of emergency, on premises of a looming armed threat which have hardly been disputed, falls within such proper functions of the President as the defender of the Constitution. It was designed to inform the people of the existence of such a threat, with the expectation that the citizenry would not aid or abet those who would overturn through force the democratic government. At the same time, the Proclamation itself does not violate the

Constitution as it does not call for or put into operation the suspension or withdrawal of any constitutional rights, or even create or diminish any substantive rights. I submit that it would be proper for the Court to recognize that PP 1017 strikes a commendable balance between the Constitution, the "calling out" power, and the inherent function of the Presidency as defender of the democratic constitution. PP 1017 keeps within the scope and limitations of these three standards. It asserts the primacy of the democratic order, civilian control over the armed forces, yet respects constitutional and statutory guarantees of the people. II. Section 17, Article XII of the Constitution In Relation to PP 1017 My next issue with the majority pertains to the assertion that the President does not have the power to take over public utilities or businesses impressed with public interest under Section 17, Article XII of the Constitution without prior congressional authorization. I agree that the power of the State to take over such utilities and businesses is highly limited, and should be viewed with suspicion if actually enforced. Yet qualifications are in order with regard to how Section 17, Article XII actually relates of PP 1017. I agree with the majority that a distinction should be asserted as between the power of the President to declare a state of emergency, and the exercise of emergency powers under Section 17, Article XII. The President would have the power to declare a state of emergency even without Section 17, Article XII. At the same time, it should be recognized that PP 1017, on its face and as applied, did not involve the actual takeover of any public utility or business impressed with public interest. To some minds, the police action in relation to the Daily Tribune may have flirted with such power, yet ultimately the newspaper was able to independently publish without police interference or court injunction. It may be so that since PP 1017 did make express reference to Section 17, Article XII, but it should be remembered that the constitutional provision refers to a two-fold power of the State to declare a national emergency and to take over such utilities and enterprises. The first power under Section 17, Article XII is not distinct from the power of the President, derived from other constitutional sources, to declare a state of national emergency. Reference to Section 17, Article XII in relation to the power to declare a state of national emergency is ultimately superfluous. A different situation would obtain though if PP 1017 were invoked in the actual takeover of a utility or business, and in such case, full consideration of the import of Section 17, Article XII would be warranted. But no such situation obtains in this case, and any discussion relating to the power of the State to take over a utility or business under Section 17, Article XII would ultimately be obiter dictum. I respectfully submit that the Court, in these petitions, need not have engaged this potentially contentious issue, especially as it extends to whether under constitutional contemplation, the President may act in behalf of the State in exercising the powers under Section 17, Article XII. Nonetheless, considering that the majority has chosen to speak out anyway, I will express agreement that as a general rule, the President may exercise such powers under Section 17, Article XII only under the grant of congressional approval. Certainly, the notion that congressional authority is required under Section 17, Article XII is not evident from the provision. Even Fr. Bernas notes that Section 17 does not require, as does Article VI, Section 23(2), that the authorization be "by law", thus leaving the impression that the authorization can 37 come from the President. After the 1989 coup detat, President Aquino issued issued Proclamation No. 503 on 6 December 1989, declaring a state of national emergency, and referring therein to Section 17,

Article XII by citing the entire provision. The declaration was subsequently reaffirmed by Congress when two weeks after, it enacted Republic Act No. 6826. Notably, Section 3(3) of the law authorized the President "to temporarily takeover or direct the operation of any privatelyowned public utility or business affected with public interest that violates the herein declared national policy". Tellingly, however, such authority was granted by Congress expressly "pursuant to Article VI, Section 23(2) of the Constitution", and not the take-over provision in Section 17, Article XII. Evidently, the view that Section 17, Article XII requires prior congressional authority has some novelty to it. Still, I concede that it is fundamentally sound to construe Section 17 as requiring congressional authority or approval before the takeover under the provision may be effected. After all, the taking over of a privately owned public utility or business affected with public interest would involve an infringement on the right of private enterprise to profit; or perhaps even expropriation for a limited period. Constitutionally, the taking of property can only be 38 accomplished with due process of law, and the enactment of appropriate legislation prescribing the terms and conditions under which the President may exercise the powers of the State under Section 17 stands as the best assurance that due process of law would be observed. The fact that Section 17 is purposely ambivalent as to whether the President may exercise the power therein with or without congressional approval leads me to conclude that it is constitutionally permissible to recognize exceptions, such as in extreme situations wherein obtention of congressional authority is impossible or inexpedient considering the emergency. I thus dissent to any proposition that such requirement is absolute under all circumstances. I maintain that in such extreme situations, the President may exercise such authority subject to judicial review. It should be admitted that some emergencies are graver and more imminent than others. It is not within the realm of impossibility that by reason of a particularly sudden and grave emergency, Congress may not be able to convene to grant the necessary congressional authority to the President. Certainly, if bombs from a foreign invader are falling over Manila skies, it may be difficult, not to mention unnecessarily onerous, to require convening Congress before the President may exercise the functions under Section 17, Article XII. The proposition of the majority may be desirable as the general rule, but the correct rule that should be adopted by the Court should not be so absolute so as to preclude the exercise by the President of such power under extreme situations. 39 In response to this argument, the majority cites portions of Araneta v. Dinglasan, most pertinent of which reads: "The point is, under this framework of government, legislation is preserved for Congress all the time, not excepting periods of crisis no matter how serious." For one, Araneta did not involve a situation wherein the President attempted to exercise emergency powers without congressional authority; concerning as it did the exercise by President Quirino of those emergency powers conferred several years earlier by Congress to President Quezon at the onset of the Pacific phase of World War II. The Court therein ruled that the emergency that justified then the extraordinary grant of powers had since expired, and that there no longer existed any authority on the part of the President to exercise such powers, notwithstanding that the law, Commonwealth Act No. 671, "did not in term fix the duration of its effectiveness". Clearly, the context in which the Court made that observation in Araneta is not the same context within which my own observations oscillate. My own submission is premised on the extreme situation wherein Congress may be physically unable to convene, an exceptional circumstance which the hard-line stance of the majority makes no concessions for.

Indeed, even the factual milieu recounted in Araneta conceded that such extreme circumstance could occur, when it noted President Quezons claim that he was impelled to call for a special session of the National Assembly after foreseeing that "it was most unlikely that the Philippine Legislature would hold its next regular session which was to open on January 1, 40 1942." That the National Assembly then was able to convene and pass Commonwealth Act No. 671 was fortunate, but somewhat a luxury nonetheless. Indeed, it is not beyond the realm of possibility that the emergency contemplated would be so grave that a sufficient number of members of Congress would be physically unable to convene and meet the quorum requirement. Ultimately though, considering that the authorized or actual takeover under Section 17, Article XII, is not presented as a properly justiciable issue. Nonetheless, and consistent with the general tenor, the majority has undertaken to decide this non-justiciable issue, and to even place their view in the dispositive portion in a bid to enshrine it as doctrine. In truth, the Courts pronouncement on this point is actually obiter. It is hoped that should the issue become ripe for adjudication before this Court, the obiter is not adopted as a precedent without the qualification that in extreme situations wherein congressional approval is impossible or highly impractical to obtain, the powers under Section 17, Article XII may be authorized by the President. III. Overbreadth and "Void for Vagueness" Doctrines Applicable Not Only To Free Speech Cases The majority states that "the overbreadth doctrine is an analytical tool developed for te sting on 41 their faces statutes in free speech cases" , and may thus be entertained "in cases involving statutes which, by their terms, seek to regulate only spoken words, and not conduct. A similar characterization is made as to the "void for vagueness" doctrine, which according to the majority, is "subject to the same principles governing overbreadth doctrine also an analytical 42 tool for testing on their faces statutes in free speech cases." 43 As I noted in my Separate Opinion in Romualdez v. Sandiganbayan, citing Justice Kapunan, there is a viable distinction between "void for vagueness" and "overbreadth" which the majority sadly ignores. A view has been proferred that "vagueness and overbreadth doctrines are not applicable to penal laws." These two concepts, while related, are distinct from each other. On one hand, the doctrine of overbreadth applies generally to statutes that infringe upon freedom of speech. On the other hand, the "void-for-vagueness" doctrine applies to criminal laws, not merely those that regulate speech or other fundamental constitutional right. (not merely those that regulate speech or other fundamental constitutional rights.) The fact that a particular criminal statute does not infringe upon free speech does not mean that a facial challenge to the statute on 44 vagueness grounds cannot succeed. The distinction may prove especially crucial since there has been a long line of cases in American Supreme Court jurisprudence wherein penal statutes have been invalidated on the 45 ground that they were "void for vagueness." As I cited in Romualdez v. Sandiganbayan, 46 47 these cases are Connally v. General Construction Co,. Lanzetta v. State of New Jersey, 48 49 50 Bouie v. City of Columbia, Papachristou v. City of Jacksonville, Kolender v. Lawson, and 51 City of Chicago v. Morales. Granting that perhaps as a general rule, overbreadth may find application only in "free 52 speech" cases, it is on the other hand very settled doctrine that a penal statute regulating conduct, not speech, may be invalidated on the ground of "void for vagueness". In Romualdez, I decried the elevation of the suspect and radical new doctrine that the "void for vagueness" challenge cannot apply other than in free speech cases. My view on this point has not changed, and insofar as the ponencia would hold otherwise, I thus dissent.

Moreover, even though the argument that an overbreadth challenge can be maintained only in free speech cases has more jurisprudential moorings, the rejection of the challenge on that basis alone may prove unnecessarily simplistic. I maintain that there is an even stronger ground on which the overbreadth and "void for vagueness" arguments can be refuted that Presidential Proclamation 1017 (PP 1017) neither creates nor diminishes any rights or obligations whatsoever. In fact, I submit again that this proposition is the key perspective from which the petitions should be examined. IV. General Order No. 5 Suffers No Constitutional Infirmity The majority correctly concludes that General Order No. 5 is generally constitutional. However, they make an unnecessary distinction with regard to "acts of terrorism", pointing out that Congress has not yet passed a law defining and punishing terrorism or acts of terrorism. That may be the case, but does the majority seriously suggest that the President or the State is powerless to suppress acts of terrorism until the word "terrorism" is defined by law? Terrorism has a widely accepted meaning that encompasses many acts already punishable by our general penal laws. There are several United Nations and multilateral conventions on 53 terrorism , as well as declarations made by the United Nations General Assembly denouncing 54 and seeking to combat terrorism. There is a general sense in international law as to what constitutes terrorism, even if no precise definition has been adopted as binding on all nations. Even without an operative law specifically defining terrorism, the State already has the power to suppress and punish such acts of terrorism, insofar as such acts are already punishable, as they almost always are, in our extant general penal laws. The President, tasked with the execution of all existing laws, already has a sufficient mandate to order the Armed Forces to combat those acts of terrorism that are already punishable in our Revised Penal Code, such as rebellion, coup detat, murder, homicide, arson, physical injuries, grave threats, and the like. Indeed, those acts which under normal contemplation would constitute terrorism are associated anyway with or subsumed under lawless violence, which is a term found in the Constitution itself. Thus long ago, the State has already seen it fit to punish such acts. Moreover, General Order No. 5 cannot redefine statutory crimes or create new penal acts, since such power belongs to the legislative alone. Fortunately, General Order No. 5 does not assume to make such redefinitions. It may have been a different matter had General Order No. 5 attempted to define "acts of terrorism" in a manner that would include such acts that are not punished under our statute books, but the order is not comported in such a way. The proper course of action should be to construe "terrorism" not in any legally defined sense, but in its general sense. So long as it is understood that "acts of terrorism" encompasses only those acts which are already punishable under our laws, the reference is not constitutionally infirm. The majority cites a theoretical example wherein a group of persons engaged in a drinking spree may be arrested by the military or police in the belief that they were committing acts of terrorism pursuant to General Order No. 5. Under the same logical framework that group of persons engaged in a drinking spree could very well be arrested by the military or police in the belief that they are committing acts of lawless violence pursuant to General Order No. 5, instead of acts of terrorism. Obviously such act would be "abuse and oppression" on the part of the military and the police, whether justified under "lawless violence" or "acts of terrorism". Yet following the logic of the majority, the directive to prevent acts of "lawless violence" should be nullified as well. If the point of the majority is that there are no justiciable standards on what constitutes acts of terrorism, it should be pointed out that only the following scenarios could ensue. For one, a

person would actually be arrested and charged with "acts of terrorism", and such arrest or charge would be thrown out of the courts, since our statute books do not criminalize the specific crime of terrorism. More probably, a person will be arrested and charged for acts that may under the laypersons contemplation constitutes acts of terrorism, but would be categorized in the information and charge sheet as actual crimes under our Revised Penal Code. I simply cannot see how General Order No. 5 could validate arrests and convictions for non-existent crimes. Interestingly, the majority, by taking issue with the lack of definition and possible broad context of "acts of terrorism", seems to be positively applying the arguments of "overbreadth" or "void for vagueness", arguments which they earlier rejected as applicable only in the context of free expression cases. The inconsistency is breath-taking. While I disagree with the majorityimposed limitations on the applicability of the "overbreadth" or "void for vagueness" doctrines, I likewise cannot accede to the application of those doctrines in the context of General Order No. 5, for the same reason that they should not apply to PP 1017. Neither General Order No. 5 nor PP 1017 is a penal statute, or have an operative legal effect of infringing upon liberty, expression or property. As such, neither General Order No. 5 nor PP 1017 can cause the deprivation of life, liberty or property, thus divorcing those issuances from the context of the due process clause. The same absence of any binding legal effect of these two issuances correspondingly disassociates them from the constitutional infringement of free expression or association. Neither "void for vagueness" nor "overbreadth" therefore lie. Another point. The majority concludes from General Order No. 5 that the military or police is limited in authority to perform those acts that are "necessary and appropriate actions and measures to suppress and prevent acts of terrorism and lawless violence," and such acts committed beyond such authority are considered illegal. I do not dispute such conclusion, but it must be emphasized that "necessary and appropriate actions and measures" precisely do not authorize the military or police to commit unlawful and unconstitutional acts themselves, even if they be geared towards suppressing acts of terrorism or lawless violence. Indeed, with the emphasis that PP 1017 does not create new rights or obligations, or diminish existing ones, it necessarily follows that General Order No. 5, even if premised on a state of emergency, cannot authorize the military or police to ignore or violate constitutional or statutory rights, or enforce laws completely alien to the suppression of lawless violence. Again, following the cardinal principle of legal hermeneutics earlier adverted to, General Order No. 5 should be viewed in harmony with the Constitution, and only if it the Order irreconcilably deviates from the fundamental law should it be struck down. V. Court Should Refrain Making Any Further Declaration, For Now, Relating to the Individual Grievances Raised by the Petitioners in Relation To PP 1017 I respectfully disagree with the manner by which the majority would treat the "void as applied" argument presented by the petitioners. The majority adopts the tack of citing three particular injuries alleged by the petitioners as inflicted with the implementation of PP 1017. The majority analyzes the alleged injuries, correlates them to particular violations of the Bill of Rights, and ultimately concludes that such violations were illegal. The problem with this approach is that it would forever deem the Court as a trier or reviewer at first instance over questions involving the validity of warrantless arrests, searches, seizures and the dispersal of rallies, all of which entail a substantial level of factual determination. I agree that PP 1017 does not expand the grounds for warrantless arrests, searches and seizures or dispersal of rallies, and that the proclamation cannot be invoked before any court to assert the validity of such unauthorized actions. Yet the problem with directly adjudicating that

the injuries inflicted on David, et al., as illegal, would be that such would have been done with undue haste, through an improper legal avenue, without the appropriate trial of facts, and without even impleading the particular officers who effected the arrests/searches/seizures. I understand that the injurious acts complained of by the petitioners upon the implementation of PP 1017 are a source of grave concern. Indubitably, any person whose statutory or constitutional rights were violated in the name of PP 1017 or General Order No. 5 deserves redress in the appropriate civil or criminal proceeding, and even the minority wishes to makes this point as emphatically clear, if not moreso, as the majority. Yet a ruling from this Court, without the proper factual basis or prayer for remuneration for the injury sustained, would ultimately be merely symbolic. While the Court will not be harmed by a symbolic reaffirmation of commitment to the principles in the Bill of Rights, it will be harmed by a ruling that unduly and inappropriately expands the very limited function of the Court as a trier of facts on first instance. 55 In my dissent in Teves v. Sandiganbayan, I alluded to the fact that our legal system may run counter-intuitive in the sense that the seemingly or obviously guilty may still, after trial, be properly acquitted or exonerated; to the extent that even an accused who murders another person in front of live television cameras broadcast to millions of sets is not yet necessarily 56 guilty of the crime of murder or homicide. Hence, the necessity of a proper trial so as to allow the entire factual milieu to be presented, tested and evaluated before the court. In my theoretical example, the said accused should nonetheless be acquitted if the presence of exempting circumstances is established. The same principle applies in these cases. Certainly, we in the Court can all agree that PP 1017 cannot be invoked to justify acts by the police or military officers that go beyond the Constitution and the laws. But the course of prudence dictates that the pronouncement of such a doctrine, while enforceable in a court of law, should not yet extend itself to specific examples that have not yet been properly litigated. The function of this Court is to make legal pronouncements not based on "obvious" facts, but on proven facts. A haphazard declaration by the Court that the arrests or seizures were "illegal" would likewise preclude any meaningful review or reevaluation of pertinent legal doctrines that otherwise could have been reexamined had these acts been properly challenged in regular order. For example, the matter of the warrantless arrests in these cases could have most certainly compelled the Court to again consider the doctrine laid down in Umil v. Ramos on warrantless arrests and rebellion as a continuing crime, a doctrine that may merit renewed evaluation. Yet any healthy reexamination of Umil, or other precedents for that matter, require the presentation and trial of the proper factual predicates, a course which the majority unfortunately "short-cuts" in this present decision. Of course, despite the grandiloquent pronouncement by the majority that the acts complained of by the petitioners and implemented pursuant to General Order No. 5 are illegal, it could nonetheless impose civil, criminal or administrative sanctions on the individual police officers concerned, as these officers had not been "individually identified and given their day in court". Of course, the Court would be left with pie on its face if these persons, once "given their day in court", would be able to indubitably establish that their acts were actually justified under law. Perhaps worse, the pronouncement of the majority would have had the effect of prejudging these cases, if ever lodged, even before trial on the merits. Certainly, a declaration by the majority that PP 1017 or General Order No. 5 cannot justify violation of statutory or constitutional rights (a declaration which the minority would have no qualms assenting to) would sufficiently arm those petitioners and other persons whose rights may have been injured in the implementation of PP 1017, with an impeccable cause of action

which they could pursue against the violators before the appropriate courts. At the same time, if the officers or officials concerned have basis to contend that no such rights were violated, for justifications independent of PP 1017 or General Order No. 5, such claims could receive due consideration before the courts. Such a declaration would squarely entrench the Court as a defender of the Bill of Rights, foster enforceable means by which the injured could seek actual redress for the injury sustained, and preserve the integrity and order of our procedural law. VI. Conclusion The country-wide attention that the instant petitions have drawn should not make the Court lose focus on its principal mission, which is to settle the law of the case. On the contrary, the highly political nature of these petitions should serve as forewarning for the Court to proceed ex abundante cautelam, lest the institution be unduly dragged into the partisan mud. The credibility of the Court is ensured by making decisions in accordance with the Constitution without regard to the individual personalities involved; with sights set on posterity, oblivious of the popular flavor of the day. By deciding non-justiciable issues and prejudging cases and controversies without a proper trial on the merits, the majority has diminished the potency of this Courts constitutional power in favor of rhetorical statements that afford no quantifiable relief. It is for the poet and the politician to pen beautiful paeans to the peoples rights and liberties, it is for the Court to provide for viable legal means to enforce and safeguard these rights and liberties. When the passions of these times die down, and sober retrospect accedes, the decision of this Court in these cases will be looked upon as an extended advisory opinion. Yes, PP 1017 and General Order No. 5 warrant circumspect scrutiny from those interested and tasked with preserving our civil liberties. They may even stand, in the appropriate contexts, as viable partisan political issues. But the plain fact remains that, under legal contemplation, these issuances are valid on their face, and should result in no constitutional or statutory breaches if applied according to their letter. I vote to DISMISS all the petitions. DANTE O. TINGA Associate Justice Footnotes 1 G.R. Nos. 159085, 159103, 159185, 159196, 3 February 2004, 421 SCRA 656. 2 R. Agpalo, Statutory Construction, 3rd.ed. (1995), at 21. 3 "When a statute is reasonably susceptible of two constructions, one constitutional and the other unconstitutional, that construction in favor of its constitutionality shall be adopted and the construction that will render it invalid rejected." See R. Agpalo, id., at 266; citing Mutuc v. COMELEC, G.R. No. 32717, Nov. 26, 1970, 36 SCRA 228; J.M. Tuason & Co., Inc. v. Land Tenure Adm., G.R. No. 21064, Feb. 18, 1970, 31 SCRA 413; American Bible Society v. City of Manila, 101 Phil. 386 (1957); Alba v. Evangelista, 100 Phil. 683 (1957); Maddumba v. Ozaeta, 82 Phil. 345 (1948); Benguet Exploration, Inc. v. Department of Agriculture and Natural Resources, G.R. No. 29534, Fe. 28, 1977, 75 SCRA 285 (1977); De la Cruz v. Paras, G.R. No. 42591, July 25, 1983, 123 SCRA 569. 4 See Constitution, Section 17, Article VII. 5 See Constitution, Section 18, Article VII. 6 See Constitution, Section 1, Article VII. 7 The plenary legislative power being vested in Congress. See Constitution, Section 1,

Article VI. 8 "[The President] shall ensure that the laws be faithfully executed." See Constitution, Section 17, Article VII. 9 Supra note 4. 10 "No officer or employee of the civil service shall be removed or suspended except for cause provided by law." See Constitution, Section 2(3), Article IX-B. 11 See, e.g., Marcos v. Manglapus, G.R. No. 88211, 27 October 1989, 178 SCRA 760, 763. 12 See Administrative Code, Section 4, Chapter 2, Book III. 13 See Section 18, Article VII, Constitution. 14 392 Phil. 618 (2000) 15 Id. at 627. 16 Id. at 644. 17 Id. at 636. 18 Id. at 643. 19 Id. 20 Sanlakas v. Executive Secretary, supra note 1, at 668. 21 Id. at 677. 22 Supra note 8. 23 The declaration of martial law then within the President to make under authority of Section 10(2), Article VII of the 1935 Constitution. 24 No. L-35546, 17 September 1974, 59 SCRA 183. 25 Aquino, Jr. v. Enrile, id. at 240-241. 26 Aquino, Jr. v. Enrile, id. at 262-263, Castro, J., Separate Opinion. 27 Id. at 398-399, Barredo, J., concurring. 28 Id. at 405-406, Barredo, J., concurring. 29 Id. at 423, Barredo, J., concurring. 30 Constitution, Section 18, Article VII. 31 Constitution, Section 18, Article VII. 32 See Mijares v. Hon. Ranada, G.R. No. 139325, 12 April 2005. 33 See R. Agpalo, Statutory Construction, p. 206. 34 343 U.S. 579, 653-654, J. Jackson, concurring. 35 Ibid. 36 See George Fort Milton, The Use of Presidential Power: 1789-1943, 1980 ed., at 119-120. 37 See J. Bernas, S.J., The 1987 Constitution of the Republic of the Philippines: A Commentary, 2003 ed., at 1183. 38 See Section 1, Article III, Constitution. 39 84 Phil. 368 (1949). 40 Id. at 379. 41 Decision, infra. 42 Id. 43 G.R. No. 152259, 29 July 2004, 435 SCRA 371, 395-406. 44 Id., at 398, citing Estrada v. Sandiganbayan, 421 Phil. 290, J. Kapunan, dissenting, at pp. 382-384. 45 Id., at 398-401. 46 269 U.S. 385, 393 (1926). 47 306 U.S. 451 (1939).

48 49

378 U.S. 347 (1964). 405 U.S. 156 (1972). 50 461 U.S. 352 (1983). 51 Case No. 97-1121, 10 June 1999. 52 But see United States v. Robel, 389 U.S. 258 (1967), wherein the U.S. Supreme Court invalidated a portion of the Subversive Control Activities Act on the ground of overbreadth as it sought to proscribe the exercise the right of free association, also within the First Amendment of the United States Constitution but a distinct right altogether from free expression. 53 To name a few, the Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons, including Diplomatic Agents (1973); International Convention for the Suppression of Terrorist Bombings (1997); International Convention for the Suppression of the Financing of Terrorism (1999); the International Convention for the Suppression of Acts of Nuclear Terrorism (2005). See "United Nations Treaty Collection Conventions on Terrorism", http://untreaty.un.org/English/Terrorism.asp (last visited, 30 April 2006). 54 See, e.g., Resolution No. 49/60, Adopted by the United Nations General Assembly on 17 February 1995. 55 G.R. No. 154182, 17 December 2004, 447 SCRA 309, 335-348. J. Tinga, dissenting. 56 Id. at 345. The Lawphil Project - Arellano Law Foundation

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 96541 August 24, 1993 DEAN JOSE JOYA, CARMEN GUERRERO NAKPIL, ARMIDA SIGUION REYNA, PROF. RICARTE M. PURUGANAN, IRMA POTENCIANO, ADRIAN CRISTOBAL, INGRID SANTAMARIA, CORAZON FIEL, AMBASSADOR E. AGUILAR CRUZ, FLORENCIO R. JACELA, JR., MAURO MALANG, FEDERICO AGUILAR ALCUAZ, LUCRECIA R. URTULA, SUSANO GONZALES, STEVE SANTOS, EPHRAIM SAMSON, SOLER SANTOS, ANG KIU KOK, KERIMA POLOTAN, LUCRECIA KASILAG, LIGAYA DAVID PEREZ, VIRGILIO ALMARIO, LIWAYWAY A. ARCEO, CHARITO PLANAS, HELENA BENITEZ, ANNA MARIA L. HARPER, ROSALINDA OROSA, SUSAN CALO MEDINA, PATRICIA RUIZ, BONNIE RUIZ, NELSON NAVARRO, MANDY NAVASERO, ROMEO SALVADOR, JOSEPHINE DARANG, and PAZ VETO PLANAS, petitioners, vs. PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), CATALINO MACARAIG, JR., in his official capacity, and/or the Executive Secretary, and CHAIRMAN MATEO A.T. CAPARAS, respondents. M.M. Lazaro & Associates for petitioners. The Solicitor General for respondents. BELLOSILLO, J.: All thirty-five (35) petitioners in this Special Civil Action for Prohibition and Mandamus with Prayer for Preliminary Injunction and/or Restraining Order seek to enjoin the Presidential Commission on Good Government (PCGG) from proceeding with the auction sale scheduled on 11 January 1991 by Christie's of New York of the Old Masters Paintings and 18th and 19th century silverware seized from Malacaang and the Metropolitan Museum of Manila and placed in the custody of the Central Bank. The antecedents: On 9 August 1990, Mateo A.T. Caparas, then Chairman of PCGG, wrote then President Corazon C. Aquino, requesting her for authority to sign the proposed Consignment Agreement between the Republic of the Philippines through PCGG and Christie, Manson and Woods International, Inc. (Christie's of New York, or CHRISTIE'S) concerning the scheduled sale on 11 January 1991 of eighty-two (82) Old Masters Paintings and antique silverware seized from Malacaang and the Metropolitan Museum of Manila alleged to be part of the ill-gotten wealth of the late President Marcos, his relatives and cronies. On 14 August 1990, then President Aquino, through former Executive Secretary Catalino Macaraig, Jr., authorized Chairman Caparas to sign the Consignment Agreement allowing Christie's of New York to auction off the subject art pieces for and in behalf of the Republic of the Philippines. On 15 August 1990, PCGG, through Chairman Caparas, representing the Government of the Republic of the Philippines, signed the Consignment Agreement with Christie's of New York. According to the agreement, PCGG shall consign to CHRISTIE'S for sale at public auction the eighty-two (82) Old Masters Paintings then found at the Metropolitan Museum of Manila as well as the silverware contained in seventy-one (71) cartons in the custody of the Central Bank of the Philippines, and such other property as may subsequently be identified by PCGG and accepted by CHRISTIE'S to be subject to the provisions of 1 the agreement. On 26 October 1990, the Commission on Audit (COA) through then Chairman Eufemio C. Domingo submitted to President Aquino the audit findings and observations of COA on the Consignment Agreement of 15 August 1990 to the effect that: (a) the authority of former PCGG Chairman Caparas to enter into the Consignment Agreement was of doubtful legality; (b) the contract was highly disadvantageous to the government; (c) PCGG had a poor track record in asset disposal by auction in the

U.S.; and, (d) the assets subject of auction were historical relics and had cultural significance, hence, 2 their disposal was prohibited by law. On 15 November 1990, PCGG through its new Chairman David M. Castro, wrote President Aquino 3 defending the Consignment Agreement and refuting the allegations of COA Chairman Domingo. On the same date, Director of National Museum Gabriel S. Casal issued a certification that the items subject of the Consignment Agreement did not fall within the classification of protected cultural properties and did 4 not specifically qualify as part of the Filipino cultural heritage. Hence, this petition originally filed on 7 January 1991 by Dean Jose Joya, Carmen Guerrero Nakpil, Armida Siguion Reyna, Prof. Ricarte M. Puruganan, Irma Potenciano, Adrian Cristobal, Ingrid Santamaria, Corazon Fiel, Ambassador E. Aguilar Cruz, Florencio R. Jacela, Jr., Mauro Malang, Federico Aguilar Alcuaz, Lucrecia R. Urtula, Susano Gonzales, Steve Santos, Ephraim Samson, Soler Santos, Ang Kiu Kok, Kerima Polotan, Lucrecia Kasilag, Ligaya David Perez, Virgilio Almario and Liwayway A. Arceo. After the oral arguments of the parties on 9 January 1991, we issued immediately our resolution denying the application for preliminary injunction to restrain the scheduled sale of the artworks on the ground that petitioners had not presented a clear legal right to a restraining order and that proper parties had not been impleaded. On 11 January 1991, the sale at public auction proceeded as scheduled and the proceeds of 5 $13,302,604.86 were turned over to the Bureau of Treasury. On 5 February 1991, on motion of petitioners, the following were joined as additional petitioners: Charito Planas, Helena Benitez, Ana Maria L. Harper, Rosalinda Orosa, Susan Carlo Medina, Patricia Ruiz, Bonnie Ruiz, Nelson Navarro, Mandy Navasero, Romeo Salvador, Josephine Darang and Paz Veto Planas. On the other hand, Catalino Macaraig, Jr., in his capacity as former Executive Secretary, the incumbent Executive Secretary, and Chairman Mateo A.T. Caparas were impleaded as additional respondents. Petitioners raise the following issues: (a) whether petitioners have legal standing to file the instant petition; (b) whether the Old Masters Paintings and antique silverware are embraced in the phrase "cultural treasure of the nation" which is under the protection of the state pursuant to the 1987 Constitution and/or "cultural properties" contemplated under R.A. 4846, otherwise known as "The Cultural Properties Preservation and Protection Act;" (c) whether the paintings and silverware are properties of public dominion on which can be disposed of through the joint concurrence of the President and Congress; (d) whether respondent, PCGG has the jurisdiction and authority to enter into an agreement with Christie's of New York for the sale of the artworks; (e) whether, PCGG has complied with the due process clause and other statutory requirements for the exportation and sale of the subject items; and, (f) whether the petition has become moot and academic, and if so, whether the above issues warrant resolution from this Court. The issues being interrelated, they will be discussed jointly hereunder. However, before proceeding, we wish to emphasize that we admire and commend petitioners' zealous concern to keep and preserve within the country great works of art by well-known old masters. Indeed, the value of art cannot be gainsaid. For, by serving as a creative medium through which man can express his innermost thoughts and unbridled emotions while, at the same time, reflecting his deep-seated ideals, art has become a true expression of beauty, joy, and life itself. Such artistic creations give us insights into the artists' cultural heritage the historic past of the nation and the era to which they belong in their triumphant, glorious, as well as troubled and turbulent years. It must be for this reason that the framers of the 1987 Constitution mandated in Art. XIV, Sec. 14, that is the solemn duty of the state to "foster the preservation, enrichment, and dynamic evolution of a Filipino national culture based on the principle of unity in diversity in a climate of free artistic and intellectual expression." And, in urging this Court to grant their petition, petitioners invoke this policy of the state on the protection of the arts.

But, the altruistic and noble purpose of the petition notwithstanding, there is that basic legal question which must first be resolved: whether the instant petition complies with the legal requisites for this Court to exercise its power of judicial review over this case. The rule is settled that no question involving the constitutionality or validity of a law or governmental act may be heard and decided by the court unless there is compliance with the legal requisites for judicial inquiry, namely: that the question must be raised by the proper party; that there must be an actual case or controversy; that the question must be raised at the earliest possible opportunity; and, that the decision 6 on the constitutional or legal question must be necessary to the determination of the case itself. But the most important are the first two (2) requisites. On the first requisite, we have held that one having no right or interest to protect cannot invoke the jurisdiction of the court as party-plaintiff in an 7 action. This is premised on Sec. 2, Rule 3, of the Rules of Court which provides that every action must be prosecuted and defended in the name of the real party-in-interest, and that all persons having interest in the subject of the action and in obtaining the relief demanded shall be joined as plaintiffs. The Court will exercise its power of judicial review only if the case is brought before it by a party who has the legal standing to raise the constitutional or legal question. "Legal standing" means a personal and substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged. The term "interest" is material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere 8 incidental interest. Moreover, the interest of the party plaintiff must be personal and not one based on a 9 desire to vindicate the constitutional right of some third and related party. There are certain instances however when this Court has allowed exceptions to the rule on legal standing, as when a citizen brings a case for mandamus to procure the enforcement of a public duty for 10 the fulfillment of a public right recognized by the Constitution, and when a taxpayer questions the 11 validity of a governmental act authorizing the disbursement of public funds. Petitioners claim that as Filipino citizens, taxpayers and artists deeply concerned with the preservation and protection of the country's artistic wealth, they have the legal personality to restrain respondents Executive Secretary and PCGG from acting contrary to their public duty to conserve the artistic creations as mandated by the 1987 Constitution, particularly Art. XIV, Secs. 14 to 18, on Arts and Culture, and R.A. 4846 known as "The Cultural Properties Preservation and Protection Act," governing the preservation and disposition of national and important cultural properties. Petitioners also anchor their case on the premise that the paintings and silverware are public properties collectively owned by them and by the people in general to view and enjoy as great works of art. They allege that with the unauthorized act of PCGG in selling the art pieces, petitioners have been deprived of their right to public property without due process 12 of law in violation of the Constitution. Petitioners' arguments are devoid of merit. They lack basis in fact and in law. They themselves allege that the paintings were donated by private persons from different parts of the world to the Metropolitan Museum of Manila Foundation, which is a non-profit and non-stock corporations established to promote non-Philippine arts. The foundation's chairman was former First Lady Imelda R. Marcos, while its president was Bienvenido R. Tantoco. On this basis, the ownership of these paintings legally belongs to the foundation or corporation or the members thereof, although the public has been given the opportunity to view and appreciate these paintings when they were placed on exhibit. Similarly, as alleged in the petition, the pieces of antique silverware were given to the Marcos couple as gifts from friends and dignitaries from foreign countries on their silver wedding and anniversary, an occasion personal to them. When the Marcos administration was toppled by the revolutionary government, these paintings and silverware were taken from Malacaang and the Metropolitan Museum of Manila and transferred to the Central Bank Museum. The confiscation of these properties by the Aquino administration however should not be understood to mean that the ownership of these paintings has automatically passed on the government without complying with constitutional and statutory

requirements of due process and just compensation. If these properties were already acquired by the government, any constitutional or statutory defect in their acquisition and their subsequent disposition must be raised only by the proper parties the true owners thereof whose authority to recover emanates from their proprietary rights which are protected by statutes and the Constitution. Having failed to show that they are the legal owners of the artworks or that the valued pieces have become publicly owned, petitioners do not possess any clear legal right whatsoever to question their alleged unauthorized disposition. Further, although this action is also one of mandamus filed by concerned citizens, it does not fulfill the 13 criteria for a mandamus suit. In Legaspi v. Civil Service Commission, this Court laid down the rule that a writ of mandamus may be issued to a citizen only when the public right to be enforced and the concomitant duty of the state are unequivocably set forth in the Constitution. In the case at bar, petitioners are not after the fulfillment of a positive duty required of respondent officials under the 1987 Constitution. What they seek is the enjoining of an official act because it is constitutionally infirmed. Moreover, petitioners' claim for the continued enjoyment and appreciation by the public of the artworks is at most a privilege and is unenforceable as a constitutional right in this action for mandamus. Neither can this petition be allowed as a taxpayer's suit. Not every action filed by a taxpayer can qualify to challenge the legality of official acts done by the government. A taxpayer's suit can prosper only if the governmental acts being questioned involve disbursement of public funds upon the theory that the expenditure of public funds by an officer of the state for the purpose of administering an unconstitutional 14 act constitutes a misapplication of such funds, which may be enjoined at the request of a taxpayer. Obviously, petitioners are not challenging any expenditure involving public funds but the disposition of what they allege to be public properties. It is worthy to note that petitioners admit that the paintings and antique silverware were acquired from private sources and not with public money. Anent the second requisite of actual controversy, petitioners argue that this case should be resolved by this Court as an exception to the rule on moot and academic cases; that although the sale of the paintings and silver has long been consummated and the possibility of retrieving the treasure trove is nil, yet the novelty and importance of the issues raised by the petition deserve this Court's attention. They submit that the resolution by the Court of the issues in this case will establish future guiding principles and doctrines on the preservation of the nation's priceless artistic and cultural possessions for the benefit of 15 the public as a whole. For a court to exercise its power of adjudication, there must be an actual case of controversy one which involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution; the case must not be moot or academic or based on extra-legal or other similar considerations 16 not cognizable by a court of justice. A case becomes moot and academic when its purpose has 17 become stale, such as the case before us. Since the purpose of this petition for prohibition is to enjoin respondent public officials from holding the auction sale of the artworks on a particular date 11 January 1991 which is long past, the issues raised in the petition have become moot and academic. At this point, however, we need to emphasize that this Court has the discretion to take cognizance of a suit which does not satisfy the requirements of an actual case or legal standing when paramount public 18 interest is involved. We find however that there is no such justification in the petition at bar to warrant the relaxation of the rule. Section 2 of R.A. 4846, as amended by P.D. 374, declares it to be the policy of the state to preserve and protect the important cultural properties and national cultural treasures of the nation and to safeguard their intrinsic value. As to what kind of artistic and cultural properties are considered by the State as involving public interest which should therefore be protected, the answer can be gleaned from reading of the reasons behind the enactment of R.A. 4846: WHEREAS, the National Museum has the difficult task, under existing laws and regulations, of preserving and protecting the cultural properties of the nation;

WHEREAS, inumerable sites all over the country have since been excavated for cultural relics, which have passed on to private hands, representing priceless cultural treasure that properly belongs to the Filipino people as their heritage; WHEREAS, it is perhaps impossible now to find an area in the Philippines, whether government or private property, which has not been disturbed by commercially-minded diggers and collectors, literally destroying part of our historic past; WHEREAS, because of this the Philippines has been charged as incapable of preserving and protecting her cultural legacies; WHEREAS, the commercialization of Philippine relics from the contact period, the Neolithic Age, and the Paleolithic Age, has reached a point perilously placing beyond reach of savants the study and reconstruction of Philippine prehistory; and WHEREAS, it is believed that more stringent regulation on movement and a limited form of registration of important cultural properties and of designated national cultural treasures is necessary, and that regardless of the item, any cultural property exported or sold locally must be registered with the National Museum to control the deplorable situation regarding our national cultural properties and to implement the Cultural Properties Law (emphasis supplied). Clearly, the cultural properties of the nation which shall be under the protection of the state are classified as the "important cultural properties" and the "national cultural treasures." "Important cultural properties" are cultural properties which have been singled out from among the innumerable cultural properties as having exceptional historical cultural significance to the Philippines but are not sufficiently outstanding to 19 merit the classification of national cultural treasures. On the other hand, a "national cultural treasures" is a unique object found locally, possessing outstanding historical, cultural, artistic and/or scientific value 20 which is highly significant and important to this country and nation. This Court takes note of the certification issued by the Director of the Museum that the Italian paintings and silverware subject of this petition do not constitute protected cultural properties and are not among those listed in the Cultural Properties Register of the National Museum. We agree with the certification of the Director of the Museum. Under the law, it is the Director of the Museum who is authorized to undertake the inventory, registration, designation or classification, with the 21 aid of competent experts, of important cultural properties and national cultural treasures. Findings of administrative officials and agencies who have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence and are controlling on the reviewing authorities because of their 22 acknowledged expertise in the fields of specialization to which they are assigned. In view of the foregoing, this Court finds no compelling reason to grant the petition. Petitioners have failed to show that respondents Executive Secretary and PCGG exercised their functions with grave abuse of discretion or in excess of their jurisdiction. WHEREFORE, for lack of merit, the petition for prohibition and mandamus is DISMISSED. SO ORDERED. Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo, Quiason, Puno and Vitug, JJ., concur. # Footnotes 1 Rollo, pp. 55-66. 2 Rollo, pp. 37-39. 3 Rollo, pp. 48-53. 4 Rollo, p. 186.

5 Ibid. 6 Cruz, Isagani A., Philippine Political Law, 1991 ed., p. 235; Dumlao v. Commission on Elections, G.R. No. L- 50245, 22 January 1980, 95 SCRA 392. 7 Sustiguer v. Tamayo, G.R. No. L-29341, 21 August 1989, 176 SCRA 579. 8 House International Building Tenants Association, Inc. v. Intermediate Appellate Court, G.R. No. L-75287, 30 June 1987, 151 SCRA 703. 9 Bernas, Joaquin B., The Constitution of the Republic of the Philippines, Vol. II, 1988 Ed., p. 279. 10 Taada v. Tuvera, G.R. No. L- 63915, 24 April 1985, 136 SCRA 27; Legaspi v. Civil Service Commission, G.R. No. L- 72119, 29 May 1987, 150 SCRA 530. 11 Pascual v. Secretary of Public Works, 110 Phil 331 (1960). 12 Rollo, pp. 156-157. 13 G.R. No. L-72119, 29 May 1987, 150 SCRA 530. 14 Pascual v. Secretary of Public Works, 110 Phil 331 (1960). 15 Rollo, pp. 174-175. 16 See Note 6. 17 Manila Jockey Club, Inc. v. Montano Jr., G.R. No. L-24465, 28 February 1977, 75 SCRA 264. 18 Dumlao v. Comelec, G.R. No. L- 50245, 22 January 1980, 95 SCRA 392. 19 Sec. 2, par. b, R.A. 4846, as amended. 20 Sec. 3, par. c, R.A. 4846, as amended. 21 Id., Secs. 5-7. 22 Biak-na-Bato Mining Company v. Tanco, Jr., G.R. Nos. L-34267-68, 25 January 1991, 193 SCRA 323.

Lawphil Main MenuLawphil Main Menu> Constitution> Constitution> Statutes> Statutes> Jurisprudence> Jurisprudence> Judicial Issuances> Judicial Issuances> Executive Issuances> Executive Issuances> Treatise> Treatise> Legal Link> Legal Linklawphil Today is Saturday, July 02, 2011

-------------------------------------------------------------------------------Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 155001 May 5, 2003

DEMOSTHENES P. AGAN, JR., JOSEPH B. CATAHAN, JOSE MARI B. REUNILLA, MANUEL ANTONIO B. BOE, MAMERTO S. CLARA, REUEL E. DIMALANTA, MORY V. DOMALAON, CONRADO G. DIMAANO, LOLITA R. HIZON, REMEDIOS P. ADOLFO, BIENVENIDO C. HILARIO, MIASCOR WORKERS UNION - NATIONAL LABOR UNION (MWU-NLU), and PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), petitioners, vs. PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS and SECRETARY LEANDRO M. MENDOZA, in his capacity as Head of the Department of Transportation and Communications, respondents, MIASCOR GROUNDHANDLING CORPORATION, DNATA-WINGS AVIATION SYSTEMS CORPORATION, MACROASIA-EUREST SERVICES, INC., MACROASIA-MENZIES AIRPORT SERVICES CORPORATION, MIASCOR CATERING SERVICES CORPORATION, MIASCOR AIRCRAFT MAINTENANCE CORPORATION, and MIASCOR LOGISTICS CORPORATION, petitionersin-intervention, x---------------------------------------------------------x G.R. No. 155547 May 5, 2003 SALACNIB F. BATERINA, CLAVEL A. MARTINEZ and CONSTANTINO G. JARAULA, petitioners, vs. PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, SECRETARY LEANDRO M. MENDOZA, in his capacity as Head of the Department of Transportation and Communications, and SECRETARY SIMEON A. DATUMANONG, in his capacity as Head of the Department of Public Works and Highways, respondents, JACINTO V. PARAS, RAFAEL P. NANTES, EDUARDO C. ZIALCITA, WILLY BUYSON VILLARAMA, PROSPERO C. NOGRALES, PROSPERO A. PICHAY, JR., HARLIN CAST ABAYON, and BENASING O. MACARANBON, respondents-intervenors, x---------------------------------------------------------x

G.R. No. 155661 May 5, 2003 CEFERINO C. LOPEZ, RAMON M. SALES, ALFREDO B. VALENCIA, MA. TERESA V. GAERLAN, LEONARDO DE LA ROSA, DINA C. DE LEON, VIRGIE CATAMIN RONALD SCHLOBOM, ANGELITO SANTOS, MA. LUISA M. PALCON and SAMAHANG MANGGAGAWA SA PALIPARAN NG PILIPINAS (SMPP), petitioners, vs. PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY LEANDRO M. MENDOZA, in his capacity as Head of the Department of Transportation and Communications, respondents. PUNO, J.: Petitioners and petitioners-in-intervention filed the instant petitions for prohibition under Rule 65 of the Revised Rules of Court seeking to prohibit the Manila International Airport Authority (MIAA) and the Department of Transportation and Communications (DOTC) and its Secretary from implementing the following agreements executed by the Philippine Government through the DOTC and the MIAA and the Philippine International Air Terminals Co., Inc. (PIATCO): (1) the Concession Agreement signed on July 12, 1997, (2) the Amended and Restated Concession Agreement dated November 26, 1999, (3) the First Supplement to the Amended and Restated Concession Agreement dated August 27, 1999, (4) the Second Supplement to the Amended and Restated Concession Agreement dated September 4, 2000, and (5) the Third Supplement to the Amended and Restated Concession Agreement dated June 22, 2001 (collectively, the PIATCO Contracts). The facts are as follows: In August 1989, the DOTC engaged the services of Aeroport de Paris (ADP) to conduct a comprehensive study of the Ninoy Aquino International Airport (NAIA) and determine whether the present airport can cope with the traffic development up to the year 2010. The study consisted of two parts: first, traffic forecasts, capacity of existing facilities, NAIA future requirements, proposed master plans and development plans; and second, presentation of the preliminary design of the passenger terminal building. The ADP submitted a Draft Final Report to the DOTC in December 1989. Some time in 1993, six business leaders consisting of John Gokongwei, Andrew Gotianun, Henry Sy, Sr., Lucio Tan, George Ty and Alfonso Yuchengco met with then President Fidel V. Ramos to explore the possibility of investing in the construction and operation of a new international airport terminal. To signify their commitment to pursue the project, they formed the Asia's Emerging Dragon Corp. (AEDC) which was registered with the Securities and Exchange Commission (SEC) on September 15, 1993. On October 5, 1994, AEDC submitted an unsolicited proposal to the Government through the DOTC/MIAA for the development of NAIA International Passenger Terminal III (NAIA IPT III) under a build-operate-and-transfer arrangement pursuant to RA 6957 as amended by RA 7718 (BOT Law).1 On December 2, 1994, the DOTC issued Dept. Order No. 94-832 constituting the Prequalification Bids and Awards Committee (PBAC) for the implementation of the NAIA IPT III project.

On March 27, 1995, then DOTC Secretary Jose Garcia endorsed the proposal of AEDC to the National Economic and Development Authority (NEDA). A revised proposal, however, was forwarded by the DOTC to NEDA on December 13, 1995. On January 5, 1996, the NEDA Investment Coordinating Council (NEDA ICC) Technical Board favorably endorsed the project to the ICC Cabinet Committee which approved the same, subject to certain conditions, on January 19, 1996. On February 13, 1996, the NEDA passed Board Resolution No. 2 which approved the NAIA IPT III project. On June 7, 14, and 21, 1996, DOTC/MIAA caused the publication in two daily newspapers of an invitation for competitive or comparative proposals on AEDC's unsolicited proposal, in accordance with Sec. 4-A of RA 6957, as amended. The alternative bidders were required to submit three (3) sealed envelopes on or before 5:00 p.m. of September 20, 1996. The first envelope should contain the Prequalification Documents, the second envelope the Technical Proposal, and the third envelope the Financial Proposal of the proponent. On June 20, 1996, PBAC Bulletin No. 1 was issued, postponing the availment of the Bid Documents and the submission of the comparative bid proposals. Interested firms were permitted to obtain the Request for Proposal Documents beginning June 28, 1996, upon submission of a written application and payment of a non-refundable fee of P50,000.00 (US$2,000). The Bid Documents issued by the PBAC provided among others that the proponent must have adequate capability to sustain the financing requirement for the detailed engineering, design, construction, operation, and maintenance phases of the project. The proponent would be evaluated based on its ability to provide a minimum amount of equity to the project, and its capacity to secure external financing for the project. On July 23, 1996, the PBAC issued PBAC Bulletin No. 2 inviting all bidders to a pre-bid conference on July 29, 1996. On August 16, 1996, the PBAC issued PBAC Bulletin No. 3 amending the Bid Documents. The following amendments were made on the Bid Documents: a. Aside from the fixed Annual Guaranteed Payment, the proponent shall include in its financial proposal an additional percentage of gross revenue share of the Government, as follows: i. First 5 years 5.0% ii. Next 10 years 7.5% iii. Next 10 years 10.0%

b. The amount of the fixed Annual Guaranteed Payment shall be subject of the price challenge. Proponent may offer an Annual Guaranteed Payment which need not be of equal amount, but payment of which shall start upon site possession.

c. The project proponent must have adequate capability to sustain the financing requirement for the detailed engineering, design, construction, and/or operation and maintenance phases of the project as the case may be. For purposes of pre-qualification, this capability shall be measured in terms of: i. Proof of the availability of the project proponent and/or the consortium to provide the minimum amount of equity for the project; and ii. a letter testimonial from reputable banks attesting that the project proponent and/or the members of the consortium are banking with them, that the project proponent and/or the members are of good financial standing, and have adequate resources. d. The basis for the prequalification shall be the proponent's compliance with the minimum technical and financial requirements provided in the Bid Documents and the IRR of the BOT Law. The minimum amount of equity shall be 30% of the Project Cost. e. Amendments to the draft Concession Agreement shall be issued from time to time. Said amendments shall only cover items that would not materially affect the preparation of the proponent's proposal. On August 29, 1996, the Second Pre-Bid Conference was held where certain clarifications were made. Upon the request of prospective bidder People's Air Cargo & Warehousing Co., Inc (Paircargo), the PBAC warranted that based on Sec. 11.6, Rule 11 of the Implementing Rules and Regulations of the BOT Law, only the proposed Annual Guaranteed Payment submitted by the challengers would be revealed to AEDC, and that the challengers' technical and financial proposals would remain confidential. The PBAC also clarified that the list of revenue sources contained in Annex 4.2a of the Bid Documents was merely indicative and that other revenue sources may be included by the proponent, subject to approval by DOTC/MIAA. Furthermore, the PBAC clarified that only those fees and charges denominated as Public Utility Fees would be subject to regulation, and those charges which would be actually deemed Public Utility Fees could still be revised, depending on the outcome of PBAC's query on the matter with the Department of Justice. In September 1996, the PBAC issued Bid Bulletin No. 5, entitled "Answers to the Queries of PAIRCARGO as Per Letter Dated September 3 and 10, 1996." Paircargo's queries and the PBAC's responses were as follows: 1. It is difficult for Paircargo and Associates to meet the required minimum equity requirement as prescribed in Section 8.3.4 of the Bid Documents considering that the capitalization of each member company is so structured to meet the requirements and needs of their current respective business undertaking/activities. In order to comply with this equity requirement, Paircargo is requesting PBAC to just allow each member of (sic) corporation of the Joint Venture to just execute an agreement that embodies a commitment to infuse the required capital in case the project is awarded to the Joint Venture instead of increasing each corporation's current authorized capital stock just for prequalification purposes. In prequalification, the agency is interested in one's financial capability at the time of prequalification, not future or potential capability. A commitment to put up equity once awarded the project is not enough to establish that "present" financial capability. However, total financial capability of all member companies of the Consortium, to be established by submitting the respective companies' audited financial statements, shall be acceptable.

2. At present, Paircargo is negotiating with banks and other institutions for the extension of a Performance Security to the joint venture in the event that the Concessions Agreement (sic) is awarded to them. However, Paircargo is being required to submit a copy of the draft concession as one of the documentary requirements. Therefore, Paircargo is requesting that they'd (sic) be furnished copy of the approved negotiated agreement between the PBAC and the AEDC at the soonest possible time. A copy of the draft Concession Agreement is included in the Bid Documents. Any material changes would be made known to prospective challengers through bid bulletins. However, a final version will be issued before the award of contract. The PBAC also stated that it would require AEDC to sign Supplement C of the Bid Documents (Acceptance of Criteria and Waiver of Rights to Enjoin Project) and to submit the same with the required Bid Security. On September 20, 1996, the consortium composed of People's Air Cargo and Warehousing Co., Inc. (Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and Security Bank Corp. (Security Bank) (collectively, Paircargo Consortium) submitted their competitive proposal to the PBAC. On September 23, 1996, the PBAC opened the first envelope containing the prequalification documents of the Paircargo Consortium. On the following day, September 24, 1996, the PBAC prequalified the Paircargo Consortium. On September 26, 1996, AEDC informed the PBAC in writing of its reservations as regards the Paircargo Consortium, which include: a. The lack of corporate approvals and financial capability of PAIRCARGO; b. The lack of corporate approvals and financial capability of PAGS; c. The prohibition imposed by RA 337, as amended (the General Banking Act) on the amount that Security Bank could legally invest in the project; d. The inclusion of Siemens as a contractor of the PAIRCARGO Joint Venture, for prequalification purposes; and e. The appointment of Lufthansa as the facility operator, in view of the Philippine requirement in the operation of a public utility. The PBAC gave its reply on October 2, 1996, informing AEDC that it had considered the issues raised by the latter, and that based on the documents submitted by Paircargo and the established prequalification criteria, the PBAC had found that the challenger, Paircargo, had prequalified to undertake the project. The Secretary of the DOTC approved the finding of the PBAC. The PBAC then proceeded with the opening of the second envelope of the Paircargo Consortium which contained its Technical Proposal. On October 3, 1996, AEDC reiterated its objections, particularly with respect to Paircargo's financial capability, in view of the restrictions imposed by Section 21-B of the General Banking Act and Sections 1380 and 1381 of the Manual Regulations for Banks and Other Financial Intermediaries. On October 7, 1996, AEDC again manifested its objections and requested that it be furnished with excerpts of the PBAC

meeting and the accompanying technical evaluation report where each of the issues they raised were addressed. On October 16, 1996, the PBAC opened the third envelope submitted by AEDC and the Paircargo Consortium containing their respective financial proposals. Both proponents offered to build the NAIA Passenger Terminal III for at least $350 million at no cost to the government and to pay the government: 5% share in gross revenues for the first five years of operation, 7.5% share in gross revenues for the next ten years of operation, and 10% share in gross revenues for the last ten years of operation, in accordance with the Bid Documents. However, in addition to the foregoing, AEDC offered to pay the government a total of P135 million as guaranteed payment for 27 years while Paircargo Consortium offered to pay the government a total of P17.75 billion for the same period. Thus, the PBAC formally informed AEDC that it had accepted the price proposal submitted by the Paircargo Consortium, and gave AEDC 30 working days or until November 28, 1996 within which to match the said bid, otherwise, the project would be awarded to Paircargo. As AEDC failed to match the proposal within the 30-day period, then DOTC Secretary Amado Lagdameo, on December 11, 1996, issued a notice to Paircargo Consortium regarding AEDC's failure to match the proposal. On February 27, 1997, Paircargo Consortium incorporated into Philippine International Airport Terminals Co., Inc. (PIATCO). AEDC subsequently protested the alleged undue preference given to PIATCO and reiterated its objections as regards the prequalification of PIATCO. On April 11, 1997, the DOTC submitted the concession agreement for the second-pass approval of the NEDA-ICC. On April 16, 1997, AEDC filed with the Regional Trial Court of Pasig a Petition for Declaration of Nullity of the Proceedings, Mandamus and Injunction against the Secretary of the DOTC, the Chairman of the PBAC, the voting members of the PBAC and Pantaleon D. Alvarez, in his capacity as Chairman of the PBAC Technical Committee. On April 17, 1997, the NEDA-ICC conducted an ad referendum to facilitate the approval, on a noobjection basis, of the BOT agreement between the DOTC and PIATCO. As the ad referendum gathered only four (4) of the required six (6) signatures, the NEDA merely noted the agreement. On July 9, 1997, the DOTC issued the notice of award for the project to PIATCO. On July 12, 1997, the Government, through then DOTC Secretary Arturo T. Enrile, and PIATCO, through its President, Henry T. Go, signed the "Concession Agreement for the Build-Operate-and-Transfer Arrangement of the Ninoy Aquino International Airport Passenger Terminal III" (1997 Concession Agreement). The Government granted PIATCO the franchise to operate and maintain the said terminal during the concession period and to collect the fees, rentals and other charges in accordance with the rates or schedules stipulated in the 1997 Concession Agreement. The Agreement provided that the concession period shall be for twenty-five (25) years commencing from the in-service date, and may be renewed at the option of the Government for a period not exceeding twenty-five (25) years. At the end of the concession period, PIATCO shall transfer the development facility to MIAA.

On November 26, 1998, the Government and PIATCO signed an Amended and Restated Concession Agreement (ARCA). Among the provisions of the 1997 Concession Agreement that were amended by the ARCA were: Sec. 1.11 pertaining to the definition of "certificate of completion"; Sec. 2.05 pertaining to the Special Obligations of GRP; Sec. 3.02 (a) dealing with the exclusivity of the franchise given to the Concessionaire; Sec. 4.04 concerning the assignment by Concessionaire of its interest in the Development Facility; Sec. 5.08 (c) dealing with the proceeds of Concessionaire's insurance; Sec. 5.10 with respect to the temporary take-over of operations by GRP; Sec. 5.16 pertaining to the taxes, duties and other imposts that may be levied on the Concessionaire; Sec. 6.03 as regards the periodic adjustment of public utility fees and charges; the entire Article VIII concerning the provisions on the termination of the contract; and Sec. 10.02 providing for the venue of the arbitration proceedings in case a dispute or controversy arises between the parties to the agreement. Subsequently, the Government and PIATCO signed three Supplements to the ARCA. The First Supplement was signed on August 27, 1999; the Second Supplement on September 4, 2000; and the Third Supplement on June 22, 2001 (collectively, Supplements). The First Supplement to the ARCA amended Sec. 1.36 of the ARCA defining "Revenues" or "Gross Revenues"; Sec. 2.05 (d) of the ARCA referring to the obligation of MIAA to provide sufficient funds for the upkeep, maintenance, repair and/or replacement of all airport facilities and equipment which are owned or operated by MIAA; and further providing additional special obligations on the part of GRP aside from those already enumerated in Sec. 2.05 of the ARCA. The First Supplement also provided a stipulation as regards the construction of a surface road to connect NAIA Terminal II and Terminal III in lieu of the proposed access tunnel crossing Runway 13/31; the swapping of obligations between GRP and PIATCO regarding the improvement of Sales Road; and the changes in the timetable. It also amended Sec. 6.01 (c) of the ARCA pertaining to the Disposition of Terminal Fees; Sec. 6.02 of the ARCA by inserting an introductory paragraph; and Sec. 6.02 (a) (iii) of the ARCA referring to the Payments of Percentage Share in Gross Revenues. The Second Supplement to the ARCA contained provisions concerning the clearing, removal, demolition or disposal of subterranean structures uncovered or discovered at the site of the construction of the terminal by the Concessionaire. It defined the scope of works; it provided for the procedure for the demolition of the said structures and the consideration for the same which the GRP shall pay PIATCO; it provided for time extensions, incremental and consequential costs and losses consequent to the existence of such structures; and it provided for some additional obligations on the part of PIATCO as regards the said structures. Finally, the Third Supplement provided for the obligations of the Concessionaire as regards the construction of the surface road connecting Terminals II and III. Meanwhile, the MIAA which is charged with the maintenance and operation of the NAIA Terminals I and II, had existing concession contracts with various service providers to offer international airline airport services, such as in-flight catering, passenger handling, ramp and ground support, aircraft maintenance and provisions, cargo handling and warehousing, and other services, to several international airlines at the NAIA. Some of these service providers are the Miascor Group, DNATA-Wings Aviation Systems Corp., and the MacroAsia Group. Miascor, DNATA and MacroAsia, together with Philippine Airlines (PAL), are the dominant players in the industry with an aggregate market share of 70%.

On September 17, 2002, the workers of the international airline service providers, claiming that they stand to lose their employment upon the implementation of the questioned agreements, filed before this Court a petition for prohibition to enjoin the enforcement of said agreements.2 On October 15, 2002, the service providers, joining the cause of the petitioning workers, filed a motion for intervention and a petition-in-intervention. On October 24, 2002, Congressmen Salacnib Baterina, Clavel Martinez and Constantino Jaraula filed a similar petition with this Court.3 On November 6, 2002, several employees of the MIAA likewise filed a petition assailing the legality of the various agreements.4 On December 11, 2002. another group of Congressmen, Hon. Jacinto V. Paras, Rafael P. Nantes, Eduardo C. Zialcita, Willie B. Villarama, Prospero C. Nograles, Prospero A. Pichay, Jr., Harlin Cast Abayon and Benasing O. Macaranbon, moved to intervene in the case as Respondents-Intervenors. They filed their Comment-In-Intervention defending the validity of the assailed agreements and praying for the dismissal of the petitions. During the pendency of the case before this Court, President Gloria Macapagal Arroyo, on November 29, 2002, in her speech at the 2002 Golden Shell Export Awards at Malacaang Palace, stated that she will not "honor (PIATCO) contracts which the Executive Branch's legal offices have concluded (as) null and void."5 Respondent PIATCO filed its Comments to the present petitions on November 7 and 27, 2002. The Office of the Solicitor General and the Office of the Government Corporate Counsel filed their respective Comments in behalf of the public respondents. On December 10, 2002, the Court heard the case on oral argument. After the oral argument, the Court then resolved in open court to require the parties to file simultaneously their respective Memoranda in amplification of the issues heard in the oral arguments within 30 days and to explore the possibility of arbitration or mediation as provided in the challenged contracts. In their consolidated Memorandum, the Office of the Solicitor General and the Office of the Government Corporate Counsel prayed that the present petitions be given due course and that judgment be rendered declaring the 1997 Concession Agreement, the ARCA and the Supplements thereto void for being contrary to the Constitution, the BOT Law and its Implementing Rules and Regulations. On March 6, 2003, respondent PIATCO informed the Court that on March 4, 2003 PIATCO commenced arbitration proceedings before the International Chamber of Commerce, International Court of Arbitration (ICC) by filing a Request for Arbitration with the Secretariat of the ICC against the Government of the Republic of the Philippines acting through the DOTC and MIAA. In the present cases, the Court is again faced with the task of resolving complicated issues made difficult by their intersecting legal and economic implications. The Court is aware of the far reaching fall out effects of the ruling which it makes today. For more than a century and whenever the exigencies of the times demand it, this Court has never shirked from its solemn duty to dispense justice and resolve "actual controversies involving rights which are legally demandable and enforceable, and to determine whether

or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction."6 To be sure, this Court will not begin to do otherwise today. We shall first dispose of the procedural issues raised by respondent PIATCO which they allege will bar the resolution of the instant controversy. Petitioners' Legal Standing to File the present Petitions a. G.R. Nos. 155001 and 155661 In G.R. No. 155001 individual petitioners are employees of various service providers7 having separate concession contracts with MIAA and continuing service agreements with various international airlines to provide in-flight catering, passenger handling, ramp and ground support, aircraft maintenance and provisions, cargo handling and warehousing and other services. Also included as petitioners are labor unions MIASCOR Workers Union-National Labor Union and Philippine Airlines Employees Association. These petitioners filed the instant action for prohibition as taxpayers and as parties whose rights and interests stand to be violated by the implementation of the PIATCO Contracts. Petitioners-Intervenors in the same case are all corporations organized and existing under Philippine laws engaged in the business of providing in-flight catering, passenger handling, ramp and ground support, aircraft maintenance and provisions, cargo handling and warehousing and other services to several international airlines at the Ninoy Aquino International Airport. Petitioners-Intervenors allege that as taxpaying international airline and airport-related service operators, each one of them stands to be irreparably injured by the implementation of the PIATCO Contracts. Each of the petitioners-intervenors have separate and subsisting concession agreements with MIAA and with various international airlines which they allege are being interfered with and violated by respondent PIATCO. In G.R. No. 155661, petitioners constitute employees of MIAA and Samahang Manggagawa sa Paliparan ng Pilipinas - a legitimate labor union and accredited as the sole and exclusive bargaining agent of all the employees in MIAA. Petitioners anchor their petition for prohibition on the nullity of the contracts entered into by the Government and PIATCO regarding the build-operate-and-transfer of the NAIA IPT III. They filed the petition as taxpayers and persons who have a legitimate interest to protect in the implementation of the PIATCO Contracts. Petitioners in both cases raise the argument that the PIATCO Contracts contain stipulations which directly contravene numerous provisions of the Constitution, specific provisions of the BOT Law and its Implementing Rules and Regulations, and public policy. Petitioners contend that the DOTC and the MIAA, by entering into said contracts, have committed grave abuse of discretion amounting to lack or excess of jurisdiction which can be remedied only by a writ of prohibition, there being no plain, speedy or adequate remedy in the ordinary course of law. In particular, petitioners assail the provisions in the 1997 Concession Agreement and the ARCA which grant PIATCO the exclusive right to operate a commercial international passenger terminal within the Island of Luzon, except those international airports already existing at the time of the execution of the agreement. The contracts further provide that upon the commencement of operations at the NAIA IPT III, the Government shall cause the closure of Ninoy Aquino International Airport Passenger Terminals I and II as international passenger terminals. With respect to existing concession agreements between MIAA

and international airport service providers regarding certain services or operations, the 1997 Concession Agreement and the ARCA uniformly provide that such services or operations will not be carried over to the NAIA IPT III and PIATCO is under no obligation to permit such carry over except through a separate agreement duly entered into with PIATCO.8 With respect to the petitioning service providers and their employees, upon the commencement of operations of the NAIA IPT III, they allege that they will be effectively barred from providing international airline airport services at the NAIA Terminals I and II as all international airlines and passengers will be diverted to the NAIA IPT III. The petitioning service providers will thus be compelled to contract with PIATCO alone for such services, with no assurance that subsisting contracts with MIAA and other international airlines will be respected. Petitioning service providers stress that despite the very competitive market, the substantial capital investments required and the high rate of fees, they entered into their respective contracts with the MIAA with the understanding that the said contracts will be in force for the stipulated period, and thereafter, renewed so as to allow each of the petitioning service providers to recoup their investments and obtain a reasonable return thereon. Petitioning employees of various service providers at the NAIA Terminals I and II and of MIAA on the other hand allege that with the closure of the NAIA Terminals I and II as international passenger terminals under the PIATCO Contracts, they stand to lose employment. The question on legal standing is whether such parties have "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions."9 Accordingly, it has been held that the interest of a person assailing the constitutionality of a statute must be direct and personal. He must be able to show, not only that the law or any government act is invalid, but also that he sustained or is in imminent danger of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. It must appear that the person complaining has been or is about to be denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by reason of the statute or act complained of.10 We hold that petitioners have the requisite standing. In the above-mentioned cases, petitioners have a direct and substantial interest to protect by reason of the implementation of the PIATCO Contracts. They stand to lose their source of livelihood, a property right which is zealously protected by the Constitution. Moreover, subsisting concession agreements between MIAA and petitioners-intervenors and service contracts between international airlines and petitioners-intervenors stand to be nullified or terminated by the operation of the NAIA IPT III under the PIATCO Contracts. The financial prejudice brought about by the PIATCO Contracts on petitioners and petitioners-intervenors in these cases are legitimate interests sufficient to confer on them the requisite standing to file the instant petitions. b. G.R. No. 155547 In G.R. No. 155547, petitioners filed the petition for prohibition as members of the House of Representatives, citizens and taxpayers. They allege that as members of the House of Representatives, they are especially interested in the PIATCO Contracts, because the contracts compel the Government and/or the House of Representatives to appropriate funds necessary to comply with the provisions therein.11 They cite provisions of the PIATCO Contracts which require disbursement of unappropriated amounts in compliance with the contractual obligations of the Government. They allege that the Government obligations in the PIATCO Contracts which compel government expenditure without

appropriation is a curtailment of their prerogatives as legislators, contrary to the mandate of the Constitution that "[n]o money shall be paid out of the treasury except in pursuance of an appropriation made by law."12 Standing is a peculiar concept in constitutional law because in some cases, suits are not brought by parties who have been personally injured by the operation of a law or any other government act but by concerned citizens, taxpayers or voters who actually sue in the public interest. Although we are not unmindful of the cases of Imus Electric Co. v. Municipality of Imus13 and Gonzales v. Raquiza14 wherein this Court held that appropriation must be made only on amounts immediately demandable, public interest demands that we take a more liberal view in determining whether the petitioners suing as legislators, taxpayers and citizens have locus standi to file the instant petition. In Kilosbayan, Inc. v. Guingona,15 this Court held "[i]n line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and even association of planters, and non-profit civic organizations were allowed to initiate and prosecute actions before this Court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies or instrumentalities."16 Further, "insofar as taxpayers' suits are concerned . . . (this Court) is not devoid of discretion as to whether or not it should be entertained."17 As such ". . . even if, strictly speaking, they [the petitioners] are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised."18 In view of the serious legal questions involved and their impact on public interest, we resolve to grant standing to the petitioners. Other Procedural Matters Respondent PIATCO further alleges that this Court is without jurisdiction to review the instant cases as factual issues are involved which this Court is ill-equipped to resolve. Moreover, PIATCO alleges that submission of this controversy to this Court at the first instance is a violation of the rule on hierarchy of courts. They contend that trial courts have concurrent jurisdiction with this Court with respect to a special civil action for prohibition and hence, following the rule on hierarchy of courts, resort must first be had before the trial courts. After a thorough study and careful evaluation of the issues involved, this Court is of the view that the crux of the instant controversy involves significant legal questions. The facts necessary to resolve these legal questions are well established and, hence, need not be determined by a trial court. The rule on hierarchy of courts will not also prevent this Court from assuming jurisdiction over the cases at bar. The said rule may be relaxed when the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of this Court's primary jurisdiction.19 It is easy to discern that exceptional circumstances exist in the cases at bar that call for the relaxation of the rule. Both petitioners and respondents agree that these cases are of transcendental importance as they involve the construction and operation of the country's premier international airport. Moreover, the crucial issues submitted for resolution are of first impression and they entail the proper legal interpretation of key provisions of the Constitution, the BOT Law and its Implementing Rules and Regulations. Thus, considering the nature of the controversy before the Court, procedural bars may be lowered to give way for the speedy disposition of the instant cases. Legal Effect of the Commencement

of Arbitration Proceedings by PIATCO There is one more procedural obstacle which must be overcome. The Court is aware that arbitration proceedings pursuant to Section 10.02 of the ARCA have been filed at the instance of respondent PIATCO. Again, we hold that the arbitration step taken by PIATCO will not oust this Court of its jurisdiction over the cases at bar. In Del Monte Corporation-USA v. Court of Appeals,20 even after finding that the arbitration clause in the Distributorship Agreement in question is valid and the dispute between the parties is arbitrable, this Court affirmed the trial court's decision denying petitioner's Motion to Suspend Proceedings pursuant to the arbitration clause under the contract. In so ruling, this Court held that as contracts produce legal effect between the parties, their assigns and heirs, only the parties to the Distributorship Agreement are bound by its terms, including the arbitration clause stipulated therein. This Court ruled that arbitration proceedings could be called for but only with respect to the parties to the contract in question. Considering that there are parties to the case who are neither parties to the Distributorship Agreement nor heirs or assigns of the parties thereto, this Court, citing its previous ruling in Salas, Jr. v. Laperal Realty Corporation,21 held that to tolerate the splitting of proceedings by allowing arbitration as to some of the parties on the one hand and trial for the others on the other hand would, in effect, result in multiplicity of suits, duplicitous procedure and unnecessary delay.22 Thus, we ruled that the interest of justice would best be served if the trial court hears and adjudicates the case in a single and complete proceeding. It is established that petitioners in the present cases who have presented legitimate interests in the resolution of the controversy are not parties to the PIATCO Contracts. Accordingly, they cannot be bound by the arbitration clause provided for in the ARCA and hence, cannot be compelled to submit to arbitration proceedings. A speedy and decisive resolution of all the critical issues in the present controversy, including those raised by petitioners, cannot be made before an arbitral tribunal. The object of arbitration is precisely to allow an expeditious determination of a dispute. This objective would not be met if this Court were to allow the parties to settle the cases by arbitration as there are certain issues involving non-parties to the PIATCO Contracts which the arbitral tribunal will not be equipped to resolve. Now, to the merits of the instant controversy. I Is PIATCO a qualified bidder? Public respondents argue that the Paircargo Consortium, PIATCO's predecessor, was not a duly prequalified bidder on the unsolicited proposal submitted by AEDC as the Paircargo Consortium failed to meet the financial capability required under the BOT Law and the Bid Documents. They allege that in computing the ability of the Paircargo Consortium to meet the minimum equity requirements for the project, the entire net worth of Security Bank, a member of the consortium, should not be considered. PIATCO relies, on the other hand, on the strength of the Memorandum dated October 14, 1996 issued by the DOTC Undersecretary Primitivo C. Cal stating that the Paircargo Consortium is found to have a combined net worth of P3,900,000,000.00, sufficient to meet the equity requirements of the project. The

said Memorandum was in response to a letter from Mr. Antonio Henson of AEDC to President Fidel V. Ramos questioning the financial capability of the Paircargo Consortium on the ground that it does not have the financial resources to put up the required minimum equity of P2,700,000,000.00. This contention is based on the restriction under R.A. No. 337, as amended or the General Banking Act that a commercial bank cannot invest in any single enterprise in an amount more than 15% of its net worth. In the said Memorandum, Undersecretary Cal opined: The Bid Documents, as clarified through Bid Bulletin Nos. 3 and 5, require that financial capability will be evaluated based on total financial capability of all the member companies of the [Paircargo] Consortium. In this connection, the Challenger was found to have a combined net worth of P3,926,421,242.00 that could support a project costing approximately P13 Billion. It is not a requirement that the net worth must be "unrestricted." To impose that as a requirement now will be nothing less than unfair. The financial statement or the net worth is not the sole basis in establishing financial capability. As stated in Bid Bulletin No. 3, financial capability may also be established by testimonial letters issued by reputable banks. The Challenger has complied with this requirement. To recap, net worth reflected in the Financial Statement should not be taken as the amount of the money to be used to answer the required thirty percent (30%) equity of the challenger but rather to be used in establishing if there is enough basis to believe that the challenger can comply with the required 30% equity. In fact, proof of sufficient equity is required as one of the conditions for award of contract (Section 12.1 IRR of the BOT Law) but not for pre-qualification (Section 5.4 of the same document).23 Under the BOT Law, in case of a build-operate-and-transfer arrangement, the contract shall be awarded to the bidder "who, having satisfied the minimum financial, technical, organizational and legal standards" required by the law, has submitted the lowest bid and most favorable terms of the project.24 Further, the 1994 Implementing Rules and Regulations of the BOT Law provide: Section 5.4 Pre-qualification Requirements. xxx xxx xxx

c. Financial Capability: The project proponent must have adequate capability to sustain the financing requirements for the detailed engineering design, construction and/or operation and maintenance phases of the project, as the case may be. For purposes of pre-qualification, this capability shall be measured in terms of (i) proof of the ability of the project proponent and/or the consortium to provide a minimum amount of equity to the project, and (ii) a letter testimonial from reputable banks attesting that the project proponent and/or members of the consortium are banking with them, that they are in good financial standing, and that they have adequate resources. The government agency/LGU concerned shall determine on a project-to-project basis and before pre-qualification, the minimum amount of equity needed. (emphasis supplied) Pursuant to this provision, the PBAC issued PBAC Bulletin No. 3 dated August 16, 1996 amending the financial capability requirements for pre-qualification of the project proponent as follows: 6. Basis of Pre-qualification

The basis for the pre-qualification shall be on the compliance of the proponent to the minimum technical and financial requirements provided in the Bid Documents and in the IRR of the BOT Law, R.A. No. 6957, as amended by R.A. 7718. The minimum amount of equity to which the proponent's financial capability will be based shall be thirty percent (30%) of the project cost instead of the twenty percent (20%) specified in Section 3.6.4 of the Bid Documents. This is to correlate with the required debt-to-equity ratio of 70:30 in Section 2.01a of the draft concession agreement. The debt portion of the project financing should not exceed 70% of the actual project cost. Accordingly, based on the above provisions of law, the Paircargo Consortium or any challenger to the unsolicited proposal of AEDC has to show that it possesses the requisite financial capability to undertake the project in the minimum amount of 30% of the project cost through (i) proof of the ability to provide a minimum amount of equity to the project, and (ii) a letter testimonial from reputable banks attesting that the project proponent or members of the consortium are banking with them, that they are in good financial standing, and that they have adequate resources. As the minimum project cost was estimated to be US$350,000,000.00 or roughly P9,183,650,000.00,25 the Paircargo Consortium had to show to the satisfaction of the PBAC that it had the ability to provide the minimum equity for the project in the amount of at least P2,755,095,000.00. Paircargo's Audited Financial Statements as of 1993 and 1994 indicated that it had a net worth of P2,783,592.00 and P3,123,515.00 respectively.26 PAGS' Audited Financial Statements as of 1995 indicate that it has approximately P26,735,700.00 to invest as its equity for the project.27 Security Bank's Audited Financial Statements as of 1995 show that it has a net worth equivalent to its capital funds in the amount of P3,523,504,377.00.28 We agree with public respondents that with respect to Security Bank, the entire amount of its net worth could not be invested in a single undertaking or enterprise, whether allied or non-allied in accordance with the provisions of R.A. No. 337, as amended or the General Banking Act: Sec. 21-B. The provisions in this or in any other Act to the contrary notwithstanding, the Monetary Board, whenever it shall deem appropriate and necessary to further national development objectives or support national priority projects, may authorize a commercial bank, a bank authorized to provide commercial banking services, as well as a government-owned and controlled bank, to operate under an expanded commercial banking authority and by virtue thereof exercise, in addition to powers authorized for commercial banks, the powers of an Investment House as provided in Presidential Decree No. 129, invest in the equity of a non-allied undertaking, or own a majority or all of the equity in a financial intermediary other than a commercial bank or a bank authorized to provide commercial banking services: Provided, That (a) the total investment in equities shall not exceed fifty percent (50%) of the net worth of the bank; (b) the equity investment in any one enterprise whether allied or non-allied shall not exceed fifteen percent (15%) of the net worth of the bank; (c) the equity investment of the bank, or of its wholly or majority-owned subsidiary, in a single non-allied undertaking shall not exceed thirty-five percent (35%) of the total equity in the enterprise nor shall it exceed thirty-five percent (35%) of the voting stock in that enterprise; and (d) the equity investment in other banks shall be deducted from the investing bank's net worth for purposes of computing the prescribed ratio of net worth to risk assets. xxx xxx xxx

Further, the 1993 Manual of Regulations for Banks provides: SECTION X383. Other Limitations and Restrictions. The following limitations and restrictions shall also apply regarding equity investments of banks. a. In any single enterprise. The equity investments of banks in any single enterprise shall not exceed at any time fifteen percent (15%) of the net worth of the investing bank as defined in Sec. X106 and Subsec. X121.5. Thus, the maximum amount that Security Bank could validly invest in the Paircargo Consortium is only P528,525,656.55, representing 15% of its entire net worth. The total net worth therefore of the Paircargo Consortium, after considering the maximum amounts that may be validly invested by each of its members is P558,384,871.55 or only 6.08% of the project cost,29 an amount substantially less than the prescribed minimum equity investment required for the project in the amount of P2,755,095,000.00 or 30% of the project cost. The purpose of pre-qualification in any public bidding is to determine, at the earliest opportunity, the ability of the bidder to undertake the project. Thus, with respect to the bidder's financial capacity at the pre-qualification stage, the law requires the government agency to examine and determine the ability of the bidder to fund the entire cost of the project by considering the maximum amounts that each bidder may invest in the project at the time of pre-qualification. The PBAC has determined that any prospective bidder for the construction, operation and maintenance of the NAIA IPT III project should prove that it has the ability to provide equity in the minimum amount of 30% of the project cost, in accordance with the 70:30 debt-to-equity ratio prescribed in the Bid Documents. Thus, in the case of Paircargo Consortium, the PBAC should determine the maximum amounts that each member of the consortium may commit for the construction, operation and maintenance of the NAIA IPT III project at the time of pre-qualification. With respect to Security Bank, the maximum amount which may be invested by it would only be 15% of its net worth in view of the restrictions imposed by the General Banking Act. Disregarding the investment ceilings provided by applicable law would not result in a proper evaluation of whether or not a bidder is pre-qualified to undertake the project as for all intents and purposes, such ceiling or legal restriction determines the true maximum amount which a bidder may invest in the project. Further, the determination of whether or not a bidder is pre-qualified to undertake the project requires an evaluation of the financial capacity of the said bidder at the time the bid is submitted based on the required documents presented by the bidder. The PBAC should not be allowed to speculate on the future financial ability of the bidder to undertake the project on the basis of documents submitted. This would open doors to abuse and defeat the very purpose of a public bidding. This is especially true in the case at bar which involves the investment of billions of pesos by the project proponent. The relevant government authority is duty-bound to ensure that the awardee of the contract possesses the minimum required financial capability to complete the project. To allow the PBAC to estimate the bidder's future financial capability would not secure the viability and integrity of the project. A restrictive and conservative application of the rules and procedures of public bidding is necessary not only to protect the impartiality and regularity of the proceedings but also to ensure the financial and technical reliability of the project. It has been held that: The basic rule in public bidding is that bids should be evaluated based on the required documents submitted before and not after the opening of bids. Otherwise, the foundation of a fair and competitive

public bidding would be defeated. Strict observance of the rules, regulations, and guidelines of the bidding process is the only safeguard to a fair, honest and competitive public bidding.30 Thus, if the maximum amount of equity that a bidder may invest in the project at the time the bids are submitted falls short of the minimum amounts required to be put up by the bidder, said bidder should be properly disqualified. Considering that at the pre-qualification stage, the maximum amounts which the Paircargo Consortium may invest in the project fell short of the minimum amounts prescribed by the PBAC, we hold that Paircargo Consortium was not a qualified bidder. Thus the award of the contract by the PBAC to the Paircargo Consortium, a disqualified bidder, is null and void. While it would be proper at this juncture to end the resolution of the instant controversy, as the legal effects of the disqualification of respondent PIATCO's predecessor would come into play and necessarily result in the nullity of all the subsequent contracts entered by it in pursuance of the project, the Court feels that it is necessary to discuss in full the pressing issues of the present controversy for a complete resolution thereof. II Is the 1997 Concession Agreement valid? Petitioners and public respondents contend that the 1997 Concession Agreement is invalid as it contains provisions that substantially depart from the draft Concession Agreement included in the Bid Documents. They maintain that a substantial departure from the draft Concession Agreement is a violation of public policy and renders the 1997 Concession Agreement null and void. PIATCO maintains, however, that the Concession Agreement attached to the Bid Documents is intended to be a draft, i.e., subject to change, alteration or modification, and that this intention was clear to all participants, including AEDC, and DOTC/MIAA. It argued further that said intention is expressed in Part C (6) of Bid Bulletin No. 3 issued by the PBAC which states: 6. Amendments to the Draft Concessions Agreement Amendments to the Draft Concessions Agreement shall be issued from time to time. Said amendments shall only cover items that would not materially affect the preparation of the proponent's proposal. By its very nature, public bidding aims to protect the public interest by giving the public the best possible advantages through open competition. Thus: Competition must be legitimate, fair and honest. In the field of government contract law, competition requires, not only `bidding upon a common standard, a common basis, upon the same thing, the same subject matter, the same undertaking,' but also that it be legitimate, fair and honest; and not designed to injure or defraud the government.31 An essential element of a publicly bidded contract is that all bidders must be on equal footing. Not simply in terms of application of the procedural rules and regulations imposed by the relevant government agency, but more importantly, on the contract bidded upon. Each bidder must be able to bid on the same thing. The rationale is obvious. If the winning bidder is allowed to later include or modify certain provisions in the contract awarded such that the contract is altered in any material respect, then the essence of fair competition in the public bidding is destroyed. A public bidding would indeed be a farce if after the

contract is awarded, the winning bidder may modify the contract and include provisions which are favorable to it that were not previously made available to the other bidders. Thus: It is inherent in public biddings that there shall be a fair competition among the bidders. The specifications in such biddings provide the common ground or basis for the bidders. The specifications should, accordingly, operate equally or indiscriminately upon all bidders.32 The same rule was restated by Chief Justice Stuart of the Supreme Court of Minnesota: The law is well settled that where, as in this case, municipal authorities can only let a contract for public work to the lowest responsible bidder, the proposals and specifications therefore must be so framed as to permit free and full competition. Nor can they enter into a contract with the best bidder containing substantial provisions beneficial to him, not included or contemplated in the terms and specifications upon which the bids were invited.33 In fact, in the PBAC Bid Bulletin No. 3 cited by PIATCO to support its argument that the draft concession agreement is subject to amendment, the pertinent portion of which was quoted above, the PBAC also clarified that "[s]aid amendments shall only cover items that would not materially affect the preparation of the proponent's proposal." While we concede that a winning bidder is not precluded from modifying or amending certain provisions of the contract bidded upon, such changes must not constitute substantial or material amendments that would alter the basic parameters of the contract and would constitute a denial to the other bidders of the opportunity to bid on the same terms. Hence, the determination of whether or not a modification or amendment of a contract bidded out constitutes a substantial amendment rests on whether the contract, when taken as a whole, would contain substantially different terms and conditions that would have the effect of altering the technical and/or financial proposals previously submitted by other bidders. The alterations and modifications in the contract executed between the government and the winning bidder must be such as to render such executed contract to be an entirely different contract from the one that was bidded upon. In the case of Caltex (Philippines), Inc. v. Delgado Brothers, Inc.,34 this Court quoted with approval the ruling of the trial court that an amendment to a contract awarded through public bidding, when such subsequent amendment was made without a new public bidding, is null and void: The Court agrees with the contention of counsel for the plaintiffs that the due execution of a contract after public bidding is a limitation upon the right of the contracting parties to alter or amend it without another public bidding, for otherwise what would a public bidding be good for if after the execution of a contract after public bidding, the contracting parties may alter or amend the contract, or even cancel it, at their will? Public biddings are held for the protection of the public, and to give the public the best possible advantages by means of open competition between the bidders. He who bids or offers the best terms is awarded the contract subject of the bid, and it is obvious that such protection and best possible advantages to the public will disappear if the parties to a contract executed after public bidding may alter or amend it without another previous public bidding.35 Hence, the question that comes to fore is this: is the 1997 Concession Agreement the same agreement that was offered for public bidding, i.e., the draft Concession Agreement attached to the Bid Documents? A close comparison of the draft Concession Agreement attached to the Bid Documents and the 1997 Concession Agreement reveals that the documents differ in at least two material respects:

a. Modification on the Public Utility Revenues and Non-Public Utility Revenues that may be collected by PIATCO The fees that may be imposed and collected by PIATCO under the draft Concession Agreement and the 1997 Concession Agreement may be classified into three distinct categories: (1) fees which are subject to periodic adjustment of once every two years in accordance with a prescribed parametric formula and adjustments are made effective only upon written approval by MIAA; (2) fees other than those included in the first category which maybe adjusted by PIATCO whenever it deems necessary without need for consent of DOTC/MIAA; and (3) new fees and charges that may be imposed by PIATCO which have not been previously imposed or collected at the Ninoy Aquino International Airport Passenger Terminal I, pursuant to Administrative Order No. 1, Series of 1993, as amended. The glaring distinctions between the draft Concession Agreement and the 1997 Concession Agreement lie in the types of fees included in each category and the extent of the supervision and regulation which MIAA is allowed to exercise in relation thereto. For fees under the first category, i.e., those which are subject to periodic adjustment in accordance with a prescribed parametric formula and effective only upon written approval by MIAA, the draft Concession Agreement includes the following:36 (1) aircraft parking fees; (2) aircraft tacking fees; (3) groundhandling fees; (4) rentals and airline offices; (5) check-in counter rentals; and (6) porterage fees. Under the 1997 Concession Agreement, fees which are subject to adjustment and effective upon MIAA approval are classified as "Public Utility Revenues" and include:37 (1) aircraft parking fees; (2) aircraft tacking fees; (3) check-in counter fees; and (4) Terminal Fees.

The implication of the reduced number of fees that are subject to MIAA approval is best appreciated in relation to fees included in the second category identified above. Under the 1997 Concession Agreement, fees which PIATCO may adjust whenever it deems necessary without need for consent of DOTC/MIAA are "Non-Public Utility Revenues" and is defined as "all other income not classified as Public Utility Revenues derived from operations of the Terminal and the Terminal Complex."38 Thus, under the 1997 Concession Agreement, ground handling fees, rentals from airline offices and porterage fees are no longer subject to MIAA regulation. Further, under Section 6.03 of the draft Concession Agreement, MIAA reserves the right to regulate (1) lobby and vehicular parking fees and (2) other new fees and charges that may be imposed by PIATCO. Such regulation may be made by periodic adjustment and is effective only upon written approval of MIAA. The full text of said provision is quoted below: Section 6.03. Periodic Adjustment in Fees and Charges. Adjustments in the aircraft parking fees, aircraft tacking fees, groundhandling fees, rentals and airline offices, check-in-counter rentals and porterage fees shall be allowed only once every two years and in accordance with the Parametric Formula attached hereto as Annex F. Provided that adjustments shall be made effective only after the written express approval of the MIAA. Provided, further, that such approval of the MIAA, shall be contingent only on the conformity of the adjustments with the above said parametric formula. The first adjustment shall be made prior to the In-Service Date of the Terminal. The MIAA reserves the right to regulate under the foregoing terms and conditions the lobby and vehicular parking fees and other new fees and charges as contemplated in paragraph 2 of Section 6.01 if in its judgment the users of the airport shall be deprived of a free option for the services they cover.39 On the other hand, the equivalent provision under the 1997 Concession Agreement reads: Section 6.03 Periodic Adjustment in Fees and Charges. xxx xxx xxx

(c) Concessionaire shall at all times be judicious in fixing fees and charges constituting Non-Public Utility Revenues in order to ensure that End Users are not unreasonably deprived of services. While the vehicular parking fee, porterage fee and greeter/well wisher fee constitute Non-Public Utility Revenues of Concessionaire, GRP may intervene and require Concessionaire to explain and justify the fee it may set from time to time, if in the reasonable opinion of GRP the said fees have become exorbitant resulting in the unreasonable deprivation of End Users of such services.40 Thus, under the 1997 Concession Agreement, with respect to (1) vehicular parking fee, (2) porterage fee and (3) greeter/well wisher fee, all that MIAA can do is to require PIATCO to explain and justify the fees set by PIATCO. In the draft Concession Agreement, vehicular parking fee is subject to MIAA regulation and approval under the second paragraph of Section 6.03 thereof while porterage fee is covered by the first paragraph of the same provision. There is an obvious relaxation of the extent of control and regulation by MIAA with respect to the particular fees that may be charged by PIATCO. Moreover, with respect to the third category of fees that may be imposed and collected by PIATCO, i.e., new fees and charges that may be imposed by PIATCO which have not been previously imposed or collected at the Ninoy Aquino International Airport Passenger Terminal I, under Section 6.03 of the draft Concession Agreement MIAA has reserved the right to regulate the same under the same conditions that

MIAA may regulate fees under the first category, i.e., periodic adjustment of once every two years in accordance with a prescribed parametric formula and effective only upon written approval by MIAA. However, under the 1997 Concession Agreement, adjustment of fees under the third category is not subject to MIAA regulation. With respect to terminal fees that may be charged by PIATCO,41 as shown earlier, this was included within the category of "Public Utility Revenues" under the 1997 Concession Agreement. This classification is significant because under the 1997 Concession Agreement, "Public Utility Revenues" are subject to an "Interim Adjustment" of fees upon the occurrence of certain extraordinary events specified in the agreement.42 However, under the draft Concession Agreement, terminal fees are not included in the types of fees that may be subject to "Interim Adjustment."43 Finally, under the 1997 Concession Agreement, "Public Utility Revenues," except terminal fees, are denominated in US Dollars44 while payments to the Government are in Philippine Pesos. In the draft Concession Agreement, no such stipulation was included. By stipulating that "Public Utility Revenues" will be paid to PIATCO in US Dollars while payments by PIATCO to the Government are in Philippine currency under the 1997 Concession Agreement, PIATCO is able to enjoy the benefits of depreciations of the Philippine Peso, while being effectively insulated from the detrimental effects of exchange rate fluctuations. When taken as a whole, the changes under the 1997 Concession Agreement with respect to reduction in the types of fees that are subject to MIAA regulation and the relaxation of such regulation with respect to other fees are significant amendments that substantially distinguish the draft Concession Agreement from the 1997 Concession Agreement. The 1997 Concession Agreement, in this respect, clearly gives PIATCO more favorable terms than what was available to other bidders at the time the contract was bidded out. It is not very difficult to see that the changes in the 1997 Concession Agreement translate to direct and concrete financial advantages for PIATCO which were not available at the time the contract was offered for bidding. It cannot be denied that under the 1997 Concession Agreement only "Public Utility Revenues" are subject to MIAA regulation. Adjustments of all other fees imposed and collected by PIATCO are entirely within its control. Moreover, with respect to terminal fees, under the 1997 Concession Agreement, the same is further subject to "Interim Adjustments" not previously stipulated in the draft Concession Agreement. Finally, the change in the currency stipulated for "Public Utility Revenues" under the 1997 Concession Agreement, except terminal fees, gives PIATCO an added benefit which was not available at the time of bidding. b. Assumption by the Government of the liabilities of PIATCO in the event of the latter's default thereof Under the draft Concession Agreement, default by PIATCO of any of its obligations to creditors who have provided, loaned or advanced funds for the NAIA IPT III project does not result in the assumption by the Government of these liabilities. In fact, nowhere in the said contract does default of PIATCO's loans figure in the agreement. Such default does not directly result in any concomitant right or obligation in favor of the Government.

However, the 1997 Concession Agreement provides: Section 4.04 Assignment. xxx xxx xxx

(b) In the event Concessionaire should default in the payment of an Attendant Liability, and the default has resulted in the acceleration of the payment due date of the Attendant Liability prior to its stated date of maturity, the Unpaid Creditors and Concessionaire shall immediately inform GRP in writing of such default. GRP shall, within one hundred eighty (180) Days from receipt of the joint written notice of the Unpaid Creditors and Concessionaire, either (i) take over the Development Facility and assume the Attendant Liabilities, or (ii) allow the Unpaid Creditors, if qualified, to be substituted as concessionaire and operator of the Development Facility in accordance with the terms and conditions hereof, or designate a qualified operator acceptable to GRP to operate the Development Facility, likewise under the terms and conditions of this Agreement; Provided that if at the end of the 180-day period GRP shall not have served the Unpaid Creditors and Concessionaire written notice of its choice, GRP shall be deemed to have elected to take over the Development Facility with the concomitant assumption of Attendant Liabilities. (c) If GRP should, by written notice, allow the Unpaid Creditors to be substituted as concessionaire, the latter shall form and organize a concession company qualified to take over the operation of the Development Facility. If the concession company should elect to designate an operator for the Development Facility, the concession company shall in good faith identify and designate a qualified operator acceptable to GRP within one hundred eighty (180) days from receipt of GRP's written notice. If the concession company, acting in good faith and with due diligence, is unable to designate a qualified operator within the aforesaid period, then GRP shall at the end of the 180-day period take over the Development Facility and assume Attendant Liabilities. The term "Attendant Liabilities" under the 1997 Concession Agreement is defined as: Attendant Liabilities refer to all amounts recorded and from time to time outstanding in the books of the Concessionaire as owing to Unpaid Creditors who have provided, loaned or advanced funds actually used for the Project, including all interests, penalties, associated fees, charges, surcharges, indemnities, reimbursements and other related expenses, and further including amounts owed by Concessionaire to its suppliers, contractors and sub-contractors. Under the above quoted portions of Section 4.04 in relation to the definition of "Attendant Liabilities," default by PIATCO of its loans used to finance the NAIA IPT III project triggers the occurrence of certain events that leads to the assumption by the Government of the liability for the loans. Only in one instance may the Government escape the assumption of PIATCO's liabilities, i.e., when the Government so elects and allows a qualified operator to take over as Concessionaire. However, this circumstance is dependent on the existence and availability of a qualified operator who is willing to take over the rights and obligations of PIATCO under the contract, a circumstance that is not entirely within the control of the Government. Without going into the validity of this provision at this juncture, suffice it to state that Section 4.04 of the 1997 Concession Agreement may be considered a form of security for the loans PIATCO has obtained to finance the project, an option that was not made available in the draft Concession Agreement. Section 4.04 is an important amendment to the 1997 Concession Agreement because it grants PIATCO a

financial advantage or benefit which was not previously made available during the bidding process. This financial advantage is a significant modification that translates to better terms and conditions for PIATCO. PIATCO, however, argues that the parties to the bidding procedure acknowledge that the draft Concession Agreement is subject to amendment because the Bid Documents permit financing or borrowing. They claim that it was the lenders who proposed the amendments to the draft Concession Agreement which resulted in the 1997 Concession Agreement. We agree that it is not inconsistent with the rationale and purpose of the BOT Law to allow the project proponent or the winning bidder to obtain financing for the project, especially in this case which involves the construction, operation and maintenance of the NAIA IPT III. Expectedly, compliance by the project proponent of its undertakings therein would involve a substantial amount of investment. It is therefore inevitable for the awardee of the contract to seek alternate sources of funds to support the project. Be that as it may, this Court maintains that amendments to the contract bidded upon should always conform to the general policy on public bidding if such procedure is to be faithful to its real nature and purpose. By its very nature and characteristic, competitive public bidding aims to protect the public interest by giving the public the best possible advantages through open competition.45 It has been held that the three principles in public bidding are (1) the offer to the public; (2) opportunity for competition; and (3) a basis for the exact comparison of bids. A regulation of the matter which excludes any of these factors destroys the distinctive character of the system and thwarts the purpose of its adoption.46 These are the basic parameters which every awardee of a contract bidded out must conform to, requirements of financing and borrowing notwithstanding. Thus, upon a concrete showing that, as in this case, the contract signed by the government and the contract-awardee is an entirely different contract from the contract bidded, courts should not hesitate to strike down said contract in its entirety for violation of public policy on public bidding. A strict adherence on the principles, rules and regulations on public bidding must be sustained if only to preserve the integrity and the faith of the general public on the procedure. Public bidding is a standard practice for procuring government contracts for public service and for furnishing supplies and other materials. It aims to secure for the government the lowest possible price under the most favorable terms and conditions, to curtail favoritism in the award of government contracts and avoid suspicion of anomalies and it places all bidders in equal footing.47 Any government action which permits any substantial variance between the conditions under which the bids are invited and the contract executed after the award thereof is a grave abuse of discretion amounting to lack or excess of jurisdiction which warrants proper judicial action. In view of the above discussion, the fact that the foregoing substantial amendments were made on the 1997 Concession Agreement renders the same null and void for being contrary to public policy. These amendments convert the 1997 Concession Agreement to an entirely different agreement from the contract bidded out or the draft Concession Agreement. It is not difficult to see that the amendments on (1) the types of fees or charges that are subject to MIAA regulation or control and the extent thereof and (2) the assumption by the Government, under certain conditions, of the liabilities of PIATCO directly translates concrete financial advantages to PIATCO that were previously not available during the bidding process. These amendments cannot be taken as merely supplements to or implementing provisions of those already existing in the draft Concession Agreement. The amendments discussed above present new terms and conditions which provide financial benefit to PIATCO which may have altered the technical and financial parameters of other bidders had they known that such terms were available. III

Direct Government Guarantee Article IV, Section 4.04(b) and (c), in relation to Article 1.06, of the 1997 Concession Agreement provides: Section 4.04 Assignment xxx xxx xxx

(b) In the event Concessionaire should default in the payment of an Attendant Liability, and the default resulted in the acceleration of the payment due date of the Attendant Liability prior to its stated date of maturity, the Unpaid Creditors and Concessionaire shall immediately inform GRP in writing of such default. GRP shall within one hundred eighty (180) days from receipt of the joint written notice of the Unpaid Creditors and Concessionaire, either (i) take over the Development Facility and assume the Attendant Liabilities, or (ii) allow the Unpaid Creditors, if qualified to be substituted as concessionaire and operator of the Development facility in accordance with the terms and conditions hereof, or designate a qualified operator acceptable to GRP to operate the Development Facility, likewise under the terms and conditions of this Agreement; Provided, that if at the end of the 180-day period GRP shall not have served the Unpaid Creditors and Concessionaire written notice of its choice, GRP shall be deemed to have elected to take over the Development Facility with the concomitant assumption of Attendant Liabilities. (c) If GRP, by written notice, allow the Unpaid Creditors to be substituted as concessionaire, the latter shall form and organize a concession company qualified to takeover the operation of the Development Facility. If the concession company should elect to designate an operator for the Development Facility, the concession company shall in good faith identify and designate a qualified operator acceptable to GRP within one hundred eighty (180) days from receipt of GRP's written notice. If the concession company, acting in good faith and with due diligence, is unable to designate a qualified operator within the aforesaid period, then GRP shall at the end of the 180-day period take over the Development Facility and assume Attendant Liabilities. . Section 1.06. Attendant Liabilities Attendant Liabilities refer to all amounts recorded and from time to time outstanding in the books of the Concessionaire as owing to Unpaid Creditors who have provided, loaned or advanced funds actually used for the Project, including all interests, penalties, associated fees, charges, surcharges, indemnities, reimbursements and other related expenses, and further including amounts owed by Concessionaire to its suppliers, contractors and sub-contractors.48 It is clear from the above-quoted provisions that Government, in the event that PIATCO defaults in its loan obligations, is obligated to pay "all amounts recorded and from time to time outstanding from the books" of PIATCO which the latter owes to its creditors.49 These amounts include "all interests, penalties, associated fees, charges, surcharges, indemnities, reimbursements and other related expenses."50 This obligation of the Government to pay PIATCO's creditors upon PIATCO's default would arise if the Government opts to take over NAIA IPT III. It should be noted, however, that even if the Government chooses the second option, which is to allow PIATCO's unpaid creditors operate NAIA IPT III, the Government is still at a risk of being liable to PIATCO's creditors should the latter be unable to designate a qualified operator within the prescribed period.51 In effect, whatever option the Government chooses to take in the event of PIATCO's failure to fulfill its loan obligations, the Government is still at a risk of

assuming PIATCO's outstanding loans. This is due to the fact that the Government would only be free from assuming PIATCO's debts if the unpaid creditors would be able to designate a qualified operator within the period provided for in the contract. Thus, the Government's assumption of liability is virtually out of its control. The Government under the circumstances provided for in the 1997 Concession Agreement is at the mercy of the existence, availability and willingness of a qualified operator. The above contractual provisions constitute a direct government guarantee which is prohibited by law. One of the main impetus for the enactment of the BOT Law is the lack of government funds to construct the infrastructure and development projects necessary for economic growth and development. This is why private sector resources are being tapped in order to finance these projects. The BOT law allows the private sector to participate, and is in fact encouraged to do so by way of incentives, such as minimizing the unstable flow of returns,52 provided that the government would not have to unnecessarily expend scarcely available funds for the project itself. As such, direct guarantee, subsidy and equity by the government in these projects are strictly prohibited.53 This is but logical for if the government would in the end still be at a risk of paying the debts incurred by the private entity in the BOT projects, then the purpose of the law is subverted. Section 2(n) of the BOT Law defines direct guarantee as follows: (n) Direct government guarantee An agreement whereby the government or any of its agencies or local government units assume responsibility for the repayment of debt directly incurred by the project proponent in implementing the project in case of a loan default. Clearly by providing that the Government "assumes" the attendant liabilities, which consists of PIATCO's unpaid debts, the 1997 Concession Agreement provided for a direct government guarantee for the debts incurred by PIATCO in the implementation of the NAIA IPT III project. It is of no moment that the relevant sections are subsumed under the title of "assignment". The provisions providing for direct government guarantee which is prohibited by law is clear from the terms thereof. The fact that the ARCA superseded the 1997 Concession Agreement did not cure this fatal defect. Article IV, Section 4.04(c), in relation to Article I, Section 1.06, of the ARCA provides: Section 4.04 Security xxx xxx xxx

(c) GRP agrees with Concessionaire (PIATCO) that it shall negotiate in good faith and enter into direct agreement with the Senior Lenders, or with an agent of such Senior Lenders (which agreement shall be subject to the approval of the Bangko Sentral ng Pilipinas), in such form as may be reasonably acceptable to both GRP and Senior Lenders, with regard, inter alia, to the following parameters: xxx xxx xxx

(iv) If the Concessionaire [PIATCO] is in default under a payment obligation owed to the Senior Lenders, and as a result thereof the Senior Lenders have become entitled to accelerate the Senior Loans, the Senior Lenders shall have the right to notify GRP of the same, and without prejudice to any other rights of the Senior Lenders or any Senior Lenders' agent may have (including without limitation under security interests granted in favor of the Senior Lenders), to either in good faith identify and designate a nominee which is qualified under sub-clause (viii)(y) below to operate the Development Facility [NAIA Terminal 3]

or transfer the Concessionaire's [PIATCO] rights and obligations under this Agreement to a transferee which is qualified under sub-clause (viii) below; xxx xxx xxx

(vi) if the Senior Lenders, acting in good faith and using reasonable efforts, are unable to designate a nominee or effect a transfer in terms and conditions satisfactory to the Senior Lenders within one hundred eighty (180) days after giving GRP notice as referred to respectively in (iv) or (v) above, then GRP and the Senior Lenders shall endeavor in good faith to enter into any other arrangement relating to the Development Facility [NAIA Terminal 3] (other than a turnover of the Development Facility [NAIA Terminal 3] to GRP) within the following one hundred eighty (180) days. If no agreement relating to the Development Facility [NAIA Terminal 3] is arrived at by GRP and the Senior Lenders within the said 180day period, then at the end thereof the Development Facility [NAIA Terminal 3] shall be transferred by the Concessionaire [PIATCO] to GRP or its designee and GRP shall make a termination payment to Concessionaire [PIATCO] equal to the Appraised Value (as hereinafter defined) of the Development Facility [NAIA Terminal 3] or the sum of the Attendant Liabilities, if greater. Notwithstanding Section 8.01(c) hereof, this Agreement shall be deemed terminated upon the transfer of the Development Facility [NAIA Terminal 3] to GRP pursuant hereto; xxx xxx xxx

Section 1.06. Attendant Liabilities Attendant Liabilities refer to all amounts in each case supported by verifiable evidence from time to time owed or which may become owing by Concessionaire [PIATCO] to Senior Lenders or any other persons or entities who have provided, loaned, or advanced funds or provided financial facilities to Concessionaire [PIATCO] for the Project [NAIA Terminal 3], including, without limitation, all principal, interest, associated fees, charges, reimbursements, and other related expenses (including the fees, charges and expenses of any agents or trustees of such persons or entities), whether payable at maturity, by acceleration or otherwise, and further including amounts owed by Concessionaire [PIATCO] to its professional consultants and advisers, suppliers, contractors and sub-contractors.54 It is clear from the foregoing contractual provisions that in the event that PIATCO fails to fulfill its loan obligations to its Senior Lenders, the Government is obligated to directly negotiate and enter into an agreement relating to NAIA IPT III with the Senior Lenders, should the latter fail to appoint a qualified nominee or transferee who will take the place of PIATCO. If the Senior Lenders and the Government are unable to enter into an agreement after the prescribed period, the Government must then pay PIATCO, upon transfer of NAIA IPT III to the Government, termination payment equal to the appraised value of the project or the value of the attendant liabilities whichever is greater. Attendant liabilities as defined in the ARCA includes all amounts owed or thereafter may be owed by PIATCO not only to the Senior Lenders with whom PIATCO has defaulted in its loan obligations but to all other persons who may have loaned, advanced funds or provided any other type of financial facilities to PIATCO for NAIA IPT III. The amount of PIATCO's debt that the Government would have to pay as a result of PIATCO's default in its loan obligations -- in case no qualified nominee or transferee is appointed by the Senior Lenders and no other agreement relating to NAIA IPT III has been reached between the Government and the Senior Lenders -includes, but is not limited to, "all principal, interest, associated fees, charges, reimbursements, and other related expenses . . . whether payable at maturity, by acceleration or otherwise."55

It is clear from the foregoing that the ARCA provides for a direct guarantee by the government to pay PIATCO's loans not only to its Senior Lenders but all other entities who provided PIATCO funds or services upon PIATCO's default in its loan obligation with its Senior Lenders. The fact that the Government's obligation to pay PIATCO's lenders for the latter's obligation would only arise after the Senior Lenders fail to appoint a qualified nominee or transferee does not detract from the fact that, should the conditions as stated in the contract occur, the ARCA still obligates the Government to pay any and all amounts owed by PIATCO to its lenders in connection with NAIA IPT III. Worse, the conditions that would make the Government liable for PIATCO's debts is triggered by PIATCO's own default of its loan obligations to its Senior Lenders to which loan contracts the Government was never a party to. The Government was not even given an option as to what course of action it should take in case PIATCO defaulted in the payment of its senior loans. The Government, upon PIATCO's default, would be merely notified by the Senior Lenders of the same and it is the Senior Lenders who are authorized to appoint a qualified nominee or transferee. Should the Senior Lenders fail to make such an appointment, the Government is then automatically obligated to "directly deal and negotiate" with the Senior Lenders regarding NAIA IPT III. The only way the Government would not be liable for PIATCO's debt is for a qualified nominee or transferee to be appointed in place of PIATCO to continue the construction, operation and maintenance of NAIA IPT III. This "pre-condition", however, will not take the contract out of the ambit of a direct guarantee by the government as the existence, availability and willingness of a qualified nominee or transferee is totally out of the government's control. As such the Government is virtually at the mercy of PIATCO (that it would not default on its loan obligations to its Senior Lenders), the Senior Lenders (that they would appoint a qualified nominee or transferee or agree to some other arrangement with the Government) and the existence of a qualified nominee or transferee who is able and willing to take the place of PIATCO in NAIA IPT III. The proscription against government guarantee in any form is one of the policy considerations behind the BOT Law. Clearly, in the present case, the ARCA obligates the Government to pay for all loans, advances and obligations arising out of financial facilities extended to PIATCO for the implementation of the NAIA IPT III project should PIATCO default in its loan obligations to its Senior Lenders and the latter fails to appoint a qualified nominee or transferee. This in effect would make the Government liable for PIATCO's loans should the conditions as set forth in the ARCA arise. This is a form of direct government guarantee. The BOT Law and its implementing rules provide that in order for an unsolicited proposal for a BOT project may be accepted, the following conditions must first be met: (1) the project involves a new concept in technology and/or is not part of the list of priority projects, (2) no direct government guarantee, subsidy or equity is required, and (3) the government agency or local government unit has invited by publication other interested parties to a public bidding and conducted the same.56 The failure to meet any of the above conditions will result in the denial of the proposal. It is further provided that the presence of direct government guarantee, subsidy or equity will "necessarily disqualify a proposal from being treated and accepted as an unsolicited proposal."57 The BOT Law clearly and strictly prohibits direct government guarantee, subsidy and equity in unsolicited proposals that the mere inclusion of a provision to that effect is fatal and is sufficient to deny the proposal. It stands to reason therefore that if a proposal can be denied by reason of the existence of direct government guarantee, then its inclusion in the contract executed after the said proposal has been accepted is likewise sufficient to invalidate the contract itself. A prohibited provision, the inclusion of which would result in the denial of a proposal cannot, and should not, be allowed to later on be inserted in the contract resulting from the said proposal. The basic rules of justice and fair play alone militate against such an occurrence and must not, therefore, be countenanced particularly in this instance where the government is exposed to the risk of shouldering hundreds of million of dollars in debt.

This Court has long and consistently adhered to the legal maxim that those that cannot be done directly cannot be done indirectly.58 To declare the PIATCO contracts valid despite the clear statutory prohibition against a direct government guarantee would not only make a mockery of what the BOT Law seeks to prevent -- which is to expose the government to the risk of incurring a monetary obligation resulting from a contract of loan between the project proponent and its lenders and to which the Government is not a party to -- but would also render the BOT Law useless for what it seeks to achieve - to make use of the resources of the private sector in the "financing, operation and maintenance of infrastructure and development projects"59 which are necessary for national growth and development but which the government, unfortunately, could ill-afford to finance at this point in time. IV Temporary takeover of business affected with public interest Article XII, Section 17 of the 1987 Constitution provides: 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. The above provision pertains to the right of the State in times of national emergency, and in the exercise of its police power, to temporarily take over the operation of any business affected with public interest. In the 1986 Constitutional Commission, the term "national emergency" was defined to include threat from external aggression, calamities or national disasters, but not strikes "unless it is of such proportion that would paralyze government service."60 The duration of the emergency itself is the determining factor as to how long the temporary takeover by the government would last.61 The temporary takeover by the government extends only to the operation of the business and not to the ownership thereof. As such the government is not required to compensate the private entity-owner of the said business as there is no transfer of ownership, whether permanent or temporary. The private entity-owner affected by the temporary takeover cannot, likewise, claim just compensation for the use of the said business and its properties as the temporary takeover by the government is in exercise of its police power and not of its power of eminent domain. Article V, Section 5.10 (c) of the 1997 Concession Agreement provides: Section 5.10 Temporary Take-over of operations by GRP. . (c) In the event the development Facility or any part thereof and/or the operations of Concessionaire or any part thereof, become the subject matter of or be included in any notice, notification, or declaration concerning or relating to acquisition, seizure or appropriation by GRP in times of war or national emergency, GRP shall, by written notice to Concessionaire, immediately take over the operations of the Terminal and/or the Terminal Complex. During such take over by GRP, the Concession Period shall be suspended; provided, that upon termination of war, hostilities or national emergency, the operations shall be returned to Concessionaire, at which time, the Concession period shall commence to run again. Concessionaire shall be entitled to reasonable compensation for the duration of the temporary take over by GRP, which compensation shall take into account the reasonable cost for the use of the Terminal

and/or Terminal Complex, (which is in the amount at least equal to the debt service requirements of Concessionaire, if the temporary take over should occur at the time when Concessionaire is still servicing debts owed to project lenders), any loss or damage to the Development Facility, and other consequential damages. If the parties cannot agree on the reasonable compensation of Concessionaire, or on the liability of GRP as aforesaid, the matter shall be resolved in accordance with Section 10.01 [Arbitration]. Any amount determined to be payable by GRP to Concessionaire shall be offset from the amount next payable by Concessionaire to GRP.62 PIATCO cannot, by mere contractual stipulation, contravene the Constitutional provision on temporary government takeover and obligate the government to pay "reasonable cost for the use of the Terminal and/or Terminal Complex."63 Article XII, section 17 of the 1987 Constitution envisions a situation wherein the exigencies of the times necessitate the government to "temporarily take over or direct the operation of any privately owned public utility or business affected with public interest." It is the welfare and interest of the public which is the paramount consideration in determining whether or not to temporarily take over a particular business. Clearly, the State in effecting the temporary takeover is exercising its police power. Police power is the "most essential, insistent, and illimitable of powers."64 Its exercise therefore must not be unreasonably hampered nor its exercise be a source of obligation by the government in the absence of damage due to arbitrariness of its exercise.65 Thus, requiring the government to pay reasonable compensation for the reasonable use of the property pursuant to the operation of the business contravenes the Constitution. V Regulation of Monopolies A monopoly is "a privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive right (or power) to carry on a particular business or trade, manufacture a particular article, or control the sale of a particular commodity."66 The 1987 Constitution strictly regulates monopolies, whether private or public, and even provides for their prohibition if public interest so requires. Article XII, Section 19 of the 1987 Constitution states: Sec. 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. Clearly, monopolies are not per se prohibited by the Constitution but may be permitted to exist to aid the government in carrying on an enterprise or to aid in the performance of various services and functions in the interest of the public.67 Nonetheless, a determination must first be made as to whether public interest requires a monopoly. As monopolies are subject to abuses that can inflict severe prejudice to the public, they are subject to a higher level of State regulation than an ordinary business undertaking. In the cases at bar, PIATCO, under the 1997 Concession Agreement and the ARCA, is granted the "exclusive right to operate a commercial international passenger terminal within the Island of Luzon" at the NAIA IPT III.68 This is with the exception of already existing international airports in Luzon such as those located in the Subic Bay Freeport Special Economic Zone ("SBFSEZ"), Clark Special Economic Zone ("CSEZ") and in Laoag City.69 As such, upon commencement of PIATCO's operation of NAIA IPT III, Terminals 1 and 2 of NAIA would cease to function as international passenger terminals. This, however, does not prevent MIAA to use Terminals 1 and 2 as domestic passenger terminals or in any other manner as it may deem appropriate except those activities that would compete with NAIA IPT III in the latter's operation as an international passenger terminal.70 The right granted to PIATCO to

exclusively operate NAIA IPT III would be for a period of twenty-five (25) years from the In-Service Date71 and renewable for another twenty-five (25) years at the option of the government.72 Both the 1997 Concession Agreement and the ARCA further provide that, in view of the exclusive right granted to PIATCO, the concession contracts of the service providers currently servicing Terminals 1 and 2 would no longer be renewed and those concession contracts whose expiration are subsequent to the In-Service Date would cease to be effective on the said date.73 The operation of an international passenger airport terminal is no doubt an undertaking imbued with public interest. In entering into a BuildOperate-and-Transfer contract for the construction, operation and maintenance of NAIA IPT III, the government has determined that public interest would be served better if private sector resources were used in its construction and an exclusive right to operate be granted to the private entity undertaking the said project, in this case PIATCO. Nonetheless, the privilege given to PIATCO is subject to reasonable regulation and supervision by the Government through the MIAA, which is the government agency authorized to operate the NAIA complex, as well as DOTC, the department to which MIAA is attached.74 This is in accord with the Constitutional mandate that a monopoly which is not prohibited must be regulated.75 While it is the declared policy of the BOT Law to encourage private sector participation by "providing a climate of minimum government regulations,"76 the same does not mean that Government must completely surrender its sovereign power to protect public interest in the operation of a public utility as a monopoly. The operation of said public utility can not be done in an arbitrary manner to the detriment of the public which it seeks to serve. The right granted to the public utility may be exclusive but the exercise of the right cannot run riot. Thus, while PIATCO may be authorized to exclusively operate NAIA IPT III as an international passenger terminal, the Government, through the MIAA, has the right and the duty to ensure that it is done in accord with public interest. PIATCO's right to operate NAIA IPT III cannot also violate the rights of third parties. Section 3.01(e) of the 1997 Concession Agreement and the ARCA provide: 3.01 Concession Period xxx xxx xxx

(e) GRP confirms that certain concession agreements relative to certain services and operations currently being undertaken at the Ninoy Aquino International Airport passenger Terminal I have a validity period extending beyond the In-Service Date. GRP through DOTC/MIAA, confirms that these services and operations shall not be carried over to the Terminal and the Concessionaire is under no legal obligation to permit such carry-over except through a separate agreement duly entered into with Concessionaire. In the event Concessionaire becomes involved in any litigation initiated by any such concessionaire or operator, GRP undertakes and hereby holds Concessionaire free and harmless on full indemnity basis from and against any loss and/or any liability resulting from any such litigation, including the cost of litigation and the reasonable fees paid or payable to Concessionaire's counsel of choice, all such amounts shall be fully deductible by way of an offset from any amount which the Concessionaire is bound to pay GRP under this Agreement. During the oral arguments on December 10, 2002, the counsel for the petitioners-in-intervention for G.R. No. 155001 stated that there are two service providers whose contracts are still existing and whose validity extends beyond the In-Service Date. One contract remains valid until 2008 and the other until 2010.77

We hold that while the service providers presently operating at NAIA Terminal 1 do not have an absolute right for the renewal or the extension of their respective contracts, those contracts whose duration extends beyond NAIA IPT III's In-Service-Date should not be unduly prejudiced. These contracts must be respected not just by the parties thereto but also by third parties. PIATCO cannot, by law and certainly not by contract, render a valid and binding contract nugatory. PIATCO, by the mere expedient of claiming an exclusive right to operate, cannot require the Government to break its contractual obligations to the service providers. In contrast to the arrastre and stevedoring service providers in the case of Anglo-Fil Trading Corporation v. Lazaro78 whose contracts consist of temporary hold-over permits, the affected service providers in the cases at bar, have a valid and binding contract with the Government, through MIAA, whose period of effectivity, as well as the other terms and conditions thereof, cannot be violated. In fine, the efficient functioning of NAIA IPT III is imbued with public interest. The provisions of the 1997 Concession Agreement and the ARCA did not strip government, thru the MIAA, of its right to supervise the operation of the whole NAIA complex, including NAIA IPT III. As the primary government agency tasked with the job,79 it is MIAA's responsibility to ensure that whoever by contract is given the right to operate NAIA IPT III will do so within the bounds of the law and with due regard to the rights of third parties and above all, the interest of the public. VI CONCLUSION In sum, this Court rules that in view of the absence of the requisite financial capacity of the Paircargo Consortium, predecessor of respondent PIATCO, the award by the PBAC of the contract for the construction, operation and maintenance of the NAIA IPT III is null and void. Further, considering that the 1997 Concession Agreement contains material and substantial amendments, which amendments had the effect of converting the 1997 Concession Agreement into an entirely different agreement from the contract bidded upon, the 1997 Concession Agreement is similarly null and void for being contrary to public policy. The provisions under Sections 4.04(b) and (c) in relation to Section 1.06 of the 1997 Concession Agreement and Section 4.04(c) in relation to Section 1.06 of the ARCA, which constitute a direct government guarantee expressly prohibited by, among others, the BOT Law and its Implementing Rules and Regulations are also null and void. The Supplements, being accessory contracts to the ARCA, are likewise null and void. WHEREFORE, the 1997 Concession Agreement, the Amended and Restated Concession Agreement and the Supplements thereto are set aside for being null and void. SO ORDERED. Davide, Jr., C.J., Bellosillo, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, Corona, and CarpioMorales, JJ., concur. Vitug, J., see separate (dissenting) opinion. Panganiban, J., please see separate opinion. Quisumbing, J., no jurisdiction, please see separate opinion of J. Vitug in which he concurs. Carpio, J., no part. Callejo, Sr., J., also concur in the separate opinion of J. Panganiban. Azcuna, J., joins the separate opinion of J. Vitug.

SEPARATE OPINIONS VITUG, J.: This Court is bereft of jurisdiction to hear the petitions at bar. The Constitution provides that the Supreme Court shall exercise original jurisdiction over, among other actual controversies, petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.1 The cases in question, although denominated to be petitions for prohibition, actually pray for the nullification of the PIATCO contracts and to restrain respondents from implementing said agreements for being illegal and unconstitutional. Section 2, Rule 65 of the Rules of Court states: "When the proceedings of any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may require." The rule is explicit. A petition for prohibition may be filed against a tribunal, corporation, board, officer or person, exercising judicial, quasi-judicial or ministerial functions. What the petitions seek from respondents do not involve judicial, quasi-judicial or ministerial functions. In prohibition, only legal issues affecting the jurisdiction of the tribunal, board or officer involved may be resolved on the basis of undisputed facts.2 The parties allege, respectively, contentious evidentiary facts. It would be difficult, if not anomalous, to decide the jurisdictional issue on the basis of the contradictory factual submissions made by the parties.3 As the Court has so often exhorted, it is not a trier of facts. The petitions, in effect, are in the nature of actions for declaratory relief under Rule 63 of the Rules of Court. The Rules provide that any person interested under a contract may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties thereunder.4 The Supreme Court assumes no jurisdiction over petitions for declaratory relief which are cognizable by regional trial courts.5 As I have so expressed in Tolentino vs. Secretary of Finance,6 reiterated in Santiago vs. Guingona, Jr.7 , the Supreme Court should not be thought of as having been tasked with the awesome responsibility of overseeing the entire bureaucracy. Pervasive and limitless, such as it may seem to be under the 1987 Constitution, judicial power still succumbs to the paramount doctrine of separation of powers. The Court may not at good liberty intrude, in the guise of sovereign imprimatur, into every affair of government. What significance can still then remain of the time-honored and widely acclaimed principle of separation of powers if, at every turn, the Court allows itself to pass upon at will the disposition of a co-equal, independent and coordinate branch in our system of government. I dread to think of the so varied uncertainties that such an undue interference can lead to. Accordingly, I vote for the dismissal of the petition. Quisumbing, and Azcuna, JJ., concur.

PANGANIBAN, J.: The five contracts for the construction and the operation of Ninoy Aquino International Airport (NAIA) Terminal III, the subject of the consolidated Petitions before the Court, are replete with outright violations of law, public policy and the Constitution. The only proper thing to do is declare them all null and void ab initio and let the chips fall where they may. Fiat iustitia ruat coelum. The facts leading to this controversy are already well presented in the ponencia. I shall not burden the readers with a retelling thereof. Instead, I will cut to the chase and directly address the two sets of gut issues: 1. The first issue is procedural: Does the Supreme Court have original jurisdiction to hear and decide the Petitions? Corollarily, do petitioners have locus standi and should this Court decide the cases without any mandatory referral to arbitration? 2. The second one is substantive in character: Did the subject contracts violate the Constitution, the laws, and public policy to such an extent as to render all of them void and inexistent? My answer to all the above questions is a firm "Yes." The Procedural Issue: Jurisdiction, Standing and Arbitration Definitely and surely, the issues involved in these Petitions are clearly of transcendental importance and of national interest. The subject contracts pertain to the construction and the operation of the country's premiere international airport terminal - an ultramodern world-class public utility that will play a major role in the country's economic development and serve to project a positive image of our country abroad. The five build-operate-&-transfer (BOT) contracts, while entailing the investment of billions of pesos in capital and the availment of several hundred millions of dollars in loans, contain provisions that tend to establish a monopoly, require the disbursements of public funds sans appropriations, and provide government guarantees in violation of statutory prohibitions, as well as other provisions equally offensive to law, public policy and the Constitution. Public interest will inevitably be affected thereby. Thus, objections to these Petitions, grounded upon (a) the hierarchy of courts, (b) the need for arbitration prior to court action, and (c) the alleged lack of sufficient personality, standing or interest, being in the main procedural matters, must now be set aside, as they have been in past cases. This Court must be permitted to perform its constitutional duty of determining whether the other agencies of government have acted within the limits of the Constitution and the laws, or if they have gravely abused the discretion entrusted to them.1 Hierarchy of Courts The Court has, in the past, held that questions relating to gargantuan government contracts ought to be settled without delay.2 This holding applies with greater force to the instant cases. Respondent Piatco is partly correct in averring that petitioners can obtain relief from the regional trial courts via an action to annul the contracts.

Nevertheless, the unavoidable consequence of having to await the rendition and the finality of any such judgment would be a prolonged state of uncertainty that would be prejudicial to the nation, the parties and the general public. And, in light of the feared loss of jobs of the petitioning workers, consequent to the inevitable pretermination of contracts of the petitioning service providers that will follow upon the heels of the impending opening of NAIA Terminal III, the need for relief is patently urgent, and therefore, direct resort to this Court through the special civil action of prohibition is thus justified.3 Contrary to Piatco's argument that the resolution of the issues raised in the Petitions will require delving into factual questions,4 I submit that their disposition ultimately turns on questions of law.5 Further, many of the significant and relevant factual questions can be easily addressed by an examination of the documents submitted by the parties. In any event, the Petitions raise some novel questions involving the application of the amended BOT Law, which this Court has seen fit to tackle. Arbitration Should the dispute be referred to arbitration prior to judicial recourse? Respondent Piatco claims that Section 10.02 of the Amended and Restated Concession Agreement (ARCA) provides for arbitration under the auspices of the International Chamber of Commerce to settle any dispute or controversy or claim arising in connection with the Concession Agreement, its amendments and supplements. The government disagrees, however, insisting that there can be no arbitration based on Section 10.02 of the ARCA, since all the Piatco contracts are void ab initio. Therefore, all contractual provisions, including Section 10.02 of the ARCA, are likewise void, inexistent and inoperative. To support its stand, the government cites Chavez v. Presidential Commission on Good Government:6 "The void agreement will not be rendered operative by the parties' alleged performance (partial or full) of their respective prestations. A contract that violates the Constitution and the law is null and void ab initio and vests no rights and creates no obligations. It produces no legal effect at all." As will be discussed at length later, the Piatco contracts are indeed void in their entirety; thus, a resort to the aforesaid provision on arbitration is unavailing. Besides, petitioners and petitioners-in-intervention have pointed out that, even granting arguendo that the arbitration clause remained a valid provision, it still cannot bind them inasmuch as they are not parties to the Piatco contracts. And in the final analysis, it is unarguable that the arbitration process provided for under Section 10.02 of the ARCA, to be undertaken by a panel of three (3) arbitrators appointed in accordance with the Rules of Arbitration of the International Chamber of Commerce, will not be able to address, determine and definitively resolve the constitutional and legal questions that have been raised in the Petitions before us. Locus Standi Given this Court's previous decisions in cases of similar import, no one will seriously doubt that, being taxpayers and members of the House of Representatives, Petitioners Baterina et al. have locus standi to bring the Petition in GR No. 155547. In Albano v. Reyes,7 this Court held that the petitioner therein, suing as a citizen, taxpayer and member of the House of Representatives, was sufficiently clothed with standing to bring the suit questioning the validity of the assailed contract. The Court cited the fact that public interest was involved, in view of the important role of the Manila International Container Terminal (MICT) in the country's economic development and the magnitude of the financial consideration. This, notwithstanding the fact that expenditure of public funds was not required under the assailed contract.

In the cases presently under consideration, petitioners' personal and substantial interest in the controversy is shown by the fact that certain provisions in the Piatco contracts create obligations on the part of government (through the DOTC and the MIAA) to disburse public funds without prior congressional appropriations. Petitioners thus correctly assert that the injury to them has a twofold aspect: (1) they are adversely affected as taxpayers on account of the illegal disbursement of public funds; and (2) they are prejudiced qua legislators, since the contractual provisions requiring the government to incur expenditures without appropriations also operate as limitations upon the exclusive power and prerogative of Congress over the public purse. As members of the House of Representatives, they are actually deprived of discretion insofar as the inclusion of those items of expenditure in the budget is concerned. To prevent such encroachment upon the legislative privilege and obviate injury to the institution of which they are members, petitioners-legislators have locus standi to bring suit. Messrs. Agan et al. and Lopez et al., are likewise taxpayers and thus possessed of standing to challenge the illegal disbursement of public funds. Messrs. Agan et al., in particular, are employees (or representatives of employees) of various service providers that have (1) existing concession agreements with the MIAA to provide airport services necessary to the operation of the NAIA and (2) service agreements to furnish essential support services to the international airlines operating at the NAIA. On the other hand, Messrs. Lopez et al. are employees of the MIAA. These petitioners (Messrs. Agan et al. and Messrs. Lopez et al.) are confronted with the prospect of being laid off from their jobs and losing their means of livelihood when their employer-companies are forced to shut down or otherwise retrench and cut back on manpower. Such development would result from the imminent implementation of certain provisions in the contracts that tend toward the creation of a monopoly in favor of Piatco, its subsidiaries and related companies. Petitioners-in-intervention are service providers in the business of furnishing airport-related services to international airlines and passengers in the NAIA and are therefore competitors of Piatco as far as that line of business is concerned. On account of provisions in the Piatco contracts, petitioners-in-intervention have to enter into a written contract with Piatco so as not to be shut out of NAIA Terminal III and barred from doing business there. Since there is no provision to ensure or safeguard free and fair competition, they are literally at its mercy. They claim injury on account of their deprivation of property (business) and of the liberty to contract, without due process of law. And even if petitioners and petitioners-in-intervention were not sufficiently clothed with legal standing, I have at the outset already established that, given its impact on the public and on national interest, this controversy is laden with transcendental importance and constitutional significance. Hence, I do not hesitate to adopt the same position as was enunciated in Kilosbayan v. Guingona Jr.8 that "in cases of transcendental importance, the Court may relax the standing requirements and allow a suit to prosper even when there is no direct injury to the party claiming the right of judicial review."9 The Substantive Issue: Violations of the Constitution and the Laws From the Outset, the Bidding Process Was Flawed and Tainted After studying the documents submitted and arguments advanced by the parties, I have no doubt that, right at the outset, Piatco was not qualified to participate in the bidding process for the Terminal III project,

but was nevertheless permitted to do so. It even won the bidding and was helped along by what appears to be a series of collusive and corrosive acts. The build-operate-and-transfer (BOT) project for the NAIA Passenger Terminal III comes under the category of an "unsolicited proposal," which is the subject of Section 4-A of the BOT Law.10 The unsolicited proposal was originally submitted by the Asia's Emerging Dragon Corporation (AEDC) to the Department of Transportation and Communications (DOTC) and the Manila International Airport Authority (MIAA), which reviewed and approved the proposal. The draft of the concession agreement as negotiated between AEDC and DOTC/MIAA was endorsed to the National Economic Development Authority (NEDA-ICC), which in turn reviewed it on the basis of its scope, economic viability, financial indicators and risks; and thereafter approved it for bidding. The DOTC/MIAA then prepared the Bid Documents, incorporating therein the negotiated Draft Concession Agreement, and published invitations for public bidding, i.e., for the submission of comparative or competitive proposals. Piatco's predecessor-in-interest, the Paircargo Consortium, was the only company that submitted a competitive bid or price challenge. At this point, I must emphasize that the law requires the award of a BOT project to the bidder that has satisfied the minimum requirements; and met the technical, financial, organizational and legal standards provided in the BOT Law. Section 5 of this statute states: "Sec. 5. Public bidding of projects. - . . . "In the case of a build-operate-and-transfer arrangement, the contract shall be awarded to the bidder who, having satisfied the minimum financial, technical, organizational and legal standards required by this Act, has submitted the lowest bid and most favorable terms for the project, based on the present value of its proposed tolls, fees, rentals and charges over a fixed term for the facility to be constructed, rehabilitated, operated and maintained according to the prescribed minimum design and performance standards, plans and specifications. . . ." (Emphasis supplied.) The same provision requires that the price challenge via public bidding "must be conducted under a twoenvelope/two-stage system: the first envelope to contain the technical proposal and the second envelope to contain the financial proposal." Moreover, the 1994 Implementing Rules and Regulations (IRR) provide that only those bidders that have passed the prequalification stage are permitted to have their two envelopes reviewed. In other words, prospective bidders must prequalify by submitting their prequalification documents for evaluation; and only the pre-qualified bidders would be entitled to have their bids opened, evaluated and appreciated. On the other hand, disqualified bidders are to be informed of the reason for their disqualification. This procedure was confirmed and reiterated in the Bid Documents, which I quote thus: "Prequalified proponents will be considered eligible to move to second stage technical proposal evaluation. The second and third envelopes of pre-disqualified proponents will be returned."11 Aside from complying with the legal and technical requirements (track record or experience of the firm and its key personnel), a project proponent desiring to prequalify must also demonstrate its financial capacity to undertake the project. To establish such capability, a proponent must prove that it is able to raise the minimum amount of equity required for the project and to procure the loans or financing needed for it. Section 5.4(c) of the 1994 IRR provides:

"Sec. 5.4. Prequalification Requirements. - To pre-qualify, a project proponent must comply with the following requirements: xxx xxx xxx

"c. Financial Capability. The project proponent must have adequate capability to sustain the financing requirements for the detailed engineering design, construction, and/or operation and maintenance phases of the project, as the case may be. For purposes of prequalification, this capability shall be measured in terms of: (i) proof of the ability of the project proponent and/or the consortium to provide a minimum amount of equity to the project, and (ii) a letter testimonial from reputable banks attesting that the project proponent and/or members of the consortium are banking with them, that they are in good financial standing, and that they have adequate resources. The government Agency/LGU concerned shall determine on a project-to-project basis, and before prequalification, the minimum amount of equity needed. . . . ." (Italics supplied) Since the minimum amount of equity for the project was set at 30 percent12 of the minimum project cost of US$350 million, the minimum amount of equity required of any proponent stood at US$105 million. Converted to pesos at the exchange rate then of P26.239 to US$1.00 (as quoted by the Bangko Sentral ng Pilipinas), the peso equivalent of the minimum equity was P2,755,095,000. However, the combined equity or net worth of the Paircargo consortium stood at only P558,384,871.55.13 This amount was only slightly over 6 percent of the minimum project cost and very much short of the required minimum equity, which was equivalent to 30 percent of the project cost. Such deficiency should have immediately caused the disqualification of the Paircargo consortium. This matter was brought to the attention of the Prequalification and Bidding Committee (PBAC). Notwithstanding the glaring deficiency, DOTC Undersecretary Primitivo C. Cal, concurrent chair of the PBAC, declared in a Memorandum dated 14 October 1996 that "the Challenger (Paircargo consortium) was found to have a combined net worth of P3,926,421,242.00 that could support a project costing approximately P13 billion." To justify his conclusion, he asserted: "It is not a requirement that the networth must be `unrestricted'. To impose this as a requirement now will be nothing less than unfair." He further opined, "(T)he networth reflected in the Financial Statement should not be taken as the amount of money to be used to answer the required thirty (30%) percent equity of the challenger but rather to be used in establishing if there is enough basis to believe that the challenger can comply with the required 30% equity. In fact, proof of sufficient equity is required as one of the conditions for award of contract (Sec. 12.1 of IRR of the BOT Law) but not for prequalification (Sec. 5.4 of same document)." On the basis of the foregoing dubious declaration, the Paircargo consortium was deemed prequalified and thus permitted to proceed to the other stages of the bidding process. By virtue of the prequalified status conferred upon the Paircargo, Undersecretary Cal's findings in effect relieved the consortium of the need to comply with the financial capability requirement imposed by the BOT Law and IRR. This position is unmistakably and squarely at odds with the Supreme Court's consistent doctrine emphasizing the strict application of pertinent rules, regulations and guidelines for the public bidding process, in order to place each bidder - actual or potential - on the same footing. Thus, it is unarguably irregular and contrary to the very concept of public bidding to permit a variance between the conditions under which bids are invited and those under which proposals are submitted and approved.

Republic v. Capulong,14 teaches that if one bidder is relieved from having to conform to the conditions that impose some duty upon it, that bidder is not contracting in fair competition with those bidders that propose to be bound by all conditions. The essence of public bidding is, after all, an opportunity for fair competition and a basis for the precise comparison of bids.15 Thus, each bidder must bid under the same conditions; and be subject to the same guidelines, requirements and limitations. The desired result is to be able to determine the best offer or lowest bid, all things being equal. Inasmuch as the Paircargo consortium did not possess the minimum equity equivalent to 30 percent of the minimum project cost, it should not have been prequalified or allowed to participate further in the bidding. The Prequalification and Bidding Committee (PBAC) should therefore not have opened the two envelopes of the consortium containing its technical and financial proposals; required AEDC to match the consortium's bid; 16 or awarded the Concession Agreement to the consortium's successor-in-interest, Piatco. As there was effectively no public bidding to speak of, the entire bidding process having been flawed and tainted from the very outset, therefore, the award of the concession to Paircargo's successor Piatco was void, and the Concession Agreement executed with the latter was likewise void ab initio. For this reason, Piatco cannot and should not be allowed to benefit from that Agreement.17 AEDC Was Deprived of the Right to Match PIATCO's Price Challenge In DOTC PBAC Bid Bulletin No. 4 (par. 3), Undersecretary Cal declared that, for purposes of matching the price challenge of Piatco, AEDC as originator of the unsolicited proposal would be permitted access only to the schedule of proposed Annual Guaranteed Payments submitted by Piatco, and not to the latter's financial and technical proposals that constituted the basis for the price challenge in the first place. This was supposedly in keeping with Section 11.6 of the 1994 IRR, which provides that proprietary information is to be respected, protected and treated with utmost confidentiality, and is therefore not to form part of the bidding/tender and related documents. This pronouncement, I believe, was a grievous misapplication of the mentioned provision. The "proprietary information" referred to in Section 11.6 of the IRR pertains only to the proprietary information of the originator of an unsolicited proposal, and not to those belonging to a challenger. The reason for the protection accorded proprietary information at all is the fact that, according to Section 4-A of the BOT Law as amended, a proposal qualifies as an "unsolicited proposal" when it pertains to a project that involves "a new concept or technology", and/or a project that is not on the government's list of priority projects. To be considered as utilizing a new concept or technology, a project must involve the possession of exclusive rights (worldwide or regional) over a process; or possession of intellectual property rights over a design, methodology or engineering concept.18 Patently, the intent of the BOT Law is to encourage individuals and groups to come up with creative innovations, fresh ideas and new technology. Hence, the significance and necessity of protecting proprietary information in connection with unsolicited proposals. And to make the encouragement real, the law also extends to such individuals and groups what amounts to a "right of first refusal" to undertake the project they conceptualized, involving the use of new technology or concepts, through the mechanism of matching a price challenge. A competing bid is never just any figure conjured from out of the blue; it is arrived at after studying economic, financial, technical and other, factors; it is likewise based on certain assumptions as to the nature of the business, the market potentials, the probable demand for the product or service, the future

behavior of cost items, political and other risks, and so on. It is thus self-evident that in order to be able to intelligently match a bid or price challenge, a bidder must be given access to the assumptions and the calculations that went into crafting the competing bid. In this instance, the financial and technical proposals of Piatco would have provided AEDC with the necessary information to enable it to make a reasonably informed matching bid. To put it more simply, a bidder unable to access the competitor's assumptions will never figure out how the competing bid came about; requiring him to "counter-propose" is like having him shoot at a target in the dark while blindfolded. By withholding from AEDC the challenger's financial and technical proposals containing the critical information it needed, Undersecretary Cal actually and effectively deprived AEDC of the ability to match the price challenge. One could say that AEDC did not have the benefit of a "level playing field." It seems to me, though, that AEDC was actually shut out of the game altogether. At the end of the day, the bottom line is that the validity and the propriety of the award to Piatco had been irreparably impaired. Delayed Issuance of the Notice of Award Violated the BOT Law and the IRR Section 9.5 of the IRR requires that the Notice of Award must indicate the time frame within which the winner of the bidding (and therefore the prospective awardee) shall submit the prescribed performance security, proof of commitment of equity contributions, and indications of sources of financing (loans); and, in the case of joint ventures, an agreement showing that the members are jointly and severally responsible for the obligations of the project proponent under the contract. The purpose of having a definite and firm timetable for the submission of the aforementioned requirements is not only to prevent delays in the project implementation, but also to expose and weed out unqualified proponents, who might have unceremoniously slipped through the earlier prequalification process, by compelling them to put their money where their mouths are, so to speak. Nevertheless, this provision can be easily circumvented by merely postponing the actual issuance of the Notice of Award, in order to give the favored proponent sufficient time to comply with the requirements. Hence, to avert or minimize the manipulation of the post-bidding process, the IRR not only set out the precise sequence of events occurring between the completion of the evaluation of the technical bids and the issuance of the Notice of Award, but also specified the timetables for each such event. Definite allowable extensions of time were provided for, as were the consequences of a failure to meet a particular deadline. In particular, Section 9.1 of the 1994 IRR prescribed that within 30 calendar days from the time the second-stage evaluation shall have been completed, the Committee must come to a decision whether or not to award the contract and, within 7 days therefrom, the Notice of Award must be approved by the head of agency or local government unit (LGU) concerned, and its issuance must follow within another 7 days thereafter. Section 9.2 of the IRR set the procedure applicable to projects involving substantial government undertakings as follows: Within 7 days after the decision to award is made, the draft contract shall be submitted to the ICC for clearance on a no-objection basis. If the draft contract includes government undertakings already previously approved, then the submission shall be for information only.

However, should there be additional or new provisions different from the original government undertakings, the draft shall have to be reviewed and approved. The ICC has 15 working days to act thereon, and unless otherwise specified, its failure to act on the contract within the specified time frame signifies that the agency or LGU may proceed with the award. The head of agency or LGU shall approve the Notice of Award within seven days of the clearance by the ICC on a no-objection basis, and the Notice itself has to be issued within seven days thereafter. The highly regulated time-frames within which the agents of government were to act evinced the intent to impose upon them the duty to act expeditiously throughout the process, to the end that the project be prosecuted and implemented without delay. This regulated scenario was likewise intended to discourage collusion and substantially reduce the opportunity for agents of government to abuse their discretion in the course of the award process. Despite the clear timetables set out in the IRR, several lengthy and still-unexplained delays occurred in the award process, as can be observed from the presentation made by the counsel for public respondents,19 quoted hereinbelow: "11 Dec. 1996 - The Paircargo Joint Venture was informed by the PBAC that AEDC failed to match and that negotiations preparatory to Notice of Award should be commenced. This was the decision to award that should have commenced the running of the 7-day period to approve the Notice of Award, as per Section 9.1 of the IRR, or to submit the draft contract to the ICC for approval conformably with Section 9.2. "01 April 1997 - The PBAC resolved that a copy of the final draft of the Concession Agreement be submitted to the NEDA for clearance on a no-objection basis. This resolution came more than 3 months too late as it should have been made on the 20th of December 1996 at the latest. "16 April 1997 - The PBAC resolved that the period of signing the Concession Agreement be extended by 15 days. "18 April 1997 - NEDA approved the Concession Agreement. Again this is more than 3 months too late as the NEDA's decision should have been released on the 16th of January 1997 or fifteen days after it should have been submitted to it for review. "09 July 1997 - The Notice of Award was issued to PIATCO. Following the provisions of the IRR, the Notice of Award should have been issued fourteen days after NEDA's approval, or the 28th of January 1997. In any case, even if it were to be assumed that the release of NEDA's approval on the 18th of April was timely, the Notice of Award should have been issued on the 9th of May 1997. In both cases, therefore, the release of the Notice of Award occurred in a decidedly less than timely fashion." This chronology of events bespeaks an unmistakable disregard, if not disdain, by the persons in charge of the award process for the time limitations prescribed by the IRR. Their attitude flies in the face of this Court's solemn pronouncement in Republic v. Capulong,20 that "strict observance of the rules, regulations and guidelines of the bidding process is the only safeguard to a fair, honest and competitive public bidding." From the foregoing, the only conclusion that can possibly be drawn is that the BOT law and its IRR were repeatedly violated with unmitigated impunity - and by agents of government, no less! On account of such

violation, the award of the contract to Piatco, which undoubtedly gained time and benefited from the delays, must be deemed null and void from the beginning. Further Amendments Resulted in a Substantially Different Contract, Awarded Without Public Bidding But the violations and desecrations did not stop there. After the PBAC made its decision on December 11, 1996 to award the contract to Piatco, the latter negotiated changes to the Contract bidded out and ended up with what amounts to a substantially new contract without any public bidding. This Contract was subsequently further amended four more times through negotiation and without any bidding. Thus, the contract actually executed between Piatco and DOTC/MIAA on July 12, 1997 (the Concession Agreement or "CA") differed from the contract bidded out (the draft concession agreement or "DCA") in the following very significant respects: 1. The CA inserted stipulations creating a monopoly in favor of Piatco in the business of providing airportrelated services for international airlines and passengers.21 2. The CA provided that government is to answer for Piatco's unpaid loans and debts (lumped under the term Attendant Liabilities) in the event Piatco fails to pay its senior lenders.22 3. The CA provided that in case of termination of the contract due to the fault of government, government shall pay all expenses that Piatco incurred for the project plus the appraised value of the Terminal.23 4. The CA imposed new and special obligations on government, including delivery of clean possession of the site for the terminal; acquisition of additional land at the government's expense for construction of road networks required by Piatco's approved plans and specifications; and assistance to Piatco in securing site utilities, as well as all necessary permits, licenses and authorizations.24 5. Where Section 3.02 of the DCA requires government to refrain from competing with the contractor with respect to the operation of NAIA Terminal III, Section 3.02(b) of the CA excludes and prohibits everyone, including government, from directly or indirectly competing with Piatco, with respect to the operation of, as well as operations in, NAIA Terminal III. Operations in is sufficiently broad to encompass all retail and other commercial business enterprises operating within Terminal III, inclusive of the businesses of providing various airport-related services to international airlines, within the scope of the prohibition. 6. Under Section 6.01 of the DCA, the following fees are subject to the written approval of MIAA: lease/rental charges, concession privilege fees for passenger services, food services, transportation utility concessions, groundhandling, catering and miscellaneous concession fees, porterage fees, greeter/wellwisher fees, carpark fees, advertising fees, VIP facilities fees and others. Moreover, adjustments to the groundhandling fees, rentals and porterage fees are permitted only once every two years and in accordance with a parametric formula, per DCA Section 6.03. However, the CA as executed with Piatco provides in Section 6.06 that all the aforesaid fees, rentals and charges may be adjusted without MIAA's approval or intervention. Neither are the adjustments to these fees and charges subject to or limited by any parametric formula.25 7. Section 1.29 of the DCA provides that the terminal fees, aircraft tacking fees, aircraft parking fees, check-in counter fees and other fees are to be quoted and paid in Philippine pesos. But per Section 1.33 of the CA, all the aforesaid fees save the terminal fee are denominated in US Dollars.

8. Under Section 8.07 of the DCA, the term attendant liabilities refers to liabilities pertinent to NAIA Terminal III, such as payment of lease rentals and performance of other obligations under the Land Lease Agreement; the obligations under the Tenant Agreements; and payment of all taxes, fees, charges and assessments of whatever kind that may be imposed on NAIA Terminal III or parts thereof. But in Section 1.06 of the CA, Attendant Liabilities refers to unpaid debts of Piatco: "All amounts recorded and from time to time outstanding in the books of (Piatco) as owing to Unpaid Creditors who have provided, loaned or advanced funds actually used for the Project, including all interests, penalties, associated fees, charges, surcharges, indemnities, reimbursements and other related expenses, and further including amounts owed by [Piatco] to its suppliers, contractors and subcontractors." 9. Per Sections 8.04 and 8.06 of the DCA, government may, on account of the contractors breach, rescind the contract and select one of four options: (a) take over the terminal and assume all its attendant liabilities; (b) allow the contractor's creditors to assign the Project to another entity acceptable to DOTC/MIAA; (c) pay the contractor rent for the facilities and equipment the DOTC may utilize; or (d) purchase the terminal at a price established by independent appraisers. Depending on the option selected, government may take immediate possession and control of the terminal and its operations. Government will be obligated to compensate the contractor for the "equivalent or proportionate contract costs actually disbursed," but only where government is the one in breach of the contract. But under Section 8.06(a) of the CA, whether on account of Piatco's breach of contract or its inability to pay its creditors, government is obliged to either (a) take over Terminal III and assume all of Piatco's debts or (b) permit the qualified unpaid creditors to be substituted in place of Piatco or to designate a new operator. And in the event of government's breach of contract, Piatco may compel it to purchase the terminal at fair market value, per Section 8.06(b) of the CA. 10. Under the DCA, any delay by Piatco in the payment of the amounts due the government constitutes breach of contract. However, under the CA, such delay does not necessarily constitute breach of contract, since Piatco is permitted to suspend payments to the government in order to first satisfy the claims of its secured creditors, per Section 8.04(d) of the CA. It goes without saying that the amendment of the Contract bidded out (the DCA or draft concession agreement) - in such substantial manner, without any public bidding, and after the bidding process had been concluded on December 11, 1996 - is violative of public policy on public biddings, as well as the spirit and intent of the BOT Law. The whole point of going through the public bidding exercise was completely lost. Its very rationale was totally subverted by permitting Piatco to amend the contract for which public bidding had already been concluded. Competitive bidding aims to obtain the best deal possible by fostering transparency and preventing favoritism, collusion and fraud in the awarding of contracts. That is the reason why procedural rules pertaining to public bidding demand strict observance.26 In a relatively early case, Caltex v. Delgado Brothers,27 this Court made it clear that substantive amendments to a contract for which a public bidding has already been finished should only be awarded after another public bidding: "The due execution of a contract after public bidding is a limitation upon the right of the contracting parties to alter or amend it without another public bidding, for otherwise what would a public bidding be good for if after the execution of a contract after public bidding, the contracting parties may alter or amend the contract, or even cancel it, at their will? Public biddings are held for the protection of the public, and to give the public the best possible advantages by means of open competition between the bidders. He who bids or offers the best terms is awarded the contract subject of the bid, and it is obvious that such

protection and best possible advantages to the public will disappear if the parties to a contract executed after public bidding may alter or amend it without another previous public bidding."28 The aforementioned case dealt with the unauthorized amendment of a contract executed after public bidding; in the situation before us, the amendments were made also after the bidding, but prior to execution. Be that as it may, the same rationale underlying Caltex applies to the present situation with equal force. Allowing the winning bidder to renegotiate the contract for which the bidding process has ended is tantamount to permitting it to put in anything it wants. Here, the winning bidder (Piatco) did not even bother to wait until after actual execution of the contract before rushing to amend it. Perhaps it believed that if the changes were made to a contract already won through bidding (DCA) instead of waiting until it is executed, the amendments would not be noticed or discovered by the public. In a later case, Mata v. San Diego,29 this Court reiterated its ruling as follows: "It is true that modification of government contracts, after the same had been awarded after a public bidding, is not allowed because such modification serves to nullify the effects of the bidding and whatever advantages the Government had secured thereby and may also result in manifest injustice to the other bidders. This prohibition, however, refers to a change in vital and essential particulars of the agreement which results in a substantially new contract." Piatco's counter-argument may be summed up thus: There was nothing in the 1994 IRR that prohibited further negotiations and eventual amendments to the DCA even after the bidding had been concluded. In fact, PBAC Bid Bulletin No. 3 states: "[A]mendments to the Draft Concession Agreement shall be issued from time to time. Said amendments will only cover items that would not materially affect the preparation of the proponent's proposal." I submit that accepting such warped argument will result in perverting the policy underlying public bidding. The BOT Law cannot be said to allow the negotiation of contractual stipulations resulting in a substantially new contract after the bidding process and price challenge had been concluded. In fact, the BOT Law, in recognition of the time, money and effort invested in an unsolicited proposal, accords its originator the privilege of matching the challenger's bid. Section 4-A of the BOT Law specifically refers to a "lower price proposal" by a competing bidder; and to the right of the original proponent "to match the price" of the challenger. Thus, only the price proposals are in play. The terms, conditions and stipulations in the contract for which public bidding has been concluded are understood to remain intact and not be subject to further negotiation. Otherwise, the very essence of public bidding will be destroyed - there will be no basis for an exact comparison between bids. Moreover, Piatco misinterpreted the meaning behind PBAC Bid Bulletin No. 3. The phrase amendments . . . from time to time refers only to those amendments to the draft concession agreement issued by the PBAC prior to the submission of the price challenge; it certainly does not include or permit amendments negotiated for and introduced after the bidding process, has been terminated. Piatco's Concession Agreement Was Further Amended, (ARCA) Again Without Public Bidding Not satisfied with the Concession Agreement, Piatco - once more without bothering with public bidding negotiated with government for still more substantial changes. The result was the Amended and Restated Concession Agreement (ARCA) executed on November 26, 1998. The following changes were introduced:

1. The definition of Attendant Liabilities was further amended with the result that the unpaid loans of Piatco, for which government may be required to answer, are no longer limited to only those loans recorded in Piatco's books or loans whose proceeds were actually used in the Terminal III project.30 2. Although the contract may be terminated due to breach by Piatco, it will not be liable to pay the government any Liquidated Damages if a new operator is designated to take over the operation of the terminal.31 3. The Liquidated Damages which government becomes liable for in case of its breach of contract were substantially increased.32 4. Government's right to appoint a comptroller for Piatco in case the latter encounters liquidity problems was deleted.33 5. Government is made liable for Incremental and Consequential Costs and Losses in case it fails to comply or cause any third party under its direct or indirect control to comply with the special obligations imposed on government.34 6. The insurance policies obtained by Piatco covering the terminal are now required to be assigned to the Senior Lenders as security for the loans; previously, their proceeds were to be used to repair and rehabilitate the facility in case of damage.35 7. Government bound itself to set the initial rate of the terminal fee, to be charged when Terminal III begins operations, at an amount higher than US$20.36 8. Government waived its defense of the illegality of the contract and even agreed to be liable to pay damages to Piatco in the event the contract was declared illegal.37 9. Even though government may be entitled to terminate the ARCA on account of breach by Piatco, government is still liable to pay Piatco the appraised value of Terminal III or the Attendant Liabilities, if the termination occurs before the In-Service Date.38 This condition contravenes the BOT Law provision on termination compensation. 10. Government is obligated to take the administrative action required for Piatco's imposition, collection and application of all Public Utility Revenues.39 No such obligation existed previously. 11. Government is now also obligated to perform and cause other persons and entities under its direct or indirect control to perform all acts necessary to perfect the security interests to be created in favor of Piatco's Senior Lenders.40 No such obligation existed previously. 12. DOTC/MIAA's right of intervention in instances where Piatco's Non-Public Utility Revenues become exorbitant or excessive has been removed.41 13. The illegality and unenforceability of the ARCA or any of its material provisions was made an event of default on the part of government only, thus constituting a ground for Piatco to terminate the ARCA.42 14. Amounts due from and payable by government under the contract were made payable on demand net of taxes, levies, imposts, duties, charges or fees of any kind except as required by law.43

15. The Parametric Formula in the contract, which is utilized to compute for adjustments/increases to the public utility revenues (i.e., aircraft parking and tacking fees, check-in counter fee and terminal fee), was revised to permit Piatco to input its more costly short-term borrowing rates instead of the longer-terms rates in the computations for adjustments, with the end result that the changes will redound to its greater financial benefit. 16. The Certificate of Completion simply deleted the successful performance-testing of the terminal facility in accordance with defined performance standards as a pre-condition for government's acceptance of the terminal facility.44 In sum, the foregoing revisions and amendments as embodied in the ARCA constitute very material alterations of the terms and conditions of the CA, and give further manifestly undue advantage to Piatco at the expense of government. Piatco claims that the changes to the CA were necessitated by the demands of its foreign lenders. However, no proof whatsoever has been adduced to buttress this claim. In any event, it is quite patent that the sum total of the aforementioned changes resulted in drastically weakening the position of government to a degree that seems quite excessive, even from the standpoint of a businessperson who regularly transacts with banks and foreign lenders, is familiar with their mind-set, and understands what motivates them. On the other hand, whatever it was that impelled government officials concerned to accede to those grossly disadvantageous changes, I can only hazard a guess. There is no question in my mind that the ARCA was unauthorized and illegal for lack of public bidding and for being patently disadvantageous to government. The Three Supplements Imposed New Obligations on Government, Also Without Prior Public Bidding After Piatco had managed to breach the protective rampart of public bidding, it recklessly went on a rampage of further assaults on the ARCA. The First Supplement Is as Void as the ARCA In the First Supplement ("FS") executed on August 27, 1999, the following changes were made to the ARCA: 1. The amounts payable by Piatco to government were reduced by allowing additional exceptions to the Gross Revenues in which government is supposed to participate.45 2. Made part of the properties which government is obliged to construct and/or maintain and keep in good repair are (a) the access road connecting Terminals II and III - the construction of this access road is the obligation of Piatco, in lieu of its obligation to construct an Access Tunnel connecting Terminals II and III; and (b) the taxilane and taxiway - these are likewise part of Piatco's obligations, since they are part and parcel of the project as described in Clause 1.3 of the Bid Documents .46 3. The MIAA is obligated to provide funding for the maintenance and repair of the airports and facilities owned or operated by it and by third persons under its control. It will also be liable to Piatco for the latter's losses, expenses and damages as well as liability to third persons, in case MIAA fails to perform such obligations. In addition, MIAA will also be liable for the incremental and consequential costs of the remedial work done by Piatco on account of the former's default.47

4. The FS also imposed on government ten (10) "Additional Special Obligations," including the following: (a) Working for the removal of the general aviation traffic from the NAIA airport complex48 (b) Providing through MIAA the land required by Piatco for the taxilane and one taxiway at no cost to Piatco49 (c) Implementing the government's existing storm drainage master plan50 (d) Coordinating with DPWH the financing, the implementation and the completion of the following works before the In-Service Date: three left-turning overpasses (EDSA to Tramo St., Tramo to Andrews Ave., and Manlunas Road to Sales Ave.);51 and a road upgrade and improvement program involving widening, repair and resurfacing of Sales Road, Andrews Avenue and Manlunas Road; improvement of Nichols Interchange; and removal of squatters along Andrews Avenue.52 (e) Dealing directly with BCDA and the Phil. Air Force in acquiring additional land or right of way for the road upgrade and improvement program.53 5. Government is required to work for the immediate reversion to MIAA of the Nayong Pilipino National Park.54 6. Government's share in the terminal fees collected was revised from a flat rate of P180 to 36 percent thereof; together with government's percentage share in the gross revenues of Piatco, the amount will be remitted to government in pesos instead of US dollars.55 This amendment enables Piatco to benefit from the further erosion of the peso-dollar exchange rate, while preventing government from building up its foreign exchange reserves. 7. All payments from Piatco to government are now to be invoiced to MIAA, and payments are to accrue to the latter's exclusive benefit.56 This move appears to be in support of the funds MIAA advanced to DPWH. I must emphasize that the First Supplement is void in two respects. First, it is merely an amendment to the ARCA, upon which it is wholly dependent; therefore, since the ARCA is void, inexistent and not capable of being ratified or amended, it follows that the FS too is void, inexistent and inoperative. Second, even assuming arguendo that the ARCA is somehow remotely valid, nonetheless the FS, in imposing significant new obligations upon government, altered the fundamental terms and stipulations of the ARCA, thus necessitating a public bidding all over again. That the FS was entered into sans public bidding renders it utterly void and inoperative. The Second Supplement Is Similarly Void and Inexistent The Second Supplement ("SS") was executed between the government and Piatco on September 4, 2000. It calls for Piatco, acting not as concessionaire of NAIA Terminal III but as a public works contractor, to undertake - in the government's stead - the clearing, removal, demolition and disposal of improvements, subterranean obstructions and waste materials at the project site.57 The scope of the works, the procedures involved, and the obligations of the contractor are provided for in Parts II and III of the SS. Section 4.1 sets out the compensation to be paid, listing specific rates per cubic

meter of materials for each phase of the work - excavation, leveling, removal and disposal, backfilling and dewatering. The amounts collectible by Piatco are to be offset against the Annual Guaranteed Payments it must pay government. Though denominated as Second Supplement, it was nothing less than an entirely new public works contract. Yet it, too, did not undergo any public bidding, for which reason it is also void and inoperative. Not surprisingly, Piatco had to subcontract the works to a certain Wintrack Builders, a firm reputedly owned by a former high-ranking DOTC official. But that is another story altogether. The Third Supplement Is Likewise Void and Inexistent The Third Supplement ("TS"), executed between the government and Piatco on June 22, 2001, passed on to the government certain obligations of Piatco as Terminal III concessionaire, with respect to the surface road connecting Terminals II and III. By way of background, at the inception of and forming part of the NAIA Terminal III project was the proposed construction of an access tunnel crossing Runway 13/31, which. would connect Terminal III to Terminal II. The Bid Documents in Section 4.1.2.3[B][i] declared that the said access tunnel was subject to further negotiation; but for purposes of the bidding, the proponent should submit a bid for it as well. Therefore, the tunnel was supposed to be part and parcel of the Terminal III project. However, in Section 5 of the First Supplement, the parties declared that the access tunnel was not economically viable at that time. In lieu thereof, the parties agreed that a surface access road (now called the T2-T3 Road) was to be constructed by Piatco to connect the two terminals. Since it was plainly in substitution of the tunnel, the surface road construction should likewise be considered part and parcel of the same project, and therefore part of Piatco's obligation as well. While the access tunnel was estimated to cost about P800 million, the surface road would have a price tag in the vicinity of about P100 million, thus producing significant savings for Piatco. Yet, the Third Supplement, while confirming that Piatco would construct the T2-T3 Road, nevertheless shifted to government some of the obligations pertaining to the former, as follows: 1. Government is now obliged to remove at its own expense all tenants, squatters, improvements and/or waste materials on the site where the T2-T3 road is to be constructed.58 There was no similar obligation on the part of government insofar as the access tunnel was concerned. 2. Should government fail to carry out its obligation as above described, Piatco may undertake it on government's behalf, subject to the terms and conditions (including compensation payments) contained in the Second Supplement.59 3. MIAA will answer for the operation, maintenance and repair of the T2-T3 Road.60 The TS depends upon and is intended to supplement the ARCA as well as the First Supplement, both of which are void and inexistent and not capable of being ratified or amended. It follows that the TS is likewise void, inexistent and inoperative. And even if, hypothetically speaking, both ARCA and FS are valid, still, the Third Supplement - imposing as it does significant new obligations upon government would in effect alter the terms and stipulations of the ARCA in material respects, thus necessitating another public bidding. Since the TS was not subjected to public bidding, it is consequently utterly void as

well. At any rate, the TS created new monetary obligations on the part of government, for which there were no prior appropriations. Hence it follows that the same is void ab initio. In patiently tracing the progress of the Piatco contracts from their inception up to the present, I noted that the whole process was riddled with significant lapses, if not outright irregularity and wholesale violations of law and public policy. The rationale of beginning at the beginning, so to speak, will become evident when the question of what to do with the five Piatco contracts is discussed later on. In the meantime, I shall take up specific, provisions or changes in the contracts and highlight the more prominent objectionable features. Government Directly Guarantees Piatco Debts Certainly the most discussed provision in the parties' arguments is the one creating an unauthorized, direct government guarantee of Piatco's obligations in favor of the lenders. Section 4-A of the BOT Law as amended states that unsolicited proposals, such as the NAIA Terminal III Project, may be accepted by government provided inter alia that no direct government guarantee, subsidy or equity is required. In short, such guarantee is prohibited in unsolicited proposals. Section 2(n) of the same legislation defines direct government guarantee as "an agreement whereby the government or any of its agencies or local government units (will) assume responsibility for the repayment of debt directly incurred by the project proponent in implementing the project in case of a loan default." Both the CA and the ARCA have provisions that undeniably create such prohibited government guarantee. Section 4.04 (c)(iv) to (vi) of the ARCA, which is similar to Section 4.04 of the CA, provides thus: "(iv) that if Concessionaire is in default under a payment obligation owed to the Senior Lenders, and as a result thereof the Senior Lenders have become entitled to accelerate the Senior Loans, the Senior Lenders shall have the right to notify GRP of the same . . .; (v) . . . the Senior Lenders may after written notification to GRP, transfer the Concessionaire's rights and obligations to a transferee . . .; (vi) if the Senior Lenders . . . are unable to . . . effect a transfer . . ., then GRP and the Senior Lenders shall endeavor . . . to enter into any other arrangement relating to the Development Facility . . . If no agreement relating to the Development Facility is arrived at by GRP and the Senior Lenders within the said 180-day period, then at the end thereof the Development Facility shall be transferred by the Concessionaire to GRP or its designee and GRP shall make a termination payment to Concessionaire equal to the Appraised Value (as hereinafter defined) of the Development Facility or the sum of the Attendant Liabilities, if greater. . . ." In turn, the term Attendant Liabilities is defined in Section 1.06 of the ARCA as follows: "Attendant Liabilities refer to all amounts in each case supported by verifiable evidence from time to time owed or which may become, owing by Concessionaire to Senior Lenders or any other persons or entities who have provided, loaned or advanced funds or provided financial facilities to Concessionaire for the Project, including, without limitation, all principal, interest, associated fees, charges, reimbursements, and other related expenses (including the fees, charges and expenses of any agents or trustees of such

persons or entities), whether payable at maturity, by acceleration or otherwise, and further including amounts owed by Concessionaire to its professional consultants and advisers, suppliers, contractors and sub-contractors." Government's agreement to pay becomes effective in the event of a default by Piatco on any of its loan obligations to the Senior Lenders, and the amount to be paid by government is the greater of either the Appraised Value of Terminal III or the aggregate amount of the moneys owed by Piatco - whether to the Senior Lenders or to other entities, including its suppliers, contractors and subcontractors. In effect, therefore, this agreement already constitutes the prohibited assumption by government of responsibility for repayment of Piatco's debts in case of a loan default. In fine, a direct government guarantee. It matters not that there is a roundabout procedure prescribed by Section 4.04(c)(iv), (v) and (vi) that would require, first, an attempt (albeit unsuccessful) by the Senior Lenders to transfer Piatco's rights to a transferee of their choice; and, second, an effort (equally unsuccessful) to "enter into any other arrangement" with the government regarding the Terminal III facility, before government is required to make good on its guarantee. What is abundantly clear is the fact that, in the devious labyrinthine process detailed in the aforesaid section, it is entirely within the Senior Lenders' power, prerogative and control exercisable via a mere refusal or inability to agree upon "a transferee" or "any other arrangement" regarding the terminal facility - to push the process forward to the ultimate contractual cul-de-sac, wherein government will be compelled to abjectly surrender and make good on its guarantee of payment. Piatco also argues that there is no proviso requiring government to pay the Senior Lenders in the event of Piatco's default. This is literally true, in the sense that Section 4.04(c)(vi) of ARCA speaks of government making the termination payment to Piatco, not to the lenders. However, it is almost a certainty that the Senior Lenders will already have made Piatco sign over to them, ahead of time, its right to receive such payments from government; and/or they may already have had themselves appointed its attorneys-in-fact for the purpose of collecting and receiving such payments. Nevertheless, as petitioners-in-intervention pointed out in their Memorandum,61 the termination payment is to be made to Piatco, not to the lenders; and there is no provision anywhere in the contract documents to prevent it from diverting the proceeds to its own benefit and/or to ensure that it will necessarily use the same to pay off the Senior Lenders and other creditors, in order to avert the foreclosure of the mortgage and other liens on the terminal facility. Such deficiency puts the interests of government at great risk. Indeed, if the unthinkable were to happen, government would be paying several hundreds of millions of dollars, but the mortgage liens on the facility may still be foreclosed by the Senior Lenders just the same. Consequently, the Piatco contracts are also objectionable for grievously failing to adequately protect government's interests. More accurately, the contracts would consistently weaken and do away with protection of government interests. As such, they are therefore grossly lopsided in favor of Piatco and/or its Senior Lenders. While on this subject, it is well to recall the earlier discussion regarding a particularly noticeable alteration of the concept of "Attendant Liabilities." In Section 1.06 of the CA defining the term, the Piatco debts to be assumed/paid by government were qualified by the phrases recorded and from time to time outstanding in the books of the Concessionaire and actually used for the project. These phrases were eliminated from the ARCA's definition of Attendant Liabilities. Since no explanation has been forthcoming from Piatco as to the possible justification for such a drastic change, the only conclusion, possible is that it intends to have all of its debts covered by the guarantee,

regardless of whether or not they are disclosed in its books. This has particular reference to those borrowings which were obtained in violation of the loan covenants requiring Piatco to maintain a minimum 70:30 debt-to-equity ratio, and even if the loan proceeds were not actually used for the project itself. This point brings us back to the guarantee itself. In Section 4.04(c)(vi) of ARCA, the amount which government has guaranteed to pay as termination payment is the greater of either (i) the Appraised Value of the terminal facility or (ii) the aggregate of the Attendant Liabilities. Given that the Attendant Liabilities may include practically any Piatco debt under the sun, it is highly conceivable that their sum may greatly exceed the appraised value of the facility, and government may end up paying very much more than the real worth of Terminal III. (So why did government have to bother with public bidding anyway?) In the final analysis, Section 4.04(c)(iv) to (vi) of the ARCA is diametrically at odds with the spirit and the intent of the BOT Law. The law meant to mobilize private resources (the private sector) to take on the burden and the risks of financing the construction, operation and maintenance of relevant infrastructure and development projects for the simple reason that government is not in a position to do so. By the same token, government guarantee was prohibited, since it would merely defeat the purpose and raison d'tre of a build-operate-and-transfer project to be undertaken by the private sector. To the extent that the project proponent is able to obtain loans to fund the project, those risks are shared between the project proponent on the one hand, and its banks and other lenders on the other. But where the proponent or its lenders manage to cajol or coerce the government into extending a guarantee of payment of the loan obligations, the risks assumed by the lenders are passed right back to government. I cannot understand why, in the instant case, government cheerfully assented to re-assuming the risks of the project when it gave the prohibited guarantee and thus simply negated the very purpose of the BOT Law and the protection it gives the government. Contract Termination Provisions in the Piatco Contracts Are Void The BOT Law as amended provides for contract termination as follows: "Sec. 7. Contract Termination. - In the event that a project is revoked, cancelled or terminated by the government through no fault of the project proponent or by mutual agreement, the Government shall compensate the said project proponent for its actual expenses incurred in the project plus a reasonable rate of return thereon not exceeding that stated in the contract as of the date of such revocation, cancellation or termination: Provided, That the interest of the Government in this instances [sic] shall be duly insured with the Government Service Insurance System or any other insurance entity duly accredited by the Office of the Insurance Commissioner: Provided, finally, That the cost of the insurance coverage shall be included in the terms and conditions of the bidding referred to above. "In the event that the government defaults on certain major obligations in the contract and such failure is not remediable or if remediable shall remain unremedied for an unreasonable length of time, the project proponent/contractor may, by prior notice to the concerned national government agency or local government unit specifying the turn-over date, terminate the contract. The project proponent/contractor shall be reasonably compensated by the Government for equivalent or proportionate contract cost as defined in the contract." The foregoing statutory provision in effect provides for the following limited instances when termination compensation may be allowed:

1. Termination by the government through no fault of the project proponent 2. Termination upon the parties' mutual agreement 3. Termination by the proponent due to government's default on certain major contractual obligations To emphasize, the law does not permit compensation for the project proponent when contract termination is due to the proponent's own fault or breach of contract. This principle was clearly violated in the Piatco Contracts. The ARCA stipulates that government is to pay termination compensation to Piatco even when termination is initiated by government for the following causes: "(i) Failure of Concessionaire to finish the Works in all material respects in accordance with the Tender Design and the Timetable; (ii) Commission by Concessionaire of a material breach of this Agreement . . .; (iii) . . . a change in control of Concessionaire arising from the sale, assignment, transfer or other disposition of capital stock which results in an ownership structure violative of statutory or constitutional limitations; (iv) A pattern of continuing or repeated non-compliance, willful violation, or non-performance of other terms and conditions hereof which is hereby deemed a material breach of this Agreement . . ."62 As if that were not bad enough, the ARCA also inserted into Section 8.01 the phrase "Subject to Section 4.04." The effect of this insertion is that in those instances where government may terminate the contract on account of Piatco's breach, and it is nevertheless required under the ARCA to make termination compensation to Piatco even though unauthorized by law, such compensation is to be equivalent to the payment amount guaranteed by government - either a) the Appraised Value of the terminal facility or (b) the aggregate of the Attendant Liabilities, whichever amount is greater! Clearly, this condition is not in line with Section 7 of the BOT Law. That provision permits a project proponent to recover the actual expenses it incurred in the prosecution of the project plus a reasonable rate of return not in excess of that provided in the contract; or to be compensated for the equivalent or proportionate contract cost as defined in the contract, in case the government is in default on certain major contractual obligations. Furthermore, in those instances where such termination compensation is authorized by the BOT Law, it is indispensable that the interest of government be duly insured. Section 5.08 the ARCA mandates insurance coverage for the terminal facility; but all insurance policies are to be assigned, and all proceeds are payable, to the Senior Lenders. In brief, the interest being secured by such coverage is that of the Senior Lenders, not that of government. This can hardly be considered compliance with law. In essence, the ARCA provisions on termination compensation result in another unauthorized government guarantee, this time in favor of Piatco. A Prohibited Direct Government Subsidy, Which at the Same Time Is an Assault on the National Honor

Still another contractual provision offensive to law and public policy is Section 8.01(d) of the ARCA, which is a "bolder and badder" version of Section 8.04(d) of the CA. It will be recalled that Section 4-A of the BOT Law as amended prohibits not only direct government guarantees, but likewise a direct government subsidy for unsolicited proposals. Section 13.2. b. iii. of the 1999 IRR defines a direct government subsidy as encompassing "an agreement whereby the Government . . . will . . . postpone any payments due from the proponent." Despite the statutory ban, Section 8.01 (d) of the ARCA provides thus: "(d) The provisions of Section 8.01(a) notwithstanding, and for the purpose of preventing a disruption of the operations in the Terminal and/or Terminal Complex, in the event that at any time Concessionaire is of the reasonable opinion that it shall be unable to meet a payment obligation owed to the Senior Lenders, Concessionaire shall give prompt notice to GRP, through DOTC/MIAA and to the Senior Lenders. In such circumstances, the Senior Lenders (or the Senior Lenders' Representative) may ensure that after making provision for administrative expenses and depreciation, the cash resources of Concessionaire shall first be used and applied to meet all payment obligations owed to the Senior Lenders. Any excess cash, after meeting such payment obligations, shall be earmarked for the payment of all sums payable by Concessionaire to GRP under this Agreement. If by reason of the foregoing GRP should be unable to collect in full all payments due to GRP under this Agreement, then the unpaid balance shall be payable within a 90-day grace period counted from the relevant due date, with interest per annum at the rate equal to the average 91-day Treasury Bill Rate as of the auction date immediately preceding the relevant due date. If payment is not effected by Concessionaire within the grace period, then a spread of five (5%) percent over the applicable 91-day Treasury Bill Rate shall be added on the unpaid amount commencing on the expiry of the grace period up to the day of full payment. When the temporary illiquidity of Concessionaire shall have been corrected and the cash position of Concessionaire should indicate its ability to meet its maturing obligations, then the provisions set forth under this Section 8.01(d) shall cease to apply. The foregoing remedial measures shall be applicable only while there remains unpaid and outstanding amounts owed to the Senior Lenders." (Emphasis supplied) By any manner of interpretation or application, Section 8.01(d) of the ARCA clearly mandates the indefinite postponement of payment of all of Piatco's obligations to the government, in order to ensure that Piatco's obligations to the Senior Lenders are paid in full first. That is nothing more or less than the direct government subsidy prohibited by the BOT Law and the IRR. The fact that Piatco will pay interest on the unpaid amounts owed to government does not change the situation or render the prohibited subsidy any less unacceptable. But beyond the clear violations of law, there are larger issues involved in the ARCA. Earlier, I mentioned that Section 8.01(d) of the ARCA completely eliminated the proviso in Section 8.04(d) of the CA which gave government the right to appoint a financial controller to manage the cash position of Piatco during situations of financial distress. Not only has government been deprived of any means of monitoring and managing the situation; worse, as can be seen from Section 8.01(d) above-quoted, the Senior Lenders have effectively locked in on the right to exercise financial controllership over Piatco and to allocate its cash resources to the payment of all amounts owed to the Senior Lenders before allowing any payment to be made to government. In brief, this particular provision of the ARCA has placed in the hands of foreign lenders the power and the authority to determine how much (if at all) and when the Philippine government (as grantor of the franchise) may be allowed to receive from Piatco. In that situation, government will be at the mercy of the

foreign lenders. This is a situation completely contrary to the rationale of the BOT Law and to public policy. The aforesaid provision rouses mixed emotions - shame and disgust at the parties' (especially the government officials') docile submission and abject servitude and surrender to the imperious and excessive demands of the foreign lenders, on the one hand; and vehement outrage at the affront to the sovereignty of the Republic and to the national honor, on the other. It is indeed time to put an end to such an unbearable, dishonorable situation. The Piatco Contracts Unarguably Violate Constitutional Injunctions I will now discuss the manner in which the Piatco Contracts offended the Constitution. The Exclusive Right Granted to Piatco to Operate a Public Utility Is Prohibited by the Constitution While Section 2.02 of the ARCA spoke of granting to Piatco "a franchise to operate and maintain the Terminal Complex," Section 3.02(a) of the same ARCA granted to Piatco, for the entire term of the concession agreement, "the exclusive right to operate a commercial international passenger terminal within the Island of Luzon" with the exception of those three terminals already existing63 at the time of execution of the ARCA. Section 11 of Article XII of the Constitution prohibits the grant of a "franchise, certificate, or any other form of authorization for the operation of a public utility" that is "exclusive in character." In its Opinion No. 078, Series of 1995, the Department of justice held that "the NAIA Terminal III which . . . is a 'terminal for public use' is a public utility." Consequently, the constitutional prohibition against the exclusivity of a franchise applies to the franchise for the operation of NAIA Terminal III as well. What was granted to Piatco was not merely a franchise, but an "exclusive right" to operate an international passenger terminal within the "Island of Luzon." What this grant effectively means is that the government is now estopped from exercising its inherent power to award any other person another franchise or a right to operate such a public utility, in the event public interest in Luzon requires it. This restriction is highly detrimental to government and to the public interest. Former Secretary of Justice Hernando B. Perez expressed this point well in his Memorandum for the President dated 21 May 2002: "Section 3.02 on 'Exclusivity' "This provision gives to PIATCO (the Concessionaire) the exclusive right to operate a commercial international airport within the Island of Luzon with the exception of those already existing at the time of the execution of the Agreement, such as the airports at Subic, Clark and Laoag City. In the case of the Clark International Airport, however, the provision restricts its operation beyond its design capacity of 850,000 passengers per annum and the operation of new terminal facilities therein until after the new NAIA Terminal III shall have consistently reached or exceeded its design capacity of ten (10) million passenger capacity per year for three (3) consecutive years during the concession period. "This is an onerous and disadvantageous provision. It effectively grants PIATCO a monopoly in Luzon and ties the hands of government in the matter of developing new airports which may be found expedient and necessary in carrying out any future plan for an inter-modal transportation system in Luzon.

"Additionally, it imposes an unreasonable restriction on the operation of the Clark International Airport which could adversely affect the operation and development of the Clark Special Economic Zone to the economic prejudice of the local constituencies that are being benefited by its operation." (Emphasis supplied) While it cannot be gainsaid that an enterprise that is a public utility may happen to constitute a monopoly on account of the very nature of its business and the absence of competition, such a situation does not however constitute justification to violate the constitutional prohibition and grant an exclusive franchise or exclusive right to operate a public utility. Piatco's contention that the Constitution does not actually prohibit monopolies is beside the point. As correctly argued,64 the existence of a monopoly by a public utility is a situation created by circumstances that do not encourage competition. This situation is different from the grant of a franchise to operate a public utility, a privilege granted by government. Of course, the grant of a franchise may result in a monopoly. But making such franchise exclusive is what is expressly proscribed by the Constitution. Actually, the aforementioned Section 3.02 of the ARCA more than just guaranteed exclusivity; it also guaranteed that the government will not improve or expand the facilities at Clark - and in fact is required to put a cap on the latter's operations - until after Terminal III shall have been operated at or beyond its peak capacity for three consecutive years.65 As counsel for public respondents pointed out, in the real world where the rate of influx of international passengers can fluctuate substantially from year to year, it may take many years before Terminal III sees three consecutive years' operations at peak capacity. The Diosdado Macapagal International Airport may thus end up stagnating for a long time. Indeed, in order to ensure greater profits for Piatco, the economic progress of a region has had to be sacrificed. The Piatco Contracts Violate the Time Limitation on Franchises Section 11 of Article XII of the Constitution also provides that "no franchise, certificate or any other form of authorization for the operation of a public utility shall be . . . for a longer period than fifty years." After all, a franchise held for an unreasonably long time would likely give rise to the same evils as a monopoly. The Piatco Contracts have come up with an innovative way to circumvent the prohibition and obtain an extension. This fact can be gleaned from Section 8.03(b) of the ARCA, which I quote thus: "Sec. 8.03. Termination Procedure and Consequences of Termination. a) x x x xxx xxx

b) In the event the Agreement is terminated pursuant to Section 8.01 (b) hereof, Concessionaire shall be entitled to collect the Liquidated Damages specified in Annex 'G'. The full payment by GRP to Concessionaire of the Liquidated Damages shall be a condition precedent to the transfer by Concessionaire to GRP of the Development Facility. Prior to the full payment of the Liquidated Damages, Concessionaire shall to the extent practicable continue to operate the Terminal and the Terminal Complex and shall be entitled to retain and withhold all payments to GRP for the purpose of offsetting the same against the Liquidated Damages. Upon full payment of the Liquidated Damages, Concessionaire shall immediately transfer the Development Facility to GRP on 'as-is-where-is' basis." The aforesaid easy payment scheme is less beneficial than it first appears. Although it enables government to avoid having to make outright payment of an obligation that will likely run into billions of

pesos, this easy payment plan will nevertheless cost government considerable loss of income, which it would earn if it were to operate Terminal III by itself. Inasmuch as payments to the concessionaire (Piatco) will be on "installment basis," interest charges on the remaining unpaid balance would undoubtedly cause the total outstanding balance to swell. Piatco would thus be entitled to remain in the driver's seat and keep operating the terminal for an indefinite length of time. The Contracts Create Two Monopolies for Piatco By way of background, two monopolies were actually created by the Piatco contracts. The first and more obvious one refers to the business of operating an international passenger terminal in Luzon, the business end of which involves providing international airlines with parking space for their aircraft, and airline passengers with the use of departure and arrival areas, check-in counters, information systems, conveyor systems, security equipment and paraphernalia, immigrations and customs processing areas; and amenities such as comfort rooms, restaurants and shops. In furtherance of the first monopoly, the Piatco Contracts stipulate that the NAIA Terminal III will be the only facility to be operated as an international passenger terminal;66 that NAIA Terminals I and II will no longer be operated as such;67 and that no one (including the government) will be allowed to compete with Piatco in the operation of an international passenger terminal in the NAIA Complex.68 Given that, at this time, the government and Piatco are the only ones engaged in the business of operating an international passenger terminal, I am not acutely concerned with this particular monopolistic situation. There was however another monopoly within the NAIA created by the subject contracts for Piatco - in the business of providing international airlines with the following: groundhandling, in-flight catering, cargo handling, and aircraft repair and maintenance services. These are lines of business activity in which are engaged many service providers (including the petitioners-in-intervention), who will be adversely affected upon full implementation of the Piatco Contracts, particularly Sections 3.01(d)69 and (e)70 of both the ARCA and the CA. On the one hand, Section 3.02(a) of the ARCA makes Terminal III the only international passenger terminal at the NAIA, and therefore the only place within the NAIA Complex where the business of providing airport-related services to international airlines may be conducted. On the other hand, Section 3.01(d) of the ARCA requires government, through the MIAA, not to allow service providers with expired MIAA contracts to renew or extend their contracts to render airport-related services to airlines. Meanwhile, Section 3.01(e) of the ARCA requires government, through the DOTC and MIAA, not to allow service providers - those with subsisting concession agreements for services and operations being conducted at Terminal I - to carry over their concession agreements, services and operations to Terminal III, unless they first enter into a separate agreement with Piatco. The aforementioned provisions vest in Piatco effective and exclusive control over which service provider may and may not operate at Terminal III and render the airport-related services needed by international airlines. It thereby possesses the power to exclude competition. By necessary implication, it also has effective control over the fees and charges that will be imposed and collected by these service providers. This intention is exceedingly clear in the declaration by Piatco that it is "completely within its rights to exclude any party that it has not contracted with from NAIA Terminal III."71 Worse, there is nothing whatsoever in the Piatco Contracts that can serve to restrict, control or regulate the concessionaire's discretion and power to reject any service provider and/or impose any term or

condition it may see fit in any contract it enters into with a service provider. In brief, there is no safeguard whatsoever to ensure free and fair competition in the service-provider sector. In the meantime, and not surprisingly, Piatco is first in line, ready to exploit the unique business opportunity. It announced72 that it has accredited three groundhandlers for Terminal III. Aside from the Philippine Airlines, the other accredited entities are the Philippine Airport and Ground Services Globeground, Inc. ("PAGSGlobeground") and the Orbit Air Systems, Inc. ("Orbit"). PAGSGlobeground is a wholly-owned subsidiary of the Philippine Airport and Ground Services, Inc. or PAGS,73 while Orbit is a wholly-owned subsidiary of Friendship Holdings, Inc.,74 which is in turn owned 80 percent by PAGS.75 PAGS is a service provider owned 60 percent by the Cheng Family;76 it is a stockholder of 35 percent of Piatco77 and is the latter's designated contractor-operator for NAIA Terminal III.78 Such entry into and domination of the airport-related services sector appear to be very much in line with the following provisions contained in the First Addendum to the Piatco Shareholders Agreement,79 executed on July 6, 1999, which appear to constitute a sort of master plan to create a monopoly and combinations in restraint of trade: "11. The Shareholders shall ensure: a. x x x xxx x x x.;

b. That (Phil. Airport and Ground Services, Inc.) PAGS and/or its designated Affiliates shall, at all times during the Concession Period, be exclusively authorized by (PIATCO) to engage in the provision of ground-handling, catering and fueling services within the Terminal Complex. c. That PAIRCARGO and/or its designated Affiliate shall, during the Concession Period, be the only entities authorized to construct and operate a warehouse for all cargo handling and related services within the Site." Precisely, proscribed by our Constitution are the monopoly and the restraint of trade being fostered by the Piatco Contracts through the erection of barriers to the entry of other service providers into Terminal III. In Tatad v. Secretary of the Department of Energy,80 the Court ruled: ". . . [S]ection 19 of Article XII of the Constitution . . . mandates: '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.' "A monopoly is a privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive right or power to carry on a particular business or trade, manufacture a particular article, or control the sale or the whole supply of a particular commodity. It is a form of market structure in which one or only a few firms dominate the total sales of a product or service. On the other hand, a combination in restraint of trade is an agreement or understanding between two or more persons, in the form of a contract, trust, pool, holding company, or other form of association, for the purpose of unduly restricting competition, monopolizing trade and commerce in a certain commodity, controlling its production, distribution and price, or otherwise interfering with freedom of trade without statutory authority. Combination in restraint of trade refers to the means while monopoly refers to the end. "x x x xxx xxx

"Section 19, Article XII of our Constitution is anti-trust in history and in spirit. It espouses competition. The desirability of competition is the reason for the prohibition against restraint of trade, the reason for the interdiction of unfair competition, and the reason for regulation of unmitigated monopolies. Competition is thus the underlying principle of [S]ection 19, Article XII of our Constitution, . . ."81 Gokongwei Jr. v. Securities and Exchange Commission82 elucidates the criteria to be employed: "A 'monopoly' embraces any combination the tendency of which is to prevent competition in the broad and general sense, or to control prices to the detriment of the public. In short, it is the concentration of business in the hands of a few. The material consideration in determining its existence is not that prices are raised and competition actually excluded, but that power exists to raise prices or exclude competition when desired."83 (Emphasis supplied) The Contracts Encourage Monopolistic Pricing, Too Aside from creating a monopoly, the Piatco contracts also give the concessionaire virtually limitless power over the charging of fees, rentals and so forth. What little "oversight function" the government might be able and minded to exercise is less than sufficient to protect the public interest, as can be gleaned from the following provisions: "Sec. 6.06. Adjustment of Non-Public Utility Fees and Charges "For fees, rentals and charges constituting Non-Public Utility Revenues, Concessionaire may make any adjustments it deems appropriate without need for the consent of GRP or any government agency subject to Sec. 6.03(c)." Section 6.03(c) in turn provides: "(c) Concessionaire shall at all times be judicious in fixing fees and charges constituting Non-Public Utility Revenues in order to ensure that End Users are not unreasonably deprived of services. While the vehicular parking fee, porterage fee and greeter/wellwisher fee constitute Non-Public Utility Revenues of Concessionaire, GRP may require Concessionaire to explain and justify the fee it may set from time to time, if in the reasonable opinion of GRP the said fees have become exorbitant resulting in the unreasonable deprivation of End Users of such services." It will be noted that the above-quoted provision has no teeth, so the concessionaire can defy the government without fear of any sanction. Moreover, Section 6.06 - taken together with Section 6.03(c) of the ARCA - falls short of the standard set by the BOT Law as amended, which expressly requires in Section 2(b) that the project proponent is "allowed to charge facility users appropriate tolls, fees, rentals and charges not exceeding those proposed in its bid or as negotiated and incorporated in the contract x x x." The Piatco Contracts Violate Constitutional Prohibitions Against Impairment of Contracts and Deprivation of Property Without Due Process Earlier, I discussed how Section 3.01(e)84 of both the CA and the ARCA requires government, through DOTC/MIAA, not to permit the carry-over to Terminal III of the services and operations of certain service providers currently operating at Terminal I with subsisting contracts.

By the In-Service Date, Terminal III shall be the only facility to be operated as an international passenger terminal at the NAIA;85 thus, Terminals I and II shall no longer operate as such,86 and no one shall be allowed to compete with Piatco in the operation of an international passenger terminal in the NAIA.87 The bottom line is that, as of the In-Service Date, Terminal III will be the only terminal where the business of providing airport-related services to international airlines and passengers may be conducted at all. Consequently, government through the DOTC/MIAA will be compelled to cease honoring existing contracts with service providers after the In-Service Date, as they cannot be allowed to operate in Terminal III. In short, the CA and the ARCA obligate and constrain government to break its existing contracts with these service providers. Notably, government is not in a position to require Piatco to accommodate the displaced service providers, and it would be unrealistic to think that these service providers can perform their service contracts in some other international airport outside Luzon. Obviously, then, these displaced service providers are - to borrow a quaint expression - up the river without a paddle. In plainer terms, they will have lost their businesses entirely, in the blink of an eye. What we have here is a set of contractual provisions that impair the obligation of contracts and contravene the constitutional prohibition against deprivation of property without due process of law.88 Moreover, since the displaced service providers, being unable to operate, will be forced to close shop, their respective employees - among them Messrs. Agan and Lopez et al. - have very grave cause for concern, as they will find themselves out of employment and bereft of their means of livelihood. This situation comprises still another violation of the constitution prohibition against deprivation of property without due process. True, doing business at the NAIA may be viewed more as a privilege than as a right. Nonetheless, where that privilege has been availed of by the petitioners-in-intervention service providers for years on end, a situation arises, similar to that in American Inter-fashion v. GTEB.89 We held therein that a privilege enjoyed for seven years "evolved into some form of property right which should not be removed x x x arbitrarily and without due process." Said pronouncement is particularly relevant and applicable to the situation at bar because the livelihood of the employees of petitioners-intervenors are at stake. The Piatco Contracts Violate Constitutional Prohibition Against Deprivation of Liberty Without Due Process The Piatco Contracts by locking out existing service providers from entry into Terminal III and restricting entry of future service providers, thereby infringed upon the freedom - guaranteed to and heretofore enjoyed by international airlines - to contract with local service providers of their choice, and vice versa. Both the service providers and their client airlines will be deprived of the right to liberty, which includes the right to enter into all contracts,90 and/or the right to make a contract in relation to one's business.91 By Creating New Financial Obligations for Government, Supplements to the ARCA Violate the Constitutional Ban on Disbursement of Public Funds Without Valid Appropriation

Clearly prohibited by the Constitution is the disbursement of public funds out of the treasury, except in pursuance of an appropriation made by law.92 The immediate effect of this constitutional ban is that all the various agencies of government are constrained to limit their expenditures to the amounts appropriated by law for each fiscal year; and to carefully count their cash before taking on contractual commitments. Giving flesh and form to the injunction of the fundamental law, Sections 46 and 47 of Executive Order 292, otherwise known as the Administrative Code of 1987, provide as follows: "Sec. 46. Appropriation Before Entering into Contract. - (1) No contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed expenditure; and . . "Sec. 47. Certificate Showing Appropriation to Meet Contract. - Except in the case of a contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for three (3) months, or banking transactions of government-owned or controlled banks, no contract involving the expenditure of public funds by any government agency shall be entered into or authorized unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current calendar year is available for expenditure on account thereof, subject to verification by the auditor concerned. The certificate signed by the proper accounting official and the auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished." Referring to the aforequoted provisions, this Court has held that "(I)t is quite evident from the tenor of the language of the law that the existence of appropriations and the availability of funds are indispensable pre-requisites to or conditions sine qua non for the execution of government contracts. The obvious intent is to impose such conditions as a priori requisites to the validity of the proposed contract."93 Notwithstanding the constitutional ban, statutory mandates and Jurisprudential precedents, the three Supplements to the ARCA, which were not approved by NEDA, imposed on government the additional burden of spending public moneys without prior appropriation. In the First Supplement ("FS") dated August 27, 1999, the following requirements were imposed on the government: To construct, maintain and keep in good repair and operating condition all airport support services, facilities, equipment and infrastructure owned and/or operated by MIAA, which are not part of the Project or which are located outside the Site, even though constructed by Concessionaire - including the access road connecting Terminals II and III and the taxilane, taxiways and runways To obligate the MIAA to provide funding for the upkeep, maintenance and repair of the airports and facilities owned or operated by it and by third persons under its control in order to ensure compliance with international standards; and holding MIAA liable to Piatco for the latter's losses, expenses and damages as well as for the latter's liability to third persons, in case MIAA fails to perform such obligations; in addition, MIAA will also be liable for the incremental and consequential costs of the remedial work done by Piatco on account of the former's default.

 Section 4 of the FS imposed on government ten (10) "Additional Special Obligations ," including the following:

Providing thru MIAA the land required by Piatco for the taxilane and one taxiway, at no cost to Piatco

Implementing the government's existing storm drainage master plan

Coordinating with DPWH the financing, implementation and completion of the following works before the In-Service Date: three left-turning overpasses (Edsa to Tramo St., Tramo to Andrews Ave., and Manlunas Road to Sales Ave.) and a road upgrade and improvement program involving widening, repair and resurfacing of Sales Road, Andrews Avenue and Manlunas Road; improvement of Nichols Interchange; and removal of squatters along Andrews Avenue

Dealing directly with BCDA and the Philippine Air Force in acquiring additional land or right of way for the road upgrade and improvement program

Requiring government to work for the immediate reversion to MIAA of the Nayong Pilipino National Park, in order to permit the building of the second west parallel taxiway Section 5 of the FS also provides that in lieu of the access tunnel, a surface access road (T2-T3) will be constructed. This provision requires government to expend funds to purchase additional land from Nayong Pilipino and to clear the same in order to be able to deliver clean possession of the site to Piatco, as required in Section 5(c) of the FS. On the other hand, the Third Supplement ("TS") obligates the government to deliver, within 120 days from date thereof, clean possession of the land on which the T2-T3 Road is to be constructed. The foregoing contractual stipulations undeniably impose on government the expenditures of public funds not included in any congressional appropriation or authorized by any other statute. Piatco however attempts to take these stipulations out of the ambit of Sections 46 and 47 of the Administrative Code by characterizing them as stipulations for compliance on a "best-efforts basis" only. To determine whether the additional obligations under the Supplements may really be undertaken on a best-efforts basis only, the nature of each of these obligations must be examined in the context of its relevance and significance to the Terminal III Project, as well as of any adverse impact that may result if such obligation is not performed or undertaken on time. In short, the criteria for determining whether the best-efforts basis will apply is whether the obligations are critical to the success of the Project and, accordingly, whether failure to perform them (or to perform them on time) could result in a material breach of the contract. Viewed in this light, the "Additional Special Obligations" set out in Section 4 of the FS take on a different aspect. In particular, each of the following may all be deemed to play a major role in the successful and timely prosecution of the Terminal III Project: the obtention of land required by PIATCO for the taxilane and taxiway; the implementation of government's existing storm drainage master plan; and coordination

with DPWH for the completion of the three left-turning overpasses before the In-Service Date, as well as acquisition and delivery of additional land for the construction of the T2-T3 access road. Conversely, failure to deliver on any of these obligations may conceivably result in substantial prejudice to the concessionaire, to such an extent as to constitute a material breach of the Piatco Contracts. Whereupon, the concessionaire may outrightly terminate the Contracts pursuant to Section 8.01(b)(i) and (ii) of the ARCA and seek payment of Liquidated Damages in accordance with Section 8.02(a) of the ARCA; or the concessionaire may instead require government to pay the Incremental and Consequential Losses under Section 1.23 of the ARCA.94 The logical conclusion then is that the obligations in the Supplements are not to be performed on a best-efforts basis only, but are unarguably mandatory in character. Regarding MIAA's obligation to coordinate with the DPWH for the complete implementation of the road upgrading and improvement program for Sales, Andrews and Manlunas Roads (which provide access to the Terminal III site) prior to the In-Service Date, it is essential to take note of the fact that there was a pressing need to complete the program before the opening of Terminal III.95 For that reason, the MIAA was compelled to enter into a memorandum of agreement with the DPWH in order to ensure the timely completion of the road widening and improvement program. MIAA agreed to advance the total amount of P410.11 million to DPWH for the works, while the latter was committed to do the following: "2.2.8. Reimburse all advance payments to MIAA including but not limited to interest, fees, plus other costs of money within the periods CY2004 and CY2006 with payment of no less than One Hundred Million Pesos (PhP100M) every year. "2.2.9. Perform all acts necessary to include in its CY2004 to CY2006 budget allocation the repayments for the advances made by MIAA, to ensure that the advances are fully repaid by CY2006. For this purpose, DPWH shall include the amounts to be appropriated for reimbursement to MIAA in the "Not Needing Clearance" column of their Agency Budget Matrix (ABM) submitted to the Department of Budget and Management." It can be easily inferred, then, that DPWH did not set aside enough funds to be able to complete the upgrading program for the crucially situated access roads prior to the targeted opening date of Terminal III; and that, had MIAA not agreed to lend the P410 Million, DPWH would not have been able to complete the program on time. As a consequence, government would have been in breach of a material obligation. Hence, this particular undertaking of government may likewise not be construed as being for best-efforts compliance only. They also Infringe on the Legislative Prerogative and Power Over the Public Purse But the particularly sad thing about this transaction between MIAA and DPWH is the fact that both agencies were maneuvered into (or allowed themselves to be maneuvered into) an agreement that would ensure delivery of upgraded roads for Piatco's benefit, using funds not allocated for that purpose. The agreement would then be presented to Congress as a done deal. Congress would thus be obliged to uphold the agreement and support it with the necessary allocations and appropriations for three years, in order to enable DPWH to deliver on its committed repayments to MIAA. The net result is an infringement on the legislative power over the public purse and a diminution of Congress' control over expenditures of public funds - a development that would not have come about, were it not for the Supplements. Very clever but very illegal!

EPILOGUE What Do We Do Now? In the final analysis, there remains but one ultimate question, which I raised during the Oral Argument on December 10, 2002: What do we do with the Piatco Contracts and Terminal III?96 (Feeding directly into the resolution of the decisive question is the other nagging issue: Why should we bother with determining the legality and validity of these contracts, when the Terminal itself has already been built and is practically complete?) Prescinding from all the foregoing disquisition, I find that all the Piatco contracts, without exception, are void ab initio, and therefore inoperative. Even the very process by which the contracts came into being the bidding and the award - has been riddled with irregularities galore and blatant violations of law and public policy, far too many to ignore. There is thus no conceivable way, as proposed by some, of saving one (the original Concession Agreement) while junking all the rest. Neither is it possible to argue for the retention of the Draft Concession Agreement (referred to in the various pleadings as the Contract Bidded Out) as the contract that should be kept in force and effect to govern the situation, inasmuch as it was never executed by the parties. What Piatco and the government executed was the Concession Agreement which is entirely different from the Draft Concession Agreement. Ultimately, though, it would be tantamount to an outrageous, grievous and unforgivable mutilation of public policy and an insult to ourselves if we opt to keep in place a contract - any contract - for to do so would assume that we agree to having Piatco continue as the concessionaire for Terminal III. Despite all the insidious contraventions of the Constitution, law and public policy Piatco perpetrated, keeping Piatco on as concessionaire and even rewarding it by allowing it to operate and profit from Terminal III - instead of imposing upon it the stiffest sanctions permissible under the laws - is unconscionable. It is no exaggeration to say that Piatco may not really mind which contract we decide to keep in place. For all it may care, we can do just as well without one, if we only let it continue and operate the facility. After all, the real money will come not from building the Terminal, but from actually operating it for fifty or more years and charging whatever it feels like, without any competition at all. This scenario must not be allowed to happen. If the Piatco contracts are junked altogether as I think they should be, should not AEDC automatically be considered the winning bidder and therefore allowed to operate the facility? My answer is a stone-cold 'No'. AEDC never won the bidding, never signed any contract, and never built any facility. Why should it be allowed to automatically step in and benefit from the greed of another? Should government pay at all for reasonable expenses incurred in the construction of the Terminal? Indeed it should, otherwise it will be unjustly enriching itself at the expense of Piatco and, in particular, its funders, contractors and investors - both local and foreign. After all, there is no question that the State needs and will make use of Terminal III, it being part and parcel of the critical infrastructure and transportation-related programs of government. In Melchor v. Commission on Audit,97 this Court held that even if the contract therein was void, the principle of payment by quantum meruit was found applicable, and the contractor was allowed to recover

the reasonable value of the thing or services rendered (regardless of any agreement as to the supposed value), in order to avoid unjust enrichment on the part of government. The principle of quantum meruit was likewise applied in Eslao v. Commission on Audit,98 because to deny payment for a building almost completed and already occupied would be to permit government to unjustly enrich itself at the expense of the contractor. The same principle was applied in Republic v. Court of Appeals.99 One possible practical solution would be for government - in view of the nullity of the Piatco contracts and of the fact that Terminal III has already been built and is almost finished - to bid out the operation of the facility under the same or analogous principles as build-operate-and-transfer projects. To be imposed, however, is the condition that the winning bidder must pay the builder of the facility a price fixed by government based on quantum meruit; on the real, reasonable - not inflated - value of the built facility. How the payment or series of payments to the builder, funders, investors and contractors will be staggered and scheduled, will have to be built into the bids, along with the annual guaranteed payments to government. In this manner, this whole sordid mess could result in something truly beneficial for all, especially for the Filipino people. WHEREFORE, I vote to grant the Petitions and to declare the subject contracts NULL and VOID.

Footnotes 1 An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector. 2 G.R. No. 155001. 3 G.R. No. 155547. 4 G.R. No. 155661. 5 An international airport is any nation's gateway to the world, the first contact of foreigners with the Philippine Republic, especially those foreigners who have not been in contact with the wonderful exports of the Philippine economy, those foreigners who have not had the benefit of enjoying Philippine export products. Because for them, when they see your products, that is the face of the Philippines they see. But if they are not exposed to your products, then it's the airport that's the first face of the Philippines they see. Therefore, it's not only a matter of opening yet, but making sure that it is a world class airport that operates without any hitches at all and without the slightest risk to travelers. But it's also emerging as a test case of my administration's commitment to fight corruption to rid our state from the hold of any vested interest, the Solicitor General, and the Justice Department have determined that all five agreements covering the NAIA Terminal 3, most of which were contracted in the previous administration, are null and void. I cannot honor contracts which the Executive Branch's legal offices have concluded (as) null and void. I am, therefore, ordering the Department of Justice and the Presidential Anti-Graft Commission to investigate any anomalies and prosecute all those found culpable in connection with the NAIA contract. But despite all of the problems involving the PIATCO contracts, I am assuring our people, our travelers, our exporters, my administration will open the terminal even if it requires invoking the whole powers of the

Presidency under the Constitution and we will open a safe, secure and smoothly functioning airport, a world class airport, as world class as the exporters we are honoring today. (Speech of President Arroyo, emphasis supplied) 6 Art. VIII, Sec. 1, Philippine Constitution. 7 MIASCOR, MACROASIA-EUREST, MACROASIA OGDEN and Philippine Airlines. 8 Sections 3.01 (a) and 3.02, 1997 Concession Agreement; Sections 3.01 (d) and (e) and 3.02, ARCA. 9 Kilosbayan, Inc. v. Morato, G.R. No. 118910, July 17, 1995, 246 SCRA 540, 562-563, citing Baker v. Carr, 369 U.S. 186, 7 L. Ed. 633 (1962). 10 Id.; Bayan v. Zamora, G.R. No. 138570, October 10, 2000; 342 SCRA 449, 478. 11 Rollo, G.R. No. 155547, p.12. 12 Article VI, Section 29 (1). 13 G.R. No. 39842, March 28, 1934, 59 Phil 823. 14 G.R. No. 29627, December 19, 1989; 180 SCRA 254, 260-261. 15 G. R. No. 113375, May 5, 1994. 16 Id. 17 Id. citing Tan vs. Macapagal, 43 SCRA 677, 680 [1972]. 18 Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, G. R. No. 78742, July 14, 1989; 175 SCRA 343, 364-365 [1989]. 19 Santiago v. Vasquez, G.R. Nos. 99289-90, January 27, 1993; 217 SCRA 633, 652. 20 G.R. No. 136154, February 7, 2001; 351 SCRA 373, 381. 21 G.R. No. 135362, December 13, 1999; 320 SCRA 610. 22 Del Monte Corporation-USA v. Court of Appeals, G.R. No. 136154, February 7, 2001; 351 SCRA 373, 382. 23 Rollo, G.R. No.155001, pp. 2487-2488. 24 Section 5, R.A. No. 7718. 25 At the United States Dollar-Philippine Peso exchange rate of US$1:P26.239 quoted by the Bangko Sentral ng Pilipinas at that time. 26 Rollo, G.R. No.155001, pp. 2471-2474.

27 Id. at 2475-2477. Derived from the figures on the authorized capital stock and the shares of stock that are subscribed and paid-up. 28 Id. at 2478-2484. 29Member Maximum Amount of Equity Security Bank P528,525,656.55 PAGS 26,735,700.00 Paircargo 3,123,515.00 TOTAL P558,384,871.55

30 Republic of the Philippines vs. Hon. Ignacio C. Capulong, G.R. No. 93359, July 12, 1991; 199 SCRA 134, 146-147. Emphasis supplied. 31 Danville Maritime, Inc. v. Commission on Audit, G.R. No. 85285, July 28, 1989, 175 SCRA 701, 713. Citations omitted. 32 A. Cobacha & D. Lucenario, Law on Public Bidding and Government Contracts 13 (1960). 33 Diamond v. City of Mankato, et al., 93 N.W. 912. 34 G.R. No. L-5439, December 29, 1954; 96 Phil 368. 35 Id. at 375. 36 Section 6.03, draft Concession Agreement. 37 Sections 1.33 and 6.03(b), 1997 Concession Agreement. 38 Sections 1.27 and 6.06, 1997 Concession Agreement. 39 Emphasis supplied. 40 Emphasis supplied. 41 Referred to as "Passenger Service Fee" under the draft Concession Agreement.

42 Section 6.05 Interim Adjustment (a) Concessionaire may apply for and, if warranted, may be granted an interim adjustment of the fees and charges constituting Public Utility Revenues upon the occurrence of extraordinary events resulting from any of the following: a depreciation since the last adjustment by at least fifteen percent (15%) of the value of the Philippine Peso relative to the US Dollar using the exchange rates published by the Philippine Dealing System as reference; an increase since the last adjustment by at least fifteen percent (15%) in the Metro Manila Consumer Price Index based on National Census and Statistics Office publications; an increase since the last adjustment in MERALCO power rates billing by at least fifteen percent (15%); an increase since the last adjustment in the 180-day Treasury Bill interest rates by at least thirty (30%). xxx xxx xxx

43 Section 6.05, draft Concession Agreement. 44 Section 1.33, 1997 Concession Agreement. 45 Supra note 31. 46 Malaga v. Penachos, Jr., G.R No. 86695, September 3, 1992; 213 SCRA 516, 526. 47 A. Cobacha & D. Lucenario, Law on Public Bidding and Government Contracts 6-7 (1960). 48 Emphasis supplied. 49 Concession Agreement, Art. 4, Sec. 4.04 (b) and (c), Art. 1, Sec. 1.06, July 12, 1997. 50 Ibid. 51 Id. at Art. 4, Sec. 4.04 (c). 52 Record of the Senate Second Regular Session 1993-1994, vol. III, no. 42, p. 362. 53 Republic Act No. 7718, Secs. 2 and 4-A, Implementing Rules and Regulations, Rule 11, Secs. 11.1 and 11.3. 54 Emphasis and caption supplied. 55 Sec. 1.06, ARCA. 56 Republic Act No. 7718, as amended, Sec. 4-A, May 5, 1994; Implementing Rules and Regulations, Rule 10, Sec. 10.1.

57 Implementing Rules and Regulations, Rule 10, Sec. 10.4. 58 North Negros Sugar Co., Inc. v. Hidalgo, G.R. No. 42334, October 31, 1936; Intestate estate of the deceased Florentino San Gil. Josefa R. Oppus v. Bonifacio San Gil, G.R. No. 48115, October 12, 1942; San Diego v. Municipality of Naujan, G.R. No. L-9920, February 29, 1960; Favis vs. Municipality of Sabagan, G.R. No. L-26522, 27 February 1969; City of Manila vs. Tarlac Development Corporation, L24557, L-24469 & L-24481, 31 July 1968; In the matter of the Petition for Declaratory Judgment on Title to Real Property (Quieting of Title) Pechueco Sons Company v. Provincial Board of Antique, G.R. No. L27038, January 30, 1970; Fornilda v. The Branch 164, Regional Trial Court IVth Judicial Region, Pasig, G.R. No. L-72306, October 5, 1988; Laurel v. Civil Service Commission, G.R. No. 71562, October 28, 1991; Davac v. Court of Appeals, G.R. No. 106105, April 21, 1994. 59 Republic Act No. 7718, Sec. 1. 60 III Record of the Constitutional Commission, pp. 266-267 (1986). 61 Id. 62 Except for providing for the suspension of all payments due to the Government for the duration of the takeover, Article V, Section 5.10(b) of the ARCA contains the same provision. Emphasis and caption supplied. 63 Id. 64 Bataan Shipyard and Engineering Co., Inc. v. Presidential Commission on Good Government, G.R. No. 75885, May 27, 1987 citing Freund, The Police Power (Chicago, 1904). 65 Genuino v. Court of Agrarian Relations, G.R. No. L-25035, February 26, 1968. 66 Black's Law Dictionary, 4th Ed., p. 1158. 67 36 Am Jur 480 citing Slaughter-House Cases, 16 Wall. (US) 36, 21 L ed 394. 68 Concession Agreement ("CA") dated July 12, 1997, Art. III, Sec. 3.02(a); Amended and Restated Concession Agreement ("ARCA") dated November 26, 1998, Art. III, Sec. 3.02(a). 69 Ibid. 70 Id. at CA, Art. III, Sec. 3.02(b); ARCA, Art. III, Sec. 3.02(b). 71 The day immediately following the day on which the Certificate of Completion is issued or deemed to be issued. 72 Id. at CA, Art. III, Sec. 3.01(a) and (b); ARCA, Art. III, Sec. 3.01 (a) and (b). 73 Id. at CA, Art. III, Sec. 3.01(d) and (e); ARCA, Art. III, Sec. 3.01(d) and (e). 74 Executive Order No. 903, as amended, Sec. 4 (b) and (c).

75 Art. XII, Sec. 19, Philippine Constitution. 76 Republic Act No. 7718, Sec. 1. 77 Transcript of Oral Arguments, p. 157, December 10, 2002. 78 G.R. No. L-54958, September 2, 1983; 09 Phil. 400. 79 Executive Order No. 903, July 21, 1983, provides: Section 5. Functions, Powers, and Duties. The Authority shall have the following functions, powers and duties: xxx (b) To control, supervise, construct, maintain, operate and provide such facilities or services as shall be necessary for the efficient functioning of the Airport; (c) To promulgate rules and regulations governing the planning, development, maintenance, operation and improvement of the Airport and to control and/or supervise as may be necessary the construction of any structure or the rendition of any service within the Airport; VITUG, J.: 1 Article VIII, Section 5(1), 1987 Constitution. 2 Matuguina Integrated Products, Inc. vs. CA, 263 SCRA 490; Mafinco Trading Corporation vs. Ople, 70 SCRA 139. 3 Mafinco Trading Corporation vs. Ople, supra. 4 Section 1, Rule 63, Rules of Court. 5 In re: Bermudez, 145 SCRA 160. 6 235 SCRA 630, 720. 7 298 SCRA 795. PANGANIBAN, J.: 1 See Kilosbayan, Inc. v. Guingona Jr., 232 SCRA 110, May 5, 1994; and Basco v. Phil. Amusements and Gaming Corporation, 197 SCRA 52, May 14, 1991. 2 COMELEC v. Quijano-Padilla, GR No. 151992, September 18, 2002. 3 Vide: ABS-CBN Broadcasting Corp. v. Commission on Elections, 323 SCRA 811, January 28, 2000; likewise, COMELEC v. Quijano-Padilla, supra.

4 See Respondent PIATCO's Memorandum, pp. 25-26. 5 See public respondents' Memorandum, p. 24. 6 307 SCRA 394, 399, May 19, 1999, per Panganiban, J. 7 175 SCRA 264, July 11, 1989. 8 Supra, Paras, J. 9 As reiterated in Bayan (Bagong Alyansang Makabayan) v. Zamora, 342 SCRA 449, 480-481, October 10, 2000. 10 RA No. 6957 as amended by RA No. 7718. 11 Par. 3.6.1 on page 8 of the Bid Documents. 12 Initially the minimum equity was set at 20%, per Sec. 3.6.4 of the Bid Documents. However, this was later clarified in Bid Bulletin No. 3(B)(6) to read 30% of Project Cost, to bring the same in line with the draft concession agreement's Art. II Sec. 2.01(a), which specifically set the project's debt-to-equity ratio at 70:30, thereby requiring a minimum equity of 30% of project cost. 13 The consortium was composed of Paircargo, PAGS and Security Bank. Paircargo's audited financial statements as of 1993 and 1994 showed a net worth of P2,783,592 and P3,123,515 respectively. PAGS' audited financial statements as of 1995 showed a paid-up capital of P5,000,000 and deposits on future subscriptions of P21,735,700, or an aggregate of P26,735,700 of equity available to invest in the project. Security Bank's audited statements for 1995 showed a net worth of P3,523,504,377. However, the bank's entire net worth was not available for investment in the project since Sec. 21-B of the General Banking Act provides inter alia that a commercial bank's equity investment in any one enterprise, whether allied or non-allied, should not exceed 15% of the net worth of the investing bank. This limitation is reiterated in Sec. 1381.1.a. of the Manual for Banks and Other Financial Intermediaries. Thus, the maximum amount which Security Bank could have legally invested in the project was only P528,525,656.55. And consequently, the maximum amount of equity which the consortium could have put up was only P558,384,871.55. 14 199 SCRA 134, July 12, 1991. 15 Malaga v. Penachos Jr., 213 SCRA 516, September 3, 1992. 16 Part of the bid process under the BOT Law is the right of the originator of an unsolicited proposal to match a price challenge. Pursuant to Sec. 4-A, "in the event another proponent submits a lower price proposal, the original proponent shall have the right to match that price within thirty (30) working days." 17 Cf. Malaga v. Penachos, Jr., supra. 18 11.2, 1994 IRR. 19 Public respondents' Memorandum, pp. 86-87; prepared jointly by the solicitor general, the acting government corporate counsel, and their respective deputies and assistants.

20 Supra, note 14, per Medialdea, J. 21 3.01(d), 3.01(e), 3.02(a), 3.02(b) and 5.15 of the CA. 22 See 1.06 of the CA. 23 3.02 of the CA. 24 2.05 of the CA. 25 The parametric formula referred to in the CA applies only to the following so-called public utility fees: aircraft parking and tacking fees, check-in counter fees and terminal fees. 26 Fernandez, A Treatise on Government Contracts under Philippine Law, 2001 ed., p. 70. 27 96 Phil. 368, December 29, 1954. 28 Id., p. 375, per Paras, CJ. 29 63 SCRA 170, 177-178, March 21, 1975, per Antonio, J. 30 Cf . 1.06 of the ARCA vis--vis 1.06 of the CA. 31 4.04 and 8.01 of the ARCA vis--vis 8.04 of the CA. 32 As cf. Annex "G" of the ARCA vis--vis Annex "G" of the CA. 33 Cf . 8.04(d) of the ARCA vis--vis 9.01(d) of the CA. 34 Cf . 2.05 of the ARCA vis--vis 2.05 of the CA. 35 Cf . 5.08(a) of the ARCA vis--vis 5.08(a) of the CA. 36 Cf . 6.03(a)(i) of the ARCA vis--vis 6.03(a) of the CA. 37 Cf . 8.01(b) and 12.09 of the ARCA vis--vis 8.04(b) and 12.09 of the CA. 38 Cf . 8.03(a)(i) of the ARCA vis--vis 8.06(a)(i) of the CA. 39 2.05(g) of the ARCA. 40 4.04(b) of the ARCA. 41 6.03(c) of the ARCA vis--vis 6.03(c) of the CA. 42 Cf . 8.01(b) of the ARCA vis--vis 8.04(b) of the CA. 43 12.14 of the ARCA.

44 Cf. 1.11(b) and 5.06 of the ARCA vis--vis 1.11(b) and 5.06 of the CA. 45 2 of the FS, amending 1.36 of the ARCA. 46 3 of the FS, amending 2.05(d) of the ARCA. 47 Ibid. 48 4 of the FS, adding 2.05(h) to ARCA. 49 4 of the FS, adding 2.05(i) to ARCA. 50 4 of the FS, adding 2.05(p) to ARCA. 51 Per 4 of the FS, adding 2.05(n) to ARCA. 52 Per 4 of the FS, adding 2.05(o) to ARCA. 53 Per 4 of the FS, adding 2.05(p) to ARCA. 54 Per 4 of the FS, adding 2.05(j) to ARCA. 55 8 of the FS, amending 6.01(c) of the ARCA. 56 9 of the FS, amending 6.02 of the ARCA. 57 Sec. 21 of the SS. 58 Per 3.1 of the TS. 59 Vide 3.4 of the TS. 60 4.2 of the TS. 61 Page 37. 62 8.01 (a) of the ARCA. 63 Namely, the airports at the Subic Bay Freeport Special Economic Zone, the Clark Special Economic Zone, and Laoag City. 64 Memorandum, pp. 5-7, of the petitioners-in-intervention. 65 3.02 a): ". . . With regard to CSEZ, GRP shall ensure that, until such time as the Development Facility Capacity shall have been consistently reached or exceeded for three (3) consecutive years during the Concession Period, (i) Clark International Airport shall not be operated beyond its design capacity of Eight Hundred Fifty Thousand (850,000) passengers per annum and (ii) no new terminal facilities shall be

operated therein. "Development Facility Capacity" refers to the ten million (10,000,000) passenger capacity per year of the Development Facility." 66 3.02(a) of the ARCA and 3.02(a) of the CA. 67 3.02(b) and (c) of the ARCA, and 3.02(b) of the CA. 68 3.02(b) and (c) of the ARCA and 3.02(b) of the CA. Pertinent portions of 3.02(b) of the ARCA are quoted hereinbelow: "(b) On the In-Service Date, GRP shall cause the closure of the Ninoy Aquino International Airport Passenger Terminals I and II as international passenger terminals in order to allow Concessionaire, during the entire Concession Period, to exclusively operate a commercial international passenger terminal within the island of Luzon; provided that the aforesaid exclusive right to operate a commercial international passenger terminal shall be without prejudice to the international passenger terminal operations already existing on the date of this Agreement in SBFSEZ, CSEZ and Laoag City (but subject to the limitation with regard to CSEZ referred to in Section 3.02[a]). Neither shall GRP, DOTC or MIAA use or permit the use of Terminals I and/or II under any arrangement or scheme, for compensation or otherwise, with any party which would directly or indirectly compete with Concessionaire in the latter's operation of and the operations in the Terminal and Terminal Complex, including without limitation the use of Terminals I and/or II for the handling of international traffic; provided that if Terminals I and/or II are operated as domestic passenger terminals, the conduct of any activity therein which under the ordinary course of operating a domestic passenger terminal is normally undertaken, shall not be considered to be in direct or indirect competition with Concessionaire in its operation of the Development Facility." 69 Sec. 3.01(d) of the ARCA and the CA reads as follows: "(d) For the purpose of an orderly transition, MIAA shall not renew any expired concession agreement relative to any service or operation currently being undertaken at the Ninoy Aquino International Airport Passenger Terminal I, or extend any concession agreement which may expire subsequent hereto, except to the extent that the continuation of existing services and operations shall lapse on or before the InService Date. Nothing herein shall be construed to prohibit MIAA from maintaining arrangements for the uninterrupted provision of essential services at the Ninoy Aquino International Airport Passenger Terminal I until the Terminal shall have commenced operations on the In-Service Date, and thereafter, from making such arrangements as are necessary for the utilization of NAIA Passenger Terminal I as a domestic passenger terminal or as a facility other than an international passenger terminal. 70 Sec. 3.01(e) of the ARCA and the CA reads as follows: "(e) GRP confirms that certain concession agreements relative to certain services or operations currently being undertaken at the Ninoy Aquino International Airport Passenger Terminal I have a validity period extending beyond the In-Service Date. GRP, through DOTC/MIAA, confirms that these services and operations shall not be carried over to the Terminal and that Concessionaire is under no legal obligation to permit such carry-over except through a separate agreement duly entered into with Concessionaire. In the event Concessionaire becomes involved in any litigation initiated by any such concessionaire or operator, GRP undertakes and hereby holds Concessionaire free and harmless on a full indemnity basis from and against any loss and/or liability resulting from any such litigation, including the cost of litigation and the reasonable fees paid or payable to Concessionaire's counsel of choice, all such amounts being

fully deductible by way of an offset from any amount which Concessionaire is bound to pay GRP under this Agreement." 71 PIATCO Comment, par. 9, on p. 6. 72 PIATCO letter dated October 14, 2002 addressed to the Board of Airline Representatives, copy attached as Annex "OO-Service Providers". 73 Based on the PAGSGlobeground GIS as of July 2000, attached as Annex "LL-Service Providers" to the Memorandum of petitioners-in-intervention. 74 Based on the Orbit GIS as of August 2000, attached as Annex "MM-Service Providers" to the Memorandum of petitioners-in-intervention. 75 Based on the Friendship Holdings, Inc. GIS as of December 2001, attached as Annex "NN-Service Providers" to the Memorandum of petitioners-in-intervention. 76 Per the Articles of Incorporation of PAGS, attached as Annex "Y-Service Providers" to the petition-inintervention. 77 Per the GIS of Piatco as of May 2000. 78 Per 5.15 of both the CA and the ARCA. 79 Copy of which was presented by Piatco to the Senate Blue Ribbon Committee during committee hearings. 80 281 SCRA 330, November 5, 1997. 81 Id., pp. 355-358, per Puno, J. 82 89 SCRA 336, April 11, 1979. 83 Id., p. 376, per Antonio, J. 84 Please see footnote 70 supra. 85 3.02(a) of the CA and 3.02(a) of the ARCA. 86 3.02(b) of the CA and 3.02(b) and (c) of the ARCA. 87 Ibid. 88 1, Art. III, Constitution. 89 197 SCRA 409, May 23, 1991, per Gutierrez Jr., J. 90 See Rubi v. Provincial Board of Mindoro, 39 Phil. 660, March 7, 1919.

91 Davao Stevedores Mutual Benefit Association v. Compaia Maritima, 90 Phil. 847, February 29, 1952. 92 29(1), Article VI, 1987 Constitution. 93 Commission on Elections v. Quijano-Padilla, GR No. 151992, September 18, 2002, p. 20, per Sandoval-Gutierrez, J. 94 1.23 of the ARCA defines Incremental and Consequential Costs as "additional costs properly documented and reasonably incurred by Concessionaire (including without limitation additional overhead costs, cost of any catch-up program, demobilization, re-mobilization, storage costs, termination penalties, increase in construction costs, additional interest expense, costs, fees and other expenses and increase in the cost of financing) in excess of a budgeted or contracted amount, occasioned by, among other things, delay in the prosecution of Works by reason not attributable to Concessionaire or a deviation from the Tender Design or any suspension or interference with the operation of the Terminal Complex by reason not attributable to Concessionaire. . . ." 95 Memorandum of Agreement between the Manila International Airport Authority and the Department of Public Works and Highways, p. 2. 96 When I asked this question, Atty. Jose A. Bernas replied that if Piatco is deemed a builder in good faith then it may be entitled to some form of compensation under the principle barring unjust enrichment. But if it is found to be a builder in bad faith then it may not be entitled to compensation. (See TSN, December 10, 2002, pp. 58-71.) Faced with the same question, Solicitor General Alfredo L. Benipayo responded that the facility will not be torn down but taken over by government by virtue of police power or eminent domain. (Id., pp. 94-99.) When asked the same question, Atty. Eduardo delos Angeles explained that under the provision on Step in Rights, the senior lenders can designate a qualified operator to operate the facility. (Id., pp. 225-226.) This solution, however, assumes that this contractual provision is valid. 97 200 SCRA 704, August 16, 1991. 98 195 SCRA 730, April 8, 1991. 99 299 SCRA 199, November 25, 1998.

The Lawphil Project - Arellano Law Foundation --------------------------------------------------------------------------------

SUPREME COURT Manila SECOND DIVISION G.R. No. 155336 November 25, 2004

COMMISSION ON HUMAN RIGHTS EMPLOYEES' ASSOCIATION (CHREA) Represented by its President, MARCIAL A. SANCHEZ, JR., petitioner, vs. COMMISSION ON HUMAN RIGHTS, respondent.

DECISION

CHICO-NAZARIO, J.: Can the Commission on Human Rights lawfully implement an upgrading and reclassification of personnel positions without the prior approval of the Department of Budget and Management? Before this Court is a petition for review filed by petitioner Commission on Human Rights Employees' Association (CHREA) challenging the Decision1 dated 29 November 2001 of the Court of Appeals in CAG.R. SP No. 59678 affirming the Resolutions2 dated 16 December 1999 and 09 June 2000 of the Civil Service Commission (CSC), which sustained the validity of the upgrading and reclassification of certain personnel positions in the Commission on Human Rights (CHR) despite the disapproval thereof by the Department of Budget and Management (DBM). Also assailed is the resolution dated 11 September 2002 of the Court of Appeals denying the motion for reconsideration filed by petitioner. The antecedent facts which spawned the present controversy are as follows: On 14 February 1998, Congress passed Republic Act No. 8522, otherwise known as the General Appropriations Act of 1998. It provided for Special Provisions Applicable to All Constitutional Offices Enjoying Fiscal Autonomy. The last portion of Article XXXIII covers the appropriations of the CHR. These special provisions state: 1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the limits of their respective appropriations as authorized in this Act, the Constitutional Commissions and Offices enjoying fiscal autonomy are authorized to formulate and implement the organizational structures of their respective offices, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in their personal services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices: PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws, which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws.

2. Use of Savings. The Constitutional Commissions and Offices enjoying fiscal autonomy are hereby authorized to use savings in their respective appropriations for: (a) printing and/or publication of decisions, resolutions, and training information materials; (b) repair, maintenance and improvement of central and regional offices, facilities and equipment; (c) purchase of books, journals, periodicals and equipment; (d) necessary expenses for the employment of temporary, contractual and casual employees; (e) payment of extraordinary and miscellaneous expenses, commutable representation and transportation allowances, and fringe benefits for their officials and employees as may be authorized by law; and (f) other official purposes, subject to accounting and auditing rules and regulations. (Emphases supplied) on the strength of these special provisions, the CHR, through its then Chairperson Aurora P. NavaretteRecia and Commissioners Nasser A. Marohomsalic, Mercedes V. Contreras, Vicente P. Sibulo, and Jorge R. Coquia, promulgated Resolution No. A98-047 on 04 September 1998, adopting an upgrading and reclassification scheme among selected positions in the Commission, to wit: WHEREAS, the General Appropriations Act, FY 1998, R.A. No. 8522 has provided special provisions applicable to all Constitutional Offices enjoying Fiscal Autonomy, particularly on organizational structures and authorizes the same to formulate and implement the organizational structures of their respective offices to fix and determine the salaries, allowances and other benefits of their personnel and whenever public interest so requires, make adjustments in the personnel services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices: PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws, which shall be payable from any unexpanded balance of, or savings in the appropriations of their respective offices; Whereas, the Commission on Human Rights is a member of the Constitutional Fiscal Autonomy Group (CFAG) and on July 24, 1998, CFAG passed an approved Joint Resolution No. 49 adopting internal rules implementing the special provisions heretoforth mentioned;

NOW THEREFORE, the Commission by virtue of its fiscal autonomy hereby approves and authorizes the upgrading and augmentation of the commensurate amount generated from savings under Personal Services to support the implementation of this resolution effective Calendar Year 1998; Let the Human Resources Development Division (HRDD) prepare the necessary Notice of Salary Adjustment and other appropriate documents to implement this resolution; . . . .3 (Emphasis supplied) Annexed to said resolution is the proposed creation of ten additional plantilla positions, namely: one Director IV position, with Salary Grade 28 for the Caraga Regional Office, four Security Officer II with Salary Grade 15, and five Process Servers, with Salary Grade 5 under the Office of the Commissioners. 4 On 19 October 1998, CHR issued Resolution No. A98-0555 providing for the upgrading or raising of salary grades of the following positions in the Commission: Number of Positions Position Title Salary Grade

Total Salary Requirements From To From To 12 Attorney VI (In the Regional Field Offices) Director IV 26 28 P229,104.00 4 Director III Director IV 27 28 38,928.00 1 Financial & Management Officer II Director IV 24 28 36,744.00 1 Budget Officer III Budget Officer IV 18 24 51,756.00 1 Accountant III Chief Accountant 18 24 51,756.00 1 Cashier III Cashier V 18 24 51,756.00

1 Information Officer V Director IV 24 28 36,744.006

It, likewise, provided for the creation and upgrading of the following positions: A. Creation Number of Positions Position Title Salary Grade Total Salary Requirements 4 Security Officer II (Coterminous) 15 684,780.00

B. Upgrading Number of Positions Position Title Salary Grade Total Salary Requirements From To From To 1 Attorney V Director IV 25 28 P28,092.00 2 Security Officer I Security Officer II 11 15

57,456.00 ---------------Total 3 P 85,548.007

To support the implementation of such scheme, the CHR, in the same resolution, authorized the augmentation of a commensurate amount generated from savings under Personnel Services. By virtue of Resolution No. A98-062 dated 17 November 1998, the CHR "collapsed" the vacant positions in the body to provide additional source of funding for said staffing modification. Among the positions collapsed were: one Attorney III, four Attorney IV, one Chemist III, three Special Investigator I, one Clerk III, and one Accounting Clerk II.8 The CHR forwarded said staffing modification and upgrading scheme to the DBM with a request for its approval, but the then DBM secretary Benjamin Diokno denied the request on the following justification: Based on the evaluations made the request was not favorably considered as it effectively involved the elevation of the field units from divisions to services. The present proposal seeks further to upgrade the twelve (12) positions of Attorney VI, SG-26 to Director IV, SG-28. This would elevate the field units to a bureau or regional office, a level even higher than the one previously denied. The request to upgrade the three (3) positions of Director III, SG-27 to Director IV, SG-28, in the Central Office in effect would elevate the services to Office and change the context from support to substantive without actual change in functions. In the absence of a specific provision of law which may be used as a legal basis to elevate the level of divisions to a bureau or regional office, and the services to offices, we reiterate our previous stand denying the upgrading of the twelve (12) positions of Attorney VI, SG-26 to Director III, SG-27 or Director IV, SG-28, in the Field Operations Office (FOO) and three (3) Director III, SG-27 to Director IV, SG-28 in the Central Office. As represented, President Ramos then issued a Memorandum to the DBM Secretary dated 10 December 1997, directing the latter to increase the number of Plantilla positions in the CHR both Central and Regional Offices to implement the Philippine Decade Plan on Human Rights Education, the Philippine Human Rights Plan and Barangay Rights Actions Center in accordance with existing laws. (Emphasis in the original) Pursuant to Section 78 of the General Provisions of the General Appropriations Act (GAA) FY 1998, no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President, thus, the creation of a Finance Management Office and a Public Affairs Office cannot be given favorable recommendation.

Moreover, as provided under Section 2 of RA No. 6758, otherwise known as the Compensation Standardization Law, the Department of Budget and Management is directed to establish and administer a unified compensation and position classification system in the government. The Supreme Court ruled in the case of Victorina Cruz vs. Court of Appeals, G.R. No. 119155, dated January 30, 1996, that this Department has the sole power and discretion to administer the compensation and position classification system of the National Government. Being a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law. We therefore reiterate our previous stand on the matter.9 (Emphases supplied) In light of the DBM's disapproval of the proposed personnel modification scheme, the CSC-National Capital Region Office, through a memorandum dated 29 March 1999, recommended to the CSC-Central Office that the subject appointments be rejected owing to the DBM's disapproval of the plantilla reclassification. Meanwhile, the officers of petitioner CHREA, in representation of the rank and file employees of the CHR, requested the CSC-Central Office to affirm the recommendation of the CSC-Regional Office. CHREA stood its ground in saying that the DBM is the only agency with appropriate authority mandated by law to evaluate and approve matters of reclassification and upgrading, as well as creation of positions. The CSC-Central Office denied CHREA's request in a Resolution dated 16 December 1999, and reversed the recommendation of the CSC-Regional Office that the upgrading scheme be censured. The decretal portion of which reads: WHEREFORE, the request of Ronnie N. Rosero, Hubert V. Ruiz, Flordeliza A. Briones, George Q. Dumlao [and], Corazon A. Santos-Tiu, is hereby denied.10 CHREA filed a motion for reconsideration, but the CSC-Central Office denied the same on 09 June 2000. Given the cacophony of judgments between the DBM and the CSC, petitioner CHREA elevated the matter to the Court of Appeals. The Court of Appeals affirmed the pronouncement of the CSC-Central Office and upheld the validity of the upgrading, retitling, and reclassification scheme in the CHR on the justification that such action is within the ambit of CHR's fiscal autonomy. The fallo of the Court of Appeals decision provides: IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED and the questioned Civil Service Commission Resolution No. 99-2800 dated December 16, 1999 as well as No. 001354 dated June 9, 2000, are hereby AFFIRMED. No cost.11 Unperturbed, petitioner filed this petition in this Court contending that: A.

THE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT UNDER THE 1987 CONSTITUTION, THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY. B. THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE CONSTRUCTION OF THE COMMISSION ON HUMAN RIGHTS OF REPUBLIC ACT NO. 8522 (THE GENERAL APPROPRIATIONS ACT FOR THE FISCAL YEAR 1998) DESPITE ITS BEING IN SHARP CONFLICT WITH THE 1987 CONSTITUTION AND THE STATUTE ITSELF. C. THE COURT OF APPEALS SERIOUSLY AND GRAVELY ERRED IN AFFIRMING THE VALIDITY OF THE CIVIL SERVICE COMMISSION RESOLUTION NOS. 992800 AND 001354 AS WELL AS THAT OF THE OPINION OF THE DEPARTMENT OF JUSTICE IN STATING THAT THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY UNDER THE 1987 CONSTITUTION AND THAT THIS FISCAL AUTONOMY INCLUDES THE ACTION TAKEN BY IT IN COLLAPSING, UPGRADING AND RECLASSIFICATION OF POSITIONS THEREIN.12 The central question we must answer in order to resolve this case is: Can the Commission on Human Rights validly implement an upgrading, reclassification, creation, and collapsing of plantilla positions in the Commission without the prior approval of the Department of Budget and Management? Petitioner CHREA grouses that the Court of Appeals and the CSC-Central Office both erred in sanctioning the CHR's alleged blanket authority to upgrade, reclassify, and create positions inasmuch as the approval of the DBM relative to such scheme is still indispensable. Petitioner bewails that the CSC and the Court of Appeals erroneously assumed that CHR enjoys fiscal autonomy insofar as financial matters are concerned, particularly with regard to the upgrading and reclassification of positions therein. Respondent CHR sharply retorts that petitioner has no locus standi considering that there exists no official written record in the Commission recognizing petitioner as a bona fide organization of its employees nor is there anything in the records to show that its president, Marcial A. Sanchez, Jr., has the authority to sue the CHR. The CHR contends that it has the authority to cause the upgrading, reclassification, plantilla creation, and collapsing scheme sans the approval of the DBM because it enjoys fiscal autonomy. After a thorough consideration of the arguments of both parties and an assiduous scrutiny of the records in the case at bar, it is the Court's opinion that the present petition is imbued with merit. On petitioner's personality to bring this suit, we held in a multitude of cases that a proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of.13 Here, petitioner, which consists of rank and file employees of respondent CHR, protests that the upgrading and collapsing of positions benefited only a select few in the upper level positions in the Commission resulting to the demoralization of the rank and file employees. This sufficiently meets the injury test. Indeed, the CHR's upgrading scheme, if found to be valid, potentially entails eating up the Commission's savings or that portion of its budgetary pie otherwise allocated for Personnel Services, from which the benefits of the employees, including those in the rank and file, are derived.

Further, the personality of petitioner to file this case was recognized by the CSC when it took cognizance of the CHREA's request to affirm the recommendation of the CSC-National Capital Region Office. CHREA's personality to bring the suit was a non-issue in the Court of Appeals when it passed upon the merits of this case. Thus, neither should our hands be tied by this technical concern. Indeed, it is settled jurisprudence that an issue that was neither raised in the complaint nor in the court below cannot be raised for the first time on appeal, as to do so would be offensive to the basic rules of fair play, justice, and due process.14 We now delve into the main issue of whether or not the approval by the DBM is a condition precedent to the enactment of an upgrading, reclassification, creation and collapsing of plantilla positions in the CHR. Germane to our discussion is Rep. Act No. 6758, An Act Prescribing a Revised Compensation and Position Classification System in the Government and For Other Purposes, or the Salary Standardization Law, dated 01 July 1989, which provides in Sections 2 and 4 thereof that it is the DBM that shall establish and administer a unified Compensation and Position Classification System. Thus: SEC. 2. Statement of Policy. -- It is hereby declared the policy of the State to provide equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions. In determining rates of pay, due regard shall be given to, among others, prevailing rates in the private sector for comparable work. For this purpose, the Department of Budget and Management (DBM) is hereby directed to establish and administer a unified Compensation and Position Classification System, hereinafter referred to as the System as provided for in Presidential Decree No. 985, as amended, that shall be applied for all government entities, as mandated by the Constitution. (Emphasis supplied.) SEC. 4. Coverage. The Compensation and Position Classification System herein provided shall apply to all positions, appointive or elective, on full or part-time basis, now existing or hereafter created in the government, including government-owned or controlled corporations and government financial institutions. The term "government" refers to the Executive, the Legislative and the Judicial Branches and the Constitutional Commissions and shall include all, but shall not be limited to, departments, bureaus, offices, boards, commissions, courts, tribunals, councils, authorities, administrations, centers, institutes, state colleges and universities, local government units, and the armed forces. The term "governmentowned or controlled corporations and financial institutions" shall include all corporations and financial institutions owned or controlled by the National Government, whether such corporations and financial institutions perform governmental or proprietary functions. (Emphasis supplied.) The disputation of the Court of Appeals that the CHR is exempt from the long arm of the Salary Standardization Law is flawed considering that the coverage thereof, as defined above, encompasses the entire gamut of government offices, sans qualification. This power to "administer" is not purely ministerial in character as erroneously held by the Court of Appeals. The word to administer means to control or regulate in behalf of others; to direct or superintend the execution, application or conduct of; and to manage or conduct public affairs, as to administer the government of the state.15 The regulatory power of the DBM on matters of compensation is encrypted not only in law, but in jurisprudence as well. In the recent case of Philippine Retirement Authority (PRA) v. Jesusito L. Buag,16

this Court, speaking through Mr. Justice Reynato Puno, ruled that compensation, allowances, and other benefits received by PRA officials and employees without the requisite approval or authority of the DBM are unauthorized and irregular. In the words of the Court Despite the power granted to the Board of Directors of PRA to establish and fix a compensation and benefits scheme for its employees, the same is subject to the review of the Department of Budget and Management. However, in view of the express powers granted to PRA under its charter, the extent of the review authority of the Department of Budget and Management is limited. As stated in Intia, the task of the Department of Budget and Management is simply to review the compensation and benefits plan of the government agency or entity concerned and determine if the same complies with the prescribed policies and guidelines issued in this regard. The role of the Department of Budget and Management is supervisorial in nature, its main duty being to ascertain that the proposed compensation, benefits and other incentives to be given to PRA officials and employees adhere to the policies and guidelines issued in accordance with applicable laws. In Victorina Cruz v. Court of Appeals,17 we held that the DBM has the sole power and discretion to administer the compensation and position classification system of the national government. In Intia, Jr. v. Commission on Audit,18 the Court held that although the charter19 of the Philippine Postal Corporation (PPC) grants it the power to fix the compensation and benefits of its employees and exempts PPC from the coverage of the rules and regulations of the Compensation and Position Classification Office, by virtue of Section 6 of P.D. No. 1597, the compensation system established by the PPC is, nonetheless, subject to the review of the DBM. This Court intoned: It should be emphasized that the review by the DBM of any PPC resolution affecting the compensation structure of its personnel should not be interpreted to mean that the DBM can dictate upon the PPC Board of Directors and deprive the latter of its discretion on the matter. Rather, the DBM's function is merely to ensure that the action taken by the Board of Directors complies with the requirements of the law, specifically, that PPC's compensation system "conforms as closely as possible with that provided for under R.A. No. 6758." (Emphasis supplied.) As measured by the foregoing legal and jurisprudential yardsticks, the imprimatur of the DBM must first be sought prior to implementation of any reclassification or upgrading of positions in government. This is consonant to the mandate of the DBM under the Revised Administrative Code of 1987, Section 3, Chapter 1, Title XVII, to wit: SEC. 3. Powers and Functions. The Department of Budget and Management shall assist the President in the preparation of a national resources and expenditures budget, preparation, execution and control of the National Budget, preparation and maintenance of accounting systems essential to the budgetary process, achievement of more economy and efficiency in the management of government operations, administration of compensation and position classification systems, assessment of organizational effectiveness and review and evaluation of legislative proposals having budgetary or organizational implications. (Emphasis supplied.) Irrefragably, it is within the turf of the DBM Secretary to disallow the upgrading, reclassification, and creation of additional plantilla positions in the CHR based on its finding that such scheme lacks legal justification.

Notably, the CHR itself recognizes the authority of the DBM to deny or approve the proposed reclassification of positions as evidenced by its three letters to the DBM requesting approval thereof. As such, it is now estopped from now claiming that the nod of approval it has previously sought from the DBM is a superfluity. The Court of Appeals incorrectly relied on the pronouncement of the CSC-Central Office that the CHR is a constitutional commission, and as such enjoys fiscal autonomy.20 Palpably, the Court of Appeals' Decision was based on the mistaken premise that the CHR belongs to the species of constitutional commissions. But, Article IX of the Constitution states in no uncertain terms that only the CSC, the Commission on Elections, and the Commission on Audit shall be tagged as Constitutional Commissions with the appurtenant right to fiscal autonomy. Thus: Sec. 1. The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit. Sec. 5. The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically and regularly released. Along the same vein, the Administrative Code, in Chapter 5, Sections 24 and 26 of Book II on Distribution of Powers of Government, the constitutional commissions shall include only the Civil Service Commission, the Commission on Elections, and the Commission on Audit, which are granted independence and fiscal autonomy. In contrast, Chapter 5, Section 29 thereof, is silent on the grant of similar powers to the other bodies including the CHR. Thus: SEC. 24. Constitutional Commissions. The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit. SEC. 26. Fiscal Autonomy. The Constitutional Commissions shall enjoy fiscal autonomy. The approved annual appropriations shall be automatically and regularly released. SEC. 29. Other Bodies. There shall be in accordance with the Constitution, an Office of the Ombudsman, a Commission on Human Rights, and independent central monetary authority, and a national police commission. Likewise, as provided in the Constitution, Congress may establish an independent economic and planning agency. (Emphasis ours.) From the 1987 Constitution and the Administrative Code, it is abundantly clear that the CHR is not among the class of Constitutional Commissions. As expressed in the oft-repeated maxim expressio unius est exclusio alterius, the express mention of one person, thing, act or consequence excludes all others. Stated otherwise, expressium facit cessare tacitum what is expressed puts an end to what is implied.21 Nor is there any legal basis to support the contention that the CHR enjoys fiscal autonomy. In essence, fiscal autonomy entails freedom from outside control and limitations, other than those provided by law. It is the freedom to allocate and utilize funds granted by law, in accordance with law, and pursuant to the wisdom and dispatch its needs may require from time to time.22 In Blaquera v. Alcala and Bengzon v. Drilon,23 it is understood that it is only the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman, which enjoy fiscal autonomy. Thus, in Bengzon,24 we explained:

As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the discharge of their functions. ... The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based. In the interest of comity and cooperation, the Supreme Court, [the] Constitutional Commissions, and the Ombudsman have so far limited their objections to constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision. (Emphasis supplied.) Neither does the fact that the CHR was admitted as a member by the Constitutional Fiscal Autonomy Group (CFAG) ipso facto clothed it with fiscal autonomy. Fiscal autonomy is a constitutional grant, not a tag obtainable by membership. We note with interest that the special provision under Rep. Act No. 8522, while cited under the heading of the CHR, did not specifically mention CHR as among those offices to which the special provision to formulate and implement organizational structures apply, but merely states its coverage to include Constitutional Commissions and Offices enjoying fiscal autonomy. In contrast, the Special Provision Applicable to the Judiciary under Article XXVIII of the General Appropriations Act of 1998 specifically mentions that such special provision applies to the judiciary and had categorically authorized the Chief Justice of the Supreme Court to formulate and implement the organizational structure of the Judiciary, to wit: 1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the limits of their respective appropriations authorized in this Act, the Chief Justice of the Supreme Court is authorized to formulate and implement organizational structure of the Judiciary, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in the personal services itemization including, but not limited to, the transfer of item or creation of new positions in the Judiciary; PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing law, which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws. (Emphasis supplied.) All told, the CHR, although admittedly a constitutional creation is, nonetheless, not included in the genus of offices accorded fiscal autonomy by constitutional or legislative fiat.

Even assuming en arguendo that the CHR enjoys fiscal autonomy, we share the stance of the DBM that the grant of fiscal autonomy notwithstanding, all government offices must, all the same, kowtow to the Salary Standardization Law. We are of the same mind with the DBM on its standpoint, thusBeing a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law.25 (Emphasis supplied.) The most lucid argument against the stand of respondent, however, is the provision of Rep. Act No. 8522 "that the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws."26 Indeed, the law upon which respondent heavily anchors its case upon has expressly provided that any form of adjustment in the organizational structure must be within the parameters of the Salary Standardization Law. The Salary Standardization Law has gained impetus in addressing one of the basic causes of discontent of many civil servants.27 For this purpose, Congress has delegated to the DBM the power to administer the Salary Standardization Law and to ensure that the spirit behind it is observed. This power is part of the system of checks and balances or system of restraints in our government. The DBM's exercise of such authority is not in itself an arrogation inasmuch as it is pursuant to the paramount law of the land, the Salary Standardization Law and the Administrative Code. In line with its role to breathe life into the policy behind the Salary Standardization Law of "providing equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions," the DBM, in the case under review, made a determination, after a thorough evaluation, that the reclassification and upgrading scheme proposed by the CHR lacks legal rationalization. The DBM expounded that Section 78 of the general provisions of the General Appropriations Act FY 1998, which the CHR heavily relies upon to justify its reclassification scheme, explicitly provides that "no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President." Here, the DBM discerned that there is no law authorizing the creation of a Finance Management Office and a Public Affairs Office in the CHR. Anent CHR's proposal to upgrade twelve positions of Attorney VI, SG-26 to Director IV, SG-28, and four positions of Director III, SG-27 to Director IV, SG-28, in the Central Office, the DBM denied the same as this would change the context from support to substantive without actual change in functions. This view of the DBM, as the law's designated body to implement and administer a unified compensation system, is beyond cavil. The interpretation of an administrative government agency, which is tasked to implement a statute is accorded great respect and ordinarily controls the construction of the courts. In Energy Regulatory Board v. Court of Appeals,28 we echoed the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies.

To be sure, considering his expertise on matters affecting the nation's coffers, the Secretary of the DBM, as the President's alter ego, knows from where he speaks inasmuch as he has the front seat view of the adverse effects of an unwarranted upgrading or creation of positions in the CHR in particular and in the entire government in general. WHEREFORE, the petition is GRANTED, the Decision dated 29 November 2001 of the Court of Appeals in CA-G.R. SP No. 59678 and its Resolution dated 11 September 2002 are hereby REVERSED and SET ASIDE. The ruling dated 29 March 1999 of the Civil Service Commision-National Capital Region is REINSTATED. The Commission on Human Rights Resolution No. A98-047 dated 04 September 1998, Resolution No. A98-055 dated 19 October 1998 and Resolution No. A98-062 dated 17 November 1998 without the approval of the Department of Budget and Management are disallowed. No pronouncement as to costs. SO ORDERED. Puno, Acting C.J., Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

Footnotes 1 Rollo, pp. 36-50; Penned by Associate Justice Conrado M. Vasquez, Jr., with Associate Justices Andres B. Reyes, Jr. and Amelita G. Tolentino, concurring. 2 Id. at 37. 3 Id. at 51-52. 4 Id. at 53-56. 5 Id. at 54. 6 Id. 7 Id. at 55. 8 Id. at 57. 9 Id. at 62-63. 10 Id. at 37. 11 Id. at 47. 12 Id. at 19-20. 13 Cruz, Philippine Political Law 243 (1996 ed.), citing Ex Parte Lewitt, 303 U.S. 633. 14 EASCO v. LTFRB, G.R. No. 149717, 07 October 2003, 413 SCRA 75.

15 Philippine Law Dictionary 21 (2nd ed.), citing Caw v. Benedicto, 63 OG 3393; 8 C.A.R. (2s) 814. 16 G.R. No. 143784, 05 February 2003, 397 SCRA 27, 35. 17 G.R. No. 119155, 30 January 1996, 252 SCRA599. 18 G.R. No. 131529, 30 April 1999, 306 SCRA 593, 609. 19 Rep. Act No. 7354 (1992). 20 Rollo, p. 46. 21 Canet v. Decena, G.R. No. 155344, 20 January 2004, 420 SCRA 388. 22 Blaquera v. Alcala, G.R. Nos. 109406, 110642, 111494, 112056 and 119597, 11 September 1998, 295 SCRA 366. 23 Id.; Bengzon v. Drilon, G.R. No. 103524, 15 April 1992, 208 SCRA 133. 24 Id. 25 Rollo, p. 63. 26 Article XXXIII, Rep. Act No. 8522, Special Provisions Applicable to all Constitutional Offices Enjoying Fiscal Autonomy. 27 Cruz, Philippine Political Law, p. 243 (1996 Ed). 28 G.R. No. 113079, 20 April 2001, 357 SCRA 30, citing Nestle v. Court of Appeals, G.R. No. 86738, 13 November 1991, 203 SCRA 504.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 157509 January 18, 2005

AUTOMOTIVE INDUSTRY WORKERS ALLIANCE (AIWA) and its Affiliated Unions: Mitsubishi Motors Workers Phils. Union; Mitsubishi Motors Phils. Supervisors Union, Nissan Motors Phils., Inc. Workers Union, Toyota Motors Phils. Workers Union, DURASTEEL WORKERS UNION, FILSHUTTERS EMPLOYEES & WORKERS UNION, NATIONAL LABOR UNION, PEPSI-COLA SUPERVISORS AND EMPLOYEES UNION, PSBA FACULTY ASSOCIATION, PLDT SECURITY PERSONNEL UNION, PUREFOODS UNIFIED LABOR ORGANIZATION, SAMAHANG MANGGAGAWA NG BICUTAN CONTAINERS CORP., SAMAHANG MANGGAGAWA NG CINDERELLA, SAMAHANG MANGGAGAWA NG LAURAS FOOD PRODUCTS, petitioners, vs. HON. ALBERTO ROMULO, in his capacity as Executive Secretary, and HON. PATRICIA STO. TOMAS, in her capacity as Secretary of Labor and Employment, respondents. DECISION CHICO-NAZARIO, J.: Petitioners, composed of ten (10) labor unions, call upon this Court to exercise its power of judicial review to declare as unconstitutional an executive order assailed to be in derogation of the constitutional doctrine of separation of powers. In an original action for certiorari, petitioners invoke their status as labor unions and as taxpayers whose rights and interests are allegedly violated and prejudiced by Executive Order No. 185 dated 10 March 2003 whereby administrative supervision over the National Labor Relations Commission (NLRC), its regional branches and all its personnel including the executive labor arbiters and labor arbiters was transferred from the NLRC Chairperson to the Secretary of Labor and Employment. In support of their position,1 petitioners argue that the NLRC -- created by Presidential Decree No. 442, otherwise known as the Labor Code, during Martial Law was an integral part of the Department (then Ministry) of Labor and Employment (DOLE) under the administrative supervision of the Secretary of Justice. During the time of President Corazon C. Aquino, and while she was endowed with legislative functions after EDSA I, Executive Order No. 2922 was issued whereby the NLRC became an agency attached to the DOLE for policy and program coordination and for administrative supervision. On 02 March 1989, Article 213 of the Labor Code was expressly amended by Republic Act No. 6715 declaring that the NLRC was to be attached to the DOLE for program and policy coordination only while the administrative supervision over the NLRC, its regional branches and personnel, was turned over to the NLRC Chairman. The subject E.O. No. 185, in authorizing the Secretary of Labor to exercise administrative supervision over the NLRC, its regional branches and personnel, allegedly reverted to the pre-Rep. Act No. 6715 set-up, amending the latter law which only Congress can do. The respondents herein, as represented by the Office of the Solicitor General, opposed the petition on procedural3 and substantive4 grounds. Procedurally, it is alleged that the petition does not pose an actual case or controversy upon which judicial review may be exercised as petitioners have not specifically cited

how E.O. No. 185 has prejudiced or threatened to prejudice their rights and existence as labor unions and as taxpayers. Closely intertwined therewith, respondents further argue that petitioners have no locus standi to assail the validity of E.O. No. 185, not even in their capacity as taxpayers, considering that labor unions are exempt from paying taxes, citing Sec. 30 of the Tax Reform Act of 1997. Even assuming that their individual members are taxpayers, respondents maintain that a taxpayer suit will not prosper as E.O. No. 185 does not require additional appropriation for its implementation. As the petition can be decided without passing on the validity of the subject executive order, respondents conclude that the same should be forthwith dismissed. Even on the merits, respondents advance the view that the petition must fail as the administrative supervision granted by the Labor Code to the NLRC Chairman over the NLRC, its regional branches and personnel, does not place them beyond the Presidents broader power of control and supervision, a power conferred no less than by the Constitution in Section 17, Article VII thereof. Thus, in the exercise of the Presidents power of control and supervision, he can genera lly oversee the operations of the NLRC, its regional branches and personnel thru his alter ego, the Secretary of Labor, pursuant to the doctrine of qualified political agency. In their Reply,5 petitioners affirm their locus standi contending that they are suing for and in behalf of their members estimated to be more or less fifty thousand (50,000) workers who are the real parties to be affected by the resolution of this Court. They likewise maintain that they are suing in behalf of the employees of the NLRC who have pending cases for dismissal. Thus, possessed of the necessary standing, petitioners theorize that the issue before this Court must necessarily be decided as it involves an act of the Chief Executive amending a provision of law. For clarity, E.O. No. 185 is hereby quoted: EXECUTIVE ORDER NO. 185 AUTHORIZING THE SECRETARY OF LABOR AND EMPLOYMENT TO EXERCISE ADMINISTRATIVE SUPERVISION OVER THE NATIONAL LABOR RELATIONS COMMISSION WHEREAS, Section 17, Article VII of the Constitution provides that the President shall have control of all executive departments, bureaus and offices and shall ensure that the laws be faithfully executed; WHEREAS, the National Labor Relations Commission (NLRC) which was created by virtue of Presidential Decree No. 442, otherwise known as the "Labor Code of the Philippines," is an agency under the Executive Department and was originally envisaged as being an integral part of the Department (then Ministry) of Labor and Employment (DOLE) under the administrative supervision of the Secretary of Labor and Employment ("Secretary of Labor"); WHEREAS, upon the issuance of Executive Order No. 292, otherwise known as the "Revised Administrative Code of 1987" (the "Administrative Code"), the NLRC, by virtue of Section 25, Chapter 6, Title VII, Book IV thereof, became an agency attached to the DOLE for policy and program coordination and administrative supervision; WHEREAS, Article 213 of the Labor Code and Section 25, Chapter 6, Title VII, Book IV of the Administrative Code were amended by Republic Act. No. 6715 approved on March 2, 1989, which provides that the NLRC shall be attached to the DOLE for program and policy coordination only and

transferred administrative supervision over the NLRC, all its regional branches and personnel to the NLRC Chairman; WHEREAS, Section 16, Article III of the Constitution guarantees the right of all persons to a speedy disposition of their cases before all judicial, quasi-judicial and administrative bodies; WHEREAS, the Secretary of Labor, after evaluating the NLRCs performance record in the last five (5) years, including the rate of disposition of pending cases before it, has informed the President that there is a need to expedite the disposition of labor cases pending before the NLRC and all its regional and subregional branches or provincial extension units and initiate potent measures to prevent graft and corruption therein so as to reform its systems and personnel, as well as infuse the organization with a sense of public service in consonance with the imperative of change for the greater interest of the people; WHEREAS, after consultations with the relevant sectors, the Secretary of Labor has recommended that the President, pursuant to her powers under the Constitution and existing laws, authorize the Secretary of Labor to exercise administrative supervision over the NLRC and all its regional and sub-regional branches or provincial extension units with the objective of improving the rate of disposition of pending cases and institute adequate measures for the prevention of graft and corruption within the said agency; NOW, THEREFORE, I, GLORIA MACAPAGAL ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and existing laws, do hereby order: SECTION 1. Authority To Exercise Administrative Supervision. The Secretary of Labor is hereby authorized to exercise administrative supervision over the NLRC, its regional branches and all its personnel, including the Executive Labor Arbiters and Labor Arbiters, with the objective of improving the rate of disposition of cases pending before it and its regional and sub-regional branches or provincial extension units and to institute adequate measures for the prevention of graft and corruption within the said agency. For this purpose, the Secretary of Labor shall, among others: a. Generally oversee the operations of the NLRC and its regional and sub-regional branches or provincial extension units for the purpose of ensuring that cases pending before them are decided or resolved expeditiously; b. Require the submission of reports as the Secretary of Labor may deem necessary; c. Initiate measures within the agency to prevent graft and corruption, including but not limited to, the conduct of management audits, performance evaluations and inspections to determine compliance with established policies, standards and guidelines; d. To take such action as may be necessary for the proper performance of official functions, including rectification of violations, abuses and other forms of mal-administration; and e. Investigate, on its own or upon complaint, matters involving disciplinary action against any of the NLRCs personnel, including Presidential appointees, in accordance with existing laws, ru les and regulations. After completing his/her investigation, the Secretary of Labor shall submit a report to the President on the investigation conducted with a recommendation as to the penalty to be imposed or other action to be taken, including referral to the Presidential Anti-Graft Commission (PAGC), the Office of the

Ombudsman or any other office, committee, commission, agency, department, instrumentality or branch of the government for appropriate action. The authority conferred herein upon the Secretary of Labor shall not extend to the power to review, reverse, revise, or modify the decisions of the NLRC in the exercise of its quasi-judicial functions (cf. Section 38(2) (b), Chapter 7, Book IV, Administrative Code). SECTION 2. Report to the Secretary of Labor. The NLRC, through its Chairman, shall submit a report to the Secretary of Labor within thirty (30) days from issuance of this Executive Order, on the following matters: a. Performance Report/Audit for the last five (5) years, including list of pending cases and cases disposed of within the said period by the NLRC en banc, by Division and by the Labor Arbiters in each of its regional and sub-regional branches or provincial extension units; b. Detailed Master Plan on how to liquidate its backlog of cases with clear timetables to clean up its dockets within six (6) months from the issuance hereof; c. Complete inventory of its assets and list of personnel indicating their present positions and stations; and d. Such other matters as may be required by the Secretary of Labor. SECTION 3. Rules and Regulations. The Secretary of Labor, in consultation with the Chairman of the NLRC, is hereby authorized to issue rules and regulations for the effective implementation of the provisions of this Executive Order. SECTION 4. Repealing Clause. All laws, executive issuances, rules and regulations or parts thereof which are inconsistent with the provisions of this Executive Order are hereby repealed, amended, or modified accordingly. SECTION 5. Effectivity. This Executive Order shall take effect immediately upon the completion of its publication in the Official Gazette or in a newspaper of general circulation in the country. City of Manila, March 10, 2003.6 The constitutionality of a governmental act having been challenged, it comes as no surprise that the first line of defense is to question the standing of petitioners and the justiciability of herein case. It is hornbook doctrine that the exercise of the power of judicial review requires the concurrence of the following requisites, namely: (1) the existence of an appropriate case; (2) an interest personal and substantial by the party raising the constitutional question; (3) the plea that the function be exercised at the earliest opportunity; and (4) the necessity that the constitutional question be passed upon in order to decide the case.71awphi1.nt As correctly pointed out by respondents, judicial review cannot be exercised in vacuo. The function of the courts is to determine controversies between litigants and not to give advisory opinions.8 The power of judicial review can only be exercised in connection with a bona fide case or controversy which involves the statute sought to be reviewed.9

Even with the presence of an actual case or controversy, the Court may refuse to exercise judicial review unless the constitutional question is brought before it by a party having the requisite standing to challenge it.10 Legal standing or locus standi is defined as a "personal and substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged."11 For a citizen to have standing, he must establish that he has suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government; the injury is fairly traceable to the challenged action; and the injury is likely to be redressed by a favorable action.12 Petitioners have not shown that they have sustained or are in danger of sustaining any personal injury attributable to the enactment of E.O. No. 185. As labor unions representing their members, it cannot be said that E.O. No. 185 will prejudice their rights and interests considering that the scope of the authority conferred upon the Secretary of Labor does not extend to the power to review, reverse, revise or modify the decisions of the NLRC in the exercise of its quasi-judicial functions.13 Thus, only NLRC personnel who may find themselves the subject of the Secretary of Labors disciplina ry authority, conferred by Section 1(d) of the subject executive order, may be said to have a direct and specific interest in raising the substantive issue herein. Moreover, and if at all, only Congress, and not petitioners, can claim any injury14 from the alleged executive encroachment of the legislative function to amend, modify and/or repeal laws. Neither can standing be conferred on petitioners as taxpayers since petitioners have not established disbursement of public funds in contravention of law or the Constitution.15 A taxpayers suit is properly brought only when there is an exercise of the spending or taxing power of Congress.16 As correctly pointed out by respondents, E.O. No. 185 does not even require for its implementation additional appropriation. All told, if we were to follow the strict rule on locus standi, this petition should be forthwith dismissed on that score. The rule on standing, however, is a matter of procedure, hence, can be relaxed for nontraditional plaintiffs like ordinary citizens, taxpayers and legislators when the public interest so requires, such as when the matter is of transcendental importance, of overarching significance to society, or of paramount public interest.171awphi1.nt The question is, does the issue posed in this petition meet the exacting standard required for this Court to take the liberal approach and recognize the standing of herein petitioners? The instant petition fails to persuade us. The subject matter of E.O. No. 185 is the grant of authority by the President to the Secretary of Labor to exercise administrative supervision over the NLRC, its regional branches and all its personnel, including the Executive Labor Arbiters and Labor Arbiters. Its impact, sans the challenge to its constitutionality, is thereby limited to the departments to which it is addressed. Taking our cue from the early case of Olsen v. Herstein and Rafferty,18 the subject executive order can be considered as nothing more or less than a command from a superior to an inferior. It creates no relation except between the official who issued it and the officials who received it. It has for its object simply the efficient and economical administration of the affairs of the department to which it is issued in accordance with the law governing the subject matter. Administrative in its nature, the subject order does not pass beyond the limits of the departments to which it is directed, hence, it has not created any rights in third persons, not even in the fifty thousand or so union members being represented by petitioners who may or may not have pending cases before the labor arbiters or the NLRC.

In fine, considering that the governmental act being questioned has a limited reach, its impact confined to corridors of the executive department, this is not one of those exceptional occasions where the Court is justified in sweeping aside a critical procedural requirement, rooted as it is in the constitutionally enshrined principle of separation of powers. As succinctly put by Mr. Justice Reynato S. Puno in his dissenting opinion in the first Kilosbayan case:19 . . . [C]ourts are neither free to decide all kinds of cases dumped into their laps nor are they free to open their doors to all parties or entities claiming a grievance. The rationale for this constitutional requirement of locus standi is by no means trifle. It is intended "to assure a vigorous adversary presentation of the case, and, perhaps more importantly to warrant the judiciarys overruling the determination of a coordinate, democratically elected organ of government."20 It thus goes to the very essence of representative democracies. ... A lesser but not insignificant reason for screening the standing of persons who desire to litigate constitutional issues is economic in character. Given the sparseness of our resources, the capacity of courts to render efficient judicial service to our people is severely limited. For courts to indiscriminately open their doors to all types of suits and suitors is for them to unduly overburden their dockets, and ultimately render themselves ineffective dispensers of justice. To be sure, this is an evil that clearly confronts our judiciary today. All things considered, whether or not E.O. No. 185 is indeed unconstitutional will have to await the proper party in a proper case to assail its validity. WHEREFORE, premises considered, the instant petition dated 27 March 2003 is hereby DISMISSED for lack of merit. No costs. SO ORDERED. Puno, (Acting C.J.), Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, AustriaMartinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, and Garcia, JJ., concur. Davide, Jr., C.J., on leave.

Footnotes 1 Rollo, pp. 7-8. 2 Otherwise known as the Administrative Code of 1987. Signed into law on 25 July 1987. 3 Rollo, pp. 2-10. 4 Id. at 11-20. 5 Id. at 69-76.

6 Rollo, pp. 15-18. 7 People v. Vera,65 Phil. 56 [1937], as cited in Dumlao v. Comelec, G.R. No. L-52245, 22 January 1980, 95 SCRA 392, 400. 8 Allied Broadcasting Center, Inc. v. Republic,G.R. No. 91500, 18 October 1990, 190 SCRA 782. 9 Ibid. 10 Bernas, SJ, The 1987 Constitution of the Republic of the Philippines A Commentary, 2003 Edition, p. 939. 11 Integrated Bar of the Philippines, G.R. No. 141284 , 15 August 2000, 338 SCRA, 81, 100. 12 Gonzales v. Narvasa, G.R. No. 140835 , 14 August 2000, 337 SCRA 733, 740 citing Telecommunications and Broadcast Attorneys of the Philippines, Inc. v. Commission on Elections, G.R. No. 132922 , 21 April 1998, 289 SCRA 337, 343. 13 Executive Order No. 185, Section 1 (last paragraph). 14 Gonzales v. Narvasa, Aug. 14, 2000, G.R. No. 140835 , 14 August 2000, 337 SCRA 733, 741. 15 Ibid. 16 Ibid. 17 Araneta v. Dinglasan 84 Phil. 368 (1949); Dumlao v. COMELEC, G.R. No. L-52245, 22 January 1980, 95 SCRA 392, 404; De Guia v. COMELEC, G.R. No. 104712, 06 May 1992, 208 SCRA 420,422; Tatad v. Secretary of the Department of Energy, G.R. Nos. 124360 and 127867 , 05 November 1997, 281 SCRA 330, 349; Osmea v. COMELEC, G.R. Nos. 100318, 100417 and 100420, 30 July 1991, 199 SCRA 750, 757; Basco v. Pagcor, G.R. No. 91649, 14 May 1991, 197 SCRA 52, 60; Kilosbayan v. Guingona, Jr., G.R. No. 113375, 05 May 1994, 232 SCRA 110, 139; Agan, Jr. v. Philippine International Air Terminals Co., Inc., G.R. Nos. 15001, 155547 & 155661 , 05 May 2003, 402 SCRA 612, 645-646; Farias, et al. v. Executive Secretary, et al., G.R. Nos. 147387 & 152161 , 10 December 2003, 417 SCRA 503, 515-517. 18 G.R. No. 11138, 15 December 1915. This was a case for mandamus filed by an exporter of cigars to compel the Insular Collector of Customs or the Collector of Internal Revenue ostensibly pursuant to E.O. No. 41 dated 7 May 1909 to issue a certificate of origin of cigars about to be exported to the United States. The Court held that E.O. No. 41 conferred no legal right on anyone as its "very nature, as determined by the relationship which produced [it], demonstrates clearly the impossibility of any other person enforcing [it] except the one who created [it]." (32 Phil. 520, 532). 19 Kilosbayan, Incorporated v. Guingona, Jr., G.R. No. 113375, 05 May 1994, 232 SCRA 110, 169-171. 20 Citing Dorsen, Bender, Neuborne, Political and Civil Rights in the United States, Vol. I, 4th ed., p. 1200.

Lawphil Main MenuLawphil Main Menu> Constitution> Constitution> Statutes> Statutes> Jurisprudence> Jurisprudence> Judicial Issuances> Judicial Issuances> Executive Issuances> Executive Issuances> Treatise> Treatise> Legal Link> Legal Linklawphil Today is Saturday, July 02, 2011

-------------------------------------------------------------------------------Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 133250 July 9, 2002

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents. CARPIO, J.: This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a temporary restraining order. The petition seeks to compel the Public Estates Authority ("PEA" for brevity) to disclose all facts on PEA's then on-going renegotiations with Amari Coastal Bay and Development Corporation ("AMARI" for brevity) to reclaim portions of Manila Bay. The petition further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation. The Facts On November 20, 1973, the government, through the Commissioner of Public Highways, signed a contract with the Construction and Development Corporation of the Philippines ("CDCP" for brevity) to reclaim certain foreshore and offshore areas of Manila Bay. The contract also included the construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to carry out all the works in consideration of fifty percent of the total reclaimed land. On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084 creating PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged areas," and "to develop, improve, acquire, x x x lease and sell any and all kinds of lands."1 On the same date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA the "lands reclaimed in the foreshore and offshore of the Manila Bay"2 under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP). On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its contract with CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned by PEA." Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December 29, 1981, which stated:

"(i) CDCP shall undertake all reclamation, construction, and such other works in the MCCRRP as may be agreed upon by the parties, to be paid according to progress of works on a unit price/lump sum basis for items of work to be agreed upon, subject to price escalation, retention and other terms and conditions provided for in Presidential Decree No. 1594. All the financing required for such works shall be provided by PEA. xxx (iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and transfer in favor of PEA, all of the rights, title, interest and participation of CDCP in and to all the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have not yet been sold, transferred or otherwise disposed of by CDCP as of said date, which areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473) square meters in the Financial Center Area covered by land pledge No. 5 and approximately Three Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of reclaimed areas at varying elevations above Mean Low Water Level located outside the Financial Center Area and the First Neighborhood Unit."3 On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting and transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters." Subsequently, on April 9, 1988, the Register of Deeds of the Municipality of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering the three reclaimed islands known as the "Freedom Islands" located at the southern portion of the Manila-Cavite Coastal Road, Paraaque City. The Freedom Islands have a total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred and Forty One (1,578,441) square meters or 157.841 hectares. On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a private corporation, to develop the Freedom Islands. The JVA also required the reclamation of an additional 250 hectares of submerged areas surrounding these islands to complete the configuration in the Master Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI entered into the JVA through negotiation without public bidding.4 On April 28, 1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed the JVA.5 On June 8, 1995, then President Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved the JVA.6 On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the Senate and denounced the JVA as the "grandmother of all scams." As a result, the Senate Committee on Government Corporations and Public Enterprises, and the Committee on Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate Committees reported the results of their investigation in Senate Committee Report No. 560 dated September 16, 1997.7 Among the conclusions of their report are: (1) the reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of the public domain which the government has not classified as alienable lands and therefore PEA cannot alienate these lands; (2) the certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal. On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No. 365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate Committee Report No. 560. The members of the Legal Task Force were the Secretary of Justice,8 the Chief

Presidential Legal Counsel,9 and the Government Corporate Counsel.10 The Legal Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate Committees.11 On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were ongoing renegotiations between PEA and AMARI under an order issued by then President Fidel V. Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz composed the negotiating panel of PEA. On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application for the Issuance of a Temporary Restraining Order and Preliminary Injunction docketed as G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the petition "for unwarranted disregard of judicial hierarchy, without prejudice to the refiling of the case before the proper court."12 On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order. Petitioner contends the government stands to lose billions of pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose the terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987 Constitution on the right of the people to information on matters of public concern. Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private corporations. Finally, petitioner asserts that he seeks to enjoin the loss of billions of pesos in properties of the State that are of public dominion. After several motions for extension of time,13 PEA and AMARI filed their Comments on October 19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI contract; (b) for issuance of a temporary restraining order; and (c) to set the case for hearing on oral argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the Court denied in a Resolution dated June 22, 1999. In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the parties to file their respective memoranda. On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended JVA," for brevity). On May 28, 1999, the Office of the President under the administration of then President Joseph E. Estrada approved the Amended JVA. Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on "constitutional and statutory grounds the renegotiated contract be declared null and void."14 The Issues The issues raised by petitioner, PEA15 and AMARI16 are as follows: I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;

II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE PRINCIPLE GOVERNING THE HIERARCHY OF COURTS; III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES; IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT; V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT; VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY DISADVANTAGEOUS TO THE GOVERNMENT. The Court's Ruling First issue: whether the principal reliefs prayed for in the petition are moot and academic because of subsequent events. The petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations for a new agreement." The petition also prays that the Court enjoin PEA from "privately entering into, perfecting and/or executing any new agreement with AMARI." PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner on June 21, 1999 a copy of the signed Amended JVA containing the terms and conditions agreed upon in the renegotiations. Thus, PEA has satisfied petitioner's prayer for a public disclosure of the renegotiations. Likewise, petitioner's prayer to enjoin the signing of the Amended JVA is now moot because PEA and AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the Office of the President has approved the Amended JVA on May 28, 1999. Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking the signing and approval of the Amended JVA before the Court could act on the issue. Presidential approval does not resolve the constitutional issue or remove it from the ambit of judicial review. We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President cannot operate to moot the petition and divest the Court of its jurisdiction. PEA and AMARI have still to implement the Amended JVA. The prayer to enjoin the signing of the Amended JVA on constitutional grounds necessarily includes preventing its implementation if in the meantime PEA and AMARI have signed one in violation of the Constitution. Petitioner's principal basis in assailing the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits the government from alienating lands of the public domain to private corporations. If the Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin its implementation, and if already implemented, to annul the effects of such unconstitutional contract.

The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a single private corporation. It now becomes more compelling for the Court to resolve the issue to insure the government itself does not violate a provision of the Constitution intended to safeguard the national patrimony. Supervening events, whether intended or accidental, cannot prevent the Court from rendering a decision if there is a grave violation of the Constitution. In the instant case, if the Amended JVA runs counter to the Constitution, the Court can still prevent the transfer of title and ownership of alienable lands of the public domain in the name of AMARI. Even in cases where supervening events had made the cases moot, the Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling principles to guide the bench, bar, and the public.17 Also, the instant petition is a case of first impression. All previous decisions of the Court involving Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973 Constitution,18 covered agricultural lands sold to private corporations which acquired the lands from private parties. The transferors of the private corporations claimed or could claim the right to judicial confirmation of their imperfect titles19 under Title II of Commonwealth Act. 141 ("CA No. 141" for brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and submerged areas for nonagricultural purposes by purchase under PD No. 1084 (charter of PEA) and Title III of CA No. 141. Certain undertakings by AMARI under the Amended JVA constitute the consideration for the purchase. Neither AMARI nor PEA can claim judicial confirmation of their titles because the lands covered by the Amended JVA are newly reclaimed or still to be reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive and notorious occupation of agricultural lands of the public domain for at least thirty years since June 12, 1945 or earlier. Besides, the deadline for filing applications for judicial confirmation of imperfect title expired on December 31, 1987.20 Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because of the possible transfer at any time by PEA to AMARI of title and ownership to portions of the reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the latter's seventy percent proportionate share in the reclaimed areas as the reclamation progresses. The Amended JVA even allows AMARI to mortgage at any time the entire reclaimed area to raise financing for the reclamation project.21 Second issue: whether the petition merits dismissal for failing to observe the principle governing the hierarchy of courts. PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the Court. The principle of hierarchy of courts applies generally to cases involving factual questions. As it is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant case, however, raises constitutional issues of transcendental importance to the public.22 The Court can resolve this case without determining any factual issue related to the case. Also, the instant case is a petition for mandamus which falls under the original jurisdiction of the Court under Section 5, Article VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case. Third issue: whether the petition merits dismissal for non-exhaustion of administrative remedies. PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain information without first asking PEA the needed information. PEA claims petitioner's direct resort to the Court violates the principle of exhaustion of administrative remedies. It also violates the rule that mandamus may issue only if there is no other plain, speedy and adequate remedy in the ordinary course of law.

PEA distinguishes the instant case from Taada v. Tuvera23 where the Court granted the petition for mandamus even if the petitioners there did not initially demand from the Office of the President the publication of the presidential decrees. PEA points out that in Taada, the Executive Department had an affirmative statutory duty under Article 2 of the Civil Code24 and Section 1 of Commonwealth Act No. 63825 to publish the presidential decrees. There was, therefore, no need for the petitioners in Taada to make an initial demand from the Office of the President. In the instant case, PEA claims it has no affirmative statutory duty to disclose publicly information about its renegotiation of the JVA. Thus, PEA asserts that the Court must apply the principle of exhaustion of administrative remedies to the instant case in view of the failure of petitioner here to demand initially from PEA the needed information. The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation. Under Section 79 of the Government Auditing Code,26 the disposition of government lands to private parties requires public bidding. PEA was under a positive legal duty to disclose to the public the terms and conditions for the sale of its lands. The law obligated PEA to make this public disclosure even without demand from petitioner or from anyone. PEA failed to make this public disclosure because the original JVA, like the Amended JVA, was the result of a negotiated contract, not of a public bidding. Considering that PEA had an affirmative statutory duty to make the public disclosure, and was even in breach of this legal duty, petitioner had the right to seek direct judicial intervention. Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative remedies does not apply when the issue involved is a purely legal or constitutional question.27 The principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in view of the constitutional ban prohibiting the alienation of lands of the public domain to private corporations. We rule that the principle of exhaustion of administrative remedies does not apply in the instant case. Fourth issue: whether petitioner has locus standi to bring this suit PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his constitutional right to information without a showing that PEA refused to perform an affirmative duty imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he will suffer any concrete injury because of the signing or implementation of the Amended JVA. Thus, there is no actual controversy requiring the exercise of the power of judicial review. The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to comply with its constitutional duties. There are two constitutional issues involved here. First is the right of citizens to information on matters of public concern. Second is the application of a constitutional provision intended to insure the equitable distribution of alienable lands of the public domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly information on the sale of government lands worth billions of pesos, information which the Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the Constitution, compelling PEA to comply with a constitutional duty to the nation. Moreover, the petition raises matters of transcendental importance to the public. In Chavez v. PCGG,28 the Court upheld the right of a citizen to bring a taxpayer's suit on matters of transcendental importance to the public, thus -

"Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the Marcoses is an issue of 'transcendental importance to the public.' He asserts that ordinary taxpayers have a right to initiate and prosecute actions questioning the validity of acts or orders of government agencies or instrumentalities, if the issues raised are of 'paramount public interest,' and if they 'immediately affect the social, economic and moral well being of the people.' Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when the proceeding involves the assertion of a public right, such as in this case. He invokes several decisions of this Court which have set aside the procedural matter of locus standi, when the subject of the case involved public interest. xxx In Taada v. Tuvera, the Court asserted that when the issue concerns a public right and the object of mandamus is to obtain the enforcement of a public duty, the people are regarded as the real parties in interest; and because it is sufficient that petitioner is a citizen and as such is interested in the execution of the laws, he need not show that he has any legal or special interest in the result of the action. In the aforesaid case, the petitioners sought to enforce their right to be informed on matters of public concern, a right then recognized in Section 6, Article IV of the 1973 Constitution, in connection with the rule that laws in order to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal standing, the Court declared that the right they sought to be enforced 'is a public right recognized by no less than the fundamental law of the land.' Legaspi v. Civil Service Commission, while reiterating Taada, further declared that 'when a mandamus proceeding involves the assertion of a public right, the requirement of personal interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the general 'public' which possesses the right.' Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been involved under the questioned contract for the development, management and operation of the Manila International Container Terminal, 'public interest [was] definitely involved considering the important role [of the subject contract] . . . in the economic development of the country and the magnitude of the financial consideration involved.' We concluded that, as a consequence, the disclosure provision in the Constitution would constitute sufficient authority for upholding the petitioner's standing. Similarly, the instant petition is anchored on the right of the people to information and access to official records, documents and papers a right guaranteed under Section 7, Article III of the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of the satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's legal standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we rule that the petition at bar should be allowed." We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional rights - to information and to the equitable diffusion of natural resources - matters of transcendental public importance, the petitioner has the requisite locus standi. Fifth issue: whether the constitutional right to information includes official information on on-going negotiations before a final agreement. Section 7, Article III of the Constitution explains the people's right to information on matters of public concern in this manner:

"Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law." (Emphasis supplied) The State policy of full transparency in all transactions involving public interest reinforces the people's right to information on matters of public concern. This State policy is expressed in Section 28, Article II of the Constitution, thus: "Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest." (Emphasis supplied) These twin provisions of the Constitution seek to promote transparency in policy-making and in the operations of the government, as well as provide the people sufficient information to exercise effectively other constitutional rights. These twin provisions are essential to the exercise of freedom of expression. If the government does not disclose its official acts, transactions and decisions to citizens, whatever citizens say, even if expressed without any restraint, will be speculative and amount to nothing. These twin provisions are also essential to hold public officials "at all times x x x accountable to the people,"29 for unless citizens have the proper information, they cannot hold public officials accountable for anything. Armed with the right information, citizens can participate in public discussions leading to the formulation of government policies and their effective implementation. An informed citizenry is essential to the existence and proper functioning of any democracy. As explained by the Court in Valmonte v. Belmonte, Jr.30 "An essential element of these freedoms is to keep open a continuing dialogue or process of communication between the government and the people. It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may perceive and be responsive to the people's will. Yet, this open dialogue can be effective only to the extent that the citizenry is informed and thus able to formulate its will intelligently. Only when the participants in the discussion are aware of the issues and have access to information relating thereto can such bear fruit." PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to information is limited to "definite propositions of the government." PEA maintains the right does not include access to "intra-agency or inter-agency recommendations or communications during the stage when common assertions are still in the process of being formulated or are in the 'exploratory stage'." Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before the closing of the transaction. To support its contention, AMARI cites the following discussion in the 1986 Constitutional Commission: "Mr. Suarez. And when we say 'transactions' which should be distinguished from contracts, agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the consummation of the contract, or does he refer to the contract itself? Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can cover both steps leading to a contract and already a consummated contract, Mr. Presiding Officer. Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of the transaction.

Mr. Ople: Yes, subject only to reasonable safeguards on the national interest. Mr. Suarez: Thank you."32 (Emphasis supplied) AMARI argues there must first be a consummated contract before petitioner can invoke the right. Requiring government officials to reveal their deliberations at the pre-decisional stage will degrade the quality of decision-making in government agencies. Government officials will hesitate to express their real sentiments during deliberations if there is immediate public dissemination of their discussions, putting them under all kinds of pressure before they decide. We must first distinguish between information the law on public bidding requires PEA to disclose publicly, and information the constitutional right to information requires PEA to release to the public. Before the consummation of the contract, PEA must, on its own and without demand from anyone, disclose to the public matters relating to the disposition of its property. These include the size, location, technical description and nature of the property being disposed of, the terms and conditions of the disposition, the parties qualified to bid, the minimum price and similar information. PEA must prepare all these data and disclose them to the public at the start of the disposition process, long before the consummation of the contract, because the Government Auditing Code requires public bidding. If PEA fails to make this disclosure, any citizen can demand from PEA this information at any time during the bidding process. Information, however, on on-going evaluation or review of bids or proposals being undertaken by the bidding or review committee is not immediately accessible under the right to information. While the evaluation or review is still on-going, there are no "official acts, transactions, or decisions" on the bids or proposals. However, once the committee makes its official recommendation, there arises a "definite proposition" on the part of the government. From this moment, the public's right to information attaches, and any citizen can access all the non-proprietary information leading to such definite proposition. In Chavez v. PCGG,33 the Court ruled as follows: "Considering the intent of the framers of the Constitution, we believe that it is incumbent upon the PCGG and its officers, as well as other government representatives, to disclose sufficient public information on any proposed settlement they have decided to take up with the ostensible owners and holders of ill-gotten wealth. Such information, though, must pertain to definite propositions of the government, not necessarily to intra-agency or inter-agency recommendations or communications during the stage when common assertions are still in the process of being formulated or are in the "exploratory" stage. There is need, of course, to observe the same restrictions on disclosure of information in general, as discussed earlier such as on matters involving national security, diplomatic or foreign relations, intelligence and other classified information." (Emphasis supplied) Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission understood that the right to information "contemplates inclusion of negotiations leading to the consummation of the transaction." Certainly, a consummated contract is not a requirement for the exercise of the right to information. Otherwise, the people can never exercise the right if no contract is consummated, and if one is consummated, it may be too late for the public to expose its defects.1wphi1.nt Requiring a consummated contract will keep the public in the dark until the contract, which may be grossly disadvantageous to the government or even illegal, becomes a fait accompli. This negates the State policy of full transparency on matters of public concern, a situation which the framers of the Constitution could not have intended. Such a requirement will prevent the citizenry from participating in

the public discussion of any proposed contract, effectively truncating a basic right enshrined in the Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by the State of its avowed "policy of full disclosure of all its transactions involving public interest." The right covers three categories of information which are "matters of public concern," namely: (1) official records; (2) documents and papers pertaining to official acts, transactions and decisions; and (3) government research data used in formulating policies. The first category refers to any document that is part of the public records in the custody of government agencies or officials. The second category refers to documents and papers recording, evidencing, establishing, confirming, supporting, justifying or explaining official acts, transactions or decisions of government agencies or officials. The third category refers to research data, whether raw, collated or processed, owned by the government and used in formulating government policies. The information that petitioner may access on the renegotiation of the JVA includes evaluation reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and other documents attached to such reports or minutes, all relating to the JVA. However, the right to information does not compel PEA to prepare lists, abstracts, summaries and the like relating to the renegotiation of the JVA.34 The right only affords access to records, documents and papers, which means the opportunity to inspect and copy them. One who exercises the right must copy the records, documents and papers at his expense. The exercise of the right is also subject to reasonable regulations to protect the integrity of the public records and to minimize disruption to government operations, like rules specifying when and how to conduct the inspection and copying.35 The right to information, however, does not extend to matters recognized as privileged information under the separation of powers.36 The right does not also apply to information on military and diplomatic secrets, information affecting national security, and information on investigations of crimes by law enforcement agencies before the prosecution of the accused, which courts have long recognized as confidential.37 The right may also be subject to other limitations that Congress may impose by law. There is no claim by PEA that the information demanded by petitioner is privileged information rooted in the separation of powers. The information does not cover Presidential conversations, correspondences, or discussions during closed-door Cabinet meetings which, like internal deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house of Congress,38 are recognized as confidential. This kind of information cannot be pried open by a co-equal branch of government. A frank exchange of exploratory ideas and assessments, free from the glare of publicity and pressure by interested parties, is essential to protect the independence of decision-making of those tasked to exercise Presidential, Legislative and Judicial power.39 This is not the situation in the instant case. We rule, therefore, that the constitutional right to information includes official information on on-going negotiations before a final contract. The information, however, must constitute definite propositions by the government and should not cover recognized exceptions like privileged information, military and diplomatic secrets and similar matters affecting national security and public order.40 Congress has also prescribed other limitations on the right to information in several legislations.41 Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed or to be reclaimed, violate the Constitution. The Regalian Doctrine

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine which holds that the State owns all lands and waters of the public domain. Upon the Spanish conquest of the Philippines, ownership of all "lands, territories and possessions" in the Philippines passed to the Spanish Crown.42 The King, as the sovereign ruler and representative of the people, acquired and owned all lands and territories in the Philippines except those he disposed of by grant or sale to private individuals. The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the State, in lieu of the King, as the owner of all lands and waters of the public domain. The Regalian doctrine is the foundation of the time-honored principle of land ownership that "all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain."43 Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian doctrine. Ownership and Disposition of Reclaimed Lands The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of the government to corporations and individuals. Later, on November 29, 1919, the Philippine Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the sale, of reclaimed lands of the government to corporations and individuals. On November 7, 1936, the National Assembly passed Commonwealth Act No. 141, also known as the Public Land Act, which authorized the lease, but not the sale, of reclaimed lands of the government to corporations and individuals. CA No. 141 continues to this day as the general law governing the classification and disposition of lands of the public domain. The Spanish Law of Waters of 1866 and the Civil Code of 1889 Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the maritime zone of the Spanish territory belonged to the public domain for public use.44 The Spanish Law of Waters of 1866 allowed the reclamation of the sea under Article 5, which provided as follows: "Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos or private persons, with proper permission, shall become the property of the party constructing such works, unless otherwise provided by the terms of the grant of authority." Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking the reclamation, provided the government issued the necessary permit and did not reserve ownership of the reclaimed land to the State. Article 339 of the Civil Code of 1889 defined property of public dominion as follows: "Art. 339. Property of public dominion is 1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, riverbanks, shores, roadsteads, and that of a similar character; 2. That belonging exclusively to the State which, without being of general public use, is employed in some public service, or in the development of the national wealth, such as walls, fortresses, and other works for the defense of the territory, and mines, until granted to private individuals."

Property devoted to public use referred to property open for use by the public. In contrast, property devoted to public service referred to property used for some specific public service and open only to those authorized to use the property. Property of public dominion referred not only to property devoted to public use, but also to property not so used but employed to develop the national wealth. This class of property constituted property of public dominion although employed for some economic or commercial activity to increase the national wealth. Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into private property, to wit: "Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of the territory, shall become a part of the private property of the State." This provision, however, was not self-executing. The legislature, or the executive department pursuant to law, must declare the property no longer needed for public use or territorial defense before the government could lease or alienate the property to private parties.45 Act No. 1654 of the Philippine Commission On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of reclaimed and foreshore lands. The salient provisions of this law were as follows: "Section 1. The control and disposition of the foreshore as defined in existing law, and the title to all Government or public lands made or reclaimed by the Government by dredging or filling or otherwise throughout the Philippine Islands, shall be retained by the Government without prejudice to vested rights and without prejudice to rights conceded to the City of Manila in the Luneta Extension. Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made or reclaimed by the Government by dredging or filling or otherwise to be divided into lots or blocks, with the necessary streets and alleyways located thereon, and shall cause plats and plans of such surveys to be prepared and filed with the Bureau of Lands. (b) Upon completion of such plats and plans the Governor-General shall give notice to the public that such parts of the lands so made or reclaimed as are not needed for public purposes will be leased for commercial and business purposes, x x x. xxx (e) The leases above provided for shall be disposed of to the highest and best bidder therefore, subject to such regulations and safeguards as the Governor-General may by executive order prescribe." (Emphasis supplied) Act No. 1654 mandated that the government should retain title to all lands reclaimed by the government. The Act also vested in the government control and disposition of foreshore lands. Private parties could lease lands reclaimed by the government only if these lands were no longer needed for public purpose. Act No. 1654 mandated public bidding in the lease of government reclaimed lands. Act No. 1654 made

government reclaimed lands sui generis in that unlike other public lands which the government could sell to private parties, these reclaimed lands were available only for lease to private parties. Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654 did not prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law of Waters. Lands reclaimed from the sea by private parties with government permission remained private lands. Act No. 2874 of the Philippine Legislature On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.46 The salient provisions of Act No. 2874, on reclaimed lands, were as follows: "Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and Natural Resources, shall from time to time classify the lands of the public domain into (a) Alienable or disposable, (b) Timber, and (c) Mineral lands, x x x. Sec. 7. For the purposes of the government and disposition of alienable or disposable public lands, the Governor-General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from time to time declare what lands are open to disposition or concession under this Act." Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially delimited or classified x x x. xxx Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall be classified as suitable for residential purposes or for commercial, industrial, or other productive purposes other than agricultural purposes, and shall be open to disposition or concession, shall be disposed of under the provisions of this chapter, and not otherwise. Sec. 56. The lands disposable under this title shall be classified as follows: (a) Lands reclaimed by the Government by dredging, filling, or other means; (b) Foreshore; (c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers; (d) Lands not included in any of the foregoing classes. x x x.

Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed of to private parties by lease only and not otherwise, as soon as the Governor-General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall declare that the same are not necessary for the public service and are open to disposition under this chapter. The lands included in class (d) may be disposed of by sale or lease under the provisions of this Act." (Emphasis supplied) Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain into x x x alienable or disposable"47 lands. Section 7 of the Act empowered the Governor-General to "declare what lands are open to disposition or concession." Section 8 of the Act limited alienable or disposable lands only to those lands which have been "officially delimited and classified." Section 56 of Act No. 2874 stated that lands "disposable under this title48 shall be classified" as government reclaimed, foreshore and marshy lands, as well as other lands. All these lands, however, must be suitable for residential, commercial, industrial or other productive non-agricultural purposes. These provisions vested upon the Governor-General the power to classify inalienable lands of the public domain into disposable lands of the public domain. These provisions also empowered the GovernorGeneral to classify further such disposable lands of the public domain into government reclaimed, foreshore or marshy lands of the public domain, as well as other non-agricultural lands. Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain classified as government reclaimed, foreshore and marshy lands "shall be disposed of to private parties by lease only and not otherwise." The Governor-General, before allowing the lease of these lands to private parties, must formally declare that the lands were "not necessary for the public service." Act No. 2874 reiterated the State policy to lease and not to sell government reclaimed, foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act No. 1654. Government reclaimed, foreshore and marshy lands remained sui generis, as the only alienable or disposable lands of the public domain that the government could not sell to private parties. The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy public lands for non-agricultural purposes retain their inherent potential as areas for public service. This is the reason the government prohibited the sale, and only allowed the lease, of these lands to private parties. The State always reserved these lands for some future public service. Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy lands into other non-agricultural lands under Section 56 (d). Lands falling under Section 56 (d) were the only lands for non-agricultural purposes the government could sell to private parties. Thus, under Act No. 2874, the government could not sell government reclaimed, foreshore and marshy lands to private parties, unless the legislature passed a law allowing their sale.49 Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with government permission remained private lands. Dispositions under the 1935 Constitution On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The 1935 Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that

"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time of the inauguration of the Government established under this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated, and no license, concession, or lease for the exploitation, development, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which cases beneficial use may be the measure and limit of the grant." (Emphasis supplied) The 1935 Constitution barred the alienation of all natural resources except public agricultural lands, which were the only natural resources the State could alienate. Thus, foreshore lands, considered part of the State's natural resources, became inalienable by constitutional fiat, available only for lease for 25 years, renewable for another 25 years. The government could alienate foreshore lands only after these lands were reclaimed and classified as alienable agricultural lands of the public domain. Government reclaimed and marshy lands of the public domain, being neither timber nor mineral lands, fell under the classification of public agricultural lands.50 However, government reclaimed and marshy lands, although subject to classification as disposable public agricultural lands, could only be leased and not sold to private parties because of Act No. 2874. The prohibition on private parties from acquiring ownership of government reclaimed and marshy lands of the public domain was only a statutory prohibition and the legislature could therefore remove such prohibition. The 1935 Constitution did not prohibit individuals and corporations from acquiring government reclaimed and marshy lands of the public domain that were classified as agricultural lands under existing public land laws. Section 2, Article XIII of the 1935 Constitution provided as follows: "Section 2. No private corporation or association may acquire, lease, or hold public agricultural lands in excess of one thousand and twenty four hectares, nor may any individual acquire such lands by purchase in excess of one hundred and forty hectares, or by lease in excess of one thousand and twenty-four hectares, or by homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceeding two thousand hectares, may be leased to an individual, private corporation, or association." (Emphasis supplied) Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No. 2874 to open for sale to private parties government reclaimed and marshy lands of the public domain. On the contrary, the legislature continued the long established State policy of retaining for the government title and ownership of government reclaimed and marshy lands of the public domain. Commonwealth Act No. 141 of the Philippine National Assembly On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as the Public Land Act, which compiled the then existing laws on lands of the public domain. CA No. 141, as amended, remains to this day the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands.51 Section 6 of CA No. 141 empowers the President to classify lands of the public domain into "alienable or disposable"52 lands of the public domain, which prior to such classification are inalienable and outside

the commerce of man. Section 7 of CA No. 141 authorizes the President to "declare what lands are open to disposition or concession." Section 8 of CA No. 141 states that the government can declare open for disposition or concession only lands that are "officially delimited and classified." Sections 6, 7 and 8 of CA No. 141 read as follows: "Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Commerce, shall from time to time classify the lands of the public domain into (a) Alienable or disposable, (b) Timber, and (c) Mineral lands, and may at any time and in like manner transfer such lands from one class to another,53 for the purpose of their administration and disposition. Sec. 7. For the purposes of the administration and disposition of alienable or disposable public lands, the President, upon recommendation by the Secretary of Agriculture and Commerce, shall from time to time declare what lands are open to disposition or concession under this Act. Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially delimited and classified and, when practicable, surveyed, and which have not been reserved for public or quasi-public uses, nor appropriated by the Government, nor in any manner become private property, nor those on which a private right authorized and recognized by this Act or any other valid law may be claimed, or which, having been reserved or appropriated, have ceased to be so. x x x." Thus, before the government could alienate or dispose of lands of the public domain, the President must first officially classify these lands as alienable or disposable, and then declare them open to disposition or concession. There must be no law reserving these lands for public or quasi-public uses. The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the public domain, are as follows: "Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land, is intended to be used for residential purposes or for commercial, industrial, or other productive purposes other than agricultural, and is open to disposition or concession, shall be disposed of under the provisions of this chapter and not otherwise. Sec. 59. The lands disposable under this title shall be classified as follows: (a) Lands reclaimed by the Government by dredging, filling, or other means; (b) Foreshore; (c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers; (d) Lands not included in any of the foregoing classes.

Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to any person, corporation, or association authorized to purchase or lease public lands for agricultural purposes. x x x. Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be disposed of to private parties by lease only and not otherwise, as soon as the President, upon recommendation by the Secretary of Agriculture, shall declare that the same are not necessary for the public service and are open to disposition under this chapter. The lands included in class (d) may be disposed of by sale or lease under the provisions of this Act." (Emphasis supplied) Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of the public domain. All these lands are intended for residential, commercial, industrial or other non-agricultural purposes. As before, Section 61 allowed only the lease of such lands to private parties. The government could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or those lands for nonagricultural purposes not classified as government reclaimed, foreshore and marshy disposable lands of the public domain. Foreshore lands, however, became inalienable under the 1935 Constitution which only allowed the lease of these lands to qualified private parties. Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for residential, commercial, industrial or other productive purposes other than agricultural "shall be disposed of under the provisions of this chapter and not otherwise." Under Section 10 of CA No. 141, the term "disposition" includes lease of the land. Any disposition of government reclaimed, foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter IX, Title III of CA No. 141,54 unless a subsequent law amended or repealed these provisions. In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of Appeals,55 Justice Reynato S. Puno summarized succinctly the law on this matter, as follows: "Foreshore lands are lands of public dominion intended for public use. So too are lands reclaimed by the government by dredging, filling, or other means. Act 1654 mandated that the control and disposition of the foreshore and lands under water remained in the national government. Said law allowed only the 'leasing' of reclaimed land. The Public Land Acts of 1919 and 1936 also declared that the foreshore and lands reclaimed by the government were to be "disposed of to private parties by lease only and not otherwise." Before leasing, however, the Governor-General, upon recommendation of the Secretary of Agriculture and Natural Resources, had first to determine that the land reclaimed was not necessary for the public service. This requisite must have been met before the land could be disposed of. But even then, the foreshore and lands under water were not to be alienated and sold to private parties. The disposition of the reclaimed land was only by lease. The land remained property of the State." (Emphasis supplied) As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained in effect at present." The State policy prohibiting the sale to private parties of government reclaimed, foreshore and marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect. The prohibition on the sale of foreshore lands, however, became a constitutional edict under the 1935 Constitution. Foreshore lands became inalienable as natural

resources of the State, unless reclaimed by the government and classified as agricultural lands of the public domain, in which case they would fall under the classification of government reclaimed lands. After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of the public domain continued to be only leased and not sold to private parties.56 These lands remained sui generis, as the only alienable or disposable lands of the public domain the government could not sell to private parties. Since then and until now, the only way the government can sell to private parties government reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law authorizing such sale. CA No. 141 does not authorize the President to reclassify government reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands classified under Section 59 (d) are the only alienable or disposable lands for non-agricultural purposes that the government could sell to private parties. Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under Section 59 that the government previously transferred to government units or entities could be sold to private parties. Section 60 of CA No. 141 declares that "Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the Secretary of Agriculture and Natural Resources, be reasonably necessary for the purposes for which such sale or lease is requested, and shall not exceed one hundred and forty-four hectares: Provided, however, That this limitation shall not apply to grants, donations, or transfers made to a province, municipality or branch or subdivision of the Government for the purposes deemed by said entities conducive to the public interest; but the land so granted, donated, or transferred to a province, municipality or branch or subdivision of the Government shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title, except when authorized by Congress: x x x." (Emphasis supplied) The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority required in Section 56 of Act No. 2874. One reason for the congressional authority is that Section 60 of CA No. 141 exempted government units and entities from the maximum area of public lands that could be acquired from the State. These government units and entities should not just turn around and sell these lands to private parties in violation of constitutional or statutory limitations. Otherwise, the transfer of lands for non-agricultural purposes to government units and entities could be used to circumvent constitutional limitations on ownership of alienable or disposable lands of the public domain. In the same manner, such transfers could also be used to evade the statutory prohibition in CA No. 141 on the sale of government reclaimed and marshy lands of the public domain to private parties. Section 60 of CA No. 141 constitutes by operation of law a lien on these lands.57 In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No. 141, Sections 63 and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide as follows: "Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now the Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of such authority, the Director of Lands shall give notice by public advertisement in the same manner as in the case of leases or sales of agricultural public land, x x x.

Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be made to the highest bidder. x x x." (Emphasis supplied) Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable or disposable lands of the public domain.58 Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish Law of Waters of 1866. Private parties could still reclaim portions of the sea with government permission. However, the reclaimed land could become private land only if classified as alienable agricultural land of the public domain open to disposition under CA No. 141. The 1935 Constitution prohibited the alienation of all natural resources except public agricultural lands. The Civil Code of 1950 The Civil Code of 1950 readopted substantially the definition of property of public dominion found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that "Art. 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. x x x. Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State." Again, the government must formally declare that the property of public dominion is no longer needed for public use or public service, before the same could be classified as patrimonial property of the State.59 In the case of government reclaimed and marshy lands of the public domain, the declaration of their being disposable, as well as the manner of their disposition, is governed by the applicable provisions of CA No. 141. Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those properties of the State which, without being for public use, are intended for public service or the "development of the national wealth." Thus, government reclaimed and marshy lands of the State, even if not employed for public use or public service, if developed to enhance the national wealth, are classified as property of public dominion. Dispositions under the 1973 Constitution The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian doctrine. Section 8, Article XIV of the 1973 Constitution stated that

"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State. With the exception of agricultural, industrial or commercial, residential, and resettlement lands of the public domain, natural resources shall not be alienated, and no license, concession, or lease for the exploration, development, exploitation, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for not more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which cases, beneficial use may be the measure and the limit of the grant." (Emphasis supplied) The 1973 Constitution prohibited the alienation of all natural resources with the exception of "agricultural, industrial or commercial, residential, and resettlement lands of the public domain." In contrast, the 1935 Constitution barred the alienation of all natural resources except "public agricultural lands." However, the term "public agricultural lands" in the 1935 Constitution encompassed industrial, commercial, residential and resettlement lands of the public domain.60 If the land of public domain were neither timber nor mineral land, it would fall under the classification of agricultural land of the public domain. Both the 1935 and 1973 Constitutions, therefore, prohibited the alienation of all natural resources except agricultural lands of the public domain. The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals who were citizens of the Philippines. Private corporations, even if wholly owned by Philippine citizens, were no longer allowed to acquire alienable lands of the public domain unlike in the 1935 Constitution. Section 11, Article XIV of the 1973 Constitution declared that "Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and development requirements of the natural resources, shall determine by law the size of land of the public domain which may be developed, held or acquired by, or leased to, any qualified individual, corporation, or association, and the conditions therefor. No private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area nor may any citizen hold such lands by lease in excess of five hundred hectares or acquire by purchase, homestead or grant, in excess of twenty-four hectares. No private corporation or association may hold by lease, concession, license or permit, timber or forest lands and other timber or forest resources in excess of one hundred thousand hectares. However, such area may be increased by the Batasang Pambansa upon recommendation of the National Economic and Development Authority." (Emphasis supplied) Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public domain only through lease. Only individuals could now acquire alienable lands of the public domain, and private corporations became absolutely barred from acquiring any kind of alienable land of the public domain. The constitutional ban extended to all kinds of alienable lands of the public domain, while the statutory ban under CA No. 141 applied only to government reclaimed, foreshore and marshy alienable lands of the public domain. PD No. 1084 Creating the Public Estates Authority On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084 creating PEA, a wholly government owned and controlled corporation with a special charter. Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers: "Sec. 4. Purpose. The Authority is hereby created for the following purposes:

(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or other means, or to acquire reclaimed land; (b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands, buildings, estates and other forms of real property, owned, managed, controlled and/or operated by the government; (c) To provide for, operate or administer such service as may be necessary for the efficient, economical and beneficial utilization of the above properties. Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the purposes for which it is created, have the following powers and functions: (a)To prescribe its by-laws. xxx (i) To hold lands of the public domain in excess of the area permitted to private corporations by statute. (j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal, ditch, flume x x x. xxx (o) To perform such acts and exercise such functions as may be necessary for the attainment of the purposes and objectives herein specified." (Emphasis supplied) PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain. Foreshore areas are those covered and uncovered by the ebb and flow of the tide.61 Submerged areas are those permanently under water regardless of the ebb and flow of the tide.62 Foreshore and submerged areas indisputably belong to the public domain63 and are inalienable unless reclaimed, classified as alienable lands open to disposition, and further declared no longer needed for public service. The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public domain did not apply to PEA since it was then, and until today, a fully owned government corporation. The constitutional ban applied then, as it still applies now, only to "private corporations and associations." PD No. 1084 expressly empowers PEA "to hold lands of the public domain" even "in excess of the area permitted to private corporations by statute." Thus, PEA can hold title to private lands, as well as title to lands of the public domain. In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain, there must be legislative authority empowering PEA to sell these lands. This legislative authority is necessary in view of Section 60 of CA No.141, which states "Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or branch or subdivision of the Government shall not be alienated, encumbered or otherwise disposed of in a manner affecting its title, except when authorized by Congress; x x x." (Emphasis supplied)

Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and submerged alienable lands of the public domain. Nevertheless, any legislative authority granted to PEA to sell its reclaimed alienable lands of the public domain would be subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain. Hence, such legislative authority could only benefit private individuals. Dispositions under the 1987 Constitution The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine. The 1987 Constitution declares that all natural resources are "owned by the State," and except for alienable agricultural lands of the public domain, natural resources cannot be alienated. Sections 2 and 3, Article XII of the 1987 Constitution state that "Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. x x x. Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands of the public domain may be further classified by law according to the uses which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant. Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor." (Emphasis supplied) The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations from acquiring any kind of alienable land of the public domain. Like the 1973 Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the public domain only through lease. As in the 1935 and 1973 Constitutions, the general law governing the lease to private corporations of reclaimed, foreshore and marshy alienable lands of the public domain is still CA No. 141. The Rationale behind the Constitutional Ban The rationale behind the constitutional ban on corporations from acquiring, except through lease, alienable lands of the public domain is not well understood. During the deliberations of the 1986 Constitutional Commission, the commissioners probed the rationale behind this ban, thus: "FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says: `No private corporation or association may hold alienable lands of the public domain except by lease, not to exceed one thousand hectares in area.'

If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the 1973 Constitution. In effect, it prohibits private corporations from acquiring alienable public lands. But it has not been very clear in jurisprudence what the reason for this is. In some of the cases decided in 1982 and 1983, it was indicated that the purpose of this is to prevent large landholdings. Is that the intent of this provision? MR. VILLEGAS: I think that is the spirit of the provision. FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a chapel stood because the Supreme Court said it would be in violation of this." (Emphasis supplied) In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way: "Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably diffuse land ownership or to encourage 'owner-cultivatorship and the economic family-size farm' and to prevent a recurrence of cases like the instant case. Huge landholdings by corporations or private persons had spawned social unrest." However, if the constitutional intent is to prevent huge landholdings, the Constitution could have simply limited the size of alienable lands of the public domain that corporations could acquire. The Constitution could have followed the limitations on individuals, who could acquire not more than 24 hectares of alienable lands of the public domain under the 1973 Constitution, and not more than 12 hectares under the 1987 Constitution. If the constitutional intent is to encourage economic family-size farms, placing the land in the name of a corporation would be more effective in preventing the break-up of farmlands. If the farmland is registered in the name of a corporation, upon the death of the owner, his heirs would inherit shares in the corporation instead of subdivided parcels of the farmland. This would prevent the continuing break-up of farmlands into smaller and smaller plots from one generation to the next. In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from acquiring more than the allowed area of alienable lands of the public domain. Without the constitutional ban, individuals who already acquired the maximum area of alienable lands of the public domain could easily set up corporations to acquire more alienable public lands. An individual could own as many corporations as his means would allow him. An individual could even hide his ownership of a corporation by putting his nominees as stockholders of the corporation. The corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by individuals of alienable lands of the public domain. The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a limited area of alienable land of the public domain to a qualified individual. This constitutional intent is safeguarded by the provision prohibiting corporations from acquiring alienable lands of the public domain, since the vehicle to circumvent the constitutional intent is removed. The available alienable public lands are gradually decreasing in the face of an ever-growing population. The most effective way to insure faithful adherence to this constitutional intent is to grant or sell alienable lands of the public domain only to individuals. This, it would seem, is the practical benefit arising from the constitutional ban. The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three properties, namely: 1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of 1,578,441 square meters;" 2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and 3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to regularize the configuration of the reclaimed area."65 PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further reclamation of about 250 hectares x x x," plus an option "granted to AMARI to subsequently reclaim another 350 hectares x x x."66 In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are still submerged areas forming part of Manila Bay. Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's "actual cost" in partially reclaiming the Freedom Islands. AMARI will also complete, at its own expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common areas. Title to AMARI's share in the net usable area, totaling 367.5 hectares, will be issued in the name of AMARI. Section 5.2 (c) of the Amended JVA provides that "x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or conveyance of the title pertaining to AMARI's Land share based on the Land Allocation Plan. PEA, when requested in writing by AMARI, shall then cause the issuance and delivery of the proper certificates of title covering AMARI's Land Share in the name of AMARI, x x x; provided, that if more than seventy percent (70%) of the titled area at any given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the titles pertaining to AMARI, until such time when a corresponding proportionate area of additional land pertaining to PEA has been titled." (Emphasis supplied) Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares of reclaimed land which will be titled in its name. To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture PEA's statutory authority, rights and privileges to reclaim foreshore and submerged areas in Manila Bay. Section 3.2.a of the Amended JVA states that "PEA hereby contributes to the joint venture its rights and privileges to perform Rawland Reclamation and Horizontal Development as well as own the Reclamation Area, thereby granting the Joint Venture the full and exclusive right, authority and privilege to undertake the Project in accordance with the Master Development Plan."

The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its supplemental agreement dated August 9, 1995. The Threshold Issue The threshold issue is whether AMARI, a private corporation, can acquire and own under the Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of Sections 2 and 3, Article XII of the 1987 Constitution which state that: "Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. x x x. xxx Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, x x x."(Emphasis supplied) Classification of Reclaimed Foreshore and Submerged Areas PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are alienable or disposable lands of the public domain. In its Memorandum,67 PEA admits that "Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable and disposable lands of the public domain: 'Sec. 59. The lands disposable under this title shall be classified as follows: (a) Lands reclaimed by the government by dredging, filling, or other means; x x x.'" (Emphasis supplied) Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365 admitted in its Report and Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands are classified as alienable and disposable lands of the public domain."69 The Legal Task Force concluded that "D. Conclusion Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of ownership and disposition over reclaimed lands have been transferred to PEA, by virtue of which PEA, as owner, may validly convey the same to any qualified person without violating the Constitution or any statute. The constitutional provision prohibiting private corporations from holding public land, except by lease (Sec. 3, Art. XVII,70 1987 Constitution), does not apply to reclaimed lands whose ownership has passed on to PEA by statutory grant."

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila Bay are part of the "lands of the public domain, waters x x x and other natural resources" and consequently "owned by the State." As such, foreshore and submerged areas "shall not be alienated," unless they are classified as "agricultural lands" of the public domain. The mere reclamation of these areas by PEA does not convert these inalienable natural resources of the State into alienable or disposable lands of the public domain. There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession. Moreover, these reclaimed lands cannot be classified as alienable or disposable if the law has reserved them for some public or quasipublic use.71 Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or concession which have been officially delimited and classified."72 The President has the authority to classify inalienable lands of the public domain into alienable or disposable lands of the public domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive Department attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the Philippine Government for use as the Chancery of the Philippine Embassy. Although the Chancery had transferred to another location thirteen years earlier, the Court still ruled that, under Article 42274 of the Civil Code, a property of public dominion retains such character until formally declared otherwise. The Court ruled that "The fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A property continues to be part of the public domain, not available for private appropriation or ownership 'until there is a formal declaration on the part of the government to withdraw it from being such' (Ignacio v. Director of Lands, 108 Phil. 335 [1960]." (Emphasis supplied) PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19, 1988 then President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for the 157.84 hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title corresponding to land patents. To this day, these certificates of title are still in the name of PEA. PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain. PD No. 1085 and President Aquino's issuance of a land patent also constitute a declaration that the Freedom Islands are no longer needed for public service. The Freedom Islands are thus alienable or disposable lands of the public domain, open to disposition or concession to qualified parties. At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the Freedom Islands although subsequently there were partial erosions on some areas. The government had also completed the necessary surveys on these islands. Thus, the Freedom Islands were no longer part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987 Constitution classifies lands of the public domain into "agricultural, forest or timber, mineral lands, and national parks." Being neither timber, mineral, nor national park lands, the reclaimed Freedom Islands necessarily fall under the classification of agricultural lands of the public domain. Under the 1987 Constitution, agricultural lands of the public domain are the only natural resources that the State may alienate to qualified private parties.

All other natural resources, such as the seas or bays, are "waters x x x owned by the State" forming part of the public domain, and are inalienable pursuant to Section 2, Article XII of the 1987 Constitution. AMARI claims that the Freedom Islands are private lands because CDCP, then a private corporation, reclaimed the islands under a contract dated November 20, 1973 with the Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866, argues that "if the ownership of reclaimed lands may be given to the party constructing the works, then it cannot be said that reclaimed lands are lands of the public domain which the State may not alienate."75 Article 5 of the Spanish Law of Waters reads as follows: "Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos or private persons, with proper permission, shall become the property of the party constructing such works, unless otherwise provided by the terms of the grant of authority." (Emphasis supplied) Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only with "proper permission" from the State. Private parties could own the reclaimed land only if not "otherwise provided by the terms of the grant of authority." This clearly meant that no one could reclaim from the sea without permission from the State because the sea is property of public dominion. It also meant that the State could grant or withhold ownership of the reclaimed land because any reclaimed land, like the sea from which it emerged, belonged to the State. Thus, a private person reclaiming from the sea without permission from the State could not acquire ownership of the reclaimed land which would remain property of public dominion like the sea it replaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of land ownership that "all lands that were not acquired from the government, either by purchase or by grant, belong to the public domain."77 Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the disposition of public lands. In particular, CA No. 141 requires that lands of the public domain must first be classified as alienable or disposable before the government can alienate them. These lands must not be reserved for public or quasi-public purposes.78 Moreover, the contract between CDCP and the government was executed after the effectivity of the 1973 Constitution which barred private corporations from acquiring any kind of alienable land of the public domain. This contract could not have converted the Freedom Islands into private lands of a private corporation. Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the reclamation of areas under water and revested solely in the National Government the power to reclaim lands. Section 1 of PD No. 3-A declared that "The provisions of any law to the contrary notwithstanding, the reclamation of areas under water, whether foreshore or inland, shall be limited to the National Government or any person authorized by it under a proper contract. (Emphasis supplied) x x x." PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas under water could now be undertaken only by the National Government or by a person contracted by the National Government. Private parties may reclaim from the sea only under a contract with the National Government, and no longer by grant or permission as provided in Section 5 of the Spanish Law of Waters of 1866.

Executive Order No. 525, issued on February 14, 1979, designated PEA as the National Government's implementing arm to undertake "all reclamation projects of the government," which "shall be undertaken by the PEA or through a proper contract executed by it with any person or entity." Under such contract, a private party receives compensation for reclamation services rendered to PEA. Payment to the contractor may be in cash, or in kind consisting of portions of the reclaimed land, subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain. The reclaimed land can be used as payment in kind only if the reclaimed land is first classified as alienable or disposable land open to disposition, and then declared no longer needed for public service. The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares which are still submerged and forming part of Manila Bay. There is no legislative or Presidential act classifying these submerged areas as alienable or disposable lands of the public domain open to disposition. These submerged areas are not covered by any patent or certificate of title. There can be no dispute that these submerged areas form part of the public domain, and in their present state are inalienable and outside the commerce of man. Until reclaimed from the sea, these submerged areas are, under the Constitution, "waters x x x owned by the State," forming part of the public domain and consequently inalienable. Only when actually reclaimed from the sea can these submerged areas be classified as public agricultural lands, which under the Constitution are the only natural resources that the State may alienate. Once reclaimed and transformed into public agricultural lands, the government may then officially classify these lands as alienable or disposable lands open to disposition. Thereafter, the government may declare these lands no longer needed for public service. Only then can these reclaimed lands be considered alienable or disposable lands of the public domain and within the commerce of man. The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable lands open to disposition is necessary because PEA is tasked under its charter to undertake public services that require the use of lands of the public domain. Under Section 5 of PD No. 1084, the functions of PEA include the following: "[T]o own or operate railroads, tramways and other kinds of land transportation, x x x; [T]o construct, maintain and operate such systems of sanitary sewers as may be necessary; [T]o construct, maintain and operate such storm drains as may be necessary." PEA is empowered to issue "rules and regulations as may be necessary for the proper use by private parties of any or all of the highways, roads, utilities, buildings and/or any of its properties and to impose or collect fees or tolls for their use." Thus, part of the reclaimed foreshore and submerged lands held by the PEA would actually be needed for public use or service since many of the functions imposed on PEA by its charter constitute essential public services. Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government." The same section also states that "[A]ll reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in relation to PD No. 3A and PD No.1084, PEA became the primary implementing agency of the National Government to reclaim foreshore and submerged lands of the public domain. EO No. 525 recognized PEA as the government entity "to undertake the reclamation of lands and ensure their maximum utilization in promoting public welfare and interests."79 Since large portions of these reclaimed lands would obviously be needed for public service, there must be a formal declaration segregating reclaimed lands no longer needed for public service from those still needed for public service.1wphi1.nt

Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned by the PEA," could not automatically operate to classify inalienable lands into alienable or disposable lands of the public domain. Otherwise, reclaimed foreshore and submerged lands of the public domain would automatically become alienable once reclaimed by PEA, whether or not classified as alienable or disposable. The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests in the Department of Environment and Natural Resources ("DENR" for brevity) the following powers and functions: "Sec. 4. Powers and Functions. The Department shall: (1) x x x xxx (4) Exercise supervision and control over forest lands, alienable and disposable public lands, mineral resources and, in the process of exercising such control, impose appropriate taxes, fees, charges, rentals and any such form of levy and collect such revenues for the exploration, development, utilization or gathering of such resources; xxx (14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits, concessions, lease agreements and such other privileges concerning the development, exploration and utilization of the country's marine, freshwater, and brackish water and over all aquatic resources of the country and shall continue to oversee, supervise and police our natural resources; cancel or cause to cancel such privileges upon failure, non-compliance or violations of any regulation, order, and for all other causes which are in furtherance of the conservation of natural resources and supportive of the national interest; (15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain and serve as the sole agency responsible for classification, sub-classification, surveying and titling of lands in consultation with appropriate agencies."80 (Emphasis supplied) As manager, conservator and overseer of the natural resources of the State, DENR exercises "supervision and control over alienable and disposable public lands." DENR also exercises "exclusive jurisdiction on the management and disposition of all lands of the public domain." Thus, DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should be reclaimed or not. This means that PEA needs authorization from DENR before PEA can undertake reclamation projects in Manila Bay, or in any part of the country. DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain. Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under Sections 681 and 782 of CA No. 141. Once DENR decides that the reclaimed lands should be so classified, it then recommends to the President the issuance of a proclamation classifying the lands as alienable or disposable lands of the public domain open to disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the Revised Administrative Code and Sections 6 and 7 of CA No. 141.

In short, DENR is vested with the power to authorize the reclamation of areas under water, while PEA is vested with the power to undertake the physical reclamation of areas under water, whether directly or through private contractors. DENR is also empowered to classify lands of the public domain into alienable or disposable lands subject to the approval of the President. On the other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain. Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not make the reclaimed lands alienable or disposable lands of the public domain, much less patrimonial lands of PEA. Likewise, the mere transfer by the National Government of lands of the public domain to PEA does not make the lands alienable or disposable lands of the public domain, much less patrimonial lands of PEA. Absent two official acts a classification that these lands are alienable or disposable and open to disposition and a declaration that these lands are not needed for public service, lands reclaimed by PEA remain inalienable lands of the public domain. Only such an official classification and formal declaration can convert reclaimed lands into alienable or disposable lands of the public domain, open to disposition under the Constitution, Title I and Title III83 of CA No. 141 and other applicable laws.84 PEA's Authority to Sell Reclaimed Lands PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain, the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or subdivision of the government "shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title, except when authorized by Congress: x x x."85 (Emphasis by PEA) In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987, which states that "Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following: x x x." Thus, the Court concluded that a law is needed to convey any real property belonging to the Government. The Court declared that "It is not for the President to convey real property of the government on his or her own sole will. Any such conveyance must be authorized and approved by a law enacted by the Congress. It requires executive and legislative concurrence." (Emphasis supplied) PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that "The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the contract for the reclamation and construction of the Manila-Cavite Coastal Road Project between the Republic of the Philippines and the Construction and Development Corporation of the Philippines dated November 20, 1973 and/or any other contract or reclamation covering the same area is hereby transferred, conveyed and assigned to the ownership and administration of the Public Estates Authority established pursuant to PD No. 1084; Provided, however, That the rights and interests of the Construction and Development Corporation of the Philippines pursuant to the aforesaid contract shall be recognized and respected.

Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations of the Republic of the Philippines (Department of Public Highways) arising from, or incident to, the aforesaid contract between the Republic of the Philippines and the Construction and Development Corporation of the Philippines. In consideration of the foregoing transfer and assignment, the Public Estates Authority shall issue in favor of the Republic of the Philippines the corresponding shares of stock in said entity with an issued value of said shares of stock (which) shall be deemed fully paid and non-assessable. The Secretary of Public Highways and the General Manager of the Public Estates Authority shall execute such contracts or agreements, including appropriate agreements with the Construction and Development Corporation of the Philippines, as may be necessary to implement the above. Special land patent/patents shall be issued by the Secretary of Natural Resources in favor of the Public Estates Authority without prejudice to the subsequent transfer to the contractor or his assignees of such portion or portions of the land reclaimed or to be reclaimed as provided for in the above-mentioned contract. On the basis of such patents, the Land Registration Commission shall issue the corresponding certificate of title." (Emphasis supplied) On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that "Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be responsible for its administration, development, utilization or disposition in accordance with the provisions of Presidential Decree No. 1084. Any and all income that the PEA may derive from the sale, lease or use of reclaimed lands shall be used in accordance with the provisions of Presidential Decree No. 1084." There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed lands. PD No. 1085 merely transferred "ownership and administration" of lands reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA "shall belong to or be owned by PEA." EO No. 525 expressly states that PEA should dispose of its reclaimed lands "in accordance with the provisions of Presidential Decree No. 1084," the charter of PEA. PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled and/or operated by the government."87 (Emphasis supplied) There is, therefore, legislative authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public domain. PEA may sell to private parties its patrimonial properties in accordance with the PEA charter free from constitutional limitations. The constitutional ban on private corporations from acquiring alienable lands of the public domain does not apply to the sale of PEA's patrimonial lands. PEA may also sell its alienable or disposable lands of the public domain to private individuals since, with the legislative authority, there is no longer any statutory prohibition against such sales and the constitutional ban does not apply to individuals. PEA, however, cannot sell any of its alienable or disposable lands of the public domain to private corporations since Section 3, Article XII of the 1987 Constitution expressly prohibits such sales. The legislative authority benefits only individuals. Private corporations remain barred from acquiring any kind of alienable land of the public domain, including government reclaimed lands.

The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the "contractor or his assignees" (Emphasis supplied) would not apply to private corporations but only to individuals because of the constitutional ban. Otherwise, the provisions of PD No. 1085 would violate both the 1973 and 1987 Constitutions. The requirement of public auction in the sale of reclaimed lands Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to disposition, and further declared no longer needed for public service, PEA would have to conduct a public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63 and 67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a public auction.88 Special Patent No. 3517 expressly states that the patent is issued by authority of the Constitution and PD No. 1084, "supplemented by Commonwealth Act No. 141, as amended." This is an acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed alienable lands of the public domain unless otherwise provided by law. Executive Order No. 654,89 which authorizes PEA "to determine the kind and manner of payment for the transfer" of its assets and properties, does not exempt PEA from the requirement of public auction. EO No. 654 merely authorizes PEA to decide the mode of payment, whether in kind and in installment, but does not authorize PEA to dispense with public auction. Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code, the government is required to sell valuable government property through public bidding. Section 79 of PD No. 1445 mandates that "Section 79. When government property has become unserviceable for any cause, or is no longer needed, it shall, upon application of the officer accountable therefor, be inspected by the head of the agency or his duly authorized representative in the presence of the auditor concerned and, if found to be valueless or unsaleable, it may be destroyed in their presence. If found to be valuable, it may be sold at public auction to the highest bidder under the supervision of the proper committee on award or similar body in the presence of the auditor concerned or other authorized representative of the Commission, after advertising by printed notice in the Official Gazette, or for not less than three consecutive days in any newspaper of general circulation, or where the value of the property does not warrant the expense of publication, by notices posted for a like period in at least three public places in the locality where the property is to be sold. In the event that the public auction fails, the property may be sold at a private sale at such price as may be fixed by the same committee or body concerned and approved by the Commission." It is only when the public auction fails that a negotiated sale is allowed, in which case the Commission on Audit must approve the selling price.90 The Commission on Audit implements Section 79 of the Government Auditing Code through Circular No. 89-29691 dated January 27, 1989. This circular emphasizes that government assets must be disposed of only through public auction, and a negotiated sale can be resorted to only in case of "failure of public auction." At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore and submerged alienable lands of the public domain. Private corporations are barred from bidding at the auction sale of any kind of alienable land of the public domain. PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA imposed a condition that the winning bidder should reclaim another 250 hectares of submerged areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of the additional reclaimed areas in favor of the

winning bidder.92 No one, however, submitted a bid. On December 23, 1994, the Government Corporate Counsel advised PEA it could sell the Freedom Islands through negotiation, without need of another public bidding, because of the failure of the public bidding on December 10, 1991.93 However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the additional 250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim another 350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area to 750 hectares.94 The failure of public bidding on December 10, 1991, involving only 407.84 hectares,95 is not a valid justification for a negotiated sale of 750 hectares, almost double the area publicly auctioned. Besides, the failure of public bidding happened on December 10, 1991, more than three years before the signing of the original JVA on April 25, 1995. The economic situation in the country had greatly improved during the intervening period. Reclamation under the BOT Law and the Local Government Code The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear: "Private corporations or associations may not hold such alienable lands of the public domain except by lease, x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA and AMARI as legislative authority to sell reclaimed lands to private parties, recognizes the constitutional ban. Section 6 of RA No. 6957 states "Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance of any infrastructure projects undertaken through the build-operate-and-transfer arrangement or any of its variations pursuant to the provisions of this Act, the project proponent x x x may likewise be repaid in the form of a share in the revenue of the project or other non-monetary payments, such as, but not limited to, the grant of a portion or percentage of the reclaimed land, subject to the constitutional requirements with respect to the ownership of the land: x x x." (Emphasis supplied) A private corporation, even one that undertakes the physical reclamation of a government BOT project, cannot acquire reclaimed alienable lands of the public domain in view of the constitutional ban. Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local governments in land reclamation projects to pay the contractor or developer in kind consisting of a percentage of the reclaimed land, to wit: "Section 302. Financing, Construction, Maintenance, Operation, and Management of Infrastructure Projects by the Private Sector. x x x xxx In case of land reclamation or construction of industrial estates, the repayment plan may consist of the grant of a portion or percentage of the reclaimed land or the industrial estate constructed." Although Section 302 of the Local Government Code does not contain a proviso similar to that of the BOT Law, the constitutional restrictions on land ownership automatically apply even though not expressly mentioned in the Local Government Code. Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the contractor or developer is an individual, portions of the reclaimed land, not exceeding 12 hectares96 of non-agricultural

lands, may be conveyed to him in ownership in view of the legislative authority allowing such conveyance. This is the only way these provisions of the BOT Law and the Local Government Code can avoid a direct collision with Section 3, Article XII of the 1987 Constitution. Registration of lands of the public domain Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public respondent PEA transformed such lands of the public domain to private lands." This theory is echoed by AMARI which maintains that the "issuance of the special patent leading to the eventual issuance of title takes the subject land away from the land of public domain and converts the property into patrimonial or private property." In short, PEA and AMARI contend that with the issuance of Special Patent No. 3517 and the corresponding certificates of titles, the 157.84 hectares comprising the Freedom Islands have become private lands of PEA. In support of their theory, PEA and AMARI cite the following rulings of the Court: 1. Sumail v. Judge of CFI of Cotabato,97 where the Court held "Once the patent was granted and the corresponding certificate of title was issued, the land ceased to be part of the public domain and became private property over which the Director of Lands has neither control nor jurisdiction." 2. Lee Hong Hok v. David,98 where the Court declared "After the registration and issuance of the certificate and duplicate certificate of title based on a public land patent, the land covered thereby automatically comes under the operation of Republic Act 496 subject to all the safeguards provided therein."3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,99 where the Court ruled "While the Director of Lands has the power to review homestead patents, he may do so only so long as the land remains part of the public domain and continues to be under his exclusive control; but once the patent is registered and a certificate of title is issued, the land ceases to be part of the public domain and becomes private property over which the Director of Lands has neither control nor jurisdiction." 4. Manalo v. Intermediate Appellate Court,100 where the Court held "When the lots in dispute were certified as disposable on May 19, 1971, and free patents were issued covering the same in favor of the private respondents, the said lots ceased to be part of the public domain and, therefore, the Director of Lands lost jurisdiction over the same." 5.Republic v. Court of Appeals,101 where the Court stated "Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a land grant to the Mindanao Medical Center, Bureau of Medical Services, Department of Health, of the whole lot, validly sufficient for initial registration under the Land Registration Act. Such land grant is constitutive of a 'fee simple' title or absolute title in favor of petitioner Mindanao Medical Center. Thus, Section 122 of the Act, which governs the registration of grants or patents involving public lands, provides that 'Whenever public lands in the Philippine Islands belonging to the Government of the United States or to the Government of the Philippines are alienated, granted or conveyed to persons or to public or private corporations, the

same shall be brought forthwith under the operation of this Act (Land Registration Act, Act 496) and shall become registered lands.'" The first four cases cited involve petitions to cancel the land patents and the corresponding certificates of titles issued to private parties. These four cases uniformly hold that the Director of Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the land automatically comes under the Torrens System. The fifth case cited involves the registration under the Torrens System of a 12.8-hectare public land granted by the National Government to Mindanao Medical Center, a government unit under the Department of Health. The National Government transferred the 12.8-hectare public land to serve as the site for the hospital buildings and other facilities of Mindanao Medical Center, which performed a public service. The Court affirmed the registration of the 12.8-hectare public land in the name of Mindanao Medical Center under Section 122 of Act No. 496. This fifth case is an example of a public land being registered under Act No. 496 without the land losing its character as a property of public dominion. In the instant case, the only patent and certificates of title issued are those in the name of PEA, a wholly government owned corporation performing public as well as proprietary functions. No patent or certificate of title has been issued to any private party. No one is asking the Director of Lands to cancel PEA's patent or certificates of title. In fact, the thrust of the instant petition is that PEA's certificates of title should remain with PEA, and the land covered by these certificates, being alienable lands of the public domain, should not be sold to a private corporation. Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or public ownership of the land. Registration is not a mode of acquiring ownership but is merely evidence of ownership previously conferred by any of the recognized modes of acquiring ownership. Registration does not give the registrant a better right than what the registrant had prior to the registration.102 The registration of lands of the public domain under the Torrens system, by itself, cannot convert public lands into private lands.103 Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the alienable land of the public domain automatically becomes private land cannot apply to government units and entities like PEA. The transfer of the Freedom Islands to PEA was made subject to the provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by then President Aquino, to wit: "NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and in conformity with the provisions of Presidential Decree No. 1084, supplemented by Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto the Public Estates Authority the aforesaid tracts of land containing a total area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the technical description of which are hereto attached and made an integral part hereof." (Emphasis supplied) Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No. 1084. Section 60 of CA No. 141 prohibits, "except when authorized by Congress," the sale of alienable lands of the public domain that are transferred to government units or entities. Section 60 of CA No. 141 constitutes, under Section 44 of PD No. 1529, a "statutory lien affecting title" of the registered land even if not annotated on the certificate of title.104 Alienable lands of the public domain held by government entities under Section 60 of CA No. 141 remain public lands because they cannot be alienated or encumbered unless Congress passes a law authorizing their disposition. Congress, however, cannot

authorize the sale to private corporations of reclaimed alienable lands of the public domain because of the constitutional ban. Only individuals can benefit from such law. The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141 does not automatically convert alienable lands of the public domain into private or patrimonial lands. The alienable lands of the public domain must be transferred to qualified private parties, or to government entities not tasked to dispose of public lands, before these lands can become private or patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress can declare lands of the public domain as private or patrimonial lands in the hands of a government agency tasked to dispose of public lands. This will allow private corporations to acquire directly from government agencies limitless areas of lands which, prior to such law, are concededly public lands. Under EO No. 525, PEA became the central implementing agency of the National Government to reclaim foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that "EXECUTIVE ORDER NO. 525 Designating the Public Estates Authority as the Agency Primarily Responsible for all Reclamation Projects Whereas, there are several reclamation projects which are ongoing or being proposed to be undertaken in various parts of the country which need to be evaluated for consistency with national programs; Whereas, there is a need to give further institutional support to the Government's declared policy to provide for a coordinated, economical and efficient reclamation of lands; Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited to the National Government or any person authorized by it under proper contract; Whereas, a central authority is needed to act on behalf of the National Government which shall ensure a coordinated and integrated approach in the reclamation of lands; Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a government corporation to undertake reclamation of lands and ensure their maximum utilization in promoting public welfare and interests; and Whereas, Presidential Decree No. 1416 provides the President with continuing authority to reorganize the national government including the transfer, abolition, or merger of functions and offices. NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416, do hereby order and direct the following: Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government. All reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; Provided, that, reclamation projects of any national government agency or entity authorized under its charter shall be undertaken in consultation with the PEA upon approval of the President.

x x x ." As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of other alienable lands, does not dispose of private lands but alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands become private lands. In the hands of the government agency tasked and authorized to dispose of alienable of disposable lands of the public domain, these lands are still public, not private lands. Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as well as "any and all kinds of lands." PEA can hold both lands of the public domain and private lands. Thus, the mere fact that alienable lands of the public domain like the Freedom Islands are transferred to PEA and issued land patents or certificates of title in PEA's name does not automatically make such lands private. To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. PEA will simply turn around, as PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now numbering over 80 million strong. This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can "acquire x x x any and all kinds of lands." This will open the floodgates to corporations and even individuals acquiring hundreds of hectares of alienable lands of the public domain under the guise that in the hands of PEA these lands are private lands. This will result in corporations amassing huge landholdings never before seen in this country - creating the very evil that the constitutional ban was designed to prevent. This will completely reverse the clear direction of constitutional development in this country. The 1935 Constitution allowed private corporations to acquire not more than 1,024 hectares of public lands.105 The 1973 Constitution prohibited private corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally reiterated this prohibition. The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No. 1529, automatically become private lands is contrary to existing laws. Several laws authorize lands of the public domain to be registered under the Torrens System or Act No. 496, now PD No. 1529, without losing their character as public lands. Section 122 of Act No. 496, and Section 103 of PD No. 1529, respectively, provide as follows: Act No. 496 "Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of the Philippine Islands are alienated, granted, or conveyed to persons or the public or private corporations, the same shall be brought forthwith under the operation of this Act and shall become registered lands." PD No. 1529

"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government alienated, granted or conveyed to any person, the same shall be brought forthwith under the operation of this Decree." (Emphasis supplied) Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529 includes conveyances of public lands to public corporations. Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or branch or subdivision of the Government," as provided in Section 60 of CA No. 141, may be registered under the Torrens System pursuant to Section 103 of PD No. 1529. Such registration, however, is expressly subject to the condition in Section 60 of CA No. 141 that the land "shall not be alienated, encumbered or otherwise disposed of in a manner affecting its title, except when authorized by Congress." This provision refers to government reclaimed, foreshore and marshy lands of the public domain that have been titled but still cannot be alienated or encumbered unless expressly authorized by Congress. The need for legislative authority prevents the registered land of the public domain from becoming private land that can be disposed of to qualified private parties. The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be registered under the Torrens System. Section 48, Chapter 12, Book I of the Code states "Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following: (1) x x x (2) For property belonging to the Republic of the Philippines, but titled in the name of any political subdivision or of any corporate agency or instrumentality, by the executive head of the agency or instrumentality." (Emphasis supplied) Thus, private property purchased by the National Government for expansion of a public wharf may be titled in the name of a government corporation regulating port operations in the country. Private property purchased by the National Government for expansion of an airport may also be titled in the name of the government agency tasked to administer the airport. Private property donated to a municipality for use as a town plaza or public school site may likewise be titled in the name of the municipality.106 All these properties become properties of the public domain, and if already registered under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or provision in any existing law for the deregistration of land from the Torrens System. Private lands taken by the Government for public use under its power of eminent domain become unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529 authorizes the Register of Deeds to issue in the name of the National Government new certificates of title covering such expropriated lands. Section 85 of PD No. 1529 states "Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein, is expropriated or taken by eminent domain, the National Government, province, city or municipality, or any other agency or instrumentality exercising such right shall file for registration in the proper Registry a certified copy of the judgment which shall state definitely by an adequate description, the particular property or interest expropriated, the number of the certificate of title, and the nature of the public use. A

memorandum of the right or interest taken shall be made on each certificate of title by the Register of Deeds, and where the fee simple is taken, a new certificate shall be issued in favor of the National Government, province, city, municipality, or any other agency or instrumentality exercising such right for the land so taken. The legal expenses incident to the memorandum of registration or issuance of a new certificate of title shall be for the account of the authority taking the land or interest therein." (Emphasis supplied) Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws. AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the Amended JVA "is not a sale but a joint venture with a stipulation for reimbursement of the original cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP under its 1973 contract with the Republic." Whether the Amended JVA is a sale or a joint venture, the fact remains that the Amended JVA requires PEA to "cause the issuance and delivery of the certificates of title conveying AMARI's Land Share in the name of AMARI."107 This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that private corporations "shall not hold such alienable lands of the public domain except by lease." The transfer of title and ownership to AMARI clearly means that AMARI will "hold" the reclaimed lands other than by lease. The transfer of title and ownership is a "disposition" of the reclaimed lands, a transaction considered a sale or alienation under CA No. 141,108 the Government Auditing Code,109 and Section 3, Article XII of the 1987 Constitution. The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas form part of the public domain and are inalienable. Lands reclaimed from foreshore and submerged areas also form part of the public domain and are also inalienable, unless converted pursuant to law into alienable or disposable lands of the public domain. Historically, lands reclaimed by the government are sui generis, not available for sale to private parties unlike other alienable public lands. Reclaimed lands retain their inherent potential as areas for public use or public service. Alienable lands of the public domain, increasingly becoming scarce natural resources, are to be distributed equitably among our ever-growing population. To insure such equitable distribution, the 1973 and 1987 Constitutions have barred private corporations from acquiring any kind of alienable land of the public domain. Those who attempt to dispose of inalienable natural resources of the State, or seek to circumvent the constitutional ban on alienation of lands of the public domain to private corporations, do so at their own risk. We can now summarize our conclusions as follows: 1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws. 2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the

public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man. 3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares110 of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain. 4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares111 of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain. Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409112 of the Civil Code, contracts whose "object or purpose is contrary to law," or whose "object is outside the commerce of men," are "inexistent and void from the beginning." The Court must perform its duty to defend and uphold the Constitution, and therefore declares the Amended JVA null and void ab initio. Seventh issue: whether the Court is the proper forum to raise the issue of whether the Amended JVA is grossly disadvantageous to the government. Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last issue. Besides, the Court is not a trier of facts, and this last issue involves a determination of factual matters. WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint Venture Agreement which is hereby declared NULL and VOID ab initio. SO ORDERED. Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, and Corona, JJ., concur.

Footnote 1 Section 4 of PD No. 1084. 2 PEA's Memorandum dated August 4, 1999, p. 3.

3 PEA's Memorandum, supra note 2 at 7. PEA's Memorandum quoted extensively, in its Statement of Facts and the Case, the Statement of Facts in Senate Committee Report No. 560 dated September 16, 1997. 4 In Opinion No. 330 dated December 23, 1994, the Government Corporate Counsel, citing COA Audit Circular No. 89-296, advised PEA that PEA could negotiate the sale of the 157.84-hectare Freedom Islands in view of the failure of the public bidding held on December 10, 1991 where there was not a single bidder. See also Senate Committee Report No. 560, p. 12. 5 PEA's Memorandum, supra note 2 at 9. 6 Ibid. 7 The existence of this report is a matter of judicial notice pursuant to Section 1, Rule 129 of the Rules of Court which provides, "A court shall take judicial notice, without the introduction of evidence, of x x x the official acts of the legislature x x x." 8 Teofisto Guingona, Jr. 9 Renato Cayetano. 10 Virgilio C. Abejo. 11 Report and Recommendation of the Legal Task Force, Annex "C", AMARI's Memorandum dated June 19, 1999. 12 AMARI's Comment dated June 24, 1998, p. 3; Rollo, p. 68. 13 AMARI filed three motions for extension of time to file comment (Rollo, pp. 32, 38, 48), while PEA filed nine motions for extension of time (Rollo, pp. 127, 139). 14 Petitioner's Memorandum dated July 6, 1999, p. 42. 15 Represented by the Office of the Solicitor General, with Solicitor General Ricardo P. Galvez, Assistant Solicitor General Azucena R. Balanon-Corpuz, and Associate Solicitor Raymund I. Rigodon signing PEA's Memorandum. 16 Represented by Azcuna Yorac Arroyo & Chua Law Offices, and Romulo Mabanta Sayoc & De los Angeles Law Offices. 17 Salonga v. Pao, 134 SCRA 438 (1985); Gonzales v. Marcos, 65 SCRA 624 (1975 ); Aquino v. Enrile, 59 SCRA 183 (1974 ); Dela Camara v. Enage, 41 SCRA 1 (1971 ). 18 Section 11, Article XIV. 19 Manila Electric Co. v. Judge F. Castro-Bartolome, 114 SCRA 799 (1982); Republic v. CA and Iglesia, and Republic v. Cendana and Iglesia ni Cristo, 119 SCRA 449 (1982); Republic v. Villanueva and Iglesia ni Cristo, 114 SCRA 875 (1982); Director of Lands v. Lood, 124 SCRA 460 (1983); Republic v. Iglesia ni Cristo, 128 SCRA 44 (1984); Director of Lands v. Hermanos y Hermanas de Sta. Cruz de Mayo, Inc., 141

SCRA 21 (1986); Director of Lands v. IAC and Acme Plywood & Veneer Co., 146 SCRA 509 (1986); Republic v. IAC and Roman Catholic Bishop of Lucena, 168 SCRA 165 (1988); Natividad v. CA, 202 SCRA 493 (1991); Villaflor v. CA and Nasipit Lumber Co., 280 SCRA 297 (1997). In Ayog v. Cusi, 118 SCRA 492 (1982), the Court did not apply the constitutional ban in the 1973 Constitution because the applicant corporation, Bian Development Co., Inc., had fully complied with all its obligations and even paid the full purchase price before the effectivity of the 1973 Constitution, although the sales patent was issued after the 1973 Constitution took effect. 20 PD No. 1073. 21 Annex "B", AMARI's Memorandum dated June 19, 1999, Section 5.2 (c) and (e) of the Amended JVA, pp. 16-17. 22 Chavez v. PCGG, 299 SCRA 744 (1998). 23 136 SCRA 27 (1985). 24 Article 2 of the Civil Code (prior to its amendment by EO No. 200) provided as follows: "Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is provided otherwise, x x x." 25 Section 1 of CA No. 638 provides as follows: "There shall be published in the Official Gazette all important legislative acts and resolutions of the Congress of the Philippines; all executive and administrative orders and proclamations, except such as have no general applicability; x x x." 26 Section 79 of the Government Auditing Codes provides as follows: "When government property has become unserviceable for any cause, or is no longer needed, it shall, upon application of the officer accountable therefor, be inspected by the head of the agency or his duly authorized representative in the presence of the auditor concerned and, if found to be valueless or unsaleable, it may be destroyed in their presence. If found to be valuable, it may be sold at public auction to the highest bidder under the supervision of the proper committee on award or similar body in the presence of the auditor concerned or other authorized representative of the Commission, after advertising by printed notice in the Official Gazette, or for not less than three consecutive days in any newspaper of general circulation, or where the value of the property does not warrant the expense of publication, by notices posted for a like period in at least three public places in the locality where the property is to be sold. In the event that the public auction fails, the property may be sold at a private sale at such price as may be fixed by the same committee or body concerned and approved by the Commission." 27 Paat v. Court of Appeals, 266 SCRA 167 (1997); Quisumbing v. Judge Gumban, 193 SCRA 520 (1991); Valmonte v. Belmonte, Jr., 170 SCRA 256 (1989). 28 See note 22. 29 Section 1, Article XI of the 1987 Constitution states as follows: "Public office is a public trust. Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives." 30 170 SCRA 256 (1989).

31 See note 22. 32 Record of the Constitutional Commission, Vol. V, pp. 24-25, (1986). 33 Supra, Note 22. 34 Ibid. 35 Legaspi v. Civil Service Commission, 150 SCRA 530 (1987). 36 Almonte v. Vasquez, 244 SCRA 286 (1995). 37 See Note 22. 38 Chavez v. PCGG, see note 22; Aquino-Sarmiento v. Morato, 203 SCRA 515 (1991). 39 Almonte v. Vasquez, see note 36. 40 People's Movement for Press Freedom, et al. v. Hon. Raul Manglapus, G.R. No. 84642, En Banc Resolution dated April 13, 1988; Chavez v. PCGG, see note 22. 41 Section 270 of the National Internal Revenue Code punishes any officer or employee of the Bureau of Internal Revenue who divulges to any person, except as allowed by law, information regarding the business, income, or estate of any taxpayer, the secrets, operation, style of work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties. Section 14 of R.A. No. 8800 (Safeguard Measures Act) prohibits the release to the public of confidential information submitted in evidence to the Tariff Commission. Section 3 (n) of R.A. No. 8504 (Philippine AIDS Prevention and Control Act) classifies as confidential the medical records of HIV patients. Section 6 (j) of R.A. No. 8043 (Inter-Country Adoption Act) classifies as confidential the records of the adopted child, adopting parents, and natural parents. Section 94 (f) of R.A. No. 7942 (Philippine Mining Act) requires the Department of Environment and Natural Resources to maintain the confidentiality of confidential information supplied by contractors who are parties to mineral agreements or financial and technical assistance agreements. 42 The Recopilacion de Leyes de las Indias declared that: "We, having acquired full sovereignty over the Indies, and all lands, territories, and possessions not heretofore ceded away by our royal predecessors, or by us, or in our name, still pertaining to the royal crown and patrimony, it is our will that all lands which are held without proper and true deeds of grant be restored to us according as they belong to us, in order that after reserving before all what to us or to our viceroys, audiencias, and governors may seem necessary for public squares, ways, pastures, and commons in those places which are peopled, taking into consideration not only their present condition, but also their future and their probable increase, and after distributing to the natives what may be necessary for tillage and pasturage, confirming them in what they now have and giving them more if necessary, all the rest of said lands may remain free and unencumbered for us to dispose of as we may wish." See concurring opinion of Justice Reynato S. Puno in Republic Real Estate Corporation v. Court of Appeals, 299 SCRA 199 (1998). 43 Cario v. Insular Government, 41 Phil. 935 (1909). The exception mentioned in Cario, referring to lands in the possession of an occupant and of his predecessors-in-interest, since time immemorial, is actually a species of a grant by the State. The United States Supreme Court, speaking through Justice

Oliver Wendell Holmes, Jr., declared in Cario: "Prescription is mentioned again in the royal cedula of October 15, 1754, cited in 3 Philippine, 546; 'Where such possessors shall not be able to produce title deeds, it shall be sufficient if they shall show that ancient possession, as a valid title by prescription.' It may be that this means possession from before 1700; but, at all events, the principle is admitted. As prescription, even against the Crown lands, was recognized by the laws of Spain, we see no sufficient reason for hesitating to admit that it was recognized in the Philippines in regard to lands over which Spain had only a paper sovereignty." See also Republic v. Lee, 197 SCRA 13 (1991). 44 Article 1 of the Spanish Law of Waters of 1866. 45 Ignacio v. Director of Lands, 108 Phil. 335 (1960); Joven v. Director of Lands, 93 Phil. 134 (1953); Laurel v. Garcia, 187 SCRA 797 (1990). See concurring opinion of Justice Reynato S. Puno in Republic Real Estate Corporation v. Court of Appeals, 299 SCRA 199 (1998). 46 Act No. 926, enacted on October 7, 1903, was also titled the Public Land Act. This Act, however, did not cover reclaimed lands. Nevertheless, Section 23 of this Act provided as follows: "x x x In no case may lands leased under the provisions of this chapter be taken so as to gain control of adjacent land, water, stream, shore line, way, roadstead, or other valuable right which in the opinion of the Chief of the Bureau of Public Lands would be prejudicial to the interests of the public." 47 Section 10 of Act No. 2874 provided as follows: "The words "alienation," "disposition," or "concession" as used in this Act, shall mean any of the methods authorized by this Act for the acquisition, lease, use, or benefit of the lands of the public domain other than timber or mineral lands." 48 Title II of Act No. 2874 governed alienable lands of the public domain for agricultural purposes, while Title III of the same Act governed alienable lands of the public domain for non-agricultural purposes. 49 Section 57 of Act No. 2874 provided as follows: "x x x; but the land so granted, donated, or transferred to a province, municipality, or branch or subdivision of the Government shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title, except when authorized by the legislature; x x x." 50 Krivenko v. Register of Deeds, 79 Phil. 461 (1947). 51 Section 2 of CA No. 141 states as follows: "The provisions of this Act shall apply to the lands of the public domain; but timber and mineral lands shall be governed by special laws and nothing in this Act provided shall be understood or construed to change or modify the administration and disposition of the lands commonly called "friar lands" and those which, being privately owned, have reverted to or become the property of the Commonwealth of the Philippines, which administration and disposition shall be governed by the laws at present in force or which may hereafter be enacted." 52 Like Act No. 2874, Section 10 of CA No. 141 defined the terms "alienation" and "disposition" as follows: "The words "alienation," "disposition," or "concession" as used in this Act, shall mean any of the methods authorized by this Act for the acquisition, lease, use, or benefit of the lands of the public domain other than timber or mineral lands." 53 R.A. No. 6657 has suspended the authority of the President to reclassify forest or mineral lands into agricultural lands. Section 4 (a) of RA No. 6657 (Comprehensive Agrarian Reform Law of 1988) states, "No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval

of this Act until Congress, taking into account ecological, developmental and equity considerations, shall have delimited by law, the specific limits of the public domain." 54 Covering Sections 58 to 68 of CA No. 141. 55 299 SCRA 199 (1998). 56 Section 1, Article XIII of the 1935 Constitution limited the disposition and utilization of public agricultural lands to Philippine citizens or to corporations at least sixty percent owned by Philippine citizens. This was, however, subject to the original Ordinance appended to the 1935 Constitution stating, among others, that until the withdrawal of United States sovereignty in the Philippines, "Citizens and corporations of the United States shall enjoy in the Commonwealth of the Philippines all the civil rights of the citizens and corporations, respectively, thereof." 57 Section 44 of PD No. 1529 (previously Section 39 of Act No. 496) provides that "liens, claims or rights arising or existing under the laws and the Constitution of the Philippines which are not by law required to appear of record in the Registry of Deeds in order to be valid against subsequent purchasers or encumbrancers of record" constitute statutory liens affecting the title.1wphi1.nt 58 RA No. 730, which took effect on June 18, 1952, authorized the private sale of home lots to actual occupants of public lands not needed for public service. Section 1 of RA No. 730 provided as follows: "Notwithstanding the provisions of Sections 61 and 67 of Commonwealth Act No. 141, as amended by RA No. 293, any Filipino citizen of legal age who is not the owner of a home lot in the municipality or city in which he resides and who had in good faith established his residence on a parcel of land of the Republic of the Philippines which is not needed for public service, shall be given preference to purchase at a private sale of which reasonable notice shall be given to him, not more than one thousand square meters at a price to be fixed by the Director of Lands with the approval of the Secretary of Agriculture and Natural Resources. x x x." In addition, on June 16, 1948, Congress enacted R.A. No. 293 allowing the private sale of marshy alienable or disposable lands of the public domain to lessees who have improved and utilized the same as farms, fishponds or other similar purposes for at least five years from the date of the lease contract with the government. R.A. No. 293, however, did not apply to marshy lands under Section 56 (c), Title III of CA No. 141 which refers to marshy lands leased for residential, commercial, industrial or other non-agricultural purposes. 59 See note 49. 60 See note 60. 61 Republic Real Estate Corporation v. Court of Appeals, see note 56. 62 Ibid. 63 Insular Government v. Aldecoa, 19 Phil. 505 (1911); Government v. Cabangis, 53 Phil. 112 (1929). 64 118 SCRA 492 (1982). 65 Annex "B", AMARI's Memorandum, see note 2 at 1 & 2. 66 PEA's Memorandum, see note 6.

67 Ibid., p. 44. 68 See notes 9, 10 & 11. 69 Annex "C", p. 3, AMARI's Memorandum, see note 12 at 3. 70 This should read Article XII. 71 Section 8 of CA No. 141. 72 Emphasis supplied. 73 187 SCRA 797 (1990). 74 Article 422 of the Civil Code states as follows: "Property of public dominion, when no longer needed for public use or public service, shall form part of the patrimonial property of the State." 75 AMARI's Comment dated June 24, 1998, p. 20; Rollo, p. 85. 76 Dizon v. Rodriguez, 13 SCRA 705 (1965); Republic v. Lat Vda. de Castillo, 163 SCRA 286 (1988). 77 Cario v. Insular Government, 41 Phil. 935 (1909). 78 Proclamation No. 41, issued by President Ramon Magsaysay on July 5, 1954, reserved for "National Park purposes" 464.66 hectares of the public domain in Manila Bay "situated in the cities of Manila and Pasay and the municipality of Paranaque, Province of Rizal, Island of Luzon," which area, as described in detail in the Proclamation, is "B]ounded on the North, by Manila Bay; on the East, by Dewey Boulevard; and on the south and west, by Manila Bay." See concurring opinion of Justice Reynato S. Puno in Republic Real Estate Corporation v. Court of Appeals, 299 SCRA 1999 (1998). Under Sections 2 and 3, Article XII of the 1987 Constitution, "national parks" are inalienable natural resources of the State. 79 Fifth Whereas clause of EO No. 525. 80 Section 4, Chapter I, Title XIV, Book IV. 81 Section 6 of CA No 141 provides as follows: "The President, upon the recommendation of the Secretary of Agriculture and Commerce, shall from time to time classify the lands of the public domain into (a) Alienable or disposable, x x x." 82 Section 7 of CA No. 141 provides as follows: "For purposes of the administration and disposition of alienable or disposable public lands, the President, upon recommendation by the Secretary of Agriculture and Commerce, shall from time to time declare what lands are open to disposition or concession under this Act." 83 On "Lands for Residential, Commercial, or Industrial and other Similar Purposes." 84 RA No. 293, enacted on June 16, 1948, authorized the sale of marshy lands under certain conditions. Section 1 of RA No. 293 provided as follows: "The provisions of section sixty-one of Commonwealth Act

Numbered One hundred and forty-one to the contrary notwithstanding, marshy lands and lands under water bordering on shores or banks or navigable lakes or rivers which are covered by subsisting leases or leases which may hereafter be duly granted under the provisions of the said Act and are already improved and have been utilized for farming, fishpond, or similar purposes for at least five years from the date of the contract of lease, may be sold to the lessees thereof under the provisions of Chapter Five of the said Act as soon as the President, upon recommendation of the Secretary of Agriculture and Natural Resources, shall declare that the same are not necessary for the public service." 85 PEA's Memorandum, see note 2 at 45. 86 See note 73. 87 Section 4 (b) of PD No. 1084 88 R.A. No. 730 allows the private sale of home lots to actual occupants of public lands. See note 63. 89 Issued on February 26, 1981. 90 While PEA claims there was a failure of public bidding on December 10, 1991, there is no showing that the Commission on Audit approved the price or consideration stipulated in the negotiated Amended JVA as required by Section 79 of the Government Auditing Code. Senate Committee Report No. 560 did not discuss this issue. 91 Paragraph 2 (a) of COA Circular No. 89-296, on "Sale Thru Negotiation," states that disposal through negotiated sale may be resorted to if "[T]here was a failure of public auction." 92 Senate Committee Report No. 560, Statement of Facts, p. 7, citing PEA Board Resolution No. 835, as appearing in the Minutes of the PEA Board of Directors Meeting held on May 30, 1991, per Certification of Jaime T. De Veyra, Corporate Secretary, dated June 11, 1991. 93 Opinion No. 330, citing COA Audit Circular No. 89-296. See note 5. 94 PEA's Memorandum, see note 2. 95 Senate Committee Report No. 560, pp. 7-8, citing the Minutes of Meeting of the PEA Board of Directors held on December 19, 1991. 96 Section 3, Article XII of the 1987 Constitution provides as follows: "x x x Citizens of the Philippines may x x x acquire not more than twelve hectares thereof by purchase, homestead or grant." However, Section 6 of R.A. No. 6657 (Comprehensive Agrarian Reform Law) limits the ownership of "public or private agricultural land" to a maximum of five hectares per person. 97 96 Phil. 946 (1955). 98 48 SCRA 372 (1977). 99 168 SCRA 198 (1988). 100 172 SCRA 795 (1989).

101 73 SCRA 146 (1976). 102 Avila v. Tapucar, 201 SCRA 148 (1991). 103 Republic v. Ayala Cia, et al., 14 SCRA 259 (1965); Dizon v. Rodriguez, 13 SCRA 705 (1965). 104 Section 44 of PD No. 1529 states as follows: "Every registered owner receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land taking a certificate of title for value and in good faith, shall hold the same free from all encumbrances except those noted on said certificate and any of the following encumbrances which may be subsisting, namely: First. Liens, claims or rights arising or existing under the laws and Constitution of the Philippines which are not by law required to appear of record in the Registry of Deeds in order to be valid against subsequent purchasers or encumbrancers of record. x x x." Under Section 103 of PD No. 1529, Section 44 applies to certificates of title issued pursuant to a land patent granted by the government. 105 Section 2, Article XIII of the 1935 Constitution. 106 Harty v. Municipality of Victoria, 13 Phil. 152 (1909). 107 Annex "B", AMARI's Memorandum, see note 21 at 16, Section 5.2 (c) of the Amended JVA. 108 Section 10 of CA No. 141 provides as follows: "Sec. 10. The words "alienation," "disposition," or "concession" as used in this Act, shall mean any of the methods authorized by this Act for the acquisition, lease, use, or benefit of the lands of the public domain other than timber or mineral lands." 109 Section 79 of the Government Auditing Code, which requires public auction in the sale of government assets, includes all kinds of disposal or divestment of government assets. Thus, COA Audit Circular No. 86-264 dated October 16, 1986 speaks of "guidelines (which) shall govern the general procedures on the divestment or disposal of assets of government-owned and/or controlled corporations and their subsidiaries." Likewise, COA Audit Circular No. 89-296 dated January 27, speaks of "guidelines (which) shall be observed and adhered to in the divestment or disposal of property and other assets of all government entities/instrumentalities" and that "divestment shall refer to the manner or scheme of taking away, depriving, withdrawing of an authority, power or title." These COA Circulars implement Section 79 of the Government Auditing Code. 110 The share of AMARI in the Freedom Islands is 77.34 hectares, which is 70 percent of the net usable area of 110.49 hectares. The net usable area is the total land area of the Freedom Islands less 30 percent allocated for common areas. 111 The share of AMARI in the submerged areas for reclamation is 290.129 hectares, which is 70 percent of the net usable area of 414.47 hectares. 112 Article 1409 of the Civil Code provides as follows: "The following contracts are inexistent and void from the beginning: (1) Those whose cause, object or purpose is contrary to law; x x x; (4) Those whose object is outside the commerce of men; x x x."

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-------------------------------------------------------------------------------Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 115381 December 23, 1994 KILUSANG MAYO UNO LABOR CENTER, petitioner, vs. HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD, and the PROVINCIAL BUS OPERATORS ASSOCIATION OF THE PHILIPPINES, respondents. Potenciano A. Flores for petitioner. Robert Anthony C. Sison, Cesar B. Brillantes and Jose Z. Galsim for private respondent. Jose F. Miravite for movants.

KAPUNAN, J.: Public utilities are privately owned and operated businesses whose service are essential to the general public. They are enterprises which specially cater to the needs of the public and conduce to their comfort and convenience. As such, public utility services are impressed with public interest and concern. The same is true with respect to the business of common carrier which holds such a peculiar relation to the public interest that there is superinduced upon it the right of public regulation when private properties are affected with public interest, hence, they cease to be juris privati only. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect grants to the public an interest in that use, and must submit to the control by the public for the common good, to the extent of the interest he has thus created. 1 An abdication of the licensing and regulatory government agencies of their functions as the instant petition seeks to show, is indeed lamentable. Not only is it an unsound administrative policy but it is inimical to public trust and public interest as well.

The instant petition for certiorari assails the constitutionality and validity of certain memoranda, circulars and/or orders of the Department of Transportation and Communications (DOTC) and the Land Transportation Franchising and Regulatory Board LTFRB) 2 which, among others, (a) authorize provincial bus and jeepney operators to increase or decrease the prescribed transportation fares without application therefor with the LTFRB and without hearing and approval thereof by said agency in violation of Sec. 16(c) of Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act, and in derogation of LTFRB's duty to fix and determine just and reasonable fares by delegating that function to bus operators, and (b) establish a presumption of public need in favor of applicants for certificates of public convenience (CPC) and place on the oppositor the burden of proving that there is no need for the proposed service, in patent violation not only of Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act mandating that fares should be "just and reasonable." It is, likewise, violative of the Rules of Court which places upon each party the burden to prove his own affirmative allegations. 3 The offending provisions contained in the questioned issuances pointed out by petitioner, have resulted in the introduction into our highways and thoroughfares thousands of old and smoke-belching buses, many of which are right-hand driven, and have exposed our consumers to the burden of spiraling costs of public transportation without hearing and due process. The following memoranda, circulars and/or orders are sought to be nullified by the instant petition, viz: (a) DOTC Memorandum Order 90-395, dated June 26, 1990 relative to the implementation of a fare range scheme for provincial bus services in the country; (b) DOTC Department Order No. 92-587, dated March 30, 1992, defining the policy framework on the regulation of transport services; (c) DOTC Memorandum dated October 8, 1992, laying down rules and procedures to implement Department Order No. 92-587; (d) LTFRB Memorandum Circular No. 92-009, providing implementing guidelines on the DOTC Department Order No. 92-587; and (e) LTFRB Order dated March 24, 1994 in Case No. 943112. The relevant antecedents are as follows: On June 26, 1990; then Secretary of DOTC, Oscar M. Orbos, issued Memorandum Circular No. 90-395 to then LTFRB Chairman, Remedios A.S. Fernando allowing provincial bus operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official rate for a period of one (1) year. The text of the memorandum order reads in full: One of the policy reforms and measures that is in line with the thrusts and the priorities set out in the Medium-Term Philippine Development Plan (MTPDP) 1987 1992) is the liberalization of regulations in the transport sector. Along this line, the Government intends to move away gradually from regulatory policies and make progress towards greater reliance on free market forces. Based on several surveys and observations, bus companies are already charging passenger rates above and below the official fare declared by LTFRB on many provincial routes. It is in this context that some form of liberalization on public transport fares is to be tested on a pilot basis. In view thereof, the LTFRB is hereby directed to immediately publicize a fare range scheme for all provincial bus routes in country (except those operating within Metro Manila). Transport Operators shall be allowed to charge passengers within a range of fifteen percent (15%) above and fifteen percent (15%) below the LTFRB official rate for a period of one year. Guidelines and procedures for the said scheme shall be prepared by LTFRB in coordination with the DOTC Planning Service.

The implementation of the said fare range scheme shall start on 6 August 1990. For compliance. (Emphasis ours.) Finding the implementation of the fare range scheme "not legally feasible," Remedios A.S. Fernando submitted the following memorandum to Oscar M. Orbos on July 24, 1990, to wit: With reference to DOTC Memorandum Order No. 90-395 dated 26 June 1990 which the LTFRB received on 19 July 1990, directing the Board "to immediately publicize a fare range scheme for all provincial bus routes in the country (except those operating within Metro Manila)" that will allow operators "to charge passengers within a range of fifteen percent (15%) above and fifteen percent (15%) below the LTFRB official rate for a period of one year" the undersigned is respectfully adverting the Secretary's attention to the following for his consideration: 1. Section 16(c) of the Public Service Act prescribes the following for the fixing and determination of rates (a) the rates to be approved should be proposed by public service operators; (b) there should be a publication and notice to concerned or affected parties in the territory affected; (c) a public hearing should be held for the fixing of the rates; hence, implementation of the proposed fare range scheme on August 6 without complying with the requirements of the Public Service Act may not be legally feasible. 2. To allow bus operators in the country to charge fares fifteen (15%) above the present LTFRB fares in the wake of the devastation, death and suffering caused by the July 16 earthquake will not be socially warranted and will be politically unsound; most likely public criticism against the DOTC and the LTFRB will be triggered by the untimely motu propio implementation of the proposal by the mere expedient of publicizing the fare range scheme without calling a public hearing, which scheme many as early as during the Secretary's predecessor know through newspaper reports and columnists' comments to be Asian Development Bank and World Bank inspired. 3. More than inducing a reduction in bus fares by fifteen percent (15%) the implementation of the proposal will instead trigger an upward adjustment in bus fares by fifteen percent (15%) at a time when hundreds of thousands of people in Central and Northern Luzon, particularly in Central Pangasinan, La Union, Baguio City, Nueva Ecija, and the Cagayan Valley are suffering from the devastation and havoc caused by the recent earthquake. 4. In lieu of the said proposal, the DOTC with its agencies involved in public transportation can consider measures and reforms in the industry that will be socially uplifting, especially for the people in the areas devastated by the recent earthquake. In view of the foregoing considerations, the undersigned respectfully suggests that the implementation of the proposed fare range scheme this year be further studied and evaluated. On December 5, 1990, private respondent Provincial Bus Operators Association of the Philippines, Inc. (PBOAP) filed an application for fare rate increase. An across-the-board increase of eight and a half centavos (P0.085) per kilometer for all types of provincial buses with a minimum-maximum fare range of fifteen (15%) percent over and below the proposed basic per kilometer fare rate, with the said minimummaximum fare range applying only to ordinary, first class and premium class buses and a fifty-centavo (P0.50) minimum per kilometer fare for aircon buses, was sought.

On December 6, 1990, private respondent PBOAP reduced its applied proposed fare to an across-theboard increase of six and a half (P0.065) centavos per kilometer for ordinary buses. The decrease was due to the drop in the expected price of diesel. The application was opposed by the Philippine Consumers Foundation, Inc. and Perla C. Bautista alleging that the proposed rates were exorbitant and unreasonable and that the application contained no allegation on the rate of return of the proposed increase in rates. On December 14, 1990, public respondent LTFRB rendered a decision granting the fare rate increase in accordance with the following schedule of fares on a straight computation method, viz: AUTHORIZED FARES LUZON MIN. OF 5 KMS. SUCCEEDING KM. REGULAR P1.50 P0.37 STUDENT P1.15 P0.28 VISAYAS/MINDANAO REGULAR P1.60 P0.375 STUDENT P1.20 P0.285 FIRST CLASS (PER KM.) LUZON P0.385 VISAYAS/ MINDANAO P0.395 PREMIERE CLASS (PER KM.) LUZON P0.395 VISAYAS/ MINDANAO P0.405 AIRCON (PER KM.) P0.415. 4 On March 30, 1992, then Secretary of the Department of Transportation and Communications Pete Nicomedes Prado issued Department Order No. 92-587 defining the policy framework on the regulation of transport services. The full text of the said order is reproduced below in view of the importance of the provisions contained therein: WHEREAS, Executive Order No. 125 as amended, designates the Department of Transportation and Communications (DOTC) as the primary policy, planning, regulating and implementing agency on transportation; WHEREAS, to achieve the objective of a viable, efficient, and dependable transportation system, the transportation regulatory agencies under or attached to the DOTC have to harmonize their decisions and adopt a common philosophy and direction; WHEREAS, the government proposes to build on the successful liberalization measures pursued over the last five years and bring the transport sector nearer to a balanced longer term regulatory framework;

NOW, THEREFORE, pursuant to the powers granted by laws to the DOTC, the following policies and principles in the economic regulation of land, air, and water transportation services are hereby adopted: 1. Entry into and exit out of the industry. Following the Constitutional dictum against monopoly, no franchise holder shall be permitted to maintain a monopoly on any route. A minimum of two franchise holders shall be permitted to operate on any route. The requirements to grant a certificate to operate, or certificate of public convenience, shall be: proof of Filipino citizenship, financial capability, public need, and sufficient insurance cover to protect the riding public. In determining public need, the presumption of need for a service shall be deemed in favor of the applicant. The burden of proving that there is no need for a proposed service shall be with the oppositor(s). In the interest of providing efficient public transport services, the use of the "prior operator" and the "priority of filing" rules shall be discontinued. The route measured capacity test or other similar tests of demand for vehicle/vessel fleet on any route shall be used only as a guide in weighing the merits of each franchise application and not as a limit to the services offered. Where there are limitations in facilities, such as congested road space in urban areas, or at airports and ports, the use of demand management measures in conformity with market principles may be considered. The right of an operator to leave the industry is recognized as a business decision, subject only to the filing of appropriate notice and following a phase-out period, to inform the public and to minimize disruption of services. 2. Rate and Fare Setting. Freight rates shall be freed gradually from government controls. Passenger fares shall also be deregulated, except for the lowest class of passenger service (normally third class passenger transport) for which the government will fix indicative or reference fares. Operators of particular services may fix their own fares within a range 15% above and below the indicative or reference rate. Where there is lack of effective competition for services, or on specific routes, or for the transport of particular commodities, maximum mandatory freight rates or passenger fares shall be set temporarily by the government pending actions to increase the level of competition. For unserved or single operator routes, the government shall contract such services in the most advantageous terms to the public and the government, following public bids for the services. The advisability of bidding out the services or using other kinds of incentives on such routes shall be studied by the government. 3. Special Incentives and Financing for Fleet Acquisition. As a matter of policy, the government shall not engage in special financing and incentive programs, including direct subsidies for fleet acquisition and expansion. Only when the market situation warrants government intervention shall programs of this type be considered. Existing programs shall be phased out gradually. The Land Transportation Franchising and Regulatory Board, the Civil Aeronautics Board, the Maritime Industry Authority are hereby directed to submit to the Office of the Secretary, within forty-five (45) days of

this Order, the detailed rules and procedures for the Implementation of the policies herein set forth. In the formulation of such rules, the concerned agencies shall be guided by the most recent studies on the subjects, such as the Provincial Road Passenger Transport Study, the Civil Aviation Master Plan, the Presidential Task Force on the Inter-island Shipping Industry, and the Inter-island Liner Shipping Rate Rationalization Study. For the compliance of all concerned. (Emphasis ours) On October 8, 1992, public respondent Secretary of the Department of Transportation and Communications Jesus B. Garcia, Jr. issued a memorandum to the Acting Chairman of the LTFRB suggesting swift action on the adoption of rules and procedures to implement above-quoted Department Order No. 92-587 that laid down deregulation and other liberalization policies for the transport sector. Attached to the said memorandum was a revised draft of the required rules and procedures covering (i) Entry Into and Exit Out of the Industry and (ii) Rate and Fare Setting, with comments and suggestions from the World Bank incorporated therein. Likewise, resplendent from the said memorandum is the statement of the DOTC Secretary that the adoption of the rules and procedures is a pre-requisite to the approval of the Economic Integration Loan from the World Bank. 5 On February 17, 1993, the LTFRB issued Memorandum Circular No. 92-009 promulgating the guidelines for the implementation of DOTC Department Order No. 92-587. The Circular provides, among others, the following challenged portions: xxx xxx xxx IV. Policy Guidelines on the Issuance of Certificate of Public Convenience. The issuance of a Certificate of Public Convenience is determined by public need. The presumption of public need for a service shall be deemed in favor of the applicant, while burden of proving that there is no need for the proposed service shall be the oppositor'(s). xxx xxx xxx V. Rate and Fare Setting The control in pricing shall be liberalized to introduce price competition complementary with the quality of service, subject to prior notice and public hearing. Fares shall not be provisionally authorized without public hearing. A. On the General Structure of Rates 1. The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicative or reference rate as the basis for the expanded fare range. 2. Fare systems for aircon buses are liberalized to cover first class and premier services. xxx xxx xxx (Emphasis ours).

Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent of the existing fares. Said increased fares were to be made effective on March 16, 1994. On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares. On March 24, 1994, the LTFRB issued one of the assailed orders dismissing the petition for lack of merit. The dispositive portion reads: PREMISES CONSIDERED, this Board after considering the arguments of the parties, hereby DISMISSES FOR LACK OF MERIT the petition filed in the above-entitled case. This petition in this case was resolved with dispatch at the request of petitioner to enable it to immediately avail of the legal remedies or options it is entitled under existing laws. SO ORDERED. 6 Hence, the instant petition for certiorari with an urgent prayer for issuance of a temporary restraining order. The Court, on June 20, 1994, issued a temporary restraining order enjoining, prohibiting and preventing respondents from implementing the bus fare rate increase as well as the questioned orders and memorandum circulars. This meant that provincial bus fares were rolled back to the levels duly authorized by the LTFRB prior to March 16, 1994. A moratorium was likewise enforced on the issuance of franchises for the operation of buses, jeepneys, and taxicabs. Petitioner KMU anchors its claim on two (2) grounds. First, the authority given by respondent LTFRB to provincial bus operators to set a fare range of plus or minus fifteen (15%) percent, later increased to plus twenty (20%) and minus twenty-five (-25%) percent, over and above the existing authorized fare without having to file a petition for the purpose, is unconstitutional, invalid and illegal. Second, the establishment of a presumption of public need in favor of an applicant for a proposed transport service without having to prove public necessity, is illegal for being violative of the Public Service Act and the Rules of Court. In its Comment, private respondent PBOAP, while not actually touching upon the issues raised by the petitioner, questions the wisdom and the manner by which the instant petition was filed. It asserts that the petitioner has no legal standing to sue or has no real interest in the case at bench and in obtaining the reliefs prayed for. In their Comment filed by the Office of the Solicitor General, public respondents DOTC Secretary Jesus B. Garcia, Jr. and the LTFRB asseverate that the petitioner does not have the standing to maintain the instant suit. They further claim that it is within DOTC and LTFRB's authority to set a fare range scheme and establish a presumption of public need in applications for certificates of public convenience. We find the instant petition impressed with merit. At the outset, the threshold issue of locus standi must be struck. Petitioner KMU has the standing to sue.

The requirement of locus standi inheres from the definition of judicial power. Section 1 of Article VIII of the Constitution provides: xxx xxx xxx 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. In Lamb v. Phipps, 7 we ruled that judicial power is the power to hear and decide causes pending between parties who have the right to sue in the courts of law and equity. Corollary to this provision is the principle of locus standi of a party litigant. One who is directly affected by and whose interest is immediate and substantial in the controversy has the standing to sue. The rule therefore requires that a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision so as to warrant an invocation of the court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. 8 In the case at bench, petitioner, whose members had suffered and continue to suffer grave and irreparable injury and damage from the implementation of the questioned memoranda, circulars and/or orders, has shown that it has a clear legal right that was violated and continues to be violated with the enforcement of the challenged memoranda, circulars and/or orders. KMU members, who avail of the use of buses, trains and jeepneys everyday, are directly affected by the burdensome cost of arbitrary increase in passenger fares. They are part of the millions of commuters who comprise the riding public. Certainly, their rights must be protected, not neglected nor ignored. Assuming arguendo that petitioner is not possessed of the standing to sue, this court is ready to brush aside this barren procedural infirmity and recognize the legal standing of the petitioner in view of the transcendental importance of the issues raised. And this act of liberality is not without judicial precedent. As early as the Emergency Powers Cases, this Court had exercised its discretion and waived the requirement of proper party. In the recent case of Kilosbayan, Inc., et al. v. Teofisto Guingona, Jr., et al., 9 we ruled in the same lines and enumerated some of the cases where the same policy was adopted, viz: . . . A party's standing before this Court is a procedural technicality which it may, in the exercise of its discretion, set aside in view of the importance of the issues raised. In the landmark Emergency Powers Cases, [G.R. No. L-2044 (Araneta v. Dinglasan); G.R. No. L-2756 (Araneta v. Angeles); G.R. No. L-3054 (Rodriguez v. Tesorero de Filipinas); G.R. No. L-3055 (Guerrero v. Commissioner of Customs); and G.R. No. L-3056 (Barredo v. Commission on Elections), 84 Phil. 368 (1949)], this Court brushed aside this technicality because "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure. (Avelino vs. Cuenco, G.R. No. L-2621)." Insofar as taxpayers' suits are concerned, this Court had declared that it "is not devoid of discretion as to whether or not it should be entertained," (Tan v. Macapagal, 43 SCRA 677, 680 [1972]) or that it "enjoys an open discretion to entertain the same or not." [Sanidad v. COMELEC, 73 SCRA 333 (1976)]. xxx xxx xxx

In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and even association of planters, and non-profit civic organizations were allowed to initiate and prosecute actions before this court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies or instrumentalities. Among such cases were those assailing the constitutionality of (a) R.A. No. 3836 insofar as it allows retirement gratuity and commutation of vacation and sick leave to Senators and Representatives and to elective officials of both Houses of Congress (Philippine Constitution Association, Inc. v. Gimenez, 15 SCRA 479 [1965]); (b) Executive Order No. 284, issued by President Corazon C. Aquino on 25 July 1987, which allowed members of the cabinet, their undersecretaries, and assistant secretaries to hold other government offices or positions (Civil Liberties Union v. Executive Secretary, 194 SCRA 317 [1991]); (c) the automatic appropriation for debt service in the General Appropriations Act (Guingona v. Carague, 196 SCRA 221 [1991]; (d) R.A. No. 7056 on the holding of desynchronized elections (Osmea v. Commission on Elections, 199 SCRA 750 [1991]); (e) P.D. No. 1869 (the charter of the Philippine Amusement and Gaming Corporation) on the ground that it is contrary to morals, public policy, and order (Basco v. Philippine Amusement and Gaming Corp., 197 SCRA 52 [1991]); and (f) R.A. No. 6975, establishing the Philippine National Police. (Carpio v. Executive Secretary, 206 SCRA 290 [1992]). Other cases where we have followed a liberal policy regarding locus standi include those attacking the validity or legality of (a) an order allowing the importation of rice in the light of the prohibition imposed by R.A. No. 3452 (Iloilo Palay and Corn Planters Association, Inc. v. Feliciano, 13 SCRA 377 [1965]; (b) P.D. Nos. 991 and 1033 insofar as they proposed amendments to the Constitution and P.D. No. 1031 insofar as it directed the COMELEC to supervise, control, hold, and conduct the referendum-plebiscite on 16 October 1976 (Sanidad v. Commission on Elections, supra); (c) the bidding for the sale of the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo, Japan (Laurel v. Garcia, 187 SCRA 797 [1990]); (d) the approval without hearing by the Board of Investments of the amended application of the Bataan Petrochemical Corporation to transfer the site of its plant from Bataan to Batangas and the validity of such transfer and the shift of feedstock from naphtha only to naphtha and/or liquefied petroleum gas (Garcia v. Board of Investments, 177 SCRA 374 [1989]; Garcia v. Board of Investments, 191 SCRA 288 [1990]); (e) the decisions, orders, rulings, and resolutions of the Executive Secretary, Secretary of Finance, Commissioner of Internal Revenue, Commissioner of Customs, and the Fiscal Incentives Review Board exempting the National Power Corporation from indirect tax and duties (Maceda v. Macaraig, 197 SCRA 771 [1991]); (f) the orders of the Energy Regulatory Board of 5 and 6 December 1990 on the ground that the hearings conducted on the second provisional increase in oil prices did not allow the petitioner substantial cross-examination; (Maceda v. Energy Regulatory Board, 199 SCRA 454 [1991]); (g) Executive Order No. 478 which levied a special duty of P0.95 per liter of imported oil products (Garcia v. Executive Secretary, 211 SCRA 219 [1992]); (h) resolutions of the Commission on Elections concerning the apportionment, by district, of the number of elective members of Sanggunians (De Guia vs. Commission on Elections, 208 SCRA 420 [1992]); and (i) memorandum orders issued by a Mayor affecting the Chief of Police of Pasay City (Pasay Law and Conscience Union, Inc. v. Cuneta, 101 SCRA 662 [1980]). In the 1975 case of Aquino v. Commission on Elections (62 SCRA 275 [1975]), this Court, despite its unequivocal ruling that the petitioners therein had no personality to file the petition, resolved nevertheless to pass upon the issues raised because of the far-reaching implications of the petition. We did no less in De Guia v. COMELEC (Supra) where, although we declared that De Guia "does not appear to have locus standi, a standing in law, a personal or substantial interest," we brushed aside the procedural infirmity "considering the importance of the issue involved, concerning as it does the political exercise of qualified

voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent." Now on the merits of the case. On the fare range scheme. Section 16(c) of the Public Service Act, as amended, reads: Sec. 16. Proceedings of the Commission, upon notice and hearing. The Commission shall have power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to the contrary: xxx xxx xxx (c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as well as commutation, mileage kilometrage, and other special rates which shall be imposed, observed, and followed thereafter by any public service: Provided, That the Commission may, in its discretion, approve rates proposed by public services provisionally and without necessity of any hearing; but it shall call a hearing thereon within thirty days thereafter, upon publication and notice to the concerns operating in the territory affected: Provided, further, That in case the public service equipment of an operator is used principally or secondarily for the promotion of a private business, the net profits of said private business shall be considered in relation with the public service of such operator for the purpose of fixing the rates. (Emphasis ours). xxx xxx xxx Under the foregoing provision, the Legislature delegated to the defunct Public Service Commission the power of fixing the rates of public services. Respondent LTFRB, the existing regulatory body today, is likewise vested with the same under Executive Order No. 202 dated June 19, 1987. Section 5(c) of the said executive order authorizes LTFRB "to determine, prescribe, approve and periodically review and adjust, reasonable fares, rates and other related charges, relative to the operation of public land transportation services provided by motorized vehicles." Such delegation of legislative power to an administrative agency is permitted in order to adapt to the increasing complexity of modern life. As subjects for governmental regulation multiply, so does the difficulty of administering the laws. Hence, specialization even in legislation has become necessary. Given the task of determining sensitive and delicate matters as route-fixing and rate-making for the transport sector, the responsible regulatory body is entrusted with the power of subordinate legislation. With this authority, an administrative body and in this case, the LTFRB, may implement broad policies laid down in a statute by "filling in" the details which the Legislature may neither have time or competence to provide. However, nowhere under the aforesaid provisions of law are the regulatory bodies, the PSC and LTFRB alike, authorized to delegate that power to a common carrier, a transport operator, or other public service. In the case at bench, the authority given by the LTFRB to the provincial bus operators to set a fare range over and above the authorized existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislative authority. Potestas delegata non delegari potest. What has been delegated cannot be delegated. This doctrine is based on the ethical principle that such a delegated power

constitutes not only a right but a duty to be performed by the delegate through the instrumentality of his own judgment and not through the intervening mind of another. 10 A further delegation of such power would indeed constitute a negation of the duty in violation of the trust reposed in the delegate mandated to discharge it directly. 11 The policy of allowing the provincial bus operators to change and increase their fares at will would result not only to a chaotic situation but to an anarchic state of affairs. This would leave the riding public at the mercy of transport operators who may increase fares every hour, every day, every month or every year, whenever it pleases them or whenever they deem it "necessary" to do so. In Panay Autobus Co. v. Philippine Railway Co., 12 where respondent Philippine Railway Co. was granted by the Public Service Commission the authority to change its freight rates at will, this Court categorically declared that: In our opinion, the Public Service Commission was not authorized by law to delegate to the Philippine Railway Co. the power of altering its freight rates whenever it should find it necessary to do so in order to meet the competition of road trucks and autobuses, or to change its freight rates at will, or to regard its present rates as maximum rates, and to fix lower rates whenever in the opinion of the Philippine Railway Co. it would be to its advantage to do so. The mere recital of the language of the application of the Philippine Railway Co. is enough to show that it is untenable. The Legislature has delegated to the Public Service Commission the power of fixing the rates of public services, but it has not authorized the Public Service Commission to delegate that power to a common carrier or other public service. The rates of public services like the Philippine Railway Co. have been approved or fixed by the Public Service Commission, and any change in such rates must be authorized or approved by the Public Service Commission after they have been shown to be just and reasonable. The public service may, of course, propose new rates, as the Philippine Railway Co. did in case No. 31827, but it cannot lawfully make said new rates effective without the approval of the Public Service Commission, and the Public Service Commission itself cannot authorize a public service to enforce new rates without the prior approval of said rates by the commission. The commission must approve new rates when they are submitted to it, if the evidence shows them to be just and reasonable, otherwise it must disapprove them. Clearly, the commission cannot determine in advance whether or not the new rates of the Philippine Railway Co. will be just and reasonable, because it does not know what those rates will be. In the present case the Philippine Railway Co. in effect asked for permission to change its freight rates at will. It may change them every day or every hour, whenever it deems it necessary to do so in order to meet competition or whenever in its opinion it would be to its advantage. Such a procedure would create a most unsatisfactory state of affairs and largely defeat the purposes of the public service law. 13 (Emphasis ours). One veritable consequence of the deregulation of transport fares is a compounded fare. If transport operators will be authorized to impose and collect an additional amount equivalent to 20% over and above the authorized fare over a period of time, this will unduly prejudice a commuter who will be made to pay a fare that has been computed in a manner similar to those of compounded bank interest rates. Picture this situation. On December 14, 1990, the LTFRB authorized provincial bus operators to collect a thirty-seven (P0.37) centavo per kilometer fare for ordinary buses. At the same time, they were allowed to impose and collect a fare range of plus or minus 15% over the authorized rate. Thus P0.37 centavo per kilometer authorized fare plus P0.05 centavos (which is 15% of P0.37 centavos) is equivalent to P0.42 centavos, the allowed rate in 1990. Supposing the LTFRB grants another five (P0.05) centavo increase per kilometer in 1994, then, the base or reference for computation would have to be P0.47 centavos

(which is P0.42 + P0.05 centavos). If bus operators will exercise their authority to impose an additional 20% over and above the authorized fare, then the fare to be collected shall amount to P0.56 (that is, P0.47 authorized LTFRB rate plus 20% of P0.47 which is P0.29). In effect, commuters will be continuously subjected, not only to a double fare adjustment but to a compounding fare as well. On their part, transport operators shall enjoy a bigger chunk of the pie. Aside from fare increase applied for, they can still collect an additional amount by virtue of the authorized fare range. Mathematically, the situation translates into the following: Year** LTFRB authorized Fare Range Fare to be rate*** collected per kilometer 1990 P0.37 15% (P0.05) P0.42 1994 P0.42 + 0.05 = 0.47 20% (P0.09) P0.56 1998 P0.56 + 0.05 = 0.61 20% (P0.12) P0.73 2002 P0.73 + 0.05 = 0.78 20% (P0.16) P0.94 Moreover, rate making or rate fixing is not an easy task. It is a delicate and sensitive government function that requires dexterity of judgment and sound discretion with the settled goal of arriving at a just and reasonable rate acceptable to both the public utility and the public. Several factors, in fact, have to be taken into consideration before a balance could be achieved. A rate should not be confiscatory as would place an operator in a situation where he will continue to operate at a loss. Hence, the rate should enable public utilities to generate revenues sufficient to cover operational costs and provide reasonable return on the investments. On the other hand, a rate which is too high becomes discriminatory. It is contrary to public interest. A rate, therefore, must be reasonable and fair and must be affordable to the end user who will utilize the services. Given the complexity of the nature of the function of rate-fixing and its far-reaching effects on millions of commuters, government must not relinquish this important function in favor of those who would benefit and profit from the industry. Neither should the requisite notice and hearing be done away with. The people, represented by reputable oppositors, deserve to be given full opportunity to be heard in their opposition to any fare increase. The present administrative procedure, 14 to our mind, already mirrors an orderly and satisfactory arrangement for all parties involved. To do away with such a procedure and allow just one party, an interested party at that, to determine what the rate should be, will undermine the right of the other parties to due process. The purpose of a hearing is precisely to determine what a just and reasonable rate is. 15 Discarding such procedural and constitutional right is certainly inimical to our fundamental law and to public interest. On the presumption of public need. A certificate of public convenience (CPC) is an authorization granted by the LTFRB for the operation of land transportation services for public use as required by law. Pursuant to Section 16(a) of the Public Service Act, as amended, the following requirements must be met before a CPC may be granted, to wit: (i) the applicant must be a citizen of the Philippines, or a corporation or co-partnership, association or joint-stock company constituted and organized under the laws of the Philippines, at least 60 per centum of its stock or paid-up capital must belong entirely to citizens of the Philippines; (ii) the applicant must be financially capable of undertaking the proposed service and meeting the responsibilities incident to its

operation; and (iii) the applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. It is understood that there must be proper notice and hearing before the PSC can exercise its power to issue a CPC. While adopting in toto the foregoing requisites for the issuance of a CPC, LTFRB Memorandum Circular No. 92-009, Part IV, provides for yet incongruous and contradictory policy guideline on the issuance of a CPC. The guidelines states: The issuance of a Certificate of Public Convenience is determined by public need. The presumption of public need for a service shall be deemed in favor of the applicant, while the burden of proving that there is no need for the proposed service shall be the oppositor's. (Emphasis ours). The above-quoted provision is entirely incompatible and inconsistent with Section 16(c)(iii) of the Public Service Act which requires that before a CPC will be issued, the applicant must prove by proper notice and hearing that the operation of the public service proposed will promote public interest in a proper and suitable manner. On the contrary, the policy guideline states that the presumption of public need for a public service shall be deemed in favor of the applicant. In case of conflict between a statute and an administrative order, the former must prevail. By its terms, public convenience or necessity generally means something fitting or suited to the public need. 16 As one of the basic requirements for the grant of a CPC, public convenience and necessity exists when the proposed facility or service meets a reasonable want of the public and supply a need which the existing facilities do not adequately supply. The existence or non-existence of public convenience and necessity is therefore a question of fact that must be established by evidence, real and/or testimonial; empirical data; statistics and such other means necessary, in a public hearing conducted for that purpose. The object and purpose of such procedure, among other things, is to look out for, and protect, the interests of both the public and the existing transport operators. Verily, the power of a regulatory body to issue a CPC is founded on the condition that after full-dress hearing and investigation, it shall find, as a fact, that the proposed operation is for the convenience of the public. 17 Basic convenience is the primary consideration for which a CPC is issued, and that fact alone must be consistently borne in mind. Also, existing operators in subject routes must be given an opportunity to offer proof and oppose the application. Therefore, an applicant must, at all times, be required to prove his capacity and capability to furnish the service which he has undertaken to render. 18 And all this will be possible only if a public hearing were conducted for that purpose. Otherwise stated, the establishment of public need in favor of an applicant reverses well-settled and institutionalized judicial, quasi-judicial and administrative procedures. It allows the party who initiates the proceedings to prove, by mere application, his affirmative allegations. Moreover, the offending provisions of the LTFRB memorandum circular in question would in effect amend the Rules of Court by adding another disputable presumption in the enumeration of 37 presumptions under Rule 131, Section 5 of the Rules of Court. Such usurpation of this Court's authority cannot be countenanced as only this Court is mandated by law to promulgate rules concerning pleading, practice and procedure. 19 Deregulation, while it may be ideal in certain situations, may not be ideal at all in our country given the present circumstances. Advocacy of liberalized franchising and regulatory process is tantamount to an

abdication by the government of its inherent right to exercise police power, that is, the right of government to regulate public utilities for protection of the public and the utilities themselves. While we recognize the authority of the DOTC and the LTFRB to issue administrative orders to regulate the transport sector, we find that they committed grave abuse of discretion in issuing DOTC Department Order No. 92-587 defining the policy framework on the regulation of transport services and LTFRB Memorandum Circular No. 92-009 promulgating the implementing guidelines on DOTC Department Order No. 92-587, the said administrative issuances being amendatory and violative of the Public Service Act and the Rules of Court. Consequently, we rule that the twenty (20%) per centum fare increase imposed by respondent PBOAP on March 16, 1994 without the benefit of a petition and a public hearing is null and void and of no force and effect. No grave abuse of discretion however was committed in the issuance of DOTC Memorandum Order No. 90-395 and DOTC Memorandum dated October 8, 1992, the same being merely internal communications between administrative officers. WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED and the challenged administrative issuances and orders, namely: DOTC Department Order No. 92-587, LTFRB Memorandum Circular No. 92-009, and the order dated March 24, 1994 issued by respondent LTFRB are hereby DECLARED contrary to law and invalid insofar as they affect provisions therein (a) delegating to provincial bus and jeepney operators the authority to increase or decrease the duly prescribed transportation fares; and (b) creating a presumption of public need for a service in favor of the applicant for a certificate of public convenience and placing the burden of proving that there is no need for the proposed service to the oppositor. The Temporary Restraining Order issued on June 20, 1994 is hereby MADE PERMANENT insofar as it enjoined the bus fare rate increase granted under the provisions of the aforementioned administrative circulars, memoranda and/or orders declared invalid. No pronouncement as to costs. SO ORDERED. Padilla, Davide, Jr., Bellosillo and Quiason, JJ., concur.

#Footnotes 1 Pantranco v. Public Service Commission, 70 Phil. 221. 2 The 20th century ushered in the birth and growth of public utility regulation in the country. After the Americans introduced public utility regulation at the turn of the century, various regulatory bodies were created. They were the Coastwise Rate Commission under Act No. 520 passed by the Philippine Commission on November 17, 1902; the Board of Rate Regulation under Act No. 1779 dated October 12, 1907; the Board of Public Utility Commission under Act No. 2307 dated December 19, 1913; and the Public Utility Commission under Act No. 3108 dated March 19, 1923.

During the Commonwealth period, the National Assembly passed a more comprehensive public utility law. This was Commonwealth Act No. 146, as amended or the Public Service Act, as amended. Said law created a regulatory and franchising body known as the Public Service Commission (PSC). The Commission (PSC) existed for thirty-six (36) years from 1936 up to 1972. On September 24, 1972, Presidential Decree No. 1 was issued and declared "part of the law of the land." The same effected a major revamp of the executive department. Under Article III, Part X of P.D. No. 1, the Public Service Commission (PSC) was abolished and replaced by three (3) specialized regulatory boards. These were the Board of Transportation, the Board of Communications, and the Board of Power and Waterworks. The Board of Transportation (BOT) lasted for thirteen (13) years. On March 20, 1985, Executive Order No. 1011 was issued abolishing the Board of Transportation and the Bureau of Land Transportation. Their powers and functions were merged into the Land Transportation Commission (LTC). Two (2) years later, LTC was abolished by Executive Order Nos. 125 dated January 30, 1987 and 125-A dated April 13, 1987 which reorganized the Department of Transportation and Communications. On June 19, 1987, the Land Transportation Franchising and Regulatory Board (LTFRB) was created by Executive Order No. 202. The LTFRB, successor of LTC, is the existing franchising and regulatory body for overland transportation today. 3 Sec. 1, Rule 131, Rules of Court. 4 Decision of LTFRB in Case No. 90-4794, p. 4; Rollo, p. 59. 5 Rollo, p. 42. 6 Order of LTFRB, p. 4; Rollo, p. 55. 7 22 Phil. 456 [1912]. 8 Warth v. Seldin, 422 U.S. 490, 498-499, 45 L. Ed. 2d 343, 95 S. Ct. 2197 [1975]; Guzman v. Marrero, 180 U.S. 81, 45 L. Ed. 436, 21 S.Ct. 293 [1901]; McMicken v. United States, 97 U.S. 204, 24 L. Ed. 947 [1978]; Silver Star Citizens' Committee v. Orlando Fla. 194 So. 2d 681 [1967]; In Re Kenison's Guardianship, 72 S.D. 180, 31 N.W. 2d 326 [1948]. 9 G.R. No. 113375, May 5, 1994. 10 United States v. Barrias, 11 Phil. 327, 330 [1908]; People v. Vera, 65 Phil. 56, 113 [1937]. 11 Cruz, Philippine Political Law, 1991 Edition, p. 84. 12 57 Phil. 872 [1933]. 13 Id., at pp. 878-879. ** Assume a four-year interval in fare adjustment as a constant. *** Assume further a constant P0.05 centavo increase in fare every four (4) years.

14 Steps in the Filing of Petition for Rate Increase: A Petition For Adjustment of Rate (either for increase or reduction) may be filed only by a grantee of a CPC. Therefore, when franchise/CPC grantees or existing public utility operators foresee that the new oil price increase, wage hikes or similar factors would threaten the survival and viability of their operations, they may then institute a petition for increase of rates. Thus in the case of public utilities engaged in transportation, telecommunications, energy supply (electricity) and others, the following steps are usually undertaken in seeking, particularly upwards adjustments of rates: 1. Filing of formal Petition for Rate Increase. This petition alleges therein among others, the present schedule of rates, the reasons why the same is no longer economically viable and the revised schedule of rates it proposes to charge. Attached to said Petition for financial statements, projections/studies showing possible losses from oil price or wage hikes under the old or existing rates and possible margin of profit (which should be within the 12% allowable limit) under the new or revised rates; 2. After the petition is docketed, a date is set for hearing for which Notice of Hearing is issued, the same to be published in a newspaper of general circulation in the area; 3. The parties affected by the application are required to be furnished copies of the petition and the Notice of Hearing usually by registered mail with return card. The Solicitor General is also separately notified since he is the counsel for the Government; 4. The Technical Staff of the regulatory body concerned evaluates the documentary evidence attached to the petition to determine whether there is warrant to the request for rate revision; 5. Then the Commission on Audit (COA) is requested by the regulatory body to conduct an audit and examination of the books of accounts and other pertinent financial records of the public utility operator seeking the rate revision; if the applicants/petitioners are numerous, a representative number for examination purposes would do, and the period of operation covered usually ranges from six (6) months to one (1) year; COA audit report is compared with that of the regulatory body. Copies of these audit reports are furnished the petitioners and oppositors may submit their exceptions or objections thereto. 6. Then hearings are conducted. The petitioners may present accountants or such rate experts to explain their plea for rate revision. Oppositors are also allowed to rebut such evidence-in-chief with their own witnesses and documents. After the hearings, the corresponding resolution is issued. To obviate protracted hearings, the parties may agree to submit their respective Position Papers in lieu of oral testimonies. 15 Ynchausti Steamship Co. v. Public Utility Commissioner, 42 Phil. 621, 631 [1922]. 16 Black's Law Dictionary, 5th Edition, p. 1105. 17 Batangas Transportation Co. v. Orlanes, 52 Phil. 455 [1928].

18 Manila Electric Co. v. Pasay Transportation Co., 57 Phil. 825 [1933]; Please see also Raymundo Transportation v. Perez, 56 Phil. 274 [1931]; Pampanga Bus Co. v. Enriquez, 38 O.G. 374; Dela Rosa v. Corpus, 38 O.G. 2069. 19 Article VIII, Section 6, 1987 Constitution.

The Lawphil Project - Arellano Law Foundation --------------------------------------------------------------------------------

EN BANC [G.R. No. 141284. August 15, 2000] INTEGRATED BAR OF THE PHILIPPINES, petitioner, vs. HON. RONALDO B. ZAMORA, GEN. PANFILO M. LACSON, GEN. EDGAR B. AGLIPAY, and GEN. ANGELO REYES, respondents. DECISION KAPUNAN, J.: At bar is a special civil action for certiorari and prohibition with prayer for issuance of a temporary restraining order seeking to nullify on constitutional grounds the order of President Joseph Ejercito Estrada commanding the deployment of the Philippin e Marines (the Marines) to join the Philippine National Police (the PNP) in visibility patrols around the metropolis. In view of the alarming increase in violent crimes in Metro Manila, like robberies, kidnappings and carnappings, the President, in a verbal directive, ordered the PNP and the Marines to conduct joint visibility patrols for the purpose of crime prevention and suppression. The Secretary of National Defense, the Chief of Staff of the Armed Forces of the Philippines (the AFP), the Chief of the PNP and the Secretary of the Interior and Local Government were tasked to execute and implement the said order. In compliance with the presidential mandate, the PNP Chief, through Police Chief Superintendent Edgar B. Aglipay, formulated Letter of Instruction 02/2000[1] (the LOI) which detailed the manner by which the joint visibility patrols, called Task Force Tulungan, would be conducted.[2] Task Force Tulungan was placed under the leadership of the Police Chief of Metro Manila. Subsequently, the President confirmed his previous directive on the deployment of the Marines in a Memorandum, dated 24 January 2000, addressed to the Chief of Staff of the AFP and the PNP Chief.[3] In the Memorandum, the President expressed his desire to improve the peace and order situation in Metro Manila through a more effective crime prevention program including increased police patrols.[4] The President further stated that to heighten police visibility in the metropolis, augmentation from the AFP is necessary.[5] Invoking his powers as Commander-in-Chief under Section 18, Article VII of the Constitution, the President directed the AFP Chief of Staff and PNP Chief to coordinate with each other for the proper deployment and utilization of the Marines to assist the PNP in preventing or suppressing criminal or lawless violence.[6] Finally, the President declared that the services of the Marines in the anticrime campaign are merely temporary in nature and for a reasonable period only, until such time when the situation shall have improved.[7] The LOI explains the concept of the PNP-Philippine Marines joint visibility patrols as follows: xxx 2. PURPOSE: The Joint Implementing Police Visibility Patrols between the PNP NCRPO and the Philippine Marines partnership in the conduct of visibility patrols in Metro Manila for the suppression of crime prevention and other serious threats to national security.

3. SITUATION: Criminal incidents in Metro Manila have been perpetrated not only by ordinary criminals but also by organized syndicates whose members include active and former police/military personnel whose training, skill, discipline and firepower prove well-above the present capability of the local police alone to handle. The deployment of a joint PNP NCRPO-Philippine Marines in the conduct of police visibility patrol in urban areas will reduce the incidence of crimes specially those perpetrated by active or former police/military personnel. 4. MISSION: The PNP NCRPO will organize a provisional Task Force to conduct joint NCRPO-PM visibility patrols to keep Metro Manila streets crime-free, through a sustained street patrolling to minimize or eradicate all forms of high-profile crimes especially those perpetrated by organized crime syndicates whose members include those that are well-trained, disciplined and well-armed active or former PNP/Military personnel. 5. CONCEPT IN JOINT VISIBILITY PATROL OPERATIONS: a. The visibility patrols shall be conducted jointly by the NCRPO [National Capital Regional Police Office] and the Philippine Marines to curb criminality in Metro Manila and to preserve the internal security of the state against insurgents and other serious threat to national security, although the primary responsibility over Internal Security Operations still rests upon the AFP. b. The principle of integration of efforts shall be applied to eradicate all forms of high-profile crimes perpetrated by organized crime syndicates operating in Metro Manila. This concept requires the military and police to work cohesively and unify efforts to ensure a focused, effective and holistic approach in addressing crime prevention. Along this line, the role of the military and police aside from neutralizing crime syndicates is to bring a wholesome atmosphere wherein delivery of basic services to the people and development is achieved. Hand-in-hand with this joint NCRPO-Philippine Marines visibility patrols, local Police Units are responsible for the maintenance of peace and order in their locality. c. To ensure the effective implementation of this project, a provisional Task Force TULUNGAN shall be organized to provide the mechanism, structure, and procedures for the integrated planning, coordinating, monitoring and assessing the security situation. xxx.[8] The selected areas of deployment under the LOI are: Monumento Circle, North Edsa (SM City), Araneta Shopping Center, Greenhills, SM Megamall, Makati Commercial Center, LRT/MRT Stations and the NAIA and Domestic Airport.[9] On 17 January 2000, the Integrated Bar of the Philippines (the IBP) filed the instant petition to annul LOI 02/2000 and to declare the deployment of the Philippine Marines, null and void and unconstitutional, arguing that: I

THE DEPLOYMENT OF THE PHILIPPINE MARINES IN METRO MANILA IS VIOLATIVE OF THE CONSTITUTION, IN THAT: A) NO EMERGENCY SITUATION OBTAINS IN METRO MANILA AS WOULD JUSTIFY, EVEN ONLY REMOTELY, THE DEPLOYMENT OF SOLDIERS FOR LAW ENFORCEMENT WORK; HENCE, SAID DEPLOYMENT IS IN DEROGATION OF ARTICLE II, SECTION 3 OF THE CONSTITUTION; B) SAID DEPLOYMENT CONSTITUTES AN INSIDIOUS INCURSION BY THE MILITARY IN A CIVILIAN FUNCTION OF GOVERNMENT (LAW ENFORCEMENT) IN DEROGATION OF ARTICLE XVI, SECTION 5 (4), OF THE CONSTITUTION; C) SAID DEPLOYMENT CREATES A DANGEROUS TENDENCY TO RELY ON THE MILITARY TO PERFORM THE CIVILIAN FUNCTIONS OF THE GOVERNMENT. II IN MILITARIZING LAW ENFORCEMENT IN METRO MANILA, THE ADMINISTRATION IS UNWITTINGLY MAKING THE MILITARY MORE POWERFUL THAN WHAT IT SHOULD REALLY BE UNDER THE CONSTITUTION.[10] Asserting itself as the official organization of Filipino lawyers tasked with the bounden duty to uphold the rule of law and the Constitution, the IBP questions the validity of the deployment and utilization of the Marines to assist the PNP in law enforcement. Without granting due course to the petition, the Court in a Resolution,[11] dated 25 January 2000, required the Solicitor General to file his Comment on the petition. On 8 February 2000, the Solicitor General submitted his Comment. The Solicitor General vigorously defends the constitutionality of the act of the President in deploying the Marines, contending, among others, that petitioner has no legal standing; that the question of deployment of the Marines is not proper for judicial scrutiny since the same involves a political question; that the organization and conduct of police visibility patrols, which feature the team-up of one police officer and one Philippine Marine soldier, does not violate the civilian supremacy clause in the Constitution. The issues raised in the present petition are: (1) Whether or not petitioner has legal standing; (2) Whether or not the Presidents factual determination of the necessity of calling the armed forces is subject to judicial review; and, (3) Whether or not the calling of the armed forces to assist the PNP in joint visibility patrols violates the constitutional provisions on civilian supremacy over the military and the civilian character of the PNP. The petition has no merit. First, petitioner failed to sufficiently show that it is in possession of the requisites of standing to raise the issues in the petition. Second, the President did not commit grave abuse of discretion amounting to lack or excess of jurisdiction nor did he commit a violation of the civilian supremacy clause of the Constitution. The power of judicial review is set forth in Section 1, Article VIII of the Constitution, to wit:

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law. 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 grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. When questions of constitutional significance are raised, the Court can exercise its power of judicial review only if the following requisites are complied with, namely: (1) the existence of an actual and appropriate case; (2) a personal and substantial interest of the party raising the constitutional question; (3) the exercise of judicial review is pleaded at the earliest opportunity; and (4) the constitutional question is the lis mota of the case.[12] The IBP has not sufficiently complied with the requisites of standing in this case. Legal standing or locus standi has been defined as a personal and substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged.[13] The term interest means a material interest, an interest in issue affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest.[14] The gist of the question of standing is whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions.[15] In the case at bar, the IBP primarily anchors its standing on its alleged responsibility to uphold the rule of law and the Constitution. Apart from this declaration, however, the IBP asserts no other basis in support of its locus standi. The mere invocation by the IBP of its duty to preserve the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it with standing in this case. This is too general an interest which is shared by other groups and the whole citizenry. Based on the standards above-stated, the IBP has failed to present a specific and substantial interest in the resolution of the case. Its fundamental purpose which, under Section 2, Rule 139-A of the Rules of Court, is to elevate the standards of the law profession and to improve the administration of justice is alien to, and cannot be affected by the deployment of the Marines. It should also be noted that the interest of the National President of the IBP who signed the petition, is his alone, absent a formal board resolution authorizing him to file the present action. To be sure, members of the BAR, those in the judiciary included, have varying opinions on the issue. Moreover, the IBP, assuming that it has duly authorized the National President to file the petition, has not shown any specific injury which it has suffered or may suffer by virtue of the questioned governmental act. Indeed, none of its members, whom the IBP purportedly represents, has sustained any form of injury as a result of the operation of the joint visibility patrols. Neither is it alleged that any of its members has been arrested or that their civil liberties have been violated by the deployment of the Marines. What the IBP projects as injurious is the supposed militarization of law enforcement which might threaten Philippine democratic institutions and may cause more harm than good in the long run. Not only is the presumed injury not personal in character, it is likewise too vague, highly speculative and uncertain to satisfy the requirement of standing. Since petitioner has not successfully established a direct and personal injury as a consequence of the questioned act, it does not possess the personality to assail the validity of the deployment of the Marines. This Court, however, does not categorically rule that the IBP has absolutely no standing to raise constitutional issues now or in the future. The IBP must, by way of allegations and proof, satisfy this Court that it has sufficient stake to obtain judicial resolution of the controversy.

Having stated the foregoing, it must be emphasized that this Court has the discretion to take cognizance of a suit which does not satisfy the requirement of legal standing when paramount interest is involved.[16] In not a few cases, the Court has adopted a liberal attitude on the locus standi of a petitioner where the petitioner is able to craft an issue of transcendental significance to the people.[17] Thus, when the issues raised are of paramount importance to the public, the Court may brush aside technicalities of procedure.[18] In this case, a reading of the petition shows that the IBP has advanced constitutional issues which deserve the attention of this Court in view of their seriousness, novelty and weight as precedents. Moreover, because peace and order are under constant threat and lawless violence occurs in increasing tempo, undoubtedly aggravated by the Mindanao insurgency problem, the legal controversy raised in the petition almost certainly will not go away. It will stare us in the face again. It, therefore, behooves the Court to relax the rules on standing and to resolve the issue now, rather than later. The President did not commit grave abuse of discretion in calling out the Marines. In the case at bar, the bone of contention concerns the factual determination of the President of the necessity of calling the armed forces, particularly the Marines, to aid the PNP in visibility patrols. In this regard, the IBP admits that the deployment of the military personnel falls under the Commander-in-Chief powers of the President as stated in Section 18, Article VII of the Constitution, specifically, the power to call out the armed forces to prevent or suppress lawless violence, invasion or rebellion. What the IBP questions, however, is the basis for the calling of the Marines under the aforestated provision. According to the IBP, no emergency exists that would justify the need for the calling of the military to assist the police force. It contends that no lawless violence, invasion or rebellion exist to warrant the calling of the Marines. Thus, the IBP prays that this Court review the sufficiency of the factual basis for said troop [Marine] deployment.[19] The Solicitor General, on the other hand, contends that the issue pertaining to the necessity of calling the armed forces is not proper for judicial scrutiny since it involves a political question and the resolution of factual issues which are beyond the review powers of this Court. As framed by the parties, the underlying issues are the scope of presidential powers and limits, and the extent of judicial review. But, while this Court gives considerable weight to the parties formulation of the issues, the resolution of the controversy may warrant a creative approach that goes beyond the narrow confines of the issues raised. Thus, while the parties are in agreement that the power exercised by the President is the power to call out the armed forces, the Court is of the view that the power involved may be no more than the maintenance of peace and order and promotion of the general welfare.[20] For one, the realities on the ground do not show that there exist a state of warfare, widespread civil unrest or anarchy. Secondly, the full brunt of the military is not brought upon the citizenry, a point discussed in the latter part of this decision. In the words of the late Justice Irene Cortes in Marcos v. Manglapus: More particularly, this case calls for the exercise of the Presidents powers as protector of the peace. [Rossiter, The American Presidency]. The power of the President to keep the peace is not limited merely to exercising the commander-in-chief powers in times of emergency or to leading the State against external and internal threats to its existence. The President is not only clothed with extraordinary powers in times of emergency, but is also tasked with attending to the day-to-day problems of maintaining peace and order and ensuring domestic tranquility in times when no foreign foe appears on the horizon. Wide discretion, within the bounds of law, in fulfilling presidential duties in times of peace is not in any way diminished by the relative want of an emergency specified in the commander-in-chief provision. For in making the President commander-in-chief the enumeration of powers that follow cannot be said to

exclude the Presidents exercising as Commander-in-Chief powers short of the calling of the armed forces, or suspending the privilege of the writ of habeas corpus or declaring martial law, in order to keep the peace, and maintain public order and security. xxx[21] Nonetheless, even if it is conceded that the power involved is the Presidents power to call out the armed forces to prevent or suppress lawless violence, invasion or rebellion, the resolution of the controversy will reach a similar result. We now address the Solicitor Generals argument that the issue involved is not susceptible to review by the judiciary because it involves a political question, and thus, not justiciable. As a general proposition, a controversy is justiciable if it refers to a matter which is appropriate for court review.[22] It pertains to issues which are inherently susceptible of being decided on grounds recognized by law. Nevertheless, the Court does not automatically assume jurisdiction over actual constitutional cases brought before it even in instances that are ripe for resolution. One class of cases wherein the Court hesitates to rule on are political questions. The reason is that political questions are concerned with issues dependent upon the wisdom, not the legality, of a particular act or measure being assailed. Moreover, the political question being a function of the separation of powers, the courts will not normally interfere with the workings of another co-equal branch unless the case shows a clear need for the courts to step in to uphold the law and the Constitution. As Taada v. Cuenco[23] puts it, political questions refer to those questions which, under the Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full discretionary authority has been delegated to the legislative or executive branch of government. Thus, if an issue is clearly identified by the text of the Constitution as matters for discretionary action by a particular branch of government or to the people themselves then it is held to be a political question. In the classic formulation of Justice Brennan in Baker v. Carr,[24] [p]rominent on the surface of any case held to involve a political question is found a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a courts undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarassment from multifarious pronouncements by various departments on the one question. The 1987 Constitution expands the concept of judicial review by providing that (T)he Judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law. 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.[25] Under this definition, the Court cannot agree with the Solicitor General that the issue involved is a political question beyond the jurisdiction of this Court to review. When the grant of power is qualified, conditional or subject to limitations, the issue of whether the prescribed qualifications or conditions have been met or the limitations respected, is justiciable - the problem being one of legality or validity, not its wisdom.[26] Moreover, the jurisdiction to delimit constitutional boundaries has been given to this Court.[27] When political questions are involved, the Constitution limits the determination as to

whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the official whose action is being questioned.[28] By grave abuse of discretion is meant simply capricious or whimsical exercise of judgment that is patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.[29] Under this definition, a court is without power to directly decide matters over which full discretionary authority has been delegated. But while this Court has no power to substitute its judgment for that of Congress or of the President, it may look into the question of whether such exercise has been made in grave abuse of discretion.[30] A showing that plenary power is granted either department of government, may not be an obstacle to judicial inquiry, for the improvident exercise or abuse thereof may give rise to justiciable controversy.[31] When the President calls the armed forces to prevent or suppress lawless violence, invasion or rebellion, he necessarily exercises a discretionary power solely vested in his wisdom. This is clear from the intent of the framers and from the text of the Constitution itself. The Court, thus, cannot be called upon to overrule the Presidents wisdom or substitute its own. However, this does not prevent an examination of whether such power was exercised within permissible constitutional limits or whether it was exercised in a manner constituting grave abuse of discretion. In view of the constitutional intent to give the President full discretionary power to determine the necessity of calling out the armed forces, it is incumbent upon the petitioner to show that the Presidents decision is totally bereft of factual basis. The present petition fails to discharge such heavy burden as there is no evidence to support the assertion that there exist no justification for calling out the armed forces. There is, likewise, no evidence to support the proposition that grave abuse was committed because the power to call was exercised in such a manner as to violate the constitutional provision on civilian supremacy over the military. In the performance of this Courts duty of purposeful hesitation[32] before declaring an act of another branch as unconstitutional, only where such grave abuse of discretion is clearly shown shall the Court interfere with the Presidents judgment. To doubt is to sustain. There is a clear textual commitment under the Constitution to bestow on the President full discretionary power to call out the armed forces and to determine the necessity for the exercise of such power. Section 18, Article VII of the Constitution, which embodies the powers of the President as Commander-in-Chief, provides in part: The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus, or place the Philippines or any part thereof under martial law. xxx The full discretionary power of the President to determine the factual basis for the exercise of the calling out power is also implied and further reinforced in the rest of Section 18, Article VII which reads, thus: xxx Within forty-eight hours from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a report in person or in writing to the Congress. The

Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it. The Congress, if not in session, shall within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without need of a call. The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof, and must promulgate its decision thereon within thirty days from its filing. A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the writ. The suspension of the privilege of the writ shall apply only to persons judicially charged for rebellion or offenses inherent in or directly connected with invasion. During the suspension of the privilege of the writ, any person thus arrested or detained shall be judicially charged within three days, otherwise he shall be released. Under the foregoing provisions, Congress may revoke such proclamation or suspension and the Court may review the sufficiency of the factual basis thereof. However, there is no such equivalent provision dealing with the revocation or review of the Presidents action to call out the armed forces. The distinction places the calling out power in a different category from the power to declare martial law and the power to suspend the privilege of the writ of habeas corpus, otherwise, the framers of the Constitution would have simply lumped together the three powers and provided for their revocation and review without any qualification. Expressio unius est exclusio alterius. Where the terms are expressly limited to certain matters, it may not, by interpretation or construction, be extended to other matters.[33] That the intent of the Constitution is exactly what its letter says, i.e., that the power to call is fully discretionary to the President, is extant in the deliberation of the Constitutional Commission, to wit: FR. BERNAS. It will not make any difference. I may add that there is a graduated power of the President as Commander-in-Chief. First, he can call out such Armed Forces as may be necessary to suppress lawless violence; then he can suspend the privilege of the writ of habeas corpus, then he can impose martial law. This is a graduated sequence. When he judges that it is necessary to impose martial law or suspend the privilege of the writ of habeas corpus, his judgment is subject to review. We are making it subject to review by the Supreme Court and subject to concurrence by the National Assembly. But when he exercises this lesser power of calling on the Armed Forces, when he says it is necessary, it is my opinion that his judgment cannot be reviewed by anybody. xxx

FR. BERNAS. Let me just add that when we only have imminent danger, the matter can be handled by the first sentence: The President may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. So we feel that that is sufficient for handling imminent danger. MR. DE LOS REYES. So actually, if a President feels that there is imminent danger, the matter can be handled by the First Sentence: The President....may call out such Armed Forces to prevent or suppress lawless violence, invasion or rebellion. So we feel that that is sufficient for handling imminent danger, of invasion or rebellion, instead of imposing martial law or suspending the writ of habeas corpus, he must necessarily have to call the Armed Forces of the Philippines as their Commander-in-Chief. Is that the idea? MR. REGALADO. That does not require any concurrence by the legislature nor is it subject to judicial review.[34] The reason for the difference in the treatment of the aforementioned powers highlights the intent to grant the President the widest leeway and broadest discretion in using the power to call out because it is considered as the lesser and more benign power compared to the power to suspend the privilege of the writ of habeas corpus and the power to impose martial law, both of which involve the curtailment and suppression of certain basic civil rights and individual freedoms, and thus necessitating safeguards by Congress and review by this Court. Moreover, under Section 18, Article VII of the Constitution, in the exercise of the power to suspend the privilege of the writ of habeas corpus or to impose martial law, two conditions must concur: (1) there must be an actual invasion or rebellion and, (2) public safety must require it. These conditions are not required in the case of the power to call out the armed forces. The only criterion is that whenever it becomes necessary, the President may call the armed forces to prevent or suppress lawless violence, invasion or rebellion." The implication is that the President is given full discretion and wide latitude in the exercise of the power to call as compared to the two other powers. If the petitioner fails, by way of proof, to support the assertion that the President acted without factual basis, then this Court cannot undertake an independent investigation beyond the pleadings. The factual necessity of calling out the armed forces is not easily quantifiable and cannot be objectively established since matters considered for satisfying the same is a combination of several factors which are not always accessible to the courts. Besides the absence of textual standards that the court may use to judge necessity, information necessary to arrive at such judgment might also prove unmanageable for the courts. Certain pertinent information might be difficult to verify, or wholly unavailable to the courts. In many instances, the evidence upon which the President might decide that there is a need to call out the armed forces may be of a nature not constituting technical proof. On the other hand, the President as Commander-in-Chief has a vast intelligence network to gather information, some of which may be classified as highly confidential or affecting the security of the state. In the exercise of the power to call, on-the-spot decisions may be imperatively necessary in emergency situations to avert great loss of human lives and mass destruction of property. Indeed, the decision to call out the military to prevent or suppress lawless violence must be done swiftly and decisively if it were to have any effect at all. Such a scenario is not farfetched when we consider the present situation in Mindanao, where the insurgency problem could spill over the other parts of the country. The determination of the necessity for the calling out power if subjected to unfettered judicial scrutiny could be a veritable prescription for disaster, as such power may be unduly straitjacketed by an injunction or a temporary restraining order every time it is exercised.

Thus, it is the unclouded intent of the Constitution to vest upon the President, as Commander-in-Chief of the Armed Forces, full discretion to call forth the military when in his judgment it is necessary to do so in order to prevent or suppress lawless violence, invasion or rebellion. Unless the petitioner can show that the exercise of such discretion was gravely abused, the Presidents exercise of judgment deserves to be accorded respect from this Court. The President has already determined the necessity and factual basis for calling the armed forces. In his Memorandum, he categorically asserted that, [V]iolent crimes like bank/store robberies, holdups, kidnappings and carnappings continue to occur in Metro Manila...[35] We do not doubt the veracity of the Presidents assessment of the situation, especially in the light of present developments. The Court takes judicial notice of the recent bombings perpetrated by lawless elements in the shopping malls, public utilities, and other public places. These are among the areas of deployment described in the LOI 2000. Considering all these facts, we hold that the President has sufficient factual basis to call for military aid in law enforcement and in the exercise of this constitutional power. The deployment of the Marines does not violate the civilian supremacy clause nor does it infringe the civilian character of the police force. Prescinding from its argument that no emergency situation exists to justify the calling of the Marines, the IBP asserts that by the deployment of the Marines, the civilian task of law enforcement is militarized in violation of Section 3, Article II[36] of the Constitution. We disagree. The deployment of the Marines does not constitute a breach of the civilian supremacy clause. The calling of the Marines in this case constitutes permissible use of military assets for civilian law enforcement. The participation of the Marines in the conduct of joint visibility patrols is appropriately circumscribed. The limited participation of the Marines is evident in the provisions of the LOI itself, which sufficiently provides the metes and bounds of the Marines authority. It is noteworthy that the local polic e forces are the ones in charge of the visibility patrols at all times, the real authority belonging to the PNP. In fact, the Metro Manila Police Chief is the overall leader of the PNP-Philippine Marines joint visibility patrols.[37] Under the LOI, the police forces are tasked to brief or orient the soldiers on police patrol procedures.[38] It is their responsibility to direct and manage the deployment of the Marines.[39] It is, likewise, their duty to provide the necessary equipment to the Marines and render logistical support to these soldiers.[40] In view of the foregoing, it cannot be properly argued that military authority is supreme over civilian authority. Moreover, the deployment of the Marines to assist the PNP does not unmake the civilian character of the police force. Neither does it amount to an insidious incursion of the military in the task of law enforcement in violation of Section 5(4), Article XVI of the Constitution.[41] In this regard, it is not correct to say that General Angelo Reyes, Chief of Staff of the AFP, by his alleged involvement in civilian law enforcement, has been virtually appointed to a civilian post in derogation of the aforecited provision. The real authority in these operations, as stated in the LOI, is lodged with the head of a civilian institution, the PNP, and not with the military. Such being the case, it does not matter whether the AFP Chief actually participates in the Task Force Tulungan since he does not exercise any authority or control over the same. Since none of the Marines was incorporated or enlisted as members of the PNP, there can be no appointment to civilian position to speak of. Hence, the deployment of the Marines in the joint visibility patrols does not destroy the civilian character of the PNP.

Considering the above circumstances, the Marines render nothing more than assistance required in conducting the patrols. As such, there can be no insidious incursion of the military in civilian affairs nor can there be a violation of the civilian supremacy clause in the Constitution. It is worth mentioning that military assistance to civilian authorities in various forms persists in Philippine jurisdiction. The Philippine experience reveals that it is not averse to requesting the assistance of the military in the implementation and execution of certain traditionally civil functions. As correctly pointed out by the Solicitor General, some of the multifarious activities wherein military aid has been rendered, exemplifying the activities that bring both the civilian and the military together in a relationship of cooperation, are: 1. Elections;[42] 2. Administration of the Philippine National Red Cross;[43] 3. Relief and rescue operations during calamities and disasters;[44] 4. Amateur sports promotion and development;[45] 5. Development of the culture and the arts;[46] 6. Conservation of natural resources;[47] 7. Implementation of the agrarian reform program;[48] 8. Enforcement of customs laws;[49] 9. Composite civilian-military law enforcement activities;[50] 10. Conduct of licensure examinations;[51] 11. Conduct of nationwide tests for elementary and high school students;[52] 12. Anti-drug enforcement activities;[53] 13. Sanitary inspections;[54] 14. Conduct of census work;[55] 15. Administration of the Civil Aeronautics Board;[56] 16. Assistance in installation of weather forecasting devices;[57] 17. Peace and order policy formulation in local government units.[58] This unquestionably constitutes a gloss on executive power resulting from a systematic, unbroken, executive practice, long pursued to the knowledge of Congress and, yet, never before questioned.[59] What we have here is mutual support and cooperation between the military and civilian authorities, not derogation of civilian supremacy.

In the United States, where a long tradition of suspicion and hostility towards the use of military force for domestic purposes has persisted,[60] and whose Constitution, unlike ours, does not expressly provide for the power to call, the use of military personnel by civilian law enforcement officers is allowed under circumstances similar to those surrounding the present deployment of the Philippine Marines. Under the Posse Comitatus Act[61] of the US, the use of the military in civilian law enforcement is generally prohibited, except in certain allowable circumstances. A provision of the Act states: 1385. Use of Army and Air Force as posse comitatus Whoever, except in cases and under circumstances expressly authorized by the Constitution or Act of Congress, willfully uses any part of the Army or the Air Force as posse comitatus or otherwise to execute the laws shall be fined not more than $10,000 or imprisoned not more than two years, or both.[62] To determine whether there is a violation of the Posse Comitatus Act in the use of military personnel, the US courts[63] apply the following standards, to wit: Were Army or Air Force personnel used by the civilian law enforcement officers at Wounded Knee in such a manner that the military personnel subjected the citizens to the exercise of military power which was regulatory, proscriptive, or compulsory[64] George Washington Law Review, pp. 404-433 (1986), which discusses the four divergent standards for assessing acceptable involvement of military personnel in civil law enforcement. See likewise HONORED IN THE BREECH: PRESIDENTIAL AUTHORITY TO EXECUTE THE LAWS WITH MILITARY FORCE, 83 Yale Law Journal, pp. 130-152, 1973. 64 in nature, either presently or prospectively? x x x When this concept is transplanted into the present legal context, we take it to mean that military involvement, even when not expressly authorized by the Constitution or a statute, does not violate the Posse Comitatus Act unless it actually regulates, forbids or compels some conduct on the part of those claiming relief. A mere threat of some future injury would be insufficient. (emphasis supplied) Even if the Court were to apply the above rigid standards to the present case to determine whether there is permissible use of the military in civilian law enforcement, the conclusion is inevitable that no violation of the civilian supremacy clause in the Constitution is committed. On this point, the Court agrees with the observation of the Solicitor General: 3. The designation of tasks in Annex A[65] does not constitute the exercise of regulatory, proscriptive, or compulsory military power. First, the soldiers do not control or direct the operation. This is evident from Nos. 6,[66] 8(k)[67] and 9(a)[68] of Annex A. These soldiers, second, also have no power to prohibit or condemn. In No. 9(d)[69] of Annex A, all arrested persons are brought to the nearest police stations for proper disposition. And last, these soldiers apply no coercive force. The materials or equipment issued to them, as shown in No. 8(c)[70] of Annex A, are all low impact and defensive in character. The conclusion is that there being no exercise of regulatory, proscriptive or compulsory military power, the deployment of a handful of Philippine Marines constitutes no impermissible use of military power for civilian law enforcement.[71] It appears that the present petition is anchored on fear that once the armed forces are deployed, the military will gain ascendancy, and thus place in peril our cherished liberties. Such apprehensions,

however, are unfounded. The power to call the armed forces is just that - calling out the armed forces. Unless, petitioner IBP can show, which it has not, that in the deployment of the Marines, the President has violated the fundamental law, exceeded his authority or jeopardized the civil liberties of the people, this Court is not inclined to overrule the Presidents determination of the factual basis for the calling of the Marines to prevent or suppress lawless violence. One last point. Since the institution of the joint visibility patrol in January, 2000, not a single citizen has complained that his political or civil rights have been violated as a result of the deployment of the Marines. It was precisely to safeguard peace, tranquility and the civil liberties of the people that the joint visibility patrol was conceived. Freedom and democracy will be in full bloom only when people feel secure in their homes and in the streets, not when the shadows of violence and anarchy constantly lurk in their midst. WHEREFORE, premises considered, the petition is hereby DISMISSED. SO ORDERED. Davide, Jr., C.J., Melo, Purisima, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr., JJ., concur. Bellosillo, J., on official leave. Puno, J., see separate opinion. Vitug, J., see separate opinion. Mendoza, J., see concurring and dissenting opinion. Panganiban, J., in the result. Quisumbing, J., joins the opinion of J. Mendoza. SEPARATE OPINION PUNO, J.: If the case at bar is significant, it is because of the government attempt to foist the political question doctrine to shield an executive act done in the exercise of the commander-in-chief powers from judicial scrutiny. If the attempt succeeded, it would have diminished the power of judicial review and weakened the checking authority of this Court over the Chief Executive when he exercises his commander-in-chief powers. The attempt should remind us of the tragedy that befell the country when this Court sought refuge in the political question doctrine and forfeited its most important role as protector of the civil and political rights of our people. The ongoing conflict in Mindanao may worsen and can force the Chief Executive to resort to the use of his greater commander-in-chief powers, hence, this Court should be extra cautious in assaying similar attempts. A laid back posture may not sit well with our people considering that the 1987 Constitution strengthened the checking powers of this Court and expanded its jurisdiction precisely to stop any act constituting xxx grave abuse of jurisdiction xxx on the part of any branch or instrumentality of the Government.1

The importance of the issue at bar includes this humble separate opinion. We can best perceive the different intersecting dimensions of the political question doctrine by viewing them from the broader canvass of history. Political questions are defined as those questions which under the Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full discretionary authority has been delegated to the legislative or executive branch of government.2 They have two aspects: (1) those matters that are to be exercised by the people in their primary political capacity and (2) matters which have been specifically delegated to some other department or particular office of the government, with discretionary power to act.3 The exercise of the discretionary power of the legislative or executive branch of government was often the area where the Court had to wrestle with the political question doctrine.4 A brief review of some of our case law will thus give us a sharper perspective of the political question doctrine. This question confronted the Court as early as 1905 in the case of Barcelon v. Baker.5 The Governor-General of the Philippine Islands, pursuant to a resolution of the Philippine Commission, suspended the privilege of the writ of habeas corpus in Cavite and Batangas based on a finding of open insurrection in said provinces. Felix Barcelon, who was detained by constabulary officers in Batangas, filed a petition for the issuance of a writ of habeas corpus alleging that there was no open insurrection in Batangas. The issue to resolve was whether or not the judicial department may investigate the facts upon which the legislative (the Philippine Commission) and executive (the Governor-General) branches of government acted in suspending the privilege of the writ. The Court ruled that under our form of government, one department has no authority to inquire into the acts of another, which acts are performed within the discretion of the other department.6 Surveying American law and jurisprudence, it held that whenever a statute gives discretionary power to any person, to be exercised by him upon his own opinion of certain facts, the statute constitutes him the sole judge of the existence of those facts.7 Since the Philippine Bill of 1902 empowered the Philippine Commission and the Governor-General to suspend the privilege of the writ of habeas corpus, this power is exclusively within the discretion of the legislative and executive branches of government. The exercise of this discretion is conclusive upon the courts.8 The Court further held that once a determination is made by the executive and legislative departments that the conditions justifying the assailed acts exists, it will presume that the conditions continue until the same authority decide that they no longer exist.9 It adopted the rationale that the executive branch, thru its civil and military branches, are better situated to obtain information about peace and order from every corner of the nation, in contrast with the judicial department, with its very limited machinery.10 The seed of the political question doctrine was thus planted in Philippine soil. The doctrine barring judicial review because of the political question doctrine was next applied to the internal affairs of the legislature. The Court refused to interfere in the legislative exercise of disciplinary power over its own members. In the 1924 case of Alejandrino v. Quezon,11 Alejandrino, who was appointed Senator by the Governor-General, was declared by Senate Resolution as guilty of disorderly conduct for assaulting another Senator in the course of a debate, and was suspended from office for one year. Senator Alejandrino filed a petition for mandamus and injunction to compel the Senate to reinstate him. The Court held that under the Jones Law, the power of the Senate to punish its members for disorderly behavior does not authorize it to suspend an appointive member from the exercise of his office. While the Court found that the suspension was illegal, it refused to issue the writ of mandamus on the ground that "the Supreme Court does not possess the power of coercion to make the Philippine Senate take any particular action. [T]he Philippine Legislature or any branch thereof cannot be directly controlled in the exercise of their legislative powers by any judicial process."12

The issue revisited the Court twenty-two (22) years later. In 1946, in Vera v. Avelino,13 three senatorselect who had been prevented from taking their oaths of office by a Senate resolution repaired to this Court to compel their colleagues to allow them to occupy their seats contending that only the Electoral Tribunal had jurisdiction over contests relating to their election, returns and qualifications. Again, the Court refused to intervene citing Alejandrino and affirmed the inherent right of the legislature to determine who shall be admitted to its membership. In the 1947 case of Mabanag v. Lopez-Vito,14 three Senators and eight representatives who were proclaimed elected by Comelec were not allowed by Congress to take part in the voting for the passage of the Parity amendment to the Constitution. If their votes had been counted, the affirmative votes in favor of the proposed amendment would have been short of the necessary three-fourths vote in either House of Congress to pass the amendment. The amendment was eventually submitted to the people for ratification. The Court declined to intervene and held that a proposal to amend the Constitution is a highly political function performed by Congress in its sovereign legislative capacity.15 In the 1955 case of Arnault v. Balagtas,16 petitioner, a private citizen, assailed the legality of his detention ordered by the Senate for his refusal to answer questions put to him by members of one of its investigating committees. This Court refused to order his release holding that the process by which a contumacious witness is dealt with by the legislature is a necessary concomitant of the legislative process and the legislature's exercise of its discretionary authority is not subject to judicial interference. In the 1960 case of Osmena v. Pendatun,17 the Court followed the traditional line. Congressman Sergio Osmena, Jr. was suspended by the House of Representatives for serious disorderly behavior for making a privilege speech imputing "malicious charges" against the President of the Philippines. Osmena, Jr. invoked the power of review of this Court but the Court once more did not interfere with Congress' power to discipline its members. The contours of the political question doctrine have always been tricky. To be sure, the Court did not always stay its hand whenever the doctrine is invoked. In the 1949 case of Avelino v. Cuenco,18 Senate President Jose Avelino, who was deposed and replaced, questioned his successor's title claiming that the latter had been elected without a quorum. The petition was initially dismissed on the ground that the selection of Senate President was an internal matter and not subject to judicial review.19 On reconsideration, however, the Court ruled that it could assume jurisdiction over the controversy in light of subsequent events justifying intervention among which was the existence of a quorum.20 Though the petition was ultimately dismissed, the Court declared respondent Cuenco as the legally elected Senate President. In the 1957 case of Tanada v. Cuenco,21 the Court assumed jurisdiction over a dispute involving the formation and composition of the Senate Electoral Tribunal. It rejected the Solicitor General's claim that the dispute involved a political question. Instead, it declared that the Senate is not clothed with "full discretionary authority" in the choice of members of the Senate Electoral Tribunal and the exercise of its power thereon is subject to constitutional limitations which are mandatory in nature.22 It held that under the Constitution, the membership of the Senate Electoral Tribunal was designed to insure the exercise of judicial impartiality in the disposition of election contests affecting members of the lawmaking body.23 The Court then nullified the election to the Senate Electoral Tribunal made by Senators belonging to the party having the largest number of votes of two of their party members but purporting to act on behalf of the party having the second highest number of votes.

In the 1962 case of Cunanan v. Tan, Jr.,24 the Court passed judgment on whether Congress had formed the Commission on Appointments in accordance with the Constitution and found that it did not. It declared that the Commission on Appointments is a creature of the Constitution and its power does not come from Congress but from the Constitution. The 1967 case of Gonzales v. Comelec25 and the 1971 case of Tolentino v. Comelec26 abandoned Mabanag v. Lopez-Vito. The question of whether or not Congress, acting as a constituent assembly in proposing amendments to the Constitution violates the Constitution was held to be a justiciable and not a political issue. In Gonzales, the Court ruled: "It is true that in Mabanag v. Lopez-Vito, this Court characterizing the issue submitted thereto as a political one, declined to pass upon the question whether or not a given number of votes cast in Congress in favor of a proposed amendment to the Constitution-which was being submitted to the people for ratification-satisfied the three-fourths vote requirement of the fundamental law. The force of this precedent has been weakened, however, by Suanes v. Chief Accountant of the Senate, Avelino v. Cuenco, Tanada v. Cuenco, and Macias v. Commission on Elections. In the first, we held that the officers and employees of the Senate Electoral Tribunal are under its supervision and control, not of that of the Senate President, as claimed by the latter; in the second, this Court proceeded to determine the number of Senators necessary for a quorum in the Senate; in the third, we nullified the election, by Senators belonging to the party having the largest number of votes in said chamber, purporting to act on behalf of the party having the second largest number of votes therein, of two (2) Senators belonging to the first party, as members, for the second party, of the Senate Electoral Tribunal; and in the fourth, we declared unconstitutional an act of Congress purporting to apportion the representative districts for the House of Representatives upon the ground that the apportionment had not been made as may be possible according to the number of inhabitants of each province. Thus, we rejected the theory, advanced in these four cases, that the issues therein raised were political questions the determination of which is beyond judicial review.27 The Court explained that the power to amend the Constitution or to propose amendments thereto is not included in the general grant of legislative powers to Congress. As a constituent assembly, the members of Congress derive their authority from the fundamental law and they do not have the final say on whether their acts are within or beyond constitutional limits.28 This ruling was reiterated in Tolentino which held that acts of a constitutional convention called for the purpose of proposing amendments to the Constitution are at par with acts of Congress acting as a constituent assembly.29 In sum, this Court brushed aside the political question doctrine and assumed jurisdiction whenever it found constitutionally-imposed limits on the exercise of powers conferred upon the Legislature.30 The Court hewed to the same line as regards the exercise of Executive power. Thus, the respect accorded executive discretion was observed in Severino v. Governor-General,31 where it was held that the Governor-General, as head of the executive department, could not be compelled by mandamus to call a special election in the town of Silay for the purpose of electing a municipal president. Mandamus and injunction could not lie to enforce or restrain a duty which is discretionary. It was held that when the Legislature conferred upon the Governor-General powers and duties, it did so for the reason that he was in a better position to know the needs of the country than any other member of the executive department, and with full confidence that he will perform such duties as his best judgment dictates.32 Similarly, in Abueva v. Wood,33 the Court held that the Governor-General could not be compelled by mandamus to produce certain vouchers showing the various expenditures of the Independence

Commission. Under the principle of separation of powers, it ruled that it was not intended by the Constitution that one branch of government could encroach upon the field of duty of the other. Each department has an exclusive field within which it can perform its part within certain discretionary limits.34 It observed that "the executive and legislative departments of government are frequently called upon to deal with what are known as political questions, with which the judicial department of government has no intervention. In all such questions, the courts uniformly refused to intervene for the purpose of directing or controlling the actions of the other department; such questions being many times reserved to those departments in the organic law of the state."35 In Forties v. Tiaco,36 the Court also refused to take cognizance of a case enjoining the Chief Executive from deporting an obnoxious alien whose continued presence in the Philippines was found by him to be injurious to the public interest. It noted that sudden and unexpected conditions may arise, growing out of the presence of untrustworthy aliens, which demand immediate action. The President's inherent power to deport undesirable aliens is universally denominated as political, and this power continues to exist for the preservation of the peace and domestic tranquility of the nation.37 In Manalang v. Quitoriano,38 the Court also declined to interfere in the exercise of the President's appointing power. It held that the appointing power is the exclusive prerogative of the President, upon which no limitations may be imposed by Congress, except those resulting from the need of securing concurrence of the Commission on Appointments and from the exercise of the limited legislative power to prescribe qualifications to a given appointive office. We now come to the exercise by the President of his powers as Commander-in-Chief vis-a-vis the political question doctrine. In the 1940's, this Court has held that as Commander-in-Chief of the Armed Forces, the President has the power to determine whether war, in the legal sense, still continues or has terminated. It ruled that it is within the province of the political department and not of the judicial department of government to determine when war is at end.39 In 1952, the Court decided the landmark case of Montenegro v. Castaneda.40 President Quirino suspended the privilege of the writ of habeas corpus for persons detained or to be detained for crimes of sedition, insurrection or rebellion. The Court, citing Barcelon, declared that the authority to decide whether the exigency has arisen requiring the suspension of the privilege belongs to the President and his decision is final and conclusive on the courts.41 Barcelon was the ruling case law until the 1971 case of Lansang v. Garcia came.42 Lansang reversed the previous cases and held that the suspension of the privilege of the writ of habeas corpus was not a political question. According to the Court, the weight of Barcelon was diluted by two factors: (1) it relied heavily on Martin v. Mott, which involved the U.S. President's power to call out the militia which is a much broader power than suspension of the privilege of the writ; and (2) the privilege was suspended by the American Governor-General whose act, as representative of the sovereign affecting the freedom of its subjects, could not be equated with that of the President of the Philippines dealing with the freedom of the sovereign Filipino people. The Court declared that the power to suspend the privilege of the writ of habeas corpus is neither absolute nor unqualified because the Constitution sets limits on the exercise of executive discretion on the matter. These limits are: (1) that the privilege must not be suspended except only in cases of invasion, insurrection or rebellion or imminent danger thereof; and (2) when the public safety requires it, in any of which events the same may be suspended wherever during such period the necessity for the

suspension shall exist. The extent of the power which may be inquired into by courts is defined by these limitations.43 On the vital issue of how the Court may inquire into the President's exercise of power, it ruled that the function of the Court is not to supplant but merely to check the Executive; to ascertain whether the President has gone beyond the constitutional limits of his jurisdiction, not to exercise the power vested in him or to determine the wisdom of his act. Judicial inquiry is confined to the question of whether the President did not act arbitrarily.44 Using this yardstick, the Court found that the President did not. The emergency period of the 1970's flooded the Court with cases which raised the political question defense. The issue divided the Court down the middle. Javellana v. Executive Secretary45 showed that while a majority of the Court held that the issue of whether or not the 1973 Constitution had been ratified in accordance with the 1935 Constitution was justiciable, a majority also ruled that the decisive issue of whether the 1973 Constitution had come into force and effect, with or without constitutional ratification, was a political question.46 The validity of the declaration of martial law by then President Marcos was next litigated before the Court. In Aquino, Jr. v. Enrile,47 it upheld the President's declaration of martial law. On whether the validity of the imposition of martial law was a political or justiciable question, the Court was almost evenly divided. One-half embraced the political question position and the other half subscribed to the justiciable position in Lansang. Those adhering to the political question doctrine used different methods of approach to it.48 In 1983, the Lansang ruling was weakened by the Court in Garcia-Padilla v. Enrile.49 The petitioners therein were arrested and detained by the Philippine Constabulary by virtue of a Presidential Commitment Order (PCO). Petitioners sought the issuance of a writ of habeas corpus. The Court found that the PCO had the function of validating a person's detention for any of the offenses covered in Proclamation No. 2045 which continued in force the suspension of the privilege of the writ of habeas corpus. It held that the issuance of the PCO by the President was not subject to judicial inquiry.50 It went further by declaring that there was a need to re-examine Lansang with a view to reverting to Barcelon and Montenegro. It observed that in times of war or national emergency, the President must be given absolute control for the very life of the nation and government is in great peril. The President, it intoned, is answerable only to his conscience, the people, and God.51 But barely six (6) days after Garcia-Padilla, the Court promulgated Morales, Jr. v. Enrile52 reiterating Lansang. It held that by the power of judicial review, the Court must inquire into every phase and aspect of a person's detention from the moment he was taken into custody up to the moment the court passes upon the merits of the petition. Only after such a scrutiny can the court satisfy itself that the due process clause of the Constitution has been met.53 It is now history that the improper reliance by the Court on the political question doctrine eroded the people's faith in its capacity to check abuses committed by the then Executive in the exercise of his commander-in-chief powers, particularly violations against human rights. The refusal of courts to be proactive in the exercise of its checking power drove the people to the streets to resort to extralegal remedies. They gave birth to EDSA. Two lessons were not lost to the members of the Constitutional Commission that drafted the 1987 Constitution. The first was the need to grant this Court the express power to review the exercise of the powers as commander-in-chief by the President and deny it of any discretion to decline its exercise. The second was the need to compel the Court to be pro-active by expanding its jurisdiction and, thus, reject

its laid back stance against acts constituting grave abuse of discretion on the part of any branch or instrumentality of government. Then Chief Justice Roberto Concepcion, a member of the Constitutional Commission, worked for the insertion of the second paragraph of Section 1, Article VIII in the draft Constitution,54 which reads: "Sec. 1. x x x. 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." The language of the provision clearly gives the Court the power to strike down acts amounting to grave abuse of discretion of both the legislative and executive branches of government. We should interpret Section 18, Article VII of the 1987 Constitution in light of our constitutional history. The provision states: "Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law. Within forty-eight hours from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a report in person or in writing to Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by Congress, if the invasion or rebellion shall persist and public safety requires it. The Congress, if not in session, shall, within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without need of a call. The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof, and must promulgate its decision thereon within thirty days from its filing. x x x." It is clear from the foregoing that the President, as Commander-in-Chief of the armed forces of the Philippines, may call out the armed forces subject to two conditions: (1) whenever it becomes necessary; and (2) to prevent or suppress lawless violence, invasion or rebellion. Undeniably, these conditions lay down the sine qua requirement for the exercise of the power and the objective sought to be attained by the exercise of the power. They define the constitutional parameters of the calling out power. Whether or not there is compliance with these parameters is a justiciable issue and is not a political question. I am not unaware that in the deliberations of the Constitutional Commission, Commissioner Bernas opined that the President's exercise of the "calling out power," unlike the suspension of the privilege of

the writ of habeas corpus and the declaration of martial law, is not a justiciable issue but a political question and therefore not subject to judicial review. It must be borne in mind, however, that while a member's opinion expressed on the floor of the Constitutional Convention is valuable, it is not necessarily expressive of the people's intent.55 The proceedings of the Convention are less conclusive on the proper construction of the fundamental law than are legislative proceedings of the proper construction of a statute, for in the latter case it is the intent of the legislature the courts seek, while in the former, courts seek to arrive at the intent of the people through the discussions and deliberations of their representatives.56 The conventional wisdom is that the Constitution does not derive its force from the convention which framed it, but from the people who ratified it, the intent to be arrived at is that of the people.57 It is true that the third paragraph of Section 18, Article VII of the 1987 Constitution expressly gives the Court the power to review the sufficiency of the factual bases used by the President in the suspension of the privilege of the writ of habeas corpus and the declaration of martial law. It does not follow, however, that just because the same provision did not grant to this Court the power to review the exercise of the calling out power by the President, ergo, this Court cannot pass upon the validity of its exercise. Given the light of our constitutional history, this express grant of power merely means that the Court cannot decline the exercise of its power because of the political question doctrine as it did in the past. In fine, the express grant simply stresses the mandatory duty of this Court to check the exercise of the commander-in-chief powers of the President. It eliminated the discretion of the Court not to wield its power of review thru the use of the political question doctrine. It may be conceded that the calling out power may be a "lesser power" compared to the power to suspend the privilege of the writ of habeas corpus and the power to declare martial law. Even then, its exercise cannot be left to the absolute discretion of the Chief Executive as Commander-in-Chief of the armed forces, as its impact on the rights of our people protected by the Constitution cannot be downgraded. We cannot hold that acts of the commander-in-chief cannot be reviewed on the ground that they have lesser impact on the civil and political rights of our people. The exercise of the calling out power may be "benign" in the case at bar but may not be so in future cases. The counsel of Mr. Chief Justice Enrique M. Fernando, in his Dissenting and Concurring Opinion in Lansang that it would be dangerous and misleading to push the political question doctrine too far, is apropos. It will not be complementary to the Court if it handcuffs itself to helplessness when a grievously injured citizen seeks relief from a palpably unwarranted use of presidential or military power, especially when the question at issue falls in the penumbra between the "political" and the "justiciable. "58 We should not water down the ruling that deciding whether a matter has been committed by the Constitution to another branch of government, or whether the action of that branch exceeds whatever authority has been committed, is a delicate exercise in constitutional interpretation, and is a responsibility of the Court as ultimate interpreter of the fundamental law.59 When private justiciable rights are involved in a suit, the Court must not refuse to assume jurisdiction even though questions of extreme political importance are necessarily involved.60 Every officer under a constitutional government must act according to law and subject to the controlling power of the people, acting through the courts, as well as through the executive and legislative. One department is just as representative of the other, and the judiciary is the department which is charged with the special duty of determining the limitations which the law places upon all official action.61 This historic role of the Court is the foundation stone of a government of laws and not of men.62

I join the Decision in its result. SEPARATE OPINION VITUG, J.: In the equation of judicial power, neither of two extremes - one totalistic and the other bounded - is acceptable nor ideal. The 1987 Constitution has introduced its definition of the term "judicial power" to be that which x x x 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 grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.1 It is not meant that the Supreme Court must be deemed vested with the awesome power of overseeing the entire bureaucracy, let alone of institutionalizing judicial absolutism, under its mandate. But while this Court does not wield unlimited authority to strike down an act of its two co-equal branches of government, it must not wither under technical guise on its constitutionally ordained task to intervene, and to nullify if need be, any such act as and when it is attended by grave abuse of discretion amounting to lack or excess of jurisdiction. The proscription then against an interposition by the Court into purely political questions, heretofore known, no longer holds within that context. Justice Feria, in the case of Avelino vs. Cuenco,2 has aptly elucidated in his concurring opinion: "x x x [I] concur with the majority that this Court has jurisdiction over cases like the present x x x so as to establish in this country the judicial supremacy, with the Supreme Court as the final arbiter, to see that no one branch or agency of the government transcends the Constitution, not only in justiceable but political questions as well."3 It is here when the Court must have to depart from the broad principle of separation of powers that disallows an intrusion by it in respect to the purely political decisions of its independent and coordinate agencies of government. The term grave abuse of discretion is long understood in our jurisprudence as being, and confined to, a capricious and whimsical or despotic exercise of judgment amounting to lack or excess of jurisdiction. Minus the not-so-unusual exaggerations often invoked by litigants in the duel of views, the act of the President in simply calling on the Armed Forces of the Philippines, an executive prerogative, to assist the Philippine National Police in "joint visibility patrols" in the metropolis does not, I believe, constitute grave abuse of discretion that would now warrant an exercise by the Supreme Court of its extraordinary power as so envisioned by the fundamental law. Accordingly, I vote for the dismissal of the petition. MENDOZA, J., concurring and dissenting: I concur in the opinion of the Court insofar as it holds petitioner to be without standing to question the validity of LOI 02/2000 which mandates the Philippine Marines to conduct "joint visibility" patrols with the

police in Metro Manila. But I dissent insofar as the opinion dismisses the petition in this case on other grounds. I submit that judgment on the substantive constitutional issues raised by petitioner must await an actual case involving real parties with "injuries" to show as a result of the operation of the challenged executive action. While as an organization for the advancement of the rule of law petitioner has an interest in upholding the Constitution, its interest is indistinguishable from the interest of the rest of the citizenry and falls short of that which is necessary to give petitioner standing. As I have indicated elsewhere, a citizens' suit challenging the constitutionality of governmental action requires that (1) the petitioner must have suffered an "injury in fact" of an actual or imminent nature; (2) there must be a causal connection between the injury and the conduct complained of; and (3) the injury is likely to be redressed by a favorable action by this Court.1 The "injury in fact" test requires more than injury to a cognizable interest. It requires that the party seeking review be himself among those injured.2 My insistence on compliance with the standing requirement is grounded in the conviction that only a party injured by the operation of the governmental action challenged is in the best position to aid the Court in determining the precise nature of the problem presented. Many a time we have adverted to the power of judicial review as an awesome power not to be exercised save in the most exigent situation. For, indeed, sound judgment on momentous constitutional questions is not likely to be reached unless it is the result of a clash of adversary arguments which only parties with direct and specific interest in the outcome of the controversy can make. This is true not only when we strike down a law or official action but also when we uphold it. In this case, because of the absence of parties with real and substantial interest to protect, we do not have evidence on the effect of military presence in malls and commercial centers, i.e., whether such presence is coercive or benign. We do not know whether the presence of so many marines and policemen scares shoppers, tourists, and peaceful civilians, or whether it is reassuring to them. To be sure, the deployment of troops to such places is not like parading them at the Luneta on Independence Day. Neither is it, however, like calling them out because of actual fighting or the outbreak of violence. We need to have evidence on these questions because, under the Constitution, the President's power to call out the armed forces in order to suppress lawless violence, invasion or rebellion is subject to the limitation that the exercise of this power is required in the interest of public safety.3 Indeed, whether it is the calling out of the armed forces alone in order to suppress lawless violence, invasion or rebellion or also the suspension of the privilege of the writ of habeas corpus or the proclamation of martial law (in case of invasion or rebellion), the exercise of the President's powers as commander-in-chief, requires proof - not mere assertion.4 As has been pointed out, "Standing is not `an ingenious academic exercise in the conceivable' . . . but requires . . . a factual showing of perceptible harm."5 Because of the absence of such record evidence, we are left to guess or even speculate on these questions. Thus, at one point, the majority opinion says that what is involved here is not even the calling out of the armed forces but only the use of marines for law enforcement. (p. 13) At another point, however, the majority opinion somersaults and says that because of bombings perpetrated by lawless elements, the deployment of troops in shopping centers and public utilities is justified. (p. 24) We are likely to err in dismissing the suit brought in this case on the ground that the calling out of the military does not violate the Constitution, just as we are likely to do so if we grant the petition and invalidate the executive issuance in question. For indeed, the lack of a real, earnest and vital controversy

can only impoverish the judicial process. That is why, as Justice Laurel emphasized in the Angara case, "this power of judicial review is limited to actual cases and controversies to be exercised after full opportunity of argument by the parties, and limited further to the constitutional question raised or the very lis mota presented."6 We are told, however, that the issues raised in this case are of "paramount interest" to the nation. It is precisely because the issues raised are of paramount importance that we should all the more forego ruling on the constitutional issues raised by petitioner and limit the dismissal of this petition on the ground of lack of standing of petitioner. A Fabian policy of leaving well enough alone is a counsel of prudence. For these reasons and with due appreciation of the scholarly attention lavished by the majority opinion on the constitutional questions raised, I am constrained to limit my concurrence to the dismissal of this suit on the ground of lack of standing of petitioner and the consequent lack of an actual case or controversy.

-------------------------------------------------------------------------------1 Sec. 1, Article VIII, 1987 Constitution. 2 Tanada v. Cuenco, 103 Phil. 1051, 1067 [1957], citing 16 C.J.S. 413. 3 Tanada v. Cuenco, supra, 1067, quoting In re McConaughy, 119 NW 408 [1909]. 4 Bernas, The 1987 Constitution of the Republic of the Philippines A Commentary, p. 859 [1996]. 5 5 Phil. 87 [1905]. 6 Id. at 97. 7 Id. at 104. 8 See Cruz, Philippine Political law, p. 87 [1998]. 9 Id. at 113-114. 10 Id. at 106-107. 11 46 Phil. 83 [1924]. 12 Id. at 97. 13 77 Phil. 192 [1946]. 14 78 Phil. 1 [1947]. 15 Id. at 4-5. The court also adopted the enrolled bill theory which, like findings under the political question doctrine, imports absolute verity on the courts-at 12.

16 97 Phil. 358 [1955]. 17 109 Phil. 863 [1960]. 18 83 Phil. 17 [1949]. 19 Id. at 21-22. 20 Id. at 68-69. 21 103 Phil. 1051 [1957]. 22 Id. at 1068. 23 Id. at 1083. 24 5 SCRA 1 [1962]. 25 21 SCRA 774 [1967]. 26 41 SCRA 702 [1971]. 27 Id. at 785-786. 28 Id. at 787. 29 41 SCRA at 713. 30 Bernas, The 1987 Constitution of the Republic of the Philippines A Commentary, p. 861 [1996]. 31 16 Phil. 366 [1910]. 32 Id. at 401. 33 45 Phil. 612 [1924]. 34 Id. At 630. 35 Id. at 637-638. 36 16 Phil. 534 [1910]. 37 Id. at 568-569, 576. 38 94 Phil. 903 [1954]. 39 Untal v. Chief of Staff, AFP, 84 Phil. 586 [1949]; Raquiza v. Bradford, 75 Phil. 50 [1945]. 40 91 Phil. 882 [1952].

41 Id. at 887. 42 42 SCRA 448 [1971]. 43 Id. at 474. 44 Id. at 480-481. 45 50 SCRA 30 [1973]. 46 Id. at 138, 140-141. 47 59 SCRA 183 [1973]. 48 Ibid. 49 121 SCRA 472 [1983]. 50 Id. at 490-491. 51 Id. at 500-501. 52 121 SCRA 538 [1983]. 53 Id. at 563. 54 See Concepcions sponsorship speech, I Record 434-435; see also Bernas, the Constitution of the Republic of the Philippines A Commentary, p. 863 [1996]. 55 J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413, 423-426 [1970]. 56 Vera v. Avelino, 77 Phil. 192, 215 [1946]; see also Agpalo, Statutory Construction, 4th ed., p. 454 [1998]. 57 Black, Handbook on the Construction and Interpretation of the laws, 2d ed., p. 39 [1911]. 58 SCRA at 506-507, see also Rossiter, The Supreme Court and the Commander-in-Chief, pp. 16-17 [1951]. 59 Baker v. Carr, 7 L Ed 2d at 682. 60 Willoughby on the Constitution of the United States, vol. 3, 2d ed., p. 1336 [1929]. 61 Tanada v. Macapagal, 103 Phil. At 1067, quoting In re McConaughy, 119 NW 408 [1909]. 62 Id. 1 Section 1, Article VIII of the Constitution.

2 83 Phil. 17. 3 Sen. Miriam Defensor Santiago, et al. vs. Sen. Teofisto Guingona, Jr., et al., 298 SCRA 756. 1 Tatad v. Garcia, 243 SCRA 436, 473 (1995) (concurring). Accord, Telecommunication and Broadcast Attorneys of the Philippines v. COMELEC, 289 SCRA 343 (1998). 2 Lujan v. Defenders of Wildlife, 504 U.S. 555, 119 L. Ed. 2d 351 (1992). 3 See CONST., ART. VII, 18. 4 See Lansang v. Garcia, 42 SCRA 448 (1971). 5 Lujan v. Defenders of Wildlife, supra. 6 Angara v. Electoral Commission, 63 Phil. 139, 158 (1936)

-------------------------------------------------------------------------------[1] Rollo, pp. 17-21. [2] As of 19 May 2000, the Marines have been recalled from their areas of deployment to join the military operations in Mindanao, and replaced by Air Force personnel who took over their functions in the joint visibility patrols. The Air Force personnel, just like the Marines, were ordered to assist the PNP, also by virtue of LOI 2/2000. Since both the Marines and Air Force belong to the Armed Forces, the controversy has not been rendered moot and academic by the replacement of the former by the latter. The validity of the deployment of the armed forces in the joint visibility patrols thus remain an issue. [3] Rollo, pp. 75-76. [4] Id., at 75. [5] Id. [6] Id. [7] Rollo, p. 75. [8] Id., at 17-18. [9] Id. [10] Rollo, p. 7. [11] Id., at 24.

[12] Philippine Constitution Association v. Enriquez, 235 SCRA 506 (1994) citing Luz Farms v. Secretary of the Department of Agrarian Reform, 192 SCRA 51 (1990); Dumlao v. Commission on Elections, 95 SCRA 392 (1980); and, People v. Vera, 65 Phil. 56 (1937). [13] Joya v. Presidential Commission on Good Govenment, 225 SCRA 568, 576 (1993). [14] Ibid., citing House International Building Tenants Association, Inc. v. Intermediate Appellate Court, 151 SCRA 703 (1987). [15] Baker v. Carr, 369 U.S. 186, 82 S. Ct. 691, 7L. Ed. 2d 663, 678 (1962). [16] Joya v. Presidential Commission on Good Government, supra note 13, at 579 citing Dumlao v. Commission on Elections, 95 SCRA 392 (1980). [17] Tatad v. Secretary of the Department of Energy, 281 SCRA 330, 349 (1997) citing Garcia v. Executive Secretary, 211 SCRA 219 (1992); Osmea v. COMELEC, 199 SCRA 750 (1991); Basco v. Pagcor, 197 SCRA 52 (1991); and, Araneta v. Dinglasan, 84 Phil. 368 (1949). [18] Santiago v. COMELEC, 270 SCRA 106 (1997); Joya v. Presidential Commission on Good Government, 225 SCRA 568 (1993); Daza v. Singson, 180 SCRA 496 (1989). As formulated by Mr. Justice (now Chief Justice) Hilario G. Davide, Jr. in Kilosbayan, Inc. vs. Guingona, Jr., [232 SCRA 110 (1994)] "(a) party's standing before this Court is a procedural technicality which it may, in the exercise of its discretion, set aside in view of the importance of the issues raised," favorably citing our ruling in the Emergency Powers Cases [L-2044 (Araneta v. Dinglasan); L-2756 (Araneta v. Angeles); L-3054 (Rodriquez v. Tesorero de Filipinas); and L-3056 (Barredo v. COMELEC), 84 Phil. 368 (1940)] where this Court brushed aside this technicality because "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technical rules of procedure." An inflexible rule on locus standi would result in what Mr. Justice Florentino P. Feliciano aptly described as a doctrinal ball and chain xxx clamped on our own limbs." [Kilosbayan, Inc. v. Morato, 250 SCRA 130 (1995)]. [19] Rollo, p. 12 [20] Article II, Sections 4 and 5 of the Constitution provide: Sec. 4. The prime duty of the Government is to serve and protect the people. The Government may call upon the people to defend the State and, in the fulfillment thereof, all citizens may be required, under conditions provided by law, to render personal, military or civil service. Sec. 5. The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy. [21] 177 SCRA 668, 694 (1989). [22] WESTS LEGAL THESAURUS/DICTIONARY (Special Deluxe Edition) p. 440 (1986). [23] 103 Phil. 1051 (1957).

[24] 369 U.S. 186, 82 S ct. 691, 7 L. Ed. 2d 663, 678 (1962). [25] Article VIII, Sec. 1 of the 1987 CONSTITUTION. [26] Santiago v. Guingona, Jr., 298 SCRA 756 (1998). [27] Bengzon, Jr. v. Senate Blue Ribbon Committee, 203 SCRA 767 (1991). [28] Marcos v. Manglapus,, supra note 21, see also Daza v. Singson, 180 SCRA 496 (1988); Coseteng v. Mitra, 187 SCRA 377 (1990). [29] Sinon v. Civil Service Commission, 215 SCRA 410 (1992); See also Producers Bank v. NLRC, 165 SCRA 284 (1988); Litton Mills v. Galleon Trader, Inc., 163 SCRA 494 (1988). [30] Ledesma v. Court of Appeals, 278 SCRA 659 (1997). [31] Bondoc v. Pineda, 201 SCRA 792 (1991). [32] Drilon v. Lim, 235 SCRA 135 (1994). [33] Sarmiento v. Mison, 156 SCRA 549 (1987). [34] II RECORD OF THE CONSTITUTIONAL COMMISSION: PROCEEDINGS AND DEBATES, pp. 409, 412 (1986). [35] Rollo, p. 75. [36] Section 3, provides: Civilian authority, is at all times, supreme over the military. The Armed Forces of the Philippines is the protector of the people and the State. Its goal is to secure the sovereignty of the State and the integrity of the national territory. [37] No. 9 of the LOI provides: COORDINATING INSTRUCTIONS: a. RD, NCRPO is designated as Task Force Commander TULUNGAN. [38] No. 6 of the LOI states: DEPLOYMENT/EMPLOYMENT OF JOINT NCRPO-PHILIPPINE MARINES: b. Before their deployment/employment, receiving units shall properly brief/orient the troops on police patrol/visibility procedures. [39] No. 8 of the LOI provides: TASKS: k. POLICE DISTRICTS/STATIONS -Provide direction and manage the deployment of all Philippine Marines personnel deployed in your AOR for police visibility operations.

-Conduct briefing/orientation to Philippine Marines personnel on the dos and donts of police visibility patrols. -Provide transportation to Philippine Marines from districts headquarters to different stations and PCPs. -Perform other tasks as directed. [40] No. 8 of the LOI states: TASKS: c. RLD/R4 -Coordinate with the Directorate for Logistics for the issuance of the following equipments (sic) to be utilize (sic) by the Philippine Marines personnel: 500 pieces Probaton, 500 whistle (sic), 500 pieces brazzard blazoned. -Coordinate with the Directorate for Logistics for the issuance of the following for use of PNP personnel involved in the visibility patrol operations: 1,000 sets of PNP GOA Uniform 500 each raincoats 500 each Probaton 500 each Whistle 500 each handcuffs 500 each Combat Boots 500 each low cut shoes -Provide transportation to the Philippine Marines personnel in coordination with LSS, NHQ PNP. -Provide additional gas allocation to Philippine Marines members of the Inspection Teams. - Perform other tasks as directed.40 [41] Sec. 5(4), Article XVI, provides: No member of the Armed Forces in the active service shall, at any time, be appointed in the government including government-owned and controlled corporations or any of their subsidiaries. [42] CONSTITUTION, Article IX-C, Section 2; Comelec Resolution No. 3071 (1999), which is entitled In Re Guidelines for the Designation of Registration Centers and the Accountable Officers for the Polaroid Instant Cameras for Purposes of the Registration of Voters on 8-9 May 1999 in the Autonomous Region in Muslim Mindanao; Comelec Resolution No. 3059 (1999), which is entitled, In the Matter of Deputizing the Armed Forces of the Philippines and the Three (3) AFP Components, Namely: Philippine Army, Philippine Navy and Philippine Air Force, for the Purpose of Ensuring Free, Orderly, Honest and

Peaceful Precinct Mapping, Registration of Voters and the Holding of the September 13, 1999 Elections in the Autonomous Region in Muslim Mindanao (ARMM); Republ ic Act No. 7166 (1991), Section 33, which is entitled An Act Providing for Synchronized National and Local Elections and for Electoral Reforms, Authorizing Appropriations therefor, and for other Purposes; Administrative Code of 1987, Book V, Title I, Subtitle C, Chapter 1, Sections 2 (4) and 3; Batas Pambansa Blg. 881, Article VI, Sections 52 (b) and 57 (3) (1985), which is also known as Omnibus Election Code. [43] Republic Act No. 95 (1947), Section 5, which is entitled An Act to Incorporate the Phil ippine National Red Cross Section; Republic Act No. 855 (1953), Section 1, which is entitled An Act to Amend Section V of Republic Act Numbered Ninety-Five, entitled An Act to Incorporate the Philippine National Red Cross. [44] Republic Act No. 7077 (1991), Article III, Section 7, which is entitled An Act Providing for the Development, Administration, Organization, Training, Maintenance and Utilization of the Citizen Armed Forces of the Armed Forces of the Philippines and for other Purposes. [45] Republic Act No. 6847 (1990), Section 7, which is entitled An Act Creating and Establishing The Philippine Sports Commission, Defining its Powers, Functions and Responsibilities, Appropriating Funds therefor, and for other Purposes. [46] Republic Act No. 8492 (1998), Section 20, which is entitled An Act Establishing a National Museum System, Providing for its Permanent Home and for other Purposes. [47] Republic Act No. 8550 (1998), Section 124, which is entitled An Act Providing for the Development, Management and Conservation of the Fisheries and Aquatic Resources, Integrating All Laws Pertinent Thereto, and for other Purposes; Memorandum Circular No. 150 (1996), which is entitled Amending Memorandum Circular No. 128, dated July 20, 1995 by Reorganizing the Presidential Task Force on Tubbataha Reef National Marine Park; Executive Order No. 544 (1979), Letter I, which is entitled Creating a Presidential Committee for the Conservation of the Tamaraw, Defining its Powers and for other Purposes. [48] Executive Order No. 129-A (1987) Section 5 (m), which is entitled Modifying Executive Order No. 129 Reorganizing and Strengthening the Department of Agrarian Reform and for other Purposes. [49] Republic Act No. 1937 (1957), Section 2003, which is entitled An Act to Revised and Codify the Tariff and Customs Laws of the Philippines; Executive Order No. 45 (1998), which is entitled Creating a Presidential Anti-Smuggling Task Force to Investigate and Prosecute Crimes Involving Large-Scale Smuggling and other Frauds upon Customs and Providing Measures to Expedite Seizure Proceedings; [50] These cases involved joint military and civilian law enforcement operations: People v. Escalante, G.R No. 106633, December 1, 1994; People v. Bernardo, G.R. No. 97393, March 17, 1993; People v. De la Cruz, G.R. No. 83260, April 18, 1990; Guanzon v. de Villa, 181 SCRA 623, 631 (1990). (This case recognizes the complementary roles of the PNP and the military in conducting anti-crime campaigns, provided that the peoples rights are not violated in these words: If the military and the police must conduct concerted campaigns to flush out and catch criminal elements, such drives must be consistent with the constitutional and statutory rights of all people affected by suc h actions. The creation of the Task Force also finds support in Valmonte v. de Villa, 185 SCRA 665 (1990). Executive Order No. 62 (1999), which is entitled Creating the Philippine Center on Transnational Crime to Formulate and Implement a Concerted Program of Action of All Law Enforcement, Intelligence and other Agencies for

the Prevention and Control of Transnational Crime; Executive Order No. 8 (1998), which is entitled Creating a Presidential Anti-Organized Crime Commission and a Presidential Anti-Organized Crime Task Force, to Investigate and Prosecute Criminal Elements in the Country; Executive Order No. 280 (1995), which is entitled Creating a Presidential Task Force of Intelligence and Counter -Intelligence to Identify, Arrest and Cause the Investigation and Prosecution of Military and other Law Enforcement Personnel on their Former Members and Their Cohorts Involved in Criminal Activities. [51] Memorandum Circular No. 141 (1996), which is entitled Enjoining Government Agencies Concerned to Extend Optimum Support and Assistance to the Professional Regulation Commission in its Conduct of Licensure Examinations. [52] Memorandum Circular No. 32 (1999), which is entitled Directing the Government Agencies Concerned to Extend Maximum Support and Assistance to the National Educational Testing and Research Center (NETRC) of the Department of Education, Culture and Sports (DECS) in the Conduct of Tests of National Coverage. [53] Executive Order No. 61 (1999), which is entitled Creating the Nation al Drug Law Enforcement and Prevention Coordinating Center to Orchestrate Efforts of national Government Agencies, Local Government Units, and Non-Government Organizations for a More Effective Anti-Drug Campaign. [54] Republic Act No. 4089 (1964), which is entitled An Act Making the City Health Officer of Bacolod City the Local Civil Registrar, Amending for the Purpose Section Forty-Three of the Charter of said City;" Republic Act No. 537 (1950), which is entitled "An Act to Revise the Charter of Que zon City; Commonwealth Act No. 592 (1940), which is entitled An Act to Create the City of Dansalan; Commonwealth Act No. 509 (1939), which is entitled An Act to Create Quezon City; Commonwealth Act No. 326 (1938), which is entitled An Act Creating the City of Bacolod; Commonwealth Act No. 39 (1936), which is entitled An Act Creating the City of Zamboanga; Commonwealth Act No. 51 (1936), which is entitled An Act Creating the City of Davao. [55] Republic Act No. 36 (1946), which is entitled Census Act of Nineteen Hundred and Forty-Six. [56] Republic Act No. 776 (1952), Section 5, which is entitled An Act to Reorganize the Civil Aeronautics Board and the Civil Aeronautics Administration, To Provide for the Regulation of Civil Aeronautics in the Philippines and Authorizing the Appropriation of Funds Therefor. [57] Republic Act No. 6613 (1972), Section 4, which is entitled An Act Declaring a Policy of the State to Adopt Modern Scientific Methods to Moderate Typhoons and Prevent Destruction by Floods, Rains and Droughts, Creating a Council on Typhoons and Prevent Destruction by Flood, Rains and Droughts, Creating a Council on Typhoon Moderation and Flood Control Research and Development, Providing for its Powers and Functions and Appropriating Funds Therefor. [58] Local Government Code of 1991, Book I, Title Seven, Section 116. [59] This theory on gloss of executive power was advanced by Justice Frankfurter in his concurring opinion in Youngstown Sheet and Tube v. Sawyer, 343 US 579, 610-611 (1952). [60] Bissonette v. Haig, 766 F.2d 1384, 1389 (1985). [61] 18 U.S.C.A 1385 (1878).

[62] Ibid. [63] Bissonette v. Haig, supra note 60, at 1390. [64] A power regulatory in nature is one which controls or directs. It is proscriptive if it prohibits or condemns and compulsory if it exerts some coercive force. See US v. Yunis, 681 F.Supp. 891 (D.D.C., 1988). See also FOURTH AMENDMENT AND POSSE COMITATUS ACT RESTRICTIONS ON MILITARY INVOLVEMENT IN CIVIL LAW ENFORCEMENT, [65] L.O.I. 02/2000, TULUNGAN, Rollo, pp. 17-22. [66] No. 6 of the LOI states: DEPLOYMENT/EMPLOYMENT OF JOINT NCRPO-PHILIPPINE MARINES: a. The PNP NCPRO thru Police Districts will continue to deploy uniformed PNP personnel dedicated for police visibility patrols in tandem with the Philippine Marines. b. Before their deployment/employment, receiving units shall properly brief/orient the troops on police patrol/visibility procedures.66 [67] Supra note 34. [68] Supra note 32. [69] No. 9 of the LOI states: d. In case of apprehensions, arrested person/s shall be brought to the nearest police stations/PCPs. [70] Supra note 35. [71] Rollo, p. 70.

Lawphil Main MenuLawphil Main Menu> Constitution> Constitution> Statutes> Statutes> Jurisprudence> Jurisprudence> Judicial Issuances> Judicial Issuances> Executive Issuances> Executive Issuances> Treatise> Treatise> Legal Link> Legal Linklawphil Today is Saturday, July 02, 2011

-------------------------------------------------------------------------------Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 131719 May 25, 2004

THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE, THE SECRETARY OF LABOR AND EMPLOYMENT, AND THE SECRETARY OF FOREIGN AFFAIRS, OWWA PUNO, ADMINISTRATOR, and POEA ADMINISTRATOR, petitioners, vs. THE HON. COURT OF APPEALS and ASIAN RECRUITMENT COUNCIL PHILIPPINE CHAPTER (ARCO-PHIL.), INC., representing its members: Worldcare Services Internationale, Inc., Steadfast International Recruitment Corporation, Dragon International Manpower Services Corporation, Verdant Manpower Mobilization Corporation, Brent Overseas Personnel, Inc., ARL Manpower Services, Inc., Dahlzhen International Services, Inc., Interworld Placement Center, Inc., Lakas Tao Contract Services, Ltd. Co., and SSC Multiservices, respondents. DECISION CALLEJO, SR., J.: In this petition for review on certiorari, the Executive Secretary of the President of the Philippines, the Secretary of Justice, the Secretary of Foreign Affairs, the Secretary of Labor and Employment, the POEA Administrator and the OWWA Administrator, through the Office of the Solicitor General, assail the Decision1 of the Court of Appeals in CA-G.R. SP No. 38815 affirming the Order2 of the Regional Trial Court of Quezon City dated August 21, 1995 in Civil Case No. Q-95-24401, granting the plea of the petitioners therein for a writ of preliminary injunction and of the writ of preliminary injunction issued by the trial court on August 24, 1995. The Antecedents Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, took effect on July 15, 1995. The Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipino Act of 1995 was, thereafter, published in the April 7, 1996 issue of the Manila Bulletin. However, even before the law took effect, the Asian Recruitment Council Philippine Chapter, Inc. (ARCOPhil.) filed, on July 17, 1995, a petition for declaratory relief under Rule 63 of the Rules of Court with the Regional Trial Court of Quezon City to declare as unconstitutional Section 2, paragraph (g), Section 6, paragraphs (a) to (j), (l) and (m), Section 7, paragraphs (a) and (b), and Sections 9 and 10 of the law, with

a plea for the issuance of a temporary restraining order and/or writ of preliminary injunction enjoining the respondents therein from enforcing the assailed provisions of the law. In a supplement to its petition, the ARCO-Phil. alleged that Rep. Act No. 8042 was self-executory and that no implementing rules were needed. It prayed that the court issue a temporary restraining order to enjoin the enforcement of Section 6, paragraphs (a) to (m) on illegal recruitment, Section 7 on penalties for illegal recruitment, and Section 9 on venue of criminal actions for illegal recruitments, viz: Viewed in the light of the foregoing discussions, there appears to be urgent an imperative need for this Honorable Court to maintain the status quo by enjoining the implementation or effectivity of the questioned provisions of RA 8042, by way of a restraining order otherwise, the member recruitment agencies of the petitioner will suffer grave or irreparable damage or injury. With the effectivity of RA 8042, a great majority of the duly licensed recruitment agencies have stopped or suspended their operations for fear of being prosecuted under the provisions of a law that are unjust and unconstitutional. This Honorable Court may take judicial notice of the fact that processing of deployment papers of overseas workers for the past weeks have come to a standstill at the POEA and this has affected thousands of workers everyday just because of the enactment of RA 8042. Indeed, this has far reaching effects not only to survival of the overseas manpower supply industry and the active participating recruitment agencies, the countrys economy which has survived mainly due to the dollar remittances of the overseas workers but more importantly, to the poor and the needy who are in dire need of income-generating jobs which can only be obtained from abroad. The loss or injury that the recruitment agencies will suffer will then be immeasurable and irreparable. As of now, even foreign employers have already reduced their manpower requirements from the Philippines due to their knowledge that RA 8042 prejudiced and adversely affected the local recruitment agencies.3 On August 1, 1995, the trial court issued a temporary restraining order effective for a period of only twenty (20) days therefrom. After the petitioners filed their comment on the petition, the ARCO-Phil. filed an amended petition, the amendments consisting in the inclusion in the caption thereof eleven (11) other corporations which it alleged were its members and which it represented in the suit, and a plea for a temporary restraining order enjoining the respondents from enforcing Section 6 subsection (i), Section 6 subsection (k) and paragraphs 15 and 16 thereof, Section 8, Section 10, paragraphs 1 and 2, and Sections 11 and 40 of Rep. Act No. 8042. The respondent ARCO-Phil. assailed Section 2(g) and (i), Section 6 subsection (a) to (m), Section 7(a) to (b), and Section 10 paragraphs (1) and (2), quoted as follows: (g) THE STATE RECOGNIZES THAT THE ULTIMATE PROTECTION TO ALL MIGRANT WORKERS IS THE POSSESSION OF SKILLS. PURSUANT TO THIS AND AS SOON AS PRACTICABLE, THE GOVERNMENT SHALL DEPLOY AND/OR ALLOW THE DEPLOYMENT ONLY OF SKILLED FILIPINO WORKERS.4 Sec. 2 subsection (i, 2nd par.) Nonetheless, the deployment of Filipino overseas workers, whether land-based or sea-based, by local service contractors and manning agents employing them shall be encourages (sic). Appropriate incentives may be extended to them.

 II. ILLEGAL RECRUITMENT SEC. 6. Definition. For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such nonlicensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall, likewise, include the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority: (a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay any amount greater than that actually received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in relation to recruitment or employment; (c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code; (d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment; (e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency; (f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; (g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by his duly authorized representative; (h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; (i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment; (j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under the Labor Code and its implementing rules and regulations; (l) Failure to actually deploy without valid reason as determined by the Department of Labor and Employment; and (m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the workers fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group. The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical persons, the officers having control, management or direction of their business shall be liable. SEC. 7. Penalties. (a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than two hundred thousand pesos (P200,000.00) nor more than five hundred thousand pesos (P500,000.00). (b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos (P500,000.00) nor more than one million pesos (P1,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined herein. Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or non-holder of authority. Sec. 8. Prohibition on Officials and Employees. It shall be unlawful for any official or employee of the Department of Labor and Employment, the Philippine Overseas Employment Administration (POEA), or the Overseas Workers Welfare Administration (OWWA), or the Department of Foreign Affairs, or other government agencies involved in the implementation of this Act, or their relatives within the fourth civil degree of consanguinity or affinity, to engage, directly or indirectly, in the business of recruiting migrant workers as defined in this Act. The penalties provided in the immediate preceding paragraph shall be imposed upon them. (underscoring supplied) Sec. 10, pars. 1 & 2.

Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employeremployee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. SEC. 11. Mandatory Periods for Resolution of Illegal Recruitment Cases. The preliminary investigations of cases under this Act shall be terminated within a period of thirty (30) calendar days from the date of their filing. Where the preliminary investigation is conducted by a prosecution officer and a prima facie case is established, the corresponding information shall be filed in court within twenty-four (24) hours from the termination of the investigation. If the preliminary investigation is conducted by a judge and a prima facie case is found to exist, the corresponding information shall be filed by the proper prosecution officer within forty-eight (48) hours from the date of receipt of the records of the case. The respondent averred that the aforequoted provisions of Rep. Act No. 8042 violate Section 1, Article III of the Constitution.5 According to the respondent, Section 6(g) and (i) discriminated against unskilled workers and their families and, as such, violated the equal protection clause, as well as Article II, Section 126 and Article XV, Sections 17 and 3(3) of the Constitution.8 As the law encouraged the deployment of skilled Filipino workers, only overseas skilled workers are granted rights. The respondent stressed that unskilled workers also have the right to seek employment abroad. According to the respondent, the right of unskilled workers to due process is violated because they are prevented from finding employment and earning a living abroad. It cannot be argued that skilled workers are immune from abuses by employers, while unskilled workers are merely prone to such abuses. It was pointed out that both skilled and unskilled workers are subjected to abuses by foreign employers. Furthermore, the prohibition of the deployment of unskilled workers abroad would only encourage fly-by-night illegal recruiters. According to the respondent, the grant of incentives to service contractors and manning agencies to the exclusion of all other licensed and authorized recruiters is an invalid classification. Licensed and authorized recruiters are thus deprived of their right to property and due process and to the "equality of the person." It is understandable for the law to prohibit illegal recruiters, but to discriminate against licensed and registered recruiters is unconstitutional. The respondent, likewise, alleged that Section 6, subsections (a) to (m) is unconstitutional because licensed and authorized recruitment agencies are placed on equal footing with illegal recruiters. It contended that while the Labor Code distinguished between recruiters who are holders of licenses and non-holders thereof in the imposition of penalties, Rep. Act No. 8042 does not make any distinction. The penalties in Section 7(a) and (b) being based on an invalid classification are, therefore, repugnant to the equal protection clause, besides being excessive; hence, such penalties are violative of Section 19(1), Article III of the Constitution.9 It was also pointed out that the penalty for officers/officials/employees of

recruitment agencies who are found guilty of economic sabotage or large-scale illegal recruitment under Rep. Act No. 8042 is life imprisonment. Since recruitment agencies usually operate with a manpower of more than three persons, such agencies are forced to shut down, lest their officers and/or employees be charged with large scale illegal recruitment or economic sabotage and sentenced to life imprisonment. Thus, the penalty imposed by law, being disproportionate to the prohibited acts, discourages the business of licensed and registered recruitment agencies. The respondent also posited that Section 6(m) and paragraphs (15) and (16), Sections 8, 9 and 10, paragraph 2 of the law violate Section 22, Article III of the Constitution10 prohibiting ex-post facto laws and bills of attainder. This is because the provisions presume that a licensed and registered recruitment agency is guilty of illegal recruitment involving economic sabotage, upon a finding that it committed any of the prohibited acts under the law. Furthermore, officials, employees and their relatives are presumed guilty of illegal recruitment involving economic sabotage upon such finding that they committed any of the said prohibited acts. The respondent further argued that the 90-day period in Section 10, paragraph (1) within which a labor arbiter should decide a money claim is relatively short, and could deprive licensed and registered recruiters of their right to due process. The period within which the summons and the complaint would be served on foreign employees and, thereafter, the filing of the answer to the complaint would take more than 90 days. This would thereby shift on local licensed and authorized recruiters the burden of proving the defense of foreign employers. Furthermore, the respondent asserted, Section 10, paragraph 2 of the law, which provides for the joint and several liability of the officers and employees, is a bill of attainder and a violation of the right of the said corporate officers and employees to due process. Considering that such corporate officers and employees act with prior approval of the board of directors of such corporation, they should not be liable, jointly and severally, for such corporate acts. The respondent asserted that the following provisions of the law are unconstitutional: SEC. 9. Venue. A criminal action arising from illegal recruitment as defined herein shall be filed with the Regional Trial Court of the province or city where the offense was committed or where the offended party actually resides at the time of the commission of the offense: Provided, That the court where the criminal action is first filed shall acquire jurisdiction to the exclusion of other courts: Provided, however, That the aforestated provisions shall also apply to those criminal actions that have already been filed in court at the time of the effectivity of this Act. SEC. 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. Sec. 40. The departments and agencies charged with carrying out the provisions of this Act shall, within ninety (90) days after the effectiviy of this Act, formulate the necessary rules and regulations for its effective implementation.

According to the respondent, the said provisions violate Section 5(5), Article VIII of the Constitution11 because they impair the power of the Supreme Court to promulgate rules of procedure. In their answer to the petition, the petitioners alleged, inter alia, that (a) the respondent has no cause of action for a declaratory relief; (b) the petition was premature as the rules implementing Rep. Act No. 8042 not having been released as yet; (c) the assailed provisions do not violate any provisions of the Constitution; and, (d) the law was approved by Congress in the exercise of the police power of the State. In opposition to the respondents plea for injunctive relief, the petitioners averred that: As earlier shown, the amended petition for declaratory relief is devoid of merit for failure of petitioner to demonstrate convincingly that the assailed law is unconstitutional, apart from the defect and impropriety of the petition. One who attacks a statute, alleging unconstitutionality must prove its invalidity beyond reasonable doubt (Caleon v. Agus Development Corporation, 207 SCRA 748). All reasonable doubts should be resolved in favor of the constitutionality of a statute (People v. Vera, 65 Phil. 56). This presumption of constitutionality is based on the doctrine of separation of powers which enjoin upon each department a becoming respect for the acts of the other departments (Garcia vs. Executive Secretary, 204 SCRA 516 [1991]). Necessarily, the ancillary remedy of a temporary restraining order and/or a writ of preliminary injunction prayed for must fall. Besides, an act of legislature approved by the executive is presumed to be within constitutional bounds (National Press Club v. Commission on Elections, 207 SCRA 1).12 After the respective counsels of the parties were heard on oral arguments, the trial court issued on August 21, 1995, an order granting the petitioners plea for a writ of preliminary injunction upon a bond of P50,000. The petitioner posted the requisite bond and on August 24, 1995, the trial court issued a writ of preliminary injunction enjoining the enforcement of the following provisions of Rep. Act No. 8042 pending the termination of the proceedings: Section 2, subsections (g) and (i, 2nd par.); Section 6, subsec tions (a) to (m), and pars. 15 & 16; Section 7, subsections (a) & (b); Section 8; Section 9; Section 10; pars. 1 & 2; Section 11; and Section 40 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995. 13 The petitioners filed a petition for certiorari with the Court of Appeals assailing the order and the writ of preliminary injunction issued by the trial court on the following grounds: 1. Respondent ARCO-PHIL. had utterly failed to show its clear right/s or that of its member-agencies to be protected by the injunctive relief and/or violation of said rights by the enforcement of the assailed sections of R.A. 8042; 2. Respondent Judge fixed a P50,000 injunction bond which is grossly inadequate to answer for the damage which petitioner-officials may sustain, should respondent ARCO-PHIL. be finally adjudged as not being entitled thereto.14 The petitioners asserted that the respondent is not the real party-in-interest as petitioner in the trial court. It is inconceivable how the respondent, a non-stock and non-profit corporation, could sustain direct injury as a result of the enforcement of the law. They argued that if, at all, any damage would result in the implementation of the law, it is the licensed and registered recruitment agencies and/or the unskilled Filipino migrant workers discriminated against who would sustain the said injury or damage, not the respondent. The respondent, as petitioner in the trial court, was burdened to adduce preponderant

evidence of such irreparable injury, but failed to do so. The petitioners further insisted that the petition a quo was premature since the rules and regulations implementing the law had yet to be promulgated when such petition was filed. Finally, the petitioners averred that the respondent failed to establish the requisites for the issuance of a writ of preliminary injunction against the enforcement of the law and the rules and regulations issued implementing the same. On December 5, 1997, the appellate court came out with a four-page decision dismissing the petition and affirming the assailed order and writ of preliminary injunction issued by the trial court. The appellate court, likewise, denied the petitioners motion for reconsideration of the said decision. The petitioners now come to this Court in a petition for review on certiorari on the following grounds: 1. Private respondent ARCO-PHIL. had utterly failed to show its clear right/s or that of its memberagencies to be protected by the injunctive relief and/or violation of said rights by the enforcement of the assailed sections of R.A. 8042; 2. The P50,000 injunction bond fixed by the court a quo and sustained by the Court of Appeals is grossly inadequate to answer for the damage which petitioners-officials may sustain, should private respondent ARCO-PHIL. be finally adjudged as not being entitled thereto.15 On February 16, 1998, this Court issued a temporary restraining order enjoining the respondents from enforcing the assailed order and writ of preliminary injunction. The Issues The core issue in this case is whether or not the trial court committed grave abuse of its discretion amounting to excess or lack of jurisdiction in issuing the assailed order and the writ of preliminary injunction on a bond of only P50,000 and whether or not the appellate court erred in affirming the trial courts order and the writ of preliminary injunction issued by it. The petitioners contend that the respondent has no locus standi. It is a non-stock, non-profit organization; hence, not the real party-in-interest as petitioner in the action. Although the respondent filed the petition in the Regional Trial Court in behalf of licensed and registered recruitment agencies, it failed to adduce in evidence a certified copy of its Articles of Incorporation and the resolutions of the said members authorizing it to represent the said agencies in the proceedings. Neither is the suit of the respondent a class suit so as to vest in it a personality to assail Rep. Act No. 8042; the respondent is service-oriented while the recruitment agencies it purports to represent are profit-oriented. The petitioners assert that the law is presumed constitutional and, as such, the respondent was burdened to make a case strong enough to overcome such presumption and establish a clear right to injunctive relief. The petitioners bewail the P50,000 bond fixed by the trial court for the issuance of a writ of preliminary injunction and affirmed by the appellate court. They assert that the amount is grossly inadequate to answer for any damages that the general public may suffer by reason of the non-enforcement of the assailed provisions of the law. The trial court committed a grave abuse of its discretion in granting the respondents plea for injunctive relief, and the appellate court erred in affirming the order and the writ of preliminary injunction issued by the trial court. The respondent, for its part, asserts that it has duly established its locus standi and its right to injunctive relief as gleaned from its pleadings and the appendages thereto. Under Section 5, Rule 58 of the Rules of

Court, it was incumbent on the petitioners, as respondents in the RTC, to show cause why no injunction should issue. It avers that the injunction bond posted by the respondent was more than adequate to answer for any injury or damage the petitioners may suffer, if any, by reason of the writ of preliminary injunction issued by the RTC. In any event, the assailed provisions of Rep. Act No. 8042 exposed its members to the immediate and irreparable damage of being deprived of their right to a livelihood without due process, a property right protected under the Constitution. The respondent contends that the commendable purpose of the law to eradicate illegal recruiters should not be done at the expense and to the prejudice of licensed and authorized recruitment agencies. The writ of preliminary injunction was necessitated by the great number of duly licensed recruitment agencies that had stopped or suspended their business operations for fear that their officers and employees would be indicted and prosecuted under the assailed oppressive penal provisions of the law, and meted excessive penalties. The respondent, likewise, urges that the Court should take judicial notice that the processing of deployment papers of overseas workers have come to a virtual standstill at the POEA. The Courts Ruling The petition is meritorious. The Respondent Has Locus Standi To File the Petition in the RTC in Representation of the Eleven Licensed and Registered Recruitment Agencies Impleaded in the Amended Petition The modern view is that an association has standing to complain of injuries to its members. This view fuses the legal identity of an association with that of its members.16 An association has standing to file suit for its workers despite its lack of direct interest if its members are affected by the action. An organization has standing to assert the concerns of its constituents.17 In Telecommunications and Broadcast Attorneys of the Philippines v. Commission on Elections,18 we held that standing jus tertii would be recognized only if it can be shown that the party suing has some substantial relation to the third party, or that the right of the third party would be diluted unless the party in court is allowed to espouse the third partys constitutional claims. In this case, the respondent filed the petition for declaratory relief under Rule 64 of the Rules of Court for and in behalf of its eleven (11) licensed and registered recruitment agencies which are its members, and which approved separate resolutions expressly authorizing the respondent to file the said suit for and in their behalf. We note that, under its Articles of Incorporation, the respondent was organized for the purposes inter alia of promoting and supporting the growth and development of the manpower recruitment industry, both in the local and international levels; providing, creating and exploring employment opportunities for the exclusive benefit of its general membership; enhancing and promoting the general welfare and protection of Filipino workers; and, to act as the representative of any individual, company, entity or association on matters related to the manpower recruitment industry, and to perform other acts and activities necessary to accomplish the purposes embodied therein. The respondent is, thus, the appropriate party to assert the rights of its members, because it and its members are in every practical sense identical. The respondent asserts that the assailed provisions violate the constitutional rights of its members and the officers and employees thereof. The respondent is but the medium through which its individual members seek to make more effective the expression of their voices and the redress of their grievances.19

However, the respondent has no locus standi to file the petition for and in behalf of unskilled workers. We note that it even failed to implead any unskilled workers in its petition. Furthermore, in failing to implead, as parties-petitioners, the eleven licensed and registered recruitment agencies it claimed to represent, the respondent failed to comply with Section 2 of Rule 6320 of the Rules of Court. Nevertheless, since the eleven licensed and registered recruitment agencies for which the respondent filed the suit are specifically named in the petition, the amended petition is deemed amended to avoid multiplicity of suits.21 The Assailed Order and Writ of Preliminary Injunction Is Mooted By Case Law The respondent justified its plea for injunctive relief on the allegation in its amended petition that its members are exposed to the immediate and irreparable danger of being deprived of their right to a livelihood and other constitutional rights without due process, on its claim that a great number of duly licensed recruitment agencies have stopped or suspended their operations for fear that (a) their officers and employees would be prosecuted under the unjust and unconstitutional penal provisions of Rep. Act No. 8042 and meted equally unjust and excessive penalties, including life imprisonment, for illegal recruitment and large scale illegal recruitment without regard to whether the recruitment agencies involved are licensed and/or authorized; and, (b) if the members of the respondent, which are licensed and authorized, decide to continue with their businesses, they face the stigma and the curse of being labeled "illegal recruiters." In granting the respondents plea for a writ of preliminary injunction, the trial court held, without stating the factual and legal basis therefor, that the enforcement of Rep. Act No. 8042, pendente lite, would cause grave and irreparable injury to the respondent until the case is decided on its merits. We note, however, that since Rep. Act No. 8042 took effect on July 15, 1995, the Court had, in a catena of cases, applied the penal provisions in Section 6, including paragraph (m) thereof, and the last two paragraphs therein defining large scale illegal recruitment committed by officers and/or employees of recruitment agencies by themselves and in connivance with private individuals, and imposed the penalties provided in Section 7 thereof, including the penalty of life imprisonment.22 The Informations therein were filed after preliminary investigations as provided for in Section 11 of Rep. Act No. 8042 and in venues as provided for in Section 9 of the said act. In People v. Chowdury,23 we held that illegal recruitment is a crime of economic sabotage and must be enforced. In People v. Diaz,24 we held that Rep. Act No. 8042 is but an amendment of the Labor Code of the Philippines and is not an ex-post facto law because it is not applied retroactively. In JMM Promotion and Management, Inc. v. Court of Appeals,25 the issue of the extent of the police power of the State to regulate a business, profession or calling vis--vis the equal protection clause and the non-impairment clause of the Constitution were raised and we held, thus: A profession, trade or calling is a property right within the meaning of our constitutional guarantees. One cannot be deprived of the right to work and the right to make a living because these rights are property rights, the arbitrary and unwarranted deprivation of which normally constitutes an actionable wrong.

Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or trade has always been upheld as a legitimate subject of a valid exercise of the police power by the state particularly when their conduct affects either the execution of legitimate governmental functions, the preservation of the State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum non laedas, it must of course be within the legitimate range of legislative action to define the mode and manner in which every one may so use his own property so as not to pose injury to himself or others. In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of regulatory measures is certainly much wider. To pretend that licensing or accreditation requirements violates the due process clause is to ignore the settled practice, under the mantle of the police power, of regulating entry to the practice of various trades or professions. Professionals leaving for abroad are required to pass rigid written and practical exams before they are deemed fit to practice their trade. Seamen are required to take tests determining their seamanship. Locally, the Professional Regulation Commission has begun to require previously licensed doctors and other professionals to furnish documentary proof that they had either re-trained or had undertaken continuing education courses as a requirement for renewal of their licenses. It is not claimed that these requirements pose an unwarranted deprivation of a property right under the due process clause. So long as professionals and other workers meet reasonable regulatory standards no such deprivation exists. Finally, it is a futile gesture on the part of petitioners to invoke the non-impairment clause of the Constitution to support their argument that the government cannot enact the assailed regulatory measures because they abridge the freedom to contract. In Philippine Association of Service Exporters, Inc. vs. Drilon, we held that "[t]he non-impairment clause of the Constitution must yield to the loftier purposes targeted by the government." Equally important, into every contract is read provisions of existing law, and always, a reservation of the police power for so long as the agreement deals with a subject impressed with the public welfare. A last point. Petitioners suggest that the singling out of entertainers and performing artists under the assailed department orders constitutes class legislation which violates the equal protection clause of the Constitution. We do not agree. The equal protection clause is directed principally against undue favor and individual or class privilege. It is not intended to prohibit legislation which is limited to the object to which it is directed or by the territory in which it is to operate. It does not require absolute equality, but merely that all persons be treated alike under like conditions both as to privileges conferred and liabilities imposed. We have held, time and again, that the equal protection clause of the Constitution does not forbid classification for so long as such classification is based on real and substantial differences having a reasonable relation to the subject of the particular legislation. If classification is germane to the purpose of the law, concerns all members of the class, and applies equally to present and future conditions, the classification does not violate the equal protection guarantee.26 The validity of Section 6 of R.A. No. 8042 which provides that employees of recruitment agencies may be criminally liable for illegal recruitment has been upheld in People v. Chowdury:27 As stated in the first sentence of Section 6 of RA 8042, the persons who may be held liable for illegal recruitment are the principals, accomplices and accessories. An employee of a company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. It has been held that the existence of

the corporate entity does not shield from prosecution the corporate agent who knowingly and intentionally causes the corporation to commit a crime. The corporation obviously acts, and can act, only by and through its human agents, and it is their conduct which the law must deter. The employee or agent of a corporation engaged in unlawful business naturally aids and abets in the carrying on of such business and will be prosecuted as principal if, with knowledge of the business, its purpose and effect, he consciously contributes his efforts to its conduct and promotion, however slight his contribution may be. 28 By its rulings, the Court thereby affirmed the validity of the assailed penal and procedural provisions of Rep. Act No. 8042, including the imposable penalties therefor. Until the Court, by final judgment, declares that the said provisions are unconstitutional, the enforcement of the said provisions cannot be enjoined. The RTC Committed Grave Abuse of Its Discretion Amounting to Excess or Lack of Jurisdiction in Issuing the Assailed Order and the Writ of Preliminary Injunction The matter of whether to issue a writ of preliminary injunction or not is addressed to the sound discretion of the trial court. However, if the court commits grave abuse of its discretion in issuing the said writ amounting to excess or lack of jurisdiction, the same may be nullified via a writ of certiorari and prohibition. In Social Security Commission v. Judge Bayona,29 we ruled that a law is presumed constitutional until otherwise declared by judicial interpretation. The suspension of the operation of the law is a matter of extreme delicacy because it is an interference with the official acts not only of the duly elected representatives of the people but also of the highest magistrate of the land. In Younger v. Harris, Jr.,30 the Supreme Court of the United States emphasized, thus: Federal injunctions against state criminal statutes, either in their entirety or with respect to their separate and distinct prohibitions, are not to be granted as a matter of course, even if such statutes are unconstitutional. No citizen or member of the community is immune from prosecution, in good faith, for his alleged criminal acts. The imminence of such a prosecution even though alleged to be unauthorized and, hence, unlawful is not alone ground for relief in equity which exerts its extraordinary powers only to prevent irreparable injury to the plaintiff who seeks its aid. 752 Beal v. Missouri Pacific Railroad Corp., 312 U.S. 45, 49, 61 S.Ct. 418, 420, 85 L.Ed. 577. And similarly, in Douglas, supra, we made clear, after reaffirming this rule, that: "It does not appear from the record that petitioners have been threatened with any injury other than that incidental to every criminal proceeding brought lawfully and in good faith " 319 U.S., at 164, 63 S.Ct., at 881.31 The possible unconstitutionality of a statute, on its face, does not of itself justify an injunction against good faith attempts to enforce it, unless there is a showing of bad faith, harassment, or any other unusual circumstance that would call for equitable relief.32 The "on its face" invalidation of statutes has been described as "manifestly strong medicine," to be employed "sparingly and only as a last resort," and is generally disfavored.33 To be entitled to a preliminary injunction to enjoin the enforcement of a law assailed to be unconstitutional, the party must establish that it will suffer irreparable harm in the absence of injunctive

relief and must demonstrate that it is likely to succeed on the merits, or that there are sufficiently serious questions going to the merits and the balance of hardships tips decidedly in its favor.34 The higher standard reflects judicial deference toward "legislation or regulations developed through presumptively reasoned democratic processes." Moreover, an injunction will alter, rather than maintain, the status quo, or will provide the movant with substantially all the relief sought and that relief cannot be undone even if the defendant prevails at a trial on the merits.35 Considering that injunction is an exercise of equitable relief and authority, in assessing whether to issue a preliminary injunction, the courts must sensitively assess all the equities of the situation, including the public interest.36 In litigations between governmental and private parties, courts go much further both to give and withhold relief in furtherance of public interest than they are accustomed to go when only private interests are involved.37 Before the plaintiff may be entitled to injunction against future enforcement, he is burdened to show some substantial hardship.38 The fear or chilling-effect of the assailed penal provisions of the law on the members of the respondent does not by itself justify prohibiting the State from enforcing them against those whom the State believes in good faith to be punishable under the laws: Just as the incidental "chilling effect" of such statutes does not automatically render them unconstitutional, so the chilling effect that admittedly can result from the very existence of certain laws on the statute books does not in itself justify prohibiting the State from carrying out the important and necessary task of enforcing these laws against socially harmful conduct that the State believes in good faith to be punishable under its laws and the Constitution.39 It must be borne in mind that subject to constitutional limitations, Congress is empowered to define what acts or omissions shall constitute a crime and to prescribe punishments therefor.40 The power is inherent in Congress and is part of the sovereign power of the State to maintain peace and order. Whatever views may be entertained regarding the severity of punishment, whether one believes in its efficiency or its futility, these are peculiarly questions of legislative policy.41 The comparative gravity of crimes and whether their consequences are more or less injurious are matters for the State and Congress itself to determine.42 Specification of penalties involves questions of legislative policy.43 Due process prohibits criminal stability from shifting the burden of proof to the accused, punishing wholly passive conduct, defining crimes in vague or overbroad language and failing to grant fair warning of illegal conduct.44 Class legislation is such legislation which denies rights to one which are accorded to others, or inflicts upon one individual a more severe penalty than is imposed upon another in like case offending.45 Bills of attainder are legislative acts which inflict punishment on individuals or members of a particular group without a judicial trial. Essential to a bill of attainder are a specification of certain individuals or a group of individuals, the imposition of a punishment, penal or otherwise, and the lack of judicial trial.46 Penalizing unlicensed and licensed recruitment agencies and their officers and employees and their relatives employed in government agencies charged with the enforcement of the law for illegal recruitment and imposing life imprisonment for those who commit large scale illegal recruitment is not offensive to the Constitution. The accused may be convicted of illegal recruitment and large scale illegal recruitment only if, after trial, the prosecution is able to prove all the elements of the crime charged.47 The possibility that the officers and employees of the recruitment agencies, which are members of the respondent, and their relatives who are employed in the government agencies charged in the enforcement of the law, would be indicted for illegal recruitment and, if convicted sentenced to life imprisonment for large scale illegal recruitment, absent proof of irreparable injury, is not sufficient on

which to base the issuance of a writ of preliminary injunction to suspend the enforcement of the penal provisions of Rep. Act No. 8042 and avert any indictments under the law.48 The normal course of criminal prosecutions cannot be blocked on the basis of allegations which amount to speculations about the future.49 There is no allegation in the amended petition or evidence adduced by the respondent that the officers and/or employees of its members had been threatened with any indictments for violations of the penal provisions of Rep. Act No. 8042. Neither is there any allegation therein that any of its members and/or their officers and employees committed any of the acts enumerated in Section 6(a) to (m) of the law for which they could be indicted. Neither did the respondent adduce any evidence in the RTC that any or all of its members or a great number of other duly licensed and registered recruitment agencies had to stop their business operations because of fear of indictments under Sections 6 and 7 of Rep. Act No. 8042. The respondent merely speculated and surmised that licensed and registered recruitment agencies would close shop and stop business operations because of the assailed penal provisions of the law. A writ of preliminary injunction to enjoin the enforcement of penal laws cannot be based on such conjectures or speculations. The Court cannot take judicial notice that the processing of deployment papers of overseas workers have come to a virtual standstill at the POEA because of the assailed provisions of Rep. Act No. 8042. The respondent must adduce evidence to prove its allegation, and the petitioners accorded a chance to adduce controverting evidence. The respondent even failed to adduce any evidence to prove irreparable injury because of the enforcement of Section 10(1)(2) of Rep. Act No. 8042. Its fear or apprehension that, because of time constraints, its members would have to defend foreign employees in cases before the Labor Arbiter is based on speculations. Even if true, such inconvenience or difficulty is hardly irreparable injury. The trial court even ignored the public interest involved in suspending the enforcement of Rep. Act No. 8042 vis--vis the eleven licensed and registered recruitment agencies represented by the respondent. In People v. Gamboa,50 we emphasized the primary aim of Rep. Act No. 8042: Preliminarily, the proliferation of illegal job recruiters and syndicates preying on innocent people anxious to obtain employment abroad is one of the primary considerations that led to the enactment of The Migrant Workers and Overseas Filipinos Act of 1995. Aimed at affording greater protection to overseas Filipino workers, it is a significant improvement on existing laws in the recruitment and placement of workers for overseas employment. Otherwise known as the Magna Carta of OFWs, it broadened the concept of illegal recruitment under the Labor Code and provided stiffer penalties thereto, especially those that constitute economic sabotage, i.e., Illegal Recruitment in Large Scale and Illegal Recruitment Committed by a Syndicate.51 By issuing the writ of preliminary injunction against the petitioners sans any evidence, the trial court frustrated, albeit temporarily, the prosecution of illegal recruiters and allowed them to continue victimizing hapless and innocent people desiring to obtain employment abroad as overseas workers, and blocked the attainment of the salutary policies52 embedded in Rep. Act No. 8042. It bears stressing that overseas workers, land-based and sea-based, had been remitting to the Philippines billions of dollars which over the years had propped the economy. In issuing the writ of preliminary injunction, the trial court considered paramount the interests of the eleven licensed and registered recruitment agencies represented by the respondent, and capriciously overturned the presumption of the constitutionality of the assailed provisions on the barefaced claim of the respondent that the assailed provisions of Rep. Act No. 8042 are unconstitutional. The trial court

committed a grave abuse of its discretion amounting to excess or lack of jurisdiction in issuing the assailed order and writ of preliminary injunction. It is for this reason that the Court issued a temporary restraining order enjoining the enforcement of the writ of preliminary injunction issued by the trial court. IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed decision of the appellate court is REVERSED AND SET ASIDE. The Order of the Regional Trial Court dated August 21, 1995 in Civil Case No. Q-95-24401 and the Writ of Preliminary Injunction issued by it in the said case on August 24, 1995 are NULLIFIED. No costs. SO ORDERED. Puno*, Quisumbing**, Austria-Martinez, and Tinga, JJ., concur. Footnotes * On official leave. ** Acting Chairman. 1 Penned by Associate Justice Jesus M. Elbinias with Associate Justices Hector L. Hofilea and Omar U. Amin concurring. 2 Penned by Judge Teodoro P. Regino, who was later promoted Associate Justice of the Court of Appeals. 3 Records, Vol. I, pp. 86-87. 4 Section 2, paragraph (g). 5 Section 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws. 6 Sec. 12. The State recognizes the sanctity of family life and shall protect and strengthen the family as a basic autonomous social institution. It shall equally protect the life of the mother and the life of the unborn from conception. The natural and primary right and duty of parents in the rearing of the youth for civic efficiency and the development of moral character shall receive the support of the Government. 7 Section 1. The State recognizes the Filipino family as the foundation of the nation. Accordingly, it shall strengthen its solidarity and actively promote its total development. 8 Sec. 3. The State shall defend the following: (3) The right of the family to a family living wage and income.

9 Sec. 19. (1) Excessive fines shall not be imposed, nor cruel, degrading or inhuman punishment inflicted. Neither shall death penalty be imposed, unless, for compelling reasons involving heinous crimes, the Congress hereafter provides for it. Any death penalty already imposed shall be reduced to reclusion perpetua. (Section 19, Article III of the Constitution.) 10 Sec. 22. No ex-post facto law or bill of attainder shall be enacted. 11 (5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court. 12 Records, Vol. I, p. 223. 13 Id. at 235. 14 CA Rollo, p. 10. 15 Rollo, p. 19. 16 W.C.M. Winston Co., Inc. v. Bernardi, 730 F2d 486 (1984), citing NACCP v. Alabama, 2 L.ed.2d 1488 (1958). 17 Maite v. Chicago Board of Education, 415 NE2d 1034 (1980), cited in DeWitt County Taxpayers Association v. The County Board of Deliot County, 445 NE2d 509 (1983). 18 289 SCRA 337 (1998). 19 National Associates for the Advancement of Colored People v. State of Alabama, 2 L.Ed.2d 1488 (1958). 20 SEC. 2. Parties. All persons who have or claim any interest which would be affected by the declaration shall be made parties; and no declaration shall, except as otherwise provided in these Rules, prejudice the rights of persons not parties to the action. 21 SEC. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a misjoined party may be severed and proceeded with separately. 22 People v. Navarra, 352 SCRA 84 (2001); People v. Fajardo, 345 SCRA 395 (2000); People v. Saulo, 344 SCRA 605 (2000); People v. Gamboa, 341 SCRA 451 (2000); People v. Banzales, 336 SCRA 64 (2000); People v. Ordoo, 335 SCRA 331 (2000); People v. Mercado de Arabia, 332 SCRA 49 (2000); People v. Moreno, 314 SCRA 556 (1999); People v. Castillon, 306 SCRA 271 (1999); People v. Mercado, 304 SCRA 504 (1999); People v. Peralta, 283 SCRA 81 (1997); People v. Ortiz-Miyake, 279 SCRA 180 (1997); People v. Villas, 277 SCRA 391 (1997); People v. Santos, 276 SCRA 329 (1997); People v. Tan Tiong Meng, 271 SCRA 125 (1997); People v. Maozca, 269 SCRA 513 (1997); People v. Seoron, 267

SCRA 278 (1997); People v. De Leon, 267 SCRA 644 (1997); People v. Benemerito, 264 SCRA 677 (1996); People v. Pabalan, 262 SCRA 574 (1996); People v. Calonzo, 262 SCRA 534 (1996). 23 325 SCRA 572 (2000). 24 259 SCRA 441 (1996). 25 260 SCRA 319 (1996). 26 Id. at 330-332. 27 Supra at note 23. 28 Supra. 29 5 SCRA 126 (1962). 30 27 L.Ed.2d 669 (1971). 31 Ibid. 32 Id.; Fieger v. Thomas, 74 F.3d 740 (1996). 33 Broaderick v. Oklahoma, 37 L.Ed.2d 841. 34 Latino Officers Association v. Safir, 170 F.3d 167 (1999). 35 Forest City Daly Housing, Inc. v. Town of North Hempstead, 175 F.3d 144 (1999). 36 Beal v. Stern, 184 F.3d 117 (1999). 37 Maryland Commission on Human Relations v. Downey Communications, Inc., 110 Md.App. 493, 678 A.2d 55 (1996). 38 Croselto v. State Bar of Wisconsin, 12 F.3d 396 (1993). 39 Younger v. Harris, Jr., supra. 40 U.S. v. Schnell, 982 F.2d 216 (1992); United States v. Bogle, 689 F.Supp. 1121 (1988). 41 United States v. Bogle, supra. 42 Collins v. Joluston, 59 L.Ed. 1071 (1915). 43 Gore v. United States, 62 L.Ed.2d 1405 (1958). 44 U.S. v. Schnell, supra. 45 State v. Murray, 175 NE 666 (1919).

46 Misolas v. Panga, 181 SCRA 648 (1990). 47 The essential elements for illegal recruitment are: (1) the offender undertakes either any activity within the meaning of "recruitment and placement" defined under Art. 13(b), or any of the prohibited practices enumerated under Article 34 of the Labor Code; and (2) he has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers. [People v. Pascua, 366 SCRA 505 (2001)]. The essential elements for large scale illegal recruitment are: (1) the accused engages in the recruitment and placement of workers, as defined under Article 13(b) or in any prohibited activities under Article 34 of the Labor Code; (2) accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of a license or an authority to recruit and deploy workers, whether locally or overseas; and (3) accused commits the same against three (3) or more persons, individually or as a group. [People v. Saulo, 344 SCRA 605 (2000)]. 48 See Beal v. Pacific Railroad Corporation, 85 L.Ed. 577, cited in Younger v. Harris, Jr., supra. 49 Boyle v. Landry, 27 L.Ed.2d 696 (1971). 50 341 SCRA 451 (2000). 51 Id. at 456-458. 52 (a) In the pursuit of an independent foreign policy and while considering national sovereignty, territorial integrity, national interest and the right to self-determination paramount in its relations with other states, the State shall, at all times, uphold the dignity of its citizens whether in country or overseas, in general, and Filipino migrant workers, in particular. (b) The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. Towards this end, the State shall provide adequate and timely social, economic and legal services to Filipino migrant workers. (c) While recognizing the significant contribution of Filipino migrant workers to the national economy through their foreign exchange remittances, the State does not promote overseas employment as a means to sustain economic growth and achieve national development. The existence of the overseas employment program rests solely on the assurance that the dignity and fundamental human rights and freedoms of the Filipino citizen shall not, at any time, be compromised or violated. The State, therefore, shall continuously create local employment opportunities and promote the equitable distribution of wealth and the benefits of development.

(d) The State affirms the fundamental equality before the law of women and men and the significant role of women in nation-building. Recognizing the contribution of overseas migrant women workers and their particular vulnerabilities, the State shall apply gender sensitive criteria in the formulation and implementation of policies and programs affecting migrant workers and the composition of bodies tasked for the welfare of migrant workers. (e) Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty. In this regard, it is imperative that an effective mechanism be instituted to ensure that the rights and interest of distressed overseas Filipinos, in general, and Filipino migrant workers, in particular, documented or undocumented, are adequately protected and safeguarded. (f) The right of Filipino migrant workers and all overseas Filipinos to participate in the democratic decisionmaking processes of the State and to be represented in institutions relevant to overseas employment is recognized and guaranteed. (g) The State recognizes that the ultimate protection to all migrant workers is the possession of skills. Pursuant to this and as soon as practicable, the government shall deploy and/or allow the deployment only of skilled Filipino workers. (h) Non-governmental organizations, duly recognized as legitimate, are partners of the State in the protection of Filipino migrant workers and in the promotion of their welfare. The State shall cooperate with them in a spirit of trust and mutual respect. (i) Government fees and other administrative costs of recruitment, introduction, placement and assistance to migrant workers shall be rendered free without prejudice to the provision of Section 36 hereof. Nonetheless, the deployment of Filipino overseas workers, whether land-based or sea-based, by local service contractors and manning agencies employing them shall be encouraged. Appropriate incentives may be extended to them. (Records, Vol. I, p. 35.)

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-------------------------------------------------------------------------------Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 113375 May 5, 1994 KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO, RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE WEBB, SEN. WIGBERTO TAADA, and REP. JOKER P. ARROYO, petitioners, vs. TEOFISTO GUINGONA, JR., in his capacity as Executive Secretary, Office of the President; RENATO CORONA, in his capacity as Assistant Executive Secretary and Chairman of the Presidential review Committee on the Lotto, Office of the President; PHILIPPINE CHARITY SWEEPSTAKES OFFICE; and PHILIPPINE GAMING MANAGEMENT CORPORATION, respondents. Jovito R. Salonga, Fernando Santiago, Emilio C. Capulong, Jr. and Felipe L. Gozon for petitioners. Renato L. Cayetano and Eleazar B. Reyes for PGMC. Gamaliel G. Bongco, Oscar Karaan and Jedideoh Sincero for intervenors.

DAVIDE, JR., J.: This is a special civil action for prohibition and injunction, with a prayer for a temporary restraining order and preliminary injunction, which seeks to prohibit and restrain the implementation of the "Contract of Lease" executed by the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation (PGMC) in connection with the on- line lottery system, also known as "lotto." Petitioner Kilosbayan, Incorporated (KILOSBAYAN) avers that it is a non-stock domestic corporation composed of civic-spirited citizens, pastors, priests, nuns, and lay leaders who are committed to the cause of truth, justice, and national renewal. The rest of the petitioners, except Senators Freddie Webb and Wigberto Taada and Representative Joker P. Arroyo, are suing in their capacities as members of

the Board of Trustees of KILOSBAYAN and as taxpayers and concerned citizens. Senators Webb and Taada and Representative Arroyo are suing in their capacities as members of Congress and as taxpayers and concerned citizens of the Philippines. The pleadings of the parties disclose the factual antecedents which triggered off the filing of this petition. Pursuant to Section 1 of the charter of the PCSO (R.A. No. 1169, as amended by B.P. Blg. 42) which grants it the authority to hold and conduct "charity sweepstakes races, lotteries and other similar activities," the PCSO decided to establish an on- line lottery system for the purpose of increasing its revenue base and diversifying its sources of funds. Sometime before March 1993, after learning that the PCSO was interested in operating an on-line lottery system, the Berjaya Group Berhad, "a multinational company and one of the ten largest public companies in Malaysia," long "engaged in, among others, successful lottery operations in Asia, running both Lotto and Digit games, thru its subsidiary, Sports Toto Malaysia," with its "affiliate, the International Totalizator Systems, Inc., . . . an American public company engaged in the international sale or provision of computer systems, softwares, terminals, training and other technical services to the gaming industry," "became interested to offer its services and resources to PCSO." As an initial step, Berjaya Group Berhad (through its individual nominees) organized with some Filipino investors in March 1993 a Philippine corporation known as the Philippine Gaming Management Corporation (PGMC), which "was intended to be the medium through which the technical and management services required for the project would be offered and delivered to PCSO." 1 Before August 1993, the PCSO formally issued a Request for Proposal (RFP) for the Lease Contract of an on-line lottery system for the PCSO. 2 Relevant provisions of the RFP are the following: 1. EXECUTIVE SUMMARY xxx xxx xxx 1.2. PCSO is seeking a suitable contractor which shall build, at its own expense, all the facilities ('Facilities') needed to operate and maintain a nationwide on-line lottery system. PCSO shall lease the Facilities for a fixed percentage ofquarterly gross receipts. All receipts from ticket sales shall be turned over directly to PCSO. All capital, operating expenses and expansion expenses and risks shall be for the exclusive account of the Lessor. xxx xxx xxx 1.4. The lease shall be for a period not exceeding fifteen (15) years. 1.5. The Lessor is expected to submit a comprehensive nationwide lottery development plan ("Development Plan") which will include the game, the marketing of the games, and the logistics to introduce the games to all the cities and municipalities of the country within five (5) years. xxx xxx xxx 1.7. The Lessor shall be selected based on its technical expertise, hardware and software capability, maintenance support, and financial resources. The Development Plan shall have a substantial bearing on the choice of the Lessor. The Lessor shall be a domestic corporation, with at least sixty percent (60%) of its shares owned by Filipino shareholders.

xxx xxx xxx The Office of the President, the National Disaster Control Coordinating Council, the Philippine National Police, and the National Bureau of Investigation shall be authorized to use the nationwide telecommunications system of the Facilities Free of Charge.

1.8. Upon expiration of the lease, the Facilities shall be owned by PCSO without any additional consideration. 3 xxx xxx xxx 2.2. OBJECTIVES The objectives of PCSO in leasing the Facilities from a private entity are as follows: xxx xxx xxx 2.2.2. Enable PCSO to operate a nationwide on-line Lottery system at no expense or risk to the government. xxx xxx xxx 2.4. DUTIES AND RESPONSIBILITIES OF THE LESSOR xxx xxx xxx 2.4.2. THE LESSOR The Proponent is expected to furnish and maintain the Facilities, including the personnel needed to operate the computers, the communications network and sales offices under a build-lease basis. The printing of tickets shall be undertaken under the supervision and control of PCSO. The Facilities shall enable PCSO to computerize the entire gaming system. The Proponent is expected to formulate and design consumer-oriented Master Games Plan suited to the marketplace, especially geared to Filipino gaming habits and preferences. In addition, the Master Games Plan is expected to include a Product Plan for each game and explain how each will be introduced into the market. This will be an integral part of the Development Plan which PCSO will require from the Proponent. xxx xxx xxx The Proponent is expected to provide upgrades to modernize the entire gaming system over the life ofthe lease contract. The Proponent is expected to provide technology transfer to PCSO technical personnel. 4 7. GENERAL GUIDELINES FOR PROPONENTS

xxx xxx xxx Finally, the Proponent must be able to stand the acid test of proving that it is an entity able to take on the role of responsible maintainer of the on-line lottery system, and able to achieve PSCO's goal of formalizing an on-line lottery system to achieve its mandated objective. 5 xxx xxx xxx 16. DEFINITION OF TERMS Facilities: All capital equipment, computers, terminals, software, nationwide telecommunication network, ticket sales offices, furnishings, and fixtures; printing costs; cost of salaries and wages; advertising and promotion expenses; maintenance costs; expansion and replacement costs; security and insurance, and all other related expenses needed to operate nationwide on-line lottery system. 6 Considering the above citizenship requirement, the PGMC claims that the Berjaya Group "undertook to reduce its equity stakes in PGMC to 40%," by selling 35% out of the original 75% foreign stockholdings to local investors. On 15 August 1993, PGMC submitted its bid to the PCSO. 7 The bids were evaluated by the Special Pre-Qualification Bids and Awards Committee (SPBAC) for the on-line lottery and its Bid Report was thereafter submitted to the Office of the President. 8 The submission was preceded by complaints by the Committee's Chairperson, Dr. Mita Pardo de Tavera. 9 On 21 October 1993, the Office of the President announced that it had given the respondent PGMC the go-signal to operate the country's on-line lottery system and that the corresponding implementing contract would be submitted not later than 8 November 1993 "for final clearance and approval by the Chief Executive." 10 This announcement was published in the Manila Standard, Philippine Daily Inquirer, and the Manila Times on 29 October 1993. 11 On 4 November 1993, KILOSBAYAN sent an open letter to Presidential Fidel V. Ramos strongly opposing the setting up to the on-line lottery system on the basis of serious moral and ethical considerations. 12 At the meeting of the Committee on Games and Amusements of the Senate on 12 November 1993, KILOSBAYAN reiterated its vigorous opposition to the on-line lottery on account of its immorality and illegality. 13 On 19 November 1993, the media reported that despite the opposition, "Malacaang will push through with the operation of an on-line lottery system nationwide" and that it is actually the respondent PCSO which will operate the lottery while the winning corporate bidders are merely "lessors." 14 On 1 December 1993, KILOSBAYAN requested copies of all documents pertaining to the lottery award from Executive Secretary Teofisto Guingona, Jr. In his answer of 17 December 1993, the Executive Secretary informed KILOSBAYAN that the requested documents would be duly transmitted before the end of the month. 15. However, on that same date, an agreement denominated as "Contract of Lease" was finally executed by respondent PCSO and respondent PGMC. 16 The President, per the press statement issued by the Office of the President, approved it on 20 December 1993. 17

In view of their materiality and relevance, we quote the following salient provisions of the Contract of Lease: 1. DEFINITIONS The following words and terms shall have the following respective meanings: 1.1 Rental Fee Amount to be paid by PCSO to the LESSOR as compensation for the fulfillment of the obligations of the LESSOR under this Contract, including, but not limited to the lease of the Facilities. xxx xxx xxx 1.3 Facilities All capital equipment, computers, terminals, software (including source codes for the OnLine Lottery application software for the terminals, telecommunications and central systems), technology, intellectual property rights, telecommunications network, and furnishings and fixtures. 1.4 Maintenance and Other Costs All costs and expenses relating to printing, manpower, salaries and wages, advertising and promotion, maintenance, expansion and replacement, security and insurance, and all other related expenses needed to operate an On-Line Lottery System, which shall be for the account of the LESSOR. All expenses relating to the setting-up, operation and maintenance of ticket sales offices of dealers and retailers shall be borne by PCSO's dealers and retailers. 1.5 Development Plan The detailed plan of all games, the marketing thereof, number of players, value of winnings and the logistics required to introduce the games, including the Master Games Plan as approved by PCSO, attached hereto as Annex "A", modified as necessary by the provisions of this Contract. xxx xxx xxx 1.8 Escrow Deposit The proposal deposit in the sum of Three Hundred Million Pesos (P300,000,000.00) submitted by the LESSOR to PCSO pursuant to the requirements of the Request for Proposals. 2. SUBJECT MATTER OF THE LEASE The LESSOR shall build, furnish and maintain at its own expense and risk the Facilities for the On-Line Lottery System of PCSO in the Territory on an exclusive basis. The LESSOR shall bear all Maintenance and Other Costs as defined herein. xxx xxx xxx 3. RENTAL FEE For and in consideration of the performance by the LESSOR of its obligations herein, PCSO shall pay LESSOR a fixed Rental Fee equal to four point nine percent (4.9%) of gross receipts from ticket sales, payable net of taxes required by law to be withheld, on a semi-monthly basis. Goodwill, franchise and similar fees shall belong to PCSO.

4. LEASE PERIOD The period of the lease shall commence ninety (90) days from the date of effectivity of this Contract and shall run for a period of eight (8) years thereafter, unless sooner terminated in accordance with this Contract. 5. RIGHTS AND OBLIGATIONS OF PCSO AS OPERATOR OF THE ON-LINE LOTTERY SYSTEM PCSO shall be the sole and individual operator of the On-Line Lottery System. Consequently: 5.1 PCSO shall have sole responsibility to decide whether to implement, fully or partially, the Master Games Plan of the LESSOR. PCSO shall have the sole responsibility to determine the time for introducing new games to the market. The Master Games Plan included in Annex "A" hereof is hereby approved by PCSO. 5.2 PCSO shall have control over revenues and receipts of whatever nature from the On-Line Lottery System. After paying the Rental Fee to the LESSOR, PCSO shall have exclusive responsibility to determine the Revenue Allocation Plan; Provided, that the same shall be consistent with the requirement of R.A. No. 1169, as amended, which fixes a prize fund of fifty five percent (55%) on the average. 5.3 PCSO shall have exclusive control over the printing of tickets, including but not limited to the design, text, and contents thereof. 5.4 PCSO shall have sole responsibility over the appointment of dealers or retailers throughout the country. PCSO shall appoint the dealers and retailers in a timely manner with due regard to the implementation timetable of the On-Line Lottery System. Nothing herein shall preclude the LESSOR from recommending dealers or retailers for appointment by PCSO, which shall act on said recommendation within forty-eight (48) hours. 5.5 PCSO shall designate the necessary personnel to monitor and audit the daily performance of the OnLine Lottery System. For this purpose, PCSO designees shall be given, free of charge, suitable and adequate space, furniture and fixtures, in all offices of the LESSOR, including but not limited to its headquarters, alternate site, regional and area offices. 5.6 PCSO shall have the responsibility to resolve, and exclusive jurisdiction over, all matters involving the operation of the On-Line Lottery System not otherwise provided in this Contract. 5.7 PCSO shall promulgate procedural and coordinating rules governing all activities relating to the OnLine Lottery System. 5.8 PCSO will be responsible for the payment of prize monies, commissions to agents and dealers, and taxes and levies (if any) chargeable to the operator of the On-Line Lottery System. The LESSOR will bear all other Maintenance and Other Costs, except as provided in Section 1.4. 5.9 PCSO shall assist the LESSOR in the following: 5.9.1 Work permits for the LESSOR's staff; 5.9.2 Approvals for importation of the Facilities;

5.9.3 Approvals and consents for the On-Line Lottery System; and 5.9.4 Business and premises licenses for all offices of the LESSOR and licenses for the telecommunications network. 5.10 In the event that PCSO shall pre-terminate this Contract or suspend the operation of the On-Line Lottery System, in breach of this Contract and through no fault of the LESSOR, PCSO shall promptly, and in any event not later than sixty (60) days, reimburse the LESSOR the amount of its total investment cost associated with the On-Line Lottery System, including but not limited to the cost of the Facilities, and further compensate the LESSOR for loss of expected net profit after tax, computed over the unexpired term of the lease. 6. DUTIES AND RESPONSIBILITIES OF THE LESSOR The LESSOR is one of not more than three (3) lessors of similar facilities for the nationwide On-Line Lottery System of PCSO. It is understood that the rights of the LESSOR are primarily those of a lessor of the Facilities, and consequently, all rights involving the business aspects of the use of the Facilities are within the jurisdiction of PCSO. During the term of the lease, the LESSOR shall. 6.1 Maintain and preserve its corporate existence, rights and privileges, and conduct its business in an orderly, efficient, and customary manner. 6.2 Maintain insurance coverage with insurers acceptable to PCSO on all Facilities. 6.3 Comply with all laws, statues, rules and regulations, orders and directives, obligations and duties by which it is legally bound. 6.4 Duly pay and discharge all taxes, assessments and government charges now and hereafter imposed of whatever nature that may be legally levied upon it. 6.5 Keep all the Facilities in fail safe condition and, if necessary, upgrade, replace and improve the Facilities from time to time as new technology develops, in order to make the On-Line Lottery System more cost-effective and/or competitive, and as may be required by PCSO shall not impose such requirements unreasonably nor arbitrarily. 6.6 Provide PCSO with management terminals which will allow real-time monitoring of the On-Line Lottery System. 6.7 Upon effectivity of this Contract, commence the training of PCSO and other local personnel and the transfer of technology and expertise, such that at the end of the term of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System. 6.8 Undertake a positive advertising and promotions campaign for both institutional and product lines without engaging in negative advertising against other lessors. 6.9 Bear all expenses and risks relating to the Facilities including, but not limited to, Maintenance and Other Costs and:

xxx xxx xxx 6.10 Bear all risks if the revenues from ticket sales, on an annualized basis, are insufficient to pay the entire prize money. 6.11 Be, and is hereby, authorized to collect and retain for its own account, a security deposit from dealers and retailers, in an amount determined with the approval of PCSO, in respect of equipment supplied by the LESSOR. PCSO's approval shall not be unreasonably withheld. xxx xxx xxx 6.12 Comply with procedural and coordinating rules issued by PCSO. 7. REPRESENTATIONS AND WARRANTIES The LESSOR represents and warrants that: 7.1 The LESSOR is corporation duly organized and existing under the laws of the Republic of the Philippines, at least sixty percent (60%) of the outstanding capital stock of which is owned by Filipino shareholders. The minimum required Filipino equity participation shall not be impaired through voluntary or involuntary transfer, disposition, or sale of shares of stock by the present stockholders. 7.2 The LESSOR and its Affiliates have the full corporate and legal power and authority to own and operate their properties and to carry on their business in the place where such properties are now or may be conducted. . . . 7.3 The LESSOR has or has access to all the financing and funding requirements to promptly and effectively carry out the terms of this Contract. . . . 7.4 The LESSOR has or has access to all the managerial and technical expertise to promptly and effectively carry out the terms of this Contract. . . . xxx xxx xxx 10. TELECOMMUNICATIONS NETWORK The LESSOR shall establish a telecommunications network that will connect all municipalities and cities in the Territory in accordance with, at the LESSOR's option, either of the LESSOR's proposals (or a combinations of both such proposals) attached hereto as Annex "B," and under the following PCSO schedule: xxx xxx xxx PCSO may, at its option, require the LESSOR to establish the telecommunications network in accordance with the above Timetable in provinces where the LESSOR has not yet installed terminals. Provided, that such provinces have existing nodes. Once a municipality or city is serviced by land lines of a licensed public telephone company, and such lines are connected to Metro Manila, then the obligation of the LESSOR to connect such municipality or city through a telecommunications network shall cease with respect to such municipality or city. The voice facility will cover the four offices of the Office of the

President, National Disaster Control Coordinating Council, Philippine National Police and the National Bureau of Investigation, and each city and municipality in the Territory except Metro Manila, and those cities and municipalities which have easy telephone access from these four offices. Voice calls from the four offices shall be transmitted via radio or VSAT to the remote municipalities which will be connected to this voice facility through wired network or by radio. The facility shall be designed to handle four private conversations at any one time. xxx xxx xxx 13. STOCK DISPERSAL PLAN Within two (2) years from the effectivity of this Contract, the LESSOR shall cause itself to be listed in the local stock exchange and offer at least twenty five percent (25%) of its equity to the public. 14. NON-COMPETITION The LESSOR shall not, directly or indirectly, undertake any activity or business in competition with or adverse to the On-Line Lottery System of PCSO unless it obtains the latter's prior written consent thereto. 15. HOLD HARMLESS CLAUSE 15.1 The LESSOR shall at all times protect and defend, at its cost and expense, PCSO from and against any and all liabilities and claims for damages and/or suits for or by reason of any deaths of, or any injury or injuries to any person or persons, or damages to property of any kind whatsoever, caused by the LESSOR, its subcontractors, its authorized agents or employees, from any cause or causes whatsoever. 15.2 The LESSOR hereby covenants and agrees to indemnify and hold PCSO harmless from all liabilities, charges, expenses (including reasonable counsel fees) and costs on account of or by reason of any such death or deaths, injury or injuries, liabilities, claims, suits or losses caused by the LESSOR's fault or negligence. 15.3 The LESSOR shall at all times protect and defend, at its own cost and expense, its title to the facilities and PCSO's interest therein from and against any and all claims for the duration of the Contract until transfer to PCSO of ownership of the serviceable Facilities. 16. SECURITY 16.1 To ensure faithful compliance by the LESSOR with the terms of the Contract, the LESSOR shall secure a Performance Bond from a reputable insurance company or companies acceptable to PCSO. 16.2 The Performance Bond shall be in the initial amount of Three Hundred Million Pesos (P300,000,000.00), to its U.S. dollar equivalent, and shall be renewed to cover the duration of the Contract. However, the Performance Bond shall be reduced proportionately to the percentage of unencumbered terminals installed; Provided, that the Performance Bond shall in no case be less than One Hundred Fifty Million Pesos (P150,000,000.00). 16.3 The LESSOR may at its option maintain its Escrow Deposit as the Performance Bond. . . . 17. PENALTIES

17.1 Except as may be provided in Section 17.2, should the LESSOR fail to take remedial measures within seven (7) days, and rectify the breach within thirty (30) days, from written notice by PCSO of any wilfull or grossly negligent violation of the material terms and conditions of this Contract, all unencumbered Facilities shall automatically become the property of PCSO without consideration and without need for further notice or demand by PCSO. The Performance Bond shall likewise be forfeited in favor of PCSO. 17.2 Should the LESSOR fail to comply with the terms of the Timetables provided in Section 9 and 10, it shall be subject to an initial Penalty of Twenty Thousand Pesos (P20,000.00), per city or municipality per every month of delay; Provided, that the Penalty shall increase, every ninety (90) days, by the amount of Twenty Thousand Pesos (P20,000.00) per city or municipality per month, whilst shall failure to comply persists. The penalty shall be deducted by PCSO from the rental fee. xxx xxx xxx 20. OWNERSHIP OF THE FACILITIES After expiration of the term of the lease as provided in Section 4, the Facilities directly required for the OnLine Lottery System mentioned in Section 1.3 shall automatically belong in full ownership to PCSO without any further consideration other than the Rental Fees already paid during the effectivity of the lease. 21. TERMINATION OF THE LEASE PCSO may terminate this Contract for any breach of the material provisions of this Contract, including the following: 21.1 The LESSOR is insolvent or bankrupt or unable to pay its debts, stops or suspends or threatens to stop or suspend payment of all or a material part of its debts, or proposes or makes a general assignment or an arrangement or compositions with or for the benefit of its creditors; or 21.2 An order is made or an effective resolution passed for the winding up or dissolution of the LESSOR or when it ceases or threatens to cease to carry on all or a material part of its operations or business; or 21.3 Any material statement, representation or warranty made or furnished by the LESSOR proved to be materially false or misleading; said termination to take effect upon receipt of written notice of termination by the LESSOR and failure to take remedial action within seven (7) days and cure or remedy the same within thirty (30) days from notice. Any suspension, cancellation or termination of this Contract shall not relieve the LESSOR of any liability that may have already accrued hereunder. xxx xxx xxx Considering the denial by the Office of the President of its protest and the statement of Assistant Executive Secretary Renato Corona that "only a court injunction can stop Malacaang," and the imminent

implementation of the Contract of Lease in February 1994, KILOSBAYAN, with its co-petitioners, filed on 28 January 1994 this petition. In support of the petition, the petitioners claim that: . . . X X THE OFFICE OF THE PRESIDENT, ACTING THROUGH RESPONDENTS EXECUTIVE SECRETARY AND/OR ASSISTANT EXECUTIVE SECRETARY FOR LEGAL AFFAIRS, AND THE PCSO GRAVELY ABUSE[D] THEIR DISCRETION AND/OR FUNCTIONS TANTAMOUNT TO LACK OF JURISDICTION AND/OR AUTHORITY IN RESPECTIVELY: (A) APPROVING THE AWARD OF THE CONTRACT TO, AND (B) ENTERING INTO THE SO-CALLED "CONTRACT OF LEASE" WITH, RESPONDENT PGMC FOR THE INSTALLATION, ESTABLISHMENT AND OPERATION OF THE ONLINE LOTTERY AND TELECOMMUNICATION SYSTEMS REQUIRED AND/OR AUTHORIZED UNDER THE SAID CONTRACT, CONSIDERING THAT: a) Under Section 1 of the Charter of the PCSO, the PCSO is prohibited from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity"; b) Under Act No. 3846 and established jurisprudence, a Congressional franchise is required before any person may be allowed to establish and operate said telecommunications system; c) Under Section 11, Article XII of the Constitution, a less than 60% Filipino-owned and/or controlled corporation, like the PGMC, is disqualified from operating a public service, like the said telecommunications system; and d) Respondent PGMC is not authorized by its charter and under the Foreign Investment Act (R.A. No. 7042) to install, establish and operate the on-line lotto and telecommunications systems. 18 Petitioners submit that the PCSO cannot validly enter into the assailed Contract of Lease with the PGMC because it is an arrangement wherein the PCSO would hold and conduct the on-line lottery system in "collaboration" or "association" with the PGMC, in violation of Section 1(B) of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting charity sweepstakes races, lotteries, and other similar activities "in collaboration, association or joint venture with any person, association, company or entity, foreign or domestic." Even granting arguendo that a lease of facilities is not within the contemplation of "collaboration" or "association," an analysis, however, of the Contract of Lease clearly shows that there is a "collaboration, association, or joint venture between respondents PCSO and PGMC in the holding of the On-Line Lottery System," and that there are terms and conditions of the Contract "showing that respondent PGMC is the actual lotto operator and not respondent PCSO." 19 The petitioners also point out that paragraph 10 of the Contract of Lease requires or authorizes PGMC to establish a telecommunications network that will connect all the municipalities and cities in the territory. However, PGMC cannot do that because it has no franchise from Congress to construct, install, establish, or operate the network pursuant to Section 1 of Act No. 3846, as amended. Moreover, PGMC is a 75% foreign-owned or controlled corporation and cannot, therefore, be granted a franchise for that purpose because of Section 11, Article XII of the 1987 Constitution. Furthermore, since "the subscribed foreign capital" of the PGMC "comes to about 75%, as shown by paragraph EIGHT of its Articles of Incorporation," it cannot lawfully enter into the contract in question because all forms of gambling and lottery is one of them are included in the so-called foreign investments negative list under the Foreign Investments Act (R.A. No. 7042) where only up to 40% foreign capital is allowed. 20

Finally, the petitioners insist that the Articles of Incorporation of PGMC do not authorize it to establish and operate an on-line lottery and telecommunications systems. 21 Accordingly, the petitioners pray that we issue a temporary restraining order and a writ of preliminary injunction commanding the respondents or any person acting in their places or upon their instructions to cease and desist from implementing the challenged Contract of Lease and, after hearing the merits of the petition, that we render judgment declaring the Contract of Lease void and without effect and making the injunction permanent. 22 We required the respondents to comment on the petition. In its Comment filed on 1 March 1994, private respondent PGMC asserts that "(1) [it] is merely an independent contractor for a piece of work, (i.e., the building and maintenance of a lottery system to be used by PCSO in the operation of its lottery franchise); and (2) as such independent contractor, PGMC is not a co-operator of the lottery franchise with PCSO, nor is PCSO sharing its franchise, 'in collaboration, association or joint venture' with PGMC as such statutory limitation is viewed from the context, intent, and spirit of Republic Act 1169, as amended by Batas Pambansa 42." It further claims that as an independent contractor for a piece of work, it is neither engaged in "gambling" nor in "public service" relative to the telecommunications network, which the petitioners even consider as an "indispensable requirement" of an on-line lottery system. Finally, it states that the execution and implementation of the contract does not violate the Constitution and the laws; that the issue on the "morality" of the lottery franchise granted to the PCSO is political and not judicial or legal, which should be ventilated in another forum; and that the "petitioners do not appear to have the legal standing or real interest in the subject contract and in obtaining the reliefs sought." 23 In their Comment filed by the Office of the Solicitor General, public respondents Executive Secretary Teofisto Guingona, Jr., Assistant Executive Secretary Renato Corona, and the PCSO maintain that the contract of lease in question does not violate Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and that the petitioner's interpretation of the phrase "in collaboration, association or joint venture" in Section 1 is "much too narrow, strained and utterly devoid of logic" for it "ignores the reality that PCSO, as a corporate entity, is vested with the basic and essential prerogative to enter into all kinds of transactions or contracts as may be necessary for the attainment of its purposes and objectives." What the PCSO charter "seeks to prohibit is that arrangement akin to a "joint venture" or partnership where there is "community of interest in the business, sharing of profits and losses, and a mutual right of control," a characteristic which does not obtain in a contract of lease." With respect to the challenged Contract of Lease, the "role of PGMC is limited to that of a lessor of the facilities" for the on-line lottery system; in "strict technical and legal sense," said contract "can be categorized as a contract for a piece of work as defined in Articles 1467, 1713 and 1644 of the Civil Code." They further claim that the establishment of the telecommunications system stipulated in the Contract of Lease does not require a congressional franchise because PGMC will not operate a public utility; moreover, PGMC's "establishment of a telecommunications system is not intended to establish a telecommunications business," and it has been held that where the facilities are operated "not for business purposes but for its own use," a legislative franchise is not required before a certificate of public convenience can be granted. 24 Even granting arguendo that PGMC is a public utility, pursuant to Albano S. Reyes, 25 "it can establish a telecommunications system even without a legislative franchise because not every public utility is required to secure a legislative franchise before it could establish, maintain, and

operate the service"; and, in any case, "PGMC's establishment of the telecommunications system stipulated in its contract of lease with PCSO falls within the exceptions under Section 1 of Act No. 3846 where a legislative franchise is not necessary for the establishment of radio stations." They also argue that the contract does not violate the Foreign Investment Act of 1991; that the Articles of Incorporation of PGMC authorize it to enter into the Contract of Lease; and that the issues of "wisdom, morality and propriety of acts of the executive department are beyond the ambit of judicial review." Finally, the public respondents allege that the petitioners have no standing to maintain the instant suit, citing our resolution in Valmonte vs. Philippine Charity Sweepstakes Office. 26 Several parties filed motions to intervene as petitioners in this case, 27 but only the motion of Senators Alberto Romulo, Arturo Tolentino, Francisco Tatad, Gloria Macapagal-Arroyo, Vicente Sotto III, John Osmea, Ramon Revilla, and Jose Lina 28 was granted, and the respondents were required to comment on their petition in intervention, which the public respondents and PGMC did. In the meantime, the petitioners filed with the Securities and Exchange Commission on 29 March 1994 a petition against PGMC for the nullification of the latter's General Information Sheets. That case, however, has no bearing in this petition. On 11 April 1994, we heard the parties in oral arguments. Thereafter, we resolved to consider the matter submitted for resolution and pending resolution of the major issues in this case, to issue a temporary restraining order commanding the respondents or any person acting in their place or upon their instructions to cease and desist from implementing the challenged Contract of Lease. In the deliberation on this case on 26 April 1994, we resolved to consider only these issues: (a) the locus standi of the petitioners, and (b) the legality and validity of the Contract of Lease in the light of Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign." On the first issue, seven Justices voted to sustain the locus standi of the petitioners, while six voted not to. On the second issue, the seven Justices were of the opinion that the Contract of Lease violates the exception to Section 1(B) of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid and contrary to law. The six Justices stated that they wished to express no opinion thereon in view of their stand on the first issue. The Chief Justice took no part because one of the Directors of the PCSO is his brother-in-law. This case was then assigned to this ponente for the writing of the opinion of the Court. The preliminary issue on the locus standi of the petitioners should, indeed, be resolved in their favor. A party's standing before this Court is a procedural technicality which it may, in the exercise of its discretion, set aside in view of the importance of the issues raised. In the landmark Emergency Powers Cases, 29 this Court brushed aside this technicality because "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure. (Avelino vs. Cuenco, G.R. No. L-2821)." Insofar as taxpayers' suits are concerned, this Court had declared that it "is not devoid of discretion as to whether or not it should be entertained," 30 or that it "enjoys an open discretion to entertain the same or not." 31 In De La Llana vs. Alba, 32 this Court declared:

1. The argument as to the lack of standing of petitioners is easily resolved. As far as Judge de la Llana is concerned, he certainly falls within the principle set forth in Justice Laurel's opinion in People vs. Vera [65 Phil. 56 (1937)]. Thus: "The unchallenged rule is that the person who impugns the validity of a statute must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement [Ibid, 89]. The other petitioners as members of the bar and officers of the court cannot be considered as devoid of "any personal and substantial interest" on the matter. There is relevance to this excerpt from a separate opinion in Aquino, Jr. v. Commission on Elections [L-40004, January 31, 1975, 62 SCRA 275]: "Then there is the attack on the standing of petitioners, as vindicating at most what they consider a public right and not protecting their rights as individuals. This is to conjure the specter of the public right dogma as an inhibition to parties intent on keeping public officials staying on the path of constitutionalism. As was so well put by Jaffe; "The protection of private rights is an essential constituent of public interest and, conversely, without a wellordered state there could be no enforcement of private rights. Private and public interests are, both in a substantive and procedural sense, aspects of the totality of the legal order." Moreover, petitioners have convincingly shown that in their capacity as taxpayers, their standing to sue has been amply demonstrated. There would be a retreat from the liberal approach followed in Pascual v. Secretary of Public Works, foreshadowed by the very decision of People v. Vera where the doctrine was first fully discussed, if we act differently now. I do not think we are prepared to take that step. Respondents, however, would hard back to the American Supreme Court doctrine in Mellon v. Frothingham, with their claim that what petitioners possess "is an interest which is shared in common by other people and is comparatively so minute and indeterminate as to afford any basis and assurance that the judicial process can act on it." That is to speak in the language of a bygone era, even in the United States. For as Chief Justice Warren clearly pointed out in the later case of Flast v. Cohen, the barrier thus set up if not breached has definitely been lowered. In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan, 33 reiterated in Basco vs. Philippine Amusements and Gaming Corporation, 34 this Court stated: Objections to taxpayers' suits for lack of sufficient personality standing or interest are, however, in the main procedural matters. Considering the importance to the public of the cases at bar, and in keeping with the Court's duty, under the 1987 Constitution, to determine whether or not the other branches of government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them, this Court has brushed aside technicalities of procedure and has taken cognizance of these petitions. and in Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 35 it declared: With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained of. [Ex Parte Levitt, 303 US 633]. And even if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised. In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President Quirino although they were invoking only an indirect and general interest shared in common with the public. The Court dismissed the objective that they were not proper parties and ruled that the transcendental importance to the public of these cases

demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure. We have since then applied this exception in many other cases. (Emphasis supplied) In Daza vs. Singson, 36 this Court once more said: . . . For another, we have early as in the Emergency Powers Cases that where serious constitutional questions are involved, "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." The same policy has since then been consistently followed by the Court, as in Gonzales vs. Commission on Elections [21 SCRA 774] . . . The Federal Supreme Court of the United States of America has also expressed its discretionary power to liberalize the rule on locus standi. In United States vs. Federal Power Commission and Virginia Rea Association vs. Federal Power Commission, 37 it held: We hold that petitioners have standing. Differences of view, however, preclude a single opinion of the Court as to both petitioners. It would not further clarification of this complicated specialty of federal jurisdiction, the solution of whose problems is in any event more or less determined by the specific circumstances of individual situations, to set out the divergent grounds in support of standing in these cases. In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and even association of planters, and non-profit civic organizations were allowed to initiate and prosecute actions before this Court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies or instrumentalities. Among such cases were those assailing the constitutionality of (a) R.A. No. 3836 insofar as it allows retirement gratuity and commutation of vacation and sick leave to Senators and Representatives and to elective officials of both Houses of Congress; 38 (b) Executive Order No. 284, issued by President Corazon C. Aquino on 25 July 1987, which allowed members of the cabinet, their undersecretaries, and assistant secretaries to hold other government offices or positions; 39 (c) the automatic appropriation for debt service in the General Appropriations Act; 40 (d) R.A. No. 7056 on the holding of desynchronized elections; 41 (d) R.A. No. 1869 (the charter of the Philippine Amusement and Gaming Corporation) on the ground that it is contrary to morals, public policy, and order; 42 and (f) R.A. No. 6975, establishing the Philippine National Police. 43 Other cases where we have followed a liberal policy regarding locus standi include those attacking the validity or legality of (a) an order allowing the importation of rice in the light of the prohibition imposed by R.A. No. 3452; 44 (b) P.D. Nos. 991 and 1033 insofar as they proposed amendments to the Constitution and P.D. No. 1031 insofar as it directed the COMELEC to supervise, control, hold, and conduct the referendum-plebiscite on 16 October 1976; 45 (c) the bidding for the sale of the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo, Japan; 46 (d) the approval without hearing by the Board of Investments of the amended application of the Bataan Petrochemical Corporation to transfer the site of its plant from Bataan to Batangas and the validity of such transfer and the shift of feedstock from naphtha only to naphtha and/or liquefied petroleum gas; 47 (e) the decisions, orders, rulings, and resolutions of the Executive Secretary, Secretary of Finance, Commissioner of Internal Revenue, Commissioner of Customs, and the Fiscal Incentives Review Board exempting the National Power Corporation from indirect tax and duties; 48 (f) the orders of the Energy Regulatory Board of 5 and 6 December 1990 on the ground that the hearings conducted on the second provisional increase in oil prices did not allow the petitioner substantial cross-examination; 49 (g) Executive Order No. 478 which levied a special duty of

P0.95 per liter or P151.05 per barrel of imported crude oil and P1.00 per liter of imported oil products; 50 (h) resolutions of the Commission on Elections concerning the apportionment, by district, of the number of elective members of Sanggunians; 51 and (i) memorandum orders issued by a Mayor affecting the Chief of Police of Pasay City. 52 In the 1975 case of Aquino vs. Commission on Elections, 53 this Court, despite its unequivocal ruling that the petitioners therein had no personality to file the petition, resolved nevertheless to pass upon the issues raised because of the far-reaching implications of the petition. We did no less in De Guia vs. COMELEC 54 where, although we declared that De Guia "does not appear to have locus standi, a standing in law, a personal or substantial interest," we brushed aside the procedural infirmity "considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent." We find the instant petition to be of transcendental importance to the public. The issues it raised are of paramount public interest and of a category even higher than those involved in many of the aforecited cases. The ramifications of such issues immeasurably affect the social, economic, and moral well-being of the people even in the remotest barangays of the country and the counter-productive and retrogressive effects of the envisioned on-line lottery system are as staggering as the billions in pesos it is expected to raise. The legal standing then of the petitioners deserves recognition and, in the exercise of its sound discretion, this Court hereby brushes aside the procedural barrier which the respondents tried to take advantage of. And now on the substantive issue. Section 1 of R.A. No. 1169, as amending by B.P. Blg. 42, prohibits the PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign." Section 1 provides: Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general powers conferred in section thirteen of Act Numbered One thousand four hundred fifty-nine, as amended, and shall have the authority: A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules and regulations as shall be promulgated by the Board of Directors. B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and activities which may be profit-oriented, by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, except for the activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services, and/or charitable grants: Provided, That such investment will not compete with the private sector in areas where investments are adequate as may be determined by the National Economic and Development Authority. (emphasis supplied)

The language of the section is indisputably clear that with respect to its franchise or privilege "to hold and conduct charity sweepstakes races, lotteries and other similar activities," the PCSO cannot exercise it "in collaboration, association or joint venture" with any other party. This is the unequivocal meaning and import of the phrase "except for the activities mentioned in the preceding paragraph (A)," namely, "charity sweepstakes races, lotteries and other similar activities." B.P. Blg. 42 originated from Parliamentary Bill No. 622, which was covered by Committee Report No. 103 as reported out by the Committee on Socio-Economic Planning and Development of the Interim Batasang Pambansa. The original text of paragraph B, Section 1 of Parliamentary Bill No. 622 reads as follows: To engage in any and all investments and related profit-oriented projects or programs and activities by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, for the main purpose of raising funds for health and medical assistance and services and charitable grants. 55 During the period of committee amendments, the Committee on Socio-Economic Planning and Development, through Assemblyman Ronaldo B. Zamora, introduced an amendment by substitution to the said paragraph B such that, as amended, it should read as follows: Subject to the approval of the Minister of Human Settlements, to engage in health-oriented investments, programs, projects and activities which may be profit- oriented, by itself or in collaboration, association, or joint venture with any person, association, company or entity, whether domestic or foreign, for the purpose of providing for permanent and continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services and/or charitable grants. 56 Before the motion of Assemblyman Zamora for the approval of the amendment could be acted upon, Assemblyman Davide introduced an amendment to the amendment: MR. DAVIDE. Mr. Speaker. THE SPEAKER. The gentleman from Cebu is recognized. MR. DAVIDE. May I introduce an amendment to the committee amendment? The amendment would be to insert after "foreign" in the amendment just read the following: EXCEPT FOR THE ACTIVITY IN LETTER (A) ABOVE. When it is joint venture or in collaboration with any entity such collaboration or joint venture must not include activity activity letter (a) which is the holding and conducting of sweepstakes races, lotteries and other similar acts. MR. ZAMORA. We accept the amendment, Mr. Speaker.

MR. DAVIDE. Thank you, Mr. Speaker. THE SPEAKER. Is there any objection to the amendment? (Silence) The amendment, as amended, is approved. 57 Further amendments to paragraph B were introduced and approved. When Assemblyman Zamora read the final text of paragraph B as further amended, the earlier approved amendment of Assemblyman Davide became "EXCEPT FOR THE ACTIVITIES MENTIONED IN PARAGRAPH (A)"; and by virtue of the amendment introduced by Assemblyman Emmanuel Pelaez, the word PRECEDING was inserted before PARAGRAPH. Assemblyman Pelaez introduced other amendments. Thereafter, the new paragraph B was approved. 58 This is now paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42. No interpretation of the said provision to relax or circumvent the prohibition can be allowed since the privilege to hold or conduct charity sweepstakes races, lotteries, or other similar activities is a franchise granted by the legislature to the PCSO. It is a settled rule that "in all grants by the government to individuals or corporations of rights, privileges and franchises, the words are to be taken most strongly against the grantee .... [o]ne who claims a franchise or privilege in derogation of the common rights of the public must prove his title thereto by a grant which is clearly and definitely expressed, and he cannot enlarge it by equivocal or doubtful provisions or by probable inferences. Whatever is not unequivocally granted is withheld. Nothing passes by mere implication." 59 In short then, by the exception explicitly made in paragraph B, Section 1 of its charter, the PCSO cannot share its franchise with another by way of collaboration, association or joint venture. Neither can it assign, transfer, or lease such franchise. It has been said that "the rights and privileges conferred under a franchise may, without doubt, be assigned or transferred when the grant is to the grantee and assigns, or is authorized by statute. On the other hand, the right of transfer or assignment may be restricted by statute or the constitution, or be made subject to the approval of the grantor or a governmental agency, such as a public utilities commission, exception that an existing right of assignment cannot be impaired by subsequent legislation." 60

It may also be pointed out that the franchise granted to the PCSO to hold and conduct lotteries allows it to hold and conduct a species of gambling. It is settled that "a statute which authorizes the carrying on of a gambling activity or business should be strictly construed and every reasonable doubt so resolved as to limit the powers and rights claimed under its authority." 61 Does the challenged Contract of Lease violate or contravene the exception in Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting lotteries "in collaboration, association or joint venture with" another? We agree with the petitioners that it does, notwithstanding its denomination or designation as a (Contract of Lease). We are neither convinced nor moved or fazed by the insistence and forceful arguments of the PGMC that it does not because in reality it is only an independent contractor for a piece of work, i.e., the

building and maintenance of a lottery system to be used by the PCSO in the operation of its lottery franchise. Whether the contract in question is one of lease or whether the PGMC is merely an independent contractor should not be decided on the basis of the title or designation of the contract but by the intent of the parties, which may be gathered from the provisions of the contract itself. Animus hominis est anima scripti. The intention of the party is the soul of the instrument. In order to give life or effect to an instrument, it is essential to look to the intention of the individual who executed it. 62 And, pursuant to Article 1371 of the Civil Code, "to determine the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered." To put it more bluntly, no one should be deceived by the title or designation of a contract. A careful analysis and evaluation of the provisions of the contract and a consideration of the contemporaneous acts of the PCSO and PGMC indubitably disclose that the contract is not in reality a contract of lease under which the PGMC is merely an independent contractor for a piece of work, but one where the statutorily proscribed collaboration or association, in the least, or joint venture, at the most, exists between the contracting parties. Collaboration is defined as the acts of working together in a joint project. 63 Association means the act of a number of persons in uniting together for some special purpose or business. 64 Joint venture is defined as an association of persons or companies jointly undertaking some commercial enterprise; generally all contribute assets and share risks. It requires a community of interest in the performance of the subject matter, a right to direct and govern the policy in connection therewith, and duty, which may be altered by agreement to share both in profit and losses. 65 The contemporaneous acts of the PCSO and the PGMC reveal that the PCSO had neither funds of its own nor the expertise to operate and manage an on-line lottery system, and that although it wished to have the system, it would have it "at no expense or risks to the government." Because of these serious constraints and unwillingness to bear expenses and assume risks, the PCSO was candid enough to state in its RFP that it is seeking for "a suitable contractor which shall build, at its own expense, all the facilities needed to operate and maintain" the system; exclusively bear "all capital, operating expenses and expansion expenses and risks"; and submit "a comprehensive nationwide lottery development plan . . . which will include the game, the marketing of the games, and the logistics to introduce the game to all the cities and municipalities of the country within five (5) years"; and that the operation of the on-line lottery system should be "at no expense or risk to the government" meaning itself, since it is a governmentowned and controlled agency. The facilities referred to means "all capital equipment, computers, terminals, software, nationwide telecommunications network, ticket sales offices, furnishings and fixtures, printing costs, costs of salaries and wages, advertising and promotions expenses, maintenance costs, expansion and replacement costs, security and insurance, and all other related expenses needed to operate a nationwide on-line lottery system." In short, the only contribution the PCSO would have is its franchise or authority to operate the on-line lottery system; with the rest, including the risks of the business, being borne by the proponent or bidder. It could be for this reason that it warned that "the proponent must be able to stand to the acid test of proving that it is an entity able to take on the role of responsible maintainer of the on-line lottery system." The PCSO, however, makes it clear in its RFP that the proponent can propose a period of the contract which shall not exceed fifteen years, during which time it is assured of a "rental" which shall not exceed 12% of gross receipts. As admitted by the PGMC, upon learning of the PCSO's decision, the Berjaya Group Berhad, with its affiliates, wanted to offer its services and resources to the PCSO. Forthwith, it organized the PGMC as "a medium through which the technical and management services required for the project would be offered and delivered to PCSO." 66

Undoubtedly, then, the Berjaya Group Berhad knew all along that in connection with an on-line lottery system, the PCSO had nothing but its franchise, which it solemnly guaranteed it had in the General Information of the RFP. 67 Howsoever viewed then, from the very inception, the PCSO and the PGMC mutually understood that any arrangement between them would necessarily leave to the PGMC the technical, operations, and management aspects of the on-line lottery system while the PCSO would, primarily, provide the franchise. The words Gaming and Management in the corporate name of respondent Philippine Gaming Management Corporation could not have been conceived just for euphemistic purposes. Of course, the RFP cannot substitute for the Contract of Lease which was subsequently executed by the PCSO and the PGMC. Nevertheless, the Contract of Lease incorporates their intention and understanding. The so-called Contract of Lease is not, therefore, what it purports to be. Its denomination as such is a crafty device, carefully conceived, to provide a built-in defense in the event that the agreement is questioned as violative of the exception in Section 1 (B) of the PCSO's charter. The acuity or skill of its draftsmen to accomplish that purpose easily manifests itself in the Contract of Lease. It is outstanding for its careful and meticulous drafting designed to give an immediate impression that it is a contract of lease. Yet, woven therein are provisions which negate its title and betray the true intention of the parties to be in or to have a joint venture for a period of eight years in the operation and maintenance of the on-line lottery system. Consistent with the above observations on the RFP, the PCSO has only its franchise to offer, while the PGMC represents and warrants that it has access to all managerial and technical expertise to promptly and effectively carry out the terms of the contract. And, for a period of eight years, the PGMC is under obligation to keep all the Facilities in safe condition and if necessary, upgrade, replace, and improve them from time to time as new technology develops to make the on-line lottery system more cost-effective and competitive; exclusively bear all costs and expenses relating to the printing, manpower, salaries and wages, advertising and promotion, maintenance, expansion and replacement, security and insurance, and all other related expenses needed to operate the on-line lottery system; undertake a positive advertising and promotions campaign for both institutional and product lines without engaging in negative advertising against other lessors; bear the salaries and related costs of skilled and qualified personnel for administrative and technical operations; comply with procedural and coordinating rules issued by the PCSO; and to train PCSO and other local personnel and to effect the transfer of technology and other expertise, such that at the end of the term of the contract, the PCSO will be able to effectively take over the Facilities and efficiently operate the on-line lottery system. The latter simply means that, indeed, the managers, technicians or employees who shall operate the on-line lottery system are not managers, technicians or employees of the PCSO, but of the PGMC and that it is only after the expiration of the contract that the PCSO will operate the system. After eight years, the PCSO would automatically become the owner of the Facilities without any other further consideration. For these reasons, too, the PGMC has the initial prerogative to prepare the detailed plan of all games and the marketing thereof, and determine the number of players, value of winnings, and the logistics required to introduce the games, including the Master Games Plan. Of course, the PCSO has the reserved authority to disapprove them. 68 And, while the PCSO has the sole responsibility over the appointment of dealers and retailers throughout the country, the PGMC may, nevertheless, recommend for appointment dealers and retailers which shall be acted upon by the PCSO within forty-eight hours and collect and retain, for its own account, a security deposit from dealers and retailers in respect of equipment supplied by it. This joint venture is further established by the following:

(a) Rent is defined in the lease contract as the amount to be paid to the PGMC as compensation for the fulfillment of its obligations under the contract, including, but not limited to the lease of the Facilities. However, this rent is not actually a fixed amount. Although it is stated to be 4.9% of gross receipts from ticket sales, payable net of taxes required by law to be withheld, it may be drastically reduced or, in extreme cases, nothing may be due or demandable at all because the PGMC binds itself to "bear all risks if the revenue from the ticket sales, on an annualized basis, are insufficient to pay the entire prize money." This risk-bearing provision is unusual in a lessor-lessee relationship, but inherent in a joint venture. (b) In the event of pre-termination of the contract by the PCSO, or its suspension of operation of the online lottery system in breach of the contract and through no fault of the PGMC, the PCSO binds itself "to promptly, and in any event not later than sixty (60) days, reimburse the Lessor the amount of its total investment cost associated with the On-Line Lottery System, including but not limited to the cost of the Facilities, and further compensate the LESSOR for loss of expected net profit after tax, computed over the unexpired term of the lease." If the contract were indeed one of lease, the payment of the expected profits or rentals for the unexpired portion of the term of the contract would be enough. (c) The PGMC cannot "directly or indirectly undertake any activity or business in competition with or adverse to the On-Line Lottery System of PCSO unless it obtains the latter's prior written consent." If the PGMC is engaged in the business of leasing equipment and technology for an on-line lottery system, we fail to see any acceptable reason why it should allow a restriction on the pursuit of such business. (d) The PGMC shall provide the PCSO the audited Annual Report sent to its stockholders, and within two years from the effectivity of the contract, cause itself to be listed in the local stock exchange and offer at least 25% of its equity to the public. If the PGMC is merely a lessor, this imposition is unreasonable and whimsical, and could only be tied up to the fact that the PGMC will actually operate and manage the system; hence, increasing public participation in the corporation would enhance public interest. (e) The PGMC shall put up an Escrow Deposit of P300,000,000.00 pursuant to the requirements of the RFP, which it may, at its option, maintain as its initial performance bond required to ensure its faithful compliance with the terms of the contract. (f) The PCSO shall designate the necessary personnel to monitor and audit the daily performance of the on-line lottery system; and promulgate procedural and coordinating rules governing all activities relating to the on-line lottery system. The first further confirms that it is the PGMC which will operate the system and the PCSO may, for the protection of its interest, monitor and audit the daily performance of the system. The second admits the coordinating and cooperative powers and functions of the parties. (g) The PCSO may validly terminate the contract if the PGMC becomes insolvent or bankrupt or is unable to pay its debts, or if it stops or suspends or threatens to stop or suspend payment of all or a material part of its debts. All of the foregoing unmistakably confirm the indispensable role of the PGMC in the pursuit, operation, conduct, and management of the On-Line Lottery System. They exhibit and demonstrate the parties' indivisible community of interest in the conception, birth and growth of the on-line lottery, and, above all, in its profits, with each having a right in the formulation and implementation of policies related to the business and sharing, as well, in the losses with the PGMC bearing the greatest burden because of its assumption of expenses and risks, and the PCSO the least, because of its confessed unwillingness to

bear expenses and risks. In a manner of speaking, each is wed to the other for better or for worse. In the final analysis, however, in the light of the PCSO's RFP and the above highlighted provisions, as well as the "Hold Harmless Clause" of the Contract of Lease, it is even safe to conclude that the actual lessor in this case is the PCSO and the subject matter thereof is its franchise to hold and conduct lotteries since it is, in reality, the PGMC which operates and manages the on-line lottery system for a period of eight years. We thus declare that the challenged Contract of Lease violates the exception provided for in paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid for being contrary to law. This conclusion renders unnecessary further discussion on the other issues raised by the petitioners. WHEREFORE, the instant petition is hereby GRANTED and the challenged Contract of Lease executed on 17 December 1993 by respondent Philippine Charity Sweepstakes Office (PCSO) and respondent Philippine Gaming Management Corporation (PGMC) is hereby DECLARED contrary to law and invalid. The Temporary Restraining Order issued on 11 April 1994 is hereby MADE PERMANENT. No pronouncement as to costs. SO ORDERED. Regalado, Romero and Bellosillo, JJ., concur. Narvasa, C.J., took no part.

Separate Opinions

CRUZ, J., concurring: I am happy to join Mr. Justice Hilario G. Davide, Jr. in his excellent ponencia. I will add the following personal observations only for emphasis as it is not necessary to supplement his thorough exposition. The respondents take great pains to cite specific provisions of the contract to show that it is PCSO that is actually operating the on-line lottery, but they have not succeeded in disproving the obvious, to wit, that the document was intentionally so crafted to make it appear that the operation is not a joint undertaking of PCSO and PGMC but a mere lease of services. It is a clever instrument, to be sure, but we are, gratifyingly, not deluded. Lawyers have a special talent to disguise the real intention of the parties in a contract to make it come ostensibly within the provisions of a law although the real if furtive purpose is to violate it. That talent has been exercised in this case, but not convincingly enough.

It should be quite clear, from the adroit way the contract has been drafted, that the primary objective was to avoid the conclusion that PCSO will be operating a lottery "in association, collaboration or joint venture with any person, association, company or entity," which is prohibited by Section 1 of Rep. Act No. 1169 as amended by B.P. Blg. 42. Citing the self-serving provisions of the contract, the respondents would have us believe that the contract is perfectly lawful because all it does is provide for the lease to PCSO of the technical know-how and equipment of PGMC, with PCSO acting as "the sole and individual operator" of the lottery. I am glad we are not succumbing to this sophistry. Despite the artfulness of the contract (authorship of which was pointedly denied by both counsel for the government and the private respondent during the oral argument on this case), a careful study will reveal telling stipulations that it is PGMC and not PCSO that will actually be operating the lottery. Thus, it is provided inter alia that PGMC shall furnish all capital equipment and other facilities needed for the operation; bear all expenses relating to the operation, including those for the salaries and wages of the administrative and technical personnel; undertake a positive advertising and promotion campaign for public support of the lottery; establish a radio communications network throughout the country as part of the operation; and assume all risks if the revenues from ticket sales are insufficient to pay the entire prize money. Most significantly, to show that it is only after eight years from the effectivity of the contract that PCSO will actually operate the lottery, Par. 6.7 of the agreement provides that PGMC shall: 6.7. Upon effectivity of this Contract, commence the training of PCSO and other local personnel and the transfer of technology and expertise, such that at the end of the term of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System. (Emphasis supplied). In the meantime, that is to say during the entire 8-year term of the contract, it will be PGMC that will be operating the lottery. Only "at the end of the term of this Contract" will PCSO "be able to effectively takeover the Facilities and efficiently operate the On-Line Lottery System." Even on the assumption that it is PCSO that will be operating the lottery at the very start, the authority granted to PGMC by the agreement will readily show that PCSO will not be acting alone, as the respondents pretend. In fact, it cannot. PGMC is an indispensable co-worker because it has the equipment and the technology and the management skills that PCSO does not have at this time for the operation of the lottery, PCSO cannot deny that it needs the assistance of PGMC for this purpose, which was its reason for entering into the contract in the first place. And when PCSO does avail itself of such assistance, how will it be operating the lottery? Undoubtedly, it will be doing so "in collaboration, association or joint venture" with PGMC, which, let it be added, will not be serving as a mere "hired help" of PCSO subject to its control. PGMC will be functioning independently in the discharge of its own assigned role as stipulated in detail under the contract. PGMC is plainly a partner of PCSO in violation of law, no matter how PGMC's assistance is called or the contract is denominated. Even if it be conceded that the assistance partakes of a lease of services, the undeniable fact is that PCSO would still be collaborating or cooperating with PGMC in the operation of the lottery. What is even worse is that PCSO and PGMC may be actually engaged in a joint venture, considering that PGMC does not collect the usual fixed rentals due an ordinary lessor but is entitled to a special "Rental Fee," as the contract calls it, "equal to four point nine percent (4.9%) of gross receipts from ticket sales."

The flexibility of this amount is significant. As may be expected, it will induce in PGMC an active interest and participation in the success of PCSO that is not expected of an ordinary detached lessor who gets to be paid his rentals not a rental fee whether the lessee's business prospers or not. PGMC's share in the operation depends on its own performance and the effectiveness of its collaboration with PCSO. Although the contract pretends otherwise, PGMC is a co-investor with PCSO in what is practically, if not in a strictly legal sense, a joint venture. Concerning the doctrine of locus standi, I cannot agree that out of the sixty million Filipinos affected by the proposed lottery, not a single solitary citizen can question the agreement. Locus standi is not such an absolute rule that it cannot admit of exceptions under certain conditions or circumstances like those attending this transaction. As I remarked in my dissent in Guazon v. De Villa, 181 SCRA 623, "It is not only the owner of the burning house who has the right to call the firemen. Every one has the right and responsibility to prevent the fire from spreading even if he lives in the other block." What is especially galling is that the transaction in question would foist upon our people an essentially immoral activity through the instrumentality of a foreign corporation, which naturally does not have the same concern for our interests as we ourselves have. I am distressed that foreigners should be allowed to exploit the weakness of some of us for instant gain without work, and with the active collaboration and encouragement of our own government at that. Feliciano, J., concurring I agree with the conclusions reached by my distinguished brother in the Court Davide, Jr., J., both in respect of the question of locus standi and in respect of the merits of this case, that is, the issues of legality and constitutionality of the Contract of Lease entered into between the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation (PGMC). In this separate opinion, I propose to address only the question of locus standi. It is with some hesitation that I do so, considering the extensive separate opinions on this question written by my learned brothers Melo, Puno and Vitug, JJ. I agree with the great deal of what my brothers Melo, Puno and Vitug say about locus standi in their separate opinions and there is no need to go over the ground that I share with them. Because, however, I reach a different conclusion in respect of the presence or absence of locus standi on the part of the petitioners in the case before the Court, there is an internal need (a need internal to myself) to articulate the considerations which led me to that conclusion. There is no dispute that the doctrine of locus standi reflects an important constitutional principle, that is, the principle of separation of powers which, among other things, mandates that each of the great Departments of government is responsible for performance of its constitutionally allotted tasks. Insofar as the Judicial Department is concerned, the exercise of judicial power and carrying out of judicial functions commonly take place within the context of actual cases or controversies. This, in turn, reflects the basic notion of judicial power as the power to resolve actual disputes and of the traditional business of courts as the hearing and deciding of specific controversies brought before them. In our own jurisdiction, and at least since the turn of the present century, judicial power has always included the power of judicial review, understood as the authority of courts (more specifically the Supreme Court) to assay contested legislative and executive acts in terms of their constitutionality or legality. Thus, the general proposition has been that a petitioner who assails the legal or constitutional quality of an executive or legislative act must be able to show that he has locus standi. Otherwise, the petition becomes vulnerable to prompt dismissal by the court.

There is, upon the other hand, little substantive dispute that the possession of locus standi 1 is not, in each and every case, a rigid and absolute requirement for access to the courts. Certainly that is the case where great issues of public law are at stake, issues which cannot be approached in the same way that a court approaches a suit for the collection of a sum of money or a complaint for the recovery of possession of a particular piece of land. The broad question is when, or in what types of cases, the court should insist on a clear showing of locus standi understood as a direct and personal interest in the subject matter of the case at bar, and when the court may or should relax that apparently stringent requirement and proceed to deal with the legal or constitutional issues at stake in a particular case. I submit, with respect, that it is not enough for the Court simply to invoke "public interest" or even "paramount considerations of national interest," and to say that the specific requirements of such public interest can only be ascertained on a "case to case" basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen. This is not, however, to say that there is somewhere an over-arching juridical principle or theory, waiting to be discovered, that permits a ready answer to the question of when, or in what types of cases, the need to show locus standi may be relaxed in greater or lesser degree. To my knowledge, no satisfactory principle or theory has been discovered and none has been crafted, whether in our jurisdiction or in the United States. 2 I have neither the competence nor the opportunity to try to craft such principle or formula. It might, however, be useful to attempt to indicate the considerations of principle which, in the present case, appear to me to require an affirmative answer to the question of whether or not petitioners are properly regarded as imbued with the standing necessary to bring and maintain the present petition. Firstly, the character of the funds or other assets involved in the case is of major importance. In the case presently before the Court, the funds involved are clearly public in nature. The funds to be generated by the proposed lottery are to be raised from the population at large. Should the proposed operation be as successful as its proponents project, those funds will come from well-nigh every town and barrio of Luzon. The funds here involved are public in another very real sense: they will belong to the PCSO, a government owned or controlled corporation and an instrumentality of the government and are destined for utilization in social development projects which, at least in principle, are designed to benefit the general public. My learned brothers Melo, Puno and Vitug, JJ. concede that taxpayers' suits have been recognized as an exception to the traditional requirement of recognized as an exception to the traditional requirement of locus standi. They insist, however, that because the funds here involved will not have been generated by the exercise of the taxing power of the Government, the present petition cannot be regarded as a taxpayer's suit and therefore, must be dismissed by the Court. It is my respectful submission that that constitutes much too narrow a conception of the taxpayer's suit and of the public policy that it embodies. It is also to overlook the fact that tax monies, strictly so called, constitute only one (1) of the major categories of funds today raised and used for public purposes. It is widely known that the principal sources of funding for government operations today include, not just taxes and customs duties, but also revenues derived from activities of the Philippine Amusement Gaming Corporation (PAGCOR), as well as the proceeds of privatization of government owned or controlled corporations and other government owned assets. The interest of a private citizen in seeing to it that public funds, from whatever source they may have been derived, go only to the uses directed and permitted by law is as real and personal and substantial as the interest of a private taxpayer in seeing to it that tax monies are not intercepted on their way to the public treasury or otherwise diverted from uses prescribed or allowed by law. It is also pertinent to note that the more successful the government is in raising revenues by nontraditional methods such as PAGCOR operations and privatization measures, the lesser will be the

pressure upon the traditional sources of public revenues, i.e., the pocket books of individual taxpayers and importers. A second factor of high relevance is the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the government. A showing that a constitutional or legal provision is patently being disregarded by the agency or instrumentality whose act is being assailed, can scarcely be disregarded by court. The concept of locus standi which is part and parcel of the broader notion of ripeness of the case "does not operate independently and is not alone decisive. . . . [I]t is in substantial part a function of a judge's estimate of the merits of the constitutional [or legal] issue." 3 The notion of locus standi and the judge's conclusions about the merits of the case, in other words, interact with each other. Where the Court perceives a serious issue of violation of some constitutional or statutory limitation, it will be much less difficult for the Court to find locus standi in the petitioner and to confront the legal or constitutional issue. In the present case, the majority of the Court considers that a very substantial showing has been made that the Contract of Lease between the PCSO and the PGMC flies in the face of legal limitations. A third consideration of importance in the present case is the lack of any other party with a more direct and specific interest in raising the questions here being raised. Though a public bidding was held, no losing or dissatisfied bidder has come before the Court. The Office of the Ombudsman has not, to the knowledge of the Court, raised questions about the legality or constitutionality of the Contract of Lease here involved. The National Government itself, through the Office of the Solicitor General, is defending the PCSO Contract (though it had not participated in the drafting thereof). In a situation like that here obtaining, the submission may be made that the institution, so well known in corporation law and practice, of the corporate stockholders' derivative suit furnishes an appropriate analogy and that on the basis of such an analogy, a taxpayer's derivative suit should be recognized as available. The wide range of impact of the Contract of Lease here assailed and of its implementation, constitutes still another consideration of significance. In the case at bar, the agreement if implemented will be practically nationwide in its scope and reach (the PCSO-PGMC Contract is limited in its application to the Island of Luzon; but if the PCSO Contracts with the other two [2] private "gaming management" corporations in respect of the Visayas and Mindanao are substantially similar to PCSO's Contract with PGMC, then the Contract before us may be said to be national indeed in its implications and consequences). Necessarily, the amounts of money expected to be raised by the proposed activities of the PCSO and PGMC will be very substantial, probably in the hundreds of millions of pesos. It is not easy to conceive of a contract with greater and more far-reaching consequences, literally speaking, for the country than the Contract of Lease here involved. Thus, the subject matter of the petition is not something that the Court may casually pass over as unimportant and as not warranting the expenditure of significant judicial resources. In the examination of the various features of this case, the above considerations have appeared to me to be important and as pressing for acceptance and exercise of jurisdiction on the part of this Court. It is with these considerations in mind that I vote to grant due course to the Petition and to hold that the Contract of Lease between the PCSO and PGMC in its present form and content, and given the present state of the law, is fatally defective. PADILLA, J., concurring: My views against gambling are a matter of judicial record. In Basco v. PAGCOR, (G.R. No. 91649, 14 May 1991, 197 SCRA 52) I expressed these views in a separate opinion where I was joined by that

outstanding lady jurist, Mme. Justice A. Melencio-Herrera whose incisive approach to legal problems is today missed in this Court. I reproduce here those views because they are highly persuasive to the conclusions I reach in the present controversy: I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such policy. The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted by the political departments of government in areas which fall within their authority, except only when such policies pose a clear and present danger to the life, liberty or property of the individual. This case does not involve such a factual situation. However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human personality, destroys self-confidence and eviscerates one's self-respect, which in the long run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and homes; it is an antithesis to individual reliance and reliability as well as personal industry which are the touchstones of real economic progress and national development. Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the government out of "legalized" gambling will, in the long run, be more than offset and negated by the irreparable damage to the people's moral values. Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed and becomes untenable when it itself engages in the very activity it seeks to eradicate. One can go through the Court's decision today and mentally replace the activity referred to therein as gambling, which is legal only because it is authorized by law and run by the government, with the activity known as prostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised, and "regulated" by the government, in return for the substantial revenues it would yield the government to carry out its laudable projects, such as infrastructure and social amelioration? The question, I believe, answers itself. I submit that the sooner the legislative department outlaws all forms of gambling, as a fundamental state policy, and the sooner the executive implements such policy, the better it will be for the nation. We presently have the sweepstakes lotteries; we already have the PAGCOR's gambling casinos; the Filipino people will soon, if plans do not miscarry, be initiated into an even more sophisticated and encompassing nationwide gambling network known as the "on-line hi-tech lotto system." To be sure, it is not wealth producing; it is not export oriented. It will draw from existing wealth in the hands of Filipinos and transfer it into the coffers of the PCSO and its foreign partners at a price of further debasement of the moral standards of the Filipino people, the bulk of whom are barely subsisting below the poverty line. 1. It is said that petitioners 1 have no locus standi to bring this suit even as they challenge the legality and constitutionality of a contract of lease between the PCSO, a government-owned corporation and the PGMC, a private corporation with substantial (if not controlling) foreign composition and content. Such contract of lease contains the terms and conditions under which an "on-line hi-tech lotto system" will operate in the country.

As the ponente of the extended, unsigned en banc resolution in Valmonte v. PCSO, (G.R. No. 78716 and G.R. No. 79084, 22 September 1987), I would be the last to downgrade the rule, therein reiterated, that in order to maintain a suit challenging the constitutionality and/or legality of a statute, order or regulation or assailing a particular governmental action as done with grave abuse of discretion or with lack of jurisdiction, the petitioner must show that he has a clear personal or legal right that would be violated with the enforcement of the challenged statute, order or regulation or the implementation of the questioned governmental action. But, in my considered view, this rule maybe (and should be) relaxed when the issue involved or raised in the petition is of such paramount national interest and importance as to dwarf the above procedural rule into a barren technicality. As a unanimous Court en banc aptly put it in De Guia vs. COMELEC, G.R. No. 104712, 6 May 1992, 208 SCRA 420. Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for re-election, much less, that he is prejudiced by the election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-4640, October 12, 1976. 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533) He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action. However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmea vs. Commission on Elections. I view the present case as falling within the De Guia case doctrine. For, when the contract of lease in question seeks to establish and operate a nationwide gambling network with substantial if not controlling foreign participation, then the issue is of paramount national interest and importance as to justify and warrant a relaxation of the above-mentioned procedural rule on locus standi. 2. The charter of the PCSO Republic Act No. 1169 as amended by BP No. 42 insofar as relevant, reads: Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general powers conferred in section thirteen of Act Numbered One Thousand Four Hundred Fifty-Nine, as amended, and shall have the authority: A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules and regulations as shall be promulgated by the Board of Directors. B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and activities which may be profit-oriented, by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, except for the activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services, and/or charitable grants: Provided, That such investments will not

compete with the private sector in areas where investments are adequate as may be determined by the National Economic and Development Authority. It is at once clear from the foregoing legal provisions that, while the PCSO charter allows the PCSO to itself engage in lotteries, it does not however permit the PCSO to undertake or engage in lotteries in "collaboration, association or joint venture" with others. The palpable reason for this prohibition is, that PCSO should not and cannot be made a vehicle for an otherwise prohibited foreign or domestic entity to engage in lotteries (gambling activities) in the Philippines. The core question then is whether the lease contract between PCSO and PGMC is a device whereby PCSO will engage in lottery in collaboration, association or joint venture with another, i.e. PGMC. I need not go here into the details and different specific features of the contract to show that it is a joint venture between PCSO and PGMC. That has been taken care of in the opinion of Mr. Justice Davide to which I fully subscribe. On a slightly different plane and, perhaps simplified, I consider the agreement or arrangement between the PCSO and PGMC a joint venture because each party to the contract contributes its share in the enterprise or project. PGMC contributes its facilities, equipment and know-how (expertise). PCSO contributes (aside from its charter) the market, directly or through dealers and this to me is most important in the totality or mass of the Filipino gambling elements who will invest in lotto tickets. PGMC will get its 4.9% of gross receipts (with assumption of certain risks in the course of lotto operations); the residue of the whole exercise will go to PCSO. To any person with a minimum of business know-how, this is a joint venture between PCSO and PGMC, plain and simple. But assuming ex gratia argumenti that such arrangement between PCSO and PGMC is not a joint venture between the two of them to install and operate an "on-line hi-tech lotto system" in the country, it can hardly be denied that it is, at the very least, an association or collaboration between PCSO and PGMC. For one cannot do without the other in the installation, operation and, most importantly, marketing of the entire enterprise or project in this country. Indeed, the contract of lease in question is a clear violation of Republic Act No. 1169 as amended by BP No. 42 (the PCSO charter). Having arrived at the conclusion that the contract of lease in question between the PCSO and PGMC is illegal and, therefore, invalid, I find it unnecessary to dwell on the other issues raised in the pleadings and arguments of the parties. I, therefore, vote to give DUE COURSE to the petition and to declare the contract of lease in question between PCSO and PGMC, for the reasons aforestated, of no force and effect. MELO, J., dissenting: I submit that the petition before the Court deserves no less than outright dismissal for the reason that petitioners, as concerned citizens and as taxpayers and as members of Congress, do not possess the necessary legal standing to assail the validity of the contract of lease entered into by the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation relative to the establishment and operation of an "On-line Hi-Tech Lottery System" in the country.

As announced in Lamb vs. Phipps (22 Phil. [1912], 559), "[J]udicial power in its nature, is the power to hear and decide causes pending between parties who have the right to sue and be sued in the courts of law and equity." Necessarily, this implies that a party must show a personal stake in the outcome of the controversy or an injury to himself that can be addressed by a favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the court's remedial powers in his behalf (Warth vs. Seldin, 422 U.S. 490; Guzman vs. Marrero, 180 U.S. 81; McMicken vs. United States, 97 U.S. 204). Here, we have yet to see any of petitioners acquiring a personal stake in the outcome of the controversy or being placed in a situation whereby injury may be sustained if the contract of lease in question is implemented. It may be that the contract has somehow evoked public interest which petitioners claim to represent. But the alleged public interest which they pretend to represent is not only broad and encompassing but also strikingly and veritably indeterminate that one cannot truly say whether a handful of the public, like herein petitioners, may lay a valid claim of representation in behalf of the millions of citizens spread all over the land who may have just as many varied reactions relative to the contract in question. Any effort to infuse personality on petitioners by considering the present case as a "taxpayer's suit" could not cure the lack of locus standi on the part of petitioners. As understood in this jurisdiction, a "taxpayer's suit" refers to a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation (Pascual vs. Secretary of Public Works, 110 Phil. [1960] 331; Maceda vs. Macaraig, 197 SCRA [1991]; Lozada vs. COMELEC, 120 SCRA [1983] 337; Dumlao vs. COMELEC, 95 SCRA [1980] 392; Gonzales vs. Marcos, 65 SCRA [1975] 624). It cannot be overstressed that no public fund raised by taxation is involved in this case. In fact, it is even doubtful if the rentals which the PCSO will pay to the lessor for its operation of the lottery system may be regarded as "public fund". The PCSO is not a revenue- collecting arm of the government. Income or money realized by it from its operations will not and need not be turned over to the National Treasury. Rather, this will constitute corporate funds which will remain with the corporation to finance its various activities as authorized in its charter. And if ever some semblance of "public character" may be said to attach to its earnings, it is simply because PCSO is a government-owned or controlled entity and not a purely private enterprise. It must be conceded though that a "taxpayer's suit" had been allowed in a number of instances in this jurisdiction. For sure, after the trial was blazed by Pascual vs. Secretary of Public Works, supra, several more followed. It is to be noted, however, that in those occasions where this Court allowed such a suit, the case invariably involved either the constitutionality of a statute or the legality of the disbursement of public funds through the enforcement of what was perceived to be an invalid or unconstitutional statute or legislation (Pascual, supra; Philippine Constitution Association, Inc. vs. Jimenez, 15 SCRA [1965] 479; Philippine Constitution Association, Inc. vs. Mathay, 18 SCRA [1966] 300; Tolentino vs. COMELEC, 41 SCRA [1971] 702; Pelaez vs. Auditor General, 15 SCRA [1965] 569; Iloilo Palay and Corn Planters Association vs. Feliciano, 13 SCRA [1965] 377). The case before us is not a challenge to the validity of a statute or an attempt to restrain expenditure of public funds pursuant to an alleged invalid congressional enactment. What petitioners ask us to do is to nullify a simple contract of lease entered into by a government-owned corporation with a private entity. That contract, as earlier pointed out, does not involve the disbursement of public funds but of strictly corporate money. If every taxpayer, claiming to have interest in the contract, no matter how remote, could come to this Court and seek nullification of said contract, the day may come when the activities of government corporate entities will ground to a standstill on account of nuisance suits filed against them by persons whose supposed interest in the contract is as remote and as obscure as the interest of any man in the street. The dangers attendant thereto are not hard to discern and this Court must not allow them to come to pass.

One final observation must be emphasized. When the petition at bench was filed, the Court decided to hear the case on oral argument on the initial perception that a constitutional issue could be involved. However, it now appears that no question of constitutional dimension is at stake as indeed the majority barely touches on such an issue, concentrating as it does on its interpretation of the contract between the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation. I, therefore, vote to dismiss the petition. PUNO, J., dissenting: At the outset, let me state that my religious faith and family upbringing compel me to regard gambling, regardless of its garb, with hostile eyes. Such antagonism tempts me to view the case at bench as a struggle between good and evil, a fight between the forces of light against the forces of darkness. I will not, however, yield to that temptation for we are not judges of the Old Testament type who were not only arbiters of law but were also high priests of morality. I will therefore strictly confine the peregrinations of my mind to the legal issues for resolution: (1) whether or not the petitioners have the Locus standi to file the petition at bench; and (2) assuming their locus standi, whether or not the Contract of Lease between PCSO and PGMC is null and void considering: (a) section 1 of R.A. No. 1169, as amended by B.P. Blg. 42 (Charter of PCSO) which prohibits PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity"; (b) Act No. 3836 which requires a congressional franchise before any person or entity can establish and operate a telecommunication system; (c) section 11, Art. XII of the Constitution, which requires that for a corporation to operate a public utility, at least 60% of its capital must be owned by Filipino citizens; and (d) R.A. No. 7042, otherwise known as the "Foreign Investments Act", which includes all forms of gambling in its "negative list." While the legal issues abound, I deferentially submit that the threshold issue is the locus standi, or standing to sue, of petitioners. The petition describes petitioner Kilosbayan, Inc., as a non-stock corporation composed of "civic spirited citizens, pastors, priests, nuns, and lay leaders who are committed to the cause of truth, justice, and national renewal." 1 Petitioners Jovito R. Salonga, Cirilo A. Rigos, Ernie Camba, Emilio C. Capulong, Jr., Jose Abcede, Christine Tan, Felipe L. Gozon, Rafael G. Fernando, Raoul V. Victorino, Jose Cunanan, and Quintin S. Doromal joined the petition in their capacity as trustees of Kilosbayan, Inc., and as taxpayers and concerned citizens. 2 Petitioners Freddie Webb and Wigberto Taada joined the petition as senators, taxpayers and concerned citizens. 3 Petitioner Joker P. Arroyo joined the petition as a member of the House of Representative, a taxpayer and a concerned citizen. 4 With due respect to the majority opinion, I wish to focus on the interstices of locus standi, a concept described by Prof. Paul Freund as "among the most amorphous in the entire domain of public law." The requirement of standing to sue inheres from the definition of judicial power. It is not merely a technical rule of procedure which we are at liberty to disregard. Section 1, Article VIII of the Constitution provides: xxx xxx xxx 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. (Italics supplied) The phrase "actual controversies involving rights which are legally demandable and enforceable" has acquired a cultivated meaning given by courts. It spells out the requirements that must be satisfied before one can come to court to litigate a constitutional issue. Our distinguished colleague, Mr. Justice Isagani A. Cruz, gives a shorthand summary of these requirements when he states that no constitutional question will be heard and decided by courts unless there is a showing of the following: . . . (1) there must be an actual case or controversy; (2) the question of constitutionality must be raised by the proper party; (3) the constitutional question must be raised at the earliest possible opportunity; and (4) the decision of the constitutional question must be necessary to the determination of the case itself. 5 The complexion of the rule on locus standi has been undergoing a change. Mr. Justice Cruz has observed the continuing relaxation of the rule on standing, 6 thus: xxx xxx xxx A proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of. Until and unless such actual or potential injury is established, the complainant cannot have the legal personality to raise the constitutional question. In Tileson v. Ullmann, a physician questioned the constitutionality of a law prohibiting the use of contraceptives, upon the ground that it might prove dangerous to the life or health of some of his patients whose physical condition would not enable them to bear the rigors of childbirth. The court dismissed the challenge, holding that the patients of the physician and not the physician himself were the proper parties. In Cuyegkeng v. Cruz, the petitioner challenged in a quo warranto proceeding the title of the respondent who, he claimed, had been appointed to the board of medical examiners in violation of the provisions of the Medical Act of 1959. The Supreme Court dismissed the petition, holding that Cuyegkeng had not made a claim to the position held by Cruz and therefore could not be regarded as a proper party who had sustained an injury as a result of the questioned act. In People v. Vera, it was held that the Government of the Philippines was a proper party to challenge the constitutionality of the Probation Act because, more than any other, it was the government itself that should be concerned over the validity of its own laws. In Ex Parte Levitt, the petitioner, an American taxpayer and member of the bar, filed a motion for leave to question the qualifications of Justice Black who, he averred, had been appointed to the U.S. Supreme Court in violation of the Constitution of the United States. The Court dismissed the petition, holding that Levitt was not a proper party since he was not claiming the position held by Justice Black. The rule before was that an ordinary taxpayer did not have the proper party personality to question the legality of an appropriation law since his interest in the sum appropriated was not substantial enough. Thus, in Custodio v. Senate President, a challenge by an ordinary taxpayer to the validity of a law granting back pay to government officials, including members of Congress, during the period corresponding to the Japanese Occupation was dismissed as having been commenced by one who was not a proper party.

Since the first Emergency Powers Cases, however, the rule has been changed and it is now permissible for an ordinary taxpayer, or a group of taxpayers, to raise the question of the validity of an appropriation law. As the Supreme Court then put it. "The transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." In Tolentino v. Commission on Elections, it was held that a senator had the proper party personality to seek the prohibition of a plebiscite for the ratification of a proposed constitutional amendment. In PHILCONSA v. Jimenez, an organization of taxpayers and citizens was held to be a proper party to question the constitutionality of a law providing for special retirement benefits for members of the legislature. In Sanidad v. Commission on Elections, the Supreme Court upheld the petitioners as proper parties, thus As a preliminary resolution, We rule that the petitioners in L-44640 (Pablo C. Sanidad and Pablito V. Sanidad) possess locus standi to challenge the constitutional premise of Presidential Decree Nos. 991, 1031, and 1033. It is now an ancient rule that the valid source of a statute Presidential Decrees are of such nature may be contested by one who will sustain a direct injury as a result of its enforcement. At the instance of taxpayers, laws providing for the disbursement of public funds may be enjoined, upon the theory that the expenditure of public funds by an officer of the State for the purpose of executing an unconstitutional act constitutes a misapplication of such funds. The breadth of Presidential Decree No. 991 carries an appropriation of Five Million Pesos for the effective implementation of its purposes. Presidential Decree No. 1031 appropriates the sum of Eight Million Pesos to carry out its provisions. The interest of the aforenamed petitioners as taxpayers in the lawful expenditure of these amounts of public money sufficiently clothes them with that personality to litigate the validity of the Decrees appropriating said funds. Moreover, as regard taxpayer's suits, this Court enjoys that open discretion to entertain the same or not. For the present case, We deem it sound to exercise that discretion affirmatively so that the authority upon which the disputed Decrees are predicated may be inquired into. In Lozada v. Commission on Elections, however, the petitioners were held without legal standing to demand the filling of vacancies in the legislature because they had only "a generalized interest' shared with the rest of the citizenry." Last July 30, 1993, we further relaxed the rule on standing in Oposa, et al. v. Hon. Fulgencio S. Factoran, Jr., 7 where we recognized the locus standi of minors representing themselves as well as generations unborn to protect their constitutional right to a balanced and healthful ecology. I am perfectly at peace with the drift of our decisions liberalizing the rule on locus standi. The once stubborn disinclination to decide constitutional issues due to lack of locus standi is incompatible with the expansion of judicial power mandated in section 1 of Article VIII of the Constitution, i.e., "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." As we held thru the ground breaking ponencia of Mr. Justice Cruz in Daza v. Singson, 8 this provision no longer precludes the Court from resolving political questions in proper cases. But even perusing this provision as a constitutional warrant for the court to enter the once forbidden political thicket, it is clear that the requirement of locus standi has not been jettisoned by the Constitution for it still commands courts in no uncertain terms to settle only "actual controversies involving rights which are legally demandable and enforceable." Stated otherwise, courts are neither free to decide all kinds of cases dumped into their laps nor are they free to open their

doors to all parties or entities claiming a grievance. The rationale for this constitutional requirement of locus standi is by no means trifle. It is intended "to assure a vigorous adversary presentation of the case, and, perhaps more importantly to warrant the judiciary's overruling the determination of a coordinate, democratically elected organ of government." 9 It thus goes to the very essence of representative democracies. As Mr. Justice Powell carefully explained in U.S. v. Richardson, 10 viz: Relaxation of standing requirements is directly related to the expansion of judicial power. It seems to me inescapable that allowing unrestricted taxpayer or citizen standing would significantly alter the allocation of power at the national level, with a shift away from a democratic form of government. I also believe that repeated and essentially head-on confrontations between the life-tenured branch and the representative branches of government will not, in the long run, be beneficial to either. The public confidence essential to the former and the vitality critical to the latter may well erode if we do not exercise self- restraint in the utilization of our power to negative the actions of the other branches. We should be ever mindful of the contradictions that would arise if a democracy were to permit at large oversight of the elected branches of government by a non-representative, and in large measure insulated, judicial branch. Moreover, the argument that the Court should allow unrestricted taxpayer or citizen standing underestimates the ability of the representative branches of the Federal Government to respond to the citizen pressure that has been responsible in large measure for the current drift toward expanded standing. Indeed, taxpayer or citizen advocacy, given its potentially broad base, is precisely the type of leverage that in a democracy ought to be employed against the branches that were intended to be responsive to public attitudes about the appropriate operation of government. "We must as judges recall that, as Mr. Justice Holmes wisely observed, the other branches of Government are ultimate guardians of the liberties and welfare of the people in quite as great a degree as the courts." Unrestrained standing in federal taxpayer or citizen suits would create a remarkably illogical system of judicial supervision of the coordinate branches of the Federal Government. Randolph's proposed Council of Revision, which was repeatedly rejected by the Framers, at least had the virtue of being systematic; every law passed by the legislature automatically would have been previewed by the judiciary before the law could take effect. On the other hand, since the judiciary cannot select the taxpayers or citizens who bring suit or the nature of the suits, the allowance of public actions would produce uneven and sporadic review, the quality of which would be influenced by the resources and skill of the particular plaintiff. And issues would be presented in abstract form, contrary to the Court's recognition that "judicial review is effective largely because it is not available simply at the behest of a partisan faction, but is exercised only to remedy a particular, concrete injury." Sierra Club v. Morton, 405 U.S. 727, 740-741, n. 16 (1972). A lesser but not insignificant reason for screening the standing of persons who desire to litigate constitutional issues is economic in character. Given the sparseness of our resources, the capacity of courts to render efficient judicial service to our people is severely limited. For courts to indiscriminately open their doors to all types of suits and suitors is for them to unduly overburden their dockets, and ultimately render themselves ineffective dispensers of justice. To be sure, this is an evil that clearly confronts our judiciary today. Prescinding from these premises, and with great reluctance, I am not prepared to concede the standing to sue of petitioners. On a personal level, they have not shown that elemental injury in fact which will endow them with a standing to sue. It must be stressed that petitioners are in the main, seeking the nullity not of a law but of a Contract of Lease. Not one of the petitioners is a party to the Contract of Lease executed between PCSO and PGMC. None of the petitioners participated in the bidding, and hence they are not losing bidders. They are complete strangers to the contract. They stand neither to gain nor to lose

economically by its enforcement. It seems to me unusual that an unaffected third party to a contract could be allowed to question its validity. Petitioner Kilosbayan cannot justify this officious interference on the ground of its commitment to "truth, justice and national renewal." Such commitment to truth, justice and national renewal, however noble it may be, cannot give Kilosbayan a roving commission to check the validity of contracts entered into by the government and its agencies. Kilosbayan is not a private commission on audit. Neither can I perceive how the other petitioners can be personally injured by the Contract of Lease between PCSO and PGMC even if petitioner Salonga assails as unmitigated fraud the statistical probability of winning the lotto as he compared it to the probability of being struck twice by lightning. The reason is obvious: none of the petitioners will be exposed to this alleged fraud for all of them profess to abjure playing the lotto. It is self-evident that lotto cannot physically or spiritually injure him who does not indulge in it. Petitioners also contend they have locus standi as taxpayers. But the case at bench does not involve any expenditure of public money on the part of PCSO. In fact, paragraph 2 of the Contract of Lease provides that it is PGMC that shall build, furnish, and maintain at its own expense and risk the facilities for the OnLine Lottery System of PCSO and shall bear all maintenance and other costs. Thus, PGMC alleged it has already spent P245M in equipment and fixtures and would be investing close to P1 billion to supply adequately the technology and other requirements of PCSO. 11 If no tax money is being illegally deflected in the Contract of Lease between PCSO and PGMC, petitioners have no standing to impugn its validity as taxpayers. Our ruling in Dumlao v. Comelec, 12 settled this issue well enough, viz: However, the statutory provisions questioned in this case, namely, sec. 7, BP Blg. 51, and sections 4, 1, and 5 BP Blg. 52, do not directly involve the disbursement of public funds. While, concededly, the elections to be held involve the expenditure of public moneys, nowhere in their Petition do said petitioners allege that their tax money is "being extracted and spent in violation of specific constitutional protections against abuses of legislative power" (Flast v. Cohen, 392 U.S. 83 [1960]), or that there is a misapplication of such funds by respondent COMELEC (see Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]), or that public money is being deflected to any improper purpose. Neither do petitioners seek to restrain respondent from wasting public funds through the enforcement of an invalid or unconstitutional law. (Philippine Constitution Association vs. Mathay, 18 SCRA 300 [1966]), citing Philippine Constitution Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the institution of a taxpayer's suit, per se, is no assurance of judicial review. As held by this Court in Yan vs. Macapagal (43 SCRA 677 [1972]), speaking through our present Chief Justice, this Court is vested with discretion as to whether or not a taxpayer's suit should be entertained. Next, petitioners plead their standing as "concerned citizens." As citizens, petitioners are pleading that they be allowed to advocate the constitutional rights of other persons who are not before the court and whose protection is allegedly their concern. A citizen qua citizen suit urges a greater relaxation of the rule on locus standi. I feel no aversion to the further relaxation of the rule on standing to accommodate what in other jurisdictions is known as an assertion of jus tertii in constitutional litigation provided the claimant can demonstrate: (1) an injury in fact to himself, and (2) the need to prevent the erosion of a preferred constitutional right of a third person. As stressed before, the first requirement of injury in fact cannot be abandoned for it is an essential element for the exercise of judicial power. Again, as stressed by Mr. Justice Powell, viz: 13 The revolution in standing doctrine that has occurred, particularly in the 12 years since Baker v. Carr, supra, has not meant, however, that standing barriers have disappeared altogether. As the Court noted in

Sierra Club, "broadening the categories of injury that may be alleged in support of standing is a different matter from abandoning the requirement that the party seeking review must himself have suffered an injury." 405 U.S., at 738 . . . Indeed, despite the diminution of standing requirements in the last decade, the Court has not broken with the traditional requirement that, in the absence of a specific statutory grant of the right of review, a plaintiff must allege some particularized injury that sets him apart from the man on the street. I recognize that the Court's allegiance to a requirement of particularized injury has on occasion required a reading of the concept that threatens to transform it beyond recognition. E.G., Baker v. Carr, supra; Flast v. Cohen, supra. But despite such occasional digressions, the requirement remains, and I think it does so for the reasons outlined above. In recognition of those considerations, we should refuse to go the last mile towards abolition of standing requirements that is implicit in broadening the "precarious opening" for federal taxpayers created by Flast, see 392 U.S., at 116 (Mr. Justice Fortas, concurring) or in allowing a citizen qua citizen to invoke the power of the federal courts to negative unconstitutional acts of the Federal Government. In sum, I believe we should limit the expansion of federal taxpayer and citizen standing in the absence of specific statutory authorization to an outer boundary drawn by the results in Flast and Baker v. Carr. I think we should face up to the fact that all such suits are an effort "to employ a federal court as a forum in which to air . . . generalized grievances about the conduct of government or the allocation of power in the Federal System." Flast v. Cohen, 392 U.S., at 106. The Court should explicitly reaffirm traditional prudential barriers against such public actions. My reasons for this view are rooted in respect for democratic processes and in the conviction that "[t]he powers of the federal judiciary will be adequate for the great burdens placed upon them only if they are employed prudently, with recognition of the strengths as well as the hazards that go with our kind of representative government." Id., at 131 The second requirement recognizes society's right in the protection of certain preferred rights in the Constitution even when the rightholders are not before the court. The theory is that their dilution has a substantial fall out detriment to the rights of others, hence the latter can vindicate them. In the case at bench, it is difficult to see how petitioners can satisfy these two requirements to maintain a jus tertii claim. They claim violation of two constitutional provisions, to wit: Section 1, Article XIII. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. and Section 11, Article XII. - No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorizations be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so

requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizen of the Philippines. Section 1, Article XIII of the Constitution cannot be the matrix of petitioners' jus tertii claim for it expresses no more than a policy direction to the legislative in the discharge of its ordained duty to give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities and remove cultural inequities by equitably diffusing wealth and political power for the common good. Whether the act of the legislature in amending the charter of PCSO by giving it the authority to conduct lotto and whether the Contract of Lease entered into between PCSO and PGMC are incongruent to the policy direction of this constitutional provision is a highly debatable proposition and can be endlessly argued. Respondents steadfastly insist that the operation of lotto will increase the revenue base of PCSO and enable government to provide a wider range of social services to the people. They also allege that the operation of high-tech lotto will eradicate illegal jueteng. Petitioners are scandalized by this submission. They dismiss gambling as evil per se and castigate government for attempting to correct a wrong by committing another wrong. In any event, the proper forum for this debate, however cerebrally exciting it may be, is not this court but congress. So we held in PCSO v. Inopiquez, to wit: 14 By bringing their suit in the lower court, the private respondents in G.R. No. 79084 do not question the power of PCSO to conduct the Instant Sweepstakes game. Rather, they assail the wisdom of embarking upon this project because of their fear of the "pernicious repercussions" which may be brought about by the Instant Sweepstakes Game which they have labelled as "the worst form of gambling" which thus "affects the moral values" of the people. The Court, as held in several cases, does not pass upon questions of wisdom, justice, or expediency of legislation and executive acts. It is not the province of the courts to supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. (Italics supplied) I am not also convinced that petitioners can justify their locus standi to advocate the rights of hypothetical third parties not before the court by invoking the need to keep inviolate section 11, Article XII of the Constitution which imposes a nationality requirement on operators of a public utility. For even assuming arguendo that PGMC is a public utility, still, the records do not at the moment bear out the claim of petitioners that PGMC is a foreign owned and controlled corporation. This factual issue remains unsettled and is still the subject of litigation by the parties in the Securities and Exchange Commission. We are not at liberty to anticipate the verdict on this contested factual issue. But over and above this consideration, I respectfully submit that this constitutional provision does not confer on third parties any right of a preferred status comparable to the Bill of Rights whose dilution will justify petitioners to vindicate them in behalf of its rightholders. The legal right of hypothetical third parties they profess to advocate is to my mind too impersonal, too unsubstantial, too indirect, too amorphous to justify their access to this Court and the further lowering of the constitutional barrier of locus standi. Again, with regret, I do not agree that the distinguished status of some of the petitioners as lawmakers gives them the appropriate locus standi. I cannot perceive how their constitutional rights and prerogatives as legislators can be adversely affected by the contract in question. Their right to enact laws for the general conduct of our society remains unimpaired and undiminished. 15 Their status as legislators,

notwithstanding, they have to demonstrate that the said contract has caused them to suffer a personal, direct, and substantial injury in fact. They cannot simply advance a generic grievance in common with the people in general. I am not unaware of our ruling in De Guia v. Comelec, 16 viz: Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for reelection, much less, that he is prejudiced by the election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-44640, October 12, 1976, 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533). He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action. However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmena vs. Commission on Elections. It is my respectful submission, however, that we should re-examine de Guia. It treated the rule on locus standi as a mere procedural rule. It is not a plain procedural rule but a constitutional requirement derived from section 1, Article VIII of the Constitution which mandates courts of justice to settle only "actual controversies involving rights which are legally demandable and enforceable." The phrase has been construed since time immemorial to mean that a party in a constitutional litigation must demonstrate a standing to sue. By downgrading the requirement on locus standi as a procedural rule which can be discarded in the name of public interest, we are in effect amending the Constitution by judicial fiat. De Guia would also brush aside the rule on locus standi if a case raises an important issue. In this regard, I join the learned observation of Mr. Justice Feliciano: "that it is not enough for the Court simply to invoke 'public interest' or even 'paramount considerations of national interest,' and to say that the specific requirements of such public interest can only be ascertained on a 'case to case' basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen." I also submit that de Guia failed to perceive that the rule on locus standi has little to do with the issue posed in a case, however, important it may be. As well pointed out in Flast v. Cohen: 17 The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated. The "gist of the question of standing" is whether the party seeking relief has "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions." Baker v. Carr, 369 U.S. 186, 204 (1962). In other words, when standing is placed in issue in a case, the question is whether the person whose standing is challenged is a proper party to request an adjudication of a particular issue and not whether the issue itself is justiciable. Thus, a party may have standing in a particular case, but the federal court may nevertheless decline to pass on the merits of the case because, for example, it presents a political question. A proper party is demanded so that federal courts will not be asked to decide "illdefined controversies over constitutional issues," United public Workers v. Mitchell, 330 U.S. 75, 90

(1947), or a case which is of "a hypothetical or abstract character," Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240 (1937). It is plain to see that in de Guia, the court took an unorthodox posture, to say the least. It held there was no proper party before it, and yet it resolved the issues posed by the petition. As there was no proper party before the court, its decision is vulnerable to be criticized as an advisory opinion. With due respect, the majority decision appears to have set a dangerous precedent by unduly trivializing the rule on locus standi. By its decision, the majority has entertained a public action to annul a private contract. In so doing, the majority may have given sixty (60) million Filipinos the standing to assail contracts of government and its agencies. This is an invitation for chaos to visit our law on contract, and certainly will not sit well with prospective foreign investors. Indeed, it is difficult to tread the path of the majority on this significant issue. The majority granted locus standi to petitioners because of lack of any other party with more direct and specific interest. But one has standing because he has standing on his own and standing cannot be acquired because others with standing have refused to come to court. The thesis is also floated that petitioners have standing as they can be considered taxpayers with right to file derivative suit like a stockholder's derivative suit in private corporations. The fact, however, is that PCSO is not a private but a quasi-public corporation. Our law on private corporation categorically sanctions stockholder's derivative suit. In contrast, our law on public corporation does not recognize this so-called taxpayer's derivative suit. Hence, the idea of a taxpayer's derivative suit, while alluring, has no legal warrant. Our brethren in the majority have also taken the unprecedented step of striking down a contrast at the importunings of strangers thereto, but without justifying the interposition of judicial power on any felt need to prevent violation of an important constitutional provision. The contract in question was voided on the sole ground that it violated an ordinary statute, section 1 of R.A. 1169, as amended by B.P. Blg. 42. If there is no provision of the Constitution that is involved in the case at bench, it boggles the mind how the majority can invoke considerations of national interest to justify its abandonment of the rule on locus standi. The volume of noise created by the case cannot magically convert it to a case of paramount national importance. By its ruling, the majority has pushed the Court in unchartered water bereft of any compass, and it may have foisted the false hope that it is the repository of all remedies. If I pay an unwavering reverence to the rule of locus standi, it is because I consider it as a touchstone in maintaining the proper balance of power among the three branches of our government. The survival of our democracy rests in a large measure on our ability to maintain this delicate equipoise of powers. For this reason, I look at judicial review from a distinct prism. I see it both as a power and a duty. It is a power because it enables the judiciary to check excesses of the Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, keeps the judiciary from overreaching the powers of the other branches of government. By balancing this duality, we are able to breathe life to the principle of separation of powers and prevent tyranny. To be sure, it is our eternal concern to prevent tyranny but that includes tyranny by ourselves. The Constitution did not install a government by the judiciary, nay, not a government by the unelected. In offering this submission, I reject the sublimal fear that an unyielding insistence on the rule on locus standi will weaken the judiciary vis-a-vis the other branches of government. The hindsight of history ought to tell us that it is not power per se that strengthens. Power unused is preferable than power misused. We contribute to constitutionalism both by the use of our power to decide and its non use. As well said, the cases we decide are as significant as the cases we do not decide. Real power belongs to him who has power over power.

IN VIEW WHEREOF, and strictly on the ground of lack of locus standi on the part of petitioners, I vote to DENY the petition. VITUG, J., dissenting: Judicial power encompasses both an authority and duty to resolve "actual controversies involving rights which are legally demandable and enforceable" (Article VIII, Section 1, 1987 Constitution). As early as the case of Lamb vs. Phipps, 1 this Court ruled: "Judicial power, in its nature, is the power to hear and decide causes pending between parties who have the right to sue in the courts of law and equity." 2 An essential part of, and corollary to, this principle is the locus standi of a party litigant, referring to one who is directly affected by, and whose interest is immediate and substantial in, the controversy. The rule requires that a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. 3 If it were otherwise, the exercise of that power can easily become too unwieldy by its sheer magnitude and scope to a point that may, in no small degree, adversely affect its intended essentiality, stability and consequentiality. Locus standi, nevertheless, admits of the so-called "taxpayer's suit." Taxpayer's suits are actions or proceedings initiated by one or more taxpayers in their own behalf or, conjunctively, in representation of others similarly situated for the purpose of declaring illegal or unauthorized certain acts of public officials which are claimed to be injurious to their common interests as such taxpayers (Cf. 71 Am Jur 2d., 179180). The principle is predicated upon the theory that taxpayers are, in equity, the cestui que trust of tax funds, and any illegal diminution thereof by public officials constitutes a breach of trust even as it may result in an increased burden on taxpayers (Haddock vs. Board of Public Education, 86 A 2d 157; Henderson vs. McCormick, 17 ALR 2d 470). Justice Brandeis of the United States Supreme Court, in his concurring opinion in Ashwander vs. Tennessee Valley Authority (297 U.S. 288), said: . . . . The Court will not pass upon the validity of a statute upon complaint of one who fails to show that he is injured by its operation. Tyler v. The Judges, 179 U.S. 405; Hendrick v. Maryland, 234 U.S. 610, 621. Among the many applications of this rule, none is more striking than the denial of the right of challenge to one who lacks a personal or property right. Thus, the challenge by a public official interested only in the performance of his official duty will not be entertained. Columbus & Greenville Ry. v. Miller, 283 U.S. 96, 99-100. In Fairchild v. Hughes, 258 U.S. 126, the Court affirmed the dismissal of a suit brought by a citizen who sought to have the Nineteenth Amendment declared unconstitutional. In Massachusetts v. Mellon, 262 U.S. 447, the challenge of the federal Maternity Act was not entertained although made by the Commonwealth on behalf of all its citizens." Justice Brandeis' view, shared by Justice Frankfurter in Joint Anti-Fascist Refugee Commission vs. McGrath (351 U.S. 123), was adopted by the U.S. Supreme Court in Flast vs. Cohen (392 U.S. 83) which held that it is only when a litigant is able to show such a personal stake in the controversy as to assure a concrete adverseness in the issues submitted that legal standing can attach. A "taxpayer's suit," enough to confer locus standi to a party, we have held before, is understood to be a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation. 4 It is not enough that the dispute concerns public funds. A contrary rule could easily lead to a limitless application of the term "taxpayer's suit," already by itself a broad concept, since a questioned act of government would almost so invariably entail, as a practical matter, a financial burden of some kind.

To be sure, serious doubts have even been raised on the propriety and feasibility of unqualifiedly recognizing the "taxpayer's suit" as an exception from the standard rule of requiring a party who invokes the exercise of judicial power to have a real and personal interest or a direct injury in the outcome of a controversy. This Court has heretofore spoken on the matter, at times even venturing beyond the usual understanding of its applicability in the name of national or public interest. It is remarkable, nevertheless, that the accepted connotation of locus standi has still managed to be the rule, sanctioning, by way of exception, the so-called "taxpayer's suit" which courts accept on valid and compelling reasons. A provision which has been introduced by the 1987 Constitution is a definition, for the first time in our fundamental law, of the term "judicial power," as such authority and duty of 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" (Article VIII, Section 1, Constitution). I take it that the provision has not been intended to unduly mutate, let alone to disregard, the long established rules on locus standi. Neither has it been meant, I most respectfully submit, to do away with the principle of separation of powers and its essential incidents such as by, in effect, conferring omnipotence on, or allowing an intrusion by, the courts in respect to purely political decisions, the exercise of which is explicitly vested elsewhere, and subordinate, to that of their own, the will of either the Legislative Department or the Executive Department both co- equal, independent and coordinate branches, along with the Judiciary, in our system of government. Again, if it were otherwise, there indeed would be truth to the charge, in the words of some constitutionalists, that "judicial tyranny" has been institutionalized by the 1987 Constitution, an apprehension which should, I submit, rather be held far from truth and reality. In sum, while any act of government, be it executive in nature or legislative in character, may be struck down and declared a nullity either because it contravenes an express provision of the Constitution or because it is perceived and found to be attended by or the result of grave abuse of discretion, amounting to lack or excess of jurisdiction, that issue, however, must first be raised in a proper judicial controversy. The Court's authority to look into and grant relief in such cases would necessitate locus standi on the part of party litigants. This requirement, in my considered view, is not merely procedural or technical but goes into the essence of jurisdiction and the competence of courts to take cognizance of justiciable disputes. In Bugnay Construction and Development Corporation vs. Laron, 5 this Court ruled: . . . . Considering the importance to the public of a suit assailing the constitutionality of a tax law, and in keeping with the Court's duty, specially explicated in the 1987 Constitution, to determine whether or not the other branches of the Government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them, the Supreme Court may brush aside technicalities of procedure and take cognizance of the suit. (Citing Kapatiran vs. Tan, G.R. No. 81311, June 30, 1988.) However, for the above rule to apply, it is exigent that the taxpayer-plaintiff sufficiently show that he would be benefited or injured by the judgment or entitled to the avails of the suit as a real party in interest. (Citing Estate of George Litton vs. Mendoza, G.R. No. 49120, June 30, 1988.) Before he can invoke the power of judicial review, he must specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation (citing 11 Am. Jur. 761; Dumlao, et al. vs. Commission on Elections, 95 SCRA 392) and that he will sustain a direct injury as a result of the enforcement of the questioned statute or contract. (Citing Sanidad, et al. vs. Commission on Elections, et al., 73 SCRA 333.)

It is not sufficient that he has merely a general interest common to all members of the public. (Citing Ex Parte Levitt, 302 U.S. 633, cited in 15 SCRA 497, Annotation.) As so well pointed out by Mr. Justice Camilo D. Quiason during the Court's deliberations, "due respect and proper regard for the rule on locus standi would preclude the rendition of advisory opinions and other forms of pronouncement on abstract issues, avoid an undue interference on matters which are not justiciable in nature and spare the Court from getting itself involved in political imbroglio." The words of Senate President Edgardo J. Angara, carry wisdom; we quote: The powers of the political branches of our government over economic policies is rather clear: the Congress is to set in broad but definite strokes the legal framework and structures for economic development, while the Executive provides the implementing details for realizing the economic ends identified by Congress and executes the same. xxx xxx xxx If each economic decision made by the political branches of government, particularly by the executive, are fully open to re-examination by the judicial branch, then very little, if any, reliance can be placed by private economic actors on those decisions. Investors would always have to factor in possible costs arising from judicially-determined changes affecting their immediate business, notwithstanding assurances by executive authorities. Judicial decisions are, in addition, inflexible and can never substitute for sound decision-making at the level of those who are assigned to execute the laws of the land. Since judicial power cannot be exercised unless an actual controversy is brought before the courts for resolution, decisions cannot be properly modified unless another appropriate controversy arises." (Sen. Edgardo J. Angara, "The Supreme Court in Economic Policy Making," Policy Review A Quarterly Journal of Policy Studies, Vol. 1, No. 1, January-March 1994, published by the Senate Policy Studies Group, pp. 2-3.) A further set-back in entertaining the petition is that it unfortunately likewise strikes at factual issues. The allegations to the effect that irregularities have been committed in the processing and evaluation of the bids to favor respondent PGMC; that the Malacaang Special Review Committee did not verify warranties embodied in the contract; that the operation of telecommunication facilities is indispensable in the operation of the lottery system; the involvement of multi-national corporations in the operation of the online "hi-tech" lottery system, and the like, require the submission of evidence. This Court is not a trier of facts, and it cannot, at this time, resolve the above issues. Just recently, the Court has noted petitioners' manifestation of its petition with the Securities and Exchange Commission "for the nullification of the General Information Sheets of PGMC" in respect particularly to the nationality holdings in the corporation. The doctrine of primary jurisdiction would not justify a disregard of the jurisdiction of, nor would it permit us to now preempt, said Commission on the matter. Petitioners strongly assert, in an attempt to get the Court's concurrence in accepting the petition, that since lottery is a game of chance, the "lotto" system would itself be a "crime against morals" defined by Articles 195-199 6 of the Revised Penal Code. Being immoral and a criminal offense under the Revised Penal Code, petitioners contend, any special law authorizing gambling must, by all canons of statutory constructions, be interpreted strictly against the grantee. Citing previous decisions of this Court, they maintain that lottery is gambling, pure and simple, 7

and that this Court has consistently condemned the immorality and illegality of gambling to be a "national offense and not a minor transgression;" 8 "that it is a social scourge which must be stamped out;" 9 and, "that it is pernicious to the body politic and detrimental to the nation and its citizens." 10 I most certainly will not renounce this Court's above concerns. Nevertheless, the Court must recognize the limitations of its own authority. Courts neither legislate nor ignore legal mandates. Republic Act No. 1169, as amended, explicitly gives public respondent PCSO the authority and power "to hold and conduct sweepstakes races, lotteries, and other similar activities." In addition, it is authorized: c. To undertake any other activity that will enhance its funds generation, operations and funds management capabilities, subject to the same limitations provided for in the preceding paragraph. It shall have a Board of Directors, hereinafter designated the Board, composed of five members who shall be appointed, and whose compensation and term of office shall be fixed, by the President. xxx xxx xxx Sec.9. Powers and functions of the Board of Directors. The Board of Directors of the Office shall have the following powers and functions. (a) To adopt or amend such rules and regulations to implement the provisions of this Act. xxx xxx xxx (d) To promulgate rules and regulations for the operation of the Office and to do such act or acts as may be necessary for the attainment of its purposes and objectives. (Emphasis supplied). In People vs. Dionisio, 11 cited by the petitioners themselves, we remarked: "What evils should be corrected as pernicious to the body politic, and how correction should be done, is a matter primarily addressed to the discretion of the legislative department, not of the courts . . . ." In Valmonte vs. PCSO, 12 we also said: The Court, as held in several cases, does not pass upon questions of wisdom, justice or expediency of legislation and executive acts. It is not the province of the courts to supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. The constraints on judicial power are clear. I feel, the Court must thus beg off, albeit not without reluctance, from giving due course to the instant petition. Accordingly, I vote for the dismissal of the petition. KAPUNAN, J., dissenting:

I regret that I am unable to join my colleagues in the majority in spite of my own personal distaste for gambling and other gaming operations. Such considerations aside, I feel there are compelling reasons why the instant petition should be dismissed. I shall forthwith state the reasons why. Petitioners anchor their principal objections against the contract entered into between the Philippine Charity Sweepstakes Office (PCSO) and the PGMC on the ground that the contract entered into by the PCSO with the PGMC violates the PCSO Charter (R.A. No. 1169 as amended by B.P. Blg 427, specifically section 1 thereof which bars the said body from holding conducting lotteries "in collaboration, association or joint venture with any person association, company or entity."). However, a perusal of the petition reveals that the compelling reasons behind it, while based on apparently legal questions involving the contract between the PCSO and the PGMC, are prompted by the petitioners' moral objections against the whole idea of gambling operations operated by the government through the PCSO. The whole point of the petition, in essence, is a fight between good and evil, between the morality or amorality of lottery operations conducted on a wide scale involving millions of individuals and affecting millions of lives. Their media of opposition are the above stated defects in the said contract which they assail to be fatally defective. They come to this Court, as taxpayers and civic spirted citizens, asserting a right of standing on a transcendental issue which they assert to be of paramount public interest. Moral or legal questions aside, I believe that there are unfortunately certain standards 1 that have to be followed in the exercise of this Court's awesome power of review before this Court could even begin to assay the validity of the contract between the PCSO and the PGMC. This, in spite of the apparent expansion of judicial power granted by Section 1 of Article VIII of the 1987 Constitution. It is fundamental that such standards be complied with before this Court could even begin to explore the substantive issues raised by any controversy brought before it, for no issue brought before this court could possibly be so fundamental and paramount as to warrant a relaxation of the requisite rules for judicial review developed by settled jurisprudence inorder to avoid entangling this court in controversies which properly belong to the legislative or executive branches of our government. The potential harm to our system of government, premised on the concept of separation of powers, by the Court eager to exercise its powers and prerogatives at every turn, cannot be gainsaid. The Constitution does not mandate this Court to wield the power of judicial review with excessive vigor and alacrity in every area or at every turn, except in appropriate cases and controversies which meet established requirements for constitutional adjudication. Article VIII Sec. 1 of the Constitution notwithstanding, there are questions which I believe are still beyond the pale of judicial power. Moreover, it is my considered opinion that the instant petition does not meet the requirements set by this court for a valid exercise of judicial review. Our Constitution expressly defines judicial power as including "the duty to settle actual cases and 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 a lack or excess of jurisdiction on the part of any branch or instrumentality of the government." 2 This constitutional requirement for an actual case and controversy limits this Court's power of review to precisely those suits between adversary litigants with real interests at stake 2 thus preventing it from making all sorts of hypothetical pronouncements on abstract, contingent and amorphous issues. The Court will therefore not pass upon the validity of an act of government or a statute passed by a legislative body without a requisite showing of injury. 3 A personal stake is essential, which absence renders our pronouncements gratuitous and certainly violative of the constitutional requirement for actual cases and controversies. The requirement for standing based on personal injury may of course be bypassed, as the petitioners in this case attempt to do, by considering the case as a "taxpayer suit" which would thereby clothe them with the personality they would lack under ordinary circumstances. However, the act assailed by the

petitioners on the whole involves the generation rather than disbursement of public funds. In a line of cases starting from Pascual v. Secretary of Public Works 4 "taxpayer suits" have been understood to refer only to those cases where the act or statute assailed involves the illegal or unconstitutional disbursement of public funds derived from taxation. The main premise behind the "taxpayer suit" is that the pecuniary interest of the taxpayer is involved whenever there is an illegal or wasteful use of public funds which grants them the right to question the appropriation or disbursement on the basis of their contribution to government funds. 5 Since it has not been alleged that an illegal appropriation or disbursement of a fund derived from taxation would be made in the instant case, I fail to see how the petitioners in this case would be able to satisfy the locus standi requirement on the basis of a "taxpayer's suit". This alone should inhibit this Court from proceeding with the case at bench. The interest alleged and the potential injury asserted are far too general and hypothetical for us to rush into a judicial determination of what to me appears to be judgment better left to executive branch of our government. This brings me to one more important point: The idea that a norm of constitutional adjudication could be lightly brushed aside on the mere supposition that an issue before the Court is of paramount public concern does great harm to a democratic system which espouses a delicate balance between three separate but co-equal branches of government. It is equally of paramount public concern, certainly paramount to the survival of our democracy, that acts of the other branches of government are accorded due respect by this Court. Such acts, done within their sphere of competence, have been and should always be accorded with a presumption of regularity. When such acts are assailed as illegal or unconstitutional, the burden falls upon those who assail these acts to prove that they satisfy the essential norms of constitutional adjudication, because when we finally proceed to declare an act of the executive or legislative branch of our government unconstitutional or illegal, what we actually accomplish is the thwarting of the will of the elected representatives of the people in the executive or legislative branches government.6 Notwithstanding Article VIII, Section 1 of the Constitution, since the exercise of the power of judicial review by this Court is inherently antidemocratic, this Court should exercise a becoming modesty in acting as a revisor of an act of the executive or legislative branch. The tendency of a frequent and easy resort to the function of judicial review, particularly in areas of economic policy has become lamentably too common as to dwarf the political capacity of the people expressed through their representatives in the policy making branches of government and to deaden their sense of moral responsibility. 7 This court has been accused, of late, of an officious tendency to delve into areas better left to the political branches of government. 8 This tendency, if exercised by a court running riot over the other co-equal branches of government, poses a greater danger to our democratic system than the perceived danger real or imagined of an executive branch espousing economic or social policies of doubtful moral worth. Moreover economic policy decisions in the current milieu- including the act challenged in the instant caseinvolve complex factors requiring flexibility and a wide range of discretion on the part of our economic managers which this Court should respect because our power of review, under the constitution, is a power to check, not to supplant those acts or decisions of the elected representatives of the people. Finally, the instant petition was brought to this Court on the assumption that the issue at bench raises primarily constitutional issues. As it has ultimately turned out, the core foundation of the petitioners' objections to the LOTTO operations was based on the validity of the contract between the PCSO and the PGMC in the light of Section 1 of R.A. 1169 as amended by B.P. Blg. 427. It might have been much more appropriate for the issue to have taken its normal course in the courts below. I vote to deny the petition.

# Separate Opinions CRUZ, J., concurring: I am happy to join Mr. Justice Hilario G. Davide, Jr. in his excellent ponencia. I will add the following personal observations only for emphasis as it is not necessary to supplement his thorough exposition. The respondents take great pains to cite specific provisions of the contract to show that it is PCSO that is actually operating the on-line lottery, but they have not succeeded in disproving the obvious, to wit, that the document was intentionally so crafted to make it appear that the operation is not a joint undertaking of PCSO and PGMC but a mere lease of services. It is a clever instrument, to be sure, but we are, gratifyingly, not deluded. Lawyers have a special talent to disguise the real intention of the parties in a contract to make it come ostensibly within the provisions of a law although the real if furtive purpose is to violate it. That talent has been exercised in this case, but not convincingly enough. It should be quite clear, from the adroit way the contract has been drafted, that the primary objective was to avoid the conclusion that PCSO will be operating a lottery "in association, collaboration or joint venture with any person, association, company or entity," which is prohibited by Section 1 of Rep. Act No. 1169 as amended by B.P. Blg. 42. Citing the self-serving provisions of the contract, the respondents would have us believe that the contract is perfectly lawful because all it does is provide for the lease to PCSO of the technical know-how and equipment of PGMC, with PCSO acting as "the sole and individual operator" of the lottery. I am glad we are not succumbing to this sophistry. Despite the artfulness of the contract (authorship of which was pointedly denied by both counsel for the government and the private respondent during the oral argument on this case), a careful study will reveal telling stipulations that it is PGMC and not PCSO that will actually be operating the lottery. Thus, it is provided inter alia that PGMC shall furnish all capital equipment and other facilities needed for the operation; bear all expenses relating to the operation, including those for the salaries and wages of the administrative and technical personnel; undertake a positive advertising and promotion campaign for public support of the lottery; establish a radio communications network throughout the country as part of the operation; and assume all risks if the revenues from ticket sales are insufficient to pay the entire prize money. Most significantly, to show that it is only after eight years from the effectivity of the contract that PCSO will actually operate the lottery, Par. 6.7 of the agreement provides that PGMC shall: 6.7. Upon effectivity of this Contract, commence the training of PCSO and other local personnel and the transfer of technology and expertise, such that at the end of the term of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System. (Emphasis supplied). In the meantime, that is to say during the entire 8-year term of the contract, it will be PGMC that will be operating the lottery. Only "at the end of the term of this Contract" will PCSO "be able to effectively takeover the Facilities and efficiently operate the On-Line Lottery System." Even on the assumption that it is PCSO that will be operating the lottery at the very start, the authority granted to PGMC by the agreement will readily show that PCSO will not be acting alone, as the respondents pretend. In fact, it cannot. PGMC is an indispensable co-worker because it has the equipment and the technology and the management skills that PCSO does not have at this time for the

operation of the lottery, PCSO cannot deny that it needs the assistance of PGMC for this purpose, which was its reason for entering into the contract in the first place. And when PCSO does avail itself of such assistance, how will it be operating the lottery? Undoubtedly, it will be doing so "in collaboration, association or joint venture" with PGMC, which, let it be added, will not be serving as a mere "hired help" of PCSO subject to its control. PGMC will be functioning independently in the discharge of its own assigned role as stipulated in detail under the contract. PGMC is plainly a partner of PCSO in violation of law, no matter how PGMC's assistance is called or the contract is denominated. Even if it be conceded that the assistance partakes of a lease of services, the undeniable fact is that PCSO would still be collaborating or cooperating with PGMC in the operation of the lottery. What is even worse is that PCSO and PGMC may be actually engaged in a joint venture, considering that PGMC does not collect the usual fixed rentals due an ordinary lessor but is entitled to a special "Rental Fee," as the contract calls it, "equal to four point nine percent (4.9%) of gross receipts from ticket sales." The flexibility of this amount is significant. As may be expected, it will induce in PGMC an active interest and participation in the success of PCSO that is not expected of an ordinary detached lessor who gets to be paid his rentals not a rental fee whether the lessee's business prospers or not. PGMC's share in the operation depends on its own performance and the effectiveness of its collaboration with PCSO. Although the contract pretends otherwise, PGMC is a co-investor with PCSO in what is practically, if not in a strictly legal sense, a joint venture. Concerning the doctrine of locus standi, I cannot agree that out of the sixty million Filipinos affected by the proposed lottery, not a single solitary citizen can question the agreement. Locus standi is not such an absolute rule that it cannot admit of exceptions under certain conditions or circumstances like those attending this transaction. As I remarked in my dissent in Guazon v. De Villa, 181 SCRA 623, "It is not only the owner of the burning house who has the right to call the firemen. Every one has the right and responsibility to prevent the fire from spreading even if he lives in the other block." What is especially galling is that the transaction in question would foist upon our people an essentially immoral activity through the instrumentality of a foreign corporation, which naturally does not have the same concern for our interests as we ourselves have. I am distressed that foreigners should be allowed to exploit the weakness of some of us for instant gain without work, and with the active collaboration and encouragement of our own government at that. Feliciano, J., concurring I agree with the conclusions reached by my distinguished brother in the Court Davide, Jr., J., both in respect of the question of locus standi and in respect of the merits of this case, that is, the issues of legality and constitutionality of the Contract of Lease entered into between the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation (PGMC). In this separate opinion, I propose to address only the question of locus standi. It is with some hesitation that I do so, considering the extensive separate opinions on this question written by my learned brothers Melo, Puno and Vitug, JJ. I agree with the great deal of what my brothers Melo, Puno and Vitug say about locus standi in their separate opinions and there is no need to go over the ground that I share with them. Because, however, I reach a different conclusion in respect of the presence or absence of locus standi on

the part of the petitioners in the case before the Court, there is an internal need (a need internal to myself) to articulate the considerations which led me to that conclusion. There is no dispute that the doctrine of locus standi reflects an important constitutional principle, that is, the principle of separation of powers which, among other things, mandates that each of the great Departments of government is responsible for performance of its constitutionally allotted tasks. Insofar as the Judicial Department is concerned, the exercise of judicial power and carrying out of judicial functions commonly take place within the context of actual cases or controversies. This, in turn, reflects the basic notion of judicial power as the power to resolve actual disputes and of the traditional business of courts as the hearing and deciding of specific controversies brought before them. In our own jurisdiction, and at least since the turn of the present century, judicial power has always included the power of judicial review, understood as the authority of courts (more specifically the Supreme Court) to assay contested legislative and executive acts in terms of their constitutionality or legality. Thus, the general proposition has been that a petitioner who assails the legal or constitutional quality of an executive or legislative act must be able to show that he has locus standi. Otherwise, the petition becomes vulnerable to prompt dismissal by the court. There is, upon the other hand, little substantive dispute that the possession of locus standi 1 is not, in each and every case, a rigid and absolute requirement for access to the courts. Certainly that is the case where great issues of public law are at stake, issues which cannot be approached in the same way that a court approaches a suit for the collection of a sum of money or a complaint for the recovery of possession of a particular piece of land. The broad question is when, or in what types of cases, the court should insist on a clear showing of locus standi understood as a direct and personal interest in the subject matter of the case at bar, and when the court may or should relax that apparently stringent requirement and proceed to deal with the legal or constitutional issues at stake in a particular case. I submit, with respect, that it is not enough for the Court simply to invoke "public interest" or even "paramount considerations of national interest," and to say that the specific requirements of such public interest can only be ascertained on a "case to case" basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen. This is not, however, to say that there is somewhere an over-arching juridical principle or theory, waiting to be discovered, that permits a ready answer to the question of when, or in what types of cases, the need to show locus standi may be relaxed in greater or lesser degree. To my knowledge, no satisfactory principle or theory has been discovered and none has been crafted, whether in our jurisdiction or in the United States. 2 I have neither the competence nor the opportunity to try to craft such principle or formula. It might, however, be useful to attempt to indicate the considerations of principle which, in the present case, appear to me to require an affirmative answer to the question of whether or not petitioners are properly regarded as imbued with the standing necessary to bring and maintain the present petition. Firstly, the character of the funds or other assets involved in the case is of major importance. In the case presently before the Court, the funds involved are clearly public in nature. The funds to be generated by the proposed lottery are to be raised from the population at large. Should the proposed operation be as successful as its proponents project, those funds will come from well-nigh every town and barrio of Luzon. The funds here involved are public in another very real sense: they will belong to the PCSO, a government owned or controlled corporation and an instrumentality of the government and are destined for utilization in social development projects which, at least in principle, are designed to benefit the

general public. My learned brothers Melo, Puno and Vitug, JJ. concede that taxpayers' suits have been recognized as an exception to the traditional requirement of recognized as an exception to the traditional requirement of locus standi. They insist, however, that because the funds here involved will not have been generated by the exercise of the taxing power of the Government, the present petition cannot be regarded as a taxpayer's suit and therefore, must be dismissed by the Court. It is my respectful submission that that constitutes much too narrow a conception of the taxpayer's suit and of the public policy that it embodies. It is also to overlook the fact that tax monies, strictly so called, constitute only one (1) of the major categories of funds today raised and used for public purposes. It is widely known that the principal sources of funding for government operations today include, not just taxes and customs duties, but also revenues derived from activities of the Philippine Amusement Gaming Corporation (PAGCOR), as well as the proceeds of privatization of government owned or controlled corporations and other government owned assets. The interest of a private citizen in seeing to it that public funds, from whatever source they may have been derived, go only to the uses directed and permitted by law is as real and personal and substantial as the interest of a private taxpayer in seeing to it that tax monies are not intercepted on their way to the public treasury or otherwise diverted from uses prescribed or allowed by law. It is also pertinent to note that the more successful the government is in raising revenues by nontraditional methods such as PAGCOR operations and privatization measures, the lesser will be the pressure upon the traditional sources of public revenues, i.e., the pocket books of individual taxpayers and importers. A second factor of high relevance is the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the government. A showing that a constitutional or legal provision is patently being disregarded by the agency or instrumentality whose act is being assailed, can scarcely be disregarded by court. The concept of locus standi which is part and parcel of the broader notion of ripeness of the case "does not operate independently and is not alone decisive. . . . [I]t is in substantial part a function of a judge's estimate of the merits of the constitutional [or legal] issue." 3 The notion of locus standi and the judge's conclusions about the merits of the case, in other words, interact with each other. Where the Court perceives a serious issue of violation of some constitutional or statutory limitation, it will be much less difficult for the Court to find locus standi in the petitioner and to confront the legal or constitutional issue. In the present case, the majority of the Court considers that a very substantial showing has been made that the Contract of Lease between the PCSO and the PGMC flies in the face of legal limitations. A third consideration of importance in the present case is the lack of any other party with a more direct and specific interest in raising the questions here being raised. Though a public bidding was held, no losing or dissatisfied bidder has come before the Court. The Office of the Ombudsman has not, to the knowledge of the Court, raised questions about the legality or constitutionality of the Contract of Lease here involved. The National Government itself, through the Office of the Solicitor General, is defending the PCSO Contract (though it had not participated in the drafting thereof). In a situation like that here obtaining, the submission may be made that the institution, so well known in corporation law and practice, of the corporate stockholders' derivative suit furnishes an appropriate analogy and that on the basis of such an analogy, a taxpayer's derivative suit should be recognized as available. The wide range of impact of the Contract of Lease here assailed and of its implementation, constitutes still another consideration of significance. In the case at bar, the agreement if implemented will be practically nationwide in its scope and reach (the PCSO-PGMC Contract is limited in its application to the Island of Luzon; but if the PCSO Contracts with the other two [2] private "gaming management" corporations in respect of the Visayas and Mindanao are substantially similar to PCSO's Contract with PGMC, then the Contract before us may be said to be national indeed in its implications and

consequences). Necessarily, the amounts of money expected to be raised by the proposed activities of the PCSO and PGMC will be very substantial, probably in the hundreds of millions of pesos. It is not easy to conceive of a contract with greater and more far-reaching consequences, literally speaking, for the country than the Contract of Lease here involved. Thus, the subject matter of the petition is not something that the Court may casually pass over as unimportant and as not warranting the expenditure of significant judicial resources. In the examination of the various features of this case, the above considerations have appeared to me to be important and as pressing for acceptance and exercise of jurisdiction on the part of this Court. It is with these considerations in mind that I vote to grant due course to the Petition and to hold that the Contract of Lease between the PCSO and PGMC in its present form and content, and given the present state of the law, is fatally defective. PADILLA, J., concurring: My views against gambling are a matter of judicial record. In Basco v. PAGCOR, (G.R. No. 91649, 14 May 1991, 197 SCRA 52) I expressed these views in a separate opinion where I was joined by that outstanding lady jurist, Mme. Justice A. Melencio-Herrera whose incisive approach to legal problems is today missed in this Court. I reproduce here those views because they are highly persuasive to the conclusions I reach in the present controversy: I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such policy. The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted by the political departments of government in areas which fall within their authority, except only when such policies pose a clear and present danger to the life, liberty or property of the individual. This case does not involve such a factual situation. However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human personality, destroys self-confidence and eviscerates one's self-respect, which in the long run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and homes; it is an antithesis to individual reliance and reliability as well as personal industry which are the touchstones of real economic progress and national development. Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the government out of "legalized" gambling will, in the long run, be more than offset and negated by the irreparable damage to the people's moral values. Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed and becomes untenable when it itself engages in the very activity it seeks to eradicate. One can go through the Court's decision today and mentally replace the activity referred to therein as gambling, which is legal only because it is authorized by law and run by the government, with the activity known as prostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised, and "regulated" by the government, in return for the substantial revenues it would yield the

government to carry out its laudable projects, such as infrastructure and social amelioration? The question, I believe, answers itself. I submit that the sooner the legislative department outlaws all forms of gambling, as a fundamental state policy, and the sooner the executive implements such policy, the better it will be for the nation. We presently have the sweepstakes lotteries; we already have the PAGCOR's gambling casinos; the Filipino people will soon, if plans do not miscarry, be initiated into an even more sophisticated and encompassing nationwide gambling network known as the "on-line hi-tech lotto system." To be sure, it is not wealth producing; it is not export oriented. It will draw from existing wealth in the hands of Filipinos and transfer it into the coffers of the PCSO and its foreign partners at a price of further debasement of the moral standards of the Filipino people, the bulk of whom are barely subsisting below the poverty line. 1. It is said that petitioners 1 have no locus standi to bring this suit even as they challenge the legality and constitutionality of a contract of lease between the PCSO, a government-owned corporation and the PGMC, a private corporation with substantial (if not controlling) foreign composition and content. Such contract of lease contains the terms and conditions under which an "on-line hi-tech lotto system" will operate in the country. As the ponente of the extended, unsigned en banc resolution in Valmonte v. PCSO, (G.R. No. 78716 and G.R. No. 79084, 22 September 1987), I would be the last to downgrade the rule, therein reiterated, that in order to maintain a suit challenging the constitutionality and/or legality of a statute, order or regulation or assailing a particular governmental action as done with grave abuse of discretion or with lack of jurisdiction, the petitioner must show that he has a clear personal or legal right that would be violated with the enforcement of the challenged statute, order or regulation or the implementation of the questioned governmental action. But, in my considered view, this rule maybe (and should be) relaxed when the issue involved or raised in the petition is of such paramount national interest and importance as to dwarf the above procedural rule into a barren technicality. As a unanimous Court en banc aptly put it in De Guia vs. COMELEC, G.R. No. 104712, 6 May 1992, 208 SCRA 420. Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for re-election, much less, that he is prejudiced by the election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-4640, October 12, 1976. 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533) He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action. However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmea vs. Commission on Elections. I view the present case as falling within the De Guia case doctrine. For, when the contract of lease in question seeks to establish and operate a nationwide gambling network with substantial if not controlling foreign participation, then the issue is of paramount national interest and importance as to justify and warrant a relaxation of the above-mentioned procedural rule on locus standi. 2. The charter of the PCSO Republic Act No. 1169 as amended by BP No. 42 insofar as relevant, reads:

Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general powers conferred in section thirteen of Act Numbered One Thousand Four Hundred Fifty-Nine, as amended, and shall have the authority: A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules and regulations as shall be promulgated by the Board of Directors. B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and activities which may be profit-oriented, by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, except for the activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services, and/or charitable grants: Provided, That such investments will not compete with the private sector in areas where investments are adequate as may be determined by the National Economic and Development Authority. It is at once clear from the foregoing legal provisions that, while the PCSO charter allows the PCSO to itself engage in lotteries, it does not however permit the PCSO to undertake or engage in lotteries in "collaboration, association or joint venture" with others. The palpable reason for this prohibition is, that PCSO should not and cannot be made a vehicle for an otherwise prohibited foreign or domestic entity to engage in lotteries (gambling activities) in the Philippines. The core question then is whether the lease contract between PCSO and PGMC is a device whereby PCSO will engage in lottery in collaboration, association or joint venture with another, i.e. PGMC. I need not go here into the details and different specific features of the contract to show that it is a joint venture between PCSO and PGMC. That has been taken care of in the opinion of Mr. Justice Davide to which I fully subscribe. On a slightly different plane and, perhaps simplified, I consider the agreement or arrangement between the PCSO and PGMC a joint venture because each party to the contract contributes its share in the enterprise or project. PGMC contributes its facilities, equipment and know-how (expertise). PCSO contributes (aside from its charter) the market, directly or through dealers and this to me is most important in the totality or mass of the Filipino gambling elements who will invest in lotto tickets. PGMC will get its 4.9% of gross receipts (with assumption of certain risks in the course of lotto operations); the residue of the whole exercise will go to PCSO. To any person with a minimum of business know-how, this is a joint venture between PCSO and PGMC, plain and simple. But assuming ex gratia argumenti that such arrangement between PCSO and PGMC is not a joint venture between the two of them to install and operate an "on-line hi-tech lotto system" in the country, it can hardly be denied that it is, at the very least, an association or collaboration between PCSO and PGMC. For one cannot do without the other in the installation, operation and, most importantly, marketing of the entire enterprise or project in this country. Indeed, the contract of lease in question is a clear violation of Republic Act No. 1169 as amended by BP No. 42 (the PCSO charter).

Having arrived at the conclusion that the contract of lease in question between the PCSO and PGMC is illegal and, therefore, invalid, I find it unnecessary to dwell on the other issues raised in the pleadings and arguments of the parties. I, therefore, vote to give DUE COURSE to the petition and to declare the contract of lease in question between PCSO and PGMC, for the reasons aforestated, of no force and effect. MELO, J., dissenting: I submit that the petition before the Court deserves no less than outright dismissal for the reason that petitioners, as concerned citizens and as taxpayers and as members of Congress, do not possess the necessary legal standing to assail the validity of the contract of lease entered into by the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation relative to the establishment and operation of an "On-line Hi-Tech Lottery System" in the country. As announced in Lamb vs. Phipps (22 Phil. [1912], 559), "[J]udicial power in its nature, is the power to hear and decide causes pending between parties who have the right to sue and be sued in the courts of law and equity." Necessarily, this implies that a party must show a personal stake in the outcome of the controversy or an injury to himself that can be addressed by a favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the court's remedial powers in his behalf (Warth vs. Seldin, 422 U.S. 490; Guzman vs. Marrero, 180 U.S. 81; McMicken vs. United States, 97 U.S. 204). Here, we have yet to see any of petitioners acquiring a personal stake in the outcome of the controversy or being placed in a situation whereby injury may be sustained if the contract of lease in question is implemented. It may be that the contract has somehow evoked public interest which petitioners claim to represent. But the alleged public interest which they pretend to represent is not only broad and encompassing but also strikingly and veritably indeterminate that one cannot truly say whether a handful of the public, like herein petitioners, may lay a valid claim of representation in behalf of the millions of citizens spread all over the land who may have just as many varied reactions relative to the contract in question. Any effort to infuse personality on petitioners by considering the present case as a "taxpayer's suit" could not cure the lack of locus standi on the part of petitioners. As understood in this jurisdiction, a "taxpayer's suit" refers to a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation (Pascual vs. Secretary of Public Works, 110 Phil. [1960] 331; Maceda vs. Macaraig, 197 SCRA [1991]; Lozada vs. COMELEC, 120 SCRA [1983] 337; Dumlao vs. COMELEC, 95 SCRA [1980] 392; Gonzales vs. Marcos, 65 SCRA [1975] 624). It cannot be overstressed that no public fund raised by taxation is involved in this case. In fact, it is even doubtful if the rentals which the PCSO will pay to the lessor for its operation of the lottery system may be regarded as "public fund". The PCSO is not a revenue- collecting arm of the government. Income or money realized by it from its operations will not and need not be turned over to the National Treasury. Rather, this will constitute corporate funds which will remain with the corporation to finance its various activities as authorized in its charter. And if ever some semblance of "public character" may be said to attach to its earnings, it is simply because PCSO is a government-owned or controlled entity and not a purely private enterprise. It must be conceded though that a "taxpayer's suit" had been allowed in a number of instances in this jurisdiction. For sure, after the trial was blazed by Pascual vs. Secretary of Public Works, supra, several more followed. It is to be noted, however, that in those occasions where this Court allowed such a suit, the case invariably involved either the constitutionality of a statute or the legality of the disbursement of

public funds through the enforcement of what was perceived to be an invalid or unconstitutional statute or legislation (Pascual, supra; Philippine Constitution Association, Inc. vs. Jimenez, 15 SCRA [1965] 479; Philippine Constitution Association, Inc. vs. Mathay, 18 SCRA [1966] 300; Tolentino vs. COMELEC, 41 SCRA [1971] 702; Pelaez vs. Auditor General, 15 SCRA [1965] 569; Iloilo Palay and Corn Planters Association vs. Feliciano, 13 SCRA [1965] 377). The case before us is not a challenge to the validity of a statute or an attempt to restrain expenditure of public funds pursuant to an alleged invalid congressional enactment. What petitioners ask us to do is to nullify a simple contract of lease entered into by a government-owned corporation with a private entity. That contract, as earlier pointed out, does not involve the disbursement of public funds but of strictly corporate money. If every taxpayer, claiming to have interest in the contract, no matter how remote, could come to this Court and seek nullification of said contract, the day may come when the activities of government corporate entities will ground to a standstill on account of nuisance suits filed against them by persons whose supposed interest in the contract is as remote and as obscure as the interest of any man in the street. The dangers attendant thereto are not hard to discern and this Court must not allow them to come to pass. One final observation must be emphasized. When the petition at bench was filed, the Court decided to hear the case on oral argument on the initial perception that a constitutional issue could be involved. However, it now appears that no question of constitutional dimension is at stake as indeed the majority barely touches on such an issue, concentrating as it does on its interpretation of the contract between the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation. I, therefore, vote to dismiss the petition. PUNO, J., dissenting: At the outset, let me state that my religious faith and family upbringing compel me to regard gambling, regardless of its garb, with hostile eyes. Such antagonism tempts me to view the case at bench as a struggle between good and evil, a fight between the forces of light against the forces of darkness. I will not, however, yield to that temptation for we are not judges of the Old Testament type who were not only arbiters of law but were also high priests of morality. I will therefore strictly confine the peregrinations of my mind to the legal issues for resolution: (1) whether or not the petitioners have the Locus standi to file the petition at bench; and (2) assuming their locus standi, whether or not the Contract of Lease between PCSO and PGMC is null and void considering: (a) section 1 of R.A. No. 1169, as amended by B.P. Blg. 42 (Charter of PCSO) which prohibits PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity"; (b) Act No. 3836 which requires a congressional franchise before any person or entity can establish and operate a telecommunication system; (c) section 11, Art. XII of the Constitution, which requires that for a corporation to operate a public utility, at least 60% of its capital must be owned by Filipino citizens; and (d) R.A. No. 7042, otherwise known as the "Foreign Investments Act", which includes all forms of gambling in its "negative list." While the legal issues abound, I deferentially submit that the threshold issue is the locus standi, or standing to sue, of petitioners. The petition describes petitioner Kilosbayan, Inc., as a non-stock corporation composed of "civic spirited citizens, pastors, priests, nuns, and lay leaders who are committed to the cause of truth, justice, and national renewal." 1 Petitioners Jovito R. Salonga, Cirilo A. Rigos, Ernie Camba, Emilio C. Capulong, Jr., Jose Abcede, Christine Tan, Felipe L. Gozon, Rafael G.

Fernando, Raoul V. Victorino, Jose Cunanan, and Quintin S. Doromal joined the petition in their capacity as trustees of Kilosbayan, Inc., and as taxpayers and concerned citizens. 2 Petitioners Freddie Webb and Wigberto Taada joined the petition as senators, taxpayers and concerned citizens. 3 Petitioner Joker P. Arroyo joined the petition as a member of the House of Representative, a taxpayer and a concerned citizen. 4 With due respect to the majority opinion, I wish to focus on the interstices of locus standi, a concept described by Prof. Paul Freund as "among the most amorphous in the entire domain of public law." The requirement of standing to sue inheres from the definition of judicial power. It is not merely a technical rule of procedure which we are at liberty to disregard. Section 1, Article VIII of the Constitution provides: xxx xxx xxx 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. (Italics supplied) The phrase "actual controversies involving rights which are legally demandable and enforceable" has acquired a cultivated meaning given by courts. It spells out the requirements that must be satisfied before one can come to court to litigate a constitutional issue. Our distinguished colleague, Mr. Justice Isagani A. Cruz, gives a shorthand summary of these requirements when he states that no constitutional question will be heard and decided by courts unless there is a showing of the following: . . . (1) there must be an actual case or controversy; (2) the question of constitutionality must be raised by the proper party; (3) the constitutional question must be raised at the earliest possible opportunity; and (4) the decision of the constitutional question must be necessary to the determination of the case itself. 5 The complexion of the rule on locus standi has been undergoing a change. Mr. Justice Cruz has observed the continuing relaxation of the rule on standing, 6 thus: xxx xxx xxx A proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of. Until and unless such actual or potential injury is established, the complainant cannot have the legal personality to raise the constitutional question. In Tileson v. Ullmann, a physician questioned the constitutionality of a law prohibiting the use of contraceptives, upon the ground that it might prove dangerous to the life or health of some of his patients whose physical condition would not enable them to bear the rigors of childbirth. The court dismissed the challenge, holding that the patients of the physician and not the physician himself were the proper parties. In Cuyegkeng v. Cruz, the petitioner challenged in a quo warranto proceeding the title of the respondent who, he claimed, had been appointed to the board of medical examiners in violation of the provisions of the Medical Act of 1959. The Supreme Court dismissed the petition, holding that Cuyegkeng had not made a claim to the position held by Cruz and therefore could not be regarded as a proper party who had sustained an injury as a result of the questioned act.

In People v. Vera, it was held that the Government of the Philippines was a proper party to challenge the constitutionality of the Probation Act because, more than any other, it was the government itself that should be concerned over the validity of its own laws. In Ex Parte Levitt, the petitioner, an American taxpayer and member of the bar, filed a motion for leave to question the qualifications of Justice Black who, he averred, had been appointed to the U.S. Supreme Court in violation of the Constitution of the United States. The Court dismissed the petition, holding that Levitt was not a proper party since he was not claiming the position held by Justice Black. The rule before was that an ordinary taxpayer did not have the proper party personality to question the legality of an appropriation law since his interest in the sum appropriated was not substantial enough. Thus, in Custodio v. Senate President, a challenge by an ordinary taxpayer to the validity of a law granting back pay to government officials, including members of Congress, during the period corresponding to the Japanese Occupation was dismissed as having been commenced by one who was not a proper party. Since the first Emergency Powers Cases, however, the rule has been changed and it is now permissible for an ordinary taxpayer, or a group of taxpayers, to raise the question of the validity of an appropriation law. As the Supreme Court then put it. "The transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." In Tolentino v. Commission on Elections, it was held that a senator had the proper party personality to seek the prohibition of a plebiscite for the ratification of a proposed constitutional amendment. In PHILCONSA v. Jimenez, an organization of taxpayers and citizens was held to be a proper party to question the constitutionality of a law providing for special retirement benefits for members of the legislature. In Sanidad v. Commission on Elections, the Supreme Court upheld the petitioners as proper parties, thus As a preliminary resolution, We rule that the petitioners in L-44640 (Pablo C. Sanidad and Pablito V. Sanidad) possess locus standi to challenge the constitutional premise of Presidential Decree Nos. 991, 1031, and 1033. It is now an ancient rule that the valid source of a statute Presidential Decrees are of such nature may be contested by one who will sustain a direct injury as a result of its enforcement. At the instance of taxpayers, laws providing for the disbursement of public funds may be enjoined, upon the theory that the expenditure of public funds by an officer of the State for the purpose of executing an unconstitutional act constitutes a misapplication of such funds. The breadth of Presidential Decree No. 991 carries an appropriation of Five Million Pesos for the effective implementation of its purposes. Presidential Decree No. 1031 appropriates the sum of Eight Million Pesos to carry out its provisions. The interest of the aforenamed petitioners as taxpayers in the lawful expenditure of these amounts of public money sufficiently clothes them with that personality to litigate the validity of the Decrees appropriating said funds. Moreover, as regard taxpayer's suits, this Court enjoys that open discretion to entertain the same or not. For the present case, We deem it sound to exercise that discretion affirmatively so that the authority upon which the disputed Decrees are predicated may be inquired into. In Lozada v. Commission on Elections, however, the petitioners were held without legal standing to demand the filling of vacancies in the legislature because they had only "a generalized interest' shared with the rest of the citizenry."

Last July 30, 1993, we further relaxed the rule on standing in Oposa, et al. v. Hon. Fulgencio S. Factoran, Jr., 7 where we recognized the locus standi of minors representing themselves as well as generations unborn to protect their constitutional right to a balanced and healthful ecology. I am perfectly at peace with the drift of our decisions liberalizing the rule on locus standi. The once stubborn disinclination to decide constitutional issues due to lack of locus standi is incompatible with the expansion of judicial power mandated in section 1 of Article VIII of the Constitution, i.e., "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." As we held thru the ground breaking ponencia of Mr. Justice Cruz in Daza v. Singson, 8 this provision no longer precludes the Court from resolving political questions in proper cases. But even perusing this provision as a constitutional warrant for the court to enter the once forbidden political thicket, it is clear that the requirement of locus standi has not been jettisoned by the Constitution for it still commands courts in no uncertain terms to settle only "actual controversies involving rights which are legally demandable and enforceable." Stated otherwise, courts are neither free to decide all kinds of cases dumped into their laps nor are they free to open their doors to all parties or entities claiming a grievance. The rationale for this constitutional requirement of locus standi is by no means trifle. It is intended "to assure a vigorous adversary presentation of the case, and, perhaps more importantly to warrant the judiciary's overruling the determination of a coordinate, democratically elected organ of government." 9 It thus goes to the very essence of representative democracies. As Mr. Justice Powell carefully explained in U.S. v. Richardson, 10 viz: Relaxation of standing requirements is directly related to the expansion of judicial power. It seems to me inescapable that allowing unrestricted taxpayer or citizen standing would significantly alter the allocation of power at the national level, with a shift away from a democratic form of government. I also believe that repeated and essentially head-on confrontations between the life-tenured branch and the representative branches of government will not, in the long run, be beneficial to either. The public confidence essential to the former and the vitality critical to the latter may well erode if we do not exercise self- restraint in the utilization of our power to negative the actions of the other branches. We should be ever mindful of the contradictions that would arise if a democracy were to permit at large oversight of the elected branches of government by a non-representative, and in large measure insulated, judicial branch. Moreover, the argument that the Court should allow unrestricted taxpayer or citizen standing underestimates the ability of the representative branches of the Federal Government to respond to the citizen pressure that has been responsible in large measure for the current drift toward expanded standing. Indeed, taxpayer or citizen advocacy, given its potentially broad base, is precisely the type of leverage that in a democracy ought to be employed against the branches that were intended to be responsive to public attitudes about the appropriate operation of government. "We must as judges recall that, as Mr. Justice Holmes wisely observed, the other branches of Government are ultimate guardians of the liberties and welfare of the people in quite as great a degree as the courts." Unrestrained standing in federal taxpayer or citizen suits would create a remarkably illogical system of judicial supervision of the coordinate branches of the Federal Government. Randolph's proposed Council of Revision, which was repeatedly rejected by the Framers, at least had the virtue of being systematic; every law passed by the legislature automatically would have been previewed by the judiciary before the law could take effect. On the other hand, since the judiciary cannot select the taxpayers or citizens who bring suit or the nature of the suits, the allowance of public actions would produce uneven and sporadic review, the quality of which would be influenced by the resources and skill of the particular plaintiff. And issues would be presented in abstract form, contrary to the Court's recognition that "judicial review is

effective largely because it is not available simply at the behest of a partisan faction, but is exercised only to remedy a particular, concrete injury." Sierra Club v. Morton, 405 U.S. 727, 740-741, n. 16 (1972). A lesser but not insignificant reason for screening the standing of persons who desire to litigate constitutional issues is economic in character. Given the sparseness of our resources, the capacity of courts to render efficient judicial service to our people is severely limited. For courts to indiscriminately open their doors to all types of suits and suitors is for them to unduly overburden their dockets, and ultimately render themselves ineffective dispensers of justice. To be sure, this is an evil that clearly confronts our judiciary today. Prescinding from these premises, and with great reluctance, I am not prepared to concede the standing to sue of petitioners. On a personal level, they have not shown that elemental injury in fact which will endow them with a standing to sue. It must be stressed that petitioners are in the main, seeking the nullity not of a law but of a Contract of Lease. Not one of the petitioners is a party to the Contract of Lease executed between PCSO and PGMC. None of the petitioners participated in the bidding, and hence they are not losing bidders. They are complete strangers to the contract. They stand neither to gain nor to lose economically by its enforcement. It seems to me unusual that an unaffected third party to a contract could be allowed to question its validity. Petitioner Kilosbayan cannot justify this officious interference on the ground of its commitment to "truth, justice and national renewal." Such commitment to truth, justice and national renewal, however noble it may be, cannot give Kilosbayan a roving commission to check the validity of contracts entered into by the government and its agencies. Kilosbayan is not a private commission on audit. Neither can I perceive how the other petitioners can be personally injured by the Contract of Lease between PCSO and PGMC even if petitioner Salonga assails as unmitigated fraud the statistical probability of winning the lotto as he compared it to the probability of being struck twice by lightning. The reason is obvious: none of the petitioners will be exposed to this alleged fraud for all of them profess to abjure playing the lotto. It is self-evident that lotto cannot physically or spiritually injure him who does not indulge in it. Petitioners also contend they have locus standi as taxpayers. But the case at bench does not involve any expenditure of public money on the part of PCSO. In fact, paragraph 2 of the Contract of Lease provides that it is PGMC that shall build, furnish, and maintain at its own expense and risk the facilities for the OnLine Lottery System of PCSO and shall bear all maintenance and other costs. Thus, PGMC alleged it has already spent P245M in equipment and fixtures and would be investing close to P1 billion to supply adequately the technology and other requirements of PCSO. 11 If no tax money is being illegally deflected in the Contract of Lease between PCSO and PGMC, petitioners have no standing to impugn its validity as taxpayers. Our ruling in Dumlao v. Comelec, 12 settled this issue well enough, viz: However, the statutory provisions questioned in this case, namely, sec. 7, BP Blg. 51, and sections 4, 1, and 5 BP Blg. 52, do not directly involve the disbursement of public funds. While, concededly, the elections to be held involve the expenditure of public moneys, nowhere in their Petition do said petitioners allege that their tax money is "being extracted and spent in violation of specific constitutional protections against abuses of legislative power" (Flast v. Cohen, 392 U.S. 83 [1960]), or that there is a misapplication of such funds by respondent COMELEC (see Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]), or that public money is being deflected to any improper purpose. Neither do petitioners seek to restrain respondent from wasting public funds through the enforcement of an invalid or unconstitutional law. (Philippine Constitution Association vs. Mathay, 18 SCRA 300 [1966]), citing Philippine Constitution Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the institution of a taxpayer's suit, per se, is no

assurance of judicial review. As held by this Court in Yan vs. Macapagal (43 SCRA 677 [1972]), speaking through our present Chief Justice, this Court is vested with discretion as to whether or not a taxpayer's suit should be entertained. Next, petitioners plead their standing as "concerned citizens." As citizens, petitioners are pleading that they be allowed to advocate the constitutional rights of other persons who are not before the court and whose protection is allegedly their concern. A citizen qua citizen suit urges a greater relaxation of the rule on locus standi. I feel no aversion to the further relaxation of the rule on standing to accommodate what in other jurisdictions is known as an assertion of jus tertii in constitutional litigation provided the claimant can demonstrate: (1) an injury in fact to himself, and (2) the need to prevent the erosion of a preferred constitutional right of a third person. As stressed before, the first requirement of injury in fact cannot be abandoned for it is an essential element for the exercise of judicial power. Again, as stressed by Mr. Justice Powell, viz: 13 The revolution in standing doctrine that has occurred, particularly in the 12 years since Baker v. Carr, supra, has not meant, however, that standing barriers have disappeared altogether. As the Court noted in Sierra Club, "broadening the categories of injury that may be alleged in support of standing is a different matter from abandoning the requirement that the party seeking review must himself have suffered an injury." 405 U.S., at 738 . . . Indeed, despite the diminution of standing requirements in the last decade, the Court has not broken with the traditional requirement that, in the absence of a specific statutory grant of the right of review, a plaintiff must allege some particularized injury that sets him apart from the man on the street. I recognize that the Court's allegiance to a requirement of particularized injury has on occasion required a reading of the concept that threatens to transform it beyond recognition. E.G., Baker v. Carr, supra; Flast v. Cohen, supra. But despite such occasional digressions, the requirement remains, and I think it does so for the reasons outlined above. In recognition of those considerations, we should refuse to go the last mile towards abolition of standing requirements that is implicit in broadening the "precarious opening" for federal taxpayers created by Flast, see 392 U.S., at 116 (Mr. Justice Fortas, concurring) or in allowing a citizen qua citizen to invoke the power of the federal courts to negative unconstitutional acts of the Federal Government. In sum, I believe we should limit the expansion of federal taxpayer and citizen standing in the absence of specific statutory authorization to an outer boundary drawn by the results in Flast and Baker v. Carr. I think we should face up to the fact that all such suits are an effort "to employ a federal court as a forum in which to air . . . generalized grievances about the conduct of government or the allocation of power in the Federal System." Flast v. Cohen, 392 U.S., at 106. The Court should explicitly reaffirm traditional prudential barriers against such public actions. My reasons for this view are rooted in respect for democratic processes and in the conviction that "[t]he powers of the federal judiciary will be adequate for the great burdens placed upon them only if they are employed prudently, with recognition of the strengths as well as the hazards that go with our kind of representative government." Id., at 131 The second requirement recognizes society's right in the protection of certain preferred rights in the Constitution even when the rightholders are not before the court. The theory is that their dilution has a substantial fall out detriment to the rights of others, hence the latter can vindicate them. In the case at bench, it is difficult to see how petitioners can satisfy these two requirements to maintain a jus tertii claim. They claim violation of two constitutional provisions, to wit:

Section 1, Article XIII. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. and Section 11, Article XII. - No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorizations be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizen of the Philippines. Section 1, Article XIII of the Constitution cannot be the matrix of petitioners' jus tertii claim for it expresses no more than a policy direction to the legislative in the discharge of its ordained duty to give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities and remove cultural inequities by equitably diffusing wealth and political power for the common good. Whether the act of the legislature in amending the charter of PCSO by giving it the authority to conduct lotto and whether the Contract of Lease entered into between PCSO and PGMC are incongruent to the policy direction of this constitutional provision is a highly debatable proposition and can be endlessly argued. Respondents steadfastly insist that the operation of lotto will increase the revenue base of PCSO and enable government to provide a wider range of social services to the people. They also allege that the operation of high-tech lotto will eradicate illegal jueteng. Petitioners are scandalized by this submission. They dismiss gambling as evil per se and castigate government for attempting to correct a wrong by committing another wrong. In any event, the proper forum for this debate, however cerebrally exciting it may be, is not this court but congress. So we held in PCSO v. Inopiquez, to wit: 14 By bringing their suit in the lower court, the private respondents in G.R. No. 79084 do not question the power of PCSO to conduct the Instant Sweepstakes game. Rather, they assail the wisdom of embarking upon this project because of their fear of the "pernicious repercussions" which may be brought about by the Instant Sweepstakes Game which they have labelled as "the worst form of gambling" which thus "affects the moral values" of the people. The Court, as held in several cases, does not pass upon questions of wisdom, justice, or expediency of legislation and executive acts. It is not the province of the courts to supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. (Italics supplied)

I am not also convinced that petitioners can justify their locus standi to advocate the rights of hypothetical third parties not before the court by invoking the need to keep inviolate section 11, Article XII of the Constitution which imposes a nationality requirement on operators of a public utility. For even assuming arguendo that PGMC is a public utility, still, the records do not at the moment bear out the claim of petitioners that PGMC is a foreign owned and controlled corporation. This factual issue remains unsettled and is still the subject of litigation by the parties in the Securities and Exchange Commission. We are not at liberty to anticipate the verdict on this contested factual issue. But over and above this consideration, I respectfully submit that this constitutional provision does not confer on third parties any right of a preferred status comparable to the Bill of Rights whose dilution will justify petitioners to vindicate them in behalf of its rightholders. The legal right of hypothetical third parties they profess to advocate is to my mind too impersonal, too unsubstantial, too indirect, too amorphous to justify their access to this Court and the further lowering of the constitutional barrier of locus standi. Again, with regret, I do not agree that the distinguished status of some of the petitioners as lawmakers gives them the appropriate locus standi. I cannot perceive how their constitutional rights and prerogatives as legislators can be adversely affected by the contract in question. Their right to enact laws for the general conduct of our society remains unimpaired and undiminished. 15 Their status as legislators, notwithstanding, they have to demonstrate that the said contract has caused them to suffer a personal, direct, and substantial injury in fact. They cannot simply advance a generic grievance in common with the people in general. I am not unaware of our ruling in De Guia v. Comelec, 16 viz: Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for reelection, much less, that he is prejudiced by the election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-44640, October 12, 1976, 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533). He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action. However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmena vs. Commission on Elections. It is my respectful submission, however, that we should re-examine de Guia. It treated the rule on locus standi as a mere procedural rule. It is not a plain procedural rule but a constitutional requirement derived from section 1, Article VIII of the Constitution which mandates courts of justice to settle only "actual controversies involving rights which are legally demandable and enforceable." The phrase has been construed since time immemorial to mean that a party in a constitutional litigation must demonstrate a standing to sue. By downgrading the requirement on locus standi as a procedural rule which can be discarded in the name of public interest, we are in effect amending the Constitution by judicial fiat. De Guia would also brush aside the rule on locus standi if a case raises an important issue. In this regard, I join the learned observation of Mr. Justice Feliciano: "that it is not enough for the Court simply to invoke 'public interest' or even 'paramount considerations of national interest,' and to say that the specific requirements of such public interest can only be ascertained on a 'case to case' basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close

to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen." I also submit that de Guia failed to perceive that the rule on locus standi has little to do with the issue posed in a case, however, important it may be. As well pointed out in Flast v. Cohen: 17 The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated. The "gist of the question of standing" is whether the party seeking relief has "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions." Baker v. Carr, 369 U.S. 186, 204 (1962). In other words, when standing is placed in issue in a case, the question is whether the person whose standing is challenged is a proper party to request an adjudication of a particular issue and not whether the issue itself is justiciable. Thus, a party may have standing in a particular case, but the federal court may nevertheless decline to pass on the merits of the case because, for example, it presents a political question. A proper party is demanded so that federal courts will not be asked to decide "illdefined controversies over constitutional issues," United public Workers v. Mitchell, 330 U.S. 75, 90 (1947), or a case which is of "a hypothetical or abstract character," Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240 (1937). It is plain to see that in de Guia, the court took an unorthodox posture, to say the least. It held there was no proper party before it, and yet it resolved the issues posed by the petition. As there was no proper party before the court, its decision is vulnerable to be criticized as an advisory opinion. With due respect, the majority decision appears to have set a dangerous precedent by unduly trivializing the rule on locus standi. By its decision, the majority has entertained a public action to annul a private contract. In so doing, the majority may have given sixty (60) million Filipinos the standing to assail contracts of government and its agencies. This is an invitation for chaos to visit our law on contract, and certainly will not sit well with prospective foreign investors. Indeed, it is difficult to tread the path of the majority on this significant issue. The majority granted locus standi to petitioners because of lack of any other party with more direct and specific interest. But one has standing because he has standing on his own and standing cannot be acquired because others with standing have refused to come to court. The thesis is also floated that petitioners have standing as they can be considered taxpayers with right to file derivative suit like a stockholder's derivative suit in private corporations. The fact, however, is that PCSO is not a private but a quasi-public corporation. Our law on private corporation categorically sanctions stockholder's derivative suit. In contrast, our law on public corporation does not recognize this so-called taxpayer's derivative suit. Hence, the idea of a taxpayer's derivative suit, while alluring, has no legal warrant. Our brethren in the majority have also taken the unprecedented step of striking down a contrast at the importunings of strangers thereto, but without justifying the interposition of judicial power on any felt need to prevent violation of an important constitutional provision. The contract in question was voided on the sole ground that it violated an ordinary statute, section 1 of R.A. 1169, as amended by B.P. Blg. 42. If there is no provision of the Constitution that is involved in the case at bench, it boggles the mind how the majority can invoke considerations of national interest to justify its abandonment of the rule on locus standi. The volume of noise created by the case cannot magically convert it to a case of paramount national importance. By its ruling, the majority has pushed the Court in unchartered water bereft of any compass, and it may have foisted the false hope that it is the repository of all remedies.

If I pay an unwavering reverence to the rule of locus standi, it is because I consider it as a touchstone in maintaining the proper balance of power among the three branches of our government. The survival of our democracy rests in a large measure on our ability to maintain this delicate equipoise of powers. For this reason, I look at judicial review from a distinct prism. I see it both as a power and a duty. It is a power because it enables the judiciary to check excesses of the Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, keeps the judiciary from overreaching the powers of the other branches of government. By balancing this duality, we are able to breathe life to the principle of separation of powers and prevent tyranny. To be sure, it is our eternal concern to prevent tyranny but that includes tyranny by ourselves. The Constitution did not install a government by the judiciary, nay, not a government by the unelected. In offering this submission, I reject the sublimal fear that an unyielding insistence on the rule on locus standi will weaken the judiciary vis-a-vis the other branches of government. The hindsight of history ought to tell us that it is not power per se that strengthens. Power unused is preferable than power misused. We contribute to constitutionalism both by the use of our power to decide and its non use. As well said, the cases we decide are as significant as the cases we do not decide. Real power belongs to him who has power over power. IN VIEW WHEREOF, and strictly on the ground of lack of locus standi on the part of petitioners, I vote to DENY the petition. VITUG, J., dissenting: Judicial power encompasses both an authority and duty to resolve "actual controversies involving rights which are legally demandable and enforceable" (Article VIII, Section 1, 1987 Constitution). As early as the case of Lamb vs. Phipps, 1 this Court ruled: "Judicial power, in its nature, is the power to hear and decide causes pending between parties who have the right to sue in the courts of law and equity." 2 An essential part of, and corollary to, this principle is the locus standi of a party litigant, referring to one who is directly affected by, and whose interest is immediate and substantial in, the controversy. The rule requires that a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. 3 If it were otherwise, the exercise of that power can easily become too unwieldy by its sheer magnitude and scope to a point that may, in no small degree, adversely affect its intended essentiality, stability and consequentiality. Locus standi, nevertheless, admits of the so-called "taxpayer's suit." Taxpayer's suits are actions or proceedings initiated by one or more taxpayers in their own behalf or, conjunctively, in representation of others similarly situated for the purpose of declaring illegal or unauthorized certain acts of public officials which are claimed to be injurious to their common interests as such taxpayers (Cf. 71 Am Jur 2d., 179180). The principle is predicated upon the theory that taxpayers are, in equity, the cestui que trust of tax funds, and any illegal diminution thereof by public officials constitutes a breach of trust even as it may result in an increased burden on taxpayers (Haddock vs. Board of Public Education, 86 A 2d 157; Henderson vs. McCormick, 17 ALR 2d 470). Justice Brandeis of the United States Supreme Court, in his concurring opinion in Ashwander vs. Tennessee Valley Authority (297 U.S. 288), said: . . . . The Court will not pass upon the validity of a statute upon complaint of one who fails to show that he is injured by its operation. Tyler v. The Judges, 179 U.S. 405; Hendrick v. Maryland, 234 U.S. 610, 621. Among the many applications of this rule, none is more striking than the denial of the right of challenge to

one who lacks a personal or property right. Thus, the challenge by a public official interested only in the performance of his official duty will not be entertained. Columbus & Greenville Ry. v. Miller, 283 U.S. 96, 99-100. In Fairchild v. Hughes, 258 U.S. 126, the Court affirmed the dismissal of a suit brought by a citizen who sought to have the Nineteenth Amendment declared unconstitutional. In Massachusetts v. Mellon, 262 U.S. 447, the challenge of the federal Maternity Act was not entertained although made by the Commonwealth on behalf of all its citizens." Justice Brandeis' view, shared by Justice Frankfurter in Joint Anti-Fascist Refugee Commission vs. McGrath (351 U.S. 123), was adopted by the U.S. Supreme Court in Flast vs. Cohen (392 U.S. 83) which held that it is only when a litigant is able to show such a personal stake in the controversy as to assure a concrete adverseness in the issues submitted that legal standing can attach. A "taxpayer's suit," enough to confer locus standi to a party, we have held before, is understood to be a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation. 4 It is not enough that the dispute concerns public funds. A contrary rule could easily lead to a limitless application of the term "taxpayer's suit," already by itself a broad concept, since a questioned act of government would almost so invariably entail, as a practical matter, a financial burden of some kind. To be sure, serious doubts have even been raised on the propriety and feasibility of unqualifiedly recognizing the "taxpayer's suit" as an exception from the standard rule of requiring a party who invokes the exercise of judicial power to have a real and personal interest or a direct injury in the outcome of a controversy. This Court has heretofore spoken on the matter, at times even venturing beyond the usual understanding of its applicability in the name of national or public interest. It is remarkable, nevertheless, that the accepted connotation of locus standi has still managed to be the rule, sanctioning, by way of exception, the so-called "taxpayer's suit" which courts accept on valid and compelling reasons. A provision which has been introduced by the 1987 Constitution is a definition, for the first time in our fundamental law, of the term "judicial power," as such authority and duty of 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" (Article VIII, Section 1, Constitution). I take it that the provision has not been intended to unduly mutate, let alone to disregard, the long established rules on locus standi. Neither has it been meant, I most respectfully submit, to do away with the principle of separation of powers and its essential incidents such as by, in effect, conferring omnipotence on, or allowing an intrusion by, the courts in respect to purely political decisions, the exercise of which is explicitly vested elsewhere, and subordinate, to that of their own, the will of either the Legislative Department or the Executive Department both co- equal, independent and coordinate branches, along with the Judiciary, in our system of government. Again, if it were otherwise, there indeed would be truth to the charge, in the words of some constitutionalists, that "judicial tyranny" has been institutionalized by the 1987 Constitution, an apprehension which should, I submit, rather be held far from truth and reality. In sum, while any act of government, be it executive in nature or legislative in character, may be struck down and declared a nullity either because it contravenes an express provision of the Constitution or because it is perceived and found to be attended by or the result of grave abuse of discretion, amounting to lack or excess of jurisdiction, that issue, however, must first be raised in a proper judicial controversy. The Court's authority to look into and grant relief in such cases would necessitate locus standi on the part of party litigants. This requirement, in my considered view, is not merely procedural or technical but goes into the essence of jurisdiction and the competence of courts to take cognizance of justiciable disputes.

In Bugnay Construction and Development Corporation vs. Laron, 5 this Court ruled: . . . . Considering the importance to the public of a suit assailing the constitutionality of a tax law, and in keeping with the Court's duty, specially explicated in the 1987 Constitution, to determine whether or not the other branches of the Government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them, the Supreme Court may brush aside technicalities of procedure and take cognizance of the suit. (Citing Kapatiran vs. Tan, G.R. No. 81311, June 30, 1988.) However, for the above rule to apply, it is exigent that the taxpayer-plaintiff sufficiently show that he would be benefited or injured by the judgment or entitled to the avails of the suit as a real party in interest. (Citing Estate of George Litton vs. Mendoza, G.R. No. 49120, June 30, 1988.) Before he can invoke the power of judicial review, he must specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation (citing 11 Am. Jur. 761; Dumlao, et al. vs. Commission on Elections, 95 SCRA 392) and that he will sustain a direct injury as a result of the enforcement of the questioned statute or contract. (Citing Sanidad, et al. vs. Commission on Elections, et al., 73 SCRA 333.) It is not sufficient that he has merely a general interest common to all members of the public. (Citing Ex Parte Levitt, 302 U.S. 633, cited in 15 SCRA 497, Annotation.) As so well pointed out by Mr. Justice Camilo D. Quiason during the Court's deliberations, "due respect and proper regard for the rule on locus standi would preclude the rendition of advisory opinions and other forms of pronouncement on abstract issues, avoid an undue interference on matters which are not justiciable in nature and spare the Court from getting itself involved in political imbroglio." The words of Senate President Edgardo J. Angara, carry wisdom; we quote: The powers of the political branches of our government over economic policies is rather clear: the Congress is to set in broad but definite strokes the legal framework and structures for economic development, while the Executive provides the implementing details for realizing the economic ends identified by Congress and executes the same. xxx xxx xxx If each economic decision made by the political branches of government, particularly by the executive, are fully open to re-examination by the judicial branch, then very little, if any, reliance can be placed by private economic actors on those decisions. Investors would always have to factor in possible costs arising from judicially-determined changes affecting their immediate business, notwithstanding assurances by executive authorities. Judicial decisions are, in addition, inflexible and can never substitute for sound decision-making at the level of those who are assigned to execute the laws of the land. Since judicial power cannot be exercised unless an actual controversy is brought before the courts for resolution, decisions cannot be properly modified unless another appropriate controversy arises." (Sen. Edgardo J. Angara, "The Supreme Court in Economic Policy Making," Policy Review A Quarterly Journal of Policy Studies, Vol. 1, No. 1, January-March 1994, published by the Senate Policy Studies Group, pp. 2-3.) A further set-back in entertaining the petition is that it unfortunately likewise strikes at factual issues. The allegations to the effect that irregularities have been committed in the processing and evaluation of the bids to favor respondent PGMC; that the Malacaang Special Review Committee did not verify warranties

embodied in the contract; that the operation of telecommunication facilities is indispensable in the operation of the lottery system; the involvement of multi-national corporations in the operation of the online "hi-tech" lottery system, and the like, require the submission of evidence. This Court is not a trier of facts, and it cannot, at this time, resolve the above issues. Just recently, the Court has noted petitioners' manifestation of its petition with the Securities and Exchange Commission "for the nullification of the General Information Sheets of PGMC" in respect particularly to the nationality holdings in the corporation. The doctrine of primary jurisdiction would not justify a disregard of the jurisdiction of, nor would it permit us to now preempt, said Commission on the matter. Petitioners strongly assert, in an attempt to get the Court's concurrence in accepting the petition, that since lottery is a game of chance, the "lotto" system would itself be a "crime against morals" defined by Articles 195-199 6 of the Revised Penal Code. Being immoral and a criminal offense under the Revised Penal Code, petitioners contend, any special law authorizing gambling must, by all canons of statutory constructions, be interpreted strictly against the grantee. Citing previous decisions of this Court, they maintain that lottery is gambling, pure and simple, 7 and that this Court has consistently condemned the immorality and illegality of gambling to be a "national offense and not a minor transgression;" 8 "that it is a social scourge which must be stamped out;" 9 and, "that it is pernicious to the body politic and detrimental to the nation and its citizens." 10 I most certainly will not renounce this Court's above concerns. Nevertheless, the Court must recognize the limitations of its own authority. Courts neither legislate nor ignore legal mandates. Republic Act No. 1169, as amended, explicitly gives public respondent PCSO the authority and power "to hold and conduct sweepstakes races, lotteries, and other similar activities." In addition, it is authorized: c. To undertake any other activity that will enhance its funds generation, operations and funds management capabilities, subject to the same limitations provided for in the preceding paragraph. It shall have a Board of Directors, hereinafter designated the Board, composed of five members who shall be appointed, and whose compensation and term of office shall be fixed, by the President. xxx xxx xxx Sec.9. Powers and functions of the Board of Directors. The Board of Directors of the Office shall have the following powers and functions. (a) To adopt or amend such rules and regulations to implement the provisions of this Act. xxx xxx xxx (d) To promulgate rules and regulations for the operation of the Office and to do such act or acts as may be necessary for the attainment of its purposes and objectives. (Emphasis supplied). In People vs. Dionisio, 11 cited by the petitioners themselves, we remarked: "What evils should be corrected as pernicious to the body politic, and how correction should be done, is a matter primarily addressed to the discretion of the legislative department, not of the courts . . . ." In Valmonte vs. PCSO, 12 we also said:

The Court, as held in several cases, does not pass upon questions of wisdom, justice or expediency of legislation and executive acts. It is not the province of the courts to supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. The constraints on judicial power are clear. I feel, the Court must thus beg off, albeit not without reluctance, from giving due course to the instant petition. Accordingly, I vote for the dismissal of the petition. KAPUNAN, J., dissenting: I regret that I am unable to join my colleagues in the majority in spite of my own personal distaste for gambling and other gaming operations. Such considerations aside, I feel there are compelling reasons why the instant petition should be dismissed. I shall forthwith state the reasons why. Petitioners anchor their principal objections against the contract entered into between the Philippine Charity Sweepstakes Office (PCSO) and the PGMC on the ground that the contract entered into by the PCSO with the PGMC violates the PCSO Charter (R.A. No. 1169 as amended by B.P. Blg 427, specifically section 1 thereof which bars the said body from holding conducting lotteries "in collaboration, association or joint venture with any person association, company or entity."). However, a perusal of the petition reveals that the compelling reasons behind it, while based on apparently legal questions involving the contract between the PCSO and the PGMC, are prompted by the petitioners' moral objections against the whole idea of gambling operations operated by the government through the PCSO. The whole point of the petition, in essence, is a fight between good and evil, between the morality or amorality of lottery operations conducted on a wide scale involving millions of individuals and affecting millions of lives. Their media of opposition are the above stated defects in the said contract which they assail to be fatally defective. They come to this Court, as taxpayers and civic spirted citizens, asserting a right of standing on a transcendental issue which they assert to be of paramount public interest. Moral or legal questions aside, I believe that there are unfortunately certain standards 1 that have to be followed in the exercise of this Court's awesome power of review before this Court could even begin to assay the validity of the contract between the PCSO and the PGMC. This, in spite of the apparent expansion of judicial power granted by Section 1 of Article VIII of the 1987 Constitution. It is fundamental that such standards be complied with before this Court could even begin to explore the substantive issues raised by any controversy brought before it, for no issue brought before this court could possibly be so fundamental and paramount as to warrant a relaxation of the requisite rules for judicial review developed by settled jurisprudence inorder to avoid entangling this court in controversies which properly belong to the legislative or executive branches of our government. The potential harm to our system of government, premised on the concept of separation of powers, by the Court eager to exercise its powers and prerogatives at every turn, cannot be gainsaid. The Constitution does not mandate this Court to wield the power of judicial review with excessive vigor and alacrity in every area or at every turn, except in appropriate cases and controversies which meet established requirements for constitutional adjudication. Article VIII Sec. 1 of the Constitution notwithstanding, there are questions which I believe are still beyond the pale of judicial power. Moreover, it is my considered opinion that the instant petition does not meet the requirements set by this court for a valid exercise of judicial review.

Our Constitution expressly defines judicial power as including "the duty to settle actual cases and 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 a lack or excess of jurisdiction on the part of any branch or instrumentality of the government." 2 This constitutional requirement for an actual case and controversy limits this Court's power of review to precisely those suits between adversary litigants with real interests at stake 2 thus preventing it from making all sorts of hypothetical pronouncements on abstract, contingent and amorphous issues. The Court will therefore not pass upon the validity of an act of government or a statute passed by a legislative body without a requisite showing of injury. 3 A personal stake is essential, which absence renders our pronouncements gratuitous and certainly violative of the constitutional requirement for actual cases and controversies. The requirement for standing based on personal injury may of course be bypassed, as the petitioners in this case attempt to do, by considering the case as a "taxpayer suit" which would thereby clothe them with the personality they would lack under ordinary circumstances. However, the act assailed by the petitioners on the whole involves the generation rather than disbursement of public funds. In a line of cases starting from Pascual v. Secretary of Public Works 4 "taxpayer suits" have been understood to refer only to those cases where the act or statute assailed involves the illegal or unconstitutional disbursement of public funds derived from taxation. The main premise behind the "taxpayer suit" is that the pecuniary interest of the taxpayer is involved whenever there is an illegal or wasteful use of public funds which grants them the right to question the appropriation or disbursement on the basis of their contribution to government funds. 5 Since it has not been alleged that an illegal appropriation or disbursement of a fund derived from taxation would be made in the instant case, I fail to see how the petitioners in this case would be able to satisfy the locus standi requirement on the basis of a "taxpayer's suit". This alone should inhibit this Court from proceeding with the case at bench. The interest alleged and the potential injury asserted are far too general and hypothetical for us to rush into a judicial determination of what to me appears to be judgment better left to executive branch of our government. This brings me to one more important point: The idea that a norm of constitutional adjudication could be lightly brushed aside on the mere supposition that an issue before the Court is of paramount public concern does great harm to a democratic system which espouses a delicate balance between three separate but co-equal branches of government. It is equally of paramount public concern, certainly paramount to the survival of our democracy, that acts of the other branches of government are accorded due respect by this Court. Such acts, done within their sphere of competence, have been and should always be accorded with a presumption of regularity. When such acts are assailed as illegal or unconstitutional, the burden falls upon those who assail these acts to prove that they satisfy the essential norms of constitutional adjudication, because when we finally proceed to declare an act of the executive or legislative branch of our government unconstitutional or illegal, what we actually accomplish is the thwarting of the will of the elected representatives of the people in the executive or legislative branches government.6 Notwithstanding Article VIII, Section 1 of the Constitution, since the exercise of the power of judicial review by this Court is inherently antidemocratic, this Court should exercise a becoming modesty in acting as a revisor of an act of the executive or legislative branch. The tendency of a frequent and easy resort to the function of judicial review, particularly in areas of economic policy has become lamentably too common as to dwarf the political capacity of the people expressed through their representatives in the policy making branches of government and to deaden their sense of moral responsibility. 7 This court has been accused, of late, of an officious tendency to delve into areas better left to the political branches of government. 8 This tendency, if exercised by a court running riot over the other co-equal branches of government, poses a greater danger to our democratic system than the perceived danger

real or imagined of an executive branch espousing economic or social policies of doubtful moral worth. Moreover economic policy decisions in the current milieu- including the act challenged in the instant caseinvolve complex factors requiring flexibility and a wide range of discretion on the part of our economic managers which this Court should respect because our power of review, under the constitution, is a power to check, not to supplant those acts or decisions of the elected representatives of the people. Finally, the instant petition was brought to this Court on the assumption that the issue at bench raises primarily constitutional issues. As it has ultimately turned out, the core foundation of the petitioners' objections to the LOTTO operations was based on the validity of the contract between the PCSO and the PGMC in the light of Section 1 of R.A. 1169 as amended by B.P. Blg. 427. It might have been much more appropriate for the issue to have taken its normal course in the courts below. I vote to deny the petition. # Footnotes 1 PGMC's Comment, 3-4; Rollo, 181-182. 2 Annex "A," Id.; Id., 207-220. 3 Rollo, 210-211. 4 Rollo, 213. 5 Id., 215. 6 Id., 220. 7 PGMC's Comment, 7; Rollo, 184. 8 Annex "P" of Petition. 9 Annexes "L" and "N" of Petition. 10 Petition, 9; Rollo, 10. The announcement also stated that G-Tech Philippines, Inc. and the Tanjong Public Limited Company had likewise been authorized to operate separate lotto systems. 11 Id.; Id. 12 Annex "C" of Petition. 13 Petition, 10; Rollo, 11. The meeting was called to deliberate on the proposed nationwide on-line lottery program. 14 Id.; Id. 15 Id.; Id. 16 Annex "J" of Petition.

17 Annex "H" of Petition. 18 Rollo, 13-14. 19 Rollo, 16-19. 20 Id., 27-28; 30-32. 21 Id., 27. 22 Rollo, 35. 23 Id., 180-181. 24 Citing Teresa Electric & Power Co., Inc. vs. Public Service Commission, 21 SCRA 198 [1967]. 25 175 SCRA 262 [1989]. 26 G.R. No. 78716, 22 September 1987. 27 Philippine Christian Lawyers Fellowship, Inc., Gamaliel G. Bongco, Oscar Karaan, and Jedideoh Sincero (Rollo, 147); Catholic Lawyer's Guild of the Philippines, Inc., Enrique Syquia, and Pacifico Ma. Castro (Id., 154). 28 Rollo, 249 et seq. 29 G.R. No. L-2044 (Araneta vs. Dinglasan); G.R. No. L-2756 (Araneta vs. Angeles); G.R. No. L-3054 (Rodriguez vs. Tesorero de Filipinas); G.R No. L-3055 (Guerrero vs. Commissioner of Customs); and G.R. No. L-3056 (Barredo vs. Commission on Elections), 84 Phil. 368 [1949]. 30 Tan vs. Macapagal, 43 SCRA 677, 680 [1972]. 31 Sanidad vs. Commission on Elections, 73 SCRA 333 [1976]. 32 112 SCRA 294, 314-315 [1982]. 33 163 SCRA 371, 378 [1988]. 34 197 SCRA 52, 60 [1991]. 35 175 SCRA 343, 364-365 [1989] (emphasis supplied). 36 180 SCRA 496, 502 [1988]. 37 345 US 153, L ed 918, 735 Ct 609. 38 Philippine Constitution Association, Inc. vs. Gimenez, 15 SCRA 479 [1965].

39 Civil Liberties Union vs. Executive Secretary, 194 SCRA 317 [1991]. 40 Guingona vs. Carague, 196 SCRA 221 [1991]. 41 Osmea vs. Commission on Elections, 199 SCRA 750 [1991]. 42 Basco vs. Philippine Gaming and Amusement Corp., 197 SCRA 52 [1991]. 43 Carpio vs. Executive Secretary, 206 SCRA 290 [1992]. 44 Iloilo Palay and Corn Planters Association, Inc. vs. Feliciano, 13 SCRA 377 [1965]. 45 Sanidad vs. Commission on Elections, supra. 46 Laurel vs. Garcia, 187 SCRA 797 [1990]. 47 Garcia vs. Board of Investments, 177 SCRA 374 [1989]; Garcia vs. Board of Investments, 191 SCRA 288 [1990]. 48 Maceda vs. Macaraig, 197 SCRA 771 [1991]. 49 Maceda vs. Energy Regulatory Board, 199 SCRA 454 [1991]. 50 Garcia vs. Executive Secretary, 211 SCRA 219 [1992]. 51 De Guia vs. Commission on Elections, 208 SCRA 420 [1992]. 52 Pasay Law and Conscience Union, Inc. vs. Cuneta, 101 SCRA 662 [1980]. 53 62 SCRA 275 [1975]. 54 Supra. 55 Record of the Batasan, vol. Two, 993. 56 Id., 1006-1007. 57 Record of the Batasan, vol. Two, 1007 (emphasis supplied). 58 Id. 59 36 AM. JUR. 2d Franchises 26 (1968). 60 36 AM. JUR. 2d Franchises 63 (1968). 61 38 AM. JUR. 2d Gambling S 18 (1968). 62 Black's Law Dictionary, Sixth Ed., 88.

63 Id., 261. 64 Id., 121. 65 Id., 839. 66 PGMC's Comment; Rollo, 181-182. 67 It declares therein that it "has the legal authority under R.A. 1169, as amended, to hold and conduct sweepstakes races, lotteries, and other similar activities." 68 Attached to the Contract of Lease as Annex "A" is the Master Games Plan prepared by the PGMC and approved by the PCSO. FELICIANO, J. concurring: 1 The requirement of locus standi forms part of the "application of ordinary law technique to the Constitution" which historically, in the United States, promoted and reinforced the "legalization" or acceptance of the power of judicial review; S. Snowiss, Judicial Review and the Law of the Constitution, p. 197 (1990). 2 A stimulating effort is offered by Prof. Laurence H. Tribe, Constitutional Choices (1985), Chap. 8, where he examined certain trends in, and circumstances relating to, the caselaw of the Supreme Court of the United States which "make a satisfactory theory of standing specially elusive" (p. 100). 3 A.M. Bickel, The Least Dangerous Branch: The Supreme Court at the Bar of Politics 169 (1962); brackets supplied. PADILLA, J. separate concurring: 1 KILOSBAYAN, INCORPORATED, a non-stock corporation composed of civic-spirited citizens, pastors, priests, nuns and lay leaders who are committed to the cause of truth, justice and national renewal as well as members of the Board of Trustees of KILOSBAYAN as taxpayers and concerned citizens and senators Freddie Webb, Wigberto Taada and Representative Joker P. Arroyo as taxpayers, concerned citizens and legislators. PUNO, J. dissenting: 1 Petition, pp. 5-6. 2 Ibid, p. 6. 3 Ibid, p. 7. 4 Ibid. 5 Philippine Political Law, 1989 ed., p. 18 citing Dumlao v. COMELEC, 95 SCRA 392. 6 Ibid., citations omitted.

7 G.R. No. 101083. 8 G.R. No. 86344, 180 SCRA 496 [1989]. 9 Dorsen, Bender, Neuborne, Political and Civil Rights in the United, States, Vol. I, 4th ed., p. 1200. 10 418 U.S. 166, 194 S. Ct. 2940, 41 L. Ed. 2d 678 [1974]. 11 Manila Bulletin, April 21, 1994, pp. 1 and 8. 12 95 SCRA 392, 403. 13 US v. Richardson, op. cit. 14 G.R. No. 79084, September 22, 1987. 15 Compare Coleman v. Miller, 307 US 433 [1939]; Mitchell v. Laird, 488 F2d 611 CD.C. Cir. 1973; Kennedy v. Sampson, 511 F2d 430 CD.C. Cir. 1974. 16 G.R. No. 104712, May 6, 1992, 208 SCRA 420. 17 392 U.S. 83, 88 S. Ct. 1942, 20 L ed. 2d. 947 [1968]. VITUG, J. separate opinion: 1 22 Phil. 456, 559. 2 See also Lopez vs. Roxas, 17 SCRA 761. 3 Warth vs. Seldin, 422 U.S. 490, 498-499, 45 L.Ed. 2d 343, 95 S. Ct. 2197 (1975); Guzman vs. Marrero, 180 U.S. 81, 45 L.Ed. 436, 21 S.Ct. 293 (1901); McMicken vs. United States, 97 U.S. 204, 24 L.Ed. 947 (1978); Silver Star Citizens' Committee vs. Orlando Fla. 194 So. 2d 681 (1967); In Re Kenison's Guardianship, 72 S.D. 180, 31 N.W. 2d 326 (1948). 4 See Pascual v. Secretary of Public Works, 110 Phil. 331; Maceda v. Macaraig, 197 SCRA 771; Lozada v. COMELEC, 120 SCRA 337; Dumlao vs. COMELEC, 95 SCRA 392; Gonzales v. Marcos, 65 SCRA 624. 5 176 SCRA 240, 251. 6 The provision of Arts. 195-199 of the Revised Penal Code (Forms of Gambling and Betting), Republic Act No. 3063 (Horse Racing Bookies), Presidential Decree No. 483 (Penalizing Betting, Game-fixing or Pointshaving and Machinations in Sports Contests); No. 449, as amended (Cockfighting Law of 1974); No. 510 (Slot Machines) in relation to Opinion Nos. 33 and 97 of the Ministry of Justice; No. 1306 (Jai-Alai Bookies) have been repealed by Presidential Decree No. 1602, otherwise known as the New Gambling Law (Prescribing Stiffer Penalties on Illegal Gambling). Subsequently, Letter of Instruction No. 816 was issued which excluded certain prohibited games under Presidential Decree No. 1602.

7 U.S. v. Filart, 30 Phil. 80, 83 /1915/; U.S. v. Baguio, 39 Phil. 962, 966. 8 Ly Hong v. Republic, 109 Phil. 635. 9 People v. De Gorostiza, et al., 77 Phil. 88. 10 People v. Dionisio, 22 SCRA 129. 11 22 SCRA 1299, 1302. 12 G.R. No. 78716 and G.R. No. 79084, En Banc Resolution, 22 September 1987. KAPUNAN, J. dissenting: 1 People v. Vera, 65 Phil. 56 (1937) 2 JACKSON, The Supreme Court in the American System of Government in McKay, An American Constitutional Law Reader 30 (1958). 3 Ashwander v. Tennessee Valley Authority, 297 US 288, at 346-348 (1936). 4 110 Phil. 331 (1960). See also Lozada v. COMELEC 120 SCRA 337 (1983); Dumlao v. COMELEC, 95 SCRA 392 (1980); Maceda v. Macaraig, 197 SCRA 771, (1991). 5 Appeal of Sears, Roebuck and Co., 123 Ind., App.; 109 NE 2d., 620 (1952). 6 See A. BICKEL, THE LEAST DANGEROUS BRANCH: THE SUPREME COURT AT THE BAR OF POLITICS 16-17 (1962). 7 Id., citing J.B.Thayer, JOHN MARSHALL, 106-107 (1901). 8 See Romulo, The Supreme Court and Economic Policy: A Plea for Judicial Abstinence 67 Phil. L.J. 348-353 (1993). See also Fernandez, Judicial Overreaching in Selected Supreme Court Decisions Affecting Economic Policy, 67 Phil. L.J. 332-347 (1993) and Castro & Pison, The Economic Policy Determining Function of the Supreme Court in Times of National Crisis, 67 Phil. L.J. 354-411 (1993).

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Lawphil Main MenuLawphil Main Menu> Constitution> Constitution> Statutes> Statutes> Jurisprudence> Jurisprudence> Judicial Issuances> Judicial Issuances> Executive Issuances> Executive Issuances> Treatise> Treatise> Legal Link> Legal Linklawphil Today is Saturday, July 02, 2011

-------------------------------------------------------------------------------Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 159139 January 13, 2004

INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, MA. CORAZON M. AKOL, MIGUEL UY, EDUARDO H. LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO, LEY SALCEDO, and MANUEL ALCUAZ JR., petitioners, vs. COMMISSION ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN ABALOS SR.; COMELEC BIDDING and AWARD COMMITTEE CHAIRMAN EDUARDO D. MEJOS and MEMBERS GIDEON DE GUZMAN, JOSE F. BALBUENA, LAMBERTO P. LLAMAS, and BARTOLOME SINOCRUZ JR.; MEGA PACIFIC eSOLUTIONS, INC.; and MEGA PACIFIC CONSORTIUM, respondents. DECISION PANGANIBAN, J.: There is grave abuse of discretion (1) when an act is done contrary to the Constitution, the law or jurisprudence;1 or (2) when it is executed whimsically, capriciously or arbitrarily out of malice, ill will or personal bias.2 In the present case, the Commission on Elections approved the assailed Resolution and awarded the subject Contract not only in clear violation of law and jurisprudence, but also in reckless disregard of its own bidding rules and procedure. For the automation of the counting and canvassing of the ballots in the 2004 elections, Comelec awarded the Contract to "Mega Pacific Consortium" an entity that had not participated in the bidding. Despite this grant, the poll body signed the actual automation Contract with "Mega Pacific eSolutions, Inc.," a company that joined the bidding but had not met the eligibility requirements. Comelec awarded this billion-peso undertaking with inexplicable haste, without adequately checking and observing mandatory financial, technical and legal requirements. It also accepted the proferred computer hardware and software even if, at the time of the award, they had undeniably failed to pass eight critical requirements designed to safeguard the integrity of elections, especially the following three items: They failed to achieve the accuracy rating criteria of 99.9995 percent set-up by the Comelec itself They were not able to detect previously downloaded results at various canvassing or consolidation levels and to prevent these from being inputted again

 They were unable to print the statutorily required audit trails of the count/canvass at different levels without any loss of data Because of the foregoing violations of law and the glaring grave abuse of discretion committed by Comelec, the Court has no choice but to exercise its solemn "constitutional duty"3 to void the assailed Resolution and the subject Contract. The illegal, imprudent and hasty actions of the Commission have not only desecrated legal and jurisprudential norms, but have also cast serious doubts upon the poll bodys ability and capacity to conduct automated elections. Truly, the pith and soul of democracy -- credible, orderly, and peaceful elections -- has been put in jeopardy by the illegal and gravely abusive acts of Comelec. The Case Before us is a Petition4 under Rule 65 of the Rules of Court, seeking (1) to declare null and void Resolution No. 6074 of the Commission on Elections (Comelec), which awarded "Phase II of the Modernization Project of the Commission to Mega Pacific Consortium (MPC);" (2) to enjoin the implementation of any further contract that may have been entered into by Comelec "either with Mega Pacific Consortium and/or Mega Pacific eSolutions, Inc. (MPEI);" and (3) to compel Comelec to conduct a re-bidding of the project. The Facts The following facts are not disputed. They were culled from official documents, the parties pleadings, as well as from admissions during the Oral Argument on October 7, 2003. On June 7, 1995, Congress passed Republic Act 8046,5 which authorized Comelec to conduct a nationwide demonstration of a computerized election system and allowed the poll body to pilot-test the system in the March 1996 elections in the Autonomous Region in Muslim Mindanao (ARMM). On December 22, 1997, Congress enacted Republic Act 8436 authorizing Comelec to use an automated election system (AES) for the process of voting, counting votes and canvassing/consolidating the results of the national and local elections. It also mandated the poll body to acquire automated counting machines (ACMs), computer equipment, devices and materials; and to adopt new electoral forms and printing materials. Initially intending to implement the automation during the May 11, 1998 presidential elections, Comelec -in its Resolution No. 2985 dated February 9, 1998 -- eventually decided against full national implementation and limited the automation to the Autonomous Region in Muslim Mindanao (ARMM). However, due to the failure of the machines to read correctly some automated ballots in one town, the poll body later ordered their manual count for the entire Province of Sulu.8 In the May 2001 elections, the counting and canvassing of votes for both national and local positions were also done manually, as no additional ACMs had been acquired for that electoral exercise allegedly because of time constraints. On October 29, 2002, Comelec adopted in its Resolution 02-0170 a modernization program for the 2004 elections. It resolved to conduct biddings for the three (3) phases of its Automated Election System;

namely, Phase I - Voter Registration and Validation System; Phase II - Automated Counting and Canvassing System; and Phase III - Electronic Transmission. On January 24, 2003, President Gloria Macapagal-Arroyo issued Executive Order No. 172, which allocated the sum of P2.5 billion to fund the AES for the May 10, 2004 elections. Upon the request of Comelec, she authorized the release of an additional P500 million. On January 28, 2003, the Commission issued an "Invitation to Apply for Eligibility and to Bid," which we quote as follows: "INVITATION TO APPLY FOR ELIGIBILITY AND TO BID The Commission on Elections (COMELEC), pursuant to the mandate of Republic Act Nos. 8189 and 8436, invites interested offerors, vendors, suppliers or lessors to apply for eligibility and to bid for the procurement by purchase, lease, lease with option to purchase, or otherwise, supplies, equipment, materials and services needed for a comprehensive Automated Election System, consisting of three (3) phases: (a) registration/verification of voters, (b) automated counting and consolidation of votes, and (c) electronic transmission of election results, with an approved budget of TWO BILLION FIVE HUNDRED MILLION (Php2,500,000,000) Pesos. Only bids from the following entities shall be entertained: a. Duly licensed Filipino citizens/proprietorships; b. Partnerships duly organized under the laws of the Philippines and of which at least sixty percent (60%) of the interest belongs to citizens of the Philippines; c. Corporations duly organized under the laws of the Philippines, and of which at least sixty percent (60%) of the outstanding capital stock belongs to citizens of the Philippines; d. Manufacturers, suppliers and/or distributors forming themselves into a joint venture, i.e., a group of two (2) or more manufacturers, suppliers and/or distributors that intend to be jointly and severally responsible or liable for a particular contract, provided that Filipino ownership thereof shall be at least sixty percent (60%); and e. Cooperatives duly registered with the Cooperatives Development Authority. Bid documents for the three (3) phases may be obtained starting 10 February 2003, during office hours from the Bids and Awards Committee (BAC) Secretariat/Office of Commissioner Resurreccion Z. Borra, 7th Floor, Palacio del Governador, Intramuros, Manila, upon payment at the Cash Division, Commission on Elections, in cash or cashiers check, payable to the Commission on Elections, of a non -refundable amount of FIFTEEN THOUSAND PESOS (Php15,000.00) for each phase. For this purpose, interested offerors, vendors, suppliers or lessors have the option to participate in any or all of the three (3) phases of the comprehensive Automated Election System. A Pre-Bid Conference is scheduled on 13 February 2003, at 9:00 a.m. at the Session Hall, Commission on Elections, Postigo Street, Intramuros, Manila. Should there be questions on the bid documents, bidders are required to submit their queries in writing to the BAC Secretariat prior to the scheduled PreBid Conference.

Deadline for submission to the BAC of applications for eligibility and bid envelopes for the supply of the comprehensive Automated Election System shall be at the Session Hall, Commission on Elections, Postigo Street, Intramuros, Manila on 28 February 2003 at 9:00 a.m. The COMELEC reserves the right to review the qualifications of the bidders after the bidding and before the contract is executed. Should such review uncover any misrepresentation made in the eligibility statements, or any changes in the situation of the bidder to materially downgrade the substance of such statements, the COMELEC shall disqualify the bidder upon due notice without any obligation whatsoever for any expenses or losses that may be incurred by it in the preparation of its bid."9 On February 11, 2003, Comelec issued Resolution No. 5929 clarifying certain eligibility criteria for bidders and the schedule of activities for the project bidding, as follows: "1.) Open to Filipino and foreign corporation duly registered and licensed to do business and is actually doing business in the Philippines, subject to Sec. 43 of RA 9184 (An Act providing In the Modernization Standardization and Regulation of the Procurement Activities of the Government and for other purposes etc.) 2.) Track Record: a) For counting machines should have been used in at least one (1) political exercise with no less than Twenty Million Voters; b) For verification of voters the reference site of an existing data base installation using Automated Fingerprint Identification System (AFIS) with at least Twenty Million. 3.) Ten percent (10%) equity requirement shall be based on the total project cost; and 4.) Performance bond shall be twenty percent (20%) of the bid offer. RESOLVED moreover, that: 1) A. Due to the decision that the eligibility requirements and the rest of the Bid documents shall be released at the same time, and the memorandum of Comm. Resurreccion Z. Borra dated February 7, 2003, the documents to be released on Friday, February 14, 2003 at 2:00 oclock p.m. shall be the eligibility criteria, Terms of Reference (TOR) and other pertinent documents; B. Pre-Bid conference shall be on February 18, 2003; and C. Deadline for the submission and receipt of the Bids shall be on March 5, 2003. 2) The aforementioned documents will be available at the following offices: a) Voters Validation: Office of Comm. Javier b) Automated Counting Machines: Office of Comm. Borra c) Electronic Transmission: Office of Comm. Tancangco"10

On February 17, 2003, the poll body released the Request for Proposal (RFP) to procure the election automation machines. The Bids and Awards Committee (BAC) of Comelec convened a pre-bid conference on February 18, 2003 and gave prospective bidders until March 10, 2003 to submit their respective bids. Among others, the RFP provided that bids from manufacturers, suppliers and/or distributors forming themselves into a joint venture may be entertained, provided that the Philippine ownership thereof shall be at least 60 percent. Joint venture is defined in the RFP as "a group of two or more manufacturers, suppliers and/or distributors that intend to be jointly and severally responsible or liable for a particular contract."11 Basically, the public bidding was to be conducted under a two-envelope/two stage system. The bidders first envelope or the Eligibility Envelope should establish the bidders eligibility to bid and its qualifications to perform the acts if accepted. On the other hand, the second envelope would be the Bid Envelope itself. The RFP outlines the bidding procedures as follows: "25. Determination of Eligibility of Prospective Bidders "25.1 The eligibility envelopes of prospective Bidders shall be opened first to determine their eligibility. In case any of the requirements specified in Clause 20 is missing from the first bid envelope, the BAC shall declare said prospective Bidder as ineligible to bid. Bid envelopes of ineligible Bidders shall be immediately returned unopened. "25.2 The eligibilit y of prospective Bidders shall be determined using simple pass/fail criteria and shall be determined as either eligible or ineligible. If the prospective Bidder is rated passed for all the legal, technical and financial requirements, he shall be considered eligible. If the prospective Bidder is rated failed in any of the requirements, he shall be considered ineligible. "26. Bid Examination/Evaluation "26.1 The BAC will examine the Bids to determine whether they are complete, whether any computational errors have been made, whether required securities have been furnished, whether the documents have been properly signed, and whether the Bids are generally in order. "26.2 The BAC shall check the submitted documents of each Bidder against the required documents enumerated under Clause 20, to ascertain if they are all present in the Second bid envelope (Technical Envelope). In case one (1) or more of the required documents is missing, the BAC shall rate the Bid concerned as failed and immediately return to the Bidder its Third bid envelope (Financial Envelope) unopened. Otherwise, the BAC shall rate the first bid envelope as passed. "26.3 The BAC shall immediately open the Financial Envelopes of the Bidders whose Technical Envelopes were passed or rated on or above the passing score. Only Bids that are determined to contain all the bid requirements for both components shall be rated passed and shall immediately be considered for evaluation and comparison. "26.4 In the opening and examination of the Financial Envelope, the BAC shall announce and tabulate the Total Bid Price as calculated. Arithmetical errors will be rectified on the following basis: If there is a discrepancy between words and figures, the amount in words will prevail. If there is a discrepancy

between the unit price and the total price that is obtained by multiplying the unit price and the quantity, the unit price shall prevail and the total price shall be corrected accordingly. If there is a discrepancy between the Total Bid Price and the sum of the total prices, the sum of the total prices prevail and the Total Bid Price shall be corrected accordingly. "26.5 Financial Proposals which do not clearly state the Total Bid Price shall be rejected. Also, Total Bid Price as calculated that exceeds the approved budget for the contract shall also be rejected. 27. Comparison of Bids 27.1 The bid price shall be deemed to embrace all costs, charges and fees associated with carrying out all the elements of the proposed Contract, including but not limited to, license fees, freight charges and taxes. 27.2 The BAC shall establish the calculated prices of all Bids rated passed and rank the same in ascending order. xxxxxxxxx "29. Postqualification "29.1 The BAC will determine to its satisfaction whether the Bidder selected as having submitted the lowest calculated bid is qualified to satisfactorily perform the Contract. "29.2 The determination will take into account the Bidders financial, technical and production capabilities/resources. It will be based upon an examination of the documentary evidence of the Bidders qualification submitted by the Bidder as well as such other information as the BAC deems necessary and appropriate. "29.3 A bid determined as not substantially responsive will be rejected by the BAC and may not subsequently be made responsive by the Bidder by correction of the non-conformity. "29.4 The BAC may waive any informality or non-conformity or irregularity in a bid which does not constitute a material deviation, provided such waiver does not prejudice or affect the relative ranking of any Bidder. "29.5 Should the BAC find that the Bidder complies with the legal, financial and technical requirements, it shall make an affirmative determination which shall be a prerequisite for award of the Contract to the Bidder. Otherwise, it will make a negative determination which will result in rejection of the Bidders bid, in which event the BAC will proceed to the next lowest calculated bid to make a similar determination of that Bidders capabilities to perform satisfactorily."12 Out of the 57 bidders,13 the BAC found MPC and the Total Information Management Corporation (TIMC) eligible. For technical evaluation, they were referred to the BACs Technical Working Group (TWG) an d the Department of Science and Technology (DOST). In its Report on the Evaluation of the Technical Proposals on Phase II, DOST said that both MPC and TIMC had obtained a number of failed marks in the technical evaluation. Notwithstanding these failures,

Comelec en banc, on April 15, 2003, promulgated Resolution No. 6074 awarding the project to MPC. The Commission publicized this Resolution and the award of the project to MPC on May 16, 2003. On May 29, 2003, five individuals and entities (including the herein Petitioners Information Technology Foundation of the Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon Akol) wrote a letter14 to Comelec Chairman Benjamin Abalos Sr. They protested the award of the Contract to Respondent MPC "due to glaring irregularities in the manner in which the bidding process had been conducted." Citing therein the noncompliance with eligibility as well as technical and procedural requirements (many of which have been discussed at length in the Petition), they sought a re-bidding. In a letter-reply dated June 6, 2003,15 the Comelec chairman -- speaking through Atty. Jaime Paz, his head executive assistant -- rejected the protest and declared that the award "would stand up to the strictest scrutiny." Hence, the present Petition.16 The Issues In their Memorandum, petitioners raise the following issues for our consideration: "1. The COMELEC awarded and contracted with a non-eligible entity; x x x "2. Private respondents failed to pass the Technical Test as required in the RFP. Notwithstanding, such failure was ignored. In effect, the COMELEC changed the rules after the bidding in effect changing the nature of the contract bidded upon. "3. Petitioners have locus standi. "4. Instant Petition is not premature. Direct resort to the Supreme Court is justified."17 In the main, the substantive issue is whether the Commission on Elections, the agency vested with the exclusive constitutional mandate to oversee elections, gravely abused its discretion when, in the exercise of its administrative functions, it awarded to MPC the contract for the second phase of the comprehensive Automated Election System. Before discussing the validity of the award to MPC, however, we deem it proper to first pass upon the procedural issues: the legal standing of petitioners and the alleged prematurity of the Petition. This Courts Ruling The Petition is meritorious. First Procedural Issue: Locus Standi of Petitioners Respondents chorus that petitioners do not possess locus standi, inasmuch as they are not challenging the validity or constitutionality of RA 8436. Moreover, petitioners supposedly admitted during the Oral Argument that no law had been violated by the award of the Contract. Furthermore, they allegedly have

no actual and material interest in the Contract and, hence, do not stand to be injured or prejudiced on account of the award. On the other hand, petitioners -- suing in their capacities as taxpayers, registered voters and concerned citizens -- respond that the issues central to this case are "of transcendental importance and of national interest." Allegedly, Comelecs flawed bidding and questionable award of the Contract to an unqualified entity would impact directly on the success or the failure of the electoral process. Thus, any taint on the sanctity of the ballot as the expression of the will of the people would inevitably affect their faith in the democratic system of government. Petitioners further argue that the award of any contract for automation involves disbursement of public funds in gargantuan amounts; therefore, public interest requires that the laws governing the transaction must be followed strictly. We agree with petitioners. Our nations political and economic future virtually hangs in the balance, pending the outcome of the 2004 elections. Hence, there can be no serious doubt that the subject matter of this case is "a matter of public concern and imbued with public interest";18 in other words, it is of "paramount public interest"19 and "transcendental importance."20 This fact alone would justify relaxing the rule on legal standing, following the liberal policy of this Court whenever a case involves "an issue of overarching significance to our society."21 Petitioners legal standing should th erefore be recognized and upheld. Moreover, this Court has held that taxpayers are allowed to sue when there is a claim of "illegal disbursement of public funds,"22 or if public money is being "deflected to any improper purpose";23 or when petitioners seek to restrain respondent from "wasting public funds through the enforcement of an invalid or unconstitutional law."24 In the instant case, individual petitioners, suing as taxpayers, assert a material interest in seeing to it that public funds are properly and lawfully used. In the Petition, they claim that the bidding was defective, the winning bidder not a qualified entity, and the award of the Contract contrary to law and regulation. Accordingly, they seek to restrain respondents from implementing the Contract and, necessarily, from making any unwarranted expenditure of public funds pursuant thereto. Thus, we hold that petitioners possess locus standi. Second Procedural Issue: Alleged Prematurity Due to Non-Exhaustion of Administrative Remedies Respondents claim that petitioners acted prematurely, since they had not first utilized the protest mechanism available to them under RA 9184, the Government Procurement Reform Act, for the settlement of disputes pertaining to procurement contracts. Section 55 of RA 9184 states that protests against decisions of the Bidding and Awards Committee in all stages of procurement may be lodged with the head of the procuring entity by filing a verified position paper and paying a protest fee. Section 57 of the same law mandates that in no case shall any such protest stay or delay the bidding process, but it must first be resolved before any award is made. On the other hand, Section 58 provides that court action may be resorted to only after the protests contemplated by the statute shall have been completed. Cases filed in violation of this process are to be dismissed for lack of jurisdiction. Regional trial courts shall have jurisdiction over final decisions of the head of the procuring entity, and court actions shall be instituted pursuant to Rule 65 of the 1997 Rules of Civil Procedure.

Respondents assert that throughout the bidding process, petitioners never questioned the BAC Report finding MPC eligible to bid and recommending the award of the Contract to it (MPC). According to respondents, the Report should have been appealed to the Comelc en banc, pursuant to the aforementioned sections of RA 9184. In the absence of such appeal, the determination and recommendation of the BAC had become final. The Court is not persuaded. Respondent Comelec came out with its en banc Resolution No. 6074 dated April 15, 2003, awarding the project to Respondent MPC even before the BAC managed to issue its written report and recommendation on April 21, 2003. Thus, how could petitioners have appealed the BACs recommendation or report to the head of the procuring entity (the chairman of Comelec), when the Comelec en banc had already approved the award of the contract to MPC even before petitioners learned of the BAC recommendation? It is claimed25 by Comelec that during its April 15, 2003 session, it received and approved the verbal report and recommendation of the BAC for the award of the Contract to MPC, and that the BAC subsequently re-affirmed its verbal report and recommendation by submitting it in writing on April 21, 2003. Respondents insist that the law does not require that the BAC Report be in writing before Comelec can act thereon; therefore, there is allegedly nothing irregular about the Report as well as the en banc Resolution. However, it is obvious that petitioners could have appealed the BACs report and recommendation to the head of the procuring entity (the Comelec chair) only upon their discovery thereof, which at the very earliest would have been on April 21, 2003, when the BAC actually put its report in writing and finally released it. Even then, what would have been the use of protesting/appealing the report to the Comelec chair, when by that time the Commission en banc (including the chairman himself) had already approved the BAC Report and awarded the Contract to MPC? And even assuming arguendo that petitioners had somehow gotten wind of the verbal BAC report on April 15, 2003 (immediately after the en banc session), at that point the Commission en banc had already given its approval to the BAC Report along with the award to MPC. To put it bluntly, the Comelec en banc itself made it legally impossible for petitioners to avail themselves of the administrative remedy that the Commission is so impiously harping on. There is no doubt that they had not been accorded the opportunity to avail themselves of the process provided under Section 55 of RA 9184, according to which a protest against a decision of the BAC may be filed with the head of the procuring entity. Nemo tenetur ad impossible,26 to borrow private respondents favorite Latin excuse.27 Some Observations on the BAC Report to the Comelec We shall return to this issue of alleged prematurity shortly, but at this interstice, we would just want to put forward a few observations regarding the BAC Report and the Comelec en bancs approval thereof. First, Comelec contends that there was nothing unusual about the fact that the Report submitted by the BAC came only after the former had already awarded the Contract, because the latter had been asked to render its report and recommendation orally during the Commissions en banc session on April 15, 2003. Accordingly, Comelec supposedly acted upon such oral recommendation and approved the award to MPC on the same day, following which the recommendation was subsequently reduced into writing on April 21, 2003. While not entirely outside the realm of the possible, this interesting and unique spiel does

not speak well of the process that Comelec supposedly went through in making a critical decision with respect to a multi-billion-peso contract. We can imagine that anyone else standing in the shoes of the Honorable Commissioners would have been extremely conscious of the overarching need for utter transparency. They would have scrupulously avoided the slightest hint of impropriety, preferring to maintain an exacting regularity in the performance of their duties, instead of trying to break a speed record in the award of multi-billion-peso contracts. After all, between April 15 and April 21 were a mere six (6) days. Could Comelec not have waited out six more days for the written report of the BAC, instead of rushing pell-mell into the arms of MPC? Certainly, respondents never cared to explain the nature of the Commissions dire need to act immediately without awaiting the formal, written BAC Report. In short, the Court finds it difficult to reconcile the uncommon dispatch with which Comelec acted to approve the multi-billion-peso deal, with its claim of having been impelled by only the purest and most noble of motives. At any rate, as will be discussed later on, several other factors combine to lend negative credence to Comelecs tale. Second, without necessarily ascribing any premature malice or premeditation on the part of the Comelec officials involved, it should nevertheless be conceded that this cart-before-the-horse maneuver (awarding of the Contract ahead of the BACs written report) would definitely serve as a clever and effective way of averting and frustrating any impending protest under Section 55. Having made the foregoing observations, we now go back to the question of exhausting administrative remedies. Respondents may not have realized it, but the letter addressed to Chairman Benjamin Abalos Sr. dated May 29, 200328 serves to eliminate the prematurity issue as it was an actual written protest against the decision of the poll body to award the Contract. The letter was signed by/for, inter alia, two of herein petitioners: the Information Technology Foundation of the Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon Akol. Such letter-protest is sufficient compliance with the requirement to exhaust administrative remedies particularly because it hews closely to the procedure outlined in Section 55 of RA 9184. And even without that May 29, 2003 letter-protest, the Court still holds that petitioners need not exhaust administrative remedies in the light of Paat v. Court of Appeals.29 Paat enumerates the instances when the rule on exhaustion of administrative remedies may be disregarded, as follows: "(1) when there is a violation of due process, (2) when the issue involved is purely a legal question, (3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction, (4) when there is estoppel on the part of the administrative agency concerned, (5) when there is irreparable injury,

(6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter, (7) when to require exhaustion of administrative remedies would be unreasonable, (8) when it would amount to a nullification of a claim, (9) when the subject matter is a private land in land case proceedings, (10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances indicating the urgency of judicial intervention."30 The present controversy precisely falls within the exceptions listed as Nos. 7, 10 and 11: "(7) when to require exhaustion of administrative remedies would be unreasonable; (10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances indicating the urgency of judicial intervention." As already stated, Comelec itself made the exhaustion of administrative remedies legally impossible or, at the very least, "unreasonable." In any event, the peculiar circumstances surrounding the unconventional rendition of the BAC Report and the precipitate awarding of the Contract by the Comelec en banc -- plus the fact that it was racing to have its Contract with MPC implemented in time for the elections in May 2004 (barely four months away) -have combined to bring about the urgent need for judicial intervention, thus prompting this Court to dispense with the procedural exhaustion of administrative remedies in this case. Main Substantive Issue: Validity of the Award to MPC We come now to the meat of the controversy. Petitioners contend that the award is invalid, since Comelec gravely abused its discretion when it did the following: 1. Awarded the Contract to MPC though it did not even participate in the bidding 2. Allowed MPEI to participate in the bidding despite its failure to meet the mandatory eligibility requirements 3. Issued its Resolution of April 15, 2003 awarding the Contract to MPC despite the issuance by the BAC of its Report, which formed the basis of the assailed Resolution, only on April 21, 200331 4. Awarded the Contract, notwithstanding the fact that during the bidding process, there were violations of the mandatory requirements of RA 8436 as well as those set forth in Comelecs own Request for Proposal on the automated election system 5. Refused to declare a failed bidding and to conduct a re-bidding despite the failure of the bidders to pass the technical tests conducted by the Department of Science and Technology 6. Failed to follow strictly the provisions of RA 8436 in the conduct of the bidding for the automated counting machines

After reviewing the slew of pleadings as well as the matters raised during the Oral Argument, the Court deems it sufficient to focus discussion on the following major areas of concern that impinge on the issue of grave abuse of discretion: A. Matters pertaining to the identity, existence and eligibility of MPC as a bidder B. Failure of the automated counting machines (ACMs) to pass the DOST technical tests C. Remedial measures and re-testings undertaken by Comelec and DOST after the award, and their effect on the present controversy A. Failure to Establish the Identity, Existence and Eligibility of the Alleged Consortium as a Bidder On the question of the identity and the existence of the real bidder, respondents insist that, contrary to petitioners allegations, the bidder was not Mega Pacific eSolutions, Inc. (MPEI), which was incorporated only on February 27, 2003, or 11 days prior to the bidding itself. Rather, the bidder was Mega Pacific Consortium (MPC), of which MPEI was but a part. As proof thereof, they point to the March 7, 2003 letter of intent to bid, signed by the president of MPEI allegedly for and on behalf of MPC. They also call attention to the official receipt issued to MPC, acknowledging payment for the bidding documents, as proof that it was the "consortium" that participated in the bidding process. We do not agree. The March 7, 2003 letter, signed by only one signatory -- "Willy U. Yu, President, Mega Pacific eSolutions, Inc., (Lead Company/ Proponent) For: Mega Pacific Consortium" -- and without any further proof, does not by itself prove the existence of the consortium. It does not show that MPEI or its president have been duly pre-authorized by the other members of the putative consortium to represent them, to bid on their collective behalf and, more important, to commit them jointly and severally to the bid undertakings. The letter is purely self-serving and uncorroborated. Neither does an official receipt issued to MPC, acknowledging payment for the bidding documents, constitute proof that it was the purported consortium that participated in the bidding. Such receipts are issued by cashiers without any legally sufficient inquiry as to the real identity orexistence of the supposed payor. To assure itself properly of the due existence (as well as eligibility and qualification) of the putative consortium, Comelecs BAC should have examined the bidding documents submitted on behalf of MPC. They would have easily discovered the following fatal flaws. Two-Envelope, Two-Stage System As stated earlier in our factual presentation, the public bidding system designed by Comelec under its RFP (Request for Proposal for the Automation of the 2004 Election) mandated the use of a two-envelope, two-stage system. A bidders first envelope (Eligibility Envelope) was meant to establish its eligibility to bid and its qualifications and capacity to perform the contract if its bid was accepted, while the second envelope would be the Bid Envelope itself.

The Eligibility Envelope was to contain legal documents such as articles of incorporation, business registrations, licenses and permits, mayors permit, VAT certification, and so forth; technical documents containing documentary evidence to establish the track record of the bidder and its technical and production capabilities to perform the contract; and financial documents, including audited financial statements for the last three years, to establish the bidders financial capacity. In the case of a consortium or joint venture desirous of participating in the bidding, it goes without saying that the Eligibility Envelope would necessarily have to include a copy of the joint venture agreement, the consortium agreement or memorandum of agreement -- or a business plan or some other instrument of similar import -- establishing the due existence, composition and scope of such aggrupation. Otherwise, how would Comelec know who it was dealing with, and whether these parties are qualified and capable of delivering the products and services being offered for bidding?32 In the instant case, no such instrument was submitted to Comelec during the bidding process. This fact can be conclusively ascertained by scrutinizing the two-inch thick "Eligibility Requirements" file submitted by Comelec last October 9, 2003, in partial compliance with this Courts instructions given during the Oral Argument. This file purports to replicate the eligibility documents originally submitted to Comelec by MPEI allegedly on behalf of MPC, in connection with the bidding conducted in March 2003. Included in the file are the incorporation papers and financial statements of the members of the supposed consortium and certain certificates, licenses and permits issued to them. However, there is no sign whatsoever of any joint venture agreement, consortium agreement, memorandum of agreement, or business plan executed among the members of the purported consortium. The only logical conclusion is that no such agreement was ever submitted to the Comelec for its consideration, as part of the bidding process. It thus follows that, prior the award of the Contract, there was no documentary or other basis for Comelec to conclude that a consortium had actually been formed amongst MPEI, SK C&C and WeSolv, along with Election.com and ePLDT.33 Neither was there anything to indicate the exact relationships between and among these firms; their diverse roles, undertakings and prestations, if any, relative to the prosecution of the project, the extent of their respective investments (if any) in the supposed consortium or in the project; and the precise nature and extent of their respective liabilities with respect to the contract being offered for bidding. And apart from the self-serving letter of March 7, 2003, there was not even any indication that MPEI was the lead company duly authorized to act on behalf of the others. So, it necessarily follows that, during the bidding process, Comelec had no basis at all for determining that the alleged consortium really existed and was eligible and qualified; and that the arrangements among the members were satisfactory and sufficient to ensure delivery on the Contract and to protect the governments interest. Notwithstanding such deficiencies, Comelec still deemed the "consortium" eligible to participate in the bidding, proceeded to open its Second Envelope, and eventually awarded the bid to it, even though -- per the Comelecs own RFP -- the BAC should have declared the MPC ineligible to bid and returned the Second (Bid) Envelope unopened. Inasmuch as Comelec should not have considered MPEI et al. as comprising a consortium or joint venture, it should not have allowed them to avail themselves of the provision in Section 5.4 (b) (i) of the

IRR for RA 6957 (the Build-Operate-Transfer Law), as amended by RA 7718. This provision states in part that a joint venture/consortium proponent shall be evaluated based on the individual or collective experience of the member-firms of the joint venture or consortium and of the contractor(s) that it has engaged for the project. Parenthetically, respondents have uniformly argued that the said IRR of RA 6957, as amended, have suppletory application to the instant case. Hence, had the proponent MPEI been evaluated based solely on its own experience, financial and operational track record or lack thereof, it would surely not have qualified and would have been immediately considered ineligible to bid, as respondents readily admit. At any rate, it is clear that Comelec gravely abused its discretion in arbitrarily failing to observe its own rules, policies and guidelines with respect to the bidding process, thereby negating a fair, honest and competitive bidding. Commissioners Not Aware of Consortium In this regard, the Court is beguiled by the statements of Commissioner Florentino Tuason Jr., given in open court during the Oral Argument last October 7, 2003. The good commissioner affirmed that he was aware, of his own personal knowledge, that there had indeed been a written agreement among the "consortium" members,34 although it was an internal matter among them,35 and of the fact that it would be presented by counsel for private respondent.36 However, under questioning by Chief Justice Hilario G. Davide Jr. and Justice Jose C. Vitug, Commissioner Tuason in effect admitted that, while he was the commissioner-in-charge of Comelecs Legal Department, he had never seen, even up to that late date, the agreement he spoke of.37 Under further questioning, he was likewise unable to provide any information regarding the amounts invested into the project by several members of the claimed consortium.38 A short while later, he admitted that the Commission had not taken a look at the agreement (if any).39 He tried to justify his position by claiming that he was not a member of the BAC. Neither was he the commissioner-in-charge of the Phase II Modernization project (the automated election system); but that, in any case, the BAC and the Phase II Modernization Project Team did look into the aspect of the composition of the consortium. It seems to the Court, though, that even if the BAC or the Phase II Team had taken charge of evaluating the eligibility, qualifications and credentials of the consortium-bidder, still, in all probability, the former would have referred the task to Commissioner Tuason, head of Comelecs Legal Departmen t. That task was the appreciation and evaluation of the legal effects and consequences of the terms, conditions, stipulations and covenants contained in any joint venture agreement, consortium agreement or a similar document -- assuming of course that any of these was available at the time. The fact that Commissioner Tuason was barely aware of the situation bespeaks the complete absence of such document, or the utter failure or neglect of the Comelec to examine it -- assuming it was available at all -- at the time the award was made on April 15, 2003. In any event, the Court notes for the record that Commissioner Tuason basically contradicted his statements in open court about there being one written agreement among all the consortium members, when he subsequently referred40 to the four (4) Memoranda of Agreement (MOAs) executed by them.41

At this juncture, one might ask: What, then, if there are four MOAs instead of one or none at all? Isnt it enough that there are these corporations coming together to carry out the automation project? Isnt it true, as respondent aver, that nowhere in the RFP issued by Comelec is it required that the members of the joint venture execute a single written agreement to prove the existence of a joint venture. Indeed, the intention to be jointly and severally liable may be evidenced not only by a single joint venture agreement, but also by supplementary documents executed by the parties signifying such intention. What then is the big deal? The problem is not that there are four agreements instead of only one. The problem is that Comelec never bothered to check. It never based its decision on documents or other proof that would concretely establish the existence of the claimed consortium or joint venture or agglomeration. It relied merely on the self-serving representation in an uncorroborated letter signed by only one individual, claiming that his company represented a "consortium" of several different corporations. It concluded forthwith that a consortium indeed existed, composed of such and such members, and thereafter declared that the entity was eligible to bid. True, copies of financial statements and incorporation papers of the alleged "consortium" members were submitted. But these papers did not establish the existence of a consortium, as they could have been provided by the companies concerned for purposes other than to prove that they were part of a consortium or joint venture. For instance, the papers may have been intended to show that those companies were each qualified to be a sub-contractor (and nothing more) in a major project. Those documents did not by themselves support the assumption that a consortium or joint venture existed among the companies. In brief, despite the absence of competent proof as to the existence and eligibility of the alleged consortium (MPC), its capacity to deliver on the Contract, and the members joint and several liability therefor, Comelec nevertheless assumed that such consortium existed and was eligible. It then went ahead and considered the bid of MPC, to which the Contract was eventually awarded, in gross violation of the formers own bidding rules and procedures contained in its RFP. Therein lies Comelecs grave abuse of discretion. Sufficiency of the Four Agreements Instead of one multilateral agreement executed by, and effective and binding on, all the five "consortium members" -- as earlier claimed by Commissioner Tuason in open court -- it turns out that what was actually executed were four (4) separate and distinct bilateral Agreements.42 Obviously, Comelec was furnished copies of these Agreements only after the bidding process had been terminated, as these were not included in the Eligibility Documents. These Agreements are as follows: A Memorandum of Agreement between MPEI and SK C&C A Memorandum of Agreement between MPEI and WeSolv A "Teaming Agreement" between MPEI and Election.com Ltd. A "Teaming Agreement" between MPEI and ePLDT In sum, each of the four different and separate bilateral Agreements is valid and binding only between MPEI and the other contracting party, leaving the other "consortium" members total strangers thereto.

Under this setup, MPEI dealt separately with each of the "members," and the latter (WeSolv, SK C&C, Election.com, and ePLDT) in turn had nothing to do with one another, each dealing only with MPEI. Respondents assert that these four Agreements were sufficient for the purpose of enabling the corporations to still qualify (even at that late stage) as a consortium or joint venture, since the first two Agreements had allegedly set forth the joint and several undertakings among the parties, whereas the latter two clarified the parties respective roles with reg ard to the Project, with MPEI being the independent contractor and Election.com and ePLDT the subcontractors. Additionally, the use of the phrase "particular contract" in the Comelecs Request for Proposal (RFP), in connection with the joint and several liabilities of companies in a joint venture, is taken by them to mean that all the members of the joint venture need not be solidarily liable for the entire project or joint venture, because it is sufficient that the lead company and the member in charge of a particular contract or aspect of the joint venture agree to be solidarily liable. At this point, it must be stressed most vigorously that the submission of the four bilateral Agreements to Comelec after the end of the bidding process did nothing to eliminate the grave abuse of discretion it had already committed on April 15, 2003. Deficiencies Have Not Been "Cured" In any event, it is also claimed that the automation Contract awarded by Comelec incorporates all documents executed by the "consortium" members, even if these documents are not referred to therein. The basis of this assertion appears to be the passages from Section 1.4 of the Contract, which is reproduced as follows: "All Contract Documents shall form part of the Contract even if they or any one of them is not referred to or mentioned in the Contract as forming a part thereof. Each of the Contract Documents shall be mutually complementary and explanatory of each other such that what is noted in one although not shown in the other shall be considered contained in all, and what is required by any one shall be as binding as if required by all, unless one item is a correction of the other. "The intent of the Contract Documents is the proper, satisfactory and timely execution and completion of the Project, in accordance with the Contract Documents. Consequently, all items necessary for the proper and timely execution and completion of the Project shall be deemed included in the Contract." Thus, it is argued that whatever perceived deficiencies there were in the supplementary contracts -- those entered into by MPEI and the other members of the "consortium" as regards their joint and several undertakings -- have been cured. Better still, such deficiencies have supposedly been prevented from arising as a result of the above-quoted provisions, from which it can be immediately established that each of the members of MPC assumes the same joint and several liability as the other members. The foregoing argument is unpersuasive. First, the contract being referred to, entitled "The Automated Counting and Canvassing Project Contract," is between Comelec and MPEI, not the alleged consortium, MPC. To repeat, it is MPEI -- not MPC -- that is a party to the Contract. Nowhere in that Contract is there any mention of a consortium or joint venture, of members thereof, much less of joint and several liability. Supposedly executed sometime in May 2003,43 the Contract bears a notarization date of June 30, 2003, and contains the signature of Willy U. Yu signing as president of MPEI (not for and on behalf of MPC), along with that of the Comelec chair. It provides in Section 3.2 that MPEI (not MPC) is to supply the

Equipment and perform the Services under the Contract, in accordance with the appendices thereof; nothing whatsoever is said about any consortium or joint venture or partnership. Second, the portions of Section 1.4 of the Contract reproduced above do not have the effect of curing (much less preventing) deficiencies in the bilateral agreements entered into by MPEI with the other members of the "consortium," with respect to their joint and several liabilities. The term "Contract Documents," as used in the quoted passages of Section 1.4, has a well-defined meaning and actually refers only to the following documents: The Contract itself along with its appendices The Request for Proposal (also known as "Terms of Reference") issued by the Comelec, including the Tender Inquiries and Bid Bulletins The Tender Proposal submitted by MPEI In other words, the term "Contract Documents" cannot be understood as referring to or including the MOAs and the Teaming Agreements entered into by MPEI with SK C&C, WeSolv, Election.com and ePLDT. This much is very clear and admits of no debate. The attempt to use the provisions of Section 1.4 to shore up the MOAs and the Teaming Agreements is simply unwarranted. Third and last, we fail to see how respondents can arrive at the conclusion that, from the above-quoted provisions, it can be immediately established that each of the members of MPC assumes the same joint and several liability as the other members. Earlier, respondents claimed exactly the opposite -- that the two MOAs (between MPEI and SK C&C, and between MPEI and WeSolv) had set forth the joint and several undertakings among the parties; whereas the two Teaming Agreements clarified the parties respective roles with regard to the Project, with MPEI being the independent contractor and Election.com and ePLDT the subcontractors. Obviously, given the differences in their relationships, their respective liabilities cannot be the same. Precisely, the very clear terms and stipulations contained in the MOAs and the Teaming Agreements -entered into by MPEI with SK C&C, WeSolv, Election.com and ePLDT -- negate the idea that these "members" are on a par with one another and are, as such, assuming the same joint and several liability. Moreover, respondents have earlier seized upon the use of the term "particular contract" in the Comelecs Request for Proposal (RFP), in order to argue that all the members of the joint venture did not need to be solidarily liable for the entire project or joint venture. It was sufficient that the lead company and the member in charge of a particular contract or aspect of the joint venture would agree to be solidarily liable. The glaring lack of consistency leaves us at a loss. Are respondents trying to establish the same joint and solidary liability among all the "members" or not? Enforcement of Liabilities Problematic Next, it is also maintained that the automation Contract between Comelec and the MPEI confirms the solidary undertaking of the lead company and the consortium member concerned for each particular Contract, inasmuch as the position of MPEI and anyone else performing the services contemplated under the Contract is described therein as that of an independent contractor.

The Court does not see, however, how this conclusion was arrived at. In the first place, the contractual provision being relied upon by respondents is Article 14, "Independent Contractors," which states: "Nothing contained herein shall be construed as establishing or creating between the COMELEC and MEGA the relationship of employee and employer or principal and agent, it being understood that the position of MEGA and of anyone performing the Services contemplated under this Contract, is that of an independent contractor." Obviously, the intent behind the provision was simply to avoid the creation of an employer-employee or a principal-agent relationship and the complications that it would produce. Hence, the Article states that the role or position of MPEI, or anyone else performing on its behalf, is that of an independent contractor. It is obvious to the Court that respondents are stretching matters too far when they claim that, because of this provision, the Contract in effect confirms the solidary undertaking of the lead company and the consortium member concerned for the particular phase of the project. This assertion is an absolute non sequitur. Enforcement of Liabilities Under the Civil Code Not Possible In any event, it is claimed that Comelec may still enforce the liability of the "consortium" members under the Civil Code provisions on partnership, reasoning that MPEI et al. represented themselves as partners and members of MPC for purposes of bidding for the Project. They are, therefore, liable to the Comelec to the extent that the latter relied upon such representation. Their liability as partners is solidary with respect to everything chargeable to the partnership under certain conditions. The Court has two points to make with respect to this argument. First, it must be recalled that SK C&C, WeSolv, Election.com and ePLDT never represented themselves as partners and members of MPC, whether for purposes of bidding or for something else. It was MPEI alone that represented them to be members of a "consortium" it supposedly headed. Thus, its acts may not necessarily be held against the other "members." Second, this argument of the OSG in its Memorandum44 might possibly apply in the absence of a joint venture agreement or some other writing that discloses the relationship of the "members" with one another. But precisely, this case does not deal with a situation in which there is nothing in writing to serve as reference, leaving Comelec to rely on mere representations and therefore justifying a falling back on the rules on partnership. For, again, the terms and stipulations of the MOAs entered into by MPEI with SK C&C and WeSolv, as well as the Teaming Agreements of MPEI with Election.com and ePLDT (copies of which have been furnished the Comelec) are very clear with respect to the extent and the limitations of the firms respective liabilities. In the case of WeSolv and SK C&C, their MOAs state that their liabilities, while joint and several with MPEI, are limited only to the particular areas of work wherein their services are engaged or their products utilized. As for Election.com and ePLDT, their separate "Teaming Agreements" specifically ascribe to them the role of subcontractor vis--vis MPEI as contractor and, based on the terms of their particular agreements, neither Election.com nor ePLDT is, with MPEI, jointly and severally liable to Comelec.45 It follows then that in the instant case, there is no justification for anyone, much less Comelec, to resort to the rules on partnership and partners liabilities. Eligibility of a Consortium Based on the Collective Qualifications of Its Members

Respondents declare that, for purposes of assessing the eligibility of the bidder, the members of MPC should be evaluated on a collective basis. Therefore, they contend, the failure of MPEI to submit financial statements (on account of its recent incorporation) should not by itself disqualify MPC, since the other members of the "consortium" could meet the criteria set out in the RFP. Thus, according to respondents, the collective nature of the undertaking of the members of MPC, their contribution of assets and sharing of risks, and the community of their interest in the performance of the Contract lead to these reasonable conclusions: (1) that their collective qualifications should be the basis for evaluating their eligibility; (2) that the sheer enormity of the project renders it improbable to expect any single entity to be able to comply with all the eligibility requirements and undertake the project by itself; and (3) that, as argued by the OSG, the RFP allows bids from manufacturers, suppliers and/or distributors that have formed themselves into a joint venture, in recognition of the virtual impossibility of a single entitys ability to respond to the Invitation to Bid. Additionally, argues the Comelec, the Implementing Rules and Regulations of RA 6957 (the BuildOperate-Transfer Law) as amended by RA 7718 would be applicable, as proponents of BOT projects usually form joint ventures or consortiums. Under the IRR, a joint venture/consortium proponent shall be evaluated based on the individual or the collective experience of the member-firms of the joint venture/consortium and of the contractors the proponent has engaged for the project. Unfortunately, this argument seems to assume that the "collective" nature of the undertaking of the members of MPC, their contribution of assets and sharing of risks, and the "community" of their interest in the performance of the Contract entitle MPC to be treated as a joint venture or consortium; and to be evaluated accordingly on the basis of the members collective qualifications when, in fact, the evidence before the Court suggest otherwise. This Court in Kilosbayan v. Guingona46 defined joint venture as "an association of persons or companies jointly undertaking some commercial enterprise; generally, all contribute assets and share risks. It requires a community of interest in the performance of the subject matter, a right to direct and govern the policy in connection therewith, and [a] duty, which may be altered by agreement to share both in profit and losses." Going back to the instant case, it should be recalled that the automation Contract with Comelec was not executed by the "consortium" MPC -- or by MPEI for and on behalf of MPC -- but by MPEI, period. The said Contract contains no mention whatsoever of any consortium or members thereof. This fact alone seems to contradict all the suppositions about a joint undertaking that would normally apply to a joint venture or consortium: that it is a commercial enterprise involving a community of interest, a sharing of risks, profits and losses, and so on. Now let us consider the four bilateral Agreements, starting with the Memorandum of Agreement between MPEI and WeSolv Open Computing, Inc., dated March 5, 2003. The body of the MOA consists of just seven (7) short paragraphs that would easily fit in one page! It reads as follows: "1. The parties agree to cooperate in successfully implementing the Project in the substance and form as may be most beneficial to both parties and other subcontractors involved in the Project. "2. Mega Pacific shall be responsible for any contract negotiations and signing with the COMELEC and, subject to the latters approval, agrees to give WeSolv an opportunity to be present at meetings with the COMELEC concerning WeSolvs portion of the Project.

"3. WeSolv shall be jointly and severally liable with Mega Pacific only for the particular products and/or services supplied by the former for the Project. "4. Each party shall bear its own costs and expenses relative to this agreement unless otherwise agreed upon by the parties. "5. The parties undertake to do all acts and such other things incidental to, necessary or desirable or the attainment of the objectives and purposes of this Agreement. "6. In the event that the parties fail to agree on the terms and conditions of the supply of the products and services including but not limited to the scope of the products and services to be supplied and payment terms, WeSolv shall cease to be bound by its obligations stated in the aforementioned paragraphs. "7. Any dispute arising from this Agreement shall be settled amicably by the parties whenever possible. Should the parties be unable to do so, the parties hereby agree to settle their dispute through arbitration in accordance with the existing laws of the Republic of the Philippines." (Underscoring supplied.) Even shorter is the Memorandum of Agreement between MPEI and SK C&C Co. Ltd., dated March 9, 2003, the body of which consists of only six (6) paragraphs, which we quote: "1. All parties agree to cooperate in achieving the Consortiums objective of successfull y implementing the Project in the substance and form as may be most beneficial to the Consortium members and in accordance w/ the demand of the RFP. "2. Mega Pacific shall have full powers and authority to represent the Consortium with the Comelec, and to enter and sign, for and in behalf of its members any and all agreement/s which maybe required in the implementation of the Project. "3. Each of the individual members of the Consortium shall be jointly and severally liable with the Lead Firm for the particular products and/or services supplied by such individual member for the project, in accordance with their respective undertaking or sphere of responsibility. "4. Each party shall bear its own costs and expenses relative to this agreement unless otherwise agreed upon by the parties. "5. The parties undertake to do all acts and such other things incidental to, necessary or desirable for the attainment of the objectives and purposes of this Agreement. "6. Any dispute arising from this Agreement shall be settled amicably by the parties whenever possible. Should the parties be unable to do so, the parties hereby agree to settle their dispute through arbitration in accordance with the existing laws of the Republic of the Philippines." (Underscoring supplied.) It will be noted that the two Agreements quoted above are very similar in wording. Neither of them contains any specifics or details as to the exact nature and scope of the parties respective undertakings, performances and deliverables under the Agreement with respect to the automation project. Likewise, the two Agreements are quite bereft of pesos-and-centavos data as to the amount of investments each party contributes, its respective share in the revenues and/or profit from the Contract with Comelec, and so forth -- all of which are normal for agreements of this nature. Yet, according to public and private

respondents, the participation of MPEI, WeSolv and SK C&C comprises fully 90 percent of the entire undertaking with respect to the election automation project, which is worth about P1.3 billion. As for Election.com and ePLDT, the separate "Teaming Agreements" they entered into with MPEI for the remaining 10 percent of the entire project undertaking are ironically much longer and more detailed than the MOAs discussed earlier. Although specifically ascribing to them the role of subcontractor vis--vis MPEI as contractor, these Agreements are, however, completely devoid of any pricing data or payment terms. Even the appended Schedules supposedly containing prices of goods and services are shorn of any price data. Again, as mentioned earlier, based on the terms of their particular Agreements, neither Election.com nor ePLDT -- with MPEI -- is jointly and severally liable to Comelec. It is difficult to imagine how these bare Agreements -- especially the first two -- could be implemented in practice; and how a dispute between the parties or a claim by Comelec against them, for instance, could be resolved without lengthy and debilitating litigations. Absent any clear-cut statement as to the exact nature and scope of the parties respective undertakings, commitments, deliverables and covenants, one party or another can easily dodge its obligation and deny or contest its liability under the Agreement; or claim that it is the other party that should have delivered but failed to. Likewise, in the absence of definite indicators as to the amount of investments to be contributed by each party, disbursements for expenses, the parties respective shares in the profits and the like, it seems to the Court that this situation could readily give rise to all kinds of misunderstandings and disagreements over money matters. Under such a scenario, it will be extremely difficult for Comelec to enforce the supposed joint and several liabilities of the members of the "consortium." The Court is not even mentioning the possibility of a situation arising from a failure of WeSolv and MPEI to agree on the scope, the terms and the conditions for the supply of the products and services under the Agreement. In that situation, by virtue of paragraph 6 of its MOA, WeSolv would perforce cease to be bound by its obligations -- including its joint and solidary liability with MPEI under the MOA -- and could forthwith disengage from the project. Effectively, WeSolv could at any time unilaterally exit from its MOA with MPEI by simply failing to agree. Where would that outcome leave MPEI and Comelec? To the Court, this strange and beguiling arrangement of MPEI with the other companies does not qualify them to be treated as a consortium or joint venture, at least of the type that government agencies like the Comelec should be dealing with. With more reason is it unable to agree to the proposal to evaluate the members of MPC on a collective basis. In any event, the MPC members claim to be a joint venture/consortium; and respondents have consistently been arguing that the IRR for RA 6957, as amended, should be applied to the instant case in order to allow a collective evaluation of consortium members. Surprisingly, considering these facts, respondents have not deemed it necessary for MPC members to comply with Section 5.4 (a) (iii) of the IRR for RA 6957 as amended. According to the aforementioned provision, if the project proponent is a joint venture or consortium, the members or participants thereof are required to submit a sworn statement that, if awarded the contract, they shall bind themselves to be jointly, severally and solidarily liable for the project proponents obligations thereunder. This provision was supposed to mirror Section 5 of RA 6957, as amended, which states: "In all cases, a consortium that participates in a bid must present proof that the members of the consortium have bound themselves jointly and severally to assume responsibility for any project. The

withdrawal of any member of the consortium prior to the implementation of the project could be a ground for the cancellation of the contract." The Court has certainly not seen any joint and several undertaking by the MPC members that even approximates the tenor of that which is described above. We fail to see why respondents should invoke the IRR if it is for their benefit, but refuse to comply with it otherwise. B. DOST Technical Tests Flunked by the Automated Counting Machines Let us now move to the second subtopic, which deals with the substantive issue: the ACMs failure to pass the tests of the Department of Science and Technology (DOST). After respondent "consortium" and the other bidder, TIM, had submitted their respective bids on March 10, 2003, the Comelecs BAC -- through its Technical Working Group (TWG) and the DOST -- evaluated their technical proposals. Requirements that were highly technical in nature and that required the use of certain equipment in the evaluation process were referred to the DOST for testing. The Department reported thus:

TEST RESULTS MATRIX47 Technical Evaluation of Automated Counting Machine KEY REQUIREMENTS QUESTIONS MEGA-PACIFIC CONSORTIUM TOTAL INFORMATION MANAGEMENT YES NO YES NO 1. Does the machine have an accuracy rating of at least 99.995 percent At COLD environmental condition At NORMAL environmental conditions At HARSH environmental conditions 2. Accurately records and reports the date and time of the start and end of counting of ballots per precinct? 3. Prints election returns without any loss of date during generation of such reports? 4. Uninterruptible back-up power system, that will engage immediately to allow operation of at least 10 minutes after outage, power surge or abnormal electrical occurrences? 5. Machine reads two-sided ballots in one pass? Note: This particular requirement needs further verification 6. Machine can detect previously counted ballots and prevent previously counted ballots from being counted more than once? 7. Stores results of counted votes by precinct in external (removable) storage device? Note: This particular requirement needs further verification 8. Data stored in external media is encrypted? Note: This particular requirement needs further verification

9. Physical key or similar device allows, limits, or restricts operation of the machine? 10. CPU speed is at least 400mHz? Note: This particular requirement needs further verification 11. Port to allow use of dot-matrix printers? 12. Generates printouts of the election returns in a format specified by the COMELEC? Generates printouts In format specified by COMELEC 13. Prints election returns without any loss of data during generation of such report? 14. Generates an audit trail of the counting machine, both hard copy and soft copy? Hard copy Soft copy Note: This particular requirement needs further verification 15. Does the City/Municipal Canvassing System consolidate results from all precincts within it using the encrypted soft copy of the data generated by the counting machine and stored on the removable data storage device? Note: This particular requirement needs further verification 16. Does the City/Municipal Canvassing System consolidate results from all precincts within it using the encrypted soft copy of the data generated by the counting machine and transmitted through an electronic transmission media? Note: This particular requirement needs further verification Note: This particular requirement needs further verification 17. Does the system output a Zero City/Municipal Canvass Report, which is printed on election day prior to the conduct of the actual canvass operation, that shows that all totals for all the votes for all the candidates and other information, are indeed zero or null? Note: This particular requirement needs further verification 18. Does the system consolidate results from all precincts in the city/municipality using the data storage device coming from the counting machine? Note: This particular requirement needs further verification 19. Is the machine 100% accurate? Note: This particular requirement needs further verification 20. Is the Program able to detect previously downloaded precinct results and prevent these from being inputted again into the System? Note: This particular requirement needs further verification 21. The System is able to print the specified reports and the audit trail without any loss of data during generation of the above-mentioned reports? Prints specified reports Audit Trail 22. Can the result of the city/municipal consolidation be stored in a data storage device? Note: This particular requirement needs further verification

23. Does the system consolidate results from all precincts in the provincial/district/ national using the data storage device from different levels of consolidation? Note: This particular requirement needs further verification 24. Is the system 100% accurate? Note: This particular requirement needs further verification 25. Is the Program able to detect previously downloaded precinct results and prevent these from being inputted again into the System? Note: This particular requirement needs further verification 26. The System is able to print the specified reports and the audit trail without any loss of data during generation of the abovementioned reports? Prints specified reports Audit Trail Note: This particular requirement needs further verification 27. Can the results of the provincial/district/national consolidation be stored in a data storage device? Note: This particular requirement needs further verification

According to respondents, it was only after the TWG and the DOST had conducted their separate tests and submitted their respective reports that the BAC, on the basis of these reports formulated its comments/recommendations on the bids of the consortium and TIM. The BAC, in its Report dated April 21, 2003, recommended that the Phase II project involving the acquisition of automated counting machines be awarded to MPEI. It said: "After incisive analysis of the technical reports of the DOST and the Technical Working Group for Phase II Automated Counting Machine, the BAC considers adaptability to advances in modern technology to ensure an effective and efficient method, as well as the security and integrity of the system. "The results of the evaluation conducted by the TWG and that of the DOST (14 April 2003 report), would show the apparent advantage of Mega-Pacific over the other competitor, TIM. "The BAC further noted that both Mega-Pacific and TIM obtained some failed marks in the technical evaluation. In general, the failed marks of Total Information Management as enumerated abo ve affect the counting machine itself which are material in nature, constituting non-compliance to the RFP. On the other hand, the failed marks of Mega-Pacific are mere formalities on certain documentary requirements which the BAC may waive as clearly indicated in the Invitation to Bid. "In the DOST test, TIM obtained 12 failed marks and mostly attributed to the counting machine itself as stated earlier. These are requirements of the RFP and therefore the BAC cannot disregard the same. "Mega-Pacific failed in 8 items however these are mostly on the software which can be corrected by reprogramming the software and therefore can be readily corrected.

"The BAC verbally inquired from DOST on the status of the retest of the counting machines of the TIM and was informed that the report will be forthcoming after the holy week. The BAC was informed that the retest is on a different parameters theyre being two different machines being tested. One purposely to test if previously read ballots will be read again and the other for the other features such as two sided ballots. "The said machine and the software therefore may not be considered the same machine and program as submitted in the Technical proposal and therefore may be considered an enhancement of the original proposal. "Advance information relayed to the BAC as of 1:40 PM of 15 April 2003 by Executive Director Ronaldo T. Viloria of DOST is that the result of the test in the two counting machines of TIM contains substantial errors that may lead to the failure of these machines based on the specific items of the RFP that DOST has to certify. OPENING OF FINANCIAL BIDS "The BAC on 15 April 2003, after notifying the concerned bidders opened the financial bids in their presence and the results were as follows: Mega-Pacific: Option 1 Outright purchase: Bid Price if Php1,248,949,088.00 Option 2 Lease option: 70% Down payment of cost of hardware or Php642,755,757.07 Remainder payable over 50 months or a total of Php642,755,757.07 Discount rate of 15% p.a. or 1.2532% per month. Total Number of Automated Counting Machine 1,769 ACMs (Nationwide) TIM: Total Bid Price Php1,297,860,560.00 Total Number of Automated Counting Machine 2,272 ACMs (Mindanao and NCR only) "Premises considered, it appears that the bid of Mega Pacific is the lowest calculated responsive bid, and therefore, the Bids and Awards Committee (BAC) recommends that the Phase II project re Automated Counting Machine be awarded to Mega Pacific eSolutions, Inc."48 The BAC, however, also stated on page 4 of its Report: "Based on the 14 April 2003 report (Table 6) of the DOST, it appears that both Mega-Pacific and TIM (Total Information Management Corporation) failed to meet some of the requirements. Below is a comparative presentation of the requirements wherein Mega-Pacific or TIM or both of them failed: x x x." What followed was a list of "key requirements,"

referring to technical requirements, and an indication of which of the two bidders had failed to meet them.

Failure to Meet the Required Accuracy Rating The first of the key requirements was that the counting machines were to have an accuracy rating of at least 99.9995 percent. The BAC Report indicates that both Mega Pacific and TIM failed to meet this standard. The key requirement of accuracy rating happens to be part and parcel of the Comelecs Request for Proposal (RFP). The RFP, on page 26, even states that the ballot counting machines and ballot counting software "must have an accuracy rating of 99.9995% (not merely 99.995%) or better as certified by a reliable independent testing agency." When questioned on this matter during the Oral Argument, Commissioner Borra tried to wash his hands by claiming that the required accuracy rating of 99.9995 percent had been set by a private sector group in tandem with Comelec. He added that the Commission had merely adopted the accuracy rating as part of the groups recommended bid requirements, which it had not bothered to amend even after being advised by DOST that such standard was unachievable. This excuse, however, does not in any way lessen Comelecs responsibility to adhere to its own published bidding rules, as well as to see to it that the consortium indeed meets the accuracy standard. Whichever accuracy rating is the right standard -whether 99.995 or 99.9995 percent -- the fact remains that the machines of the so-called "consortium" failed to even reach the lesser of the two. On this basis alone, it ought to have been disqualified and its bid rejected outright. At this point, the Court stresses that the essence of public bidding is violated by the practice of requiring very high standards or unrealistic specifications that cannot be met -- like the 99.9995 percent accuracy rating in this case -- only to water them down after the bid has been award. Such scheme, which discourages the entry of prospective bona fide bidders, is in fact a sure indication of fraud in the bidding, designed to eliminate fair competition. Certainly, if no bidder meets the mandatory requirements, standards or specifications, then no award should be made and a failed bidding declared. Failure of Software to Detect Previously Downloaded Data Furthermore, on page 6 of the BAC Report, it appears that the "consortium" as well as TIM failed to meet another key requirement -- for the counting machines software program to be able to detect previously downloaded precinct results and to prevent these from being entered again into the counting machine. This same deficiency on the part of both bidders reappears on page 7 of the BAC Report, as a result of the recurrence of their failure to meet the said key requirement. That the ability to detect previously downloaded data at different canvassing or consolidation levels is deemed of utmost importance can be seen from the fact that it is repeated three times in the RFP. On page 30 thereof, we find the requirement that the city/municipal canvassing system software must be able to detect previously downloaded precinct results and prevent these from being "inputted" again into the system. Again, on page 32 of the RFP, we read that the provincial/district canvassing system software must be able to detect previously downloaded city/municipal results and prevent these from being "inputted" again into the system. And once more, on page 35 of the RFP, we find the requirement that the national canvassing system software must be able to detect previously downloaded provincial/district results and prevent these from being "inputted" again into the system.

Once again, though, Comelec chose to ignore this crucial deficiency, which should have been a cause for the gravest concern. Come May 2004, unscrupulous persons may take advantage of and exploit such deficiency by repeatedly downloading and feeding into the computers results favorable to a particular candidate or candidates. We are thus confronted with the grim prospect of election fraud on a massive scale by means of just a few key strokes. The marvels and woes of the electronic age! Inability to Print the Audit Trail But that grim prospect is not all. The BAC Report, on pages 6 and 7, indicate that the ACMs of both bidders were unable to print the audit trail without any loss of data. In the case of MPC, the audit trail system was "not yet incorporated" into its ACMs.

This particular deficiency is significant, not only to this bidding but to the cause of free and credible elections. The purpose of requiring audit trails is to enable Comelec to trace and verify the identities of the ACM operators responsible for data entry and downloading, as well as the times when the various data were downloaded into the canvassing system, in order to forestall fraud and to identify the perpetrators. Thus, the RFP on page 27 states that the ballot counting machines and ballot counting software must print an audit trail of all machine operations for documentation and verification purposes. Furthermore, the audit trail must be stored on the internal storage device and be available on demand for future printing and verifying. On pages 30-31, the RFP also requires that the city/municipal canvassing system software be able to print an audit trail of the canvassing operations, including therein such data as the date and time the canvassing program was started, the log-in of the authorized users (the identity of the machine operators), the date and time the canvass data were downloaded into the canvassing system, and so on and so forth. On page 33 of the RFP, we find the same audit trail requirement with respect to the provincial/district canvassing system software; and again on pages 35-36 thereof, the same audit trail requirement with respect to the national canvassing system software. That this requirement for printing audit trails is not to be lightly brushed aside by the BAC or Comelec itself as a mere formality or technicality can be readily gleaned from the provisions of Section 7 of RA 8436, which authorizes the Commission to use an automated system for elections. The said provision which respondents have quoted several times, provides that ACMs are to possess certain features divided into two classes: those that the statute itself considers mandatory and other features or capabilities that the law deems optional. Among those considered mandatory are "provisions for audit trails"! Section 7 reads as follows: "The System shall contain the following features: (a) use of appropriate ballots; (b) stand-alone machine which can count votes and an automated system which can consolidate the results immediately; (c) with provisions for audit trails; (d) minimum human intervention; and (e) adequate safeguard/security measures." (Italics and emphases supplied.) In brief, respondents cannot deny that the provision requiring audit trails is indeed mandatory, considering the wording of Section 7 of RA 8436. Neither can Respondent Comelec deny that it has relied on the BAC Report, which indicates that the machines or the software was deficient in that respect. And yet, the Commission simply disregarded this shortcoming and awarded the Contract to private respondent, thereby violating the very law it was supposed to implement. C.

Inadequacy of Post Facto Remedial Measures Respondents argue that the deficiencies relating to the detection of previously downloaded data, as well as provisions for audit trails, are mere shortcomings or minor deficiencies in software or programming, which can be rectified. Perhaps Comelec simply relied upon the BAC Report, which states on page 8 thereof that "Mega Pacific failed in 8 items[;] however these are mostly on the software which can be corrected by re-programming x x x and therefore can be readily corrected." The undersigned ponentes questions, some of which were addressed to Commissioner Borra during the Oral Argument, remain unanswered to this day. First of all, who made the determination that the eight "fail" marks of Mega Pacific were on account of the software -- was it DOST or TWG? How can we be sure these failures were not the results of machine defects? How was it determined that the software could actually be re-programmed and thereby rectified? Did a qualified technical expert read and analyze the source code49 for the programs and conclude that these could be saved and remedied? (Such determination cannot be done by any other means save by the examination and analysis of the source code.) Who was this qualified technical expert? When did he carry out the study? Did he prepare a written report on his findings? Or did the Comelec just make a wild guess? It does not follow that all defects in software programs can be rectified, and the programs saved. In the information technology sector, it is common knowledge that there are many badly written programs, with significant programming errors written into them; hence it does not make economic sense to try to correct the programs; instead, programmers simply abandon them and just start from scratch. Theres no telling if any of these programs is unrectifiable, unless a qualified programmer reads the source code. And if indeed a qualified expert reviewed the source code, did he also determine how much work would be needed to rectify the programs? And how much time and money would be spent for that effort? Who would carry out the work? After the rectification process, who would ascertain and how would it be ascertained that the programs have indeed been properly rectified, and that they would work properly thereafter? And of course, the most important question to ask: could the rectification be done in time for the elections in 2004? Clearly, none of the respondents bothered to think the matter through. Comelec simply took the word of the BAC as gospel truth, without even bothering to inquire from DOST whether it was true that the deficiencies noted could possibly be remedied by re-programming the software. Apparently, Comelec did not care about the software, but focused only on purchasing the machines. What really adds to the Courts dismay is the admission made by Commissioner Borra during the Oral Argument that the software currently being used by Comelec was merely the "demo" version, inasmuch as the final version that would actually be used in the elections was still being developed and had not yet been finalized. It is not clear when the final version of the software would be ready for testing and deployment. It seems to the Court that Comelec is just keeping its fingers crossed and hoping the final product would work. Is there a "Plan B" in case it does not? Who knows? But all these software programs are part and parcel of the bidding and the Contract awarded to the Consortium. Why is it that the machines are already being brought in and paid for, when there is as yet no way of knowing if the final version of the software would be able to run them properly, as well as canvass and consolidate the results in the manner required?

The counting machines, as well as the canvassing system, will never work properly without the correct software programs. There is an old adage that is still valid to this day: "Garbage in, garbage out." No matter how powerful, advanced and sophisticated the computers and the servers are, if the software being utilized is defective or has been compromised, the results will be no better than garbage. And to think that what is at stake here is the 2004 national elections -- the very basis of our democratic life. Correction of Defects? To their Memorandum, public respondents proudly appended 19 Certifications issued by DOST declaring that some 285 counting machines had been tested and had passed the acceptance testing conducted by the Department on October 8-18, 2003. Among those tested were some machines that had failed previous tests, but had undergone adjustments and thus passed re-testing. Unfortunately, the Certifications from DOST fail to divulge in what manner and by what standards or criteria the condition, performance and/or readiness of the machines were re-evaluated and re-appraised and thereafter given the passing mark. Apart from that fact, the remedial efforts of respondents were, not surprisingly, apparently focused again on the machines -- the hardware. Nothing was said or done about the software -- the deficiencies as to detection and prevention of downloading and entering previously downloaded data, as well as the capability to print an audit trail. No matter how many times the machines were tested and re-tested, if nothing was done about the programming defects and deficiencies, the same danger of massive electoral fraud remains. As anyone who has a modicum of knowledge of computers would say, "Thats elementary!" And only last December 5, 2003, an Inq7.net news report quoted the Comelec chair as saying that the new automated poll system would be used nationwide in May 2004, even as the software for the system remained unfinished. It also reported that a certain Titus Manuel of the Philippine Computer Society, which was helping Comelec test the hardware and software, said that the software for the counting still had to be submitted on December 15, while the software for the canvassing was due in early January. Even as Comelec continues making payments for the ACMs, we keep asking ourselves: who is going to ensure that the software would be tested and would work properly? At any rate, the re-testing of the machines and/or the 100 percent testing of all machines (testing of every single unit) would not serve to eradicate the grave abuse of discretion already committed by Comelec when it awarded the Contract on April 15, 2003, despite the obvious and admitted flaws in the bidding process, the failure of the "winning bidder" to qualify, and the inability of the ACMs and the intended software to meet the bid requirements and rules. Comelecs Latest "Assurances" Are Unpersuasive Even the latest pleadings filed by Comelec do not serve to allay our apprehensions. They merely affirm and compound the serious violations of law and gravely abusive acts it has committed. Let us examine them. The Resolution issued by this Court on December 9, 2003 required respondents to inform it as to the number of ACMs delivered and paid for, as well as the total payment made to date for the purchase thereof. They were likewise instructed to submit a certification from the DOST attesting to the number of

ACMs tested, the number found to be defective; and "whether the reprogrammed software has been tested and found to have complied with the requirements under Republic Act No. 8436."50 In its "Partial Compliance and Manifestation" dated December 29, 2003, Comelec informed the Court that 1,991 ACMs had already been delivered to the Commission as of that date. It further certified that it had already paid the supplier the sum of P849,167,697.41, which corresponded to 1,973 ACM units that had passed the acceptance testing procedures conducted by the MIRDC-DOST51 and which had therefore been accepted by the poll body. In the same submission, for the very first time, Comelec also disclosed to the Court the following: "The Automated Counting and Canvassing Project involves not only the manufacturing of the ACM hardware but also the development of three (3) types of software, which are intended for use in the following: 1. Evaluation of Technical Bids 2. Testing and Acceptance Procedures 3. Election Day Use." Purchase of the First Type of Software Without Evaluation In other words, the first type of software was to be developed solely for the purpose of enabling the evaluation of the bidders technical bid. Comelec explained thus: "In addition to the presentation of the ACM hardware, the bidders were required to develop a base software program that will enab le the ACM to function properly. Since the software program utilized during the evaluation of bids is not the actual software program to be employed on election day, there being two (2) other types of software program that will still have to be developed and thoroughly tested prior to actual election day use, defects in the base software that can be readily corrected by reprogramming are considered minor in nature, and may therefore be waived." In short, Comelec claims that it evaluated the bids and made the decision to award the Contract to the "winning" bidder partly on the basis of the operation of the ACMs running a "base" software. That software was therefore nothing but a sample or "demo" software, which would not be the actual one that would be used on election day. Keeping in mind that the Contract involves the acquisition of not just the ACMs or the hardware, but also the software that would run them, it is now even clearer that the Contract was awarded without Comelec having seen, much less evaluated, the final product -- the software that would finally be utilized come election day. (Not even the "near-final" product, for that matter). What then was the point of conducting the bidding, when the software that was the subject of the Contract was still to be created and could conceivably undergo innumerable changes before being considered as being in final form? And that is not all! No Explanation for Lapses in the Second Type of Software The second phase, allegedly involving the second type of software, is simply denominated "Testing and Acceptance Procedures." As best as we can construe, Comelec is claiming that this second type of software is also to be developed and delivered by the supplier in connection with the "testing and

acceptance" phase of the acquisition process. The previous pleadings, though -- including the DOST reports submitted to this Court -- have not heretofore mentioned any statement, allegation or representation to the effect that a particular set of software was to be developed and/or delivered by the supplier in connection with the testing and acceptance of delivered ACMs. What the records do show is that the imported ACMs were subjected to the testing and acceptance process conducted by the DOST. Since the initial batch delivered included a high percentage of machines that had failed the tests, Comelec asked the DOST to conduct a 100 percent testing; that is, to test every single one of the ACMs delivered. Among the machines tested on October 8 to 18, 2003, were some units that had failed previous tests but had subsequently been re-tested and had passed. To repeat, however, until now, there has never been any mention of a second set or type of software pertaining to the testing and acceptance process. In any event, apart from making that misplaced and uncorroborated claim, Comelec in the same submission also professes (in response to the concerns expressed by this Court) that the reprogrammed software has been tested and found to have complied with the requirements of RA 8436. It reasoned thus: "Since the software program is an inherent element in the automated counting system, the certification issued by the MIRDC-DOST that one thousand nine hundred seventy-three (1,973) units passed the acceptance test procedures is an official recognition by the MIRDC-DOST that the software component of the automated election system, which has been reprogrammed to comply with the provisions of Republic Act No. 8436 as prescribed in the Ad Hoc Technical Evaluation Committees ACM Testing and Acceptance Manual, has passed the MIRDC-DOST tests." The facts do not support this sweeping statement of Comelec. A scrutiny of the MIRDC-DOST letter dated December 15, 2003,52 which it relied upon, does not justify its grand conclusion. For claritys sa ke, we quote in full the letter-certification, as follows: "15 December 2003 "HON. RESURRECCION Z. BORRA Commissioner-in-Charge Phase II, Modernization Project Commission on Elections Intramuros, Manila Attention: Atty. Jose M. Tolentino, Jr. Project Director "Dear Commissioner Borra: "We are pleased to submit 11 DOST Test Certifications representing 11 lots and covering 158 units of automated counting machines (ACMs) that we have tested from 02-12 December 2003. "To date, we have tested all the 1,991 units of ACMs, broken down as follow: (sic)

1st batch - 30 units 4th batch - 438 units 2nd batch - 288 units 5th batch - 438 units 3rd batch - 414 units 6th batch - 383 units "It should be noted that a total of 18 units have failed the test. Out of these 18 units, only one (1) unit has failed the retest. "Thank you and we hope you will find everything in order. "Very truly yours, "ROLANDO T. VILORIA, CESO III Executive Director cum Chairman, DOST-Technical Evaluation Committee" Even a cursory glance at the foregoing letter shows that it is completely bereft of anything that would remotely support Comelecs contention that the "software component of the automated election system x x x has been reprogrammed to comply with" RA 8436, and "has passed the MIRDC-DOST tests." There is no mention at all of any software reprogramming. If the MIRDC-DOST had indeed undertaken the supposed reprogramming and the process turned out to be successful, that agency would have proudly trumpeted its singular achievement. How Comelec came to believe that such reprogramming had been undertaken is unclear. In any event, the Commission is not forthright and candid with the factual details. If reprogramming has been done, who performed it and when? What exactly did the process involve? How can we be assured that it was properly performed? Since the facts attendant to the alleged reprogramming are still shrouded in mystery, the Court cannot give any weight to Comelecs bare allegations. The fact that a total of 1,973 of the machines has ultimately passed the MIRDC-DOST tests does not by itself serve as an endorsement of the soundness of the software program, much less as a proof that it has been reprogrammed. In the first place, nothing on record shows that the tests and re-tests conducted on the machines were intended to address the serious deficiencies noted earlier. As a matter of fact, the MIRDC-DOST letter does not even indicate what kinds of tests or re-tests were conducted, their exact nature and scope, and the specific objectives thereof.53 The absence of relevant supporting documents, combined with the utter vagueness of the letter, certainly fails to inspire belief or to justify the expansive confidence displayed by Comelec. In any event, it goes without saying that remedial measures such as the alleged reprogramming cannot in any way mitigate the grave abuse of discretion already committed as early as April 15, 2003. Rationale of Public Bidding Negated by the Third Type of Software

Respondent Comelec tries to assuage this Courts anxiety in these words: "The reprogrammed software that has already passed the requirements of Republic Act No. 8436 during the MIRDC-DOST testing and acceptance procedures will require further customization since the following additional elements, among other things, will have to be considered before the final software can be used on election day: 1. Final Certified List of Candidates x x x 2. Project of Precincts x x x 3. Official Ballot Design and Security Features x x x 4. Encryption, digital certificates and digital signatures x x x. The certified list of candidates for national elective positions will be finalized on or before 23 January 2004 while the final list of projects of precincts will be prepared also on the same date. Once all the above elements are incorporated in the software program, the Test Certification Group created by the Ad Hoc Technical Evaluation Committee will conduct meticulous testing of the final software before the same can be used on election day. In addition to the testing to be conducted by said Test Certification Group, the Comelec will conduct mock elections in selected areas nationwide not only for purposes of public information but also to further test the final election day program. Public respondent Comelec, therefore, requests that it be given up to 16 February 2004 to comply with this requirement." The foregoing passage shows the imprudent approach adopted by Comelec in the bidding and acquisition process. The Commission says that before the software can be utilized on election day, it will require "customization" through addition of data -- like the list of candidates, project of precincts, and so on. And inasmuch as such data will become available only in January 2004 anyway, there is therefore no perceived need on Comelecs part to rush the supplier into producing the final (or near -final) version of the software before that time. In any case, Comelec argues that the software needed for the electoral exercise can be continuously developed, tested, adjusted and perfected, practically all the way up to election day, at the same time that the Commission is undertaking all the other distinct and diverse activities pertinent to the elections. Given such a frame of mind, it is no wonder that Comelec paid little attention to the counting and canvassing software during the entire bidding process, which took place in February-March 2003. Granted that the software was defective, could not detect and prevent the re-use of previously downloaded data or produce the audit trail -- aside from its other shortcomings -- nevertheless, all those deficiencies could still be corrected down the road. At any rate, the software used for bidding purposes would not be the same one that will be used on election day, so why pay any attention to its defects? Or to the Comelecs own bidding rules for that matter? Clearly, such jumbled ratiocinations completely negate the rationale underlying the bidding process mandated by law. At the very outset, the Court has explained that Comelec flagrantly violated the public policy on public biddings (1) by allowing MPC/MPEI to participate in the bidding even though it was not qualified to do so; and (2) by eventually awarding the Contract to MPC/MPEI. Now, with the latest explanation given by Comelec, it is clear that the Commission further desecrated the law on public bidding by permitting the winning bidder to change and alter the subject of the Contract (the software), in effect allowing a substantive amendment without public bidding. This stance is contrary to settled jurisprudence requiring the strict application of pertinent rules, regulations and guidelines for public bidding for the purpose of placing each bidder, actual or potential, on the same footing. The essence of public bidding is, after all, an opportunity for fair competition, and a fair basis for the precise comparison of bids. In common parlance, public bidding aims to "level the playing field." That means each bidder must bid under the same conditions; and be subject to the same

guidelines, requirements and limitations, so that the best offer or lowest bid may be determined, all other things being equal. Thus, it is contrary to the very concept of public bidding to permit a variance between the conditions under which bids are invited and those under which proposals are submitted and approved; or, as in this case, the conditions under which the bid is won and those under which the awarded Contract will be complied with. The substantive amendment of the contract bidded out, without any public bidding -- after the bidding process had been concluded -- is violative of the public policy on public biddings, as well as the spirit and intent of RA 8436. The whole point in going through the public bidding exercise was completely lost. The very rationale of public bidding was totally subverted by the Commission. From another perspective, the Comelec approach also fails to make sense. Granted that, before election day, the software would still have to be customized to each precinct, municipality, city, district, and so on, there still was nothing at all to prevent Comelec from requiring prospective suppliers/bidders to produce, at the very start of the bidding process, the "next-to-final" versions of the software (the best software the suppliers had) -- pre-tested and ready to be customized to the final list of candidates and project of precincts, among others, and ready to be deployed thereafter. The satisfaction of such requirement would probably have provided far better bases for evaluation and selection, as between suppliers, than the socalled demo software.Respondents contend that the bidding suppliers counting machines were previously used in at least one political exercise with no less than 20 million voters. If so, it stands to reason that the software used in that past electoral exercise would probably still be available and, in all likelihood, could have been adopted for use in this instance. Paying for machines and software of that category (already tried and proven in actual elections and ready to be adopted for use) would definitely make more sense than paying the same hundreds of millions of pesos for demo software and empty promises of usable programs in the future. But there is still another gut-level reason why the approach taken by Comelec is reprehensible. It rides on the perilous assumption that nothing would go wrong; and that, come election day, the Commission and the supplier would have developed, adjusted and "re-programmed" the software to the point where the automated system could function as envisioned. But what if such optimistic projection does not materialize? What if, despite all their herculean efforts, the software now being hurriedly developed and tested for the automated system performs dismally and inaccurately or, worse, is hacked and/or manipulated?54 What then will we do with all the machines and defective software already paid for in the amount of P849 million of our tax money? Even more important, what will happen to our country in case of failure of the automation? The Court cannot grant the plea of Comelec that it be given until February 16, 2004 to be able to submit a "certification relative to the additional elements of the software that will be customized," because for us to do so would unnecessarily delay the resolution of this case and would just give the poll body an unwarranted excuse to postpone the 2004 elections. On the other hand, because such certification will not cure the gravely abusive actions complained of by petitioners, it will be utterly useless.

Is this Court being overly pessimistic and perhaps even engaging in speculation? Hardly. Rather, the Court holds that Comelec should not have gambled on the unrealistic optimism that the suppliers software development efforts would turn out well. The Commission should have adopted a much more prudent and judicious approach to ensure the delivery of tried and tested software, and readied alternative courses of action in case of failure. Considering that the nations future is at stake here, it should have done no less.

Epilogue Once again, the Court finds itself at the crossroads of our nations history. At stake in this controversy is not just the business of a computer supplier, or a questionable proclamation by Comelec of one or more public officials. Neither is it about whether this country should switch from the manual to the automated system of counting and canvassing votes. At its core is the ability and capacity of the Commission on Elections to perform properly, legally and prudently its legal mandate to implement the transition from manual to automated elections. Unfortunately, Comelec has failed to measure up to this historic task. As stated at the start of this Decision, Comelec has not merely gravely abused its discretion in awarding the Contract for the automation of the counting and canvassing of the ballots. It has also put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally mandated technical requirements. Inadequate as they are, the remedies it proffers post facto do not cure the grave abuse of discretion it already committed (1) on April 15, 2003, when it illegally made the award; and (2) "sometime" in May 2003 when it executed the Contract for the purchase of defective machines and non-existent software from a non-eligible bidder. For these reasons, the Court finds it totally unacceptable and unconscionable to place its imprimatur on this void and illegal transaction that seriously endangers the breakdown of our electoral system. For this Court to cop-out and to close its eyes to these illegal transactions, while convenient, would be to abandon its constitutional duty of safeguarding public interest. As a necessary consequence of such nullity and illegality, the purchase of the machines and all appurtenances thereto including the still-to-be-produced (or in Comelecs words, to be "reprogrammed") software, as well as all the payments made therefor, have no basis whatsoever in law. The public funds expended pursuant to the void Resolution and Contract must therefore be recovered from the payees and/or from the persons who made possible the illegal disbursements, without prejudice to possible criminal prosecutions against them. Furthermore, Comelec and its officials concerned must bear full responsibility for the failed bidding and award, and held accountable for the electoral mess wrought by their grave abuse of discretion in the performance of their functions. The State, of course, is not bound by the mistakes and illegalities of its agents and servants. True, our country needs to transcend our slow, manual and archaic electoral process. But before it can do so, it must first have a diligent and competent electoral agency that can properly and prudently implement a well-conceived automated election system. At bottom, before the country can hope to have a speedy and fraud-free automated election, it must first be able to procure the proper computerized hardware and software legally, based on a transparent and valid system of public bidding. As in any democratic system, the ultimate goal of automating elections must be achieved by a legal, valid and above-board process of acquiring the necessary tools and skills therefor. Though the Philippines needs an automated electoral process, it cannot accept just any system shoved into its bosom through improper and illegal methods. As the saying goes, the end never justifies the means. Penumbral contracting will not produce enlightened results.

WHEREFORE, the Petition is GRANTED. The Court hereby declares NULL and VOID Comelec Resolution No. 6074 awarding the contract for Phase II of the AES to Mega Pacific Consortium (MPC). Also declared null and void is the subject Contract executed between Comelec and Mega Pacific eSolutions (MPEI).55 Comelec is further ORDERED to refrain from implementing any other contract or agreement entered into with regard to this project. Let a copy of this Decision be furnished the Office of the Ombudsman which shall determine the criminal liability, if any, of the public officials (and conspiring private individuals, if any) involved in the subject Resolution and Contract. Let the Office of the Solicitor General also take measures to protect the government and vindicate public interest from the ill effects of the illegal disbursements of public funds made by reason of the void Resolution and Contract. SO ORDERED. Carpio, Austria-Martinez, Carpio-Morales, and Callejo, Sr., JJ., concur. Davide, C.J., Jr., Vitug, Ynares-Santiago, JJ., see separate opinion. Puno, J., concur, and also joins the opinion of J. Ynares-Santiago. Quisumbing, J., in the result. Sandoval-Gutierrez, J., see concurring opinion. Corona, Azcuna, JJ., joins the dissent of J. Tinga. Tinga, J., pls. see dissenting opinion.

Footnotes

1 Republic v. Cocofed, 372 SCRA 462, 493, December 14, 2001. 2 Taada v. Angara, 272 SCRA 18, 79, May 2, 1997. 3 Francisco v. House of Representatives, GR No. 160261 and consolidated cases, November 10, 2003, per Morales, J. 4 Rollo, Vol. I, pp. 3-48. While petitioners labeled their pleading as one for prohibition and mandamus, its allegations qualify it also as one for certiorari. 5 An act authorizing the Commission on Elections to conduct a nationwide demonstration of a computerized election system and pilot-test it in the March 1996 elections in the Autonomous Region in Muslim Mindanao (ARMM) and for other purposes. 6 An act authorizing the Commission on Elections to use an automated election system in the May 11, 1998 national or local elections and in subsequent national and local electoral exercises, providing funds therefor and for other purposes. 7 Section 6 of RA 8436 provides "[i]f in spite of its diligent efforts to implement this mandate in the exercise of this authority, it becomes evident by February 9, 1998 that the Commission cannot fully implement the automated election system for national positions in the May 11, 1998 elections, the

elections for both national and local positions shall be done manually except in the Autonomous Region in Muslim Mindanao (ARMM) where the automated election system shall be used for all positions." 8 Loong v. Comelec, 365 Phil. 386, April 14, 1999; see also Panganiban, Leadership by Example, 1999 ed., pp. 201-249. 9 Annex "7" of the Comment of Private Respondents MPC and MPEI, rollo, Vol. II, p. 638. 10 Annex "8" of the Comment of Private Respondents MPC and MPEI, rollo, Vol. II, pp. 641-642. 11 Annex "G" of the Petition, Request for Proposal, p. 12; rollo, Vol. I, p. 71. 12 Id., pp. 21-23 & 80-82. 13 According to Public Respondent Comelecs Memorandum prepared by the OSG, p. 8; rollo, Vol. IV, p. 2413. 14 Photocopy appended as Annex "B" of the Petition; rollo, Vol. I, pp. 52-53. 15 Photocopy appended as Annex "C" of the Petition; rollo, Vol. I, pp. 54-55. 16 The case was deemed submitted for decision on November 5, 2003, upon this Courts receipt of Private Respondent MPC/MPEIs Memorandum, which was signed by Attys. Alfredo V. Lazaro Jr., Juanito I. Velasco Jr. and Ma. Concepcion V. Murillo of the Lazaro Law Firm. On October 27, 2003, the Court received petitioners Memorandum, which was signed by Atty. Alvin Jose B . Felizardo of Pastelero Law Office, and Public Respondent Comelecs Memorandum, signed by Comelec Comm. Florentino A. Tuason Jr. Apart from these, the Office of the Solicitor General (OSG) filed another Memorandum on behalf of Comelec, also on October 27, 2003, signed by Asst. Sol. Gen. Carlos N. Ortega, Asst. Sol. Gen. Renan E. Ramos, Sol. Jane E. Yu and Asso. Sol. Catherine Joy R. Mallari, with a note that Sol. Gen. Alfredo L. Benipayo "inhibited himself." The writing of the Decision in this case was initially raffled to Justice Dante O. Tinga. However, during the Courts deliberations, the present ponentes then "Dissenting Opinion" to the draft report of Justice Tinga was upheld by the majority. Hence, the erstwhile Dissent was rewritten into this full ponencia. 17 Page 11; rollo, Vol. IV, p. 2390. During the Oral Argument on October 7, 2003, the Court limited the issues to the following: (1) locus standi of petitioners; (2) prematurity of the Petition because of nonexhaustion of administrative remedies for failure to avail of protest mechanisms; and (3) validity of the award and the Contract being challenged in the Petition. 18 Chavez v. Presidential Commission on Good Government, 360 Phil. 133, December 9, 1998, per Panganiban, J. 19 Kilosbayan, Inc. v. Morato, 320 Phil. 171, November 16, 1995, per Mendoza, J. 20 Tatad v. Secretary of the Department of Energy, 346 Phil. 321, November 5, 1997, per Puno, J. 21 Del Mar v. Philippine Amusement and Gaming Corporation, 346 SCRA 485, November 29, 2000, per Puno, J.

22 Kilosbayan, Inc. v. Morato, supra. 23 Dumlao v. Comelec, 95 SCRA 392, January 22, 1980, per Melencio-Herrera, J. 24 Philconsa v. Mathay, 124 Phil. 890, October 4, 1966, per Reyes J.B.L., J. 25 Respondent Comelecs Memorandum, pp. 50-51. 26 The law obliges no one to perform the impossible. 27 See private respondents Memorandum, p. 60. 28 Photocopy appended as Annex "B" of the petition. 29 334 Phil. 146, January 10, 1997. 30 Id., p. 153, per Torres Jr., J. 31 Although by its Resolution 6074, Comelec awarded the bid to MPC, the actual Contract was entered into by Comelec with MPEI. The Contract did not indicate an exact date of execution (except that it was allegedly done on the "____ day of May,") but it was apparently notarized on June 30, 2003. 32 In connection with this, public respondents, in their Memorandum made reference to the Implementing Rules and Regulations of RA 6957 as amended by RA 7718 (the Build-Operate-Transfer Law), and considered said IRR as being applicable to the instant case on a suppletory basis, pending the promulgation of implementing rules for RA 9184 (the Government Procurement Act). For our purposes, it is well worth noting that Sec. 5.4 of the IRR for RA 6957 as amended, speaks of prequalification requirements for project proponents, and in sub-section (b)(i), it provides that, for purposes of evaluating a joint venture or consortium, it shall submit as part of its prequalification statement a business plan which shall among others identify its members and its contractor(s), and the description of the respective roles said members and contractors shall play or undertake in the project. If undecided on a specific contractor, the proponent may submit a short list of contractors from among which it will select the final contractor. Short listed contractors are required to submit a statement indicating willingness to participate in the project and capacity to undertake the requirements of the project. The business plan shall disclose which of the members of the joint venture/consortium shall be the lead member, the financing arm, and/or facility operator(s), and the contractor(s). In other words, since public respondents argue that the IRR of RA 6957 as amended would be suppletorily applicable to this bidding, they could not have been unaware of the requirement under Sec. 5.4 (b)(i) thereof, in respect of submission of the requisite business plan by a joint venture or consortium participating in a bidding. 33 Now, what would prevent an enterprising individual from obtaining copies of the Articles of Incorporation and financial statements of, let us say, San Miguel Corporation and Ayala Corporation from the SEC, and using these to support ones claim that these two giant conglomerates have formed a consortium with ones own penny-ante company for the purpose of bidding for a multi-billion peso contract? As far as Comelec is concerned, the answer seems to be: Nothing. 34 TSN, October 7, 2003, p. 104. 35 Ibid.

36 Id., pp. 104-105. 37 Id., pp. 103-108. 38 Id., pp. 108-114. 39 Id., pp. 142-145. 40 On pp. 42-43 of the Memorandum of public respondents, filed with this Court on October 27, 2003, Comm. Tuason himself signed this pleading in his capacity as counsel of all the public respondents. 41 Copies of these four agreements were belatedly submitted to this Court by MPEI through a Manifestation with Profuse Apologies filed on October 9, 2003. 42 Copies of the four separate bilateral agreements were submitted to the Court last October 9, 2003. 43 The date was carelessly stated as "____ May, 2003." 44 At p. 38. 45 During the Oral Argument, counsel for public respondents admitted that Comelec was aware that not all the members of the "consortium" had agreed to be jointly and solidarily liable with MPEI. 46 232 SCRA 110, 144, May 5, 1994, per Davide Jr., J. (now CJ). 47 Culled from table 6, DOST Report; rollo, Vol. II, pp. 1059-1072. 48 Annex "I" of the Petition, Vol. I, pp. 116-118. 49 Source code is the program instructions in their original form. Initially, a programmer writes a computer program in a particular programming language. This form of the program is called the source program, or more generically, source code. To execute the program, however, the programmer must translate it into machine language, the language that the computer understands. Source code is the only format that is readable by humans. When you purchase programs, you usually receive them in their machine-language format. This means that you can execute them directly, but you cannot read or modify them. Some software manufacturers provide source code, but this is useful only if you are an experienced programmer. 50 The key passages of the Courts Resolution of December 9, 2003 were cited and reproduced verbatim in the Comelecs Partial Compliance and Manifestation. 51 Metals Industry Research and Development Center (MIRDC) of the Department of Science & Technology (DOST). 52 Photocopy of the MIRDC-DOST letter of Dec. 15, 2003 is attached as Annex "A" to Respondent Comelecs Partial Compliance and Manifestation. However, the 11 Test Certifications of the DOST (covering 11 lots or 158 ACMs) which were purportedly attached to this letter, have not been reproduced and submitted to the Court, for reasons known only to respondents.

53 For example, one can conduct tests to see if certain machines will tip over and fall on their sides when accidentally bumped, or if they have a tendency to collapse under their own weight. A less frivolous example might be that of conducting the same tests, but lowering the bar or passing mark. 54 In the December 15, 2003 issue of the Philippine Daily Inquirer is an item titled "Digital dagdag bawas: a nonpartisan issue" by Dean Jorge Bocobo, from which the following passages appear: "The Commission on Elections will use automated counting machines to tally paper ballots in the May elections, and a telecommunications network to transmit the results to headquarters, along with CDs of the data. Yet, with only five months to go, the application software packages for that crucial democratic exercise--several hundred thousand lines of obscure and opaque code--has not yet even been delivered in its final form, Comelec Chairman Benjamin Abalos admitted last week. "My jaw dropped in amazement. Having built software for General Electric Co.'s medical systems business and military aircraft engines division (in another lifetime), I have learned the hard and painful way that 90 percent of unintended fatal problems with complex software lies in the last 10 percent of the code produced. From experience, I can assure you now with metaphysical certainty that not even the people furiously writing that software know whether it will actually work as intended on May 10, much less guarantee it. Simply put, the proposed software-hardware combination has neither been tested completely nor verified to comply with specifications." 55 Dated " ____ May, 2003" but notarized on June 30, 2003.

The Lawphil Project - Arellano Law Foundation --------------------------------------------------------------------------------

EN BANC [G.R. No. 148334. January 21, 2004] ARTURO M. TOLENTINO and ARTURO C. MOJICA, petitioners, vs. COMMISSION ON ELECTIONS, SENATOR RALPH G. RECTO and SENATOR GREGORIO B. HONASAN, respondents. DECISION CARPIO, J.: The Case This is a petition for prohibition to set aside Resolution No. NBC 01-005 dated 5 June 2001 (Resolution No. 01-005) and Resolution No. NBC 01-006 dated 20 July 2001 (Resolution No. 01-006) of respondent Commission on Elections (COMELEC). Resolution No. 01-005 proclaimed the 13 candidates elected as Senators in the 14 May 2001 elections while Resolution No. 01-006 declared official and final the ranking of the 13 Senators proclaimed in Resolution No. 01 -005. The Facts Shortly after her succession to the Presidency in January 2001, President Gloria Macapagal-Arroyo nominated then Senator Teofisto T. Guingona, Jr. (Senator Guingona) as Vice -President. Congress confirmed the nomination of Senator Guingona who took his oath as Vice-President on 9 February 2001. Following Senator Guingonas confirmation, the Senate on 8 February 2001 passed Resolution No. 84 (Resolution No. 84) certifying to the existence of a vacancy in the Senate. Resolution No. 84 called on COMELEC to fill the vacancy through a special election to be held simultaneously with the regular elections on 14 May 2001. Twelve Senators, with a 6-year term each, were due to be elected in that election.[1] Resolution No. 84 further provided that the Senatorial cand idate garnering the 13th highest number of votes shall serve only for the unexpired term of former Senator Teofisto T. Guingona, Jr., which ends on 30 June 2004.[2] On 5 June 2001, after COMELEC had canvassed the election results from all the provinces but one (Lanao del Norte), COMELEC issued Resolution No. 01-005 provisionally proclaiming 13 candidates as the elected Senators. Resolution No. 01-005 also provided that the first twelve (12) Senators shall serve for a term of six (6) years and the thirteenth (13th) Senator shall serve the unexpired term of three (3) years of Senator Teofisto T. Guingona, Jr. who was appointed Vice-President.[3] Respondents Ralph Recto (Recto) and Gregorio Honasan (Honasan) ranked 12th and 13th, respectively, in Reso lution No. 01-005. On 20 June 2001, petitioners Arturo Tolentino and Arturo Mojica (petitioners), as voters and taxpayers, filed the instant petition for prohibition, impleading only COMELEC as respondent. Petitioners sought to enjoin COMELEC from proclaiming with finality the candidate for Senator receiving the 13th highest number of votes as the winner in the special election for a single three-year term seat. Accordingly, petitioners prayed for the nullification of Resolution No. 01-005 in so far as it makes a proclamation to such effect.

Petitioners contend that COMELEC issued Resolution No. 01-005 without jurisdiction because: (1) it failed to notify the electorate of the position to be filled in the special election as required under Section 2 of Republic Act No. 6645 (R.A. No. 6645);[4] (2) it failed to require senatorial candidates to indicate in their certificates of candidacy whether they seek election under the special or regular elections as allegedly required under Section 73 of Batas Pambansa Blg. 881;[5] and, consequently, (3) it failed to specify in the Voters Information Sheet the candidates seeking election under the special or regular senatorial elections as purportedly required under Section 4, paragraph 4 of Republic Act No. 66 46 (R.A. No. 6646).[6] Petitioners add that because of these omissions, COMELEC canvassed all the votes cast for the senatorial candidates in the 14 May 2001 elections without distinction such that there were no two separate Senate elections held simultaneously but just a single election for thirteen seats, irrespective of term.[7] Stated otherwise, petitioners claim that if held simultaneously, a special and a regular election must be distinguished in the documentation as well as in the canvassing of their results. To support their claim, petitioners cite the special elections simultaneously held with the regular elections of 13 November 1951 and 8 November 1955 to fill the seats vacated by Senators Fernando Lopez and Carlos P. Garcia, respectively, who became Vice-Presidents during their tenures in the Senate.[8] Petitioners point out that in those elections, COMELEC separately canvassed the votes cast for the senatorial candidates running under the regular elections from the votes cast for the candidates running under the special elections. COMELEC also separately proclaimed the winners in each of those elections.[9] Petitioners sought the issuance of a temporary restraining order during the pendency of their petition. Without issuing any restraining order, we required COMELEC to Comment on the petition. On 20 July 2001, after COMELEC had canvassed the results from all the provinces, it issued Resolution No. 01-006 declaring official and final the ranking of the 13 Senators proclaimed in Resolution No. 01005. The 13 Senators took their oaths of office on 23 July 2001. In view of the issuance of Resolution No. 01-006, the Court required petitioners to file an amended petition impleading Recto and Honasan as additional respondents. Petitioners accordingly filed an amended petition in which they reiterated the contentions raised in their original petition and, in addition, sought the nullification of Resolution No. 01-006. In their Comments, COMELEC, Honasan, and Recto all claim that a special election to fill the seat vacated by Senator Guingona was validly held on 14 May 2001. COMELEC and Honasan further raise preliminary issues on the mootness of the petition and on petitioners standing to litigate. Honasan also claims that the petition, which seeks the nullity of his proclamation as Senator, is actually a quo warranto petition and the Court should dismiss the same for lack of jurisdiction. For his part, Recto, as the 12th ranking Senator, contends he is not a proper party to this case because the petition only involves the validity of the proclamation of the 13th placer in the 14 May 2001 senatorial elections. The Issues The following are the issues presented for resolution: (1) Procedurally

(a) whether the petition is in fact a petition for quo warranto over which the Senate Electoral Tribunal is the sole judge; (b) whether the petition is moot; and (c) whether petitioners have standing to litigate. (2) On the merits, whether a special election to fill a vacant three-year term Senate seat was validly held on 14 May 2001. The Ruling of the Court The petition has no merit. On the Preliminary Matters The Nature of the Petition and the Courts Jurisdiction A quo warranto proceeding is, among others, one to determine the right of a public officer in the exercise of his office and to oust him from its enjoyment if his claim is not well-founded.[10] Under Section 17, Article VI of the Constitution, the Senate Electoral Tribunal is the sole judge of all contests relating to the qualifications of the members of the Senate. A perusal of the allegations contained in the instant petition shows, however, that what petitioners are questioning is the validity of the special election on 14 May 2001 in which Honasan was elected. Petitioners various prayers are, namely: (1) a declaration that no special election was held simultaneously with the general elections on 14 May 2001; (2) to enjoin COMELEC from declaring anyone as having won in the special election; and (3) to annul Resolution Nos. 01-005 and 01-006 in so far as these Resolutions proclaim Honasan as the winner in the special election. Petitioners anchor their prayers on COMELECs alleged failure to comply with certain requirements pertaining to the conduct of that special election. Clearly then, the petition does not seek to determine Honasans right in the exercise of his office as Senator. Petitioners prayer for the annulment of Honasans proclamation and, ultimately, election is merely incidental to petitioners cause of action. Consequently, the Court can properly exercise jurisdiction over the instant petition. On the Mootness of the Petition COMELEC contends that its proclamation on 5 June 2001 of the 13 Senators and its subsequent confirmation on 20 July 2001 of the ranking of the 13 Senators render the instant petition to set aside Resolutions Nos. 01-005 and 01-006 moot and academic. Admittedly, the office of the writ of prohibition is to command a tribunal or board to desist from committing an act threatened to be done without jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.[11] Consequently, the writ will not lie to enjoin acts already done.[12] However, as an exception to the rule on mootness, courts will decide a question otherwise moot if it is capable of repetition yet evading review.[13] Thus, in Alunan III v. Mirasol,[14] we took cognizance of a petition to set aside an order canceling the general elections for the Sangguniang Kabataan (SK) on 4 December 1992 despite that at the time the petition was filed, the SK election had already taken place. We noted in Alunan that since the question of the validity of the order sought to be annulled is likely to arise in every

SK elections and yet the question may not be decid ed before the date of such elections, the mootness of the petition is no bar to its resolution. This observation squarely applies to the instant case. The question of the validity of a special election to fill a vacancy in the Senate in relation to COMELE Cs failure to comply with requirements on the conduct of such special election is likely to arise in every such election. Such question, however, may not be decided before the date of the election. On Petitioners Standing Honasan questions petitioners standing to bring the instant petition as taxpayers and voters because petitioners do not claim that COMELEC illegally disbursed public funds. Neither do petitioners claim that they sustained personal injury because of the issuance of Resolution Nos. 01-005 and 01-006. Legal standing or locus standi refers to a personal and substantial interest in a case such that the party has sustained or will sustain direct injury because of the challenged governmental act.[15] The requirement of standing, which necessarily sharpens the presentation of issues,[16] relates to the constitutional mandate that this Court settle only actual cases or controversies.[17] Thus, generally, a party will be allowed to litigate only when (1) he can show that he has personally suffered some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.[18] Applied strictly, the doctrine of standing to litigate will indeed bar the instant petition. In questioning, in their capacity as voters, the validity of the special election on 14 May 2001, petitioners assert a harm classified as a generalized grievance. This generalized grievance is shared in substantially equal measure by a large class of voters, if not all the voters, who voted in that election.[19] Neither have petitioners alleged, in their capacity as taxpayers, that the Court should give due course to the petition because in the special election held on 14 May 2001 tax money [was] x x x extracted and spent in violation of specific constitutional protections against abuses of legislative power or that there [was] misapplication of such funds by COMELEC or that public money [was] deflected to any improper purpose.[20] On the other hand, we have relaxed the requirement on standing and exercised our discretion to give due course to voters suits involving the right of suffrage.[21] Also, in the recent case of Integrated Bar of the Philippines v. Zamora,[22] we gave the same liberal treatment to a petition filed by the Integrated Bar of the Philippines (IBP). The IBP questioned the validity of a Presidential directive deploying elements of the Philippine National Police and the Philippine Marines in Metro Manila to conduct patrols even though the IBP presented too general an interest. We held: [T]he IBP primarily anchors its standing on its alleged responsibility to uphold the rule of law and the Constitution. Apart from this declaration, however, the IBP asserts no other basis in support of its locus standi. The mere invocation by the IBP of its duty to preserve the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it with standing in this case. This is too general an interest which is shared by other groups and the whole citizenry x x x. Having stated the foregoing, this Court has the discretion to take cognizance of a suit which does not satisfy the requirement of legal standing when paramount interest is involved. In not a few cases, the court has adopted a liberal attitude on the locus standi of a petitioner where the petitioner is able to craft an issue of transcendental significance to the people. Thus, when the issues raised are of paramount importance to the public, the Court may brush aside technicalities of procedure. In this case, a reading of the petition shows that the IBP has advanced constitutional issues which deserve the attention of this

Court in view of their seriousness, novelty and weight as precedents. Moreover, because peace and order are under constant threat and lawless violence occurs in increasing tempo, undoubtedly aggravated by the Mindanao insurgency problem, the legal controversy raised in the petition almost certainly will not go away. It will stare us in the face again. It, therefore, behooves the Court to relax the rules on standing and to resolve the issue now, rather than later.[23] (Emphasis supplied) We accord the same treatment to petitioners in the instant case in their capacity as voters since they raise important issues involving their right of suffrage, considering that the issue raised in this petition is likely to arise again. Whether a Special Election for a Single, Three-Year Term Senatorial Seat was Validly Held on 14 May 2001 Under Section 9, Article VI of the Constitution, a special election may be called to fill any vacancy in the Senate and the House of Representatives in the manner prescribed by law, thus: In case of vacancy in the Senate or in the House of Representatives, a special election may be called to fill such vacancy in the manner prescribed by law, but the Senator or Member of the House of Representatives thus elected shall serve only for the unexpired term. (Emphasis supplied) To implement this provision of the Constitution, Congress passed R.A. No. 6645, which provides in pertinent parts: SECTION 1. In case a vacancy arises in the Senate at least eighteen (18) months or in the House of Representatives at least one (1) year before the next regular election for Members of Congress, the Commission on Elections, upon receipt of a resolution of the Senate or the House of Representatives, as the case may be, certifying to the existence of such vacancy and calling for a special election, shall hold a special election to fill such vacancy. If Congress is in recess, an official communication on the existence of the vacancy and call for a special election by the President of the Senate or by the Speaker of the House of Representatives, as the case may be, shall be sufficient for such purpose. The Senator or Member of the House of Representatives thus elected shall serve only for the unexpired term. SECTION 2. The Commission on Elections shall fix the date of the special election, which shall not be earlier than forty-five (45) days nor later than ninety (90) days from the date of such resolution or communication, stating among other things the office or offices to be voted for: Provided, however, That if within the said period a general election is scheduled to be held, the special election shall be held simultaneously with such general election. (Emphasis supplied) Section 4 of Republic Act No. 7166 subsequently amended Section 2 of R.A. No. 6645, as follows: Postponement, Failure of Election and Special Elections. x x x In case a permanent vacancy shall occur in the Senate or House of Representatives at least one (1) year before the expiration of the term, the Commission shall call and hold a special election to fill the vacancy not earlier than sixty (60) days nor longer than ninety (90) days after the occurrence of the vacancy. However, in case of such vacancy in the Senate, the special election shall be held simultaneously with the next succeeding regular election. (Emphasis supplied)

Thus, in case a vacancy arises in Congress at least one year before the expiration of the term, Section 2 of R.A. No. 6645, as amended, requires COMELEC: (1) to call a special election by fixing the date of the special election, which shall not be earlier than sixty (60) days nor later than ninety (90) after the occurrence of the vacancy but in case of a vacancy in the Senate, the special election shall be held simultaneously with the next succeeding regular election; and (2) to give notice to the voters of, among other things, the office or offices to be voted for. Did COMELEC, in conducting the special senatorial election simultaneously with the 14 May 2001 regular elections, comply with the requirements in Section 2 of R.A. No. 6645? A survey of COMELECs resolutions relating to the conduct of the 14 May 2001 elections reveals that they contain nothing which would amount to a compliance, either strict or substantial, with the requirements in Section 2 of R.A. No. 6645, as amended. Thus, nowhere in its resolutions[24] or even in its press releases[25] did COMELEC state that it would hold a special election for a single three-year term Senate seat simultaneously with the regular elections on 14 May 2001. Nor did COMELEC give formal notice that it would proclaim as winner the senatorial candidate receiving the 13th highest number of votes in the special election. The controversy thus turns on whether COMELECs failure, assuming it did fail, to comply with the requirements in Section 2 of R.A. No. 6645, as amended, invalidated the conduct of the special senatorial election on 14 May 2001 and accordingly rendered Honasans proclamation as the winner in that special election void. More precisely, the question is whether the special election is invalid for lack of a call for such election and for lack of notice as to the office to be filled and the manner by which the winner in the special election is to be determined. For reasons stated below, the Court answers in the negative. COMELECs Failure to Give Notice of the Time of the Special Election Did Not Negate the Calling of such Election The calling of an election, that is, the giving notice of the time and place of its occurrence, whether made by the legislature directly or by the body with the duty to give such call, is indispensable to the elections validity.[26] In a general election, where the law fixes the date of the election, the election is valid without any call by the body charged to administer the election.[27] In a special election to fill a vacancy, the rule is that a statute that expressly provides that an election to fill a vacancy shall be held at the next general elections fixes the date at which the special election is to be held and operates as the call for that election. Consequently, an election held at the time thus prescribed is not invalidated by the fact that the body charged by law with the duty of calling the election failed to do so.[28] This is because the right and duty to hold the election emanate from the statute and not from any call for the election by some authority[29] and the law thus charges voters with knowledge of the time and place of the election.[30] Conversely, where the law does not fix the time and place for holding a special election but empowers some authority to fix the time and place after the happening of a condition precedent, the statutory provision on the giving of notice is considered mandatory, and failure to do so will render the election a nullity.[31]

In the instant case, Section 2 of R.A. No. 6645 itself provides that in case of vacancy in the Senate, the special election to fill such vacancy shall be held simultaneously with the next succeeding regular election. Accordingly, the special election to fill the vacancy in the Senate arising from Senator Guingonas appointment as Vice-President in February 2001 could not be held at any other time but must be held simultaneously with the next succeeding regular elections on 14 May 2001. The law charges the voters with knowledge of this statutory notice and COMELECs failure to give the additional notice did not negate the calling of such special election, much less invalidate it. Our conclusion might be different had the present case involved a special election to fill a vacancy in the House of Representatives. In such a case, the holding of the special election is subject to a condition precedent, that is, the vacancy should take place at least one year before the expiration of the term. The time of the election is left to the discretion of COMELEC subject only to the limitation that it holds the special election within the range of time provided in Section 2 of R.A. No. 6645, as amended. This makes mandatory the requirement in Section 2 of R.A. No. 6645, as amended, for COMELEC to call x x x a special election x x x not earlier than 60 days nor longer than 90 days after the occurrence of the vacancy and give notice of the office to be filled. The COMELECs failure to so call and give notice will nullify any attempt to hold a special election to fill the vacancy. Indeed, it will be well-nigh impossible for the voters in the congressional district involved to know the time and place of the special election and the office to be filled unless the COMELEC so notifies them. No Proof that COMELECs Failure to Give Notice of the Office to be Filled and the Manner of Determining the Winner in the Special Election Misled Voters The test in determining the validity of a special election in relation to the failure to give notice of the special election is whether the want of notice has resulted in misleading a sufficient number of voters as would change the result of the special election. If the lack of official notice misled a substantial number of voters who wrongly believed that there was no special election to fill a vacancy, a choice by a small percentage of voters would be void.[32] The required notice to the voters in the 14 May 2001 special senatorial election covers two matters. First, that COMELEC will hold a special election to fill a vacant single three-year term Senate seat simultaneously with the regular elections scheduled on the same date. Second, that COMELEC will proclaim as winner the senatorial candidate receiving the 13th highest number of votes in the special election. Petitioners have neither claimed nor proved that COMELECs failure to give this required notice misled a sufficient number of voters as would change the result of the special senatorial election or led them to believe that there was no such special election. Instead, what petitioners did is conclude that since COMELEC failed to give such notice, no special election took place. This bare assertion carries no value. Section 2 of R.A. No. 6645, as amended, charged those who voted in the elections of 14 May 2001 with the knowledge that the vacancy in the Senate arising from Senator Guingonas appointment as Vice-President in February 2001 was to be filled

in the next succeeding regular election of 14 May 2001. Similarly, the absence of formal notice from COMELEC does not preclude the possibility that the voters had actual notice of the special election, the office to be voted in that election, and the manner by which COMELEC would determine the winner. Such actual notice could come from many sources, such as media reports of the enactment of R.A. No. 6645 and election propaganda during the campaign.[33] More than 10 million voters cast their votes in favor of Honasan, the party who stands most prejudiced by the instant petition. We simply cannot disenfranchise those who voted for Honasan, in the absence of proof that COMELECs omission prejudiced voters in the exercise of their right of suffrage so as to negate the holding of the special election. Indeed, this Court is loathe to annul elections and will only do so when it is impossible to distinguish what votes are lawful and what are unlawful, or to arrive at any certain result whatever, or that the great body of the voters have been prevented by violence, intimidation, and threats from exercising their franchise.[34] Otherwise, the consistent rule has been to respect the electorates will and let the results of the election stand, despite irregularities that may have attended the conduct of the elections.[35] This is but to acknowledge the purpose and role of elections in a democratic society such as ours, which is: to give the voters a direct participation in the affairs of their government, either in determining who shall be their public officials or in deciding some question of public interest; and for that purpose all of the legal voters should be permitted, unhampered and unmolested, to cast their ballot. When that is done and no frauds have been committed, the ballots should be counted and the election should not be declared null. Innocent voters should not be deprived of their participation in the affairs of their government for mere irregularities on the part of the election officers, for which they are in no way responsible. A different rule would make the manner and method of performing a public duty of greater importance than the duty itself.[36] (Emphasis in the original) Separate Documentation and Canvassing not Required under Section 2 of R.A. No. 6645, Neither is there basis in petitioners claim that the manner b y which COMELEC conducted the special senatorial election on 14 May 2001 is a nullity because COMELEC failed to document separately the candidates and to canvass separately the votes cast for the special election. No such requirements exist in our election laws. What is mandatory under Section 2 of R.A. No. 6645 is that COMELEC fix the date of the election, if necessary, and state, among others, the office or offices to be voted for. Similarly, petitioners reliance on Section 73 of B.P. Blg. 881 on t he filing of certificates of candidacy, and on Section 4(4) of R.A. No. 6646 on the printing of election returns and tally sheets, to support their claim is misplaced. These provisions govern elections in general and in no way require separate documentation of candidates or separate canvass of votes in a jointly held regular and special elections. Significantly, the method adopted by COMELEC in conducting the special election on 14 May 2001 merely implemented the procedure specified by the Senate in Resolution No. 84. Initially, the original draft of Resolution No. 84 as introduced by Senator Francisco Tatad (Senator Tatad) made no mention of the manner by which the seat vacated by former Senator Guingona would be filled. However, upon the suggestion of Senator Raul Roco (Senator Roco), the Senate agreed to amend Resolution No. 84 by providing, as it now appears, that the senatorial candidate garnering the thirteenth (13th) highest number of votes shall serve only for the unexpired term of former Senator Teofisto T. Guingona, Jr. Senator Roco

introduced the amendment to spare COMELEC and the candidates needless expenditures and the voters further inconvenience, thus: S[ENATOR] T[ATAD]. Mr. President, I move that we now consider Proposed Senate Resolution No. 934 [later converted to Resolution No. 84]. T[HE] P[RESIDENT]. Is there any objection? [Silence] There being none, the motion is approved. Consideration of Proposed Senate Resolution No. 934 is now in order. With the permission of the Body, the Secretary will read only the title and text of the resolution. T[HE] S[ECRETARY]. Proposed Senate Resolution No. 934 entitled RESOLUTION CERTIFYING TO THE EXISTENCE OF A VACANCY IN THE SENATE AND CALLING ON THE COMMISSION ON ELECTIONS (COMELEC) TO FILL UP SUCH VACANCY THROUGH ELECTION TO BE HELD SIMULTANEOUSLY WITH THE REGULAR ELECTION ON MAY 14, 2001 AND THE SENATOR THUS ELECTED TO SERVE ONLY FOR THE UNEXPIRED TERM WHEREAS, the Honorable Teofisto T. Guingona, Jr. was elected Senator of the Philippines in 1998 for a term which will expire on June 30, 2004; WHEREAS, on February 6, 2001, Her Excellency President Gloria Macapagal Arroyo nominated Senator Guingona as Vice-President of the Philippines; WHEREAS, the nomination of Senator Guingona has been confirmed by a majority vote of all the members of both House of Congress, voting separately; WHEREAS, Senator Guingona will take his Oath of Office as Vice-President of the Philippines on February 9, 2001; WHEREAS, Republic Act No. 7166 provides that the election for twelve (12) Senators, all elective Members of the House of Representatives, and all elective provincial city and municipal officials shall be held on the second Monday and every three years thereafter; Now, therefore, be it RESOLVED by the Senate, as it is hereby resolved, to certify, as it hereby certifies, the existence of a vacancy in the Senate and calling the Commission on Elections (COMELEC) to fill up such vacancy through election to be held simultaneously with the regular election on May 14, 2001 and the Senator thus elected to serve only for the unexpired term. Adopted, (Sgd.) FRANCISCO S. TATAD Senator S[ENATOR] T[ATAD]. Mr. President, I move for the adoption of this resolution. S[ENATOR] O[SMEA] (J). Mr. President.

T[HE] P[RESIDENT]. Sen. John H. Osmea is recognized. S[ENATOR] O[SMEA] (J). Thank you, Mr. President. Will the distinguished Majority Leader, Chairman of the Committee on Rules, author of this resolution, yield for a few questions? S[ENATOR] T[ATAD]. With trepidation, Mr. President. [Laughter] S[ENATOR] O[SMEA] (J). What a way of flattery. [Laughter] Mr. President, I think I recall that sometime in 1951 or 1953, there was a special election for a vacant seat in the Senate. As a matter of fact, the one who was elected in that special election was then Congressman, later Senator Feli[s]berto Verano. In that election, Mr. President, the candidates contested the seat. In other words, the electorate had to cast a vote for a ninth senator because at that time there were only eight to elect a member or rather, a candidate to that particular seat. Then I remember, Mr. President, that when we ran after the EDSA revolution, twice there were 24 candidates and the first 12 were elected to a six-year term and the next 12 were elected to a three-year term. My question therefore is, how is this going to be done in this election? Is the candidate with the 13th largest number of votes going to be the one to take a three-year term? Or is there going to be an election for a position of senator for the unexpired term of Sen. Teofisto Guingona? S[ENATOR] T[ATAD]. Mr. President, in this resolution, we are leaving the mechanics to the Commission on Elections. But personally, I would like to suggest that probably, the candidate obtaining the 13th largest number of votes be declared as elected to fill up the unexpired term of Senator Guingona. S[ENATOR] O[SMEA] (J). Is there a law that would allow the Comelec to conduct such an election? Is it not the case that the vacancy is for a specific office? I am really at a loss. I am rising here because I think it is something that we should consider. I do not know if we can No, this is not a Concurrent Resolution. S[ENATOR] T[ATAD]. May we solicit the legal wisdom of the Senate President. T[HE] P[RESIDENT]. May I share this information that under Republic Act No. 6645, what is needed is a resolution of this Chamber calling attention to the need for the holding of a special election to fill up the vacancy created, in this particular case, by the appointment of our colleague, Senator Guingona, as Vice President. It can be managed in the Commission on Elections so that a slot for the particular candidate to fill up would be that reserved for Mr. Guingonas unexpired term. In other words, it can be arranged in such a manner. xxxx S[ENATOR] R[OCO]. Mr. President.

T[HE] P[RESIDENT]. Sen. Raul S. Roco is recognized. S[ENATOR] R[OCO]. May we suggest, subject to a one-minute caucus, wordings to the effect that in the simultaneous elections, the 13th placer be therefore deemed to be the special election for this purpose. So we just nominate 13 and it is good for our colleagues. It is better for the candidates. It is also less expensive because the ballot will be printed and there will be less disfranchisement. T[HE] P[RESIDENT]. That is right. S[ENATOR] R[OCO]. If we can just deem it therefore under this resolution to be such a special election, maybe, we satisfy the requirement of the law. T[HE] P[RESIDENT]. Yes. In other words, this shall be a guidance for the Comelec. S[ENATOR] R[OCO]. Yes. T[HE] P[RESIDENT]. to implement. S[ENATOR] R[OCO]. Yes. The Comelec will not have the flexibility. T[HE] P[RESIDENT]. That is right. S[ENATOR] R[OCO]. We will already consider the 13th placer of the forthcoming elections that will be held simultaneously as a special election under this law as we understand it. T[HE] P[RESIDENT]. Yes. That will be a good compromise, Senator Roco. S[ENATOR] R[OCO]. Yes. So if the sponsor can introduce that later, maybe it will be better, Mr. President. T[HE] P[RESIDENT]. What does the sponsor say? S[ENATOR] T[ATAD]. Mr. President, that is a most satisfactory proposal because I do not believe that there will be anyone running specifically T[HE] P[RESIDENT]. Correct. S[ENATOR] T[ATAD]. to fill up this position for three years and campaigning nationwide. T[HE] P[RESIDENT]. Actually, I think what is going to happen is the 13th candidate will be running with specific groups. S[ENATOR] T[ATAD]. Yes. Whoever gets No. 13. T[HE] P[RESIDENT]. I think we can specifically define that as the intent of this resolution. S[ENATOR] T[ATAD]. Subject to style, we accept that amendment and if there will be no other amendment, I move for the adoption of this resolution.

xxxx ADOPTION OF S. RES. NO. 934 If there are no other proposed amendments, I move that we adopt this resolution. T[HE] P[RESIDENT]. There is a motion to adopt this resolution. Is there any objection? [Silence] There being none, the motion is approved.[37] Evidently, COMELEC, in the exercise of its discretion to use means and methods to conduct the special election within the confines of R.A. No. 6645, merely chose to adopt the Senates pro posal, as embodied in Resolution No. 84. This Court has consistently acknowledged and affirmed COMELECs wide latitude of discretion in adopting means to carry out its mandate of ensuring free, orderly, and honest elections subject only to the limitation that the means so adopted are not illegal or do not constitute grave abuse of discretion.[38] COMELECs decision to abandon the means it employed in the 13 November 1951 and 8 November 1955 special elections and adopt the method embodied in Resolution No. 84 is but a legitimate exercise of its discretion. Conversely, this Court will not interfere should COMELEC, in subsequent special senatorial elections, choose to revert to the means it followed in the 13 November 1951 and 8 November 1955 elections. That COMELEC adopts means that are novel or even disagreeable is no reason to adjudge it liable for grave abuse of discretion. As we have earlier noted: The Commission on Elections is a constitutional body. It is intended to play a distinct and important part in our scheme of government. In the discharge of its functions, it should not be hampered with restrictions that would be fully warranted in the case of a less responsible organization. The Commission may err, so may this Court also. It should be allowed considerable latitude in devising means and methods that will insure the accomplishment of the great objective for which it was created free, orderly and honest elections. We may not agree fully with its choice of means, but unless these are clearly illegal or constitute gross abuse of discretion, this court should not interfere.[39] A Word to COMELEC The calling of a special election, if necessary, and the giving of notice to the electorate of necessary information regarding a special election, are central to an informed exercise of the right of suffrage. While the circumstances attendant to the present case have led us to conclude that COMELECs failure to so call and give notice did not invalidate the special senatorial election held on 14 May 2001, COMELEC should not take chances in future elections. We remind COMELEC to comply strictly with all the requirements under applicable laws relative to the conduct of regular elections in general and special elections in particular. WHEREFORE, we DISMISS the petition for lack of merit. SO ORDERED. Panganiban, Quisumbing, Sandoval-Gutierrez, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur. Davide, Jr., C.J., joins Mr. Justice Puno in his dissent. Puno, J., please see dissenting opinion.

Vitug, J., joins the dissent. Ynares-Santiago, J., joins J. Punos dissent. Tinga, J., joins Justice Punos dissent.

-------------------------------------------------------------------------------[1] As provided under Section 2 of Republic Act. No. 7166, as amended. [2] Resolution No. 84 reads: WHEREAS, the Honorable Teofisto Guingona, Jr. was elected Senator of the Philippines in 1998 for a term which will expire on June 30, 2004; WHEREAS, on February 6, 2001, Her Excellency President Gloria Macapagal-Arroyo nominated Senator Guingona as Vice-President of the Philippines; WHEREAS, the nomination of Senator Guingona has been conferred by a majority vote of all the members of both Houses of Congress, voting separately; WHEREAS, Senator Guingona will take his Oath of Office as Vice-President of the Philippines on February 9, 2001; WHEREAS, Republic Act No. 7166 provides that the election for twelve (12) Senators, all elective Members of the House of Representatives, and all elective provincial, city and municipal officials shall be held on the second Monday of May and every three years thereafter. Now, therefore be it Resolved by the Senate, as it is hereby resolved to certify as it hereby certifies, the existence of a vacancy in the Senate and calling the Commission on Elections (COMELEC) to fill up said vacancy through election to be held simultaneously with the regular election on May 14, 2001 and the senatorial candidate garnering the thirteenth (13th) highest number of votes shall serve only for the unexpired term of former Senator Teofisto T. Guingona, Jr. (Emphasis supplied) [3] Resolution No. 01-005 reads: WHEREAS, the Commission on Elections, sitting [E]n [B]anc as the National Board of Canvassers for the election of Senators of the Philippines, officially canvassed in open and public proceedings the certificates of canvass of votes cast nationwide for senators in the national and local elections conducted on May 14, 2001. Based on the canvass of the Certificates of Canvass submitted by seventy-eight (78) out of seventy-nine (79) Provincial Boards of Canvassers, twenty (20) City Boards of Canvassers of cities comprising one (1) or more legislative districts, two (2) District Boards of Canvassers of Metro Manila, and one (1) Absentee Voting, and the remaining uncanvassed certificate of canvass which will not anymore affect the results, the Commission on Elections sitting En Banc as the National Board of Canvassers finds that the following

candidates for senators in said elections obtained as of June 04, 2001 the following number of votes as indicated opposite their names: Name Votes Garnered (as of 4 June 2001) NOLI DE CASTRO 16,157,811 JUAN M. FLAVIER 11,676,129 SERGIO R. OSMEA, III 11,531,427 FRANKLIN M. DRILON 11,223,020 RAMON B. MAGSAYSAY, JR. 11,187,447 JOKER P. ARROYO 11,163,801 MANUEL B. VILLAR, JR. 11,084,884 FRANCIS N. PANGILINAN 10,877,989 EDGARDO J. ANGARA 10,746,843 PANFILO M. LACSON 10,481,755 LUISA P. EJERCITO ESTRADA 10,456,674 RALPH G. RECTO 10,387,108 GREGORIO G. HONASAN 10,364,272

NOW, THEREFORE, by virtue of the powers vested in it under the Constitution, the Omnibus Election Code and other election laws, the Commission on Elections sitting En Banc as the National Board of Canvassers hereby PROCLAIMS the above-named thirteen (13) candidates as the duly elected Senators of the Philippines in the May 14, 2001 elections. Based on the certificates of canvass finally tabulated, the first twelve (12) Senators shall serve for a term of six (6) years and the thirteenth (13th) Senator shall serve the unexpired term of three (3) years of Senator Teofisto T. Guingona, Jr. who was appointed VicePresident of the Philippines pursuant to Section 9, Article VII of the Constitution, in relation to Section 9, Article VI thereof, as implemented under Republic Act No. 6645. (Emphasis supplied) [4] This provision states: The Commission on Elections shall fix the date of the special election, which shall not be earlier than forty-five (45) days nor later than ninety (90) days from the date of such resolution or communication, stating among other things the office or offices to be voted for: Provided, however, That if within the said period a general election is scheduled to be held, the special election shall be held simultaneously with such general election. [5] This provision reads: Certificate of candidacy. No person shall be eligible for any elective public office unless he files a sworn certificate of candidacy within the period fixed herein. A person who has filed a certificate of candidacy may, prior to the election, withdraw the same by submitting to the office concerned a written declaration under oath. No person shall be eligible for more than one office to be filled in the same election, and if he files his certificate of candidacy for more than one office, he shall not be eligible for any of them. However, before the expiration of the period for the filing of certificates of candidacy, the person who has filed more than one certificate of candidacy may declare under oath the office for which he desires to be eligible and cancel the certificate of candidacy for the other office or offices. The filing or withdrawal of a certificate of candidacy shall not affect whatever civil, criminal or administrative liabilities which a candidate may have incurred. [6] This provision reads: Certificates of Candidacy; Certified List of Candidates. x x x The names of all registered candidates immediately followed by the nickname or stage name shall also be printed in the election returns and tally sheets. [7] Rollo, pp. 5-7, 12-14. [8] Senator Roseller T. Lim was elected in the special election of 13 November 1951 while Senator Felisberto Verano was elected in the special election of 8 November 1955. [9] Rollo, pp. 8-12. [10] Castro v. Del Rosario, 25 Phil. 611 (1967); Section 1(a), Rule 66, the 1997 Rules of Civil Procedure. [11] Sections 1-2, Rule 65, The 1997 Rules of Civil Procedure. [12] Gil v. Benipayo, G.R. No. 148179, 26 June 2001 (minute resolution). [13] Acop v. Guingona, G.R. No. 134856, 2 July 2002, 383 SCRA 577; Viola v. Hon. Alunan III, 343 Phil. 184 (1997); Alunan III v. Mirasol, 342 Phil. 467 (1997).

[14] 342 Phil. 467 (1997). [15] Joya v. Presidential Commission on Good Government, G.R. No. 96541, 24 August 1993, 225 SCRA 568. [16] Kilosbayan, Incorporated v. Morato, 316 Phil. 652 (1995). [17] Const., art. VIII, secs. 1 and 5(2). [18] Telecommunications and Broadcast Attorneys of the Philippines, Inc. v. Commission on Elections, 352 Phil. 153 (1998). [19] See Warth v. Seldin, 442 U.S. 490, 45 L.Ed.2d 343 (1975). [20] Dumlao v. COMELEC, G.R. No. L-52245, 22 January 1980, 95 SCRA 392 (internal citations omitted). [21] De Guia v. COMELEC, G.R. No. 104712, 6 May 1992, 208 SCRA 420; Gonzales v. COMELEC, 129 Phil. 7 (1967). See also Telecom & Broadcast Attys. of the Phils., Inc. v. COMELEC, 352 Phil. 153 (1998). [22] G.R. No. 141284, 15 August 2000, 338 SCRA 81. [23] Integrated Bar of the Philippines vs. Zamora, G.R. No. 141284, 15 August 2000, 338 SCRA 81. [24] E.g. Resolution No. 3258, dated 28 September 2000 (providing for the calendar of activities and periods of prohibited acts in connection with the 14 May 2001 elections as amended by Resolution Nos. 3322, dated 5 October 2000; 3284, dated 20 October 2000; 3306, dated 7 November 2000; 3426, dated 22 December 2000; and 3359, dated 6 February 2001); Resolution No. 3632, dated 1 March 2001 (canceling the certificates of candidacy of nuisance senatorial candidates); and Resolution No. 3743, dated 12 March 2001 (providing for the general instructions to the Boards of Election Inspectors on the casting and counting of votes). [25] E.g. undated COMELEC pamphlet entitled Frequently Asked Questions on the May 14, 2001 Elections. [26] 26 Am. Jur. 2d Elections 281 (1996); 29 C.J.S. Elections 70 (1965). [27] Ibid; ibid. [28] 26 Am. Jur. 2d Elections 282 (1996). [29] Ibid. [30] McCoy v. Fisher, 67 S.E. 2d 543 (1951). [31] 26 Am. Jur. 2d Elections 281 (1996); 29 C.J.S. Elections 70 (1965). [32] See 26 Am. Jur. 2d Elections 292 (1996); 29 C.J.S. Elections 72 (1965).

[33] Indeed, the fact that 13 senators were due to be elected in the 14 May 2001 elections and that the senator elected to the 13th place will serve the remaining term of Senator Guingona was published in news reports (see Philippine Star, 9 February 2001, pp. 1, 6 and Daily Tribune, 9 February 2001, pp. 1, 8; Philippine Daily Inquirer, 12 February 2001, pp. 1, 10; 14 February 2001, pp. 1, A20; Today, 8 February 2001, p. 10; Manila Bulletin, 9 February 2001, pp. 3, 8). Furthermore, the fact that the administration and opposition coalitions each fielded 13 senatorial candidates (and not only 12) was similarly given extensive coverage by news publications (see Philippine Daily Inquirer, 12 February 2001, pp. 1, 10; 13 February 2001, pp. 1, A14; 14 February 2001, pp. 1, A20; Philippine Star, 13 February 2001, pp. 1, 4; 14 February 2001, pp. 1, 6; Today, 9 February 2001, pp. 1, 4; 12 February 2001, pp. 1, 10; 13 February 2001, pp. 1, 10; Manila Standard, 13 February 2001, pp. 1, 2; Malaya, 13 February 2001, pp. 1, 6; 14 February 2001, pp. 1, 4; Daily Tribune 14 February 2001, pp. 1, 6; Manila Times, 14 February 2001, pp. 1, 2A; Philippine Star Ngayon, 13 February 2001, pp. 1, 4). [34] Florendo, Sr. vs. Buyser, 129 Phil. 353 (1967); Capalla v. Tabiana, 63 Phil. 95 (1936); Kiamzon v. Pugeda, 54 Phil. 755 (1930); Cailles v. Gomez, 42 Phil. 852 (1924). Batas Pambansa Blg. 881, as amended, (Omnibus Election Code), on failure of elections (resulting to the annulment of elections), provides: SEC. 6. Failure of election. If, on account of force majeure, violence, terrorism, fraud, or other analogous causes the election in any polling place had not been held on the date fixed, or had been suspended before the hour fixed by law for the closing of the voting, or after the voting and during the preparation and the transmission of the election returns or in the custody or canvass thereof, such election results in a failure to elect, and in any of such cases the failure or suspension of election would affect the result of the election, the Commission shall, on the basis of a verified petition by an interested party and after due notice and hearing, call for the holding or continuation of the election not held, suspended or which resulted in a failure to elect on a date reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause of such postponement or suspension of the election or failure to elect. [35] Alcala v. Commission on Elections, 218 Phil. 322 (1984); Villareal v. Fornier, 84 Phil. 756 (1949); Lucero v. De Guzman, 45 Phil. 852 (1924). [36] Lino Luna vs. Rodriguez, 39 Phil. 208 (1918). [37] Transcript of Session Proceedings of the Philippine Senate, 8 February 2001, pp. 49-54. (Emphasis supplied) [38] E.g. Cauton v. COMELEC, 126 Phil. 291 (1967). [39] Pugutan v. Abubakar, 150 Phil. 1 (1972) citing Sumulong v. Commission on Elections, 73 Phil. 237 (1941).

EN BANC [G.R. No. 127685. July 23, 1998] BLAS F. OPLE, petitioner, vs. RUBEN D. TORRES, ALEXANDER AGUIRRE, HECTOR VILLANUEVA, CIELITO HABITO, ROBERT BARBERS, CARMENCITA REODICA, CESAR SARINO, RENATO VALENCIA, TOMAS P. AFRICA, HEAD OF THE NATIONAL COMPUTER CENTER and CHAIRMAN OF THE COMMISSION ON AUDIT, respondents. DECISION PUNO, J.: The petition at bar is a commendable effort on the part of Senator Blas F. Ople to prevent the shrinking of the right to privacy, which the revered Mr. Justice Brandeis considered as "the most comprehensive of rights and the right most valued by civilized men."[1] Petitioner Ople prays that we invalidate Administrative Order No. 308 entitled "Adoption of a National Computerized Identification Reference System" on two important constitutional grounds, viz: one, it is a usurpation of the power of Congress to legislate, and two, it impermissibly intrudes on our citizenry's protected zone of privacy. We grant the petition for the rights sought to be vindicated by the petitioner need stronger barriers against further erosion. A.O. No. 308 was issued by President Fidel V. Ramos on December 12, 1996 and reads as follows: "ADOPTION OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM WHEREAS, there is a need to provide Filipino citizens and foreign residents with the facility to conveniently transact business with basic service and social security providers and other government instrumentalities; WHEREAS, this will require a computerized system to properly and efficiently identify persons seeking basic services on social security and reduce, if not totally eradicate, fraudulent transactions and misrepresentations; WHEREAS, a concerted and collaborative effort among the various basic services and social security providing agencies and other government instrumentalities is required to achieve such a system; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby direct the following: SECTION 1. Establishment of a National Computerized Identification Reference System. A decentralized Identification Reference System among the key basic services and social security providers is hereby established. SEC. 2 Inter-Agency Coordinating Committee. An Inter-Agency Coordinating Committee (IACC) to drawup the implementing guidelines and oversee the implementation of the System is hereby created, chaired by the Executive Secretary, with the following as members: Head, Presidential Management Staff

Secretary, National Economic Development Authority Secretary, Department of the Interior and Local Government Secretary, Department of Health Administrator, Government Service Insurance System, Administrator, Social Security System, Administrator, National Statistics Office Managing Director, National Computer Center. SEC. 3. Secretariat. The National Computer Center (NCC) is hereby designated as secretariat to the IACC and as such shall provide administrative and technical support to the IACC. SEC. 4. Linkage Among Agencies. The Population Reference Number (PRN) generated by the NSO shall serve as the common reference number to establish a linkage among concerned agencies. The IACC Secretariat shall coordinate with the different Social Security and Services Agencies to establish the standards in the use of Biometrics Technology and in computer application designs of their respective systems. SEC. 5. Conduct of Information Dissemination Campaign. The Office of the Press Secretary, in coordination with the National Statistics Office, the GSIS and SSS as lead agencies and other concerned agencies shall undertake a massive tri-media information dissemination campaign to educate and raise public awareness on the importance and use of the PRN and the Social Security Identification Reference. SEC. 6. Funding. The funds necessary for the implementation of the system shall be sourced from the respective budgets of the concerned agencies. SEC. 7. Submission of Regular Reports. The NSO, GSIS and SSS shall submit regular reports to the Office of the President, through the IACC, on the status of implementation of this undertaking. SEC. 8. Effectivity. This Administrative Order shall take effect immediately. DONE in the City of Manila, this 12th day of December in the year of Our Lord, Nineteen Hundred and Ninety-Six. (SGD.) FIDEL V. RAMOS" A.O. No. 308 was published in four newspapers of general circulation on January 22, 1997 and January 23, 1997. On January 24, 1997, petitioner filed the instant petition against respondents, then Executive Secretary Ruben Torres and the heads of the government agencies, who as members of the InterAgency Coordinating Committee, are charged with the implementation of A.O. No. 308. On April 8, 1997, we issued a temporary restraining order enjoining its implementation.

Petitioner contends: "A. THE ESTABLISHMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT. THE ISSUANCE OF A.O. NO. 308 BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES IS, THEREFORE, AN UNCONSTITUTIONAL USURPATION OF THE LEGISLATIVE POWERS OF THE CONGRESS OF THE REPUBLIC OF THE PHILIPPINES. B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE IMPLEMENTATION OF A.O. NO. 308 IS AN UNCONSTITUTIONAL USURPATION OF THE EXCLUSIVE RIGHT OF CONGRESS TO APPROPRIATE PUBLIC FUNDS FOR EXPENDITURE. C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE THE BILL OF RIGHTS ENSHRINED IN THE CONSTITUTION."[2] Respondents counter-argue: A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD WARRANT A JUDICIAL REVIEW; B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE AND ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT ENCROACHING ON THE LEGISLATIVE POWERS OF CONGRESS; C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE IDENTIFICATION REFERENCE SYSTEM MAY BE SOURCED FROM THE BUDGETS OF THE CONCERNED AGENCIES; D. A.O. NO. 308 [1996] PROTECTS AN INDIVIDUAL'S INTEREST IN PRIVACY.[3]

We now resolve. I As is usual in constitutional litigation, respondents raise the threshold issues relating to the standing to sue of the petitioner and the justiciability of the case at bar. More specifically, respondents aver that petitioner has no legal interest to uphold and that the implementing rules of A.O. No. 308 have yet to be promulgated. These submissions do not deserve our sympathetic ear. Petitioner Ople is a distinguished member of our Senate. As a Senator, petitioner is possessed of the requisite standing to bring suit raising the issue that the issuance of A.O. No. 308 is a usurpation of legislative power.[4] As taxpayer and member of the Government Service Insurance System (GSIS), petitioner can also impugn the legality of the misalignment of public funds and the misuse of GSIS funds to implement A.O. No. 308.[5] The ripeness for adjudication of the petition at bar is not affected by the fact that the implementing rules of A.O. No. 308 have yet to be promulgated. Petitioner Ople assails A.O. No. 308 as invalid per se and as infirmed on its face. His action is not premature for the rules yet to be promulgated cannot cure its fatal defects. Moreover, the respondents themselves have started the implementation of A.O. No. 308 without waiting for the rules. As early as January 19, 1997, respondent Social Security System (SSS) caused the publication of a notice to bid for the manufacture of the National Identification (ID) card.[6]

Respondent Executive Secretary Torres has publicly announced that representatives from the GSIS and the SSS have completed the guidelines for the national identification system.[7] All signals from the respondents show their unswerving will to implement A.O. No. 308 and we need not wait for the formality of the rules to pass judgment on its constitutionality. In this light, the dissenters insistence that we tighten the rule on standing is not a commendable stance as its result would be to throttle an important constitutional principle and a fundamental right. II We now come to the core issues. Petitioner claims that A.O. No. 308 is not a mere administrative order but a law and hence, beyond the power of the President to issue. He alleges that A.O. No. 308 establishes a system of identification that is all-encompassing in scope, affects the life and liberty of every Filipino citizen and foreign resident, and more particularly, violates their right to privacy. Petitioner's sedulous concern for the Executive not to trespass on the lawmaking domain of Congress is understandable. The blurring of the demarcation line between the power of the Legislature to make laws and the power of the Executive to execute laws will disturb their delicate balance of power and cannot be allowed. Hence, the exercise by one branch of government of power belonging to another will be given a stricter scrutiny by this Court. The line that delineates Legislative and Executive power is not indistinct. Legislative power is "the authority, under the Constitution, to make laws, and to alter and repeal them."[8] The Constitution, as the will of the people in their original, sovereign and unlimited capacity, has vested this power in the Congress of the Philippines.[9] The grant of legislative power to Congress is broad, general and comprehensive.[10] The legislative body possesses plenary power for all purposes of civil government.[11] Any power, deemed to be legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it elsewhere.[12] In fine, except as limited by the Constitution, either expressly or impliedly, legislative power embraces all subjects and extends to matters of general concern or common interest.[13] While Congress is vested with the power to enact laws, the President executes the laws.[14] The executive power is vested in the President.[15] It is generally defined as the power to enforce and administer the laws.[16] It is the power of carrying the laws into practical operation and enforcing their due observance.[17] As head of the Executive Department, the President is the Chief Executive. He represents the government as a whole and sees to it that all laws are enforced by the officials and employees of his department.[18] He has control over the executive department, bureaus and offices. This means that he has the authority to assume directly the functions of the executive department, bureau and office, or interfere with the discretion of its officials.[19] Corollary to the power of control, the President also has the duty of supervising the enforcement of laws for the maintenance of general peace and public order. Thus, he is granted administrative power over bureaus and offices under his control to enable him to discharge his duties effectively.[20] Administrative power is concerned with the work of applying policies and enforcing orders as determined by proper governmental organs.[21] It enables the President to fix a uniform standard of administrative efficiency and check the official conduct of his agents.[22] To this end, he can issue administrative orders, rules and regulations.

Prescinding from these precepts, we hold that A.O. No. 308 involves a subject that is not appropriate to be covered by an administrative order. An administrative order is: "Sec. 3. Administrative Orders.-- Acts of the President which relate to particular aspects of governmental operation in pursuance of his duties as administrative head shall be promulgated in administrative orders."[23] An administrative order is an ordinance issued by the President which relates to specific aspects in the administrative operation of government. It must be in harmony with the law and should be for the sole purpose of implementing the law and carrying out the legislative policy.[24] We reject the argument that A.O. No. 308 implements the legislative policy of the Administrative Code of 1987. The Code is a general law and "incorporates in a unified document the major structural, functional and procedural principles of governance"[25] and "embodies changes in administrative structures and procedures designed to serve the people."[26] The Code is divided into seven (7) Books: Book I deals with Sovereignty and General Administration, Book II with the Distribution of Powers of the three branches of Government, Book III on the Office of the President, Book IV on the Executive Branch, Book V on the Constitutional Commissions, Book VI on National Government Budgeting, and Book VII on Administrative Procedure. These Books contain provisions on the organization, powers and general administration of the executive, legislative and judicial branches of government, the organization and administration of departments, bureaus and offices under the executive branch, the organization and functions of the Constitutional Commissions and other constitutional bodies, the rules on the national government budget, as well as guidelines for the exercise by administrative agencies of quasi-legislative and quasi-judicial powers. The Code covers both the internal administration of government, i.e, internal organization, personnel and recruitment, supervision and discipline, and the effects of the functions performed by administrative officials on private individuals or parties outside government.[27] It cannot be simplistically argued that A.O. No. 308 merely implements the Administrative Code of 1987. It establishes for the first time a National Computerized Identification Reference System. Such a System requires a delicate adjustment of various contending state policies-- the primacy of national security, the extent of privacy interest against dossier-gathering by government, the choice of policies, etc. Indeed, the dissent of Mr. Justice Mendoza states that the A.O. No. 308 involves the all-important freedom of thought. As said administrative order redefines the parameters of some basic rights of our citizenry visa-vis the State as well as the line that separates the administrative power of the President to make rules and the legislative power of Congress, it ought to be evident that it deals with a subject that should be covered by law. Nor is it correct to argue as the dissenters do that A.O. No. 308 is not a law because it confers no right, imposes no duty, affords no protection, and creates no office. Under A.O. No. 308, a citizen cannot transact business with government agencies delivering basic services to the people without the contemplated identification card. No citizen will refuse to get this identification card for no one can avoid dealing with government. It is thus clear as daylight that without the ID, a citizen will have difficulty exercising his rights and enjoying his privileges. Given this reality, the contention that A.O. No. 308 gives no right and imposes no duty cannot stand. Again, with due respect, the dissenting opinions unduly expand the limits of administrative legislation and consequently erodes the plenary power of Congress to make laws. This is contrary to the established approach defining the traditional limits of administrative legislation. As well stated by Fisher: "x x x Many regulations however, bear directly on the public. It is here that administrative legislation must be restricted in its scope and application. Regulations are not supposed to be a substitute for the general

policy-making that Congress enacts in the form of a public law. Although administrative regulations are entitled to respect, the authority to prescribe rules and regulations is not an independent source of power to make laws."[28] III Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it cannot pass constitutional muster as an administrative legislation because facially it violates the right to privacy. The essence of privacy is the "right to be let alone."[29] In the 1965 case of Griswold v. Connecticut,[30] the United States Supreme Court gave more substance to the right of privacy when it ruled that the right has a constitutional foundation. It held that there is a right of privacy which can be found within the penumbras of the First, Third, Fourth, Fifth and Ninth Amendments,[31] viz: "Specific guarantees in the Bill of Rights have penumbras formed by emanations from these guarantees that help give them life and substance x x x. Various guarantees create zones of privacy. The right of association contained in the penumbra of the First Amendment is one, as we have seen. The Third Amendment in its prohibition against the quartering of soldiers `in any house' in time of peace without the consent of the owner is another facet of that privacy. The Fourth Amendment explicitly affirms the `right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.' The Fifth Amendment in its Self-Incrimination Clause enables the citizen to create a zone of privacy which government may not force him to surrender to his detriment. The Ninth Amendment provides: `The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.'" In the 1968 case of Morfe v. Mutuc,[32] we adopted the Griswold ruling that there is a constitutional right to privacy. Speaking thru Mr. Justice, later Chief Justice, Enrique Fernando, we held: "xxx The Griswold case invalidated a Connecticut statute which made the use of contraceptives a criminal offense on the ground of its amounting to an unconstitutional invasion of the right of privacy of married persons; rightfully it stressed "a relationship lying within the zone of privacy created by several fundamental constitutional guarantees." It has wider implications though. The constitutional right to privacy has come into its own. So it is likewise in our jurisdiction. The right to privacy as such is accorded recognition independently of its identification with liberty; in itself, it is fully deserving of constitutional protection. The language of Prof. Emerson is particularly apt: 'The concept of limited government has always included the idea that governmental powers stop short of certain intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between absolute and limited government. Ultimate and pervasive control of the individual, in all aspects of his life, is the hallmark of the absolute state. In contrast, a system of limited government safeguards a private sector, which belongs to the individual, firmly distinguishing it from the public sector, which the state can control. Protection of this private sector-- protection, in other words, of the dignity and integrity of the individual--has become increasingly important as modern society has developed. All the forces of a technological age --industrialization, urbanization, and organization-operate to narrow the area of privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this enclave of private life marks the difference between a democratic and a totalitarian society.'"

Indeed, if we extend our judicial gaze we will find that the right of privacy is recognized and enshrined in several provisions of our Constitution.[33] It is expressly recognized in Section 3(1) of the Bill of Rights: "Sec. 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise as prescribed by law." Other facets of the right to privacy are protected in various provisions of the Bill of Rights, viz:[34] "Sec. 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. Sec. 2. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized. x x x.

Sec. 6. The liberty of abode and of changing the same within the limits prescribed by law shall not be impaired except upon lawful order of the court. Neither shall the right to travel be impaired except in the interest of national security, public safety, or public health, as may be provided by law. x x x.

Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. Sec. 17. No person shall be compelled to be a witness against himself." Zones of privacy are likewise recognized and protected in our laws. The Civil Code provides that "[e]very person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons" and punishes as actionable torts several acts by a person of meddling and prying into the privacy of another.[35] It also holds a public officer or employee or any private individual liable for damages for any violation of the rights and liberties of another person,[36] and recognizes the privacy of letters and other private communications.[37] The Revised Penal Code makes a crime the violation of secrets by an officer,[38] the revelation of trade and industrial secrets,[39] and trespass to dwelling.[40] Invasion of privacy is an offense in special laws like the Anti-Wiretapping Law,[41] the Secrecy of Bank Deposit Act[42] and the Intellectual Property Code.[43] The Rules of Court on privileged communication likewise recognize the privacy of certain information.[44] Unlike the dissenters, we prescind from the premise that the right to privacy is a fundamental right guaranteed by the Constitution, hence, it is the burden of government to show that A.O. No. 308 is justified by some compelling state interest and that it is narrowly drawn. A.O. No. 308 is predicated on two considerations: (1) the need to provide our citizens and foreigners with the facility to conveniently transact business with basic service and social security providers and other government instrumentalities and (2) the need to reduce, if not totally eradicate, fraudulent transactions and misrepresentations by persons seeking basic services. It is debatable whether these interests are compelling enough to warrant

the issuance of A.O. No. 308. But what is not arguable is the broadness, the vagueness, the overbreadth of A.O. No. 308 which if implemented will put our people's right to privacy in clear and present danger. The heart of A.O. No. 308 lies in its Section 4 which provides for a Population Reference Number (PRN) as a "common reference number to establish a linkage among concerned agencies" through the use of "Biometrics Technology" and "computer application designs." Biometry or biometrics is "the science of the application of statistical methods to biological facts; a mathematical analysis of biological data."[45] The term "biometrics" has now evolved into a broad category of technologies which provide precise confirmation of an individual's identity through the use of the individual's own physiological and behavioral characteristics.[46] A physiological characteristic is a relatively stable physical characteristic such as a fingerprint, retinal scan, hand geometry or facial features. A behavioral characteristic is influenced by the individual's personality and includes voice print, signature and keystroke.[47] Most biometric identification systems use a card or personal identification number (PIN) for initial identification. The biometric measurement is used to verify that the individual holding the card or entering the PIN is the legitimate owner of the card or PIN.[48] A most common form of biological encoding is finger-scanning where technology scans a fingertip and turns the unique pattern therein into an individual number which is called a biocrypt. The biocrypt is stored in computer data banks[49] and becomes a means of identifying an individual using a service. This technology requires one's fingertip to be scanned every time service or access is provided.[50] Another method is the retinal scan. Retinal scan technology employs optical technology to map the capillary pattern of the retina of the eye. This technology produces a unique print similar to a finger print.[51] Another biometric method is known as the "artificial nose." This device chemically analyzes the unique combination of substances excreted from the skin of people.[52] The latest on the list of biometric achievements is the thermogram. Scientists have found that by taking pictures of a face using infra-red cameras, a unique heat distribution pattern is seen. The different densities of bone, skin, fat and blood vessels all contribute to the individual's personal "heat signature."[53] In the last few decades, technology has progressed at a galloping rate. Some science fictions are now science facts. Today, biometrics is no longer limited to the use of fingerprint to identify an individual. It is a new science that uses various technologies in encoding any and all biological characteristics of an individual for identification. It is noteworthy that A.O. No. 308 does not state what specific biological characteristics and what particular biometrics technology shall be used to identify people who will seek its coverage. Considering the banquet of options available to the implementors of A.O. No. 308, the fear that it threatens the right to privacy of our people is not groundless. A.O. No. 308 should also raise our antennas for a further look will show that it does not state whether encoding of data is limited to biological information alone for identification purposes. In fact, the Solicitor General claims that the adoption of the Identification Reference System will contribute to the "generation of population data for development planning."[54] This is an admission that the PRN will not be used solely for identification but for the generation of other data with remote relation to the avowed purposes of A.O. No. 308. Clearly, the indefiniteness of A.O. No. 308 can give the government the roving authority to store and retrieve information for a purpose other than the identification of the individual through his PRN. The potential for misuse of the data to be gathered under A.O. No. 308 cannot be underplayed as the dissenters do. Pursuant to said administrative order, an individual must present his PRN everytime he deals with a government agency to avail of basic services and security. His transactions with the government agency will necessarily be recorded-- whether it be in the computer or in the documentary file

of the agency. The individual's file may include his transactions for loan availments, income tax returns, statement of assets and liabilities, reimbursements for medication, hospitalization, etc. The more frequent the use of the PRN, the better the chance of building a huge and formidable information base through the electronic linkage of the files.[55] The data may be gathered for gainful and useful government purposes; but the existence of this vast reservoir of personal information constitutes a covert invitation to misuse, a temptation that may be too great for some of our authorities to resist.[56] We can even grant, arguendo, that the computer data file will be limited to the name, address and other basic personal information about the individual.[57] Even that hospitable assumption will not save A.O. No. 308 from constitutional infirmity for again said order does not tell us in clear and categorical terms how these information gathered shall be handled. It does not provide who shall control and access the data, under what circumstances and for what purpose. These factors are essential to safeguard the privacy and guaranty the integrity of the information.[58] Well to note, the computer linkage gives other government agencies access to the information. Yet, there are no controls to guard against leakage of information. When the access code of the control programs of the particular computer system is broken, an intruder, without fear of sanction or penalty, can make use of the data for whatever purpose, or worse, manipulate the data stored within the system.[59] It is plain and we hold that A.O. No. 308 falls short of assuring that personal information which will be gathered about our people will only be processed for unequivocally specified purposes.[60] The lack of proper safeguards in this regard of A.O. No. 308 may interfere with the individual's liberty of abode and travel by enabling authorities to track down his movement; it may also enable unscrupulous persons to access confidential information and circumvent the right against self-incrimination; it may pave the way for "fishing expeditions" by government authorities and evade the right against unreasonable searches and seizures.[61] The possibilities of abuse and misuse of the PRN, biometrics and computer technology are accentuated when we consider that the individual lacks control over what can be read or placed on his ID, much less verify the correctness of the data encoded.[62] They threaten the very abuses that the Bill of Rights seeks to prevent.[63] The ability of a sophisticated data center to generate a comprehensive cradle-to-grave dossier on an individual and transmit it over a national network is one of the most graphic threats of the computer revolution.[64] The computer is capable of producing a comprehensive dossier on individuals out of information given at different times and for varied purposes.[65] It can continue adding to the stored data and keeping the information up to date. Retrieval of stored data is simple. When information of a privileged character finds its way into the computer, it can be extracted together with other data on the subject.[66] Once extracted, the information is putty in the hands of any person. The end of privacy begins. Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions would dismiss its danger to the right to privacy as speculative and hypothetical. Again, we cannot countenance such a laidback posture. The Court will not be true to its role as the ultimate guardian of the people's liberty if it would not immediately smother the sparks that endanger their rights but would rather wait for the fire that could consume them. We reject the argument of the Solicitor General that an individual has a reasonable expectation of privacy with regard to the National ID and the use of biometrics technology as it stands on quicksand. The reasonableness of a person's expectation of privacy depends on a two-part test: (1) whether by his conduct, the individual has exhibited an expectation of privacy; and (2) whether this expectation is one that society recognizes as reasonable.[67] The factual circumstances of the case determines the

reasonableness of the expectation.[68] However, other factors, such as customs, physical surroundings and practices of a particular activity, may serve to create or diminish this expectation.[69] The use of biometrics and computer technology in A.O. No. 308 does not assure the individual of a reasonable expectation of privacy.[70] As technology advances, the level of reasonably expected privacy decreases.[71] The measure of protection granted by the reasonable expectation diminishes as relevant technology becomes more widely accepted.[72] The security of the computer data file depends not only on the physical inaccessibility of the file but also on the advances in hardware and software computer technology. A.O. No. 308 is so widely drawn that a minimum standard for a reasonable expectation of privacy, regardless of technology used, cannot be inferred from its provisions. The rules and regulations to be drawn by the IACC cannot remedy this fatal defect. Rules and regulations merely implement the policy of the law or order. On its face, A.O. No. 308 gives the IACC virtually unfettered discretion to determine the metes and bounds of the ID System. Nor do our present laws provide adequate safeguards for a reasonable expectation of privacy. Commonwealth Act No. 591 penalizes the disclosure by any person of data furnished by the individual to the NSO with imprisonment and fine.[73] Republic Act No. 1161 prohibits public disclosure of SSS employment records and reports.[74] These laws, however, apply to records and data with the NSO and the SSS. It is not clear whether they may be applied to data with the other government agencies forming part of the National ID System. The need to clarify the penal aspect of A.O. No. 308 is another reason why its enactment should be given to Congress. Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the right of privacy by using the rational relationship test.[75] He stressed that the purposes of A.O. No. 308 are: (1) to streamline and speed up the implementation of basic government services, (2) eradicate fraud by avoiding duplication of services, and (3) generate population data for development planning. He concludes that these purposes justify the incursions into the right to privacy for the means are rationally related to the end.[76] We are not impressed by the argument. In Morfe v. Mutuc,[77] we upheld the constitutionality of R.A. 3019, the Anti-Graft and Corrupt Practices Act, as a valid police power measure. We declared that the law, in compelling a public officer to make an annual report disclosing his assets and liabilities, his sources of income and expenses, did not infringe on the individual's right to privacy. The law was enacted to promote morality in public administration by curtailing and minimizing the opportunities for official corruption and maintaining a standard of honesty in the public service.[78] The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a statute, not an administrative order. Secondly, R.A. 3019 itself is sufficiently detailed. The law is clear on what practices were prohibited and penalized, and it was narrowly drawn to avoid abuses. In the case at bar, A.O. No. 308 may have been impelled by a worthy purpose, but, it cannot pass constitutional scrutiny for it is not narrowly drawn. And we now hold that when the integrity of a fundamental right is at stake, this court will give the challenged law, administrative order, rule or regulation a stricter scrutiny. It will not do for the authorities to invoke the presumption of regularity in the performance of official duties. Nor is it enough for the authorities to prove that their act is not irrational for a basic right can be diminished, if not defeated, even when the government does not act irrationally. They must satisfactorily show the presence of compelling state interests and that the law, rule, or regulation is narrowly drawn to preclude abuses. This approach is demanded by the 1987 Constitution whose entire matrix is designed to protect human rights and to prevent authoritarianism. In case of doubt, the least we can do is to lean towards the stance that will not put in danger the rights protected by the Constitution.

The case of Whalen v. Roe[79] cited by the Solicitor General is also off-line. In Whalen, the United States Supreme Court was presented with the question of whether the State of New York could keep a centralized computer record of the names and addresses of all persons who obtained certain drugs pursuant to a doctor's prescription. The New York State Controlled Substances Act of 1972 required physicians to identify patients obtaining prescription drugs enumerated in the statute, i.e., drugs with a recognized medical use but with a potential for abuse, so that the names and addresses of the patients can be recorded in a centralized computer file of the State Department of Health. The plaintiffs, who were patients and doctors, claimed that some people might decline necessary medication because of their fear that the computerized data may be readily available and open to public disclosure; and that once disclosed, it may stigmatize them as drug addicts.[80] The plaintiffs alleged that the statute invaded a constitutionally protected zone of privacy, i.e, the individual interest in avoiding disclosure of personal matters, and the interest in independence in making certain kinds of important decisions. The U.S. Supreme Court held that while an individual's interest in avoiding disclosure of personal matters is an aspect of the right to privacy, the statute did not pose a grievous threat to establish a constitutional violation. The Court found that the statute was necessary to aid in the enforcement of laws designed to minimize the misuse of dangerous drugs. The patient-identification requirement was a product of an orderly and rational legislative decision made upon recommendation by a specially appointed commission which held extensive hearings on the matter. Moreover, the statute was narrowly drawn and contained numerous safeguards against indiscriminate disclosure. The statute laid down the procedure and requirements for the gathering, storage and retrieval of the information. It enumerated who were authorized to access the data. It also prohibited public disclosure of the data by imposing penalties for its violation. In view of these safeguards, the infringement of the patients' right to privacy was justified by a valid exercise of police power. As we discussed above, A.O. No. 308 lacks these vital safeguards. Even while we strike down A.O. No. 308, we spell out in neon that the Court is not per se against the use of computers to accumulate, store, process, retrieve and transmit data to improve our bureaucracy. Computers work wonders to achieve the efficiency which both government and private industry seek. Many information systems in different countries make use of the computer to facilitate important social objectives, such as better law enforcement, faster delivery of public services, more efficient management of credit and insurance programs, improvement of telecommunications and streamlining of financial activities.[81] Used wisely, data stored in the computer could help good administration by making accurate and comprehensive information for those who have to frame policy and make key decisions.[82] The benefits of the computer has revolutionized information technology. It developed the internet,[83] introduced the concept of cyberspace[84] and the information superhighway where the individual, armed only with his personal computer, may surf and search all kinds and classes of information from libraries and databases connected to the net. In no uncertain terms, we also underscore that the right to privacy does not bar all incursions into individual privacy. The right is not intended to stifle scientific and technological advancements that enhance public service and the common good. It merely requires that the law be narrowly focused[85] and a compelling interest justify such intrusions.[86] Intrusions into the right must be accompanied by proper safeguards and well-defined standards to prevent unconstitutional invasions. We reiterate that any law or order that invades individual privacy will be subjected by this Court to strict scrutiny. The reason for this stance was laid down in Morfe v. Mutuc, to wit: "The concept of limited government has always included the idea that governmental powers stop short of certain intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between absolute and limited government. Ultimate and pervasive control of the individual, in all aspects of his life,

is the hallmark of the absolute state. In contrast, a system of limited government safeguards a private sector, which belongs to the individual, firmly distinguishing it from the public sector, which the state can control. Protection of this private sector-- protection, in other words, of the dignity and integrity of the individual-- has become increasingly important as modern society has developed. All the forces of a technological age-- industrialization, urbanization, and organization-- operate to narrow the area of privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this enclave of private life marks the difference between a democratic and a totalitarian society."[87] IV The right to privacy is one of the most threatened rights of man living in a mass society. The threats emanate from various sources-- governments, journalists, employers, social scientists, etc.[88] In the case at bar, the threat comes from the executive branch of government which by issuing A.O. No. 308 pressures the people to surrender their privacy by giving information about themselves on the pretext that it will facilitate delivery of basic services. Given the record-keeping power of the computer, only the indifferent will fail to perceive the danger that A.O. No. 308 gives the government the power to compile a devastating dossier against unsuspecting citizens. It is timely to take note of the well-worded warning of Kalvin, Jr., "the disturbing result could be that everyone will live burdened by an unerasable record of his past and his limitations. In a way, the threat is that because of its record-keeping, the society will have lost its benign capacity to forget."[89] Oblivious to this counsel, the dissents still say we should not be too quick in labelling the right to privacy as a fundamental right. We close with the statement that the right to privacy was not engraved in our Constitution for flattery. IN VIEW WHEREOF, the petition is granted and Administrative Order No. 308 entitled "Adoption of a National Computerized Identification Reference System" declared null and void for being unconstitutional. SO ORDERED.

Narvasa, C.J., Melo, and Quisumbing, JJ., joins J. Kapunan and J. Mendoza in their dissents. Regalado, J., in the result. Davide, Jr., in the result; joins J. Panganiban in his separate opinion. Romero, Vitug and Panganiban, JJ., see separate opinion. Kapunan, and Mendoza, JJ., see dissenting opinion. Bellosillo, and Martinez, JJ., concur. Purisima, J., joins J. Mendozas dissent.

-------------------------------------------------------------------------------[1] Dissenting Opinion of Justice Brandeis in Olmstead v. United States, 277 U.S. 438, 478 [1928].

[2] Petition, p. 9, Rollo, p. 11. [3] Comment, pp. 6, 9, 14, 15, Rollo, pp. 65, 68, 73-74. [4] Philconsa v. Enriquez, 235 SCRA 506 [1994]; Guingona v. PCGG, 207 SCRA 659 [1992]; Tolentino v. Commission on Elections, 41 SCRA 702 [1971]. [5] Sanidad v. Commission on Elections, 73 SCRA 333 [1976]; Pascual v. Secretary of Public Works, 110 Phil. 331 [1960]. [6] "Invitation to Bid," Annex "E" to the Petition, Rollo, p. 50. [7] Annex "B" to Petitioner's Reply, Rollo, p. 144. [8] Government of the Philippine Islands v. Springer, 50 Phil. 259, 276 [1927]. [9] Section 1, Article VI, 1987 Constitution [10] Fernando, The Philippine Constitution, pp. 175-176 [1974]. [11] Id., at 177; citing the concurring opinion of Justice Laurel in Schneckenburger v. Moran, 63 Phil. 249, 266 [1936]. [12] Vera v. Avelino, 77 Phil. 192, 212 [1936]. [13] See concurring opinion of Justice Laurel in Schneckenburger v. Moran, supra, at 266-267. [14] Government of the Philippine Islands v. Springer, 50 Phil. 259, 305 [1927]. [15] Section 1, Article VII, 1987 Constitution. [16] Cruz, Philippine Political Law, p. 173 [1996]. [17] Tanada and Carreon, Political Law of the Philippines, vol. 1, p. 275 [1961]. [18] Section 17, Article VII of the 1987 Constitution provides: "Sec. 17. The President shall have control of all the executive departments, bureaus and offices. He shall ensure that the laws be faithfully executed." [19] Pelaez v. Auditor General, 15 SCRA 569, 583 [1965]. [20] Sinco, Philippine Political Law, pp. 234-235 [1962]. [21] Id., at 234. [22] Id., at 235.

[23] Section 3, Chapter 2, Title I, Book III, Administrative Code of 1987. [24] Cruz, Philippine Administrative Law, p.18 (1991). [25] Third Whereas Clause, Administrative Code of 1987. [26] Fourth Whereas Clause, Administrative Code of 1987. [27] See Cortes, Philippine Administrative Law, pp. 2-5 [1984]. [28] Fisher, Constitutional Conflicts Between Congress and the President, 4th ed., pp. 106-107. [29] Cooley on Torts, Sec. 135, vol. 1, 4th ed., [1932]; see also Warren and Brandeis, "The Right to Privacy," 4 Harvard Law Review 193-220 [1890] - this article greatly influenced the enactment of privacy statutes in the United States (Cortes, I., The Constitutional Foundations of Privacy, p. 15 [1970]). [30] 381 U.S. 479, 14 L. ed. 2d 510 [1965]. [31] AMENDMENT I [1791] Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. AMENDMENT III [1791] No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law. AMENDMENT IV [1791] The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. AMENDMENT V [1791] No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. xxx AMENDMENT IX [1791]

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people. [32] 22 SCRA 424, 444-445. [33] Morfe v. Mutuc, 22 SCRA 424, 444 [1968]; Cortes, The Constitutional Foundations of Privacy, p. 18 [1970]. [34] Cortes, The Constitutional Foundations of Privacy, p. 18 [1970]. [35] Article 26 of the Civil Code provides: "Art. 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief: (1) Prying into the privacy of another's residence; (2) Meddling with or disturbing the private life or family relations of another; (3) Intriguing to cause another to be alienated from his friends; (4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical defect, or other personal condition." [36] Article 32, Civil Code. [37] Article 723, Civil Code. [38] Article 229, Revised Penal Code. [39] Articles 290-292, Revised Penal Code. [40] Article 280, Revised Penal Code. [41] R.A. 4200. [42] R.A. 1405. [43] R.A. 8293. [44] Section 24, Rule 130 [C], Revised Rules on Evidence. [45] "Biometry," Dorland's Illustrated Medical Dictionary, 24th ed. [1965]. "Biometry" or "biometrics" is literally, the measurement of living things; but it is generally used to mean the application of mathematics to biology. The term is now largely obsolete as a biological science since mathematical or statistical work is an integral part of most biological disciplines (The Dictionary of Science [1993]).

[46]"Biometric Identification," http://www.afmc.wpafb.af. mil/=organizations/HQAFMC/LG/LSO/LOA/bio.html; see also "Biometrics Explained- Section-1," http://www.ncsa.com/services/consortia/cbdc/sec1.html. [47] Id. [48] Id. [49] Or in microchips of smart cards and magnetic strips of bank cards. [50] "Privacy at Risk, Finger-scanning for Ideology and Profit" [1998], file:///DI/commentary.html [51] "Biometric Identification," http://www.afmc.wpafb.af.mil/organizations/HQAFMC/LG/LSO/LOA/bio.html [52] "The Libertarian Library: Facing Up to Biometrics," The Mouse Monitor, The International Journal of Bureau-Rat Control [1998], http://www.cyberhaven.com/libertarian/biomet.html. [53] Id. The thermogram is so accurate that it can tell identical twins apart and cannot be fooled by cosmetic surgery or disguises, including facial hair. [54] "An updated national population register will provide a suitable base for all types of planning and programming of government facilities and services" (Memorandum of the Solicitor General, p. 20, Rollo, p. 210). [55] Simitis, "Reviewing Privacy in an Information Society," University of Pennsylvania Law Review, vol. 135: 707, 717 [March 1985]. [56] Sloan, I. Law of Privacy Rights in a Technological Society, p. 6 [1986]. [57] Respondent GSIS, through counsel, claims that the basic information shall be limited to the individual's full name, place of birth, date of birth, photograph, signature and thumbmark (Comment of Respondent GSIS, p. 6, Rollo, p. 101). [58] Otani, K. "Information Security in the Network Age," 70 Philippine Law Journal, 1, 9 [1995]. [59] Cortes, I., The Constitutional Foundations of Privacy, p. 12 (1970). [60] Simitis, "Reviewing Privacy in an Information Society," University of Pennsylvania Law Review, vol. 135: 707, 740 [March 1987]. [61] Ibid., p. 718. [62] The right to control the collection, maintenance, use, and dissemination of data about oneself is called "informational privacy" (Hancock, G., "California's Privacy Act: Controlling Government's Use of Information? 32 Stanford Law Review no. 5, p. 1001 [May 1980]. The right to make personal decisions or conduct personal activities without intrusion, observation or interference is called "autonomy privacy" (Hill v. NCAA, 865 P. 2d 633, 652-654 [Cal. 1994].

[63] Hosch, "The Interest in Limiting the Disclosure of Personal Information: A Constitutional Analysis," Vanderbilt Law Review vol. 36: 139, 142 [Jan. 1983]. [64] Miller, "Personal Privacy in the Computer Age, The Challenge of a New Technology in an Information-Oriented Society," 67 Michigan Law Review 1091, 1119 [1969]; see also Cortes, supra, at 13. [65] Cortes, I. The Constitutional Foundation Foundation of Privacy, p.12 [1970]. [66] Id. [67] Rakas v. Illinois, 439 U.S. 128, 143-144 [1978]; see the decision and Justice Harlan's concurring opinion in Katz v. United States, 389 U.S. 347, 353, 361, 19 L. ed. 2d 576, 583, 587-589 [1967]; see also Southard, "Individual Privacy and Governmental Efficiency: Technology's Effect on the Government's Ability to Gather, Store, and Distribute Information" (Computer/Law Journal, vol. IX, pp. 359, 367, note 63 [1989]). [68] Kennedy, "Note: Emasculating a State's Constitutional Right to Privacy: The California Supreme Court's Decision in Hill v. NCAA," Temple Law Review, vol. 68: 1497, 1517 [1995]. [69] Id. [70] Southard, supra, at 369. [71] Id; see also Laurence H. Tribe, "The Constitution in Cyberspace: Law and Liberty Beyond the Electronic Frontier," Keynote Address at the First Conference on Computers, Freedom and Privacy, at Jim Warren & Computer Professionals for Social Responsibility [1991]. [72] As one author has observed, previously, one could take steps to ensure an expectation of privacy in a private place, e.g., locking of doors and closing of curtains. Because advances in surveillance technology have made these precautions meaningless, the expectation of the privacy they offer is no longer justifiable and reasonable-- Southard, supra, at 369. [73] Section 4, Commonwealth Act No. 591 [1940]. [74] Sections 24 [c] and 28 [e], R.A. 1161, as amended. [75] Citing Morfe v. Mutuc, 22 SCRA 424, 445 [1968]. [76] Comment of the Solicitor General, p. 16, Rollo, p. 75. [77] Op. cit., note 76. [78] Id., at 435. [79] 429 U.S. 589, 51 L ed. 2d 64 [1977]. [80] Some of the patients were children whose parents feared would be stigmatized by the State's central filing system.

[81] Sloan, Law of Privacy Rights in a Technological Society, p. 4 [1986]. [82] Southard, "Individual Privacy and Governmental Efficiency: Technology's Effect on the Government's Ability to Gather, Store, and Distribute Information," IX Computer/Law Journal 359, 360 [1989]. [83] The Internet is a decentralized network interconnected by the TCP/IP protocol. The Net was started as a military network ARPANET in 1969 by the US Department of Defense for the purpose of networking main frame computers to prepare against missile weapons. It opened to public research organizations and universities in 1983 and has been interconnected with commercial networks since 1990 (Kazuko Otani, "Information Security in the Network Age," Philippine Law Journal, vol. 70: 1, 2 [1995]). [84] Cyberspace is a place located in no particular geographical location but available to anyone, anywhere in the world, with access to the internet (Darrel Menthe, "Jurisdiction in Cyberspace: A Theory of International Spaces 4 Mich. Tel. Tech. L. Rev. 3 (April 23, 1998), <http://www. law.umich.edu/ mttlr/volfour/menthe.html>. [85] Southard, supra, at 361-362 [86] Id; White v. Davis, 533 P. 2d 222 [Cal. 1975]; City of Sta. Barbara v. Adamson, 610 P. 2d 436 [Cal. 1980]. In his concurring opinion in Whalen v. Roe, Justice Brennan stated that a statute that deprives an individual of his privacy is not unconstitutional only if it was necessary to promote a compelling state interest (429 U.S. 589, 606-607, 51 L. ed. 2d 64, 77- 78). [87] Morfe v. Mutuc, supra, at 444-445 citing Emerson, "Nine Justices in Search of a Doctrine," 64 Michigan Law Review 219, 229 [1965]. [88] See Shils, "Privacy: Its Constitution and Vicissitudes," Law and Contemporary Problems, vol. 31, pp. 301-303 [1966]. [89] Harry Kalvin, Jr., "The Problems of Privacy in the Year 2000," Daedalus, vol. 96, pp. 876-879 [1967].

Lawphil Main MenuLawphil Main Menu> Constitution> Constitution> Statutes> Statutes> Jurisprudence> Jurisprudence> Judicial Issuances> Judicial Issuances> Executive Issuances> Executive Issuances> Treatise> Treatise> Legal Link> Legal Linklawphil Today is Saturday, July 02, 2011

-------------------------------------------------------------------------------Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-45685 November 16, 1937

THE PEOPLE OF THE PHILIPPINE ISLANDS and HONGKONG & SHANGHAI BANKING CORPORATION, petitioners, vs. JOSE O. VERA, Judge . of the Court of First Instance of Manila, and MARIANO CU UNJIENG, respondents. Office of the Solicitor General Tuason and City Fiscal Diaz for the Government. De Witt, Perkins and Ponce Enrile for the Hongkong and Shanghai Banking Corporation. Vicente J. Francisco, Feria and La O, Orense and Belmonte, and Gibbs and McDonough for respondent Cu Unjieng. No appearance for respondent Judge.

LAUREL, J.: This is an original action instituted in this court on August 19, 1937, for the issuance of the writ of certiorari and of prohibition to the Court of First Instance of Manila so that this court may review the actuations of the aforesaid Court of First Instance in criminal case No. 42649 entitled "The People of the Philippine Islands vs. Mariano Cu Unjieng, et al.", more particularly the application of the defendant Mariano Cu Unjieng therein for probation under the provisions of Act No. 4221, and thereafter prohibit the said Court of First Instance from taking any further action or entertaining further the aforementioned application for probation, to the end that the defendant Mariano Cu Unjieng may be forthwith committed to prison in accordance with the final judgment of conviction rendered by this court in said case (G. R. No. 41200). 1 Petitioners herein, the People of the Philippine and the Hongkong and Shanghai Banking Corporation, are respectively the plaintiff and the offended party, and the respondent herein Mariano Cu Unjieng is one of the defendants, in the criminal case entitled "The People of the Philippine Islands vs. Mariano Cu Unjieng, et al.", criminal case No. 42649 of the Court of First Instance of Manila and G.R. No. 41200 of this court. Respondent herein, Hon. Jose O. Vera, is the Judge ad interim of the seventh branch

of the Court of First Instance of Manila, who heard the application of the defendant Mariano Cu Unjieng for probation in the aforesaid criminal case. The information in the aforesaid criminal case was filed with the Court of First Instance of Manila on October 15, 1931, petitioner herein Hongkong and Shanghai Banking Corporation intervening in the case as private prosecutor. After a protracted trial unparalleled in the annals of Philippine jurisprudence both in the length of time spent by the court as well as in the volume in the testimony and the bulk of the exhibits presented, the Court of First Instance of Manila, on January 8, 1934, rendered a judgment of conviction sentencing the defendant Mariano Cu Unjieng to indeterminate penalty ranging from four years and two months of prision correccional to eight years of prision mayor, to pay the costs and with reservation of civil action to the offended party, the Hongkong and Shanghai Banking Corporation. Upon appeal, the court, on March 26, 1935, modified the sentence to an indeterminate penalty of from five years and six months of prision correccional to seven years, six months and twenty-seven days of prision mayor, but affirmed the judgment in all other respects. Mariano Cu Unjieng filed a motion for reconsideration and four successive motions for new trial which were denied on December 17, 1935, and final judgment was accordingly entered on December 18, 1935. The defendant thereupon sought to have the case elevated on certiorari to the Supreme Court of the United States but the latter denied the petition for certiorari in November, 1936. This court, on November 24, 1936, denied the petition subsequently filed by the defendant for leave to file a second alternative motion for reconsideration or new trial and thereafter remanded the case to the court of origin for execution of the judgment. The instant proceedings have to do with the application for probation filed by the herein respondent Mariano Cu Unjieng on November 27, 1936, before the trial court, under the provisions of Act No. 4221 of the defunct Philippine Legislature. Herein respondent Mariano Cu Unjieng states in his petition, inter alia, that he is innocent of the crime of which he was convicted, that he has no criminal record and that he would observe good conduct in the future. The Court of First Instance of Manila, Judge Pedro Tuason presiding, referred the application for probation of the Insular Probation Office which recommended denial of the same June 18, 1937. Thereafter, the Court of First Instance of Manila, seventh branch, Judge Jose O. Vera presiding, set the petition for hearing on April 5, 1937. On April 2, 1937, the Fiscal of the City of Manila filed an opposition to the granting of probation to the herein respondent Mariano Cu Unjieng. The private prosecution also filed an opposition on April 5, 1937, alleging, among other things, that Act No. 4221, assuming that it has not been repealed by section 2 of Article XV of the Constitution, is nevertheless violative of section 1, subsection (1), Article III of the Constitution guaranteeing equal protection of the laws for the reason that its applicability is not uniform throughout the Islands and because section 11 of the said Act endows the provincial boards with the power to make said law effective or otherwise in their respective or otherwise in their respective provinces. The private prosecution also filed a supplementary opposition on April 19, 1937, elaborating on the alleged unconstitutionality on Act No. 4221, as an undue delegation of legislative power to the provincial boards of several provinces (sec. 1, Art. VI, Constitution). The City Fiscal concurred in the opposition of the private prosecution except with respect to the questions raised concerning the constitutionality of Act No. 4221. On June 28, 1937, herein respondent Judge Jose O. Vera promulgated a resolution with a finding that "las pruebas no han establecido de unamanera concluyente la culpabilidad del peticionario y que todos los hechos probados no son inconsistentes o incongrentes con su inocencia" and concludes that the herein respondent Mariano Cu Unjieng "es inocente por duda racional" of the crime of which he stands convicted by this court in G.R. No. 41200, but denying the latter's petition for probation for the reason that:

. . . Si este Juzgado concediera la poblacion solicitada por las circunstancias y la historia social que se han expuesto en el cuerpo de esta resolucion, que hacen al peticionario acreedor de la misma, una parte de la opinion publica, atizada por los recelos y las suspicacias, podria levantarse indignada contra un sistema de probacion que permite atisbar en los procedimientos ordinarios de una causa criminal perturbando la quietud y la eficacia de las decisiones ya recaidas al traer a la superficie conclusiones enteramente differentes, en menoscabo del interes publico que demanda el respeto de las leyes y del veredicto judicial. On July 3, 1937, counsel for the herein respondent Mariano Cu Unjieng filed an exception to the resolution denying probation and a notice of intention to file a motion for reconsideration. An alternative motion for reconsideration or new trial was filed by counsel on July 13, 1937. This was supplemented by an additional motion for reconsideration submitted on July 14, 1937. The aforesaid motions were set for hearing on July 31, 1937, but said hearing was postponed at the petition of counsel for the respondent Mariano Cu Unjieng because a motion for leave to intervene in the case as amici curiae signed by thirtythree (thirty-four) attorneys had just been filed with the trial court. Attorney Eulalio Chaves whose signature appears in the aforesaid motion subsequently filed a petition for leave to withdraw his appearance as amicus curiae on the ground that the motion for leave to intervene as amici curiae was circulated at a banquet given by counsel for Mariano Cu Unjieng on the evening of July 30, 1937, and that he signed the same "without mature deliberation and purely as a matter of courtesy to the person who invited me (him)." On August 6, 1937, the Fiscal of the City of Manila filed a motion with the trial court for the issuance of an order of execution of the judgment of this court in said case and forthwith to commit the herein respondent Mariano Cu Unjieng to jail in obedience to said judgment. On August 7, 1937, the private prosecution filed its opposition to the motion for leave to intervene as amici curiae aforementioned, asking that a date be set for a hearing of the same and that, at all events, said motion should be denied with respect to certain attorneys signing the same who were members of the legal staff of the several counsel for Mariano Cu Unjieng. On August 10, 1937, herein respondent Judge Jose O. Vera issued an order requiring all parties including the movants for intervention as amici curiae to appear before the court on August 14, 1937. On the last-mentioned date, the Fiscal of the City of Manila moved for the hearing of his motion for execution of judgment in preference to the motion for leave to intervene as amici curiae but, upon objection of counsel for Mariano Cu Unjieng, he moved for the postponement of the hearing of both motions. The respondent judge thereupon set the hearing of the motion for execution on August 21, 1937, but proceeded to consider the motion for leave to intervene as amici curiae as in order. Evidence as to the circumstances under which said motion for leave to intervene as amici curiae was signed and submitted to court was to have been heard on August 19, 1937. But at this juncture, herein petitioners came to this court on extraordinary legal process to put an end to what they alleged was an interminable proceeding in the Court of First Instance of Manila which fostered "the campaign of the defendant Mariano Cu Unjieng for delay in the execution of the sentence imposed by this Honorable Court on him, exposing the courts to criticism and ridicule because of the apparent inability of the judicial machinery to make effective a final judgment of this court imposed on the defendant Mariano Cu Unjieng." The scheduled hearing before the trial court was accordingly suspended upon the issuance of a temporary restraining order by this court on August 21, 1937.

To support their petition for the issuance of the extraordinary writs of certiorari and prohibition, herein petitioners allege that the respondent judge has acted without jurisdiction or in excess of his jurisdiction: I. Because said respondent judge lacks the power to place respondent Mariano Cu Unjieng under probation for the following reason: (1) Under section 11 of Act No. 4221, the said of the Philippine Legislature is made to apply only to the provinces of the Philippines; it nowhere states that it is to be made applicable to chartered cities like the City of Manila. (2) While section 37 of the Administrative Code contains a proviso to the effect that in the absence of a special provision, the term "province" may be construed to include the City of Manila for the purpose of giving effect to laws of general application, it is also true that Act No. 4221 is not a law of general application because it is made to apply only to those provinces in which the respective provincial boards shall have provided for the salary of a probation officer. (3) Even if the City of Manila were considered to be a province, still, Act No. 4221 would not be applicable to it because it has provided for the salary of a probation officer as required by section 11 thereof; it being immaterial that there is an Insular Probation Officer willing to act for the City of Manila, said Probation Officer provided for in section 10 of Act No. 4221 being different and distinct from the Probation Officer provided for in section 11 of the same Act. II. Because even if the respondent judge originally had jurisdiction to entertain the application for probation of the respondent Mariano Cu Unjieng, he nevertheless acted without jurisdiction or in excess thereof in continuing to entertain the motion for reconsideration and by failing to commit Mariano Cu Unjieng to prison after he had promulgated his resolution of June 28, 1937, denying Mariano Cu Unjieng's application for probation, for the reason that: (1) His jurisdiction and power in probation proceedings is limited by Act No. 4221 to the granting or denying of applications for probation. (2) After he had issued the order denying Mariano Cu Unjieng's petition for probation on June 28, 1937, it became final and executory at the moment of its rendition. (3) No right on appeal exists in such cases. (4) The respondent judge lacks the power to grant a rehearing of said order or to modify or change the same. III. Because the respondent judge made a finding that Mariano Cu Unjieng is innocent of the crime for which he was convicted by final judgment of this court, which finding is not only presumptuous but without foundation in fact and in law, and is furthermore in contempt of this court and a violation of the respondent's oath of office as ad interim judge of first instance. IV. Because the respondent judge has violated and continues to violate his duty, which became imperative when he issued his order of June 28, 1937, denying the application for probation, to commit his co-respondent to jail.

Petitioners also avers that they have no other plain, speedy and adequate remedy in the ordinary course of law. In a supplementary petition filed on September 9, 1937, the petitioner Hongkong and Shanghai Banking Corporation further contends that Act No. 4221 of the Philippine Legislature providing for a system of probation for persons eighteen years of age or over who are convicted of crime, is unconstitutional because it is violative of section 1, subsection (1), Article III, of the Constitution of the Philippines guaranteeing equal protection of the laws because it confers upon the provincial board of its province the absolute discretion to make said law operative or otherwise in their respective provinces, because it constitutes an unlawful and improper delegation to the provincial boards of the several provinces of the legislative power lodged by the Jones Law (section 8) in the Philippine Legislature and by the Constitution (section 1, Art. VI) in the National Assembly; and for the further reason that it gives the provincial boards, in contravention of the Constitution (section 2, Art. VIII) and the Jones Law (section 28), the authority to enlarge the powers of the Court of First Instance of different provinces without uniformity. In another supplementary petition dated September 14, 1937, the Fiscal of the City of Manila, in behalf of one of the petitioners, the People of the Philippine Islands, concurs for the first time with the issues raised by other petitioner regarding the constitutionality of Act No. 4221, and on the oral argument held on October 6, 1937, further elaborated on the theory that probation is a form of reprieve and therefore Act. No. 4221 is an encroachment on the exclusive power of the Chief Executive to grant pardons and reprieves. On October 7, 1937, the City Fiscal filed two memorandums in which he contended that Act No. 4221 not only encroaches upon the pardoning power to the executive, but also constitute an unwarranted delegation of legislative power and a denial of the equal protection of the laws. On October 9, 1937, two memorandums, signed jointly by the City Fiscal and the Solicitor-General, acting in behalf of the People of the Philippine Islands, and by counsel for the petitioner, the Hongkong and Shanghai Banking Corporation, one sustaining the power of the state to impugn the validity of its own laws and the other contending that Act No. 4221 constitutes an unwarranted delegation of legislative power, were presented. Another joint memorandum was filed by the same persons on the same day, October 9, 1937, alleging that Act No. 4221 is unconstitutional because it denies the equal protection of the laws and constitutes an unlawful delegation of legislative power and, further, that the whole Act is void: that the Commonwealth is not estopped from questioning the validity of its laws; that the private prosecution may intervene in probation proceedings and may attack the probation law as unconstitutional; and that this court may pass upon the constitutional question in prohibition proceedings. Respondents in their answer dated August 31, 1937, as well as in their oral argument and memorandums, challenge each and every one of the foregoing proposition raised by the petitioners. As special defenses, respondents allege: (1) That the present petition does not state facts sufficient in law to warrant the issuance of the writ of certiorari or of prohibition. (2) That the aforesaid petition is premature because the remedy sought by the petitioners is the very same remedy prayed for by them before the trial court and was still pending resolution before the trial court when the present petition was filed with this court. (3) That the petitioners having themselves raised the question as to the execution of judgment before the trial court, said trial court has acquired exclusive jurisdiction to resolve the same under the theory that its resolution denying probation is unappealable.

(4) That upon the hypothesis that this court has concurrent jurisdiction with the Court of First Instance to decide the question as to whether or not the execution will lie, this court nevertheless cannot exercise said jurisdiction while the Court of First Instance has assumed jurisdiction over the same upon motion of herein petitioners themselves. (5) That upon the procedure followed by the herein petitioners in seeking to deprive the trial court of its jurisdiction over the case and elevate the proceedings to this court, should not be tolerated because it impairs the authority and dignity of the trial court which court while sitting in the probation cases is "a court of limited jurisdiction but of great dignity." (6) That under the supposition that this court has jurisdiction to resolve the question submitted to and pending resolution by the trial court, the present action would not lie because the resolution of the trial court denying probation is appealable; for although the Probation Law does not specifically provide that an applicant for probation may appeal from a resolution of the Court of First Instance denying probation, still it is a general rule in this jurisdiction that a final order, resolution or decision of an inferior court is appealable to the superior court. (7) That the resolution of the trial court denying probation of herein respondent Mariano Cu Unjieng being appealable, the same had not become final and executory for the reason that the said respondent had filed an alternative motion for reconsideration and new trial within the requisite period of fifteen days, which motion the trial court was able to resolve in view of the restraining order improvidently and erroneously issued by this court.lawphi1.net (8) That the Fiscal of the City of Manila had by implication admitted that the resolution of the trial court denying probation is not final and unappealable when he presented his answer to the motion for reconsideration and agreed to the postponement of the hearing of the said motion. (9) That under the supposition that the order of the trial court denying probation is not appealable, it is incumbent upon the accused to file an action for the issuance of the writ of certiorari with mandamus, it appearing that the trial court, although it believed that the accused was entitled to probation, nevertheless denied probation for fear of criticism because the accused is a rich man; and that, before a petition for certiorari grounded on an irregular exercise of jurisdiction by the trial court could lie, it is incumbent upon the petitioner to file a motion for reconsideration specifying the error committed so that the trial court could have an opportunity to correct or cure the same. (10) That on hypothesis that the resolution of this court is not appealable, the trial court retains its jurisdiction within a reasonable time to correct or modify it in accordance with law and justice; that this power to alter or modify an order or resolution is inherent in the courts and may be exercise either motu proprio or upon petition of the proper party, the petition in the latter case taking the form of a motion for reconsideration. (11) That on the hypothesis that the resolution of the trial court is appealable as respondent allege, said court cannot order execution of the same while it is on appeal, for then the appeal would not be availing because the doors of probation will be closed from the moment the accused commences to serve his sentence (Act No. 4221, sec. 1; U.S. vs. Cook, 19 Fed. [2d], 827). In their memorandums filed on October 23, 1937, counsel for the respondents maintain that Act No. 4221 is constitutional because, contrary to the allegations of the petitioners, it does not constitute an undue delegation of legislative power, does not infringe the equal protection clause of the Constitution,

and does not encroach upon the pardoning power of the Executive. In an additional memorandum filed on the same date, counsel for the respondents reiterate the view that section 11 of Act No. 4221 is free from constitutional objections and contend, in addition, that the private prosecution may not intervene in probation proceedings, much less question the validity of Act No. 4221; that both the City Fiscal and the Solicitor-General are estopped from questioning the validity of the Act; that the validity of Act cannot be attacked for the first time before this court; that probation in unavailable; and that, in any event, section 11 of the Act No. 4221 is separable from the rest of the Act. The last memorandum for the respondent Mariano Cu Unjieng was denied for having been filed out of time but was admitted by resolution of this court and filed anew on November 5, 1937. This memorandum elaborates on some of the points raised by the respondents and refutes those brought up by the petitioners. In the scrutiny of the pleadings and examination of the various aspects of the present case, we noted that the court below, in passing upon the merits of the application of the respondent Mariano Cu Unjieng and in denying said application assumed the task not only of considering the merits of the application, but of passing upon the culpability of the applicant, notwithstanding the final pronouncement of guilt by this court. (G.R. No. 41200.) Probation implies guilt be final judgment. While a probation case may look into the circumstances attending the commission of the offense, this does not authorize it to reverse the findings and conclusive of this court, either directly or indirectly, especially wherefrom its own admission reliance was merely had on the printed briefs, averments, and pleadings of the parties. As already observed by this court in Shioji vs. Harvey ([1922], 43 Phil., 333, 337), and reiterated in subsequent cases, "if each and every Court of First Instance could enjoy the privilege of overruling decisions of the Supreme Court, there would be no end to litigation, and judicial chaos would result." A becoming modesty of inferior courts demands conscious realization of the position that they occupy in the interrelation and operation of the intergrated judicial system of the nation. After threshing carefully the multifarious issues raised by both counsel for the petitioners and the respondents, this court prefers to cut the Gordian knot and take up at once the two fundamental questions presented, namely, (1) whether or not the constitutionality of Act No. 4221 has been properly raised in these proceedings; and (2) in the affirmative, whether or not said Act is constitutional. Considerations of these issues will involve a discussion of certain incidental questions raised by the parties. To arrive at a correct conclusion on the first question, resort to certain guiding principles is necessary. It is a well-settled rule that the constitutionality of an act of the legislature will not be determined by the courts unless that question is properly raised and presented inappropriate cases and is necessary to a determination of the case; i.e., the issue of constitutionality must be the very lis mota presented. (McGirr vs. Hamilton and Abreu [1915], 30 Phil., 563, 568; 6 R. C. L., pp. 76, 77; 12 C. J., pp. 780-782, 783.) The question of the constitutionality of an act of the legislature is frequently raised in ordinary actions. Nevertheless, resort may be made to extraordinary legal remedies, particularly where the remedies in the ordinary course of law even if available, are not plain, speedy and adequate. Thus, in Cu Unjieng vs. Patstone ([1922]), 42 Phil., 818), this court held that the question of the constitutionality of a statute may be raised by the petitioner in mandamus proceedings (see, also, 12 C. J., p. 783); and in Government of the Philippine Islands vs. Springer ([1927], 50 Phil., 259 [affirmed in Springer vs. Government of the Philippine Islands (1928), 277 U. S., 189; 72 Law. ed., 845]), this court declared an act of the legislature unconstitutional in an action of quo warranto brought in the name of the Government of the Philippines. It has also been held that the constitutionality of a statute may be questioned in habeas corpus proceedings (12 C. J., p. 783; Bailey on Habeas Corpus, Vol. I, pp. 97, 117), although there are

authorities to the contrary; on an application for injunction to restrain action under the challenged statute (mandatory, see Cruz vs. Youngberg [1931], 56 Phil., 234); and even on an application for preliminary injunction where the determination of the constitutional question is necessary to a decision of the case. (12 C. J., p. 783.) The same may be said as regards prohibition and certiorari.(Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385; [1926], 271 U. S., 500; 70 Law. ed., 1059; Bell vs. First Judicial District Court [1905], 28 Nev., 280; 81 Pac., 875; 113 A. S. R., 854; 6 Ann. Cas., 982; 1 L. R. A. [N. S], 843, and cases cited). The case of Yu Cong Eng vs. Trinidad, supra, decided by this court twelve years ago was, like the present one, an original action for certiorari and prohibition. The constitutionality of Act No. 2972, popularly known as the Chinese Bookkeeping Law, was there challenged by the petitioners, and the constitutional issue was not met squarely by the respondent in a demurrer. A point was raised "relating to the propriety of the constitutional question being decided in original proceedings in prohibition." This court decided to take up the constitutional question and, with two justices dissenting, held that Act No. 2972 was constitutional. The case was elevated on writ of certiorari to the Supreme Court of the United States which reversed the judgment of this court and held that the Act was invalid. (271 U. S., 500; 70 Law. ed., 1059.) On the question of jurisdiction, however, the Federal Supreme Court, though its Chief Justice, said: By the Code of Civil Procedure of the Philippine Islands, section 516, the Philippine supreme court is granted concurrent jurisdiction in prohibition with courts of first instance over inferior tribunals or persons, and original jurisdiction over courts of first instance, when such courts are exercising functions without or in excess of their jurisdiction. It has been held by that court that the question of the validity of the criminal statute must usually be raised by a defendant in the trial court and be carried regularly in review to the Supreme Court. (Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192). But in this case where a new act seriously affected numerous persons and extensive property rights, and was likely to cause a multiplicity of actions, the Supreme Court exercised its discretion to bring the issue to the act's validity promptly before it and decide in the interest of the orderly administration of justice. The court relied by analogy upon the cases of Ex parte Young (209 U. S., 123;52 Law ed., 714; 13 L. R. A. [N. S.] 932; 28 Sup. Ct. Rep., 441; 14 Ann. Ca., 764; Traux vs. Raich, 239 U. S., 33; 60 Law. ed., 131; L. R. A. 1916D, 545; 36 Sup. Ct. Rep., 7; Ann. Cas., 1917B, 283; and Wilson vs. New, 243 U. S., 332; 61 Law. ed., 755; L. R. A. 1917E, 938; 37 Sup. Ct. Rep., 298; Ann. Cas. 1918A, 1024). Although objection to the jurisdiction was raise by demurrer to the petition, this is now disclaimed on behalf of the respondents, and both parties ask a decision on the merits. In view of the broad powers in prohibition granted to that court under the Island Code, we acquiesce in the desire of the parties. The writ of prohibition is an extraordinary judicial writ issuing out of a court of superior jurisdiction and directed to an inferior court, for the purpose of preventing the inferior tribunal from usurping a jurisdiction with which it is not legally vested. (High, Extraordinary Legal Remedies, p. 705.) The general rule, although there is a conflict in the cases, is that the merit of prohibition will not lie whether the inferior court has jurisdiction independent of the statute the constitutionality of which is questioned, because in such cases the interior court having jurisdiction may itself determine the constitutionality of the statute, and its decision may be subject to review, and consequently the complainant in such cases ordinarily has adequate remedy by appeal without resort to the writ of prohibition. But where the inferior court or tribunal derives its jurisdiction exclusively from an unconstitutional statute, it may be prevented by the writ of prohibition from enforcing that statute. (50 C. J., 670; Ex parte Round tree [1874, 51 Ala., 42; In re Macfarland, 30 App. [D. C.], 365; Curtis vs. Cornish [1912], 109 Me., 384; 84 A., 799; Pennington vs. Woolfolk [1880], 79 Ky., 13; State vs. Godfrey [1903], 54 W. Va., 54; 46 S. E., 185; Arnold vs. Shields [1837], 5 Dana, 19; 30 Am. Dec., 669.)

Courts of First Instance sitting in probation proceedings derived their jurisdiction solely from Act No. 4221 which prescribes in detailed manner the procedure for granting probation to accused persons after their conviction has become final and before they have served their sentence. It is true that at common law the authority of the courts to suspend temporarily the execution of the sentence is recognized and, according to a number of state courts, including those of Massachusetts, Michigan, New York, and Ohio, the power is inherent in the courts (Commonwealth vs. Dowdican's Bail [1874], 115 Mass., 133; People vs. Stickel [1909], 156 Mich., 557; 121 N. W., 497; People ex rel. Forsyth vs. Court of Session [1894], 141 N. Y., 288; Weber vs. State [1898], 58 Ohio St., 616). But, in the leading case of Ex parte United States ([1916], 242 U. S., 27; 61 Law. ed., 129; L. R. A., 1917E, 1178; 37 Sup. Ct. Rep., 72; Ann. Cas. 1917B, 355), the Supreme Court of the United States expressed the opinion that under the common law the power of the court was limited to temporary suspension, and brushed aside the contention as to inherent judicial power saying, through Chief Justice White: Indisputably under our constitutional system the right to try offenses against the criminal laws and upon conviction to impose the punishment provided by law is judicial, and it is equally to be conceded that, in exerting the powers vested in them on such subject, courts inherently possess ample right to exercise reasonable, that is, judicial, discretion to enable them to wisely exert their authority. But these concessions afford no ground for the contention as to power here made, since it must rest upon the proposition that the power to enforce begets inherently a discretion to permanently refuse to do so. And the effect of the proposition urged upon the distribution of powers made by the Constitution will become apparent when it is observed that indisputable also is it that the authority to define and fix the punishment for crime is legislative and includes the right in advance to bring within judicial discretion, for the purpose of executing the statute, elements of consideration which would be otherwise beyond the scope of judicial authority, and that the right to relieve from the punishment, fixed by law and ascertained according to the methods by it provided belongs to the executive department. Justice Carson, in his illuminating concurring opinion in the case of Director of Prisons vs. Judge of First Instance of Cavite (29 Phil., 265), decided by this court in 1915, also reached the conclusion that the power to suspend the execution of sentences pronounced in criminal cases is not inherent in the judicial function. "All are agreed", he said, "that in the absence of statutory authority, it does not lie within the power of the courts to grant such suspensions." (at p. 278.) Both petitioner and respondents are correct, therefore, when they argue that a Court of First Instance sitting in probation proceedings is a court of limited jurisdiction. Its jurisdiction in such proceedings is conferred exclusively by Act No. 4221 of the Philippine Legislature. It is, of course, true that the constitutionality of a statute will not be considered on application for prohibition where the question has not been properly brought to the attention of the court by objection of some kind (Hill vs. Tarver [1901], 130 Ala., 592; 30 S., 499; State ex rel. Kelly vs. Kirby [1914], 260 Mo., 120; 168 S. W., 746). In the case at bar, it is unquestionable that the constitutional issue has been squarely presented not only before this court by the petitioners but also before the trial court by the private prosecution. The respondent, Hon. Jose O Vera, however, acting as judge of the court below, declined to pass upon the question on the ground that the private prosecutor, not being a party whose rights are affected by the statute, may not raise said question. The respondent judge cited Cooley on Constitutional Limitations (Vol. I, p. 339; 12 C. J., sec. 177, pp. 760 and 762), and McGlue vs. Essex County ([1916], 225 Mass., 59; 113 N. E., 742, 743), as authority for the proposition that a court will not consider any attack made on the constitutionality of a statute by one who has no interest in defeating it because his rights are not affected by its operation. The respondent judge further stated that it may not motu proprio take up the constitutional question and, agreeing with Cooley that "the power to declare a legislative enactment void is one which the judge, conscious of the fallibility of the human judgment, will

shrink from exercising in any case where he can conscientiously and with due regard to duty and official oath decline the responsibility" (Constitutional Limitations, 8th ed., Vol. I, p. 332), proceeded on the assumption that Act No. 4221 is constitutional. While therefore, the court a quo admits that the constitutional question was raised before it, it refused to consider the question solely because it was not raised by a proper party. Respondents herein reiterates this view. The argument is advanced that the private prosecution has no personality to appear in the hearing of the application for probation of defendant Mariano Cu Unjieng in criminal case No. 42648 of the Court of First Instance of Manila, and hence the issue of constitutionality was not properly raised in the lower court. Although, as a general rule, only those who are parties to a suit may question the constitutionality of a statute involved in a judicial decision, it has been held that since the decree pronounced by a court without jurisdiction is void, where the jurisdiction of the court depends on the validity of the statute in question, the issue of the constitutionality will be considered on its being brought to the attention of the court by persons interested in the effect to be given the statute.(12 C. J., sec. 184, p. 766.) And, even if we were to concede that the issue was not properly raised in the court below by the proper party, it does not follow that the issue may not be here raised in an original action of certiorari and prohibitions. It is true that, as a general rule, the question of constitutionality must be raised at the earliest opportunity, so that if not raised by the pleadings, ordinarily it may not be raised at the trial, and if not raised in the trial court, it will not considered on appeal. (12 C. J., p. 786. See, also, Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192, 193-195.) But we must state that the general rule admits of exceptions. Courts, in the exercise of sounds discretion, may determine the time when a question affecting the constitutionality of a statute should be presented. (In re Woolsey [1884], 95 N. Y., 135, 144.) Thus, in criminal cases, although there is a very sharp conflict of authorities, it is said that the question may be raised for the first time at any stage of the proceedings, either in the trial court or on appeal. (12 C. J., p. 786.) Even in civil cases, it has been held that it is the duty of a court to pass on the constitutional question, though raised for the first time on appeal, if it appears that a determination of the question is necessary to a decision of the case. (McCabe's Adm'x vs. Maysville & B. S. R. Co., [1910], 136 ky., 674; 124 S. W., 892; Lohmeyer vs. St. Louis Cordage Co. [1908], 214 Mo., 685; 113 S. W. 1108; Carmody vs. St. Louis Transit Co., [1905], 188 Mo., 572; 87 S. W., 913.) And it has been held that a constitutional question will be considered by an appellate court at any time, where it involves the jurisdiction of the court below (State vs. Burke [1911], 175 Ala., 561; 57 S., 870.) As to the power of this court to consider the constitutional question raised for the first time before this court in these proceedings, we turn again and point with emphasis to the case of Yu Cong Eng vs. Trinidad, supra. And on the hypotheses that the Hongkong & Shanghai Banking Corporation, represented by the private prosecution, is not the proper party to raise the constitutional question here a point we do not now have to decide we are of the opinion that the People of the Philippines, represented by the Solicitor-General and the Fiscal of the City of Manila, is such a proper party in the present proceedings. The unchallenged rule is that the person who impugns the validity of a statute must have a personal and substantial interest in the case such that he has sustained, or will sustained, direct injury as a result of its enforcement. It goes without saying that if Act No. 4221 really violates the constitution, the People of the Philippines, in whose name the present action is brought, has a substantial interest in having it set aside. Of grater import than the damage caused by the illegal expenditure of public funds is the mortal wound inflicted upon the fundamental law by the enforcement of an invalid statute. Hence, the well-settled rule that the state can challenge the validity of its own laws. In Government of the Philippine Islands vs. Springer ([1927]), 50 Phil., 259 (affirmed in Springer vs. Government of the Philippine Islands [1928], 277 U.S., 189; 72 Law. ed., 845), this court declared an act of the legislature unconstitutional in an action instituted in behalf of the Government of the Philippines. In Attorney General vs. Perkins ([1889], 73 Mich., 303, 311, 312; 41 N. W. 426, 428, 429), the State of Michigan, through its Attorney General, instituted quo warranto proceedings to test the right of the respondents to renew a mining corporation, alleging that the statute under which the respondents base their right was unconstitutional because it impaired the obligation of contracts. The capacity of the chief

law officer of the state to question the constitutionality of the statute was though, as a general rule, only those who are parties to a suit may question the constitutionality of a statute involved in a judicial decision, it has been held that since the decree pronounced by a court without jurisdiction in void, where the jurisdiction of the court depends on the validity of the statute in question, the issue of constitutionality will be considered on its being brought to the attention of the court by persons interested in the effect to begin the statute. (12 C.J., sec. 184, p. 766.) And, even if we were to concede that the issue was not properly raised in the court below by the proper party, it does not follow that the issue may not be here raised in an original action of certiorari and prohibition. It is true that, as a general rule, the question of constitutionality must be raised at the earliest opportunity, so that if not raised by the pleadings, ordinarily it may not be raised a the trial, and if not raised in the trial court, it will not be considered on appeal. (12 C.J., p. 786. See, also, Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192, 193-195.) But we must state that the general rule admits of exceptions. Courts, in the exercise of sound discretion, may determine the time when a question affecting the constitutionality of a statute should be presented. (In re Woolsey [19884], 95 N.Y., 135, 144.) Thus, in criminal cases, although there is a very sharp conflict of authorities, it is said that the question may be raised for the first time at any state of the proceedings, either in the trial court or on appeal. (12 C.J., p. 786.) Even in civil cases, it has been held that it is the duty of a court to pass on the constitutional question, though raised for first time on appeal, if it appears that a determination of the question is necessary to a decision of the case. (McCabe's Adm'x vs. Maysville & B. S. R. Co. [1910], 136 Ky., 674; 124 S. W., 892; Lohmeyer vs. St. Louis, Cordage Co. [1908], 214 Mo. 685; 113 S. W., 1108; Carmody vs. St. Louis Transit Co. [1905], 188 Mo., 572; 87 S. W., 913.) And it has been held that a constitutional question will be considered by an appellate court at any time, where it involves the jurisdiction of the court below (State vs. Burke [1911], 175 Ala., 561; 57 S., 870.) As to the power of this court to consider the constitutional question raised for the first time before this court in these proceedings, we turn again and point with emphasis to the case of Yu Cong Eng. vs. Trinidad, supra. And on the hypothesis that the Hongkong & Shanghai Banking Corporation, represented by the private prosecution, is not the proper party to raise the constitutional question here a point we do not now have to decide we are of the opinion that the People of the Philippines, represented by the Solicitor-General and the Fiscal of the City of Manila, is such a proper party in the present proceedings. The unchallenged rule is that the person who impugns the validity of a statute must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement. It goes without saying that if Act No. 4221 really violates the Constitution, the People of the Philippines, in whose name the present action is brought, has a substantial interest in having it set aside. Of greater import than the damage caused by the illegal expenditure of public funds is the mortal wound inflicted upon the fundamental law by the enforcement of an invalid statute. Hence, the well-settled rule that the state can challenge the validity of its own laws. In Government of the Philippine Islands vs. Springer ([1927]), 50 Phil., 259 (affirmed in Springer vs. Government of the Philippine Islands [1928], 277 U.S., 189; 72 Law. ed., 845), this court declared an act of the legislature unconstitutional in an action instituted in behalf of the Government of the Philippines. In Attorney General vs. Perkings([1889], 73 Mich., 303, 311, 312; 41 N.W., 426, 428, 429), the State of Michigan, through its Attorney General, instituted quo warranto proceedings to test the right of the respondents to renew a mining corporation, alleging that the statute under which the respondents base their right was unconstitutional because it impaired the obligation of contracts. The capacity of the chief law officer of the state to question the constitutionality of the statute was itself questioned. Said the Supreme Court of Michigan, through Champlin, J.: . . . The idea seems to be that the people are estopped from questioning the validity of a law enacted by their representatives; that to an accusation by the people of Michigan of usurpation their government, a statute enacted by the people of Michigan is an adequate answer. The last proposition is true, but, if the statute relied on in justification is unconstitutional, it is statute only in form, and lacks the

force of law, and is of no more saving effect to justify action under it than if it had never been enacted. The constitution is the supreme law, and to its behests the courts, the legislature, and the people must bow . . . The legislature and the respondents are not the only parties in interest upon such constitutional questions. As was remarked by Mr. Justice Story, in speaking of an acquiescence by a party affected by an unconstitutional act of the legislature: "The people have a deep and vested interest in maintaining all the constitutional limitations upon the exercise of legislative powers." (Allen vs. Mckeen, 1 Sum., 314.) In State vs. Doane ([1916], 98 Kan., 435; 158 Pac., 38, 40), an original action (mandamus) was brought by the Attorney-General of Kansas to test the constitutionality of a statute of the state. In disposing of the question whether or not the state may bring the action, the Supreme Court of Kansas said: . . . the state is a proper party indeed, the proper party to bring this action. The state is always interested where the integrity of its Constitution or statutes is involved. "It has an interest in seeing that the will of the Legislature is not disregarded, and need not, as an individual plaintiff must, show grounds of fearing more specific injury. (State vs. Kansas City 60 Kan., 518 [57 Pac., 118])." (State vs. Lawrence, 80 Kan., 707; 103 Pac., 839.) Where the constitutionality of a statute is in doubt the state's law officer, its Attorney-General, or county attorney, may exercise his bet judgment as to what sort of action he will bring to have the matter determined, either by quo warranto to challenge its validity (State vs. Johnson, 61 Kan., 803; 60 Pac., 1068; 49 L.R.A., 662), by mandamus to compel obedience to its terms (State vs. Dolley, 82 Kan., 533; 108 Pac., 846), or by injunction to restrain proceedings under its questionable provisions (State ex rel. vs. City of Neodesha, 3 Kan. App., 319; 45 Pac., 122). Other courts have reached the same conclusion (See State vs. St. Louis S. W. Ry. Co. [1917], 197 S. W., 1006; State vs. S.H. Kress & Co. [1934], 155 S., 823; State vs. Walmsley [1935], 181 La., 597; 160 S., 91; State vs. Board of County Comr's [1934], 39 Pac. [2d], 286; First Const. Co. of Brooklyn vs. State [1917], 211 N.Y., 295; 116 N.E., 1020; Bush vs. State {1918], 187 Ind., 339; 119 N.E., 417; State vs. Watkins [1933], 176 La., 837; 147 S., 8, 10, 11). In the case last cited, the Supreme Court of Luisiana said: It is contended by counsel for Herbert Watkins that a district attorney, being charged with the duty of enforcing the laws, has no right to plead that a law is unconstitutional. In support of the argument three decisions are cited, viz.: State ex rel. Hall, District Attorney, vs. Judge of Tenth Judicial District (33 La. Ann., 1222); State ex rel. Nicholls, Governor vs. Shakespeare, Mayor of New Orleans (41 Ann., 156; 6 So., 592); and State ex rel., Banking Co., etc. vs. Heard, Auditor (47 La. Ann., 1679; 18 So., 746; 47 L. R. A., 512). These decisions do not forbid a district attorney to plead that a statute is unconstitutional if he finds if in conflict with one which it is his duty to enforce. In State ex rel. Hall, District Attorney, vs. Judge, etc., the ruling was the judge should not, merely because he believed a certain statute to be unconstitutional forbid the district attorney to file a bill of information charging a person with a violation of the statute. In other words, a judge should not judicially declare a statute unconstitutional until the question of constitutionality is tendered for decision, and unless it must be decided in order to determine the right of a party litigant. State ex rel. Nicholls, Governor, etc., is authority for the proposition merely that an officer on whom a statute imposes the duty of enforcing its provisions cannot avoid the duty upon the ground that he considers the statute unconstitutional, and hence in enforcing the statute he is immune from responsibility if the statute be unconstitutional. State ex rel. Banking Co., etc., is authority for the proposition merely that executive officers, e.g., the state auditor and state treasurer, should not decline to

perform ministerial duties imposed upon them by a statute, on the ground that they believe the statute is unconstitutional. It is the duty of a district attorney to enforce the criminal laws of the state, and, above all, to support the Constitution of the state. If, in the performance of his duty he finds two statutes in conflict with each other, or one which repeals another, and if, in his judgment, one of the two statutes is unconstitutional, it is his duty to enforce the other; and, in order to do so, he is compelled to submit to the court, by way of a plea, that one of the statutes is unconstitutional. If it were not so, the power of the Legislature would be free from constitutional limitations in the enactment of criminal laws. The respondents do not seem to doubt seriously the correctness of the general proposition that the state may impugn the validity of its laws. They have not cited any authority running clearly in the opposite direction. In fact, they appear to have proceeded on the assumption that the rule as stated is sound but that it has no application in the present case, nor may it be invoked by the City Fiscal in behalf of the People of the Philippines, one of the petitioners herein, the principal reasons being that the validity before this court, that the City Fiscal is estopped from attacking the validity of the Act and, not authorized challenge the validity of the Act in its application outside said city. (Additional memorandum of respondents, October 23, 1937, pp. 8,. 10, 17 and 23.) The mere fact that the Probation Act has been repeatedly relied upon the past and all that time has not been attacked as unconstitutional by the Fiscal of Manila but, on the contrary, has been impliedly regarded by him as constitutional, is no reason for considering the People of the Philippines estopped from nor assailing its validity. For courts will pass upon a constitutional questions only when presented before it in bona fide cases for determination, and the fact that the question has not been raised before is not a valid reason for refusing to allow it to be raised later. The fiscal and all others are justified in relying upon the statute and treating it as valid until it is held void by the courts in proper cases. It remains to consider whether the determination of the constitutionality of Act No. 4221 is necessary to the resolution of the instant case. For, ". . . while the court will meet the question with firmness, where its decision is indispensable, it is the part of wisdom, and just respect for the legislature, renders it proper, to waive it, if the case in which it arises, can be decided on other points." (Ex parte Randolph [1833], 20 F. Cas. No. 11, 558; 2 Brock., 447. Vide, also Hoover vs. wood [1857], 9 Ind., 286, 287.) It has been held that the determination of a constitutional question is necessary whenever it is essential to the decision of the case (12 C. J., p. 782, citing Long Sault Dev. Co. vs. Kennedy [1913], 158 App. Div., 398; 143 N. Y. Supp., 454 [aff. 212 N.Y., 1: 105 N. E., 849; Ann. Cas. 1915D, 56; and app dism 242 U.S., 272]; Hesse vs. Ledesma, 7 Porto Rico Fed., 520; Cowan vs. Doddridge, 22 Gratt [63 Va.], 458; Union Line Co., vs. Wisconsin R. Commn., 146 Wis., 523; 129 N. W., 605), as where the right of a party is founded solely on a statute the validity of which is attacked. (12 C.J., p. 782, citing Central Glass Co. vs. Niagrara F. Ins. Co., 131 La., 513; 59 S., 972; Cheney vs. Beverly, 188 Mass., 81; 74 N.E., 306). There is no doubt that the respondent Cu Unjieng draws his privilege to probation solely from Act No. 4221 now being assailed. Apart from the foregoing considerations, that court will also take cognizance of the fact that the Probation Act is a new addition to our statute books and its validity has never before been passed upon by the courts; that may persons accused and convicted of crime in the City of Manila have applied for probation; that some of them are already on probation; that more people will likely take advantage of the Probation Act in the future; and that the respondent Mariano Cu Unjieng has been at large for a period of about four years since his first conviction. All wait the decision of this court on the constitutional question. Considering, therefore, the importance which the instant case has assumed and to prevent multiplicity of

suits, strong reasons of public policy demand that the constitutionality of Act No. 4221 be now resolved. (Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385; [1926], 271 U.S., 500; 70 Law. ed., 1059. See 6 R.C.L., pp. 77, 78; People vs. Kennedy [1913], 207 N.Y., 533; 101 N.E., 442, 444; Ann. Cas. 1914C, 616; Borginis vs. Falk Co. [1911], 147 Wis., 327; 133 N.W., 209, 211; 37 L.R.A. [N.S.] 489; Dimayuga and Fajardo vs. Fernandez [1922], 43 Phil., 304.) In Yu Cong Eng vs. Trinidad, supra, an analogous situation confronted us. We said: "Inasmuch as the property and personal rights of nearly twelve thousand merchants are affected by these proceedings, and inasmuch as Act No. 2972 is a new law not yet interpreted by the courts, in the interest of the public welfare and for the advancement of public policy, we have determined to overrule the defense of want of jurisdiction in order that we may decide the main issue. We have here an extraordinary situation which calls for a relaxation of the general rule." Our ruling on this point was sustained by the Supreme Court of the United States. A more binding authority in support of the view we have taken can not be found. We have reached the conclusion that the question of the constitutionality of Act No. 4221 has been properly raised. Now for the main inquiry: Is the Act unconstitutional? Under a doctrine peculiarly American, it is the office and duty of the judiciary to enforce the Constitution. This court, by clear implication from the provisions of section 2, subsection 1, and section 10, of Article VIII of the Constitution, may declare an act of the national legislature invalid because in conflict with the fundamental lay. It will not shirk from its sworn duty to enforce the Constitution. And, in clear cases, it will not hesitate to give effect to the supreme law by setting aside a statute in conflict therewith. This is of the essence of judicial duty. This court is not unmindful of the fundamental criteria in cases of this nature that all reasonable doubts should be resolved in favor of the constitutionality of a statute. An act of the legislature approved by the executive, is presumed to be within constitutional limitations. The responsibility of upholding the Constitution rests not on the courts alone but on the legislature as well. "The question of the validity of every statute is first determined by the legislative department of the government itself." (U.S. vs. Ten Yu [1912], 24 Phil., 1, 10; Case vs. Board of Health and Heiser [1913], 24 Phil., 250, 276; U.S. vs. Joson [1913], 26 Phil., 1.) And a statute finally comes before the courts sustained by the sanction of the executive. The members of the Legislature and the Chief Executive have taken an oath to support the Constitution and it must be presumed that they have been true to this oath and that in enacting and sanctioning a particular law they did not intend to violate the Constitution. The courts cannot but cautiously exercise its power to overturn the solemn declarations of two of the three grand departments of the governments. (6 R.C.L., p. 101.) Then, there is that peculiar political philosophy which bids the judiciary to reflect the wisdom of the people as expressed through an elective Legislature and an elective Chief Executive. It follows, therefore, that the courts will not set aside a law as violative of the Constitution except in a clear case. This is a proposition too plain to require a citation of authorities. One of the counsel for respondents, in the course of his impassioned argument, called attention to the fact that the President of the Philippines had already expressed his opinion against the constitutionality of the Probation Act, adverting that as to the Executive the resolution of this question was a foregone conclusion. Counsel, however, reiterated his confidence in the integrity and independence of this court. We take notice of the fact that the President in his message dated September 1, 1937, recommended to the National Assembly the immediate repeal of the Probation Act (No. 4221); that this message resulted in the approval of Bill No. 2417 of the Nationality Assembly repealing the probation Act, subject to certain conditions therein mentioned; but that said bill was vetoed by the President on September 13, 1937, much against his wish, "to have stricken out from the statute books of the Commonwealth a law . . . unfair and very likely unconstitutional." It is sufficient to observe in this

connection that, in vetoing the bill referred to, the President exercised his constitutional prerogative. He may express the reasons which he may deem proper for taking such a step, but his reasons are not binding upon us in the determination of actual controversies submitted for our determination. Whether or not the Executive should express or in any manner insinuate his opinion on a matter encompassed within his broad constitutional power of veto but which happens to be at the same time pending determination in this court is a question of propriety for him exclusively to decide or determine. Whatever opinion is expressed by him under these circumstances, however, cannot sway our judgment on way or another and prevent us from taking what in our opinion is the proper course of action to take in a given case. It if is ever necessary for us to make any vehement affirmance during this formative period of our political history, it is that we are independent of the Executive no less than of the Legislative department of our government independent in the performance of our functions, undeterred by any consideration, free from politics, indifferent to popularity, and unafraid of criticism in the accomplishment of our sworn duty as we see it and as we understand it. The constitutionality of Act No. 4221 is challenged on three principal grounds: (1) That said Act encroaches upon the pardoning power of the Executive; (2) that its constitutes an undue delegation of legislative power and (3) that it denies the equal protection of the laws. 1. Section 21 of the Act of Congress of August 29, 1916, commonly known as the Jones Law, in force at the time of the approval of Act No. 4221, otherwise known as the Probation Act, vests in the Governor-General of the Philippines "the exclusive power to grant pardons and reprieves and remit fines and forfeitures". This power is now vested in the President of the Philippines. (Art. VII, sec. 11, subsec. 6.) The provisions of the Jones Law and the Constitution differ in some respects. The adjective "exclusive" found in the Jones Law has been omitted from the Constitution. Under the Jones Law, as at common law, pardon could be granted any time after the commission of the offense, either before or after conviction (Vide Constitution of the United States, Art. II, sec. 2; In re Lontok [1922], 43 Phil., 293). The Governor-General of the Philippines was thus empowered, like the President of the United States, to pardon a person before the facts of the case were fully brought to light. The framers of our Constitution thought this undesirable and, following most of the state constitutions, provided that the pardoning power can only be exercised "after conviction". So, too, under the new Constitution, the pardoning power does not extend to "cases of impeachment". This is also the rule generally followed in the United States (Vide Constitution of the United States, Art. II, sec. 2). The rule in England is different. There, a royal pardon can not be pleaded in bar of an impeachment; "but," says Blackstone, "after the impeachment has been solemnly heard and determined, it is not understood that the king's royal grace is further restrained or abridged." (Vide, Ex parte Wells [1856], 18 How., 307; 15 Law. ed., 421; Com. vs. Lockwood [1872], 109 Mass., 323; 12 Am. Rep., 699; Sterling vs. Drake [1876], 29 Ohio St., 457; 23 am. Rep., 762.) The reason for the distinction is obvious. In England, Judgment on impeachment is not confined to mere "removal from office and disqualification to hold and enjoy any office of honor, trust, or profit under the Government" (Art. IX, sec. 4, Constitution of the Philippines) but extends to the whole punishment attached by law to the offense committed. The House of Lords, on a conviction may, by its sentence, inflict capital punishment, perpetual banishment, perpetual banishment, fine or imprisonment, depending upon the gravity of the offense committed, together with removal from office and incapacity to hold office. (Com. vs. Lockwood, supra.) Our Constitution also makes specific mention of "commutation" and of the power of the executive to impose, in the pardons he may grant, such conditions, restrictions and limitations as he may deem proper. Amnesty may be granted by the President under the Constitution but only with the concurrence of the National Assembly. We need not dwell at length on the significance of these fundamental changes. It is sufficient for our purposes to state that the pardoning power has remained essentially the same. The question is: Has the pardoning power of the Chief Executive under the Jones Law been impaired by the Probation Act?

As already stated, the Jones Law vests the pardoning power exclusively in the Chief Executive. The exercise of the power may not, therefore, be vested in anyone else. ". . . The benign prerogative of mercy reposed in the executive cannot be taken away nor fettered by any legislative restrictions, nor can like power be given by the legislature to any other officer or authority. The coordinate departments of government have nothing to do with the pardoning power, since no person properly belonging to one of the departments can exercise any powers appertaining to either of the others except in cases expressly provided for by the constitution." (20 R.C.L., pp., , and cases cited.) " . . . where the pardoning power is conferred on the executive without express or implied limitations, the grant is exclusive, and the legislature can neither exercise such power itself nor delegate it elsewhere, nor interfere with or control the proper exercise thereof, . . ." (12 C.J., pp. 838, 839, and cases cited.) If Act No. 4221, then, confers any pardoning power upon the courts it is for that reason unconstitutional and void. But does it? In the famous Killitts decision involving an embezzlement case, the Supreme Court of the United States ruled in 1916 that an order indefinitely suspending sentenced was void. (Ex parte United States [1916], 242 U.S., 27; 61 Law. ed., 129; L.R.A. 1917E, 1178; 37 Sup. Ct. Rep., 72; Ann. Cas. 1917B, 355.) Chief Justice White, after an exhaustive review of the authorities, expressed the opinion of the court that under the common law the power of the court was limited to temporary suspension and that the right to suspend sentenced absolutely and permanently was vested in the executive branch of the government and not in the judiciary. But, the right of Congress to establish probation by statute was conceded. Said the court through its Chief Justice: ". . . and so far as the future is concerned, that is, the causing of the imposition of penalties as fixed to be subject, by probation legislation or such other means as the legislative mind may devise, to such judicial discretion as may be adequate to enable courts to meet by the exercise of an enlarged but wise discretion the infinite variations which may be presented to them for judgment, recourse must be had Congress whose legislative power on the subject is in the very nature of things adequately complete." (Quoted in Riggs vs. United States [1926], 14 F. [2d], 5, 6.) This decision led the National Probation Association and others to agitate for the enactment by Congress of a federal probation law. Such action was finally taken on March 4, 1925 (chap. 521, 43 Stat. L. 159, U.S.C. title 18, sec. 724). This was followed by an appropriation to defray the salaries and expenses of a certain number of probation officers chosen by civil service. (Johnson, Probation for Juveniles and Adults, p. 14.) In United States vs. Murray ([1925], 275 U.S., 347; 48 Sup. Ct. Rep., 146; 72 Law. ed., 309), the Supreme Court of the United States, through Chief Justice Taft, held that when a person sentenced to imprisonment by a district court has begun to serve his sentence, that court has no power under the Probation Act of March 4, 1925 to grant him probation even though the term at which sentence was imposed had not yet expired. In this case of Murray, the constitutionality of the probation Act was not considered but was assumed. The court traced the history of the Act and quoted from the report of the Committee on the Judiciary of the United States House of Representatives (Report No. 1377, 68th Congress, 2 Session) the following statement: Prior to the so-called Killitts case, rendered in December, 1916, the district courts exercised a form of probation either, by suspending sentence or by placing the defendants under state probation officers or volunteers. In this case, however (Ex parte United States, 242 U.S., 27; 61 L. Ed., 129; L.R.A., 1917E, 1178; 37 Sup. Ct. Rep., 72 Ann. Cas. 1917B, 355), the Supreme Court denied the right of the district courts to suspend sentenced. In the same opinion the court pointed out the necessity for action by Congress if the courts were to exercise probation powers in the future . . .

Since this decision was rendered, two attempts have been made to enact probation legislation. In 1917, a bill was favorably reported by the Judiciary Committee and passed the House. In 1920, the judiciary Committee again favorably reported a probation bill to the House, but it was never reached for definite action. If this bill is enacted into law, it will bring the policy of the Federal government with reference to its treatment of those convicted of violations of its criminal laws in harmony with that of the states of the Union. At the present time every state has a probation law, and in all but twelve states the law applies both to adult and juvenile offenders. (see, also, Johnson, Probation for Juveniles and Adults [1928], Chap. I.) The constitutionality of the federal probation law has been sustained by inferior federal courts. In Riggs vs. United States supra, the Circuit Court of Appeals of the Fourth Circuit said: Since the passage of the Probation Act of March 4, 1925, the questions under consideration have been reviewed by the Circuit Court of Appeals of the Ninth Circuit (7 F. [2d], 590), and the constitutionality of the act fully sustained, and the same held in no manner to encroach upon the pardoning power of the President. This case will be found to contain an able and comprehensive review of the law applicable here. It arose under the act we have to consider, and to it and the authorities cited therein special reference is made (Nix vs. James, 7 F. [2d], 590, 594), as is also to a decision of the Circuit Court of Appeals of the Seventh Circuit (Kriebel vs. U.S., 10 F. [2d], 762), likewise construing the Probation Act. We have seen that in 1916 the Supreme Court of the United States; in plain and unequivocal language, pointed to Congress as possessing the requisite power to enact probation laws, that a federal probation law as actually enacted in 1925, and that the constitutionality of the Act has been assumed by the Supreme Court of the United States in 1928 and consistently sustained by the inferior federal courts in a number of earlier cases. We are fully convinced that the Philippine Legislature, like the Congress of the United States, may legally enact a probation law under its broad power to fix the punishment of any and all penal offenses. This conclusion is supported by other authorities. In Ex parte Bates ([1915], 20 N. M., 542; L.R.A. 1916A, 1285; 151 Pac., 698, the court said: "It is clearly within the province of the Legislature to denominate and define all classes of crime, and to prescribe for each a minimum and maximum punishment." And in State vs. Abbott ([1910], 87 S.C., 466; 33 L.R.A. [N. S.], 112; 70 S. E., 6; Ann. Cas. 1912B, 1189), the court said: "The legislative power to set punishment for crime is very broad, and in the exercise of this power the general assembly may confer on trial judges, if it sees fit, the largest discretion as to the sentence to be imposed, as to the beginning and end of the punishment and whether it should be certain or indeterminate or conditional." (Quoted in State vs. Teal [1918], 108 S. C., 455; 95 S. E., 69.) Indeed, the Philippine Legislature has defined all crimes and fixed the penalties for their violation. Invariably, the legislature has demonstrated the desire to vest in the courts particularly the trial courts large discretion in imposing the penalties which the law prescribes in particular cases. It is believed that justice can best be served by vesting this power in the courts, they being in a position to best determine the penalties which an individual convict, peculiarly circumstanced, should suffer. Thus, while courts are not allowed to refrain from imposing a sentence merely because, taking into consideration the degree of malice and the injury caused by the offense, the penalty provided by law is clearly excessive, the courts being allowed in such case to submit to the Chief Executive, through the Department of Justice, such statement as it may deem proper (see art. 5, Revised Penal Code), in cases where both mitigating and aggravating circumstances are attendant in the commission of a crime and the law provides for a penalty composed of two indivisible penalties, the courts may allow such circumstances to offset one another in

consideration of their number and importance, and to apply the penalty according to the result of such compensation. (Art. 63, rule 4, Revised Penal Code; U.S. vs. Reguera and Asuategui [1921], 41 Phil., 506.) Again, article 64, paragraph 7, of the Revised Penal Code empowers the courts to determine, within the limits of each periods, in case the penalty prescribed by law contains three periods, the extent of the evil produced by the crime. In the imposition of fines, the courts are allowed to fix any amount within the limits established by law, considering not only the mitigating and aggravating circumstances, but more particularly the wealth or means of the culprit. (Art. 66, Revised Penal Code.) Article 68, paragraph 1, of the same Code provides that "a discretionary penalty shall be imposed" upon a person under fifteen but over nine years of age, who has not acted without discernment, but always lower by two degrees at least than that prescribed by law for the crime which he has committed. Article 69 of the same Code provides that in case of "incomplete self-defense", i.e., when the crime committed is not wholly excusable by reason of the lack of some of the conditions required to justify the same or to exempt from criminal liability in the several cases mentioned in article 11 and 12 of the Code, "the courts shall impose the penalty in the period which may be deemed proper, in view of the number and nature of the conditions of exemption present or lacking." And, in case the commission of what are known as "impossible" crimes, "the court, having in mind the social danger and the degree of criminality shown by the offender," shall impose upon him either arresto mayor or a fine ranging from 200 to 500 pesos. (Art. 59, Revised Penal Code.) Under our Revised Penal Code, also, one-half of the period of preventive imprisonment is deducted form the entire term of imprisonment, except in certain cases expressly mentioned (art. 29); the death penalty is not imposed when the guilty person is more than seventy years of age, or where upon appeal or revision of the case by the Supreme Court, all the members thereof are not unanimous in their voting as to the propriety of the imposition of the death penalty (art. 47, see also, sec. 133, Revised Administrative Code, as amended by Commonwealth Act No. 3); the death sentence is not to be inflicted upon a woman within the three years next following the date of the sentence or while she is pregnant, or upon any person over seventy years of age (art. 83); and when a convict shall become insane or an imbecile after final sentence has been pronounced, or while he is serving his sentenced, the execution of said sentence shall be suspended with regard to the personal penalty during the period of such insanity or imbecility (art. 79). But the desire of the legislature to relax what might result in the undue harshness of the penal laws is more clearly demonstrated in various other enactments, including the probation Act. There is the Indeterminate Sentence Law enacted in 1933 as Act No. 4103 and subsequently amended by Act No. 4225, establishing a system of parole (secs. 5 to 100 and granting the courts large discretion in imposing the penalties of the law. Section 1 of the law as amended provides; "hereafter, in imposing a prison sentence for an offenses punished by the Revised Penal Code, or its amendments, the court shall sentence the accused to an indeterminate sentence the maximum term of which shall be that which, in view of the attending circumstances, could be properly imposed under the rules of the said Code, and to a minimum which shall be within the range of the penalty next lower to that prescribed by the Code for the offense; and if the offense is punished by any other law, the court shall sentence the accused to an indeterminate sentence, the maximum term of which shall not exceed the maximum fixed by said law and the minimum shall not be less than the minimum term prescribed by the same." Certain classes of convicts are, by section 2 of the law, excluded from the operation thereof. The Legislature has also enacted the Juvenile Delinquency Law (Act No. 3203) which was subsequently amended by Act No. 3559. Section 7 of the original Act and section 1 of the amendatory Act have become article 80 of the Revised Penal Code, amended by Act No. 4117 of the Philippine Legislature and recently reamended by Commonwealth Act No. 99 of the National Assembly. In this Act is again manifested the intention of the legislature to "humanize" the penal laws. It allows, in effect, the modification in particular cases of the penalties prescribed by law by permitting the suspension of the execution of the judgment in the

discretion of the trial court, after due hearing and after investigation of the particular circumstances of the offenses, the criminal record, if any, of the convict, and his social history. The Legislature has in reality decreed that in certain cases no punishment at all shall be suffered by the convict as long as the conditions of probation are faithfully observed. It this be so, then, it cannot be said that the Probation Act comes in conflict with the power of the Chief Executive to grant pardons and reprieves, because, to use the language of the Supreme Court of New Mexico, "the element of punishment or the penalty for the commission of a wrong, while to be declared by the courts as a judicial function under and within the limits of law as announced by legislative acts, concerns solely the procedure and conduct of criminal causes, with which the executive can have nothing to do." (Ex parte Bates, supra.) In Williams vs. State ([1926], 162 Ga., 327; 133 S.E., 843), the court upheld the constitutionality of the Georgia probation statute against the contention that it attempted to delegate to the courts the pardoning power lodged by the constitution in the governor alone is vested with the power to pardon after final sentence has been imposed by the courts, the power of the courts to imposed any penalty which may be from time to time prescribed by law and in such manner as may be defined cannot be questioned." We realize, of course, the conflict which the American cases disclose. Some cases hold it unlawful for the legislature to vest in the courts the power to suspend the operation of a sentenced, by probation or otherwise, as to do so would encroach upon the pardoning power of the executive. (In re Webb [1895], 89 Wis., 354; 27 L.R.A., 356; 46 Am. St. Rep., 846; 62 N.W., 177; 9 Am. Crim., Rep., 702; State ex rel. Summerfield vs. Moran [1919], 43 Nev., 150; 182 Pac., 927; Ex parte Clendenning [1908], 22 Okla., 108; 1 Okla. Crim. Rep., 227; 19 L.R.A. [N.S.], 1041; 132 Am. St. Rep., 628; 97 Pac., 650; People vs. Barrett [1903], 202 Ill, 287; 67 N.E., 23; 63 L.R.A., 82; 95 Am. St. Rep., 230; Snodgrass vs. State [1912], 67 Tex. Crim. Rep., 615; 41 L. R. A. [N. S.], 1144; 150 S. W., 162; Ex parte Shelor [1910], 33 Nev., 361;111 Pac., 291; Neal vs. State [1898], 104 Ga., 509; 42 L. R. A., 190; 69 Am. St. Rep., 175; 30 S. E. 858; State ex rel. Payne vs. Anderson [1921], 43 S. D., 630; 181 N. W., 839; People vs. Brown, 54 Mich., 15; 19 N. W., 571; States vs. Dalton [1903], 109 Tenn., 544; 72 S. W., 456.) Other cases, however, hold contra. (Nix vs. James [1925; C. C. A., 9th], 7 F. [2d], 590; Archer vs. Snook [1926; D. C.], 10 F. [2d], 567; Riggs. vs. United States [1926; C. C. A. 4th], 14]) [2d], 5; Murphy vs. States [1926], 171 Ark., 620; 286 S. W., 871; 48 A. L. R., 1189; Re Giannini [1912], 18 Cal. App., 166; 122 Pac., 831; Re Nachnaber [1928], 89 Cal. App., 530; 265 Pac., 392; Ex parte De Voe [1931], 114 Cal. App., 730; 300 Pac., 874; People vs. Patrick [1897], 118 Cal., 332; 50 Pac., 425; Martin vs. People [1917], 69 Colo., 60; 168 Pac., 1171; Belden vs. Hugo [1914], 88 Conn., 50; 91 A., 369, 370, 371; Williams vs. State [1926], 162 Ga., 327; 133 S. E., 843; People vs. Heise [1913], 257 Ill., 443; 100 N. E., 1000; Parker vs. State [1893], 135 Ind., 534; 35 N. E., 179; 23 L. R. A., 859; St. Hillarie, Petitioner [1906], 101 Me., 522; 64 Atl., 882; People vs. Stickle [1909], 156 Mich., 557; 121 N. W., 497; State vs. Fjolander [1914], 125 Minn., 529; State ex rel. Bottomnly vs. District Court [1925], 73 Mont., 541; 237 Pac., 525; State vs. Everitt [1913], 164 N. C., 399; 79 S. E., 274; 47 L. R. A. [N. S.], 848; State ex rel. Buckley vs. Drew [1909], 75 N. H., 402; 74 Atl., 875; State vs. Osborne [1911], 79 N. J. Eq., 430; 82 Atl. 424; Ex parte Bates [1915], 20 N. M., 542; L. R. A., 1916 A. 1285; 151 Pac., 698; People vs. ex rel. Forsyth vs. Court of Session [1894], 141 N. Y., 288; 23 L. R. A., 856; 36 N. E., 386; 15 Am. Crim. Rep., 675; People ex rel. Sullivan vs. Flynn [1907], 55 Misc., 639; 106 N. Y. Supp., 928; People vs. Goodrich [1914], 149 N. Y. Supp., 406; Moore vs. Thorn [1935], 245 App. Div., 180; 281 N. Y. Supp., 49; Re Hart [1914], 29 N. D., 38; L. R. A., 1915C, 1169; 149 N. W., 568; Ex parte Eaton [1925], 29 Okla., Crim. Rep., 275; 233 P., 781; State vs. Teal [1918], 108 S. C., 455; 95 S. E., 69; State vs. Abbot [1910], 87 S. C., 466; 33 L.R.A., [N. S.], 112; 70 S. E., 6; Ann. Cas., 1912B, 1189; Fults vs. States [1854],34 Tenn., 232; Woods vs. State [1814], 130 Tenn., 100; 169 S. W., 558; Baker vs. State [1814], 130 Tenn., 100; 169 S. W., 558; Baker vs. State [1913],70 Tex., Crim. Rep., 618; 158 S. W., 998; Cook vs. State [1914], 73 Tex. Crim. Rep., 548; 165 S. W., 573; King vs. State [1914], 72 Tex. Crim. Rep., 394; 162 S. W., 890; Clare vs. State

[1932], 122 Tex. Crim. Rep., 394; 162 S. W., 890; Clare vs. State [1932], 122 Tex. Crim. Rep., 211; 54 S. W. [2d], 127; Re Hall [1927], 100 Vt., 197; 136 A., 24; Richardson vs. Com. [1921], 131 Va., 802; 109 S.E., 460; State vs. Mallahan [1911], 65 Wash., 287; 118 Pac., 42; State ex rel. Tingstand vs. Starwich [1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R., 393; 396.) We elect to follow this long catena of authorities holding that the courts may be legally authorized by the legislature to suspend sentence by the establishment of a system of probation however characterized. State ex rel. Tingstand vs. Starwich ([1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R., 393), deserved particular mention. In that case, a statute enacted in 1921 which provided for the suspension of the execution of a sentence until otherwise ordered by the court, and required that the convicted person be placed under the charge of a parole or peace officer during the term of such suspension, on such terms as the court may determine, was held constitutional and as not giving the court a power in violation of the constitutional provision vesting the pardoning power in the chief executive of the state. (Vide, also, Re Giannini [1912], 18 Cal App., 166; 122 Pac., 831.) Probation and pardon are not coterminous; nor are they the same. They are actually district and different from each other, both in origin and in nature. In People ex rel. Forsyth vs. Court of Sessions ([1894], 141 N. Y., 288, 294; 36 N. E., 386, 388; 23 L. R. A., 856; 15 Am. Crim. Rep., 675), the Court of Appeals of New York said: . . . The power to suspend sentence and the power to grant reprieves and pardons, as understood when the constitution was adopted, are totally distinct and different in their nature. The former was always a part of the judicial power; the latter was always a part of the executive power. The suspension of the sentence simply postpones the judgment of the court temporarily or indefinitely, but the conviction and liability following it, and the civil disabilities, remain and become operative when judgment is rendered. A pardon reaches both the punishment prescribed for the offense and the guilt of the offender. It releases the punishment, and blots out of existence the guilt, so that in the eye of the law, the offender is as innocent as if he had never committed the offense. It removes the penalties and disabilities, and restores him to all his civil rights. It makes him, as it were, a new man, and gives him a new credit and capacity. (Ex parte Garland, 71 U. S., 4 Wall., 333; 18 Law. ed., 366; U. S. vs. Klein, 80 U. S., 13 Wall., 128; 20 Law. ed., 519; Knote vs. U. S., 95 U. S., 149; 24 Law. ed., 442.) The framers of the federal and the state constitutions were perfectly familiar with the principles governing the power to grant pardons, and it was conferred by these instruments upon the executive with full knowledge of the law upon the subject, and the words of the constitution were used to express the authority formerly exercised by the English crown, or by its representatives in the colonies. (Ex parte Wells, 59 U. S., 18 How., 307; 15 Law. ed., 421.) As this power was understood, it did not comprehend any part of the judicial functions to suspend sentence, and it was never intended that the authority to grant reprieves and pardons should abrogate, or in any degree restrict, the exercise of that power in regard to its own judgments, that criminal courts has so long maintained. The two powers, so distinct and different in their nature and character, were still left separate and distinct, the one to be exercised by the executive, and the other by the judicial department. We therefore conclude that a statute which, in terms, authorizes courts of criminal jurisdiction to suspend sentence in certain cases after conviction, a power inherent in such courts at common law, which was understood when the constitution was adopted to be an ordinary judicial function, and which, ever since its adoption, has been exercised of legislative power under the constitution. It does not encroach, in any just sense, upon the powers of the executive, as they have been understood and practiced from the earliest times. (Quoted with approval in Directors of Prisons vs. Judge of First Instance of Cavite [1915], 29 Phil., 265, Carson, J., concurring, at pp. 294, 295.)

In probation, the probationer is in no true sense, as in pardon, a free man. He is not finally and completely exonerated. He is not exempt from the entire punishment which the law inflicts. Under the Probation Act, the probationer's case is not terminated by the mere fact that he is placed on probation. Section 4 of the Act provides that the probation may be definitely terminated and the probationer finally discharged from supervision only after the period of probation shall have been terminated and the probation officer shall have submitted a report, and the court shall have found that the probationer has complied with the conditions of probation. The probationer, then, during the period of probation, remains in legal custody subject to the control of the probation officer and of the court; and, he may be rearrested upon the non-fulfillment of the conditions of probation and, when rearrested, may be committed to prison to serve the sentence originally imposed upon him. (Secs. 2, 3, 5 and 6, Act No. 4221.) The probation described in the act is not pardon. It is not complete liberty, and may be far from it. It is really a new mode of punishment, to be applied by the judge in a proper case, in substitution of the imprisonment and find prescribed by the criminal laws. For this reason its application is as purely a judicial act as any other sentence carrying out the law deemed applicable to the offense. The executive act of pardon, on the contrary, is against the criminal law, which binds and directs the judges, or rather is outside of and above it. There is thus no conflict with the pardoning power, and no possible unconstitutionality of the Probation Act for this cause. (Archer vs. Snook [1926], 10 F. [2d], 567, 569.) Probation should also be distinguished from reprieve and from commutation of the sentence. Snodgrass vs. State ([1912], 67 Tex. Crim. Rep., 615;41 L. R. A. [N. S.], 1144; 150 S. W., 162), is relied upon most strongly by the petitioners as authority in support of their contention that the power to grant pardons and reprieves, having been vested exclusively upon the Chief Executive by the Jones Law, may not be conferred by the legislature upon the courts by means of probation law authorizing the indefinite judicial suspension of sentence. We have examined that case and found that although the Court of Criminal Appeals of Texas held that the probation statute of the state in terms conferred on the district courts the power to grant pardons to persons convicted of crime, it also distinguished between suspensions sentence on the one hand, and reprieve and commutation of sentence on the other. Said the court, through Harper, J.: That the power to suspend the sentence does not conflict with the power of the Governor to grant reprieves is settled by the decisions of the various courts; it being held that the distinction between a "reprieve" and a suspension of sentence is that a reprieve postpones the execution of the sentence to a day certain, whereas a suspension is for an indefinite time. (Carnal vs. People, 1 Parker, Cr. R., 262; In re Buchanan, 146 N. Y., 264; 40 N. E., 883), and cases cited in 7 Words & Phrases, pp. 6115, 6116. This law cannot be hold in conflict with the power confiding in the Governor to grant commutations of punishment, for a commutations is not but to change the punishment assessed to a less punishment. In State ex rel. Bottomnly vs. District Court ([1925], 73 Mont., 541; 237 Pac., 525), the Supreme Court of Montana had under consideration the validity of the adult probation law of the state enacted in 1913, now found in sections 12078-12086, Revised Codes of 1921. The court held the law valid as not impinging upon the pardoning power of the executive. In a unanimous decision penned by Justice Holloway, the court said: . . . . the term "pardon", "commutation", and "respite" each had a well understood meaning at the time our Constitution was adopted, and no one of them was intended to comprehend the suspension of the execution of the judgment as that phrase is employed in sections 12078-12086. A "pardon" is an act of grace, proceeding from the power intrusted with the execution of the laws which exempts the individual

on whom it is bestowed from the punishment the law inflicts for a crime he has committed (United States vs. Wilson, 7 Pet., 150; 8 Law. ed., 640); It is a remission of guilt (State vs. Lewis, 111 La., 693; 35 So., 816), a forgiveness of the offense (Cook vs. Middlesex County, 26 N. J. Law, 326; Ex parte Powell, 73 Ala., 517; 49 Am. Rep., 71). "Commutation" is a remission of a part of the punishment; a substitution of a less penalty for the one originally imposed (Lee vs. Murphy, 22 Grat. [Va.] 789; 12 Am. Rep., 563; Rich vs. Chamberlain, 107 Mich., 381; 65 N. W., 235). A "reprieve" or "respite" is the withholding of the sentence for an interval of time (4 Blackstone's Commentaries, 394), a postponement of execution (Carnal vs. People, 1 Parker, Cr. R. [N. Y.], 272), a temporary suspension of execution (Butler vs. State, 97 Ind., 373). Few adjudicated cases are to be found in which the validity of a statute similar to our section 12078 has been determined; but the same objections have been urged against parole statutes which vest the power to parole in persons other than those to whom the power of pardon is granted, and these statutes have been upheld quite uniformly, as a reference to the numerous cases cited in the notes to Woods vs. State (130 Tenn., 100; 169 S. W.,558, reported in L. R. A., 1915F, 531), will disclose. (See, also, 20 R. C. L., 524.) We conclude that the Probation Act does not conflict with the pardoning power of the Executive. The pardoning power, in respect to those serving their probationary sentences, remains as full and complete as if the Probation Law had never been enacted. The President may yet pardon the probationer and thus place it beyond the power of the court to order his rearrest and imprisonment. (Riggs vs. United States [1926], 14 F. [2d], 5, 7.) 2. But while the Probation Law does not encroach upon the pardoning power of the executive and is not for that reason void, does section 11 thereof constitute, as contended, an undue delegation of legislative power? Under the constitutional system, the powers of government are distributed among three coordinate and substantially independent organs: the legislative, the executive and the judicial. Each of these departments of the government derives its authority from the Constitution which, in turn, is the highest expression of popular will. Each has exclusive cognizance of the matters within its jurisdiction, and is supreme within its own sphere. The power to make laws the legislative power is vested in a bicameral Legislature by the Jones Law (sec. 12) and in a unicamiral National Assembly by the Constitution (Act. VI, sec. 1, Constitution of the Philippines). The Philippine Legislature or the National Assembly may not escape its duties and responsibilities by delegating that power to any other body or authority. Any attempt to abdicate the power is unconstitutional and void, on the principle that potestas delegata non delegare potest. This principle is said to have originated with the glossators, was introduced into English law through a misreading of Bracton, there developed as a principle of agency, was established by Lord Coke in the English public law in decisions forbidding the delegation of judicial power, and found its way into America as an enlightened principle of free government. It has since become an accepted corollary of the principle of separation of powers. (5 Encyc. of the Social Sciences, p. 66.) The classic statement of the rule is that of Locke, namely: "The legislative neither must nor can transfer the power of making laws to anybody else, or place it anywhere but where the people have." (Locke on Civil Government, sec. 142.) Judge Cooley enunciates the doctrine in the following oft-quoted language: "One of the settled maxims in constitutional law is, that the power conferred upon the legislature to make laws cannot be delegated by that department to any other body or authority. Where the sovereign power of the state has located the

authority, there it must remain; and by the constitutional agency alone the laws must be made until the Constitution itself is charged. The power to whose judgment, wisdom, and patriotism this high prerogative has been intrusted cannot relieve itself of the responsibilities by choosing other agencies upon which the power shall be devolved, nor can it substitute the judgment, wisdom, and patriotism of any other body for those to which alone the people have seen fit to confide this sovereign trust." (Cooley on Constitutional Limitations, 8th ed., Vol. I, p. 224. Quoted with approval in U. S. vs. Barrias [1908], 11 Phil., 327.) This court posits the doctrine "on the ethical principle that such a delegated power constitutes not only a right but a duty to be performed by the delegate by the instrumentality of his own judgment acting immediately upon the matter of legislation and not through the intervening mind of another. (U. S. vs. Barrias, supra, at p. 330.) The rule, however, which forbids the delegation of legislative power is not absolute and inflexible. It admits of exceptions. An exceptions sanctioned by immemorial practice permits the central legislative body to delegate legislative powers to local authorities. (Rubi vs. Provincial Board of Mindoro [1919], 39 Phil., 660; U. S. vs. Salaveria [1918], 39 Phil., 102; Stoutenburgh vs. Hennick [1889], 129 U. S., 141; 32 Law. ed., 637; 9 Sup. Ct. Rep., 256; State vs. Noyes [1855], 30 N. H., 279.) "It is a cardinal principle of our system of government, that local affairs shall be managed by local authorities, and general affairs by the central authorities; and hence while the rule is also fundamental that the power to make laws cannot be delegated, the creation of the municipalities exercising local self government has never been held to trench upon that rule. Such legislation is not regarded as a transfer of general legislative power, but rather as the grant of the authority to prescribed local regulations, according to immemorial practice, subject of course to the interposition of the superior in cases of necessity." (Stoutenburgh vs. Hennick, supra.) On quite the same principle, Congress is powered to delegate legislative power to such agencies in the territories of the United States as it may select. A territory stands in the same relation to Congress as a municipality or city to the state government. (United States vs. Heinszen [1907], 206 U. S., 370; 27 Sup. Ct. Rep., 742; 51 L. ed., 1098; 11 Ann. Cas., 688; Dorr vs. United States [1904], 195 U.S., 138; 24 Sup. Ct. Rep., 808; 49 Law. ed., 128; 1 Ann. Cas., 697.) Courts have also sustained the delegation of legislative power to the people at large. Some authorities maintain that this may not be done (12 C. J., pp. 841, 842; 6 R. C. L., p. 164, citing People vs. Kennedy [1913], 207 N. Y., 533; 101 N. E., 442; Ann. Cas., 1914C, 616). However, the question of whether or not a state has ceased to be republican in form because of its adoption of the initiative and referendum has been held not to be a judicial but a political question (Pacific States Tel. & Tel. Co. vs. Oregon [1912], 223 U. S., 118; 56 Law. ed., 377; 32 Sup. Cet. Rep., 224), and as the constitutionality of such laws has been looked upon with favor by certain progressive courts, the sting of the decisions of the more conservative courts has been pretty well drawn. (Opinions of the Justices [1894], 160 Mass., 586; 36 N. E., 488; 23 L. R. A., 113; Kiernan vs. Portland [1910], 57 Ore., 454; 111 Pac., 379; 1132 Pac., 402; 37 L. R. A. [N. S.], 332; Pacific States Tel. & Tel. Co. vs. Oregon, supra.) Doubtless, also, legislative power may be delegated by the Constitution itself. Section 14, paragraph 2, of article VI of the Constitution of the Philippines provides that "The National Assembly may by law authorize the President, subject to such limitations and restrictions as it may impose, to fix within specified limits, tariff rates, import or export quotas, and tonnage and wharfage dues." And section 16 of the same article of the Constitution provides that "In times of war or other national emergency, the National Assembly may by law authorize the President, for a limited period and subject to such restrictions as it may prescribed, to promulgate rules and regulations to carry out a declared national policy." It is beyond the scope of this decision to determine whether or not, in the absence of the foregoing constitutional provisions, the President could be authorized to exercise the powers thereby vested in him. Upon the other hand, whatever doubt may have existed has been removed by the Constitution itself. The case before us does not fall under any of the exceptions hereinabove mentioned.

The challenged section of Act No. 4221 in section 11 which reads as follows: This Act shall apply only in those provinces in which the respective provincial boards have provided for the salary of a probation officer at rates not lower than those now provided for provincial fiscals. Said probation officer shall be appointed by the Secretary of Justice and shall be subject to the direction of the Probation Office. (Emphasis ours.) In testing whether a statute constitute an undue delegation of legislative power or not, it is usual to inquire whether the statute was complete in all its terms and provisions when it left the hands of the legislature so that nothing was left to the judgment of any other appointee or delegate of the legislature. (6 R. C. L., p. 165.) In the United States vs. Ang Tang Ho ([1922], 43 Phil., 1), this court adhered to the foregoing rule when it held an act of the legislature void in so far as it undertook to authorize the Governor-General, in his discretion, to issue a proclamation fixing the price of rice and to make the sale of it in violation of the proclamation a crime. (See and cf. Compaia General de Tabacos vs. Board of Public Utility Commissioners [1916], 34 Phil., 136.) The general rule, however, is limited by another rule that to a certain extent matters of detail may be left to be filled in by rules and regulations to be adopted or promulgated by executive officers and administrative boards. (6 R. C. L., pp. 177-179.) For the purpose of Probation Act, the provincial boards may be regarded as administrative bodies endowed with power to determine when the Act should take effect in their respective provinces. They are the agents or delegates of the legislature in this respect. The rules governing delegation of legislative power to administrative and executive officers are applicable or are at least indicative of the rule which should be here adopted. An examination of a variety of cases on delegation of power to administrative bodies will show that the ratio decidendi is at variance but, it can be broadly asserted that the rationale revolves around the presence or absence of a standard or rule of action or the sufficiency thereof in the statute, to aid the delegate in exercising the granted discretion. In some cases, it is held that the standard is sufficient; in others that is insufficient; and in still others that it is entirely lacking. As a rule, an act of the legislature is incomplete and hence invalid if it does not lay down any rule or definite standard by which the administrative officer or board may be guided in the exercise of the discretionary powers delegated to it. (See Schecter vs. United States [1925], 295 U. S., 495; 79 L. ed., 1570; 55 Sup. Ct. Rep., 837; 97 A.L.R., 947; People ex rel. Rice vs. Wilson Oil Co. [1936], 364 Ill., 406; 4 N. E. [2d], 847; 107 A.L.R., 1500 and cases cited. See also R. C. L., title "Constitutional Law", sec 174.) In the case at bar, what rules are to guide the provincial boards in the exercise of their discretionary power to determine whether or not the Probation Act shall apply in their respective provinces? What standards are fixed by the Act? We do not find any and none has been pointed to us by the respondents. The probation Act does not, by the force of any of its provisions, fix and impose upon the provincial boards any standard or guide in the exercise of their discretionary power. What is granted, if we may use the language of Justice Cardozo in the recent case of Schecter, supra, is a "roving commission" which enables the provincial boards to exercise arbitrary discretion. By section 11 if the Act, the legislature does not seemingly on its own authority extend the benefits of the Probation Act to the provinces but in reality leaves the entire matter for the various provincial boards to determine. In other words, the provincial boards of the various provinces are to determine for themselves, whether the Probation Law shall apply to their provinces or not at all. The applicability and application of the Probation Act are entirely placed in the hands of the provincial boards. If the provincial board does not wish to have the Act applied in its province, all that it has to do is to decline to appropriate the needed amount for the salary of a probation officer. The plain language of the Act is not susceptible of any other interpretation. This, to our minds, is a virtual surrender of legislative power to the provincial boards.

"The true distinction", says Judge Ranney, "is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made." (Cincinnati, W. & Z. R. Co. vs. Clinton County Comrs. [1852]; 1 Ohio St., 77, 88. See also, Sutherland on Statutory Construction, sec 68.) To the same effect are the decision of this court in Municipality of Cardona vs. Municipality of Binangonan ([1917], 36 Phil., 547); Rubi vs. Provincial Board of Mindoro ([1919],39 Phil., 660) and Cruz vs. Youngberg ([1931], 56 Phil., 234). In the first of these cases, this court sustained the validity of the law conferring upon the Governor-General authority to adjust provincial and municipal boundaries. In the second case, this court held it lawful for the legislature to direct non-Christian inhabitants to take up their habitation on unoccupied lands to be selected by the provincial governor and approved by the provincial board. In the third case, it was held proper for the legislature to vest in the Governor-General authority to suspend or not, at his discretion, the prohibition of the importation of the foreign cattle, such prohibition to be raised "if the conditions of the country make this advisable or if deceased among foreign cattle has ceased to be a menace to the agriculture and livestock of the lands." It should be observed that in the case at bar we are not concerned with the simple transference of details of execution or the promulgation by executive or administrative officials of rules and regulations to carry into effect the provisions of a law. If we were, recurrence to our own decisions would be sufficient. (U. S. vs. Barrias [1908], 11 Phil., 327; U.S. vs. Molina [1914], 29 Phil., 119; Alegre vs. Collector of Customs [1929], 53 Phil., 394; Cebu Autobus Co. vs. De Jesus [1931], 56 Phil., 446; U. S. vs. Gomez [1915], 31 Phil., 218; Rubi vs. Provincial Board of Mindoro [1919], 39 Phil., 660.) It is connected, however, that a legislative act may be made to the effect as law after it leaves the hands of the legislature. It is true that laws may be made effective on certain contingencies, as by proclamation of the executive or the adoption by the people of a particular community (6 R. C. L., 116, 170-172; Cooley, Constitutional Limitations, 8th ed., Vol. I, p. 227). In Wayman vs. Southard ([1825], 10 Wheat. 1; 6 Law. ed., 253), the Supreme Court of the United State ruled that the legislature may delegate a power not legislative which it may itself rightfully exercise.(Vide, also, Dowling vs. Lancashire Ins. Co. [1896], 92 Wis., 63; 65 N. W., 738; 31 L. R. A., 112.) The power to ascertain facts is such a power which may be delegated. There is nothing essentially legislative in ascertaining the existence of facts or conditions as the basis of the taking into effect of a law. That is a mental process common to all branches of the government. (Dowling vs. Lancashire Ins. Co., supra; In re Village of North Milwaukee [1896], 93 Wis., 616; 97 N.W., 1033; 33 L.R.A., 938; Nash vs. Fries [1906], 129 Wis., 120; 108 N.W., 210; Field vs. Clark [1892], 143 U.S., 649; 12 Sup. Ct., 495; 36 Law. ed., 294.) Notwithstanding the apparent tendency, however, to relax the rule prohibiting delegation of legislative authority on account of the complexity arising from social and economic forces at work in this modern industrial age (Pfiffner, Public Administration [1936] ch. XX; Laski, "The Mother of Parliaments", foreign Affairs, July, 1931, Vol. IX, No. 4, pp. 569-579; Beard, "Squirt-Gun Politics", in Harper's Monthly Magazine, July, 1930, Vol. CLXI, pp. 147, 152), the orthodox pronouncement of Judge Cooley in his work on Constitutional Limitations finds restatement in Prof. Willoughby's treatise on the Constitution of the United States in the following language speaking of declaration of legislative power to administrative agencies: "The principle which permits the legislature to provide that the administrative agent may determine when the circumstances are such as require the application of a law is defended upon the ground that at the time this authority is granted, the rule of public policy, which is the essence of the legislative act, is determined by the legislature. In other words, the legislature, as it its duty to do, determines that, under given circumstances, certain executive or administrative action is to be taken, and that, under other circumstances, different of no action at all is to be taken. What is thus left to the administrative official is not the legislative determination of what public policy demands, but simply the ascertainment of what the facts of the case

require to be done according to the terms of the law by which he is governed." (Willoughby on the Constitution of the United States, 2nd ed., Vol. II, p. 1637.) In Miller vs. Mayer, etc., of New York [1883], 109 U.S., 3 Sup. Ct. Rep., 228; 27 Law. ed., 971, 974), it was said: "The efficiency of an Act as a declaration of legislative will must, of course, come from Congress, but the ascertainment of the contingency upon which the Act shall take effect may be left to such agencies as it may designate." (See, also, 12 C.J., p. 864; State vs. Parker [1854], 26 Vt., 357; Blanding vs. Burr [1859], 13 Cal., 343, 258.) The legislature, then may provide that a contingencies leaving to some other person or body the power to determine when the specified contingencies has arisen. But, in the case at bar, the legislature has not made the operation of the Prohibition Act contingent upon specified facts or conditions to be ascertained by the provincial board. It leaves, as we have already said, the entire operation or non-operation of the law upon the provincial board. the discretion vested is arbitrary because it is absolute and unlimited. A provincial board need not investigate conditions or find any fact, or await the happening of any specified contingency. It is bound by no rule, limited by no principle of expendiency announced by the legislature. It may take into consideration certain facts or conditions; and, again, it may not. It may have any purpose or no purpose at all. It need not give any reason whatsoever for refusing or failing to appropriate any funds for the salary of a probation officer. This is a matter which rest entirely at its pleasure. The fact that at some future time we cannot say when the provincial boards may appropriate funds for the salaries of probation officers and thus put the law into operation in the various provinces will not save the statute. The time of its taking into effect, we reiterate, would yet be based solely upon the will of the provincial boards and not upon the happening of a certain specified contingency, or upon the ascertainment of certain facts or conditions by a person or body other than legislature itself. The various provincial boards are, in practical effect, endowed with the power of suspending the operation of the Probation Law in their respective provinces. In some jurisdiction, constitutions provided that laws may be suspended only by the legislature or by its authority. Thus, section 28, article I of the Constitution of Texas provides that "No power of suspending laws in this state shall be exercised except by the legislature"; and section 26, article I of the Constitution of Indiana provides "That the operation of the laws shall never be suspended, except by authority of the General Assembly." Yet, even provisions of this sort do not confer absolute power of suspension upon the legislature. While it may be undoubted that the legislature may suspend a law, or the execution or operation of a law, a law may not be suspended as to certain individuals only, leaving the law to be enjoyed by others. The suspension must be general, and cannot be made for individual cases or for particular localities. In Holden vs. James ([1814], 11 Mass., 396; 6 Am. Dec., 174, 177, 178), it was said: By the twentieth article of the declaration of rights in the constitution of this commonwealth, it is declared that the power of suspending the laws, or the execution of the laws, ought never to be exercised but by the legislature, or by authority derived from it, to be exercised in such particular cases only as the legislature shall expressly provide for. Many of the articles in that declaration of rights were adopted from the Magna Charta of England, and from the bill of rights passed in the reign of William and Mary. The bill of rights contains an enumeration of the oppressive acts of James II, tending to subvert and extirpate the protestant religion, and the laws and liberties of the kingdom; and the first of them is the assuming and exercising a power of dispensing with and suspending the laws, and the execution of the laws without consent of parliament. The first article in the claim or declaration of rights contained in the statute is, that the exercise of such power, by legal authority without consent of parliament, is illegal. In the tenth section of the same statute it is further declared and enacted, that "No dispensation by non obstante of or to any statute, or part thereof, should be allowed; but the same should be held void and of no effect, except a dispensation be allowed of in such statute." There is an implied reservation of authority in the parliament to exercise the power here mentioned; because, according to the theory of the English Constitution, "that

absolute despotic power, which must in all governments reside somewhere," is intrusted to the parliament: 1 Bl. Com., 160. The principles of our government are widely different in this particular. Here the sovereign and absolute power resides in the people; and the legislature can only exercise what is delegated to them according to the constitution. It is obvious that the exercise of the power in question would be equally oppressive to the subject, and subversive of his right to protection, "according to standing laws," whether exercised by one man or by a number of men. It cannot be supposed that the people when adopting this general principle from the English bill of rights and inserting it in our constitution, intended to bestow by implication on the general court one of the most odious and oppressive prerogatives of the ancient kings of England. It is manifestly contrary to the first principles of civil liberty and natural justice, and to the spirit of our constitution and laws, that any one citizen should enjoy privileges and advantages which are denied to all others under like circumstances; or that ant one should be subject to losses, damages, suits, or actions from which all others under like circumstances are exempted. To illustrate the principle: A section of a statute relative to dogs made the owner of any dog liable to the owner of domestic animals wounded by it for the damages without proving a knowledge of it vicious disposition. By a provision of the act, power was given to the board of supervisors to determine whether or not during the current year their county should be governed by the provisions of the act of which that section constituted a part. It was held that the legislature could not confer that power. The court observed that it could no more confer such a power than to authorize the board of supervisors of a county to abolish in such county the days of grace on commercial paper, or to suspend the statute of limitations. (Slinger vs. Henneman [1875], 38 Wis., 504.) A similar statute in Missouri was held void for the same reason in State vs. Field ([1853, 17 Mo., 529;59 Am. Dec., 275.) In that case a general statute formulating a road system contained a provision that "if the county court of any county should be of opinion that the provisions of the act should not be enforced, they might, in their discretion, suspend the operation of the same for any specified length of time, and thereupon the act should become inoperative in such county for the period specified in such order; and thereupon order the roads to be opened and kept in good repair, under the laws theretofore in force." Said the court: ". . . this act, by its own provisions, repeals the inconsistent provisions of a former act, and yet it is left to the county court to say which act shall be enforce in their county. The act does not submit the question to the county court as an original question, to be decided by that tribunal, whether the act shall commence its operation within the county; but it became by its own terms a law in every county not excepted by name in the act. It did not, then, require the county court to do any act in order to give it effect. But being the law in the county, and having by its provisions superseded and abrogated the inconsistent provisions of previous laws, the county court is . . . empowered, to suspend this act and revive the repealed provisions of the former act. When the question is before the county court for that tribunal to determine which law shall be in force, it is urge before us that the power then to be exercised by the court is strictly legislative power, which under our constitution, cannot be delegated to that tribunal or to any other body of men in the state. In the present case, the question is not presented in the abstract; for the county court of Saline county, after the act had been for several months in force in that county, did by order suspend its operation; and during that suspension the offense was committed which is the subject of the present indictment . . . ." (See Mitchell vs. State [1901], 134 Ala., 392; 32 S., 687.) True, the legislature may enact laws for a particular locality different from those applicable to other localities and, while recognizing the force of the principle hereinabove expressed, courts in may jurisdiction have sustained the constitutionality of the submission of option laws to the vote of the people. (6 R.C.L., p. 171.) But option laws thus sustained treat of subjects purely local in character which should receive different treatment in different localities placed under different circumstances. "They relate to

subjects which, like the retailing of intoxicating drinks, or the running at large of cattle in the highways, may be differently regarded in different localities, and they are sustained on what seems to us the impregnable ground, that the subject, though not embraced within the ordinary powers of municipalities to make by-laws and ordinances, is nevertheless within the class of public regulations, in respect to which it is proper that the local judgment should control." (Cooley on Constitutional Limitations, 5th ed., p. 148.) So that, while we do not deny the right of local self-government and the propriety of leaving matters of purely local concern in the hands of local authorities or for the people of small communities to pass upon, we believe that in matters of general of general legislation like that which treats of criminals in general, and as regards the general subject of probation, discretion may not be vested in a manner so unqualified and absolute as provided in Act No. 4221. True, the statute does not expressly state that the provincial boards may suspend the operation of the Probation Act in particular provinces but, considering that, in being vested with the authority to appropriate or not the necessary funds for the salaries of probation officers, they thereby are given absolute discretion to determine whether or not the law should take effect or operate in their respective provinces, the provincial boards are in reality empowered by the legislature to suspend the operation of the Probation Act in particular provinces, the Act to be held in abeyance until the provincial boards should decide otherwise by appropriating the necessary funds. The validity of a law is not tested by what has been done but by what may be done under its provisions. (Walter E. Olsen & Co. vs. Aldanese and Trinidad [1922], 43 Phil., 259; 12 C. J., p. 786.) It in conceded that a great deal of latitude should be granted to the legislature not only in the expression of what may be termed legislative policy but in the elaboration and execution thereof. "Without this power, legislation would become oppressive and yet imbecile." (People vs. Reynolds, 5 Gilman, 1.) It has been said that popular government lives because of the inexhaustible reservoir of power behind it. It is unquestionable that the mass of powers of government is vested in the representatives of the people and that these representatives are no further restrained under our system than by the express language of the instrument imposing the restraint, or by particular provisions which by clear intendment, have that effect. (Angara vs. Electoral Commission [1936], 35 Off. Ga., 23; Schneckenburger vs. Moran [1936], 35 Off. Gaz., 1317.) But, it should be borne in mind that a constitution is both a grant and a limitation of power and one of these time-honored limitations is that, subject to certain exceptions, legislative power shall not be delegated. We conclude that section 11 of Act No. 4221 constitutes an improper and unlawful delegation of legislative authority to the provincial boards and is, for this reason, unconstitutional and void. 3. It is also contended that the Probation Act violates the provisions of our Bill of Rights which prohibits the denial to any person of the equal protection of the laws (Act. III, sec. 1 subsec. 1. Constitution of the Philippines.) This basic individual right sheltered by the Constitution is a restraint on all the tree grand departments of our government and on the subordinate instrumentalities and subdivision thereof, and on many constitutional power, like the police power, taxation and eminent domain. The equal protection of laws, sententiously observes the Supreme Court of the United States, "is a pledge of the protection of equal laws." (Yick Wo vs. Hopkins [1886], 118 U. S., 356; 30 Law. ed., 220; 6 Sup. Ct. Rep., 10464; Perley vs. North Carolina, 249 U. S., 510; 39 Sup. Ct. Rep., 357; 63 Law. ed., 735.) Of course, what may be regarded as a denial of the equal protection of the laws in a question not always easily determined. No rule that will cover every case can be formulated. (Connolly vs. Union Sewer Pipe Co. [1902], 184, U. S., 540; 22 Sup. Ct., Rep., 431; 46 Law. ed., 679.) Class legislation discriminating against some and favoring others in prohibited. But classification on a reasonable basis, and nor made arbitrarily or capriciously, is permitted. (Finely vs. California [1911], 222 U. S., 28; 56 Law. ed., 75; 32 Sup. Ct. Rep., 13; Gulf. C. & S.

F. Ry Co. vs. Ellis [1897], 165 U. S., 150; 41 Law. ed., 666; 17 Sup. Ct. Rep., 255; Smith, Bell & Co. vs. Natividad [1919], 40 Phil., 136.) The classification, however, to be reasonable must be based on substantial distinctions which make real differences; it must be germane to the purposes of the law; it must not be limited to existing conditions only, and must apply equally to each member of the class. (Borgnis vs. Falk. Co. [1911], 147 Wis., 327, 353; 133 N. W., 209; 3 N. C. C. A., 649; 37 L. R. A. [N. S.], 489; State vs. Cooley, 56 Minn., 540; 530-552; 58 N. W., 150; Lindsley vs. Natural Carbonic Gas Co.[1911], 220 U. S., 61, 79, 55 Law. ed., 369, 377; 31 Sup. Ct. Rep., 337; Ann. Cas., 1912C, 160; Lake Shore & M. S. R. Co. vs. Clough [1917], 242 U.S., 375; 37 Sup. Ct. Rep., 144; 61 Law. ed., 374; Southern Ry. Co. vs. Greene [1910], 216 U. S., 400; 30 Sup. Ct. Rep., 287; 54 Law. ed., 536; 17 Ann. Cas., 1247; Truax vs. Corrigan [1921], 257 U. S., 312; 12 C. J., pp. 1148, 1149.) In the case at bar, however, the resultant inequality may be said to flow from the unwarranted delegation of legislative power, although perhaps this is not necessarily the result in every case. Adopting the example given by one of the counsel for the petitioners in the course of his oral argument, one province may appropriate the necessary fund to defray the salary of a probation officer, while another province may refuse or fail to do so. In such a case, the Probation Act would be in operation in the former province but not in the latter. This means that a person otherwise coming within the purview of the law would be liable to enjoy the benefits of probation in one province while another person similarly situated in another province would be denied those same benefits. This is obnoxious discrimination. Contrariwise, it is also possible for all the provincial boards to appropriate the necessary funds for the salaries of the probation officers in their respective provinces, in which case no inequality would result for the obvious reason that probation would be in operation in each and every province by the affirmative action of appropriation by all the provincial boards. On that hypothesis, every person coming within the purview of the Probation Act would be entitled to avail of the benefits of the Act. Neither will there be any resulting inequality if no province, through its provincial board, should appropriate any amount for the salary of the probation officer which is the situation now and, also, if we accept the contention that, for the purpose of the Probation Act, the City of Manila should be considered as a province and that the municipal board of said city has not made any appropriation for the salary of the probation officer. These different situations suggested show, indeed, that while inequality may result in the application of the law and in the conferment of the benefits therein provided, inequality is not in all cases the necessary result. But whatever may be the case, it is clear that in section 11 of the Probation Act creates a situation in which discrimination and inequality are permitted or allowed. There are, to be sure, abundant authorities requiring actual denial of the equal protection of the law before court should assume the task of setting aside a law vulnerable on that score, but premises and circumstances considered, we are of the opinion that section 11 of Act No. 4221 permits of the denial of the equal protection of the law and is on that account bad. We see no difference between a law which permits of such denial. A law may appear to be fair on its face and impartial in appearance, yet, if it permits of unjust and illegal discrimination, it is within the constitutional prohibitions. (By analogy, Chy Lung vs. Freeman [1876], 292 U. S., 275; 23 Law. ed., 550; Henderson vs. Mayor [1876], 92 U. S., 259; 23 Law. ed., 543; Ex parte Virginia [1880], 100 U. S., 339; 25 Law. ed., 676; Neal vs. Delaware [1881], 103 U. S., 370; 26 Law. ed., 567; Soon Hing vs. Crowley [1885], 113 U. S., 703; 28 Law. ed., 1145, Yick Wo vs. Hopkins [1886],118 U. S., 356; 30 Law. ed., 220; Williams vs. Mississippi [1897], 170 U. S., 218; 18 Sup. Ct. Rep., 583; 42 Law. ed., 1012; Bailey vs. Alabama [1911], 219 U. S., 219; 31 Sup. Ct. Rep. 145; 55 Law. ed., Sunday Lake Iron Co. vs. Wakefield [1918], 247 U. S., 450; 38 Sup. Ct. Rep., 495; 62 Law. ed., 1154.) In other words, statutes may be adjudged unconstitutional because of their effect in operation (General Oil Co. vs. Clain [1907], 209 U. S., 211; 28 Sup. Ct. Rep., 475; 52 Law. ed., 754; State vs. Clement Nat. Bank [1911], 84 Vt., 167; 78 Atl., 944; Ann. Cas., 1912D, 22). If the law has the effect of denying the equal protection of the law it is unconstitutional. (6 R. C. L. p. 372; Civil Rights Cases, 109 U. S., 3; 3 Sup. Ct. Rep., 18; 27 Law. ed., 835; Yick Wo vs. Hopkins, supra; State vs. Montgomery, 94 Me., 192; 47 Atl., 165; 80 A. S. R., 386; State

vs. Dering, 84 Wis., 585; 54 N. W., 1104; 36 A. S. R., 948; 19 L. R. A., 858.) Under section 11 of the Probation Act, not only may said Act be in force in one or several provinces and not be in force in other provinces, but one province may appropriate for the salary of the probation officer of a given year and have probation during that year and thereafter decline to make further appropriation, and have no probation is subsequent years. While this situation goes rather to the abuse of discretion which delegation implies, it is here indicated to show that the Probation Act sanctions a situation which is intolerable in a government of laws, and to prove how easy it is, under the Act, to make the guaranty of the equality clause but "a rope of sand". (Brewer, J. Gulf C. & S. F. Ry. Co. vs. Ellis [1897], 165 U. S., 150 154; 41 Law. ed., 666; 17 Sup. Ct. Rep., 255.)lawph!1.net Great reliance is placed by counsel for the respondents on the case of Ocampo vs. United States ([1914], 234 U. S., 91; 58 Law. ed., 1231). In that case, the Supreme Court of the United States affirmed the decision of this court (18 Phil., 1) by declining to uphold the contention that there was a denial of the equal protection of the laws because, as held in Missouri vs. Lewis (Bowman vs. Lewis) decided in 1880 (101 U. S., 220; 25 Law. ed., 991), the guaranty of the equality clause does not require territorial uniformity. It should be observed, however, that this case concerns the right to preliminary investigations in criminal cases originally granted by General Orders No. 58. No question of legislative authority was involved and the alleged denial of the equal protection of the laws was the result of the subsequent enactment of Act No. 612, amending the charter of the City of Manila (Act No. 813) and providing in section 2 thereof that "in cases triable only in the court of first instance of the City of Manila, the defendant . . . shall not be entitled as of right to a preliminary examination in any case where the prosecuting attorney, after a due investigation of the facts . . . shall have presented an information against him in proper form . . . ." Upon the other hand, an analysis of the arguments and the decision indicates that the investigation by the prosecuting attorney although not in the form had in the provinces was considered a reasonable substitute for the City of Manila, considering the peculiar conditions of the city as found and taken into account by the legislature itself. Reliance is also placed on the case of Missouri vs. Lewis, supra. That case has reference to a situation where the constitution of Missouri permits appeals to the Supreme Court of the state from final judgments of any circuit court, except those in certain counties for which counties the constitution establishes a separate court of appeals called St. Louis Court of Appeals. The provision complained of, then, is found in the constitution itself and it is the constitution that makes the apportionment of territorial jurisdiction. We are of the opinion that section 11 of the Probation Act is unconstitutional and void because it is also repugnant to equal-protection clause of our Constitution. Section 11 of the Probation Act being unconstitutional and void for the reasons already stated, the next inquiry is whether or not the entire Act should be avoided. In seeking the legislative intent, the presumption is against any mutilation of a statute, and the courts will resort to elimination only where an unconstitutional provision is interjected into a statute otherwise valid, and is so independent and separable that its removal will leave the constitutional features and purposes of the act substantially unaffected by the process. (Riccio vs. Hoboken, 69 N. J. Law., 649, 662; 63 L. R. A., 485; 55 Atl., 1109, quoted in Williams vs. Standard Oil Co. [1929], 278 U.S., 235, 240; 73 Law. ed., 287, 309; 49 Sup. Ct. Rep., 115; 60 A. L. R., 596.) In Barrameda vs. Moir ([1913], 25 Phil., 44, 47), this court stated the well-established rule concerning partial invalidity of statutes in the following language:

. . . where part of the a statute is void, as repugnant to the Organic Law, while another part is valid, the valid portion, if separable from the valid, may stand and be enforced. But in order to do this, the valid portion must be in so far independent of the invalid portion that it is fair to presume that the Legislative would have enacted it by itself if they had supposed that they could not constitutionally enact the other. (Mutual Loan Co. vs. Martell, 200 Mass., 482; 86 N. E., 916; 128 A. S. R., 446; Supervisors of Holmes Co. vs. Black Creek Drainage District, 99 Miss., 739; 55 Sou., 963.) Enough must remain to make a complete, intelligible, and valid statute, which carries out the legislative intent. (Pearson vs. Bass. 132 Ga., 117; 63 S. E., 798.) The void provisions must be eliminated without causing results affecting the main purpose of the Act, in a manner contrary to the intention of the Legislature. (State vs. A. C. L. R., Co., 56 Fla., 617, 642; 47 Sou., 969; Harper vs. Galloway, 58 Fla., 255; 51 Sou., 226; 26 L. R. A., N. S., 794; Connolly vs. Union Sewer Pipe Co., 184 U. S., 540, 565; People vs. Strassheim, 240 Ill., 279, 300; 88 N. E., 821; 22 L. R. A., N. S., 1135; State vs. Cognevich, 124 La., 414; 50 Sou., 439.) The language used in the invalid part of a statute can have no legal force or efficacy for any purpose whatever, and what remains must express the legislative will, independently of the void part, since the court has no power to legislate. (State vs. Junkin, 85 Neb., 1; 122 N. W., 473; 23 L. R. A., N. S., 839; Vide, also,. U. S., vs. Rodriguez [1918], 38 Phil., 759; Pollock vs. Farmers' Loan and Trust Co. [1895], 158 U. S., 601, 635; 39 Law. ed., 1108, 1125; 15 Sup. Ct. Rep., 912; 6 R.C.L., 121.) It is contended that even if section 11, which makes the Probation Act applicable only in those provinces in which the respective provincial boards provided for the salaries of probation officers were inoperative on constitutional grounds, the remainder of the Act would still be valid and may be enforced. We should be inclined to accept the suggestions but for the fact that said section is, in our opinion, is inseparably linked with the other portions of the Act that with the elimination of the section what would be left is the bare idealism of the system, devoid of any practical benefit to a large number of people who may be deserving of the intended beneficial result of that system. The clear policy of the law, as may be gleaned from a careful examination of the whole context, is to make the application of the system dependent entirely upon the affirmative action of the different provincial boards through appropriation of the salaries for probation officers at rates not lower than those provided for provincial fiscals. Without such action on the part of the various boards, no probation officers would be appointed by the Secretary of Justice to act in the provinces. The Philippines is divided or subdivided into provinces and it needs no argument to show that if not one of the provinces and this is the actual situation now appropriate the necessary fund for the salary of a probation officer, probation under Act No. 4221 would be illusory. There can be no probation without a probation officer. Neither can there be a probation officer without the probation system. Section 2 of the Acts provides that the probation officer shall supervise and visit the probationer. Every probation officer is given, as to the person placed in probation under his care, the powers of the police officer. It is the duty of the probation officer to see that the conditions which are imposed by the court upon the probationer under his care are complied with. Among those conditions, the following are enumerated in section 3 of the Act: That the probationer (a) shall indulge in no injurious or vicious habits; (b) Shall avoid places or persons of disreputable or harmful character; (c) Shall report to the probation officer as directed by the court or probation officers; (d) Shall permit the probation officer to visit him at reasonable times at his place of abode or elsewhere;

(e) Shall truthfully answer any reasonable inquiries on the part of the probation officer concerning his conduct or condition; "(f) Shall endeavor to be employed regularly; "(g) Shall remain or reside within a specified place or locality; (f) Shall make reparation or restitution to the aggrieved parties for actual damages or losses caused by his offense; (g) Shall comply with such orders as the court may from time to time make; and (h) Shall refrain from violating any law, statute, ordinance, or any by-law or regulation, promulgated in accordance with law. The court is required to notify the probation officer in writing of the period and terms of probation. Under section 4, it is only after the period of probation, the submission of a report of the probation officer and appropriate finding of the court that the probationer has complied with the conditions of probation that probation may be definitely terminated and the probationer finally discharged from supervision. Under section 5, if the court finds that there is non-compliance with said conditions, as reported by the probation officer, it may issue a warrant for the arrest of the probationer and said probationer may be committed with or without bail. Upon arraignment and after an opportunity to be heard, the court may revoke, continue or modify the probation, and if revoked, the court shall order the execution of the sentence originally imposed. Section 6 prescribes the duties of probation officers: "It shall be the duty of every probation officer to furnish to all persons placed on probation under his supervision a statement of the period and conditions of their probation, and to instruct them concerning the same; to keep informed concerning their conduct and condition; to aid and encourage them by friendly advice and admonition, and by such other measures, not inconsistent with the conditions imposed by court as may seem most suitable, to bring about improvement in their conduct and condition; to report in writing to the court having jurisdiction over said probationers at least once every two months concerning their conduct and condition; to keep records of their work; make such report as are necessary for the information of the Secretary of Justice and as the latter may require; and to perform such other duties as are consistent with the functions of the probation officer and as the court or judge may direct. The probation officers provided for in this Act may act as parole officers for any penal or reformatory institution for adults when so requested by the authorities thereof, and, when designated by the Secretary of Justice shall act as parole officer of persons released on parole under Act Number Forty-one Hundred and Three, without additional compensation." It is argued, however, that even without section 11 probation officers maybe appointed in the provinces under section 10 of Act which provides as follows: There is hereby created in the Department of Justice and subject to its supervision and control, a Probation Office under the direction of a Chief Probation Officer to be appointed by the Governor-General with the advise and consent of the Senate who shall receive a salary of four eight hundred pesos per annum. To carry out this Act there is hereby appropriated out of any funds in the Insular Treasury not otherwise appropriated, the sum of fifty thousand pesos to be disbursed by the Secretary of Justice, who is hereby authorized to appoint probation officers and the administrative personnel of the probation officer under civil service regulations from among those who possess the qualifications, training and experience prescribed by the Bureau of Civil Service, and shall fix the compensation of such probation officers and administrative personnel until such positions shall have been included in the Appropriation Act.

But the probation officers and the administrative personnel referred to in the foregoing section are clearly not those probation officers required to be appointed for the provinces under section 11. It may be said, reddendo singula singulis, that the probation officers referred to in section 10 above-quoted are to act as such, not in the various provinces, but in the central office known as the Probation Office established in the Department of Justice, under the supervision of the Chief Probation Officer. When the law provides that "the probation officer" shall investigate and make reports to the court (secs. 1 and 4); that "the probation officer" shall supervise and visit the probationer (sec. 2; sec. 6, par. d); that the probationer shall report to the "probationer officer" (sec. 3, par. c.), shall allow "the probationer officer" to visit him (sec. 3, par. d), shall truthfully answer any reasonable inquiries on the part of "the probation officer" concerning his conduct or condition (sec. 3, par. 4); that the court shall notify "the probation officer" in writing of the period and terms of probation (sec. 3, last par.), it means the probation officer who is in charge of a particular probationer in a particular province. It never could have been intention of the legislature, for instance, to require the probationer in Batanes, to report to a probationer officer in the City of Manila, or to require a probation officer in Manila to visit the probationer in the said province of Batanes, to place him under his care, to supervise his conduct, to instruct him concerning the conditions of his probation or to perform such other functions as are assigned to him by law. That under section 10 the Secretary of Justice may appoint as many probation officers as there are provinces or groups of provinces is, of course possible. But this would be arguing on what the law may be or should be and not on what the law is. Between is and ought there is a far cry. The wisdom and propriety of legislation is not for us to pass upon. We may think a law better otherwise than it is. But much as has been said regarding progressive interpretation and judicial legislation we decline to amend the law. We are not permitted to read into the law matters and provisions which are not there. Not for any purpose not even to save a statute from the doom of invalidity. Upon the other hand, the clear intention and policy of the law is not to make the Insular Government defray the salaries of probation officers in the provinces but to make the provinces defray them should they desire to have the Probation Act apply thereto. The sum of P50,000, appropriated "to carry out the purposes of this Act", is to be applied, among other things, for the salaries of probation officers in the central office at Manila. These probation officers are to receive such compensations as the Secretary of Justice may fix "until such positions shall have been included in the Appropriation Act". It was the intention of the legislature to empower the Secretary of Justice to fix the salaries of the probation officers in the provinces or later on to include said salaries in an appropriation act. Considering, further, that the sum of P50,000 appropriated in section 10 is to cover, among other things, the salaries of the administrative personnel of the Probation Office, what would be left of the amount can hardly be said to be sufficient to pay even nominal salaries to probation officers in the provinces. We take judicial notice of the fact that there are 48 provinces in the Philippines and we do not think it is seriously contended that, with the fifty thousand pesos appropriated for the central office, there can be in each province, as intended, a probation officer with a salary not lower than that of a provincial fiscal. If this a correct, the contention that without section 11 of Act No. 4221 said act is complete is an impracticable thing under the remainder of the Act, unless it is conceded that in our case there can be a system of probation in the provinces without probation officers. Probation as a development of a modern penology is a commendable system. Probation laws have been enacted, here and in other countries, to permit what modern criminologist call the "individualization of the punishment", the adjustment of the penalty to the character of the criminal and the circumstances of his particular case. It provides a period of grace in order to aid in the rehabilitation of a penitent offender. It is believed that, in any cases, convicts may be reformed and their development into hardened criminals aborted. It, therefore, takes advantage of an opportunity for reformation and avoids

imprisonment so long as the convicts gives promise of reform. (United States vs. Murray [1925], 275 U. S., 347 357, 358; 72 Law. ed., 309; 312, 313; 48 Sup. Ct. Rep., 146; Kaplan vs. Hecht, 24 F. [2d], 664, 665.) The Welfare of society is its chief end and aim. The benefit to the individual convict is merely incidental. But while we believe that probation is commendable as a system and its implantation into the Philippines should be welcomed, we are forced by our inescapable duty to set the law aside because of the repugnancy to our fundamental law. In arriving at this conclusion, we have endeavored to consider the different aspects presented by able counsel for both parties, as well in their memorandums as in their oral argument. We have examined the cases brought to our attention, and others we have been able to reach in the short time at our command for the study and deliberation of this case. In the examination of the cases and in then analysis of the legal principles involved we have inclined to adopt the line of action which in our opinion, is supported better reasoned authorities and is more conducive to the general welfare. (Smith, Bell & Co. vs. Natividad [1919], 40 Phil., 136.) Realizing the conflict of authorities, we have declined to be bound by certain adjudicated cases brought to our attention, except where the point or principle is settled directly or by clear implication by the more authoritative pronouncements of the Supreme Court of the United States. This line of approach is justified because: (a) The constitutional relations between the Federal and the State governments of the United States and the dual character of the American Government is a situation which does not obtain in the Philippines; (b) The situation of s state of the American Union of the District of Columbia with reference to the Federal Government of the United States is not the situation of the province with respect to the Insular Government (Art. I, sec. 8 cl. 17 and 10th Amendment, Constitution of the United States; Sims vs. Rives, 84 Fed. [2d], 871), (c) The distinct federal and the state judicial organizations of the United States do not embrace the integrated judicial system of the Philippines (Schneckenburger vs. Moran [1936], 35 Off. Gaz., p. 1317); (d) "General propositions do not decide concrete cases" (Justice Holmes in Lochner vs. New York [1904], 198 U. S., 45, 76; 49 Law. ed., 937, 949) and, "to keep pace with . . . new developments of times and circumstances" (Chief Justice Waite in Pensacola Tel. Co. vs. Western Union Tel. Co. [1899], 96 U. S., 1, 9; 24 Law. ed., 708; Yale Law Journal, Vol. XXIX, No. 2, Dec. 1919, 141, 142), fundamental principles should be interpreted having in view existing local conditions and environment. Act No. 4221 is hereby declared unconstitutional and void and the writ of prohibition is, accordingly, granted. Without any pronouncement regarding costs. So ordered. Avancea, C.J., Imperial, Diaz and Concepcion, JJ., concur. Villa-real and Abad Santos, JJ., concur in the result.

EN BANC [G.R. No. 148560. November 19, 2001] JOSEPH EJERCITO ESTRADA, petitioner, vs. SANDIGANBAYAN (Third Division) and PEOPLE OF THE PHILIPPINES, respondents. DECISION BELLOSILLO, J.: JOHN STUART MILL, in his essay On Liberty, unleashes the full fury of his pen in defense of the rights of the individual from the vast powers of the State and the inroads of societal pressure. But even as he draws a sacrosanct line demarcating the limits on individuality beyond which the State cannot tread asserting that "individual spontaneity" must be allowed to flourish with very little regard to social interference - he veritably acknowledges that the exercise of rights and liberties is imbued with a civic obligation, which society is justified in enforcing at all cost, against those who would endeavor to withhold fulfillment. Thus he says The sole end for which mankind is warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. Parallel to individual liberty is the natural and illimitable right of the State to self-preservation. With the end of maintaining the integrity and cohesiveness of the body politic, it behooves the State to formulate a system of laws that would compel obeisance to its collective wisdom and inflict punishment for nonobservance. The movement from Mill's individual liberalism to unsystematic collectivism wrought changes in the social order, carrying with it a new formulation of fundamental rights and duties more attuned to the imperatives of contemporary socio-political ideologies. In the process, the web of rights and State impositions became tangled and obscured, enmeshed in threads of multiple shades and colors, the skein irregular and broken. Antagonism, often outright collision, between the law as the expression of the will of the State, and the zealous attempts by its members to preserve their individuality and dignity, inevitably followed. It is when individual rights are pitted against State authority that judicial conscience is put to its severest test. Petitioner Joseph Ejercito Estrada, the highest-ranking official to be prosecuted under RA 7080 (An Act Defining and Penalizing the Crime of Plunder),[1] as amended by RA 7659,[2] wishes to impress upon us that the assailed law is so defectively fashioned that it crosses that thin but distinct line which divides the valid from the constitutionally infirm. He therefore makes a stringent call for this Court to subject the Plunder Law to the crucible of constitutionality mainly because, according to him, (a) it suffers from the vice of vagueness; (b) it dispenses with the "reasonable doubt" standard in criminal prosecutions; and, (c) it abolishes the element of mens rea in crimes already punishable under The Revised Penal Code, all of which are purportedly clear violations of the fundamental rights of the accused to due process and to be informed of the nature and cause of the accusation against him. Specifically, the provisions of the Plunder Law claimed by petitioner to have transgressed constitutional boundaries are Secs. 1, par. (d), 2 and 4 which are reproduced hereunder:

Section 1. x x x x (d) "Ill-gotten wealth" means any asset, property, business, enterprise or material possession of any person within the purview of Section Two (2) hereof, acquired by him directly or indirectly through dummies, nominees, agents, subordinates and/or business associates by any combination or series of the following means or similar schemes: (1) Through misappropriation, conversion, misuse, or malversation of public funds or raids on the public treasury; (2) By receiving, directly or indirectly, any commission, gift, share, percentage, kickbacks or any other form of pecuniary benefit from any person and/or entity in connection with any government contract or project or by reason of the office or position of the public office concerned; (3) By the illegal or fraudulent conveyance or disposition of assets belonging to the National Government or any of its subdivisions, agencies or instrumentalities, or government owned or controlled corporations and their subsidiaries; (4) By obtaining, receiving or accepting directly or indirectly any shares of stock, equity or any other form of interest or participation including the promise of future employment in any business enterprise or undertaking; (5) By establishing agricultural, industrial or commercial monopolies or other combinations and/or implementation of decrees and orders intended to benefit particular persons or special interests; or (6) By taking advantage of official position, authority, relationship, connection or influence to unjustly enrich himself or themselves at the expense and to the damage and prejudice of the Filipino people and the Republic of the Philippines. Section 2. Definition of the Crime of Plunder, Penalties. - Any public officer who, by himself or in connivance with members of his family, relatives by affinity or consanguinity, business associates, subordinates or other persons, amasses, accumulates or acquires ill-gotten wealth through a combination or series of overt or criminal acts as described in Section 1 (d) hereof, in the aggregate amount or total value of at least fifty million pesos (P50,000,000.00) shall be guilty of the crime of plunder and shall be punished by reclusion perpetua to death. Any person who participated with the said public officer in the commission of an offense contributing to the crime of plunder shall likewise be punished for such offense. In the imposition of penalties, the degree of participation and the attendance of mitigating and extenuating circumstances as provided by the Revised Penal Code shall be considered by the court. The court shall declare any and all ill-gotten wealth and their interests and other incomes and assets including the properties and shares of stocks derived from the deposit or investment thereof forfeited in favor of the State (underscoring supplied). Section 4. Rule of Evidence. - For purposes of establishing the crime of plunder, it shall not be necessary to prove each and every criminal act done by the accused in furtherance of the scheme or conspiracy to amass, accumulate or acquire ill-gotten wealth, it being sufficient to establish beyond reasonable doubt a pattern of overt or criminal acts indicative of the overall unlawful scheme or conspiracy (underscoring supplied). On 4 April 2001 the Office of the Ombudsman filed before the Sandiganbayan eight (8) separate Informations, docketed as: (a) Crim. Case No. 26558, for violation of RA 7080, as amended by RA 7659;

(b) Crim. Cases Nos. 26559 to 26562, inclusive, for violation of Secs. 3, par. (a), 3, par. (a), 3, par. (e) and 3, par. (e), of RA 3019 (Anti-Graft and Corrupt Practices Act), respectively; (c) Crim. Case No. 26563, for violation of Sec. 7, par. (d), of RA 6713 (The Code of Conduct and Ethical Standards for Public Officials and Employees); (d) Crim. Case No. 26564, for Perjury (Art. 183 of The Revised Penal Code); and, (e) Crim. Case No. 26565, for Illegal Use Of An Alias (CA No. 142, as amended by RA 6085). On 11 April 2001 petitioner filed an Omnibus Motion for the remand of the case to the Ombudsman for preliminary investigation with respect to specification "d" of the charges in the Information in Crim. Case No. 26558; and, for reconsideration/reinvestigation of the offenses under specifications "a," "b," and "c" to give the accused an opportunity to file counter-affidavits and other documents necessary to prove lack of probable cause. Noticeably, the grounds raised were only lack of preliminary investigation, reconsideration/reinvestigation of offenses, and opportunity to prove lack of probable cause. The purported ambiguity of the charges and the vagueness of the law under which they are charged were never raised in that Omnibus Motion thus indicating the explicitness and comprehensibility of the Plunder Law. On 25 April 2001 the Sandiganbayan, Third Division, issued a Resolution in Crim. Case No. 26558 finding that "a probable cause for the offense of PLUNDER exists to justify the issuance of warrants for the arrest of the accused." On 25 June 2001 petitioner's motion for reconsideration was denied by the Sandiganbayan. On 14 June 2001 petitioner moved to quash the Information in Crim. Case No. 26558 on the ground that the facts alleged therein did not constitute an indictable offense since the law on which it was based was unconstitutional for vagueness, and that the Amended Information for Plunder charged more than one (1) offense. On 21 June 2001 the Government filed its Opposition to the Motion to Quash, and five (5) days later or on 26 June 2001 petitioner submitted his Reply to the Opposition. On 9 July 2001 the Sandiganbayan denied petitioner's Motion to Quash. As concisely delineated by this Court during the oral arguments on 18 September 2001, the issues for resolution in the instant petition for certiorari are: (a) The Plunder Law is unconstitutional for being vague; (b) The Plunder Law requires less evidence for proving the predicate crimes of plunder and therefore violates the rights of the accused to due process; and, (c) Whether Plunder as defined in RA 7080 is a malum prohibitum, and if so, whether it is within the power of Congress to so classify it. Preliminarily, the whole gamut of legal concepts pertaining to the validity of legislation is predicated on the basic principle that a legislative measure is presumed to be in harmony with the Constitution.[3] Courts invariably train their sights on this fundamental rule whenever a legislative act is under a constitutional attack, for it is the postulate of constitutional adjudication. This strong predilection for constitutionality takes its bearings on the idea that it is forbidden for one branch of the government to encroach upon the duties and powers of another. Thus it has been said that the presumption is based on the deference the judicial branch accords to its coordinate branch - the legislature. If there is any reasonable basis upon which the legislation may firmly rest, the courts must assume that the legislature is ever conscious of the borders and edges of its plenary powers, and has passed the law with full knowledge of the facts and for the purpose of promoting what is right and advancing the welfare of the majority. Hence in determining whether the acts of the legislature are in tune with the fundamental law, courts should proceed with judicial restraint and act with caution and forbearance. Every intendment of the law must be adjudged by the courts in favor of its constitutionality, invalidity being a measure of last

resort. In construing therefore the provisions of a statute, courts must first ascertain whether an interpretation is fairly possible to sidestep the question of constitutionality. In La Union Credit Cooperative, Inc. v. Yaranon[4] we held that as long as there is some basis for the decision of the court, the constitutionality of the challenged law will not be touched and the case will be decided on other available grounds. Yet the force of the presumption is not sufficient to catapult a fundamentally deficient law into the safe environs of constitutionality. Of course, where the law clearly and palpably transgresses the hallowed domain of the organic law, it must be struck down on sight lest the positive commands of the fundamental law be unduly eroded. Verily, the onerous task of rebutting the presumption weighs heavily on the party challenging the validity of the statute. He must demonstrate beyond any tinge of doubt that there is indeed an infringement of the constitution, for absent such a showing, there can be no finding of unconstitutionality. A doubt, even if well-founded, will hardly suffice. As tersely put by Justice Malcolm, "To doubt is to sustain."[5] And petitioner has miserably failed in the instant case to discharge his burden and overcome the presumption of constitutionality of the Plunder Law. As it is written, the Plunder Law contains ascertainable standards and well-defined parameters which would enable the accused to determine the nature of his violation. Section 2 is sufficiently explicit in its description of the acts, conduct and conditions required or forbidden, and prescribes the elements of the crime with reasonable certainty and particularity. Thus 1. That the offender is a public officer who acts by himself or in connivance with members of his family, relatives by affinity or consanguinity, business associates, subordinates or other persons; 2. That he amassed, accumulated or acquired ill-gotten wealth through a combination or series of the following overt or criminal acts: (a) through misappropriation, conversion, misuse, or malversation of public funds or raids on the public treasury; (b) by receiving, directly or indirectly, any commission, gift, share, percentage, kickback or any other form of pecuniary benefits from any person and/or entity in connection with any government contract or project or by reason of the office or position of the public officer; (c) by the illegal or fraudulent conveyance or disposition of assets belonging to the National Government or any of its subdivisions, agencies or instrumentalities of Government owned or controlled corporations or their subsidiaries; (d) by obtaining, receiving or accepting directly or indirectly any shares of stock, equity or any other form of interest or participation including the promise of future employment in any business enterprise or undertaking; (e) by establishing agricultural, industrial or commercial monopolies or other combinations and/or implementation of decrees and orders intended to benefit particular persons or special interests; or (f) by taking advantage of official position, authority, relationship, connection or influence to unjustly enrich himself or themselves at the expense and to the damage and prejudice of the Filipino people and the Republic of the Philippines; and, 3. That the aggregate amount or total value of the ill-gotten wealth amassed, accumulated or acquired is at least P50,000,000.00. As long as the law affords some comprehensible guide or rule that would inform those who are subject to it what conduct would render them liable to its penalties, its validity will be sustained. It must sufficiently guide the judge in its application; the counsel, in defending one charged with its violation; and more importantly, the accused, in identifying the realm of the proscribed conduct. Indeed, it can be understood with little difficulty that what the assailed statute punishes is the act of a public officer in amassing or

accumulating ill-gotten wealth of at least P50,000,000.00 through a series or combination of acts enumerated in Sec. 1, par. (d), of the Plunder Law. In fact, the amended Information itself closely tracks the language of the law, indicating with reasonable certainty the various elements of the offense which petitioner is alleged to have committed: "The undersigned Ombudsman, Prosecutor and OIC-Director, EPIB, Office of the Ombudsman, hereby accuses former PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, Joseph Ejercito Estrada, a.k.a. 'ASIONG SALONGA' and a.k.a. 'JOSE VELARDE,' together with Jose 'Jinggoy' Estrada, Charlie 'Atong' Ang, Edward Serapio, Yolanda T. Ricaforte, Alma Alfaro, JOHN DOE a.k.a. Eleuterio Tan OR Eleuterio Ramos Tan or Mr. Uy, Jane Doe a.k.a. Delia Rajas, and John DOES & Jane Does, of the crime of Plunder, defined and penalized under R.A. No. 7080, as amended by Sec. 12 of R.A. No. 7659, committed as follows: That during the period from June, 1998 to January 2001, in the Philippines, and within the jurisdiction of this Honorable Court, accused Joseph Ejercito Estrada, THEN A PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, by himself AND/OR in CONNIVANCE/CONSPIRACY with his co-accused, WHO ARE MEMBERS OF HIS FAMILY, RELATIVES BY AFFINITY OR CONSANGUINITY, BUSINESS ASSOCIATES, SUBORDINATES AND/OR OTHER PERSONS, BY TAKING UNDUE ADVANTAGE OF HIS OFFICIAL POSITION, AUTHORITY, RELATIONSHIP, CONNECTION, OR INFLUENCE, did then and there willfully, unlawfully and criminally amass, accumulate and acquire BY HIMSELF, DIRECTLY OR INDIRECTLY, ill-gotten wealth in the aggregate amount or TOTAL VALUE of FOUR BILLION NINETY SEVEN MILLION EIGHT HUNDRED FOUR THOUSAND ONE HUNDRED SEVENTY THREE PESOS AND SEVENTEEN CENTAVOS (P4,097,804,173.17), more or less, THEREBY UNJUSTLY ENRICHING HIMSELF OR THEMSELVES AT THE EXPENSE AND TO THE DAMAGE OF THE FILIPINO PEOPLE AND THE REPUBLIC OF THE PHILIPPINES, through ANY OR A combination OR A series of overt OR criminal acts, OR SIMILAR SCHEMES OR MEANS, described as follows: (a) by receiving OR collecting, directly or indirectly, on SEVERAL INSTANCES, MONEY IN THE AGGREGATE AMOUNT OF FIVE HUNDRED FORTY-FIVE MILLION PESOS (P545,000,000.00), MORE OR LESS, FROM ILLEGAL GAMBLING IN THE FORM OF GIFT, SHARE, PERCENTAGE, KICKBACK OR ANY FORM OF PECUNIARY BENEFIT, BY HIMSELF AND/OR in connection with co-accused CHARLIE 'ATONG' ANG, Jose 'Jinggoy' Estrada, Yolanda T. Ricaforte, Edward Serapio, AND JOHN DOES AND JANE DOES, in consideration OF TOLERATION OR PROTECTION OF ILLEGAL GAMBLING; (b) by DIVERTING, RECEIVING, misappropriating, converting OR misusing DIRECTLY OR INDIRECTLY, for HIS OR THEIR PERSONAL gain and benefit, public funds in the amount of ONE HUNDRED THIRTY MILLION PESOS (P130,000,000.00), more or less, representing a portion of the TWO HUNDRED MILLION PESOS (P200,000,000.00) tobacco excise tax share allocated for the province of Ilocos Sur under R.A. No. 7171, by himself and/or in connivance with co-accused Charlie 'Atong' Ang, Alma Alfaro, JOHN DOE a.k.a. Eleuterio Ramos Tan or Mr. Uy, Jane Doe a.k.a. Delia Rajas, AND OTHER JOHN DOES & JANE DOES; (italic supplied). (c) by directing, ordering and compelling, FOR HIS PERSONAL GAIN AND BENEFIT, the Government Service Insurance System (GSIS) TO PURCHASE 351,878,000 SHARES OF STOCKS, MORE OR LESS, and the Social Security System (SSS), 329,855,000 SHARES OF STOCK, MORE OR LESS, OF THE BELLE CORPORATION IN THE AMOUNT OF MORE OR LESS ONE BILLION ONE HUNDRED TWO MILLION NINE HUNDRED SIXTY FIVE THOUSAND SIX HUNDRED SEVEN PESOS AND FIFTY

CENTAVOS (P1,102,965,607.50) AND MORE OR LESS SEVEN HUNDRED FORTY FOUR MILLION SIX HUNDRED TWELVE THOUSAND AND FOUR HUNDRED FIFTY PESOS (P744,612,450.00), RESPECTIVELY, OR A TOTAL OF MORE OR LESS ONE BILLION EIGHT HUNDRED FORTY SEVEN MILLION FIVE HUNDRED SEVENTY EIGHT THOUSAND FIFTY SEVEN PESOS AND FIFTY CENTAVOS (P1,847,578,057.50); AND BY COLLECTING OR RECEIVING, DIRECTLY OR INDIRECTLY, BY HIMSELF AND/OR IN CONNIVANCE WITH JOHN DOES AND JANE DOES, COMMISSIONS OR PERCENTAGES BY REASON OF SAID PURCHASES OF SHARES OF STOCK IN THE AMOUNT OF ONE HUNDRED EIGHTY NINE MILLION SEVEN HUNDRED THOUSAND PESOS (P189,700,000.00) MORE OR LESS, FROM THE BELLE CORPORATION WHICH BECAME PART OF THE DEPOSIT IN THE EQUITABLE-PCI BANK UNDER THE ACCOUNT NAME 'JOSE VELARDE;' (d) by unjustly enriching himself FROM COMMISSIONS, GIFTS, SHARES, PERCENTAGES, KICKBACKS, OR ANY FORM OF PECUNIARY BENEFITS, IN CONNIVANCE WITH JOHN DOES AND JANE DOES, in the amount of MORE OR LESS THREE BILLION TWO HUNDRED THIRTY THREE MILLION ONE HUNDRED FOUR THOUSAND ONE HUNDRED SEVENTY THREE PESOS AND SEVENTEEN CENTAVOS (P3,233,104,173.17) AND DEPOSITING THE SAME UNDER HIS ACCOUNT NAME 'JOSE VELARDE' AT THE EQUITABLE-PCI BANK." We discern nothing in the foregoing that is vague or ambiguous - as there is obviously none - that will confuse petitioner in his defense. Although subject to proof, these factual assertions clearly show that the elements of the crime are easily understood and provide adequate contrast between the innocent and the prohibited acts. Upon such unequivocal assertions, petitioner is completely informed of the accusations against him as to enable him to prepare for an intelligent defense. Petitioner, however, bewails the failure of the law to provide for the statutory definition of the terms "combination" and "series" in the key phrase "a combination or series of overt or criminal acts" found in Sec. 1, par. (d), and Sec. 2, and the word "pattern" in Sec. 4. These omissions, according to petitioner, render the Plunder Law unconstitutional for being impermissibly vague and overbroad and deny him the right to be informed of the nature and cause of the accusation against him, hence, violative of his fundamental right to due process. The rationalization seems to us to be pure sophistry. A statute is not rendered uncertain and void merely because general terms are used therein, or because of the employment of terms without defining them;[6] much less do we have to define every word we use. Besides, there is no positive constitutional or statutory command requiring the legislature to define each and every word in an enactment. Congress is not restricted in the form of expression of its will, and its inability to so define the words employed in a statute will not necessarily result in the vagueness or ambiguity of the law so long as the legislative will is clear, or at least, can be gathered from the whole act, which is distinctly expressed in the Plunder Law. Moreover, it is a well-settled principle of legal hermeneutics that words of a statute will be interpreted in their natural, plain and ordinary acceptation and signification,[7] unless it is evident that the legislature intended a technical or special legal meaning to those words.[8] The intention of the lawmakers - who are, ordinarily, untrained philologists and lexicographers - to use statutory phraseology in such a manner is always presumed. Thus, Webster's New Collegiate Dictionary contains the following commonly accepted definition of the words "combination" and "series:" Combination - the result or product of combining; the act or process of combining. To combine is to bring into such close relationship as to obscure individual characters.

Series - a number of things or events of the same class coming one after another in spatial and temporal succession. That Congress intended the words "combination" and "series" to be understood in their popular meanings is pristinely evident from the legislative deliberations on the bill which eventually became RA 7080 or the Plunder Law: DELIBERATIONS OF THE BICAMERAL COMMITTEE ON JUSTICE, 7 May 1991 REP. ISIDRO: I am just intrigued again by our definition of plunder. We say THROUGH A COMBINATION OR SERIES OF OVERT OR CRIMINAL ACTS AS MENTIONED IN SECTION ONE HEREOF. Now when we say combination, we actually mean to say, if there are two or more means, we mean to say that number one and two or number one and something else are included, how about a series of the same act? For example, through misappropriation, conversion, misuse, will these be included also? REP. GARCIA: Yeah, because we say a series. REP. ISIDRO: Series. REP. GARCIA: Yeah, we include series. REP. ISIDRO: But we say we begin with a combination. REP. GARCIA: Yes. REP. ISIDRO: When we say combination, it seems that REP. GARCIA: Two. REP. ISIDRO: Not only two but we seem to mean that two of the enumerated means not twice of one enumeration. REP. GARCIA: No, no, not twice. REP. ISIDRO: Not twice? REP. GARCIA: Yes. Combination is not twice - but combination, two acts. REP. ISIDRO: So in other words, thats it. When we say combination, we mean, two different acts. It cannot be a repetition of the same act. REP. GARCIA: That be referred to series, yeah. REP. ISIDRO: No, no. Supposing one act is repeated, so there are two. REP. GARCIA: A series.

REP. ISIDRO: Thats not series. Its a combination. Because when we say combination or series, we seem to say that two or more, di ba? REP. GARCIA: Yes, this distinguishes it really from ordinary crimes. That is why, I said, that is a very good suggestion because if it is only one act, it may fall under ordinary crime but we have here a combination or series of overt or criminal acts. So x x x x REP. GARCIA: Series. One after the other eh di.... SEN. TANADA: So that would fall under the term series? REP. GARCIA: Series, oo. REP. ISIDRO: Now, if it is a combination, ano, two misappropriations.... REP. GARCIA: Its not... Two misappropriations will not be combination. Series. REP. ISIDRO: So, it is not a combination? REP. GARCIA: Yes. REP. ISIDRO: When you say combination, two different? REP. GARCIA: Yes. SEN. TANADA: Two different. REP. ISIDRO: Two different acts. REP. GARCIA: For example, ha... REP. ISIDRO: Now a series, meaning, repetition... DELIBERATIONS ON SENATE BILL NO. 733, 6 June 1989 SENATOR MACEDA: In line with our interpellations that sometimes one or maybe even two acts may already result in such a big amount, on line 25, would the Sponsor consider deleting the words a series of overt or, to read, therefore: or conspiracy COMMITTED by criminal acts such as. Remove the idea of necessitating a series. An yway, the criminal acts are in the plural. SENATOR TANADA: That would mean a combination of two or more of the acts mentioned in this. THE PRESIDENT: Probably two or more would be.... SENATOR MACEDA: Yes, because a series implies several or many; two or more. SENATOR TANADA: Accepted, Mr. President x x x x

THE PRESIDENT: If there is only one, then he has to be prosecuted under the particular crime. But when we say acts of plunder there should be, at least, two or more. SENATOR ROMULO: In other words, that is already covered by existing laws, Mr. President. Thus when the Plunder Law speaks of "combination," it is referring to at least two (2) acts falling under different categories of enumeration provided in Sec. 1, par. (d), e.g., raids on the public treasury in Sec. 1, par. (d), subpar. (1), and fraudulent conveyance of assets belonging to the National Government under Sec. 1, par. (d), subpar. (3). On the other hand, to constitute a series" there must be two (2) or more overt or criminal acts falling under the same category of enumeration found in Sec. 1, par. (d), say, misappropriation, malversation and raids on the public treasury, all of which fall under Sec. 1, par. (d), subpar. (1). Verily, had the legislature intended a technical or distinctive meaning for "combination" and "series," it would have taken greater pains in specifically providing for it in the law. As for "pattern," we agree with the observations of the Sandiganbayan[9] that this term is sufficiently defined in Sec. 4, in relation to Sec. 1, par. (d), and Sec. 2 x x x x under Sec. 1 (d) of the law, a 'pattern' consists of at least a combination or series of overt or criminal acts enumerated in subsections (1) to (6) of Sec. 1 (d). Secondly, pursuant to Sec. 2 of the law, the pattern of overt or criminal acts is directed towards a common purpose or goal which is to enable the public officer to amass, accumulate or acquire ill-gotten wealth. And thirdly, there must either be an 'overall unlawful scheme' or 'conspiracy' to achieve said common goal. As commonly understood, the term 'overall unlawful scheme' indicates a 'general plan of action or method' which the principal accused and public officer and others conniving with him follow to achieve the aforesaid common goal. In the alternative, if there is no such overall scheme or where the schemes or methods used by multiple accused vary, the overt or criminal acts must form part of a conspiracy to attain a common goal. Hence, it cannot plausibly be contended that the law does not give a fair warning and sufficient notice of what it seeks to penalize. Under the circumstances, petitioner's reliance on the "void-for-vagueness" doctrine is manifestly misplaced. The doctrine has been formulated in various ways, but is most commonly stated to the effect that a statute establishing a criminal offense must define the offense with sufficient definiteness that persons of ordinary intelligence can understand what conduct is prohibited by the statute. It can only be invoked against that specie of legislation that is utterly vague on its face, i.e., that which cannot be clarified either by a saving clause or by construction. A statute or act may be said to be vague when it lacks comprehensible standards that men of common intelligence must necessarily guess at its meaning and differ in its application. In such instance, the statute is repugnant to the Constitution in two (2) respects - it violates due process for failure to accord persons, especially the parties targeted by it, fair notice of what conduct to avoid; and, it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government muscle.[10] But the doctrine does not apply as against legislations that are merely couched in imprecise language but which nonetheless specify a standard though defectively phrased; or to those that are apparently ambiguous yet fairly applicable to certain types of activities. The first may be "saved" by proper construction, while no challenge may be mounted as against the second whenever directed against such activities.[11] With more reason, the doctrine cannot be invoked where the assailed statute is clear and free from ambiguity, as in this case.

The test in determining whether a criminal statute is void for uncertainty is whether the language conveys a sufficiently definite warning as to the proscribed conduct when measured by common understanding and practice.[12] It must be stressed, however, that the "vagueness" doctrine merely requires a reasonable degree of certainty for the statute to be upheld - not absolute precision or mathematical exactitude, as petitioner seems to suggest. Flexibility, rather than meticulous specificity, is permissible as long as the metes and bounds of the statute are clearly delineated. An act will not be held invalid merely because it might have been more explicit in its wordings or detailed in its provisions, especially where, because of the nature of the act, it would be impossible to provide all the details in advance as in all other statutes. Moreover, we agree with, hence we adopt, the observations of Mr. Justice Vicente V. Mendoza during the deliberations of the Court that the allegations that the Plunder Law is vague and overbroad do not justify a facial review of its validity The void-for-vagueness doctrine states that "a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due process of law."[13] The overbreadth doctrine, on the other hand, decrees that "a governmental purpose may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms."[14] A facial challenge is allowed to be made to a vague statute and to one which is overbroad because of possible "chilling effect" upon protected speech. The theory is that "[w]hen statutes regulate or proscribe speech and no readily apparent construction suggests itself as a vehicle for rehabilitating the statutes in a single prosecution, the transcendent value to all society of constitutionally protected expression is deemed to justify allowing attacks on overly broad statutes with no requirement that the person making the attack demonstrate that his own conduct could not be regulated by a statute drawn with narrow specificity."[15] The possible harm to society in permitting some unprotected speech to go unpunished is outweighed by the possibility that the protected speech of others may be deterred and perceived grievances left to fester because of possible inhibitory effects of overly broad statutes. This rationale does not apply to penal statutes. Criminal statutes have general in terrorem effect resulting from their very existence, and, if facial challenge is allowed for this reason alone, the State may well be prevented from enacting laws against socially harmful conduct. In the area of criminal law, the law cannot take chances as in the area of free speech. The overbreadth and vagueness doctrines then have special application only to free speech cases. They are inapt for testing the validity of penal statutes. As the U.S. Supreme Court put it, in an opinion by Chief Justice Rehnquist, "we have not recognized an 'overbreadth' doctrine outside the limited context of the First Amendment."[16] In Broadrick v. Oklahoma,[17] the Court ruled that "claims of facial overbreadth have been entertained in cases involving statutes which, by their terms, seek to regulate only spoken words" and, again, that "overbreadth claims, if entertained at all, have been curtailed when invoked against ordinary criminal laws that are sought to be applied to protected conduct." For this reason, it has been held that "a facial challenge to a legislative act is the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid."[18] As for the vagueness doctrine, it is said that a litigant may challenge a statute on its face only if it is vague in all its possible applications. "A plaintiff who engages in some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of others."[19]

In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed for testing "on their faces" statutes in free speech cases or, as they are called in American law, First Amendment cases. They cannot be made to do service when what is involved is a criminal statute. With respect to such statute, the established rule is that "one to whom application of a statute is constitutional will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to other persons or other situations in which its application might be unconstitutional."[20] As has been pointed out, "vagueness challenges in the First Amendment context, like overbreadth challenges typically produce facial invalidation, while statutes found vague as a matter of due process typically are invalidated [only] 'as applied' to a particular defendant."[21] Consequently, there is no basis for petitioner's claim that this Court review the Anti-Plunder Law on its face and in its entirety. Indeed, "on its face" invalidation of statutes results in striking them down entirely on the ground that they might be applied to parties not before the Court whose activities are constitutionally protected.[22] It constitutes a departure from the case and controversy requirement of the Constitution and permits decisions to be made without concrete factual settings and in sterile abstract contexts.[23] But, as the U.S. Supreme Court pointed out in Younger v. Harris[24] [T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The combination of the relative remoteness of the controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the required line-by-line analysis of detailed statutes, . . . ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional questions, whichever way they might be decided. For these reasons, "on its face" invalidation of statutes has been described as "manifestly strong medicine," to be employed "sparingly and only as a last resort,"[25] and is generally disfavored.[26] In determining the constitutionality of a statute, therefore, its provisions which are alleged to have been violated in a case must be examined in the light of the conduct with which the defendant is charged.[27] In light of the foregoing disquisition, it is evident that the purported ambiguity of the Plunder Law, so tenaciously claimed and argued at length by petitioner, is more imagined than real. Ambiguity, where none exists, cannot be created by dissecting parts and words in the statute to furnish support to critics who cavil at the want of scientific precision in the law. Every provision of the law should be construed in relation and with reference to every other part. To be sure, it will take more than nitpicking to overturn the well-entrenched presumption of constitutionality and validity of the Plunder Law. A fortiori, petitioner cannot feign ignorance of what the Plunder Law is all about. Being one of the Senators who voted for its passage, petitioner must be aware that the law was extensively deliberated upon by the Senate and its appropriate committees by reason of which he even registered his affirmative vote with full knowledge of its legal implications and sound constitutional anchorage. The parallel case of Gallego v. Sandiganbayan[28] must be mentioned if only to illustrate and emphasize the point that courts are loathed to declare a statute void for uncertainty unless the law itself is so imperfect and deficient in its details, and is susceptible of no reasonable construction that will support and give it effect. In that case, petitioners Gallego and Agoncillo challenged the constitutionality of Sec. 3, par. (e), of The Anti-Graft and Corrupt Practices Act for being vague. Petitioners posited, among others, that the term "unwarranted" is highly imprecise and elastic with no common law meaning or settled definition by prior judicial or administrative precedents; that, for its vagueness, Sec. 3, par. (e), violates due process in that it does not give fair warning or sufficient notice of what it seeks to penalize. Petitioners further argued that the Information charged them with three (3) distinct offenses, to wit: (a)

giving of "unwarranted" benefits through manifest partiality; (b) giving of "unwarranted" benefits through evident bad faith; and, (c) giving of "unwarranted" benefits through gross inexcusable negligence while in the discharge of their official function and that their right to be informed of the nature and cause of the accusation against them was violated because they were left to guess which of the three (3) offenses, if not all, they were being charged and prosecuted. In dismissing the petition, this Court held that Sec. 3, par. (e), of The Anti-Graft and Corrupt Practices Act does not suffer from the constitutional defect of vagueness. The phrases "manifest partiality," "evident bad faith," and "gross and inexcusable negligence" merely describe the different modes by which the offense penalized in Sec. 3, par. (e), of the statute may be committed, and the use of all these phrases in the same Information does not mean that the indictment charges three (3) distinct offenses. The word 'unwarranted' is not uncertain. It seems lacking adequate or official support; unjustified; unauthorized (Webster, Third International Dictionary, p. 2514); or without justification or adequate reason (Philadelphia Newspapers, Inc. v. US Dept. of Justice, C.D. Pa., 405 F. Supp. 8, 12, cited in Words and Phrases, Permanent Edition, Vol. 43-A 1978, Cumulative Annual Pocket Part, p. 19). The assailed provisions of the Anti-Graft and Corrupt Practices Act consider a corrupt practice and make unlawful the act of the public officer in: x x x or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence, x x x (Section 3 [e], Rep. Act 3019, as amended). It is not at all difficult to comprehend that what the aforequoted penal provisions penalize is the act of a public officer, in the discharge of his official, administrative or judicial functions, in giving any private party benefits, advantage or preference which is unjustified, unauthorized or without justification or adequate reason, through manifest partiality, evident bad faith or gross inexcusable negligence. In other words, this Court found that there was nothing vague or ambiguous in the use of the term "unwarranted" in Sec. 3, par. (e), of The Anti-Graft and Corrupt Practices Act, which was understood in its primary and general acceptation. Consequently, in that case, petitioners' objection thereto was held inadequate to declare the section unconstitutional. On the second issue, petitioner advances the highly stretched theory that Sec. 4 of the Plunder Law circumvents the immutable obligation of the prosecution to prove beyond reasonable doubt the predicate acts constituting the crime of plunder when it requires only proof of a pattern of overt or criminal acts showing unlawful scheme or conspiracy SEC. 4. Rule of Evidence. - For purposes of establishing the crime of plunder, it shall not be necessary to prove each and every criminal act done by the accused in furtherance of the scheme or conspiracy to amass, accumulate or acquire ill-gotten wealth, it being sufficient to establish beyond reasonable doubt a pattern of overt or criminal acts indicative of the overall unlawful scheme or conspiracy. The running fault in this reasoning is obvious even to the simplistic mind. In a criminal prosecution for plunder, as in all other crimes, the accused always has in his favor the presumption of innocence which is guaranteed by the Bill of Rights, and unless the State succeeds in demonstrating by proof beyond reasonable doubt that culpability lies, the accused is entitled to an acquittal.[29] The use of the "reasonable doubt" standard is indispensable to command the respect and confidence of the community

in the application of criminal law. It is critical that the moral force of criminal law be not diluted by a standard of proof that leaves people in doubt whether innocent men are being condemned. It is also important in our free society that every individual going about his ordinary affairs has confidence that his government cannot adjudge him guilty of a criminal offense without convincing a proper factfinder of his guilt with utmost certainty. This "reasonable doubt" standard has acquired such exalted stature in the realm of constitutional law as it gives life to the Due Process Clause which protects the accused against conviction except upon proof beyond reasonable doubt of every fact necessary to constitute the crime with which he is charged.[30] The following exchanges between Rep. Rodolfo Albano and Rep. Pablo Garcia on this score during the deliberations in the floor of the House of Representatives are elucidating DELIBERATIONS OF THE HOUSE OF REPRESENTATIVES ON RA 7080, 9 October 1990 MR. ALBANO: Now, Mr. Speaker, it is also elementary in our criminal law that what is alleged in the information must be proven beyond reasonable doubt. If we will prove only one act and find him guilty of the other acts enumerated in the information, does that not work against the right of the accused especially so if the amount committed, say, by falsification is less than P100 million, but the totality of the crime committed is P100 million since there is malversation, bribery, falsification of public document, coercion, theft? MR. GARCIA: Mr. Speaker, not everything alleged in the information needs to be proved beyond reasonable doubt. What is required to be proved beyond reasonable doubt is every element of the crime charged. For example, Mr. Speaker, there is an enumeration of the things taken by the robber in the information three pairs of pants, pieces of jewelry. These need not be proved beyond reasonable doubt, but these will not prevent the conviction of a crime for which he was charged just because, say, instead of 3 pairs of diamond earrings the prosecution proved two. Now, what is required to be proved beyond reasonable doubt is the element of the offense. MR. ALBANO: I am aware of that, Mr. Speaker, but considering that in the crime of plunder the totality of the amount is very important, I feel that such a series of overt criminal acts has to be taken singly. For instance, in the act of bribery, he was able to accumulate only P50,000 and in the crime of extortion, he was only able to accumulate P1 million. Now, when we add the totality of the other acts as required under this bill through the interpretation on the rule of evidence, it is just one single act, so how can we now convict him? MR. GARCIA: With due respect, Mr. Speaker, for purposes of proving an essential element of the crime, there is a need to prove that element beyond reasonable doubt. For example, one essential element of the crime is that the amount involved is P100 million. Now, in a series of defalcations and other acts of corruption in the enumeration the total amount would be P110 or P120 million, but there are certain acts that could not be proved, so, we will sum up the amounts involved in those transactions which were proved. Now, if the amount involved in these transactions, proved beyond reasonable doubt, is P100 million, then there is a crime of plunder (underscoring supplied). It is thus plain from the foregoing that the legislature did not in any manner refashion the standard quantum of proof in the crime of plunder. The burden still remains with the prosecution to prove beyond any iota of doubt every fact or element necessary to constitute the crime. The thesis that Sec. 4 does away with proof of each and every component of the crime suffers from a dismal misconception of the import of that provision. What the prosecution needs to prove beyond reasonable doubt is only a number of acts sufficient to form a combination or series which would

constitute a pattern and involving an amount of at least P50,000,000.00. There is no need to prove each and every other act alleged in the Information to have been committed by the accused in furtherance of the overall unlawful scheme or conspiracy to amass, accumulate or acquire ill-gotten wealth. To illustrate, supposing that the accused is charged in an Information for plunder with having committed fifty (50) raids on the public treasury. The prosecution need not prove all these fifty (50) raids, it being sufficient to prove by pattern at least two (2) of the raids beyond reasonable doubt provided only that they amounted to at least P50,000,000.00.[31] A reading of Sec. 2 in conjunction with Sec. 4, brings us to the logical conclusion that "pattern of overt or criminal acts indicative of the overall unlawful scheme or conspiracy" inheres in the very acts of accumulating, acquiring or amassing hidden wealth. Stated otherwise, such pattern arises where the prosecution is able to prove beyond reasonable doubt the predicate acts as defined in Sec. 1, par. (d). Pattern is merely a by-product of the proof of the predicate acts. This conclusion is consistent with reason and common sense. There would be no other explanation for a combination or series of overt or criminal acts to stash P50,000,000.00 or more, than "a scheme or conspiracy to amass, accumulate or acquire ill gotten wealth." The prosecution is therefore not required to make a deliberate and conscious effort to prove pattern as it necessarily follows with the establishment of a series or combination of the predicate acts. Relative to petitioner's contentions on the purported defect of Sec. 4 is his submission that "pattern" is "a very important element of the crime of plunder;" and that Sec. 4 is "two pronged, (as) it contains a rule of evidence and a substantive element of the crime," such that without it the accused cannot be convicted of plunder JUSTICE BELLOSILLO: In other words, cannot an accused be convicted under the Plunder Law without applying Section 4 on the Rule of Evidence if there is proof beyond reasonable doubt of the commission of the acts complained of? ATTY. AGABIN: In that case he can be convicted of individual crimes enumerated in the Revised Penal Code, but not plunder. JUSTICE BELLOSILLO: In other words, if all the elements of the crime are proved beyond reasonable doubt without applying Section 4, can you not have a conviction under the Plunder Law? ATTY. AGABIN: Not a conviction for plunder, your Honor. JUSTICE BELLOSILLO: Can you not disregard the application of Sec. 4 in convicting an accused charged for violation of the Plunder Law? ATTY. AGABIN: Well, your Honor, in the first place Section 4 lays down a substantive element of the law xxxx JUSTICE BELLOSILLO: What I said is - do we have to avail of Section 4 when there is proof beyond reasonable doubt on the acts charged constituting plunder? ATTY. AGABIN: Yes, your Honor, because Section 4 is two pronged, it contains a rule of evidence and it contains a substantive element of the crime of plunder. So, there is no way by which we can avoid Section 4.

JUSTICE BELLOSILLO: But there is proof beyond reasonable doubt insofar as the predicate crimes charged are concerned that you do not have to go that far by applying Section 4? ATTY. AGABIN: Your Honor, our thinking is that Section 4 contains a very important element of the crime of plunder and that cannot be avoided by the prosecution.[32] We do not subscribe to petitioner's stand. Primarily, all the essential elements of plunder can be culled and understood from its definition in Sec. 2, in relation to Sec. 1, par. (d), and "pattern" is not one of them. Moreover, the epigraph and opening clause of Sec. 4 is clear and unequivocal: SEC. 4. Rule of Evidence. - For purposes of establishing the crime of plunder x x x x It purports to do no more than prescribe a rule of procedure for the prosecution of a criminal case for plunder. Being a purely procedural measure, Sec. 4 does not define or establish any substantive right in favor of the accused but only operates in furtherance of a remedy. It is only a means to an end, an aid to substantive law. Indubitably, even without invoking Sec. 4, a conviction for plunder may be had, for what is crucial for the prosecution is to present sufficient evidence to engender that moral certitude exacted by the fundamental law to prove the guilt of the accused beyond reasonable doubt. Thus, even granting for the sake of argument that Sec. 4 is flawed and vitiated for the reasons advanced by petitioner, it may simply be severed from the rest of the provisions without necessarily resulting in the demise of the law; after all, the existing rules on evidence can supplant Sec. 4 more than enough. Besides, Sec. 7 of RA 7080 provides for a separability clause Sec. 7. Separability of Provisions. - If any provisions of this Act or the application thereof to any person or circumstance is held invalid, the remaining provisions of this Act and the application of such provisions to other persons or circumstances shall not be affected thereby. Implicit in the foregoing section is that to avoid the whole act from being declared invalid as a result of the nullity of some of its provisions, assuming that to be the case although it is not really so, all the provisions thereof should accordingly be treated independently of each other, especially if by doing so, the objectives of the statute can best be achieved. As regards the third issue, again we agree with Justice Mendoza that plunder is a malum in se which requires proof of criminal intent. Thus, he says, in his Concurring Opinion x x x Precisely because the constitutive crimes are mala in se the element of mens rea must be proven in a prosecution for plunder. It is noteworthy that the amended information alleges that the crime of plunder was committed "willfully, unlawfully and criminally." It thus alleges guilty knowledge on the part of petitioner. In support of his contention that the statute eliminates the requirement of mens rea and that is the reason he claims the statute is void, petitioner cites the following remarks of Senator Taada made during the deliberation on S.B. No. 733: SENATOR TAADA . . . And the evidence that will be required to convict him would not be evidence for each and every individual criminal act but only evidence sufficient to establish the conspiracy or scheme to commit this crime of plunder.[33]

However, Senator Taada was discussing 4 as shown by the succeeding portion of the transcript quoted by petitioner: SENATOR ROMULO: And, Mr. President, the Gentleman feels that it is contained in Section 4, Rule of Evidence, which, in the Gentleman's view, would provide for a speedier and faster process of attending to this kind of cases? SENATOR TAADA: Yes, Mr. President . . .[34] Senator Taada was only saying that where the charge is conspiracy to commit plunder, the prosecution need not prove each and every criminal act done to further the scheme or conspiracy, it being enough if it proves beyond reasonable doubt a pattern of overt or ciminal acts indicative of the overall unlawful scheme or conspiracy. As far as the acts constituting the pattern are concerned, however, the elements of the crime must be proved and the requisite mens rea must be shown. Indeed, 2 provides that Any person who participated with the said public officer in the commission of an offense contributing to the crime of plunder shall likewise be punished for such offense. In the imposition of penalties, the degree of participation and the attendance of mitigating and extenuating circumstances, as provided by the Revised Penal Code, shall be considered by the court. The application of mitigating and extenuating circumstances in the Revised Penal Code to prosecutions under the Anti-Plunder Law indicates quite clearly that mens rea is an element of plunder since the degree of responsibility of the offender is determined by his criminal intent. It is true that 2 refers to "any person who participates with the said public officer in the commission of an offense contributing to the crime of plunder." There is no reason to believe, however, that it does not apply as well to the public officer as principal in the crime. As Justice Holmes said: "We agree to all the generalities about not supplying criminal laws with what they omit, but there is no canon against using common sense in construing laws as saying what they obviously mean."[35] Finally, any doubt as to whether the crime of plunder is a malum in se must be deemed to have been resolved in the affirmative by the decision of Congress in 1993 to include it among the heinous crimes punishable by reclusion perpetua to death. Other heinous crimes are punished with death as a straight penalty in R.A. No. 7659. Referring to these groups of heinous crimes, this Court held in People v. Echegaray:[36] The evil of a crime may take various forms. There are crimes that are, by their very nature, despicable, either because life was callously taken or the victim is treated like an animal and utterly dehumanized as to completely disrupt the normal course of his or her growth as a human being . . . . Seen in this light, the capital crimes of kidnapping and serious illegal detention for ransom resulting in the death of the victim or the victim is raped, tortured, or subjected to dehumanizing acts; destructive arson resulting in death; and drug offenses involving minors or resulting in the death of the victim in the case of other crimes; as well as murder, rape, parricide, infanticide, kidnapping and serious illegal detention, where the victim is detained for more than three days or serious physical injuries were inflicted on the victim or threats to kill him were made or the victim is a minor, robbery with homicide, rape or intentional mutilation, destructive arson, and carnapping where the owner, driver or occupant of the carnapped vehicle is killed or raped, which are penalized by reclusion perpetua to death, are clearly heinous by their very nature.

There are crimes, however, in which the abomination lies in the significance and implications of the subject criminal acts in the scheme of the larger socio-political and economic context in which the state finds itself to be struggling to develop and provide for its poor and underprivileged masses. Reeling from decades of corrupt tyrannical rule that bankrupted the government and impoverished the population, the Philippine Government must muster the political will to dismantle the culture of corruption, dishonesty, greed and syndicated criminality that so deeply entrenched itself in the structures of society and the psyche of the populace. [With the government] terribly lacking the money to provide even the most basic services to its people, any form of misappropriation or misapplication of government funds translates to an actual threat to the very existence of government, and in turn, the very survival of the people it governs over. Viewed in this context, no less heinous are the effects and repercussions of crimes like qualified bribery, destructive arson resulting in death, and drug offenses involving government officials, employees or officers, that their perpetrators must not be allowed to cause further destruction and damage to society. The legislative declaration in R.A. No. 7659 that plunder is a heinous offense implies that it is a malum in se. For when the acts punished are inherently immoral or inherently wrong, they are mala in se[37] and it does not matter that such acts are punished in a special law, especially since in the case of plunder the predicate crimes are mainly mala in se. Indeed, it would be absurd to treat prosecutions for plunder as though they are mere prosecutions for violations of the Bouncing Check Law (B.P. Blg. 22) or of an ordinance against jaywalking, without regard to the inherent wrongness of the acts. To clinch, petitioner likewise assails the validity of RA 7659, the amendatory law of RA 7080, on constitutional grounds. Suffice it to say however that it is now too late in the day for him to resurrect this long dead issue, the same having been eternally consigned by People v. Echegaray[38] to the archives of jurisprudential history. The declaration of this Court therein that RA 7659 is constitutionally valid stands as a declaration of the State, and becomes, by necessary effect, assimilated in the Constitution now as an integral part of it. Our nation has been racked by scandals of corruption and obscene profligacy of officials in high places which have shaken its very foundation. The anatomy of graft and corruption has become more elaborate in the corridors of time as unscrupulous people relentlessly contrive more and more ingenious ways to bilk the coffers of the government. Drastic and radical measures are imperative to fight the increasingly sophisticated, extraordinarily methodical and economically catastrophic looting of the national treasury. Such is the Plunder Law, especially designed to disentangle those ghastly tissues of grand-scale corruption which, if left unchecked, will spread like a malignant tumor and ultimately consume the moral and institutional fiber of our nation. The Plunder Law, indeed, is a living testament to the will of the legislature to ultimately eradicate this scourge and thus secure society against the avarice and other venalities in public office. These are times that try men's souls. In the checkered history of this nation, few issues of national importance can equal the amount of interest and passion generated by petitioner's ignominious fall from the highest office, and his eventual prosecution and trial under a virginal statute. This continuing saga has driven a wedge of dissension among our people that may linger for a long time. Only by responding to the clarion call for patriotism, to rise above factionalism and prejudices, shall we emerge triumphant in the midst of ferment. PREMISES CONSIDERED, this Court holds that RA 7080 otherwise known as the Plunder Law, as amended by RA 7659, is CONSTITUTIONAL. Consequently, the petition to declare the law unconstitutional is DISMISSED for lack of merit.

SO ORDERED. Buena, and De Leon, Jr., JJ., concur. Davide, Jr. C.J., Melo, Quisumbing, JJ., join concurring opinion of J. Mendoza. Puno, Vitug, JJ., concurred and joins J. Mendoza's concurring opinion. Kapunan, Pardo, Sandoval-Gutierrez, Ynares-Santiago, JJ., see dissenting opinion. Mendoza, J., please see concurring opinion. Panganiban J., please see separate concurring opinion. Carpio, J., no part. Was one of the complainants before Ombudsman.

-------------------------------------------------------------------------------[1] Approved 12 July 1991 and took effect 8 October 1991. [2] Approved 13 December 1993 and took effect 31 December 1993. [3] Lim v. Pacquing, et al., G.R. No. 115044, 27 January 1995, 240 SCRA 644. [4] G.R. No. 87001, 4 December 1989, 179 SCRA 828. [5] Yu Cong Eng v. Trinidad, 47 Phil. 385, 414 (1925). [6] 82 C.J.S. 68, p. 113; People v. Ring, 70 P.2d 281, 26 Cal. App. 2d Supp. 768. [7] Mustang Lumber, Inc. v. Court of Appeals, G.R. No. 104988, 18 June 1996, 257 SCRA 430, 448. [8] PLDT v. Eastern Telecommunications Phil., Inc., G.R. No. 943774, 27 August 1992, 213 SCRA 16, 26. [9] Resolution of 9 July 2001. [10] See People v. Nazario, No. L-44143, 31 August 1988, 165 SCRA 186, 195-196. [11] Ibid. [12] State v. Hill, 189 Kan 403, 369 P2d 365, 91 ALR2d 750. [13] Connally v. General Constr. Co., 269 U.S. 385, 391, 70 L. Ed. 328 (1926) cited in Ermita-Malate Hotel and Motel Operators Ass'n. v. City Mayor, 20 SCRA 849, 867 (1967).

[14] NAACP v. Alabama, 377 U.S. 288, 307, 12, 2 L. Ed 325, 338 (1958); Shelton v. Tucker 364 U.S. 479, 5 L. Ed. 2d 231 (1960). [15] Gooding v. Wilson, 405 U.S. 518, 521, 31 L. Ed. 2d 408, 413 (1972) (internal quotation marks omitted). [16] United States v. Salerno, 481 U.S. 739, 745 95 L. Ed 2d 697, 707 (1987); see also People v. De la Piedra, G.R. No. 121777, 24 January 2001. [17] 413 U.S. 601, 612-613, 37 L. Ed 2d 830, 840-841 (1973). [18] United States v. Salerno, supra. [19] Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494-95, 71 L. Ed. 2d 362, 369 (1982). [20] United States v. Raines, 362 U.S. 17, 21, 4 L. Ed. 2d 524, 529 (1960). The paradigmatic case is Yazoo & Mississippi Valley RR. v. Jackson Vinegar Co., 226 U.S. 217, 57 L. Ed. 193 (1912). [21] G. Gunther & K. Sullivan, Constitutional Law 1299 (2001). [22] Id. at 1328. See also Richard H. Fallon, Jr., As Applied and Facial Challenges, 113 Harv. L. Rev. 1321 (2000) arguing that, in an important sense, as applied challenges are the basic building blocks of constitutional adjudication and that determinations that statutes are facially invalid properly occur only as logical outgrowths of ruling on whether statutes may be applied to particular litigants on particular facts. [23] Constitution, Art. VIII, 1 and 5. Compare Angara v. Electoral Commission, 63 Phil. 139, 158 (1936); "[T]he power of judicial review is limited to actual cases and controversies to be exercised after full opportunity of argument by the parties, and limited further to be constitutional question raised or the very lis mota presented. Any attempt at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities." [24] 401 U.S. 37, 52-53, 27 L. Ed. 2d 669, 680 (1971). Accord, United States v. Raines, 362 U.S. 17, 4 L. Ed. 2d 524 (1960); Board of Trustees, State Univ. of N.Y. v. Fox, 492 U.S. 469, 106 L. Ed. 2d 388 (1989). [25] Broadrick v. Oklahoma, 413 U.S. at 613, 37 L. Ed. 2d at 841; National Endowment for the Arts v. Finley, 524 U.S. 569, 580 (1998). [26] FW/PBS, Inc. v. City of Dallas, 493 U.S. 223, 107 L. Ed. 2d 603 (1990); Cruz v. Secretary of Environment and Natural Resources, G.R. No. 135385, 6 December 2000 (Mendoza, J., Separate Opinion). [27] United States v. National Dairy Prod. Corp., 372 U.S. 29, 32-33, 9 L. Ed. 2d 561, 565-6 (1963). [28] G.R. No. 57841, 30 July 1982, 115 SCRA 793. [29] People v. Ganguso, G.R. No. 115430, 23 November 1995, 250 SCRA 268, 274-275.

[30] People v. Garcia, G.R. No. 94187, 4 November 1992, 215 SCRA 349, 360. [31] Then Senate President Jovito R. Salonga construed in brief the provision, thuswise: If there are let s say 150 crimes all in all, criminal acts, whether bribery, misappropriation, malversation, extortion, you need not prove all those beyond reasonable doubt. If you can prove by pattern, lets say 10, but each must be proved beyond reasonable doubt, you do not have to prove 150 crimes. Thats the meaning of this (Deliberations of Committee on Constitutional Amendments and Revision of Laws, 15 November 1988, cited in the Sandiganbayan Resolution of 9 July 2001). [32] TSN, 18 September 2001, pp. 115-121. [33] 4 Record of the Senate 1316, 5 June 1989. [34] Ibid. [35] Roschen v. Ward, 279 U.S. 337, 339, 73 L.Ed. 722, 728 (1929). [36] 267 SCRA 682, 721-2 (1997) (emphasis added). [37] Black's Law Dictionary 959 (1990); Lozano v. Martinez, 146 SCRA 324, 338 (1986). [38] G.R. No. 117472, 7 February 1997, 267 SCRA 682.

SYLLABI/SYNOPSIS

THIRD DIVISION [G.R. No. 131124. March 29, 1999] OSMUNDO G. UMALI, petitioner, vs. EXECUTIVE SECRETARY TEOFISTO T. GUINGONA JR., CHAIRMAN, PRESIDENTIAL COMMISSION AGAINST GRAFT AND CORRUPTION, THE SECRETARY OF FINANCE, AND THE COMMISSIONER OF INTERNAL REVENUE, respondents. RESOLUTION PURISIMA, J.: At bar is a petition for review under Rule 45 of the Revised Rules of Court assailing the decision of the Court of Appeals dated April 8, 1997, which set aside the Amended Decision dated December 13, 1995 of the Regional Trial Court of Makati in Civil Case No. 94-3079, and dismissed the petition for Certiorari, Prohibition and Injunction brought by petitioner against the respondents. The antecedent facts leading to the filing of the present petition are as follows: On October 27, 1993, petitioner Osmundo Umali was appointed Regional Director of the Bureau of Internal Revenue by the then President Fidel V. Ramos. He was assigned in Manila, from November 29, 1993 to March 15, 1994, and in Makati, from March 16, 1994 to August 4, 1994. On August 1, 1994, President Ramos received a confidential memorandum against the petitioner for alleged violations of internal revenue laws, rules and regulations during his incumbency as Regional Director, more particularly the following malfeasance, misfeasance and nonfeasance, to wit: A. Issuance of Letters of Authority (LAs) to investigate taxpayers despite the ban on investigati ons as ordered in Revenue memorandum Order No. 31-93. In numerous cases, revenue officers whose names appeared in the LAs as investigating officers were unaware that such LAs were issued to them. He issued LAs to favored revenue examiners such as his Secretary, Natividad Feliciano; B. Termination of tax cases without the submission of the required investigation reports, thus exempting the same from examination and review; C. Terminated cases with reports were submitted directly to and approved by respondent Umali without being reviewed by the Assessment Division, thus eliminating the check and balance mechanism designed to guard against abuses or errors; D. Unlawful issuance of LAs to taxpayers who were thereafter convinced to avail of the BIRs compromise and abatement program under RMOs 45093 and 54-93, for which the taxpayers were made, for a monetary consideration, to pay smaller amounts in lieu of being investigated; E. Despite the devolution of the authority to issue LAs from Region al Directors to the Revenue District Officers under RMO 26-94, dated April 14, 1994, respondent Umali continued to issue antedated LAs in

absolute defiance of the aforesaid issuance, using old LAs requisitioned by him when still Regional Director of San Pablo Region. In one instance, he issued a termination letter bearing the San Pablo Region letterhead even when he was already Makati Regional Director; and F. In his attempt to cover up his tracks and to muddle the real issue of his violations of the ban in the issuance of LAs and basic revenue rules and regulations, respondent enlisted the support of other regional directors for the purpose of questioning particularly the devolution/centralization of the functions of the Bureau.[1] On August 2, 1994, upon receipt of the said confidential memorandum, former President Ramos authorized the issuance of an Order for the preventive suspension of Umali and immediately referred the Complaint against the latter to the Presidential Commission on Anti-Graft and Corruption (PCAGC), for investigation. Petitioner was duly informed of the charges against him. In its Order, dated August 9, 1994, the PCAGC directed him to send in his answer, copies of his Statement of Assets and Liabilities for the past three years (3), and Personal Data Sheet. Initial hearing was set on August 25, 1994, at 2:00 p.m., at the PCAGC Office. On August 23, the petitioner filed his required Answer. On August 25, 1994, petitioner appeared with his lawyer, Atty. Bienvenido Santiago before the PCAGC. Counsel for the Commissioner of Internal Revenue submitted a Progress Report, dated August 24, 1994, on the audit conducted on the petitioner. As prayed for, petitioner and his lawyer were granted five (5) days to file a supplemental answer. The hearing was reset to August 30, 1994, during which the parties were given a chance to ask clarificatory questions. Petitioner and his counsel did not ask any question on the genuineness and authenticity of the documents attached as annexes to the Complaint. Thereafter, the parties agreed to submit the case for resolution upon the presentation of their respective memoranda. Petitioner filed his Memorandum on September 6, 1994 while the BIR sent in its Memorandum on the following day. After evaluating the evidence on record, the PCAGC issued its Resolution of September 23, 1994, finding a prima facie evidence to support six (6) of the twelve (12) charges against petitioner, to wit: 1. On the First Charge Respondent issued 176 Letters of Authority in gross disobedience to and in violation of RMOs 31-93 and 27-94. xxx xxx xxx

3. On the Third Charge There is sufficient evidence of a prima facie case of falsification of official documents as defined in Art. 171, par. 2 and 4 of the Revised Penal Code, against the respondent for the issuance of 9 LAs and who did not investigate the tax cases, each LA being a separate offense. xxx xxx xxx

7. On the Seventh Charge There is sufficient evidence of a prima facie case of falsification of official documents against respondent for antedating the four LAs cited in the charge, each LA constituting a separate offense, under Art. 171 (4) of the Revised Penal Code.

8. On the Ninth (sic) Charge There is sufficient evidence to support a prima facie case of falsification of an official document under Art. 171 (4) of the Revised Penal Code against the respondent in the tax case of Richfield International Corp., Inc. for indicating a false date on the letter of termination he issued to the company. There is, however, insufficient evidence against respondent in the other tax case of Jayson Auto Supply Co. 9. On the Ninth Charge There is sufficient evidence of a prima facie case of falsification of official documents in each of the two tax cases cited in his charge, under the provisions of Art. 171 (4) of the Revised Penal Code, as the dates of Termination Letters were false. 10. On the Tenth Charge Respondent, by his own admission, violated RMO 36-87 requiring turn over of all properties and forms to his successor upon transfer a head of office, and RMO 27-94 requiring the surrender of all unused old forms of Letters of Authority. The Commission noted the defiant attitude of respondent, as expressed in his admission, towards valid and legal orders of the BIR, and his propensity to defy and ignore such orders and regulations.[2] xxx xxx xxx

On October 6, 1994, acting upon the recommendation of the PCAGC, then President Ramos issued Administrative Order No. 152 dismissing petitioner from the service, with forfeiture of retirement and all benefits under the law. On October 24, 1994, the petitioner moved for reconsideration of his dismissal but the Office of the President denied the motion for reconsideration on November 28, 1994. On December 1, 1994, petitioner brought a Petition for Certiorari, Prohibition and Injunction, docketed as Civil Case No. 94-3079 before the Regional Trial Court of Makati, alleging, among others: I. That the petitioner was suspended and dismissed from the service in violation of his constitutional right to due process of law; and II. That the constitutional right of the petitioner to security of tenure was violated by the respondents. The case was raffled off to Branch 133 of the Regional Trial Court in Makati, which issued on December 2, 1994, a Temporary Restraining Order, enjoining the respondents and/or their representatives from enforcing Administrative Order No. 152, and directing the parties to observe the status quo until further orders from the said Court. On December 23, 1994, the said Regional Trial Court dismissed the petition. On January 10, 1995, the petitioner presented a motion for reconsideration, this time, theorizing that the Presidential Commission on Anti-Graft and Corruption is an unconstitutional office without jurisdiction to conduct the investigation against him. Respondents submitted their Opposition/Comment to the Motion for Reconsideration. Then, the petitioner filed a Motion to Inhibit Judge Inoturan on the ground that the latter was formerly a Solicitor in the Office of the Solicitor General and could not be expected to decide the case with utmost impartiality.

The case was then re-raffled to Hon. Teofilo L. Guadiz, Jr. who, on December 13, 1995, handed down an Amended Decision, granting the petition and practically reversing the original Decision. Not satisfied with the Amended Decision of Judge Guadiz, Jr., the respondents appealed therefrom to the Court of Appeals. On April 8, 1997, the Ninth Division of the Court of Appeals[3] promulgated its decision, reversing the Amended Decision of the trial court of origin, and dismissing Civil Case No. 94-3079. Petitioners motion for reconsideration met the same fate. It was denied on October 28, 1997. Undaunted, petitioner found his way to this Court via the petition under scrutiny. In the interim that the administrative and civil cases against the petitioner were pending, the criminal aspect of such cases was referred to the Office of the Ombudsman for investigation. On July 25, 1995, after conducting the investigation, Ombudsman Investigators Merba Waga and Arnulfo Pelagio issued a Resolution finding a probable cause and recommending the institution in the courts of proper Jurisdiction criminal cases for Falsification of Public Documents (13 counts) and Open Disobedience (2 counts) against the petitioner. However, acting upon petitioners motion for reconsideration Special Prosecution Officer II Lemuel M. De Guzman set aside the said Resolution of July 25, 1995, and in lieu thereof, dismissed the charges against petitioner, in the Order dated November 5, 1996, which was approved by Ombudsman Aniano Desierto. Accordingly, all the informations against the petitioner previously sent to the Office of the City Prosecutor, were recalled. On August 10, 1998, Commissioner Beethoven L. Rualo of the Bureau of Internal Revenue sent a letter to the Solicitor General informing the latter that the Bureau of Internal Revenue is no longer interested in pursuing the case against Atty. Osmundo Umali on the basis of the comment and recommendation submitted by the Legal Department of the BIR.[4] Petitioner raised the issues: 1. WHETHER ADMINISTRATIVE ORDER NO. 152 VIOLATED PETITIONERS RIGHT TO SECURITY OF TENURE; 2. WHETHER PETITIONER WAS DENIED DUE PROCESS IN THE ISSUANCE OF ADMINISTRATIVE ORDER NO. 152; 3. WHETHER THE PCAGC IS A VALIDLY CONSTITUTED GOVERNMENT AGENCY AND WHETHER PETITIONER CAN RAISE THE ISSUE OF ITS CONSTITUTIONALITY BELATEDLY IN ITS MOTION FOR RECONSIDERATION OF THE TRIAL COURTS DECISION; AND 5. WHETHER IN THE LIGHT OF THE OMBUDSMAN RESOLUTION DISMISSING THE CHARGES AGAINST PETITIONER, THERE IS STILL BASIS FOR PETITIONERS DISMISSAL WITH FORFEITURE OF BENEFITS AS RULED IN ADMINISTRATIVE ORDER NO. 152. Petitioner contends that as Regional Director of the Bureau of Internal Revenue he belongs to the Career Executive Service. Although a presidential appointee under the direct authority of the President to

discipline, he is a career executive service officer (CESO) with tenurial protection, who can only be removed for cause. In support of this theory, petitioner cited the case of Larin vs. Executive Secretary[5] where the court held: xxx petitioner is a presidential appointee who belongs to the career service of the Civil Service. Being a presidential appointee, he comes under the direct disciplining authority of the President. This is in line with the settled principle that the power to remove is inherent in the power to appoint conferred to the President by Section 16, Article VII of the constitution. xxx This power of removal, however, is not an absolute one which accepts no reservation. It must be pointed out that petitioner is a career service officer. xxx Specifically, Section 36 of P.D. No. 807, as amended, otherwise known as Civil Service Decree of the Philippines, is emphatic that career service officers and employees who enjoy security of tenure may be removed only for any of the causes enumerated in said law. In other words, the fact that petitioner is a presidential appointee does not give the appointing authority the license to remove him at will or at his pleasure for it is an admitted fact that he is likewise a career service officer who under the law is the recipient of tenurial protection, thus, may only be removed for cause and in accordance with procedural due process. Petitioner maintains that as a career executive service officer, he can only be removed for cause and under the Administrative Code of 1987,[6] loss of confidence is not one of the legal causes or grounds for removal. Consequently, his dismissal from office on the ground of loss of confidence violated his right to security of tenure; petitioner theorized. After a careful study, we are of the irresistible conclusion that the Court of Appeals ruled correctly on the first three issues. To be sure, petitioner was not denied the right to due process before the PCAGC. Records show that the petitioner filed his answer and other pleadings with respect to his alleged violation of internal revenue laws and regulations, and he attended the hearings before the investigatory body. It is thus decisively clear that his protestation of non-observance of due process is devoid of any factual or legal basis. Neither can it be said that there was a violation of what petitioner asserts as his security of tenure. According to petitioner, as a Regional Director of Bureau of Internal Revenue, he is a CESO eligible entitled to security of tenure. However, petitioners claim of CESO eligibility is anemic of evidentiary support. It was incumbent upon him to prove that he is a CESO eligible but unfortunately, he failed to adduce sufficient evidence on the matter. His failure to do so is fatal. As regards the issue of constitutionality of the PCAGC, it was only posed by petitioner in his motion for reconsideration before the Regional Trial Court of Makati. It was certainly too late to raise the said issue for the first time at such late stage of the proceedings below. How about the fourth issue, whether in view of the Resolution of the Ombudsman dismissing the charges against petitioner, there still remains a basis for the latter dismissal with forfeiture of benefits, as directed in Administrative Order No. 152? It is worthy to note that in the case under consideration, the administrative action against the petitioner was taken prior to the institution of the criminal case. The charges included in Administrative Order No. 152 were based on the results of investigation conducted by the PCAGC and not on the criminal charges before the Ombudsman.

In sum, the petition is dismissable on the ground that the issues posited by the petitioner do not constitute a valid legal basis for overturning the finding and conclusion arrived at by the Court of Appeals. However, taking into account the antecedent facts and circumstances aforementioned, the Court, in the exercise of its equity powers, has decided to consider the dismissal of the charges against petitioner before the Ombudsman, the succinct and unmistakable manifestation by the Commissioner of the Bureau of Internal Revenue that his office is no longer interested in pursuing the case, and the position taken by the Solicitor General,[7] that there is no more basis for Administrative Order No. 152, as effective and substantive supervening events that cannot be overlooked. WHEREFORE, in light of the foregoing effective and substantive supervening events, and in the exercise of its equity powers, the Court hereby GRANTS the petition. Accordingly, Administrative Order No. 152 is considered LIFTED, and petitioner can be allowed to retire with full benefits. No pronouncement as to costs. SO ORDERED. Gonzaga-Reyes, J., concur. Romero, Vitug, and Panganiban, JJ., in the result.

-------------------------------------------------------------------------------[1] Administrative Order No. 152, Rollo, pp. 141-142. [2] PCAGC Resolution, Rollo, pp. 186-189. [3] Associate Justice Ramon Mabutas Jr., ponente; Associate Justice Jorge Imperial, Chairman; Associate Justice Portia Alio-Hormachuelos, member. [4] Rollo, p. 534. [5] 280 SCRA 713. [6] Section 46, Book V, Title I, Subtitle A, Revised Administrative Code. [7] Rollo, p. 409.

Lawphil Main MenuLawphil Main Menu> Constitution> Constitution> Statutes> Statutes> Jurisprudence> Jurisprudence> Judicial Issuances> Judicial Issuances> Executive Issuances> Executive Issuances> Treatise> Treatise> Legal Link> Legal Linklawphil Today is Saturday, July 02, 2011

-------------------------------------------------------------------------------Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 152895 June 15, 2004

OFELIA V. ARCETA, petitioner, vs. The Honorable MA. CELESTINA C. MANGROBANG, Presiding Judge, Branch 54, Metropolitan Trial Court of Navotas, Metro Manila, respondent. x--------------------------x G.R. No. 153151 June 15, 2004 GLORIA S. DY, Petitioner, vs. The Honorable EDWIN B. RAMIZO, Presiding Judge, Branch 53, Metropolitan Trial Court of Caloocan City, respondent. RESOLUTION QUISUMBING, J.: For resolution are two consolidated1 petitions under Rule 65 of the Rules of Court, for certiorari, prohibition and mandamus, with prayers for a temporary restraining order. Both assail the constitutionality of the Bouncing Checks Law, also known as Batas Pambansa Bilang 22. In G.R. No. 152895, petitioner Ofelia V. Arceta prays that we order the Metropolitan Trial Court (MeTC) of Navotas, Metro Manila, Branch 54, to cease and desist from hearing Criminal Case No. 1599-CR for violation of B.P. Blg. 22, and then dismiss the case against her. In G.R. No. 153151, petitioner Gloria S. Dy also prays that this Court order the MeTC of Caloocan City to cease and desist from proceeding with Criminal Case No. 212183, and subsequently dismiss the case against her. In fine, however, we find that what both petitioners seek is that the Court should revisit and abandon the doctrine laid down in Lozano v. Martinez,2 which upheld the validity of the Bouncing Checks Law. The facts of these cases are not in dispute.

1. G.R. No. 152895 The City Prosecutor of Navotas, Metro Manila charged Ofelia V. Arceta with violating B.P. Blg. 22 in an Information, which was docketed as Criminal Case No. 1599-CR. The accusatory portion of said Information reads: That on or about the 16th day of September 1998, in Navotas, Metro Manila, and within the jurisdiction of this Honorable Court, the above-named accused, did then and there wilfully, unlawfully and feloniously make or draw and issue to OSCAR R. CASTRO, to apply on account or for value the check described below: Check No.: 00082270 Drawn Against: The Region Bank In the Amount of: P740,000.00 Date: December 21, 1998 Payable to: Cash said accused well-knowing that at the time of issue Ofelia V. Arceta did not have sufficient funds or credit with the drawee bank for the payment, which check when presented for payment within ninety (90) days from the date thereof was subsequently dishonored by the drawee bank for reason "DRAWN AGAINST INSUFFICIENT FUNDS," and despite receipt of notice of such dishonor, the accused failed to pay said payee with the face amount of said check or to make arrangement for full payment thereof within five (5) banking days after receiving notice. CONTRARY TO LAW.3 Arceta did not move to have the charge against her dismissed or the Information quashed on the ground that B.P. Blg. 22 was unconstitutional. She reasoned out that with the Lozano doctrine still in place, such a move would be an exercise in futility for it was highly unlikely that the trial court would grant her motion and thus go against prevailing jurisprudence. On October 21, 2002,4 Arceta was arraigned and pleaded "not guilty" to the charge. However, she manifested that her arraignment should be without prejudice to the present petition or to any other actions she would take to suspend proceedings in the trial court. Arceta then filed the instant petition. 2. G.R. No. 153151 The Office of the City Prosecutor of Caloocan filed a charge sheet against Gloria S. Dy for violation of the Bouncing Checks Law, docketed by the MeTC of Caloocan City as Criminal Case No. 212183. Dy allegedly committed the offense in this wise: That on or about the month of January 2000 in Caloocan City, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did then and there wilfully, unlawfully and feloniously make and issue Check No. 0000329230 drawn against PRUDENTIAL BANK in the amount of P2,500,000.00 dated January 19, 2000 to apply for value in favor of ANITA CHUA well knowing at the time of issue that she has no sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment which check was subsequently dishonored for the reason "ACCOUNT

CLOSED" and with intent to defraud failed and still fails to pay the said complainant the amount of P2,500,000.00 despite receipt of notice from the drawee bank that said check has been dishonored and had not been paid. Contrary to Law.5 Like Arceta, Dy made no move to dismiss the charges against her on the ground that B.P. Blg. 22 was unconstitutional. Dy likewise believed that any move on her part to quash the indictment or to dismiss the charges on said ground would fail in view of the Lozano ruling. Instead, she filed a petition with this Court invoking its power of judicial review to have the said law voided for Constitutional infirmity. Both Arceta and Dy raise the following identical issues for our resolution: [a] Does section 1 really penalize the act of issuing a check subsequently dishonored by the bank for lack of funds? [b] What is the effect if the dishonored check is not paid pursuant to section 2 of BP 22? [c] What is the effect if it is so paid? [d] Does section 2 make BP 22 a debt collecting law under threat of imprisonment? [e] Does BP 22 violate the constitutional proscription against imprisonment for non-payment of debt? [f] Is BP 22 a valid exercise of the police power of the state?6 After minute scrutiny of petitioners submissions, we find that the basic issue being raised in these speci al civil actions for certiorari, prohibition, and mandamus concern the unconstitutionality or invalidity of B.P. Blg. 22. Otherwise put, the petitions constitute an oblique attack on the constitutionality of the Bouncing Checks Law, a matter already passed upon by the Court through Justice (later Chief Justice) Pedro Yap almost two decades ago. Petitioners add, however, among the pertinent issues one based on the observable but worrisome transformation of certain metropolitan trial courts into seeming collection agencies of creditors whose complaints now clog the court dockets. But let us return to basics. When the issue of unconstitutionality of a legislative act is raised, it is the established doctrine that the Court may exercise its power of judicial review only if the following requisites are present: (1) an actual and appropriate case and controversy exists; (2) a personal and substantial interest of the party raising the constitutional question; (3) the exercise of judicial review is pleaded at the earliest opportunity; and (4) the constitutional question raised is the very lis mota of the case.7 Only when these requisites are satisfied may the Court assume jurisdiction over a question of unconstitutionality or invalidity of an act of Congress. With due regard to counsels spirited advocacy in both cases, we are unable to agree that the abovecited requisites have been adequately met. Perusal of these petitions reveals that they are primarily anchored on Rule 65, Section 18 of the 1997 Rules of Civil Procedure. In a special civil action of certiorari the only question that may be raised is whether or not the respondent has acted without or in excess of jurisdiction or with grave abuse of discretion.9 Yet nowhere in these petitions is there any allegation that the respondent judges acted with grave abuse of discretion amounting to lack or excess of jurisdiction. A special civil action for certiorari will prosper only if a grave abuse of discretion is manifested.10

Noteworthy, the instant petitions are conspicuously devoid of any attachments or annexes in the form of a copy of an order, decision, or resolution issued by the respondent judges so as to place them understandably within the ambit of Rule 65. What are appended to the petitions are only copies of the Informations in the respective cases, nothing else. Evidently, these petitions for a writ of certiorari, prohibition and mandamus do not qualify as the actual and appropriate cases contemplated by the rules as the first requisite for the exercise of this Courts power of judicial review. For as the petitions clearly show on their faces petitioners have not come to us with sufficient cause of action. Instead, it appears to us that herein petitioners have placed the cart before the horse, figuratively speaking. Simply put, they have ignored the hierarchy of courts outlined in Rule 65, Section 411 of the 1997 Rules of Civil Procedure. Seeking judicial review at the earliest opportunity does not mean immediately elevating the matter to this Court. Earliest opportunity means that the question of unconstitutionality of the act in question should have been immediately raised in the proceedings in the court below. Thus, the petitioners should have moved to quash the separate indictments or moved to dismiss the cases in the proceedings in the trial courts on the ground of unconstitutionality of B.P. Blg. 22. But the records show that petitioners failed to initiate such moves in the proceedings below. Needless to emphasize, this Court could not entertain questions on the invalidity of a statute where that issue was not specifically raised, insisted upon, and adequately argued.12 Taking into account the early stage of the trial proceedings below, the instant petitions are patently premature. Nor do we find the constitutional question herein raised to be the very lis mota presented in the controversy below. Every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of the Constitution, and not one that is doubtful, speculative or argumentative.13 We have examined the contentions of the petitioners carefully; but they still have to persuade us that B.P. Blg. 22 by itself or in its implementation transgressed a provision of the Constitution. Even the thesis of petitioner Dy that the present economic and financial crisis should be a basis to declare the Bouncing Checks Law constitutionally infirm deserves but scant consideration. As we stressed in Lozano, it is precisely during trying times that there exists a most compelling reason to strengthen faith and confidence in the financial system and any practice tending to destroy confidence in checks as currency substitutes should be deterred, to prevent havoc in the trading and financial communities. Further, while indeed the metropolitan trial courts may be burdened immensely by bouncing checks cases now, that fact is immaterial to the alleged invalidity of the law being assailed. The solution to the clogging of dockets in lower courts lies elsewhere. WHEREFORE, the instant petitions are DISMISSED for utter lack of merit. SO ORDERED. Davide, Jr., Puno, Vitug, Panganiban, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur.

Footnotes 1 Per Resolution of the Court En Banc dated 15 October 2002. 2 No. L-63419, 18 December 1986, 146 SCRA 323.

3 Rollo, G.R. No. 152895, p. 61. 4 Id. at 76. 5 Rollo, G.R. No. 153151, p. 58. 6 Rollo, G.R. No. 152895, pp. 8-9; Rollo, G.R. No. 153151, p. 8. 7 Philippine Constitution Association v. Enriquez, G.R. No. 113105, 19 August 1994, 235 SCRA 506, 518-519 citing Luz Farms v. Secretary of the Department of Agrarian Reform, G.R. No. 86889, 4 December 1990, 192 SCRA 51, 58; Dumlao v. COMELEC, No. L-52245, 22 January 1980, 95 SCRA 392, 400; People v. Vera, No. 45685, 16 November 1937, 65 Phil. 56, 86-89. 8 SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasijudicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46. 9 II Feria and Noche, Civil Procedure Annotated 456 (2001 Ed.). 10 Jalandoni v. Drilon, G.R. Nos. 115239-40, 2 March 2000, 327 SCRA 107, 121. 11 SEC. 4. When and where petition filed. The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of said motion. The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed in and cognizable only by the Court of Appeals. No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding 15 days. 12 Reyes v. Court of Appeals, G.R. No. 118233, 10 December 1999, 378 Phil. 232, 240 citing City of Baguio, Reforestation Administration v. Hon. Marcos, G.R. No. L-26100, 28 February 1969, 136 Phil. 569, 579.

13 Lacson v. The Executive Secretary, G.R. No. 128096, 20 January 1999, 361 Phil. 251, 263.

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-------------------------------------------------------------------------------Republic of the Philippines Congress of the Philippines Metro Manila Fourteenth Congress Second Regular Session

Begun and held in Metro Manila, on Monday, the twenty-eight day of July, two thousand eight. Republic Act No. 9522 March 10, 2009

AN ACT TO AMEND CERTAIN PROVISIONS OF REPUBLIC ACT NO. 3046, AS AMENDED BY REPUBLIC ACT NO. 5446, TO DEFINE THE ARCHIPELAGIC BASELINE OF THE PHILIPPINES AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: Section 1. Section 1 of Republic Act No. 3046, entitled "An Act to Define the Baselines of the Territorial Sea of the Philippines", as amended by Section 1 of Republic Act No. 5446, is hereby amended to read as follows: Section 1. The baselines of the Philippines archipelago are hereby defined and described specifically as follows: Basepoint Number Station Name Location World Geodetic System of 1984 (WGS 84) Coordinates Distance to next basepoint (M) Latitude (N) Longitude (E) 1 PAB-01 Amianan Is. 21657.73"

1215727.71" 70.08 2 PAB-02 Balintang Is. 195738.19" 122946.32" 99.17 3 PAB-04 Bigan Pt. 181835.30" 1222019.07" 71.83 4 PAB-05A Ditolong Pt. 17716.30" 1223128.34" 1.05 5 PAB-05B Ditolong Pt. 17614.79" 1223143.84" 0.39 6 PAB-05 Ditolong Pt. 17551.31" 1223142.66" 3.29 7 PAB-06 Spires Is. 17236.91" 122313.28" 9.74 8 PAB-06B Digollorin Pt. 165918.03"

1222756.61" 3.51 9 PAB-06C Digollorin Rk. 164956.11" 1222650.78" 2.40 10 PAB-07 Divimisa Pt. 164738.86" 122264.40" 30.94 11 PAB-08 Dinoban Pt. 161844.33" 1221406.69" 116.26 12 PAB-10A Tinaga Is. 142954.43" 1225751.15" 80.29 13 PAB-11 Horodaba Rk. 146.29.91" 1241659.21" 0.54 14 PAB-12 Matulin Rk. 146.10.40" 1241726.28" 96.04 15 PAB-13 Atalaya Pt. 12416.37"

125353.71" 6.79 16 PAB-13A Bacan Is. 123618.41" 125850.19" 5.52 17 PAB-14 Finch Rk. 1232.33.62" 1251259.70" 0.80 18 PAB-14A Cube Rk. 1231.57.45" 1251332.37" 4.90 19 PAB-14D NW Manjud Pt. 122836.42" 1251712.32" 1.30 20 PAB-15 SE Manjud Pt. 122737.51" 125185.23" 7.09 21 PAB-16A S Sorz Cay 122141.64" 125237.41" 5.68 22 PAB-16B Panablihon 121727.17"

125270.12" 5.21 23 PAB-16C Alugon 121321.95" 1253019.47" 1.94 24 PAB-16D N Bunga Pt. 121148.16" 1253130.88" 0.54 25 PAB-17 E Bunga Pt. 121120.67" 1253148.29" 5.71 26 PAB-18A SE Tobabao Is. 1267.00" 1253411.94" 83.94 27 PAB-19C Suluan Is. 104516.70" 125588.78" 56.28 28 PAB-19D N Tuason Pt. 94959.58" 126106.39" 57.44 29 PAB-20A Arangasa Is. 85316.62"

1262048.81" 40.69 30 PAB-21B Sanco Pt. 81311.53" 1262853.25" 30.80 31 PAB-22 Bagoso Is 74245.02" 1263429.08" 12.95 32 PAB-22C Languyan 72949.47" 1263559.24" 0.54 33 PAB-23 Languyan 72916.93" 1263559.50" 0.76 34 PAB-23B Languyan 72830.97" 1263557.30" 1.2 35 PAB-23C N Baculin Pt. 72729.42" 1263551.31" 10.12 36 PAB-24 Pusan Pt. 71719.80"

1263618.26" 1.14 37 PAB-24A S Pusan Pt. 71614.43" 1263557.20" 63.28 38 PAB-25B Cape San Agustin 61714.73" 1261214.40" 1.28 39 PAB-25 Cape San Agustin 6168.35" 1261135.06" 67.65 40 PAB-26 SE Sarangani Is. 52334.20" 1252842.11" 0.43 41 PAB-27 Pangil Bato Pt. 52321.80" 1252819.59" 3.44 42 PAB-28 Tapundo Pt. 62155.66" 1262511.21" 3.31 43 PAB-29 W Calia Pt. 52158.48"

1252152.03" 0.87 44 PAB-30 Manamil Is. 5222.91" 1252059.73" 1.79 45 PAB-31 Marampog Pt. 52320.18" 1251944.29" 78.42 46 PAB-32 Pola Pt. 698.44" 1241542.81" 122.88 47 PAB-33A Kantuan Is 62647.22" 12213.34.50" 29.44 48 PAB-34A Tongguil Is. 6233.77" 1215636.20" 2.38 49 PAB-35 Tongquil Is 618.51" 1215441.45" 1.72 50 PAB-35A Tongquil Is. 6017.88"

1216311.17" 85.94 51 PAB-38A Kirapusan Is 512.8.70" 1204138.14" 55.24 52 PAB-39 Manuk Manka Is. 44739.24" 1195158.08" 43.44 53 PAB-40 Frances Reef 42453.84" 1191450.71 0.61 54 PAB-40A Frances Reef 4253.83" 1191415.15" 15.48 55 PAB-41A Bajapa Reef 436"9.01" 119322.75" 6.88 56 PAB-42A Paguan Is. 44252.07" 119144.04" 8.40 57 PAB-43 Alice Reef 44555.25"

119315.19" 2.28 58 PAB-44 Alice Reef 4475.36" 119512.94" 18.60 59 PAB-45 Omapoy Rk. 45510.45" 119221.30 23.37 60 PAB-46 Bukut Lapis Pt. 5223.73" 1194418.14" 44.20 61 PAB-47 Pearl Bank 54635.15" 1193951.77" 75.17 62 PAB-48 Bagnan Is. 6558.41" 1182657.30" 8.54 63 PAB-48A Taganak Is 6414.08" 1181833.33" 13.46 64 PAB-49 Great Bakkungaan Is. 6114.65"

118654.15" 3.97 65 PAB-50 Libiman Is. 61339.90" 118352.09" 5.53 66 PAB-51 Sibaung Is. 61743.99" 11805.44" 41.60 67 PAB-52 Muligi Is. 65214.53" 1182340.49" 75.06 68 PAB-53 South Mangsee Is. 73026.05" 1171833.75" 26.00 69 PAB-54 Balabac Is. 74830.69" 1165939.18" 6.08 70 PAB-54A Balabac Great Reef 75127.17" 1165417.19" 1.18 71 PAB-54B Balabac Great Reef 75219.86"

1165328.73" 2.27 72 PAB-55 Balabac Great Reef 75436.35" 1165316.64" 5.42 73 PAB-60 Ada Reef 820.26" 1165410.04" 10.85 74 PAB.61 Secam Is. 81118.36" 1165951.87" 30.88 75 PAB-62 Latua Pt. 88756.37" 1171551.23" 7.91 76 PAB-63 SW Tatub Pt. 84417.40" 1172039.37" 11.89 77 PAB-63A W Sicud Pt. 85332.20" 1172815.78" 13.20 78 PAB-64 Tarumpitao Pt. 92.57.47"

1173738.88" 81.12 79 PAB.64B Dry Is. 95922.54" 1183653.61" 82.76 80 PAB-65C Sinangcolan Pt. 111319.82" 1191517.74" 74.65 81 PAB-67 Pinnacle Rk. 121935.22" 1195056.00 93.88 82 PAB-68 Cabra Is 135324.45" 12015.86" 115.69 83 PAB-71 Hermana Mayor Is. 154843.61" 1194656.09" 9.30 84 PAB-72 Tambobo Pt. 155761.67" 1194455.32" 12.06 85 PAB-72B Rena Pt. 16957.90"

11945.15.76" 0.25 86 PAB-73 Rena Pt. 161012.42" 1194511.95" 6.43 87 PAB-74 Rocky Ledge 161634.46" 1194619.50" 0.65 88 PAB-74A Piedra Pt. 163712.70" 1194628.62" 1.30 89 PAB-75 Piedra Pt. 161829.49" 1194644.94" 1.04 90 PAB-75C Piedra Pt. 161928.20" 119477.69" 0.63 91 PAB-75D Piedra Pt. 16204.38" 1194720.48" 80.60 92 PAB-76 Dile Pt. 173424.94"

1202033.36" 6.86 93 PAB-77 Pinget Is. 174117.56" 120212.20" 14.15 94 PAB-78 Baboc Is. 17554.13" 1202440.56" 35.40 95 PAB-79 Cape Bojeador 182932.42" 1203342.41" 1.77 96 PAB-79B Bobon 183052.88" 1203455.35" 58.23 97 PAB-80 Calagangan Pt. 191014.78" 1211252.64" 98.07 98 PAB-82 Itbayat Is. 204315.74" 1214657.80" 25.63 99 PAB-83 Amianan Is 21717.47"

1215643.85" 0.08 100 PAB-84 Amianan Is. 21718.41" 1215648.79" 0.25 101 PAB-85 Amianan Is. 21712.04" 121573.65" 0.44

Section 2. The baseline in the following areas over which the Philippines likewise exercises sovereignty and jurisdiction shall be determined as "Regime of Islands" under the Republic of the Philippines consistent with Article 121 of the United Nations Convention on the Law of the Sea (UNCLOS): a) The Kalayaan Island Group as constituted under Presidential Decree No. 1596; and b) Bajo de Masinloc, also known as Scarborough Shoal. Section 3. This Act affirms that the Republic of the Philippines has dominion, sovereignty and jurisdiction over all portions of the national territory as defined in the Constitution and by provisions of applicable laws including, without limitation, Republic Act No. 7160, otherwise known as the Local Government Code of 1991, as amended. Section 4. This Act, together with the geographic coordinates and the chart and maps indicating the aforesaid baselines, shall be deposited and registered with the Secretary General of the United Nations. Section 5. The National Mapping and Resource Information Authority (NAMRIA) shall forthwith produce and publish charts and maps of the appropriate scale clearly representing the delineation of basepoints and baselines as set forth in this Act. Section 6. The amount necessary to carry out the provisions of this Act shall be provided in a supplemental budyet or included in the General Appropriations Act of the year of its enactment into law. Section 7. If any portion or provision of this Act is declared unconstitutional or invalid the other portions or provisions hereof which are not affected thereby shall continue to be in full force and effect. Section 8. The provisions of Republic Act No. 3046, as amended by Republic Act No. 5446, and all other laws, decrees, executive orders, rules and issuances inconsistent with this Act are hereby amended or modified accordingly.

Section 9. This Act shall take effect fifteen (15) days following its publication in the Official Gazette or in any two (2) newspaper of general circulation. Approved (Sgd.) PROSPERO C. NOGRALES Speaker of the House of Representatives (Sgd.) JUAN PONCE ENRILE President of the Senate

This Act which is a consolidation of Senate Bill No. 2699 and House Bill No. 3216 was finally passed by the Senate and the House of Representative on February 17, 2009. (Sgd.) MARILYN B. BARUA-YAP Secretary General House of Represenatives (Sgd.) EMMA LIRIO-REYES Secretary of Senate

Approved: MAR 10, 2009 (Sgd.) GLORIA MACAPAGAL-ARROYO President of the Philippines

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-------------------------------------------------------------------------------Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 183591 October 14, 2008

THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR JESUS SACDALAN and/or VICE-GOVERNOR EMMANUEL PIOL, for and in his own behalf, petitioners, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN and/or GEN. HERMOGENES ESPERON, JR., the latter in his capacity as the present and duly-appointed Presidential Adviser on the Peace Process (OPAPP) or the so-called Office of the Presidential Adviser on the Peace Process, respondents. x--------------------------------------------x G.R. No. 183752 October 14, 2008

CITY GOVERNMENT OF ZAMBOANGA, as represented by HON. CELSO L. LOBREGAT, City Mayor of Zamboanga, and in his personal capacity as resident of the City of Zamboanga, Rep. MA. ISABELLE G. CLIMACO, District 1, and Rep. ERICO BASILIO A. FABIAN, District 2, City of Zamboanga, petitioners, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL (GRP), as represented by RODOLFO C. GARCIA, LEAH ARMAMENTO, SEDFREY CANDELARIA, MARK RYAN SULLIVAN and HERMOGENES ESPERON, in his capacity as the Presidential Adviser on Peace Process, respondents. x--------------------------------------------x G.R. No. 183893 October 14, 2008

THE CITY OF ILIGAN, duly represented by CITY MAYOR LAWRENCE LLUCH CRUZ, petitioner, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN; GEN. HERMOGENES ESPERON, JR., in his

capacity as the present and duly appointed Presidential Adviser on the Peace Process; and/or SEC. EDUARDO ERMITA, in his capacity as Executive Secretary. respondents. x--------------------------------------------x G.R. No. 183951 October 14, 2008

THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as represented by HON. ROLANDO E. YEBES, in his capacity as Provincial Governor, HON. FRANCIS H. OLVIS, in his capacity as ViceGovernor and Presiding Officer of the Sangguniang Panlalawigan, HON. CECILIA JALOSJOS CARREON, Congresswoman, 1st Congressional District, HON. CESAR G. JALOSJOS, Congressman, 3rd Congressional District, and Members of the Sangguniang Panlalawigan of the Province of Zamboanga del Norte, namely, HON. SETH FREDERICK P. JALOSJOS, HON. FERNANDO R. CABIGON, JR., HON. ULDARICO M. MEJORADA II, HON. EDIONAR M. ZAMORAS, HON. EDGAR J. BAGUIO, HON. CEDRIC L. ADRIATICO, HON. FELIXBERTO C. BOLANDO, HON. JOSEPH BRENDO C. AJERO, HON. NORBIDEIRI B. EDDING, HON. ANECITO S. DARUNDAY, HON. ANGELICA J. CARREON and HON. LUZVIMINDA E. TORRINO, petitioners, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL [GRP], as represented by HON. RODOLFO C. GARCIA and HON. HERMOGENES ESPERON, in his capacity as the Presidential Adviser of Peace Process, respondents. x--------------------------------------------x G.R. No. 183962 October 14, 2008

ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L. PIMENTEL III, petitioners, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL, represented by its Chairman RODOLFO C. GARCIA, and the MORO ISLAMIC LIBERATION FRONT PEACE NEGOTIATING PANEL, represented by its Chairman MOHAGHER IQBAL, respondents. x--------------------------------------------x FRANKLIN M. DRILON and ADEL ABBAS TAMANO, petitioners-in-intervention. x--------------------------------------------x SEN. MANUEL A. ROXAS, petitioners-in-intervention. x--------------------------------------------x MUNICIPALITY OF LINAMON duly represented by its Municipal Mayor NOEL N. DEANO, petitioners-inintervention, x--------------------------------------------x THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR CHERRYLYN P. SANTOSAKBAR, petitioners-in-intervention.

x--------------------------------------------x THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T. MANGUDADATU, in his capacity as Provincial Governor and a resident of the Province of Sultan Kudarat, petitioner-in-intervention. x-------------------------------------------x RUY ELIAS LOPEZ, for and in his own behalf and on behalf of Indigenous Peoples in Mindanao Not Belonging to the MILF, petitioner-in-intervention. x--------------------------------------------x CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT, JOSELITO C. ALISUAG and RICHALEX G. JAGMIS, as citizens and residents of Palawan, petitioners-in-intervention. x--------------------------------------------x MARINO RIDAO and KISIN BUXANI, petitioners-in-intervention. x--------------------------------------------x MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF), respondent-in-intervention. x--------------------------------------------x MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE & DEVELOPMENT (MMMPD), respondent-inintervention. x--------------------------------------------x DECISION CARPIO MORALES, J.: Subject of these consolidated cases is the extent of the powers of the President in pursuing the peace process. While the facts surrounding this controversy center on the armed conflict in Mindanao between the government and the Moro Islamic Liberation Front (MILF), the legal issue involved has a bearing on all areas in the country where there has been a long-standing armed conflict. Yet again, the Court is tasked to perform a delicate balancing act. It must uncompromisingly delineate the bounds within which the President may lawfully exercise her discretion, but it must do so in strict adherence to the Constitution, lest its ruling unduly restricts the freedom of action vested by that same Constitution in the Chief Executive precisely to enable her to pursue the peace process effectively. I. FACTUAL ANTECEDENTS OF THE PETITIONS On August 5, 2008, the Government of the Republic of the Philippines (GRP) and the MILF, through the Chairpersons of their respective peace negotiating panels, were scheduled to sign a Memorandum of

Agreement on the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli Agreement on Peace of 2001 in Kuala Lumpur, Malaysia. The MILF is a rebel group which was established in March 1984 when, under the leadership of the late Salamat Hashim, it splintered from the Moro National Liberation Front (MNLF) then headed by Nur Misuari, on the ground, among others, of what Salamat perceived to be the manipulation of the MNLF away from an Islamic basis towards Marxist-Maoist orientations.1 The signing of the MOA-AD between the GRP and the MILF was not to materialize, however, for upon motion of petitioners, specifically those who filed their cases before the scheduled signing of the MOAAD, this Court issued a Temporary Restraining Order enjoining the GRP from signing the same. The MOA-AD was preceded by a long process of negotiation and the concluding of several prior agreements between the two parties beginning in 1996, when the GRP-MILF peace negotiations began. On July 18, 1997, the GRP and MILF Peace Panels signed the Agreement on General Cessation of Hostilities. The following year, they signed the General Framework of Agreement of Intent on August 27, 1998. The Solicitor General, who represents respondents, summarizes the MOA-AD by stating that the same contained, among others, the commitment of the parties to pursue peace negotiations, protect and respect human rights, negotiate with sincerity in the resolution and pacific settlement of the conflict, and refrain from the use of threat or force to attain undue advantage while the peace negotiations on the substantive agenda are on-going.2 Early on, however, it was evident that there was not going to be any smooth sailing in the GRP-MILF peace process. Towards the end of 1999 up to early 2000, the MILF attacked a number of municipalities in Central Mindanao and, in March 2000, it took control of the town hall of Kauswagan, Lanao del Norte.3 In response, then President Joseph Estrada declared and carried out an "all-out-war" against the MILF. When President Gloria Macapagal-Arroyo assumed office, the military offensive against the MILF was suspended and the government sought a resumption of the peace talks. The MILF, according to a leading MILF member, initially responded with deep reservation, but when President Arroyo asked the Government of Malaysia through Prime Minister Mahathir Mohammad to help convince the MILF to return to the negotiating table, the MILF convened its Central Committee to seriously discuss the matter and, eventually, decided to meet with the GRP.4 The parties met in Kuala Lumpur on March 24, 2001, with the talks being facilitated by the Malaysian government, the parties signing on the same date the Agreement on the General Framework for the Resumption of Peace Talks Between the GRP and the MILF. The MILF thereafter suspended all its military actions.5 Formal peace talks between the parties were held in Tripoli, Libya from June 20-22, 2001, the outcome of which was the GRP-MILF Tripoli Agreement on Peace (Tripoli Agreement 2001) containing the basic principles and agenda on the following aspects of the negotiation: Security Aspect, Rehabilitation Aspect, and Ancestral Domain Aspect. With regard to the Ancestral Domain Aspect, the parties in Tripoli Agreement 2001 simply agreed "that the same be discussed further by the Parties in their next meeting." A second round of peace talks was held in Cyberjaya, Malaysia on August 5-7, 2001 which ended with the signing of the Implementing Guidelines on the Security Aspect of the Tripoli Agreement 2001 leading

to a ceasefire status between the parties. This was followed by the Implementing Guidelines on the Humanitarian Rehabilitation and Development Aspects of the Tripoli Agreement 2001, which was signed on May 7, 2002 at Putrajaya, Malaysia. Nonetheless, there were many incidence of violence between government forces and the MILF from 2002 to 2003. Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13, 2003 and he was replaced by Al Haj Murad, who was then the chief peace negotiator of the MILF. Murad's position as chief peace negotiator was taken over by Mohagher Iqbal.6 In 2005, several exploratory talks were held between the parties in Kuala Lumpur, eventually leading to the crafting of the draft MOA-AD in its final form, which, as mentioned, was set to be signed last August 5, 2008. II. STATEMENT OF THE PROCEEDINGS Before the Court is what is perhaps the most contentious "consensus" ever embodied in an instrument the MOA-AD which is assailed principally by the present petitions bearing docket numbers 183591, 183752, 183893, 183951 and 183962. Commonly impleaded as respondents are the GRP Peace Panel on Ancestral Domain7 and the Presidential Adviser on the Peace Process (PAPP) Hermogenes Esperon, Jr. On July 23, 2008, the Province of North Cotabato8 and Vice-Governor Emmanuel Piol filed a petition, docketed as G.R. No. 183591, for Mandamus and Prohibition with Prayer for the Issuance of Writ of Preliminary Injunction and Temporary Restraining Order.9 Invoking the right to information on matters of public concern, petitioners seek to compel respondents to disclose and furnish them the complete and official copies of the MOA-AD including its attachments, and to prohibit the slated signing of the MOA-AD, pending the disclosure of the contents of the MOA-AD and the holding of a public consultation thereon. Supplementarily, petitioners pray that the MOA-AD be declared unconstitutional.10 This initial petition was followed by another one, docketed as G.R. No. 183752, also for Mandamus and Prohibition11 filed by the City of Zamboanga,12 Mayor Celso Lobregat, Rep. Ma. Isabelle Climaco and Rep. Erico Basilio Fabian who likewise pray for similar injunctive reliefs. Petitioners herein moreover pray that the City of Zamboanga be excluded from the Bangsamoro Homeland and/or Bangsamoro Juridical Entity and, in the alternative, that the MOA-AD be declared null and void. By Resolution of August 4, 2008, the Court issued a Temporary Restraining Order commanding and directing public respondents and their agents to cease and desist from formally signing the MOA-AD.13 The Court also required the Solicitor General to submit to the Court and petitioners the official copy of the final draft of the MOA-AD,14 to which she complied.15 Meanwhile, the City of Iligan16 filed a petition for Injunction and/or Declaratory Relief, docketed as G.R. No. 183893, praying that respondents be enjoined from signing the MOA-AD or, if the same had already been signed, from implementing the same, and that the MOA-AD be declared unconstitutional. Petitioners herein additionally implead Executive Secretary Eduardo Ermita as respondent. The Province of Zamboanga del Norte,17 Governor Rolando Yebes, Vice-Governor Francis Olvis, Rep. Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos, and the members18 of the Sangguniang Panlalawigan of Zamboanga del Norte filed on August 15, 2008 a petition for Certiorari, Mandamus and Prohibition,19

docketed as G.R. No. 183951. They pray, inter alia, that the MOA-AD be declared null and void and without operative effect, and that respondents be enjoined from executing the MOA-AD. On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel III filed a petition for Prohibition,20 docketed as G.R. No. 183962, praying for a judgment prohibiting and permanently enjoining respondents from formally signing and executing the MOA-AD and or any other agreement derived therefrom or similar thereto, and nullifying the MOA-AD for being unconstitutional and illegal. Petitioners herein additionally implead as respondent the MILF Peace Negotiating Panel represented by its Chairman Mohagher Iqbal. Various parties moved to intervene and were granted leave of court to file their petitions-/comments-inintervention. Petitioners-in-Intervention include Senator Manuel A. Roxas, former Senate President Franklin Drilon and Atty. Adel Tamano, the City of Isabela21 and Mayor Cherrylyn Santos-Akbar, the Province of Sultan Kudarat22 and Gov. Suharto Mangudadatu, the Municipality of Linamon in Lanao del Norte,23 Ruy Elias Lopez of Davao City and of the Bagobo tribe, Sangguniang Panlungsod member Marino Ridao and businessman Kisin Buxani, both of Cotabato City; and lawyers Carlo Gomez, Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of Palawan City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and the Muslim Multi-Sectoral Movement for Peace and Development (MMMPD) filed their respective Comments-in-Intervention. By subsequent Resolutions, the Court ordered the consolidation of the petitions. Respondents filed Comments on the petitions, while some of petitioners submitted their respective Replies. Respondents, by Manifestation and Motion of August 19, 2008, stated that the Executive Department shall thoroughly review the MOA-AD and pursue further negotiations to address the issues hurled against it, and thus moved to dismiss the cases. In the succeeding exchange of pleadings, respondents' motion was met with vigorous opposition from petitioners. The cases were heard on oral argument on August 15, 22 and 29, 2008 that tackled the following principal issues: 1. Whether the petitions have become moot and academic (i) insofar as the mandamus aspect is concerned, in view of the disclosure of official copies of the final draft of the Memorandum of Agreement (MOA); and (ii) insofar as the prohibition aspect involving the Local Government Units is concerned, if it is considered that consultation has become fait accompli with the finalization of the draft; 2. Whether the constitutionality and the legality of the MOA is ripe for adjudication; 3. Whether respondent Government of the Republic of the Philippines Peace Panel committed grave abuse of discretion amounting to lack or excess of jurisdiction when it negotiated and initiated the MOA vis--vis ISSUES Nos. 4 and 5; 4. Whether there is a violation of the people's right to information on matters of public concern (1987 Constitution, Article III, Sec. 7) under a state policy of full disclosure of all its transactions involving public interest (1987 Constitution, Article II, Sec. 28) including public consultation under Republic Act No. 7160 (LOCAL GOVERNMENT CODE OF 1991)[;]

If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules of Civil Procedure is an appropriate remedy; 5. Whether by signing the MOA, the Government of the Republic of the Philippines would be BINDING itself a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a separate state, or a juridical, territorial or political subdivision not recognized by law; b) to revise or amend the Constitution and existing laws to conform to the MOA; c) to concede to or recognize the claim of the Moro Islamic Liberation Front for ancestral domain in violation of Republic Act No. 8371 (THE INDIGENOUS PEOPLES RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII (DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;] If in the affirmative, whether the Executive Branch has the authority to so bind the Government of the Republic of the Philippines; 6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of Zamboanga, Iligan and Isabela, and the Municipality of Linamon, Lanao del Norte in/from the areas covered by the projected Bangsamoro Homeland is a justiciable question; and 7. Whether desistance from signing the MOA derogates any prior valid commitments of the Government of the Republic of the Philippines.24 The Court, thereafter, ordered the parties to submit their respective Memoranda. Most of the parties submitted their memoranda on time. III. OVERVIEW OF THE MOA-AD As a necessary backdrop to the consideration of the objections raised in the subject five petitions and six petitions-in-intervention against the MOA-AD, as well as the two comments-in-intervention in favor of the MOA-AD, the Court takes an overview of the MOA. The MOA-AD identifies the Parties to it as the GRP and the MILF. Under the heading "Terms of Reference" (TOR), the MOA-AD includes not only four earlier agreements between the GRP and MILF, but also two agreements between the GRP and the MNLF: the 1976 Tripoli Agreement, and the Final Peace Agreement on the Implementation of the 1976 Tripoli Agreement, signed on September 2, 1996 during the administration of President Fidel Ramos. The MOA-AD also identifies as TOR two local statutes - the organic act for the Autonomous Region in Muslim Mindanao (ARMM)25 and the Indigenous Peoples Rights Act (IPRA),26 and several international law instruments - the ILO Convention No. 169 Concerning Indigenous and Tribal Peoples in Independent Countries in relation to the UN Declaration on the Rights of the Indigenous Peoples, and the UN Charter, among others.

The MOA-AD includes as a final TOR the generic category of "compact rights entrenchment emanating from the regime of dar-ul-mua'hada (or territory under compact) and dar-ul-sulh (or territory under peace agreement) that partakes the nature of a treaty device." During the height of the Muslim Empire, early Muslim jurists tended to see the world through a simple dichotomy: there was the dar-ul-Islam (the Abode of Islam) and dar-ul-harb (the Abode of War). The first referred to those lands where Islamic laws held sway, while the second denoted those lands where Muslims were persecuted or where Muslim laws were outlawed or ineffective.27 This way of viewing the world, however, became more complex through the centuries as the Islamic world became part of the international community of nations. As Muslim States entered into treaties with their neighbors, even with distant States and intergovernmental organizations, the classical division of the world into dar-ul-Islam and dar-ul-harb eventually lost its meaning. New terms were drawn up to describe novel ways of perceiving non-Muslim territories. For instance, areas like dar-ul-mua'hada (land of compact) and dar-ul-sulh (land of treaty) referred to countries which, though under a secular regime, maintained peaceful and cooperative relations with Muslim States, having been bound to each other by treaty or agreement. Dar-ul-aman (land of order), on the other hand, referred to countries which, though not bound by treaty with Muslim States, maintained freedom of religion for Muslims.28 It thus appears that the "compact rights entrenchment" emanating from the regime of dar-ul-mua'hada and dar-ul-sulh simply refers to all other agreements between the MILF and the Philippine government the Philippines being the land of compact and peace agreement - that partake of the nature of a treaty device, "treaty" being broadly defined as "any solemn agreement in writing that sets out understandings, obligations, and benefits for both parties which provides for a framework that elaborates the principles declared in the [MOA-AD]."29 The MOA-AD states that the Parties "HAVE AGREED AND ACKNOWLEDGED AS FOLLOWS," and starts with its main body. The main body of the MOA-AD is divided into four strands, namely, Concepts and Principles, Territory, Resources, and Governance. A. CONCEPTS AND PRINCIPLES This strand begins with the statement that it is "the birthright of all Moros and all Indigenous peoples of Mindanao to identify themselves and be accepted as Bangsamoros.'" It defines "Bangsamoro people" as the natives or original inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu archipelago at the time of conquest or colonization, and their descendants whether mixed or of full blood, including their spouses.30 Thus, the concept of "Bangsamoro," as defined in this strand of the MOA-AD, includes not only "Moros" as traditionally understood even by Muslims,31 but all indigenous peoples of Mindanao and its adjacent islands. The MOA-AD adds that the freedom of choice of indigenous peoples shall be respected. What this freedom of choice consists in has not been specifically defined. The MOA-AD proceeds to refer to the "Bangsamoro homeland," the ownership of which is vested exclusively in the Bangsamoro people by virtue of their prior rights of occupation.32 Both parties to the MOA-AD acknowledge that ancestral domain does not form part of the public domain.33

The Bangsamoro people are acknowledged as having the right to self-governance, which right is said to be rooted on ancestral territoriality exercised originally under the suzerain authority of their sultanates and the Pat a Pangampong ku Ranaw. The sultanates were described as states or "karajaan/kadatuan" resembling a body politic endowed with all the elements of a nation-state in the modern sense.34 The MOA-AD thus grounds the right to self-governance of the Bangsamoro people on the past suzerain authority of the sultanates. As gathered, the territory defined as the Bangsamoro homeland was ruled by several sultanates and, specifically in the case of the Maranao, by the Pat a Pangampong ku Ranaw, a confederation of independent principalities (pangampong) each ruled by datus and sultans, none of whom was supreme over the others.35 The MOA-AD goes on to describe the Bangsamoro people as "the First Nation' with defined territory and with a system of government having entered into treaties of amity and commerce with foreign nations." The term "First Nation" is of Canadian origin referring to the indigenous peoples of that territory, particularly those known as Indians. In Canada, each of these indigenous peoples is equally entitled to be called "First Nation," hence, all of them are usually described collectively by the plural "First Nations."36 To that extent, the MOA-AD, by identifying the Bangsamoro people as "the First Nation" - suggesting its exclusive entitlement to that designation - departs from the Canadian usage of the term.

The MOA-AD then mentions for the first time the "Bangsamoro Juridical Entity" (BJE) to which it grants the authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the Bangsamoro.37 B. TERRITORY The territory of the Bangsamoro homeland is described as the land mass as well as the maritime, terrestrial, fluvial and alluvial domains, including the aerial domain and the atmospheric space above it, embracing the Mindanao-Sulu-Palawan geographic region.38 More specifically, the core of the BJE is defined as the present geographic area of the ARMM - thus constituting the following areas: Lanao del Sur, Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi City. Significantly, this core also includes certain municipalities of Lanao del Norte that voted for inclusion in the ARMM in the 2001 plebiscite.39 Outside of this core, the BJE is to cover other provinces, cities, municipalities and barangays, which are grouped into two categories, Category A and Category B. Each of these areas is to be subjected to a plebiscite to be held on different dates, years apart from each other. Thus, Category A areas are to be subjected to a plebiscite not later than twelve (12) months following the signing of the MOA-AD.40 Category B areas, also called "Special Intervention Areas," on the other hand, are to be subjected to a plebiscite twenty-five (25) years from the signing of a separate agreement - the Comprehensive Compact.41 The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over all natural resources within its "internal waters," defined as extending fifteen (15) kilometers from the coastline of the BJE area;42 that the BJE shall also have "territorial waters," which shall stretch beyond the BJE internal waters up to the baselines of the Republic of the Philippines (RP) south east and south west of mainland Mindanao; and that within these territorial waters, the BJE and the "Central Government" (used interchangeably with

RP) shall exercise joint jurisdiction, authority and management over all natural resources.43 Notably, the jurisdiction over the internal waters is not similarly described as "joint." The MOA-AD further provides for the sharing of minerals on the territorial waters between the Central Government and the BJE, in favor of the latter, through production sharing and economic cooperation agreement.44 The activities which the Parties are allowed to conduct on the territorial waters are enumerated, among which are the exploration and utilization of natural resources, regulation of shipping and fishing activities, and the enforcement of police and safety measures.45 There is no similar provision on the sharing of minerals and allowed activities with respect to the internal waters of the BJE. C. RESOURCES The MOA-AD states that the BJE is free to enter into any economic cooperation and trade relations with foreign countries and shall have the option to establish trade missions in those countries. Such relationships and understandings, however, are not to include aggression against the GRP. The BJE may also enter into environmental cooperation agreements.46 The external defense of the BJE is to remain the duty and obligation of the Central Government. The Central Government is also bound to "take necessary steps to ensure the BJE's participation in international meetings and events" like those of the ASEAN and the specialized agencies of the UN. The BJE is to be entitled to participate in Philippine official missions and delegations for the negotiation of border agreements or protocols for environmental protection and equitable sharing of incomes and revenues involving the bodies of water adjacent to or between the islands forming part of the ancestral domain.47 With regard to the right of exploring for, producing, and obtaining all potential sources of energy, petroleum, fossil fuel, mineral oil and natural gas, the jurisdiction and control thereon is to be vested in the BJE "as the party having control within its territorial jurisdiction." This right carries the proviso that, "in times of national emergency, when public interest so requires," the Central Government may, for a fixed period and under reasonable terms as may be agreed upon by both Parties, assume or direct the operation of such resources.48 The sharing between the Central Government and the BJE of total production pertaining to natural resources is to be 75:25 in favor of the BJE.49 The MOA-AD provides that legitimate grievances of the Bangsamoro people arising from any unjust dispossession of their territorial and proprietary rights, customary land tenures, or their marginalization shall be acknowledged. Whenever restoration is no longer possible, reparation is to be in such form as mutually determined by the Parties.50 The BJE may modify or cancel the forest concessions, timber licenses, contracts or agreements, mining concessions, Mineral Production and Sharing Agreements (MPSA), Industrial Forest Management Agreements (IFMA), and other land tenure instruments granted by the Philippine Government, including those issued by the present ARMM.51 D. GOVERNANCE The MOA-AD binds the Parties to invite a multinational third-party to observe and monitor the implementation of the Comprehensive Compact. This compact is to embody the "details for the effective

enforcement" and "the mechanisms and modalities for the actual implementation" of the MOA-AD. The MOA-AD explicitly provides that the participation of the third party shall not in any way affect the status of the relationship between the Central Government and the BJE.52 The "associative" relationship between the Central Government and the BJE The MOA-AD describes the relationship of the Central Government and the BJE as "associative," characterized by shared authority and responsibility. And it states that the structure of governance is to be based on executive, legislative, judicial, and administrative institutions with defined powers and functions in the Comprehensive Compact. The MOA-AD provides that its provisions requiring "amendments to the existing legal framework" shall take effect upon signing of the Comprehensive Compact and upon effecting the aforesaid amendments, with due regard to the non-derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact. As will be discussed later, much of the present controversy hangs on the legality of this provision. The BJE is granted the power to build, develop and maintain its own institutions inclusive of civil service, electoral, financial and banking, education, legislation, legal, economic, police and internal security force, judicial system and correctional institutions, the details of which shall be discussed in the negotiation of the comprehensive compact. As stated early on, the MOA-AD was set to be signed on August 5, 2008 by Rodolfo Garcia and Mohagher Iqbal, Chairpersons of the Peace Negotiating Panels of the GRP and the MILF, respectively. Notably, the penultimate paragraph of the MOA-AD identifies the signatories as "the representatives of the Parties," meaning the GRP and MILF themselves, and not merely of the negotiating panels.53 In addition, the signature page of the MOA-AD states that it is "WITNESSED BY" Datuk Othman Bin Abd Razak, Special Adviser to the Prime Minister of Malaysia, "ENDORSED BY" Ambassador Sayed Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary General and Special Envoy for Peace Process in Southern Philippines, and SIGNED "IN THE PRESENCE OF" Dr. Albert G. Romulo, Secretary of Foreign Affairs of RP and Dato' Seri Utama Dr. Rais Bin Yatim, Minister of Foreign Affairs, Malaysia, all of whom were scheduled to sign the Agreement last August 5, 2008. Annexed to the MOA-AD are two documents containing the respective lists cum maps of the provinces, municipalities, and barangays under Categories A and B earlier mentioned in the discussion on the strand on TERRITORY. IV. PROCEDURAL ISSUES A. RIPENESS The power of judicial review is limited to actual cases or controversies.54 Courts decline to issue advisory opinions or to resolve hypothetical or feigned problems, or mere academic questions.55 The limitation of the power of judicial review to actual cases and controversies defines the role assigned to the judiciary in a tripartite allocation of power, to assure that the courts will not intrude into areas committed to the other branches of government.56

An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute. There must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence.57 The Court can decide the constitutionality of an act or treaty only when a proper case between opposing parties is submitted for judicial determination.58 Related to the requirement of an actual case or controversy is the requirement of ripeness. A question is ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it.59 For a case to be considered ripe for adjudication, it is a prerequisite that something had then been accomplished or performed by either branch before a court may come into the picture,60 and the petitioner must allege the existence of an immediate or threatened injury to itself as a result of the challenged action.61 He must show that he has sustained or is immediately in danger of sustaining some direct injury as a result of the act complained of.62 The Solicitor General argues that there is no justiciable controversy that is ripe for judicial review in the present petitions, reasoning that The unsigned MOA-AD is simply a list of consensus points subject to further negotiations and legislative enactments as well as constitutional processes aimed at attaining a final peaceful agreement. Simply put, the MOA-AD remains to be a proposal that does not automatically create legally demandable rights and obligations until the list of operative acts required have been duly complied with. x x x xxxx In the cases at bar, it is respectfully submitted that this Honorable Court has no authority to pass upon issues based on hypothetical or feigned constitutional problems or interests with no concrete bases. Considering the preliminary character of the MOA-AD, there are no concrete acts that could possibly violate petitioners' and intervenors' rights since the acts complained of are mere contemplated steps toward the formulation of a final peace agreement. Plainly, petitioners and intervenors' perceived injury, if at all, is merely imaginary and illusory apart from being unfounded and based on mere conjectures. (Underscoring supplied) The Solicitor General cites63 the following provisions of the MOA-AD: TERRITORY xxxx 2. Toward this end, the Parties enter into the following stipulations: xxxx d. Without derogating from the requirements of prior agreements, the Government stipulates to conduct and deliver, using all possible legal measures, within twelve (12) months following the signing of the MOA-AD, a plebiscite covering the areas as enumerated in the list and depicted in the map as Category A attached herein (the "Annex"). The Annex constitutes an integral part of this framework agreement. Toward this end, the Parties shall endeavor to complete the negotiations and resolve all outstanding issues on the Comprehensive Compact within fifteen (15) months from the signing of the MOA-AD.

xxxx GOVERNANCE xxxx 7. The Parties agree that mechanisms and modalities for the actual implementation of this MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to enable it to occur effectively. Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon the signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework with due regard to non-derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact.64 (Underscoring supplied) The Solicitor General's arguments fail to persuade. Concrete acts under the MOA-AD are not necessary to render the present controversy ripe. In Pimentel, Jr. v. Aguirre,65 this Court held: x x x [B]y the mere enactment of the questioned law or the approval of the challenged action, the dispute is said to have ripened into a judicial controversy even without any other overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken judicial duty. xxxx By the same token, when an act of the President, who in our constitutional scheme is a coequal of Congress, is seriously alleged to have infringed the Constitution and the laws x x x settling the dispute becomes the duty and the responsibility of the courts.66 In Santa Fe Independent School District v. Doe,67 the United States Supreme Court held that the challenge to the constitutionality of the school's policy allowing student-led prayers and speeches before games was ripe for adjudication, even if no public prayer had yet been led under the policy, because the policy was being challenged as unconstitutional on its face.68 That the law or act in question is not yet effective does not negate ripeness. For example, in New York v. United States,69 decided in 1992, the United States Supreme Court held that the action by the State of New York challenging the provisions of the Low-Level Radioactive Waste Policy Act was ripe for adjudication even if the questioned provision was not to take effect until January 1, 1996, because the parties agreed that New York had to take immediate action to avoid the provision's consequences.70 The present petitions pray for Certiorari,71 Prohibition, and Mandamus. Certiorari and Prohibition are remedies granted by law when any tribunal, board or officer has acted, in the case of certiorari, or is proceeding, in the case of prohibition, without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.72 Mandamus is a remedy granted by law when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use or enjoyment of a right or office to which such other is entitled.73 Certiorari, Mandamus and Prohibition are appropriate remedies to raise constitutional issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials.74

The authority of the GRP Negotiating Panel is defined by Executive Order No. 3 (E.O. No. 3), issued on February 28, 2001.75 The said executive order requires that "[t]he government's policy framework for peace, including the systematic approach and the administrative structure for carrying out the comprehensive peace process x x x be governed by this Executive Order."76 The present petitions allege that respondents GRP Panel and PAPP Esperon drafted the terms of the MOA-AD without consulting the local government units or communities affected, nor informing them of the proceedings. As will be discussed in greater detail later, such omission, by itself, constitutes a departure by respondents from their mandate under E.O. No. 3. Furthermore, the petitions allege that the provisions of the MOA-AD violate the Constitution. The MOA-AD provides that "any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon the signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework," implying an amendment of the Constitution to accommodate the MOAAD. This stipulation, in effect, guaranteed to the MILF the amendment of the Constitution. Such act constitutes another violation of its authority. Again, these points will be discussed in more detail later. As the petitions allege acts or omissions on the part of respondent that exceed their authority, by violating their duties under E.O. No. 3 and the provisions of the Constitution and statutes, the petitions make a prima facie case for Certiorari, Prohibition, and Mandamus, and an actual case or controversy ripe for adjudication exists. When an act of a branch of government 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.77 B. LOCUS STANDI For a party to have locus standi, one must allege "such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions."78 Because constitutional cases are often public actions in which the relief sought is likely to affect other persons, a preliminary question frequently arises as to this interest in the constitutional question raised.79 When suing as a citizen, the person complaining must allege that he has been or is about to be denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by reason of the statute or act complained of.80 When the issue concerns a public right, it is sufficient that the petitioner is a citizen and has an interest in the execution of the laws.81 For a taxpayer, one is allowed to sue where there is an assertion that public funds are illegally disbursed or deflected to an illegal purpose, or that there is a wastage of public funds through the enforcement of an invalid or unconstitutional law.82 The Court retains discretion whether or not to allow a taxpayer's suit.83 In the case of a legislator or member of Congress, an act of the Executive that injures the institution of Congress causes a derivative but nonetheless substantial injury that can be questioned by legislators. A member of the House of Representatives has standing to maintain inviolate the prerogatives, powers and privileges vested by the Constitution in his office.84

An organization may be granted standing to assert the rights of its members,85 but the mere invocation by the Integrated Bar of the Philippines or any member of the legal profession of the duty to preserve the rule of law does not suffice to clothe it with standing.86 As regards a local government unit (LGU), it can seek relief in order to protect or vindicate an interest of its own, and of the other LGUs.87 Intervenors, meanwhile, may be given legal standing upon showing of facts that satisfy the requirements of the law authorizing intervention,88 such as a legal interest in the matter in litigation, or in the success of either of the parties. In any case, the Court has discretion to relax the procedural technicality on locus standi, given the liberal attitude it has exercised, highlighted in the case of David v. Macapagal-Arroyo,89 where technicalities of procedure were brushed aside, the constitutional issues raised being of paramount public interest or of transcendental importance deserving the attention of the Court in view of their seriousness, novelty and weight as precedents.90 The Court's forbearing stance on locus standi on issues involving constitutional issues has for its purpose the protection of fundamental rights. In not a few cases, the Court, in keeping with its duty under the Constitution to determine whether the other branches of government have kept themselves within the limits of the Constitution and the laws and have not abused the discretion given them, has brushed aside technical rules of procedure.91 In the petitions at bar, petitioners Province of North Cotabato (G.R. No. 183591) Province of Zamboanga del Norte (G.R. No. 183951), City of Iligan (G.R. No. 183893) and City of Zamboanga (G.R. No. 183752) and petitioners-in-intervention Province of Sultan Kudarat, City of Isabela and Municipality of Linamon have locus standi in view of the direct and substantial injury that they, as LGUs, would suffer as their territories, whether in whole or in part, are to be included in the intended domain of the BJE. These petitioners allege that they did not vote for their inclusion in the ARMM which would be expanded to form the BJE territory. Petitioners' legal standing is thus beyond doubt. In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino Pimentel III would have no standing as citizens and taxpayers for their failure to specify that they would be denied some right or privilege or there would be wastage of public funds. The fact that they are a former Senator, an incumbent mayor of Makati City, and a resident of Cagayan de Oro, respectively, is of no consequence. Considering their invocation of the transcendental importance of the issues at hand, however, the Court grants them standing. Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as taxpayers, assert that government funds would be expended for the conduct of an illegal and unconstitutional plebiscite to delineate the BJE territory. On that score alone, they can be given legal standing. Their allegation that the issues involved in these petitions are of "undeniable transcendental importance" clothes them with added basis for their personality to intervene in these petitions. With regard to Senator Manuel Roxas, his standing is premised on his being a member of the Senate and a citizen to enforce compliance by respondents of the public's constitutional right to be informed of the MOA-AD, as well as on a genuine legal interest in the matter in litigation, or in the success or failure of either of the parties. He thus possesses the requisite standing as an intervenor.

With respect to Intervenors Ruy Elias Lopez, as a former congressman of the 3rd district of Davao City, a taxpayer and a member of the Bagobo tribe; Carlo B. Gomez, et al., as members of the IBP Palawan chapter, citizens and taxpayers; Marino Ridao, as taxpayer, resident and member of the Sangguniang Panlungsod of Cotabato City; and Kisin Buxani, as taxpayer, they failed to allege any proper legal interest in the present petitions. Just the same, the Court exercises its discretion to relax the procedural technicality on locus standi given the paramount public interest in the issues at hand. Intervening respondents Muslim Multi-Sectoral Movement for Peace and Development, an advocacy group for justice and the attainment of peace and prosperity in Muslim Mindanao; and Muslim Legal Assistance Foundation Inc., a non-government organization of Muslim lawyers, allege that they stand to be benefited or prejudiced, as the case may be, in the resolution of the petitions concerning the MOA-AD, and prays for the denial of the petitions on the grounds therein stated. Such legal interest suffices to clothe them with standing. B. MOOTNESS Respondents insist that the present petitions have been rendered moot with the satisfaction of all the reliefs prayed for by petitioners and the subsequent pronouncement of the Executive Secretary that "[n]o matter what the Supreme Court ultimately decides[,] the government will not sign the MOA."92 In lending credence to this policy decision, the Solicitor General points out that the President had already disbanded the GRP Peace Panel.93 In David v. Macapagal-Arroyo,94 this Court held that the "moot and academic" principle not being a magical formula that automatically dissuades courts in resolving a case, it will decide cases, otherwise moot and academic, if it finds that (a) there is a grave violation of the Constitution;95 (b) the situation is of exceptional character and paramount public interest is involved;96 (c) the constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public;97 and (d) the case is capable of repetition yet evading review.98 Another exclusionary circumstance that may be considered is where there is a voluntary cessation of the activity complained of by the defendant or doer. Thus, once a suit is filed and the doer voluntarily ceases the challenged conduct, it does not automatically deprive the tribunal of power to hear and determine the case and does not render the case moot especially when the plaintiff seeks damages or prays for injunctive relief against the possible recurrence of the violation.99 The present petitions fall squarely into these exceptions to thus thrust them into the domain of judicial review. The grounds cited above in David are just as applicable in the present cases as they were, not only in David, but also in Province of Batangas v. Romulo100 and Manalo v. Calderon101 where the Court similarly decided them on the merits, supervening events that would ordinarily have rendered the same moot notwithstanding. Petitions not mooted Contrary then to the asseverations of respondents, the non-signing of the MOA-AD and the eventual dissolution of the GRP Peace Panel did not moot the present petitions. It bears emphasis that the signing of the MOA-AD did not push through due to the Court's issuance of a Temporary Restraining Order.

Contrary too to respondents' position, the MOA-AD cannot be considered a mere "list of consensus points," especially given its nomenclature, the need to have it signed or initialed by all the parties concerned on August 5, 2008, and the far-reaching Constitutional implications of these "consensus points," foremost of which is the creation of the BJE. In fact, as what will, in the main, be discussed, there is a commitment on the part of respondents to amend and effect necessary changes to the existing legal framework for certain provisions of the MOAAD to take effect. Consequently, the present petitions are not confined to the terms and provisions of the MOA-AD, but to other on-going and future negotiations and agreements necessary for its realization. The petitions have not, therefore, been rendered moot and academic simply by the public disclosure of the MOA-AD,102 the manifestation that it will not be signed as well as the disbanding of the GRP Panel not withstanding. Petitions are imbued with paramount public interest There is no gainsaying that the petitions are imbued with paramount public interest, involving a significant part of the country's territory and the wide-ranging political modifications of affected LGUs. The assertion that the MOA-AD is subject to further legal enactments including possible Constitutional amendments more than ever provides impetus for the Court to formulate controlling principles to guide the bench, the bar, the public and, in this case, the government and its negotiating entity. Respondents cite Suplico v. NEDA, et al.103 where the Court did not "pontificat[e] on issues which no longer legitimately constitute an actual case or controversy [as this] will do more harm than good to the nation as a whole." The present petitions must be differentiated from Suplico. Primarily, in Suplico, what was assailed and eventually cancelled was a stand-alone government procurement contract for a national broadband network involving a one-time contractual relation between two parties-the government and a private foreign corporation. As the issues therein involved specific government procurement policies and standard principles on contracts, the majority opinion in Suplico found nothing exceptional therein, the factual circumstances being peculiar only to the transactions and parties involved in the controversy. The MOA-AD is part of a series of agreements In the present controversy, the MOA-AD is a significant part of a series of agreements necessary to carry out the Tripoli Agreement 2001. The MOA-AD which dwells on the Ancestral Domain Aspect of said Tripoli Agreement is the third such component to be undertaken following the implementation of the Security Aspect in August 2001 and the Humanitarian, Rehabilitation and Development Aspect in May 2002. Accordingly, even if the Executive Secretary, in his Memorandum of August 28, 2008 to the Solicitor General, has stated that "no matter what the Supreme Court ultimately decides[,] the government will not sign the MOA[-AD]," mootness will not set in in light of the terms of the Tripoli Agreement 2001. Need to formulate principles-guidelines Surely, the present MOA-AD can be renegotiated or another one will be drawn up to carry out the Ancestral Domain Aspect of the Tripoli Agreement 2001, in another or in any form, which could contain similar or significantly drastic provisions. While the Court notes the word of the Executive Secretary that

the government "is committed to securing an agreement that is both constitutional and equitable because that is the only way that long-lasting peace can be assured," it is minded to render a decision on the merits in the present petitions to formulate controlling principles to guide the bench, the bar, the public and, most especially, the government in negotiating with the MILF regarding Ancestral Domain. Respondents invite the Court's attention to the separate opinion of then Chief Justice Artemio Panganiban in Sanlakas v. Reyes104 in which he stated that the doctrine of "capable of repetition yet evading review" can override mootness, "provided the party raising it in a proper case has been and/or continue to be prejudiced or damaged as a direct result of their issuance." They contend that the Court must have jurisdiction over the subject matter for the doctrine to be invoked. The present petitions all contain prayers for Prohibition over which this Court exercises original jurisdiction. While G.R. No. 183893 (City of Iligan v. GRP) is a petition for Injunction and Declaratory Relief, the Court will treat it as one for Prohibition as it has far reaching implications and raises questions that need to be resolved.105 At all events, the Court has jurisdiction over most if not the rest of the petitions. Indeed, the present petitions afford a proper venue for the Court to again apply the doctrine immediately referred to as what it had done in a number of landmark cases.106 There is a reasonable expectation that petitioners, particularly the Provinces of North Cotabato, Zamboanga del Norte and Sultan Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the Municipality of Linamon, will again be subjected to the same problem in the future as respondents' actions are capable of repetition, in another or any form. It is with respect to the prayers for Mandamus that the petitions have become moot, respondents having, by Compliance of August 7, 2008, provided this Court and petitioners with official copies of the final draft of the MOA-AD and its annexes. Too, intervenors have been furnished, or have procured for themselves, copies of the MOA-AD. V. SUBSTANTIVE ISSUES As culled from the Petitions and Petitions-in-Intervention, there are basically two SUBSTANTIVE issues to be resolved, one relating to the manner in which the MOA-AD was negotiated and finalized, the other relating to its provisions, viz: 1. Did respondents violate constitutional and statutory provisions on public consultation and the right to information when they negotiated and later initialed the MOA-AD? 2. Do the contents of the MOA-AD violate the Constitution and the laws? ON THE FIRST SUBSTANTIVE ISSUE Petitioners invoke their constitutional right to information on matters of public concern, as provided in Section 7, Article III on the Bill of Rights: Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.107

As early as 1948, in Subido v. Ozaeta,108 the Court has recognized the statutory right to examine and inspect public records, a right which was eventually accorded constitutional status. The right of access to public documents, as enshrined in both the 1973 Constitution and the 1987 Constitution, has been recognized as a self-executory constitutional right.109 In the 1976 case of Baldoza v. Hon. Judge Dimaano,110 the Court ruled that access to public records is predicated on the right of the people to acquire information on matters of public concern since, undoubtedly, in a democracy, the pubic has a legitimate interest in matters of social and political significance. x x x The incorporation of this right in the Constitution is a recognition of the fundamental role of free exchange of information in a democracy. There can be no realistic perception by the public of the nation's problems, nor a meaningful democratic decision-making if they are denied access to information of general interest. Information is needed to enable the members of society to cope with the exigencies of the times. As has been aptly observed: "Maintaining the flow of such information depends on protection for both its acquisition and its dissemination since, if either process is interrupted, the flow inevitably ceases." x x x111 In the same way that free discussion enables members of society to cope with the exigencies of their time, access to information of general interest aids the people in democratic decision-making by giving them a better perspective of the vital issues confronting the nation112 so that they may be able to criticize and participate in the affairs of the government in a responsible, reasonable and effective manner. It is by ensuring an unfettered and uninhibited exchange of ideas among a well-informed public that a government remains responsive to the changes desired by the people.113 The MOA-AD is a matter of public concern That the subject of the information sought in the present cases is a matter of public concern114 faces no serious challenge. In fact, respondents admit that the MOA-AD is indeed of public concern.115 In previous cases, the Court found that the regularity of real estate transactions entered in the Register of Deeds,116 the need for adequate notice to the public of the various laws,117 the civil service eligibility of a public employee,118 the proper management of GSIS funds allegedly used to grant loans to public officials,119 the recovery of the Marcoses' alleged ill-gotten wealth,120 and the identity of party-list nominees,121 among others, are matters of public concern. Undoubtedly, the MOA-AD subject of the present cases is of public concern, involving as it does the sovereignty and territorial integrity of the State, which directly affects the lives of the public at large. Matters of public concern covered by the right to information include steps and negotiations leading to the consummation of the contract. In not distinguishing as to the executory nature or commercial character of agreements, the Court has categorically ruled: x x x [T]he right to information "contemplates inclusion of negotiations leading to the consummation of the transaction." Certainly, a consummated contract is not a requirement for the exercise of the right to information. Otherwise, the people can never exercise the right if no contract is consummated, and if one is consummated, it may be too late for the public to expose its defects. Requiring a consummated contract will keep the public in the dark until the contract, which may be grossly disadvantageous to the government or even illegal, becomes fait accompli. This negates the

State policy of full transparency on matters of public concern, a situation which the framers of the Constitution could not have intended. Such a requirement will prevent the citizenry from participating in the public discussion of any proposed contract, effectively truncating a basic right enshrined in the Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by the State of its avowed "policy of full disclosure of all its transactions involving public interest."122 (Emphasis and italics in the original) Intended as a "splendid symmetry"123 to the right to information under the Bill of Rights is the policy of public disclosure under Section 28, Article II of the Constitution reading: Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest.124 The policy of full public disclosure enunciated in above-quoted Section 28 complements the right of access to information on matters of public concern found in the Bill of Rights. The right to information guarantees the right of the people to demand information, while Section 28 recognizes the duty of officialdom to give information even if nobody demands.125 The policy of public disclosure establishes a concrete ethical principle for the conduct of public affairs in a genuinely open democracy, with the people's right to know as the centerpiece. It is a mandate of the State to be accountable by following such policy.126 These provisions are vital to the exercise of the freedom of expression and essential to hold public officials at all times accountable to the people.127 Whether Section 28 is self-executory, the records of the deliberations of the Constitutional Commission so disclose: MR. SUAREZ. And since this is not self-executory, this policy will not be enunciated or will not be in force and effect until after Congress shall have provided it. MR. OPLE. I expect it to influence the climate of public ethics immediately but, of course, the implementing law will have to be enacted by Congress, Mr. Presiding Officer.128 The following discourse, after Commissioner Hilario Davide, Jr., sought clarification on the issue, is enlightening. MR. DAVIDE. I would like to get some clarifications on this. Mr. Presiding Officer, did I get the Gentleman correctly as having said that this is not a self-executing provision? It would require a legislation by Congress to implement? MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted an amendment from Commissioner Regalado, so that the safeguards on national interest are modified by the clause "as may be provided by law" MR. DAVIDE. But as worded, does it not mean that this will immediately take effect and Congress may provide for reasonable safeguards on the sole ground national interest? MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should immediately influence the climate of the conduct of public affairs but, of course, Congress here may no longer pass a law revoking

it, or if this is approved, revoking this principle, which is inconsistent with this policy.129 (Emphasis supplied) Indubitably, the effectivity of the policy of public disclosure need not await the passing of a statute. As Congress cannot revoke this principle, it is merely directed to provide for "reasonable safeguards." The complete and effective exercise of the right to information necessitates that its complementary provision on public disclosure derive the same self-executory nature. Since both provisions go hand-in-hand, it is absurd to say that the broader130 right to information on matters of public concern is already enforceable while the correlative duty of the State to disclose its transactions involving public interest is not enforceable until there is an enabling law. Respondents cannot thus point to the absence of an implementing legislation as an excuse in not effecting such policy. An essential element of these freedoms is to keep open a continuing dialogue or process of communication between the government and the people. It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may perceive and be responsive to the people's will.131 Envisioned to be corollary to the twin rights to information and disclosure is the design for feedback mechanisms. MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the people be able to participate? Will the government provide feedback mechanisms so that the people can participate and can react where the existing media facilities are not able to provide full feedback mechanisms to the government? I suppose this will be part of the government implementing operational mechanisms. MR. OPLE. Yes. I think through their elected representatives and that is how these courses take place. There is a message and a feedback, both ways. xxxx MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last sentence? I think when we talk about the feedback network, we are not talking about public officials but also network of private business o[r] community-based organizations that will be reacting. As a matter of fact, we will put more credence or credibility on the private network of volunteers and voluntary community-based organizations. So I do not think we are afraid that there will be another OMA in the making.132 (Emphasis supplied) The imperative of a public consultation, as a species of the right to information, is evident in the "marching orders" to respondents. The mechanics for the duty to disclose information and to conduct public consultation regarding the peace agenda and process is manifestly provided by E.O. No. 3.133 The preambulatory clause of E.O. No. 3 declares that there is a need to further enhance the contribution of civil society to the comprehensive peace process by institutionalizing the people's participation. One of the three underlying principles of the comprehensive peace process is that it "should be community-based, reflecting the sentiments, values and principles important to all Filipinos" and "shall be defined not by the government alone, nor by the different contending groups only, but by all Filipinos as one community."134 Included as a component of the comprehensive peace process is consensusbuilding and empowerment for peace, which includes "continuing consultations on both national and local levels to build consensus for a peace agenda and process, and the mobilization and facilitation of people's participation in the peace process."135

Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to effectuate "continuing" consultations, contrary to respondents' position that plebiscite is "more than sufficient consultation."136 Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP, one of which is to "[c]onduct regular dialogues with the National Peace Forum (NPF) and other peace partners to seek relevant information, comments, recommendations as well as to render appropriate and timely reports on the progress of the comprehensive peace process."137 E.O. No. 3 mandates the establishment of the NPF to be "the principal forum for the PAPP to consult with and seek advi[c]e from the peace advocates, peace partners and concerned sectors of society on both national and local levels, on the implementation of the comprehensive peace process, as well as for government[-]civil society dialogue and consensusbuilding on peace agenda and initiatives."138 In fine, E.O. No. 3 establishes petitioners' right to be consulted on the peace agenda, as a corollary to the constitutional right to information and disclosure. PAPP Esperon committed grave abuse of discretion The PAPP committed grave abuse of discretion when he failed to carry out the pertinent consultation. The furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic exercise thereof. The Court may not, of course, require the PAPP to conduct the consultation in a particular way or manner. It may, however, require him to comply with the law and discharge the functions within the authority granted by the President.139 Petitioners are not claiming a seat at the negotiating table, contrary to respondents' retort in justifying the denial of petitioners' right to be consulted. Respondents' stance manifests the manner by which they treat the salient provisions of E.O. No. 3 on people's participation. Such disregard of the express mandate of the President is not much different from superficial conduct toward token provisos that border on classic lip service.140 It illustrates a gross evasion of positive duty and a virtual refusal to perform the duty enjoined. As for respondents' invocation of the doctrine of executive privilege, it is not tenable under the premises. The argument defies sound reason when contrasted with E.O. No. 3's explicit provisions on continuing consultation and dialogue on both national and local levels. The executive order even recognizes the exercise of the public's right even before the GRP makes its official recommendations or before the government proffers its definite propositions.141 It bear emphasis that E.O. No. 3 seeks to elicit relevant advice, information, comments and recommendations from the people through dialogue. AT ALL EVENTS, respondents effectively waived the defense of executive privilege in view of their unqualified disclosure of the official copies of the final draft of the MOA-AD. By unconditionally complying with the Court's August 4, 2008 Resolution, without a prayer for the document's disclosure in camera, or without a manifestation that it was complying therewith ex abundante ad cautelam. Petitioners' assertion that the Local Government Code (LGC) of 1991 declares it a State policy to "require all national agencies and offices to conduct periodic consultations with appropriate local government units, non-governmental and people's organizations, and other concerned sectors of the community

before any project or program is implemented in their respective jurisdictions"142 is well-taken. The LGC chapter on intergovernmental relations puts flesh into this avowed policy: Prior Consultations Required. - No project or program shall be implemented by government authorities unless the consultations mentioned in Sections 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian concerned is obtained: Provided, That occupants in areas where such projects are to be implemented shall not be evicted unless appropriate relocation sites have been provided, in accordance with the provisions of the Constitution.143 (Italics and underscoring supplied) In Lina, Jr. v. Hon. Pao,144 the Court held that the above-stated policy and above-quoted provision of the LGU apply only to national programs or projects which are to be implemented in a particular local community. Among the programs and projects covered are those that are critical to the environment and human ecology including those that may call for the eviction of a particular group of people residing in the locality where these will be implemented.145 The MOA-AD is one peculiar program that unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro people,146 which could pervasively and drastically result to the diaspora or displacement of a great number of inhabitants from their total environment. With respect to the indigenous cultural communities/indigenous peoples (ICCs/IPs), whose interests are represented herein by petitioner Lopez and are adversely affected by the MOA-AD, the ICCs/IPs have, under the IPRA, the right to participate fully at all levels of decision-making in matters which may affect their rights, lives and destinies.147 The MOA-AD, an instrument recognizing ancestral domain, failed to justify its non-compliance with the clear-cut mechanisms ordained in said Act,148 which entails, among other things, the observance of the free and prior informed consent of the ICCs/IPs. Notably, the IPRA does not grant the Executive Department or any government agency the power to delineate and recognize an ancestral domain claim by mere agreement or compromise. The recognition of the ancestral domain is the raison d'etre of the MOA-AD, without which all other stipulations or "consensus points" necessarily must fail. In proceeding to make a sweeping declaration on ancestral domain, without complying with the IPRA, which is cited as one of the TOR of the MOA-AD, respondents clearly transcended the boundaries of their authority. As it seems, even the heart of the MOA-AD is still subject to necessary changes to the legal framework. While paragraph 7 on Governance suspends the effectivity of all provisions requiring changes to the legal framework, such clause is itself invalid, as will be discussed in the following section. Indeed, ours is an open society, with all the acts of the government subject to public scrutiny and available always to public cognizance. This has to be so if the country is to remain democratic, with sovereignty residing in the people and all government authority emanating from them.149 ON THE SECOND SUBSTANTIVE ISSUE With regard to the provisions of the MOA-AD, there can be no question that they cannot all be accommodated under the present Constitution and laws. Respondents have admitted as much in the oral arguments before this Court, and the MOA-AD itself recognizes the need to amend the existing legal framework to render effective at least some of its provisions. Respondents, nonetheless, counter that the MOA-AD is free of any legal infirmity because any provisions therein which are inconsistent with the present legal framework will not be effective until the necessary changes to that framework are made. The validity of this argument will be considered later. For now, the Court shall pass upon how

The MOA-AD is inconsistent with the Constitution and laws as presently worded. In general, the objections against the MOA-AD center on the extent of the powers conceded therein to the BJE. Petitioners assert that the powers granted to the BJE exceed those granted to any local government under present laws, and even go beyond those of the present ARMM. Before assessing some of the specific powers that would have been vested in the BJE, however, it would be useful to turn first to a general idea that serves as a unifying link to the different provisions of the MOA-AD, namely, the international law concept of association. Significantly, the MOA-AD explicitly alludes to this concept, indicating that the Parties actually framed its provisions with it in mind. Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and paragraph 4 on GOVERNANCE. It is in the last mentioned provision, however, that the MOA-AD most clearly uses it to describe the envisioned relationship between the BJE and the Central Government. 4. The relationship between the Central Government and the Bangsamoro juridical entity shall be associative characterized by shared authority and responsibility with a structure of governance based on executive, legislative, judicial and administrative institutions with defined powers and functions in the comprehensive compact. A period of transition shall be established in a comprehensive peace compact specifying the relationship between the Central Government and the BJE. (Emphasis and underscoring supplied) The nature of the "associative" relationship may have been intended to be defined more precisely in the still to be forged Comprehensive Compact. Nonetheless, given that there is a concept of "association" in international law, and the MOA-AD - by its inclusion of international law instruments in its TOR- placed itself in an international legal context, that concept of association may be brought to bear in understanding the use of the term "associative" in the MOA-AD. Keitner and Reisman state that [a]n association is formed when two states of unequal power voluntarily establish durable links. In the basic model, one state, the associate, delegates certain responsibilities to the other, the principal, while maintaining its international status as a state. Free associations represent a middle ground between integration and independence. x x x150 (Emphasis and underscoring supplied) For purposes of illustration, the Republic of the Marshall Islands and the Federated States of Micronesia (FSM), formerly part of the U.S.-administered Trust Territory of the Pacific Islands,151 are associated states of the U.S. pursuant to a Compact of Free Association. The currency in these countries is the U.S. dollar, indicating their very close ties with the U.S., yet they issue their own travel documents, which is a mark of their statehood. Their international legal status as states was confirmed by the UN Security Council and by their admission to UN membership. According to their compacts of free association, the Marshall Islands and the FSM generally have the capacity to conduct foreign affairs in their own name and right, such capacity extending to matters such as the law of the sea, marine resources, trade, banking, postal, civil aviation, and cultural relations. The U.S. government, when conducting its foreign affairs, is obligated to consult with the governments of the Marshall Islands or the FSM on matters which it (U.S. government) regards as relating to or affecting either government.

In the event of attacks or threats against the Marshall Islands or the FSM, the U.S. government has the authority and obligation to defend them as if they were part of U.S. territory. The U.S. government, moreover, has the option of establishing and using military areas and facilities within these associated states and has the right to bar the military personnel of any third country from having access to these territories for military purposes. It bears noting that in U.S. constitutional and international practice, free association is understood as an international association between sovereigns. The Compact of Free Association is a treaty which is subordinate to the associated nation's national constitution, and each party may terminate the association consistent with the right of independence. It has been said that, with the admission of the U.S.-associated states to the UN in 1990, the UN recognized that the American model of free association is actually based on an underlying status of independence.152 In international practice, the "associated state" arrangement has usually been used as a transitional device of former colonies on their way to full independence. Examples of states that have passed through the status of associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla, Dominica, St. Lucia, St. Vincent and Grenada. All have since become independent states.153 Back to the MOA-AD, it contains many provisions which are consistent with the international legal concept of association, specifically the following: the BJE's capacity to enter into economic and trade relations with foreign countries, the commitment of the Central Government to ensure the BJE's participation in meetings and events in the ASEAN and the specialized UN agencies, and the continuing responsibility of the Central Government over external defense. Moreover, the BJE's right to participate in Philippine official missions bearing on negotiation of border agreements, environmental protection, and sharing of revenues pertaining to the bodies of water adjacent to or between the islands forming part of the ancestral domain, resembles the right of the governments of FSM and the Marshall Islands to be consulted by the U.S. government on any foreign affairs matter affecting them. These provisions of the MOA indicate, among other things, that the Parties aimed to vest in the BJE the status of an associated state or, at any rate, a status closely approximating it. The concept of association is not recognized under the present Constitution No province, city, or municipality, not even the ARMM, is recognized under our laws as having an "associative" relationship with the national government. Indeed, the concept implies powers that go beyond anything ever granted by the Constitution to any local or regional government. It also implies the recognition of the associated entity as a state. The Constitution, however, does not contemplate any state in this jurisdiction other than the Philippine State, much less does it provide for a transitory status that aims to prepare any part of Philippine territory for independence. Even the mere concept animating many of the MOA-AD's provisions, therefore, already requires for its validity the amendment of constitutional provisions, specifically the following provisions of Article X: SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided. SECTION 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive

historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines. The BJE is a far more powerful entity than the autonomous region recognized in the Constitution It is not merely an expanded version of the ARMM, the status of its relationship with the national government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but name as it meets the criteria of a state laid down in the Montevideo Convention,154 namely, a permanent population, a defined territory, a government, and a capacity to enter into relations with other states. Even assuming arguendo that the MOA-AD would not necessarily sever any portion of Philippine territory, the spirit animating it - which has betrayed itself by its use of the concept of association - runs counter to the national sovereignty and territorial integrity of the Republic. The defining concept underlying the relationship between the national government and the BJE being itself contrary to the present Constitution, it is not surprising that many of the specific provisions of the MOA-AD on the formation and powers of the BJE are in conflict with the Constitution and the laws. Article X, Section 18 of the Constitution provides that "[t]he creation of the autonomous region shall be effective when approved by a majority of the votes cast by the constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and geographic areas voting favorably in such plebiscite shall be included in the autonomous region." (Emphasis supplied) As reflected above, the BJE is more of a state than an autonomous region. But even assuming that it is covered by the term "autonomous region" in the constitutional provision just quoted, the MOA-AD would still be in conflict with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the present geographic area of the ARMM and, in addition, the municipalities of Lanao del Norte which voted for inclusion in the ARMM during the 2001 plebiscite - Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal - are automatically part of the BJE without need of another plebiscite, in contrast to the areas under Categories A and B mentioned earlier in the overview. That the present components of the ARMM and the above-mentioned municipalities voted for inclusion therein in 2001, however, does not render another plebiscite unnecessary under the Constitution, precisely because what these areas voted for then was their inclusion in the ARMM, not the BJE. The MOA-AD, moreover, would not comply with Article X, Section 20 of the Constitution since that provision defines the powers of autonomous regions as follows: SECTION 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic act of autonomous regions shall provide for legislative powers over: (1) Administrative organization; (2) Creation of sources of revenues;

(3) Ancestral domain and natural resources; (4) Personal, family, and property relations; (5) Regional urban and rural planning development; (6) Economic, social, and tourism development; (7) Educational policies; (8) Preservation and development of the cultural heritage; and (9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region. (Underscoring supplied) Again on the premise that the BJE may be regarded as an autonomous region, the MOA-AD would require an amendment that would expand the above-quoted provision. The mere passage of new legislation pursuant to sub-paragraph No. 9 of said constitutional provision would not suffice, since any new law that might vest in the BJE the powers found in the MOA-AD must, itself, comply with other provisions of the Constitution. It would not do, for instance, to merely pass legislation vesting the BJE with treaty-making power in order to accommodate paragraph 4 of the strand on RESOURCES which states: "The BJE is free to enter into any economic cooperation and trade relations with foreign countries: provided, however, that such relationships and understandings do not include aggression against the Government of the Republic of the Philippines x x x." Under our constitutional system, it is only the President who has that power. Pimentel v. Executive Secretary155 instructs: In our system of government, the President, being the head of state, is regarded as the sole organ and authority in external relations and is the country's sole representative with foreign nations. As the chief architect of foreign policy, the President acts as the country's mouthpiece with respect to international affairs. Hence, the President is vested with the authority to deal with foreign states and governments, extend or withhold recognition, maintain diplomatic relations, enter into treaties, and otherwise transact the business of foreign relations. In the realm of treaty-making, the President has the sole authority to negotiate with other states. (Emphasis and underscoring supplied) Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in the MOA-AD is to be effected. That constitutional provision states: "The State recognizes and promotes the rights of indigenous cultural communities within the framework of national unity and development." (Underscoring supplied) An associative arrangement does not uphold national unity. While there may be a semblance of unity because of the associative ties between the BJE and the national government, the act of placing a portion of Philippine territory in a status which, in international practice, has generally been a preparation for independence, is certainly not conducive to national unity. Besides being irreconcilable with the Constitution, the MOA-AD is also inconsistent with prevailing statutory law, among which are R.A. No. 9054156 or the Organic Act of the ARMM, and the IPRA.157 Article X, Section 3 of the Organic Act of the ARMM is a bar to the adoption of the definition of "Bangsamoro people" used in the MOA-AD. Paragraph 1 on Concepts and Principles states:

1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to identify themselves and be accepted as "Bangsamoros". The Bangsamoro people refers to those who are natives or original inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu archipelago at the time of conquest or colonization of its descendants whether mixed or of full blood. Spouses and their descendants are classified as Bangsamoro. The freedom of choice of the Indigenous people shall be respected. (Emphasis and underscoring supplied) This use of the term Bangsamoro sharply contrasts with that found in the Article X, Section 3 of the Organic Act, which, rather than lumping together the identities of the Bangsamoro and other indigenous peoples living in Mindanao, clearly distinguishes between Bangsamoro people and Tribal peoples, as follows: "As used in this Organic Act, the phrase "indigenous cultural community" refers to Filipino citizens residing in the autonomous region who are: (a) Tribal peoples. These are citizens whose social, cultural and economic conditions distinguish them from other sectors of the national community; and (b) Bangsa Moro people. These are citizens who are believers in Islam and who have retained some or all of their own social, economic, cultural, and political institutions." Respecting the IPRA, it lays down the prevailing procedure for the delineation and recognition of ancestral domains. The MOA-AD's manner of delineating the ancestral domain of the Bangsamoro people is a clear departure from that procedure. By paragraph 1 of Territory, the Parties simply agree that, subject to the delimitations in the agreed Schedules, "[t]he Bangsamoro homeland and historic territory refer to the land mass as well as the maritime, terrestrial, fluvial and alluvial domains, and the aerial domain, the atmospheric space above it, embracing the Mindanao-Sulu-Palawan geographic region." Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure, as illustrated in the following provisions thereof: SECTION 52. Delineation Process. - The identification and delineation of ancestral domains shall be done in accordance with the following procedures: xxxx b) Petition for Delineation. - The process of delineating a specific perimeter may be initiated by the NCIP with the consent of the ICC/IP concerned, or through a Petition for Delineation filed with the NCIP, by a majority of the members of the ICCs/IPs; c) Delineation Proper. - The official delineation of ancestral domain boundaries including census of all community members therein, shall be immediately undertaken by the Ancestral Domains Office upon filing of the application by the ICCs/IPs concerned. Delineation will be done in coordination with the community concerned and shall at all times include genuine involvement and participation by the members of the communities concerned; d) Proof Required. - Proof of Ancestral Domain Claims shall include the testimony of elders or community under oath, and other documents directly or indirectly attesting to the possession or occupation of the

area since time immemorial by such ICCs/IPs in the concept of owners which shall be any one (1) of the following authentic documents: 1) Written accounts of the ICCs/IPs customs and traditions; 2) Written accounts of the ICCs/IPs political structure and institution; 3) Pictures showing long term occupation such as those of old improvements, burial grounds, sacred places and old villages; 4) Historical accounts, including pacts and agreements concerning boundaries entered into by the ICCs/IPs concerned with other ICCs/IPs; 5) Survey plans and sketch maps; 6) Anthropological data; 7) Genealogical surveys; 8) Pictures and descriptive histories of traditional communal forests and hunting grounds; 9) Pictures and descriptive histories of traditional landmarks such as mountains, rivers, creeks, ridges, hills, terraces and the like; and 10) Write-ups of names and places derived from the native dialect of the community. e) Preparation of Maps. - On the basis of such investigation and the findings of fact based thereon, the Ancestral Domains Office of the NCIP shall prepare a perimeter map, complete with technical descriptions, and a description of the natural features and landmarks embraced therein; f) Report of Investigation and Other Documents. - A complete copy of the preliminary census and a report of investigation, shall be prepared by the Ancestral Domains Office of the NCIP; g) Notice and Publication. - A copy of each document, including a translation in the native language of the ICCs/IPs concerned shall be posted in a prominent place therein for at least fifteen (15) days. A copy of the document shall also be posted at the local, provincial and regional offices of the NCIP, and shall be published in a newspaper of general circulation once a week for two (2) consecutive weeks to allow other claimants to file opposition thereto within fifteen (15) days from date of such publication: Provided, That in areas where no such newspaper exists, broadcasting in a radio station will be a valid substitute: Provided, further, That mere posting shall be deemed sufficient if both newspaper and radio station are not available; h) Endorsement to NCIP. - Within fifteen (15) days from publication, and of the inspection process, the Ancestral Domains Office shall prepare a report to the NCIP endorsing a favorable action upon a claim that is deemed to have sufficient proof. However, if the proof is deemed insufficient, the Ancestral Domains Office shall require the submission of additional evidence: Provided, That the Ancestral Domains Office shall reject any claim that is deemed patently false or fraudulent after inspection and verification: Provided, further, That in case of rejection, the Ancestral Domains Office shall give the applicant due notice, copy furnished all concerned, containing the grounds for denial. The denial shall be

appealable to the NCIP: Provided, furthermore, That in cases where there are conflicting claims among ICCs/IPs on the boundaries of ancestral domain claims, the Ancestral Domains Office shall cause the contending parties to meet and assist them in coming up with a preliminary resolution of the conflict, without prejudice to its full adjudication according to the section below. xxxx To remove all doubts about the irreconcilability of the MOA-AD with the present legal system, a discussion of not only the Constitution and domestic statutes, but also of international law is in order, for Article II, Section 2 of the Constitution states that the Philippines "adopts the generally accepted principles of international law as part of the law of the land." Applying this provision of the Constitution, the Court, in Mejoff v. Director of Prisons,158 held that the Universal Declaration of Human Rights is part of the law of the land on account of which it ordered the release on bail of a detained alien of Russian descent whose deportation order had not been executed even after two years. Similarly, the Court in Agustin v. Edu159 applied the aforesaid constitutional provision to the 1968 Vienna Convention on Road Signs and Signals. International law has long recognized the right to self-determination of "peoples," understood not merely as the entire population of a State but also a portion thereof. In considering the question of whether the people of Quebec had a right to unilaterally secede from Canada, the Canadian Supreme Court in REFERENCE RE SECESSION OF QUEBEC160 had occasion to acknowledge that "the right of a people to self-determination is now so widely recognized in international conventions that the principle has acquired a status beyond convention' and is considered a general principle of international law." Among the conventions referred to are the International Covenant on Civil and Political Rights161 and the International Covenant on Economic, Social and Cultural Rights162 which state, in Article 1 of both covenants, that all peoples, by virtue of the right of self-determination, "freely determine their political status and freely pursue their economic, social, and cultural development." The people's right to self-determination should not, however, be understood as extending to a unilateral right of secession. A distinction should be made between the right of internal and external selfdetermination. REFERENCE RE SECESSION OF QUEBEC is again instructive: "(ii) Scope of the Right to Self-determination 126. The recognized sources of international law establish that the right to self-determination of a people is normally fulfilled through internal self-determination - a people's pursuit of its political, economic, social and cultural development within the framework of an existing state. A right to external self-determination (which in this case potentially takes the form of the assertion of a right to unilateral secession) arises in only the most extreme of cases and, even then, under carefully defined circumstances. x x x External self-determination can be defined as in the following statement from the Declaration on Friendly Relations, supra, as The establishment of a sovereign and independent State, the free association or integration with an independent State or the emergence into any other political status freely determined by a people constitute modes of implementing the right of self-determination by that people. (Emphasis added)

127. The international law principle of self-determination has evolved within a framework of respect for the territorial integrity of existing states. The various international documents that support the existence of a people's right to self-determination also contain parallel statements supportive of the conclusion that the exercise of such a right must be sufficiently limited to prevent threats to an existing state's territorial integrity or the stability of relations between sovereign states. x x x x (Emphasis, italics and underscoring supplied) The Canadian Court went on to discuss the exceptional cases in which the right to external selfdetermination can arise, namely, where a people is under colonial rule, is subject to foreign domination or exploitation outside a colonial context, and - less definitely but asserted by a number of commentators - is blocked from the meaningful exercise of its right to internal self-determination. The Court ultimately held that the population of Quebec had no right to secession, as the same is not under colonial rule or foreign domination, nor is it being deprived of the freedom to make political choices and pursue economic, social and cultural development, citing that Quebec is equitably represented in legislative, executive and judicial institutions within Canada, even occupying prominent positions therein. The exceptional nature of the right of secession is further exemplified in the REPORT OF THE INTERNATIONAL COMMITTEE OF JURISTS ON THE LEGAL ASPECTS OF THE AALAND ISLANDS QUESTION.163 There, Sweden presented to the Council of the League of Nations the question of whether the inhabitants of the Aaland Islands should be authorized to determine by plebiscite if the archipelago should remain under Finnish sovereignty or be incorporated in the kingdom of Sweden. The Council, before resolving the question, appointed an International Committee composed of three jurists to submit an opinion on the preliminary issue of whether the dispute should, based on international law, be entirely left to the domestic jurisdiction of Finland. The Committee stated the rule as follows: x x x [I]n the absence of express provisions in international treaties, the right of disposing of national territory is essentially an attribute of the sovereignty of every State. Positive International Law does not recognize the right of national groups, as such, to separate themselves from the State of which they form part by the simple expression of a wish, any more than it recognizes the right of other States to claim such a separation. Generally speaking, the grant or refusal of the right to a portion of its population of determining its own political fate by plebiscite or by some other method, is, exclusively, an attribute of the sovereignty of every State which is definitively constituted. A dispute between two States concerning such a question, under normal conditions therefore, bears upon a question which International Law leaves entirely to the domestic jurisdiction of one of the States concerned. Any other solution would amount to an infringement of sovereign rights of a State and would involve the risk of creating difficulties and a lack of stability which would not only be contrary to the very idea embodied in term "State," but would also endanger the interests of the international community. If this right is not possessed by a large or small section of a nation, neither can it be held by the State to which the national group wishes to be attached, nor by any other State. (Emphasis and underscoring supplied) The Committee held that the dispute concerning the Aaland Islands did not refer to a question which is left by international law to the domestic jurisdiction of Finland, thereby applying the exception rather than the rule elucidated above. Its ground for departing from the general rule, however, was a very narrow one, namely, the Aaland Islands agitation originated at a time when Finland was undergoing drastic political transformation. The internal situation of Finland was, according to the Committee, so abnormal that, for a considerable time, the conditions required for the formation of a sovereign State did not exist. In the midst of revolution, anarchy, and civil war, the legitimacy of the Finnish national government was

disputed by a large section of the people, and it had, in fact, been chased from the capital and forcibly prevented from carrying out its duties. The armed camps and the police were divided into two opposing forces. In light of these circumstances, Finland was not, during the relevant time period, a "definitively constituted" sovereign state. The Committee, therefore, found that Finland did not possess the right to withhold from a portion of its population the option to separate itself - a right which sovereign nations generally have with respect to their own populations. Turning now to the more specific category of indigenous peoples, this term has been used, in scholarship as well as international, regional, and state practices, to refer to groups with distinct cultures, histories, and connections to land (spiritual and otherwise) that have been forcibly incorporated into a larger governing society. These groups are regarded as "indigenous" since they are the living descendants of pre-invasion inhabitants of lands now dominated by others. Otherwise stated, indigenous peoples, nations, or communities are culturally distinctive groups that find themselves engulfed by settler societies born of the forces of empire and conquest.164 Examples of groups who have been regarded as indigenous peoples are the Maori of New Zealand and the aboriginal peoples of Canada. As with the broader category of "peoples," indigenous peoples situated within states do not have a general right to independence or secession from those states under international law,165 but they do have rights amounting to what was discussed above as the right to internal self-determination. In a historic development last September 13, 2007, the UN General Assembly adopted the United Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) through General Assembly Resolution 61/295. The vote was 143 to 4, the Philippines being included among those in favor, and the four voting against being Australia, Canada, New Zealand, and the U.S. The Declaration clearly recognized the right of indigenous peoples to self-determination, encompassing the right to autonomy or self-government, to wit: Article 3 Indigenous peoples have the right to self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development. Article 4 Indigenous peoples, in exercising their right to self-determination, have the right to autonomy or selfgovernment in matters relating to their internal and local affairs, as well as ways and means for financing their autonomous functions. Article 5 Indigenous peoples have the right to maintain and strengthen their distinct political, legal, economic, social and cultural institutions, while retaining their right to participate fully, if they so choose, in the political, economic, social and cultural life of the State. Self-government, as used in international legal discourse pertaining to indigenous peoples, has been understood as equivalent to "internal self-determination."166 The extent of self-determination provided for in the UN DRIP is more particularly defined in its subsequent articles, some of which are quoted hereunder:

Article 8 1. Indigenous peoples and individuals have the right not to be subjected to forced assimilation or destruction of their culture. 2. States shall provide effective mechanisms for prevention of, and redress for: (a) Any action which has the aim or effect of depriving them of their integrity as distinct peoples, or of their cultural values or ethnic identities; (b) Any action which has the aim or effect of dispossessing them of their lands, territories or resources; (c) Any form of forced population transfer which has the aim or effect of violating or undermining any of their rights; (d) Any form of forced assimilation or integration; (e) Any form of propaganda designed to promote or incite racial or ethnic discrimination directed against them. Article 21 1. Indigenous peoples have the right, without discrimination, to the improvement of their economic and social conditions, including, inter alia, in the areas of education, employment, vocational training and retraining, housing, sanitation, health and social security. 2. States shall take effective measures and, where appropriate, special measures to ensure continuing improvement of their economic and social conditions. Particular attention shall be paid to the rights and special needs of indigenous elders, women, youth, children and persons with disabilities. Article 26 1. Indigenous peoples have the right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired. 2. Indigenous peoples have the right to own, use, develop and control the lands, territories and resources that they possess by reason of traditional ownership or other traditional occupation or use, as well as those which they have otherwise acquired. 3. States shall give legal recognition and protection to these lands, territories and resources. Such recognition shall be conducted with due respect to the customs, traditions and land tenure systems of the indigenous peoples concerned. Article 30 1. Military activities shall not take place in the lands or territories of indigenous peoples, unless justified by a relevant public interest or otherwise freely agreed with or requested by the indigenous peoples concerned.

2. States shall undertake effective consultations with the indigenous peoples concerned, through appropriate procedures and in particular through their representative institutions, prior to using their lands or territories for military activities. Article 32 1. Indigenous peoples have the right to determine and develop priorities and strategies for the development or use of their lands or territories and other resources. 2. States shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources. 3. States shall provide effective mechanisms for just and fair redress for any such activities, and appropriate measures shall be taken to mitigate adverse environmental, economic, social, cultural or spiritual impact. Article 37 1. Indigenous peoples have the right to the recognition, observance and enforcement of treaties, agreements and other constructive arrangements concluded with States or their successors and to have States honour and respect such treaties, agreements and other constructive arrangements. 2. Nothing in this Declaration may be interpreted as diminishing or eliminating the rights of indigenous peoples contained in treaties, agreements and other constructive arrangements. Article 38 States in consultation and cooperation with indigenous peoples, shall take the appropriate measures, including legislative measures, to achieve the ends of this Declaration. Assuming that the UN DRIP, like the Universal Declaration on Human Rights, must now be regarded as embodying customary international law - a question which the Court need not definitively resolve here the obligations enumerated therein do not strictly require the Republic to grant the Bangsamoro people, through the instrumentality of the BJE, the particular rights and powers provided for in the MOA-AD. Even the more specific provisions of the UN DRIP are general in scope, allowing for flexibility in its application by the different States. There is, for instance, no requirement in the UN DRIP that States now guarantee indigenous peoples their own police and internal security force. Indeed, Article 8 presupposes that it is the State which will provide protection for indigenous peoples against acts like the forced dispossession of their lands - a function that is normally performed by police officers. If the protection of a right so essential to indigenous people's identity is acknowledged to be the responsibility of the State, then surely the protection of rights less significant to them as such peoples would also be the duty of States. Nor is there in the UN DRIP an acknowledgement of the right of indigenous peoples to the aerial domain and atmospheric space. What it upholds, in Article 26 thereof, is the right of indigenous peoples to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired.

Moreover, the UN DRIP, while upholding the right of indigenous peoples to autonomy, does not obligate States to grant indigenous peoples the near-independent status of an associated state. All the rights recognized in that document are qualified in Article 46 as follows: 1. Nothing in this Declaration may be interpreted as implying for any State, people, group or person any right to engage in any activity or to perform any act contrary to the Charter of the United Nations or construed as authorizing or encouraging any action which would dismember or impair, totally or in part, the territorial integrity or political unity of sovereign and independent States. Even if the UN DRIP were considered as part of the law of the land pursuant to Article II, Section 2 of the Constitution, it would not suffice to uphold the validity of the MOA-AD so as to render its compliance with other laws unnecessary. It is, therefore, clear that the MOA-AD contains numerous provisions that cannot be reconciled with the Constitution and the laws as presently worded. Respondents proffer, however, that the signing of the MOA-AD alone would not have entailed any violation of law or grave abuse of discretion on their part, precisely because it stipulates that the provisions thereof inconsistent with the laws shall not take effect until these laws are amended. They cite paragraph 7 of the MOA-AD strand on GOVERNANCE quoted earlier, but which is reproduced below for convenience: 7. The Parties agree that the mechanisms and modalities for the actual implementation of this MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to enable it to occur effectively. Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework with due regard to non derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact. Indeed, the foregoing stipulation keeps many controversial provisions of the MOA-AD from coming into force until the necessary changes to the legal framework are effected. While the word "Constitution" is not mentioned in the provision now under consideration or anywhere else in the MOA-AD, the term "legal framework" is certainly broad enough to include the Constitution. Notwithstanding the suspensive clause, however, respondents, by their mere act of incorporating in the MOA-AD the provisions thereof regarding the associative relationship between the BJE and the Central Government, have already violated the Memorandum of Instructions From The President dated March 1, 2001, which states that the "negotiations shall be conducted in accordance with x x x the principles of the sovereignty and territorial integrity of the Republic of the Philippines." (Emphasis supplied) Establishing an associative relationship between the BJE and the Central Government is, for the reasons already discussed, a preparation for independence, or worse, an implicit acknowledgment of an independent status already prevailing. Even apart from the above-mentioned Memorandum, however, the MOA-AD is defective because the suspensive clause is invalid, as discussed below. The authority of the GRP Peace Negotiating Panel to negotiate with the MILF is founded on E.O. No. 3, Section 5(c), which states that there shall be established Government Peace Negotiating Panels for negotiations with different rebel groups to be "appointed by the President as her official emissaries to

conduct negotiations, dialogues, and face-to-face discussions with rebel groups." These negotiating panels are to report to the President, through the PAPP on the conduct and progress of the negotiations. It bears noting that the GRP Peace Panel, in exploring lasting solutions to the Moro Problem through its negotiations with the MILF, was not restricted by E.O. No. 3 only to those options available under the laws as they presently stand. One of the components of a comprehensive peace process, which E.O. No. 3 collectively refers to as the "Paths to Peace," is the pursuit of social, economic, and political reforms which may require new legislation or even constitutional amendments. Sec. 4(a) of E.O. No. 3, which reiterates Section 3(a), of E.O. No. 125,167 states: SECTION 4. The Six Paths to Peace. - The components of the comprehensive peace process comprise the processes known as the "Paths to Peace". These component processes are interrelated and not mutually exclusive, and must therefore be pursued simultaneously in a coordinated and integrated fashion. They shall include, but may not be limited to, the following: a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This component involves the vigorous implementation of various policies, reforms, programs and projects aimed at addressing the root causes of internal armed conflicts and social unrest. This may require administrative action, new legislation or even constitutional amendments. x x x x (Emphasis supplied) The MOA-AD, therefore, may reasonably be perceived as an attempt of respondents to address, pursuant to this provision of E.O. No. 3, the root causes of the armed conflict in Mindanao. The E.O. authorized them to "think outside the box," so to speak. Hence, they negotiated and were set on signing the MOA-AD that included various social, economic, and political reforms which cannot, however, all be accommodated within the present legal framework, and which thus would require new legislation and constitutional amendments. The inquiry on the legality of the "suspensive clause," however, cannot stop here, because it must be asked whether the President herself may exercise the power delegated to the GRP Peace Panel under E.O. No. 3, Sec. 4(a). The President cannot delegate a power that she herself does not possess. May the President, in the course of peace negotiations, agree to pursue reforms that would require new legislation and constitutional amendments, or should the reforms be restricted only to those solutions which the present laws allow? The answer to this question requires a discussion of the extent of the President's power to conduct peace negotiations. That the authority of the President to conduct peace negotiations with rebel groups is not explicitly mentioned in the Constitution does not mean that she has no such authority. In Sanlakas v. Executive Secretary,168 in issue was the authority of the President to declare a state of rebellion - an authority which is not expressly provided for in the Constitution. The Court held thus: "In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence. There, the Court, by a slim 8-7 margin, upheld the President's power to forbid the return of her exiled predecessor. The rationale for the majority's ruling rested on the President's

. . . unstated residual powers which are implied from the grant of executive power and which are necessary for her to comply with her duties under the Constitution. The powers of the President are not limited to what are expressly enumerated in the article on the Executive Department and in scattered provisions of the Constitution. This is so, notwithstanding the avowed intent of the members of the Constitutional Commission of 1986 to limit the powers of the President as a reaction to the abuses under the regime of Mr. Marcos, for the result was a limitation of specific powers of the President, particularly those relating to the commander-in-chief clause, but not a diminution of the general grant of executive power. Thus, the President's authority to declare a state of rebellion springs in the main from her powers as chief executive and, at the same time, draws strength from her Commander-in-Chief powers. x x x (Emphasis and underscoring supplied) Similarly, the President's power to conduct peace negotiations is implicitly included in her powers as Chief Executive and Commander-in-Chief. As Chief Executive, the President has the general responsibility to promote public peace, and as Commander-in-Chief, she has the more specific duty to prevent and suppress rebellion and lawless violence.169 As the experience of nations which have similarly gone through internal armed conflict will show, however, peace is rarely attained by simply pursuing a military solution. Oftentimes, changes as farreaching as a fundamental reconfiguration of the nation's constitutional structure is required. The observations of Dr. Kirsti Samuels are enlightening, to wit: x x x [T]he fact remains that a successful political and governance transition must form the core of any post-conflict peace-building mission. As we have observed in Liberia and Haiti over the last ten years, conflict cessation without modification of the political environment, even where state-building is undertaken through technical electoral assistance and institution- or capacity-building, is unlikely to succeed. On average, more than 50 percent of states emerging from conflict return to conflict. Moreover, a substantial proportion of transitions have resulted in weak or limited democracies. The design of a constitution and its constitution-making process can play an important role in the political and governance transition. Constitution-making after conflict is an opportunity to create a common vision of the future of a state and a road map on how to get there. The constitution can be partly a peace agreement and partly a framework setting up the rules by which the new democracy will operate.170 In the same vein, Professor Christine Bell, in her article on the nature and legal status of peace agreements, observed that the typical way that peace agreements establish or confirm mechanisms for demilitarization and demobilization is by linking them to new constitutional structures addressing governance, elections, and legal and human rights institutions.171 In the Philippine experience, the link between peace agreements and constitution-making has been recognized by no less than the framers of the Constitution. Behind the provisions of the Constitution on autonomous regions172 is the framers' intention to implement a particular peace agreement, namely, the Tripoli Agreement of 1976 between the GRP and the MNLF, signed by then Undersecretary of National Defense Carmelo Z. Barbero and then MNLF Chairman Nur Misuari. MR. ROMULO. There are other speakers; so, although I have some more questions, I will reserve my right to ask them if they are not covered by the other speakers. I have only two questions.

I heard one of the Commissioners say that local autonomy already exists in the Muslim region; it is working very well; it has, in fact, diminished a great deal of the problems. So, my question is: since that already exists, why do we have to go into something new? MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner Yusup Abubakar is right that certain definite steps have been taken to implement the provisions of the Tripoli Agreement with respect to an autonomous region in Mindanao. This is a good first step, but there is no question that this is merely a partial response to the Tripoli Agreement itself and to the fuller standard of regional autonomy contemplated in that agreement, and now by state policy.173(Emphasis supplied) The constitutional provisions on autonomy and the statutes enacted pursuant to them have, to the credit of their drafters, been partly successful. Nonetheless, the Filipino people are still faced with the reality of an on-going conflict between the Government and the MILF. If the President is to be expected to find means for bringing this conflict to an end and to achieve lasting peace in Mindanao, then she must be given the leeway to explore, in the course of peace negotiations, solutions that may require changes to the Constitution for their implementation. Being uniquely vested with the power to conduct peace negotiations with rebel groups, the President is in a singular position to know the precise nature of their grievances which, if resolved, may bring an end to hostilities. The President may not, of course, unilaterally implement the solutions that she considers viable, but she may not be prevented from submitting them as recommendations to Congress, which could then, if it is minded, act upon them pursuant to the legal procedures for constitutional amendment and revision. In particular, Congress would have the option, pursuant to Article XVII, Sections 1 and 3 of the Constitution, to propose the recommended amendments or revision to the people, call a constitutional convention, or submit to the electorate the question of calling such a convention. While the President does not possess constituent powers - as those powers may be exercised only by Congress, a Constitutional Convention, or the people through initiative and referendum - she may submit proposals for constitutional change to Congress in a manner that does not involve the arrogation of constituent powers. In Sanidad v. COMELEC,174 in issue was the legality of then President Marcos' act of directly submitting proposals for constitutional amendments to a referendum, bypassing the interim National Assembly which was the body vested by the 1973 Constitution with the power to propose such amendments. President Marcos, it will be recalled, never convened the interim National Assembly. The majority upheld the President's act, holding that "the urges of absolute necessity" compelled the President as the agent of the people to act as he did, there being no interim National Assembly to propose constitutional amendments. Against this ruling, Justices Teehankee and Muoz Palma vigorously dissented. The Court's concern at present, however, is not with regard to the point on which it was then divided in that controversial case, but on that which was not disputed by either side. Justice Teehankee's dissent,175 in particular, bears noting. While he disagreed that the President may directly submit proposed constitutional amendments to a referendum, implicit in his opinion is a recognition that he would have upheld the President's action along with the majority had the President convened the interim National Assembly and coursed his proposals through it. Thus Justice Teehankee opined: "Since the Constitution provides for the organization of the essential departments of government, defines and delimits the powers of each and prescribes the manner of the exercise of such powers, and the

constituent power has not been granted to but has been withheld from the President or Prime Minister, it follows that the President's questioned decrees proposing and submitting constitutional amendments directly to the people (without the intervention of the interim National Assembly in whom the power is expressly vested) are devoid of constitutional and legal basis."176 (Emphasis supplied) From the foregoing discussion, the principle may be inferred that the President - in the course of conducting peace negotiations - may validly consider implementing even those policies that require changes to the Constitution, but she may not unilaterally implement them without the intervention of Congress, or act in any way as if the assent of that body were assumed as a certainty. Since, under the present Constitution, the people also have the power to directly propose amendments through initiative and referendum, the President may also submit her recommendations to the people, not as a formal proposal to be voted on in a plebiscite similar to what President Marcos did in Sanidad, but for their independent consideration of whether these recommendations merit being formally proposed through initiative. These recommendations, however, may amount to nothing more than the President's suggestions to the people, for any further involvement in the process of initiative by the Chief Executive may vitiate its character as a genuine "people's initiative." The only initiative recognized by the Constitution is that which truly proceeds from the people. As the Court stated in Lambino v. COMELEC:177 "The Lambino Group claims that their initiative is the people's vo ice.' However, the Lambino Group unabashedly states in ULAP Resolution No. 2006-02, in the verification of their petition with the COMELEC, that ULAP maintains its unqualified support to the agenda of Her Excellency President Gloria Macapagal-Arroyo for constitutional reforms.' The Lambino Group thus admits that their people's' initiative is an unqualified support to the agenda' of the incumbent President to change the Constitution. This forewarns the Court to be wary of incantations of people's voice' or sovereign will' in the present initiative." It will be observed that the President has authority, as stated in her oath of office,178 only to preserve and defend the Constitution. Such presidential power does not, however, extend to allowing her to change the Constitution, but simply to recommend proposed amendments or revision. As long as she limits herself to recommending these changes and submits to the proper procedure for constitutional amendments and revision, her mere recommendation need not be construed as an unconstitutional act. The foregoing discussion focused on the President's authority to propose constitutional amendments, since her authority to propose new legislation is not in controversy. It has been an accepted practice for Presidents in this jurisdiction to propose new legislation. One of the more prominent instances the practice is usually done is in the yearly State of the Nation Address of the President to Congress. Moreover, the annual general appropriations bill has always been based on the budget prepared by the President, which - for all intents and purposes - is a proposal for new legislation coming from the President.179 The "suspensive clause" in the MOA-AD viewed in light of the above-discussed standards Given the limited nature of the President's authority to propose constitutional amendments, she cannot guarantee to any third party that the required amendments will eventually be put in place, nor even be submitted to a plebiscite. The most she could do is submit these proposals as recommendations either to Congress or the people, in whom constituent powers are vested.

Paragraph 7 on Governance of the MOA-AD states, however, that all provisions thereof which cannot be reconciled with the present Constitution and laws "shall come into force upon signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework." This stipulation does not bear the marks of a suspensive condition - defined in civil law as a future and uncertain event - but of a term. It is not a question of whether the necessary changes to the legal framework will be effected, but when. That there is no uncertainty being contemplated is plain from what follows, for the paragraph goes on to state that the contemplated changes shall be "with due regard to non derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact." Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the changes to the legal framework contemplated in the MOA-AD - which changes would include constitutional amendments, as discussed earlier. It bears noting that, By the time these changes are put in place, the MOA-AD itself would be counted among the "prior agreements" from which there could be no derogation. What remains for discussion in the Comprehensive Compact would merely be the implementing details for these "consensus points" and, notably, the deadline for effecting the contemplated changes to the legal framework. Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the limits of the President's authority to propose constitutional amendments, it being a virtual guarantee that the Constitution and the laws of the Republic of the Philippines will certainly be adjusted to conform to all the "consensus points" found in the MOA-AD. Hence, it must be struck down as unconstitutional. A comparison between the "suspensive clause" of the MOA-AD with a similar provision appearing in the 1996 final peace agreement between the MNLF and the GRP is most instructive. As a backdrop, the parties to the 1996 Agreement stipulated that it would be implemented in two phases. Phase I covered a three-year transitional period involving the putting up of new administrative structures through Executive Order, such as the Special Zone of Peace and Development (SZOPAD) and the Southern Philippines Council for Peace and Development (SPCPD), while Phase II covered the establishment of the new regional autonomous government through amendment or repeal of R.A. No. 6734, which was then the Organic Act of the ARMM. The stipulations on Phase II consisted of specific agreements on the structure of the expanded autonomous region envisioned by the parties. To that extent, they are similar to the provisions of the MOA-AD. There is, however, a crucial difference between the two agreements. While the MOA-AD virtually guarantees that the "necessary changes to the legal framework" will be put in place, the GRPMNLF final peace agreement states thus: "Accordingly, these provisions [on Phase II] shall be recommended by the GRP to Congress for incorporation in the amendatory or repealing law." Concerns have been raised that the MOA-AD would have given rise to a binding international law obligation on the part of the Philippines to change its Constitution in conformity thereto, on the ground that it may be considered either as a binding agreement under international law, or a unilateral declaration of the Philippine government to the international community that it would grant to the Bangsamoro people all the concessions therein stated. Neither ground finds sufficient support in international law, however.

The MOA-AD, as earlier mentioned in the overview thereof, would have included foreign dignitaries as signatories. In addition, representatives of other nations were invited to witness its signing in Kuala Lumpur. These circumstances readily lead one to surmise that the MOA-AD would have had the status of a binding international agreement had it been signed. An examination of the prevailing principles in international law, however, leads to the contrary conclusion. The Decision on Challenge to Jurisdiction: Lom Accord Amnesty180 (the Lom Accord case) of the Special Court of Sierra Leone is enlightening. The Lom Accord was a peace agreement signed on July 7, 1999 between the Government of Sierra Leone and the Revolutionary United Front (RUF), a rebel group with which the Sierra Leone Government had been in armed conflict for around eight years at the time of signing. There were non-contracting signatories to the agreement, among which were the Government of the Togolese Republic, the Economic Community of West African States, and the UN. On January 16, 2002, after a successful negotiation between the UN Secretary-General and the Sierra Leone Government, another agreement was entered into by the UN and that Government whereby the Special Court of Sierra Leone was established. The sole purpose of the Special Court, an international court, was to try persons who bore the greatest responsibility for serious violations of international humanitarian law and Sierra Leonean law committed in the territory of Sierra Leone since November 30, 1996. Among the stipulations of the Lom Accord was a provision for the full pardon of the members of the RUF with respect to anything done by them in pursuit of their objectives as members of that organization since the conflict began. In the Lom Accord case, the Defence argued that the Accord created an internationally binding obligation not to prosecute the beneficiaries of the amnesty provided therein, citing, among other things, the participation of foreign dignitaries and international organizations in the finalization of that agreement. The Special Court, however, rejected this argument, ruling that the Lome Accord is not a treaty and that it can only create binding obligations and rights between the parties in municipal law, not in international law. Hence, the Special Court held, it is ineffective in depriving an international court like it of jurisdiction. "37. In regard to the nature of a negotiated settlement of an internal armed conflict it is easy to assume and to argue with some degree of plausibility, as Defence counsel for the defendants seem to have done, that the mere fact that in addition to the parties to the conflict, the document formalizing the settlement is signed by foreign heads of state or their representatives and representatives of international organizations, means the agreement of the parties is internationalized so as to create obligations in international law. xxxx 40. Almost every conflict resolution will involve the parties to the conflict and the mediator or facilitator of the settlement, or persons or bodies under whose auspices the settlement took place but who are not at all parties to the conflict, are not contracting parties and who do not claim any obligation from the contracting parties or incur any obligation from the settlement. 41. In this case, the parties to the conflict are the lawful authority of the State and the RUF which has no status of statehood and is to all intents and purposes a faction within the state. The non-contracting signatories of the Lom Agreement were moral guarantors of the principle that, in the terms of Article XXXIV of the Agreement, "this peace agreement is implemented with integrity and in good faith by both

parties". The moral guarantors assumed no legal obligation. It is recalled that the UN by its representative appended, presumably for avoidance of doubt, an understanding of the extent of the agreement to be implemented as not including certain international crimes. 42. An international agreement in the nature of a treaty must create rights and obligations regulated by international law so that a breach of its terms will be a breach determined under international law which will also provide principle means of enforcement. The Lom Agreement created neither rights nor obligations capable of being regulated by international law. An agreement such as the Lom Agreement which brings to an end an internal armed conflict no doubt creates a factual situation of restoration of peace that the international community acting through the Security Council may take note of. That, however, will not convert it to an international agreement which creates an obligation enforceable in international, as distinguished from municipal, law. A breach of the terms of such a peace agreement resulting in resumption of internal armed conflict or creating a threat to peace in the determination of the Security Council may indicate a reversal of the factual situation of peace to be visited with possible legal consequences arising from the new situation of conflict created. Such consequences such as action by the Security Council pursuant to Chapter VII arise from the situation and not from the agreement, nor from the obligation imposed by it. Such action cannot be regarded as a remedy for the breach. A peace agreement which settles an internal armed conflict cannot be ascribed the same status as one which settles an international armed conflict which, essentially, must be between two or more warring States. The Lom Agreement cannot be characterised as an international instrument. x x x" (Emphasis, italics and underscoring supplied) Similarly, that the MOA-AD would have been signed by representatives of States and international organizations not parties to the Agreement would not have sufficed to vest in it a binding character under international law. In another vein, concern has been raised that the MOA-AD would amount to a unilateral declaration of the Philippine State, binding under international law, that it would comply with all the stipulations stated therein, with the result that it would have to amend its Constitution accordingly regardless of the true will of the people. Cited as authority for this view is Australia v. France,181 also known as the Nuclear Tests Case, decided by the International Court of Justice (ICJ). In the Nuclear Tests Case, Australia challenged before the ICJ the legality of France's nuclear tests in the South Pacific. France refused to appear in the case, but public statements from its President, and similar statements from other French officials including its Minister of Defence, that its 1974 series of atmospheric tests would be its last, persuaded the ICJ to dismiss the case.182 Those statements, the ICJ held, amounted to a legal undertaking addressed to the international community, which required no acceptance from other States for it to become effective. Essential to the ICJ ruling is its finding that the French government intended to be bound to the international community in issuing its public statements, viz: 43. It is well recognized that declarations made by way of unilateral acts, concerning legal or factual situations, may have the effect of creating legal obligations. Declarations of this kind may be, and often are, very specific. When it is the intention of the State making the declaration that it should become bound according to its terms, that intention confers on the declaration the character of a legal undertaking, the State being thenceforth legally required to follow a course of conduct consistent with the declaration. An undertaking of this kind, if given publicly, and with an intent to be bound, even though not made within the context of international negotiations, is binding. In these circumstances, nothing in the nature of a quid

pro quo nor any subsequent acceptance of the declaration, nor even any reply or reaction from other States, is required for the declaration to take effect, since such a requirement would be inconsistent with the strictly unilateral nature of the juridical act by which the pronouncement by the State was made. 44. Of course, not all unilateral acts imply obligation; but a State may choose to take up a certain position in relation to a particular matter with the intention of being bound-the intention is to be ascertained by interpretation of the act. When States make statements by which their freedom of action is to be limited, a restrictive interpretation is called for. xxxx 51. In announcing that the 1974 series of atmospheric tests would be the last, the French Government conveyed to the world at large, including the Applicant, its intention effectively to terminate these tests. It was bound to assume that other States might take note of these statements and rely on their being effective. The validity of these statements and their legal consequences must be considered within the general framework of the security of international intercourse, and the confidence and trust which are so essential in the relations among States. It is from the actual substance of these statements, and from the circumstances attending their making, that the legal implications of the unilateral act must be deduced. The objects of these statements are clear and they were addressed to the international community as a whole, and the Court holds that they constitute an undertaking possessing legal effect. The Court considers *270 that the President of the Republic, in deciding upon the effective cessation of atmospheric tests, gave an undertaking to the international community to which his words were addressed. x x x (Emphasis and underscoring supplied) As gathered from the above-quoted ruling of the ICJ, public statements of a state representative may be construed as a unilateral declaration only when the following conditions are present: the statements were clearly addressed to the international community, the state intended to be bound to that community by its statements, and that not to give legal effect to those statements would be detrimental to the security of international intercourse. Plainly, unilateral declarations arise only in peculiar circumstances. The limited applicability of the Nuclear Tests Case ruling was recognized in a later case decided by the ICJ entitled Burkina Faso v. Mali,183 also known as the Case Concerning the Frontier Dispute. The public declaration subject of that case was a statement made by the President of Mali, in an interview by a foreign press agency, that Mali would abide by the decision to be issued by a commission of the Organization of African Unity on a frontier dispute then pending between Mali and Burkina Faso. Unlike in the Nuclear Tests Case, the ICJ held that the statement of Mali's President was not a unilateral act with legal implications. It clarified that its ruling in the Nuclear Tests case rested on the peculiar circumstances surrounding the French declaration subject thereof, to wit: 40. In order to assess the intentions of the author of a unilateral act, account must be taken of all the factual circumstances in which the act occurred. For example, in the Nuclear Tests cases, the Court took the view that since the applicant States were not the only ones concerned at the possible continuance of atmospheric testing by the French Government, that Government's unilateral declarations had conveyed to the world at large, including the Applicant, its intention effectively to terminate these tests (I.C.J. Reports 1974, p. 269, para. 51; p. 474, para. 53). In the particular circumstances of those cases, the French Government could not express an intention to be bound otherwise than by unilateral declarations. It is difficult to see how it could have accepted the terms of a negotiated solution with each of the applicants without thereby jeopardizing its contention that its conduct was lawful. The circumstances of

the present case are radically different. Here, there was nothing to hinder the Parties from manifesting an intention to accept the binding character of the conclusions of the Organization of African Unity Mediation Commission by the normal method: a formal agreement on the basis of reciprocity. Since no agreement of this kind was concluded between the Parties, the Chamber finds that there are no grounds to interpret the declaration made by Mali's head of State on 11 April 1975 as a unilateral act with legal implications in regard to the present case. (Emphasis and underscoring supplied) Assessing the MOA-AD in light of the above criteria, it would not have amounted to a unilateral declaration on the part of the Philippine State to the international community. The Philippine panel did not draft the same with the clear intention of being bound thereby to the international community as a whole or to any State, but only to the MILF. While there were States and international organizations involved, one way or another, in the negotiation and projected signing of the MOA-AD, they participated merely as witnesses or, in the case of Malaysia, as facilitator. As held in the Lom Accord case, the mere fact that in addition to the parties to the conflict, the peace settlement is signed by representatives of states and international organizations does not mean that the agreement is internationalized so as to create obligations in international law. Since the commitments in the MOA-AD were not addressed to States, not to give legal effect to such commitments would not be detrimental to the security of international intercourse - to the trust and confidence essential in the relations among States. In one important respect, the circumstances surrounding the MOA-AD are closer to that of Burkina Faso wherein, as already discussed, the Mali President's statement was not held to be a binding unilateral declaration by the ICJ. As in that case, there was also nothing to hinder the Philippine panel, had it really been its intention to be bound to other States, to manifest that intention by formal agreement. Here, that formal agreement would have come about by the inclusion in the MOA-AD of a clear commitment to be legally bound to the international community, not just the MILF, and by an equally clear indication that the signatures of the participating states-representatives would constitute an acceptance of that commitment. Entering into such a formal agreement would not have resulted in a loss of face for the Philippine government before the international community, which was one of the difficulties that prevented the French Government from entering into a formal agreement with other countries. That the Philippine panel did not enter into such a formal agreement suggests that it had no intention to be bound to the international community. On that ground, the MOA-AD may not be considered a unilateral declaration under international law. The MOA-AD not being a document that can bind the Philippines under international law notwithstanding, respondents' almost consummated act of guaranteeing amendments to the legal framework is, by itself, sufficient to constitute grave abuse of discretion. The grave abuse lies not in the fact that they considered, as a solution to the Moro Problem, the creation of a state within a state, but in their brazen willingness to guarantee that Congress and the sovereign Filipino people would give their imprimatur to their solution. Upholding such an act would amount to authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional Convention, or the people themselves through the process of initiative, for the only way that the Executive can ensure the outcome of the amendment process is through an undue influence or interference with that process. The sovereign people may, if it so desired, go to the extent of giving up a portion of its own territory to the Moros for the sake of peace, for it can change the Constitution in any it wants, so long as the change is not inconsistent with what, in international law, is known as Jus Cogens.184 Respondents, however, may not preempt it in that decision.

SUMMARY The petitions are ripe for adjudication. The failure of respondents to consult the local government units or communities affected constitutes a departure by respondents from their mandate under E.O. No. 3. Moreover, respondents exceeded their authority by the mere act of guaranteeing amendments to the Constitution. Any alleged violation of the Constitution by any branch of government is a proper matter for judicial review. As the petitions involve constitutional issues which are of paramount public interest or of transcendental importance, the Court grants the petitioners, petitioners-in-intervention and intervening respondents the requisite locus standi in keeping with the liberal stance adopted in David v. Macapagal-Arroyo. Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual dissolution of the GRP Peace Panel mooted the present petitions, the Court finds that the present petitions provide an exception to the "moot and academic" principle in view of (a) the grave violation of the Constitution involved; (b) the exceptional character of the situation and paramount public interest; (c) the need to formulate controlling principles to guide the bench, the bar, and the public; and (d) the fact that the case is capable of repetition yet evading review. The MOA-AD is a significant part of a series of agreements necessary to carry out the GRP-MILF Tripoli Agreement on Peace signed by the government and the MILF back in June 2001. Hence, the present MOA-AD can be renegotiated or another one drawn up that could contain similar or significantly dissimilar provisions compared to the original. The Court, however, finds that the prayers for mandamus have been rendered moot in view of the respondents' action in providing the Court and the petitioners with the official copy of the final draft of the MOA-AD and its annexes. The people's right to information on matters of public concern under Sec. 7, Article III of the Constitution is in splendid symmetry with the state policy of full public disclosure of all its transactions involving public interest under Sec. 28, Article II of the Constitution. The right to information guarantees the right of the people to demand information, while Section 28 recognizes the duty of officialdom to give information even if nobody demands. The complete and effective exercise of the right to information necessitates that its complementary provision on public disclosure derive the same self-executory nature, subject only to reasonable safeguards or limitations as may be provided by law. The contents of the MOA-AD is a matter of paramount public concern involving public interest in the highest order. In declaring that the right to information contemplates steps and negotiations leading to the consummation of the contract, jurisprudence finds no distinction as to the executory nature or commercial character of the agreement. An essential element of these twin freedoms is to keep a continuing dialogue or process of communication between the government and the people. Corollary to these twin rights is the design for feedback mechanisms. The right to public consultation was envisioned to be a species of these public rights. At least three pertinent laws animate these constitutional imperatives and justify the exercise of the people's right to be consulted on relevant matters relating to the peace agenda.

One, E.O. No. 3 itself is replete with mechanics for continuing consultations on both national and local levels and for a principal forum for consensus-building. In fact, it is the duty of the Presidential Adviser on the Peace Process to conduct regular dialogues to seek relevant information, comments, advice, and recommendations from peace partners and concerned sectors of society. Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all national offices to conduct consultations before any project or program critical to the environment and human ecology including those that may call for the eviction of a particular group of people residing in such locality, is implemented therein. The MOA-AD is one peculiar program that unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro people, which could pervasively and drastically result to the diaspora or displacement of a great number of inhabitants from their total environment. Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for clear-cut procedure for the recognition and delineation of ancestral domain, which entails, among other things, the observance of the free and prior informed consent of the Indigenous Cultural Communities/Indigenous Peoples. Notably, the statute does not grant the Executive Department or any government agency the power to delineate and recognize an ancestral domain claim by mere agreement or compromise. The invocation of the doctrine of executive privilege as a defense to the general right to information or the specific right to consultation is untenable. The various explicit legal provisions fly in the face of executive secrecy. In any event, respondents effectively waived such defense after it unconditionally disclosed the official copies of the final draft of the MOA-AD, for judicial compliance and public scrutiny. In sum, the Presidential Adviser on the Peace Process committed grave abuse of discretion when he failed to carry out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No. 7160, and Republic Act No. 8371. The furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic exercise thereof. It illustrates a gross evasion of positive duty and a virtual refusal to perform the duty enjoined. The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific provisions but the very concept underlying them, namely, the associative relationship envisioned between the GRP and the BJE, are unconstitutional, for the concept presupposes that the associated entity is a state and implies that the same is on its way to independence. While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the present legal framework will not be effective until that framework is amended, the same does not cure its defect. The inclusion of provisions in the MOA-AD establishing an associative relationship between the BJE and the Central Government is, itself, a violation of the Memorandum of Instructions From The President dated March 1, 2001, addressed to the government peace panel. Moreover, as the clause is worded, it virtually guarantees that the necessary amendments to the Constitution and the laws will eventually be put in place. Neither the GRP Peace Panel nor the President herself is authorized to make such a guarantee. Upholding such an act would amount to authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional Convention, or the people themselves through the process of initiative, for the only way that the Executive can ensure the outcome of the amendment process is through an undue influence or interference with that process.

While the MOA-AD would not amount to an international agreement or unilateral declaration binding on the Philippines under international law, respondents' act of guaranteeing amendments is, by itself, already a constitutional violation that renders the MOA-AD fatally defective. WHEREFORE, respondents' motion to dismiss is DENIED. The main and intervening petitions are GIVEN DUE COURSE and hereby GRANTED. The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli Agreement on Peace of 2001 is declared contrary to law and the Constitution. SO ORDERED. CONCHITA CARPIO MORALES Associate Justice

WE CONCUR: REYNATO S. PUNO Chief Justice LEONARDO A. QUISUMBING Associate Justice CONSUELO YNARES-SANTIAGO Associate Justice ANTONIO T. CARPIO Associate Justice MA. ALICIA AUSTRIA-MARTINEZ Associate Justice RENATO C. CORONA Associate Justice ADOLFO S. AZCUNA Associate Justice DANTE O. TINGA Associate Justice MINITA V. CHICO-NAZARIO Associate Justice PRESBITERO J. VELASCO, JR. Associate Justice ANTONIO EDUARDO B. NACHURA Associate Justice RUBEN T. REYES Associate Justice

TERESITA J. LEONARDO-DE CASTRO Associate Justice ARTURO D. BRION Associate Justice

CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. REYNATO S. PUNO Chief Justice

Separate Concurring Opinion - C.J. Puno, J. Ynares-Santiago, J. Carpio Separate Concurring and Dissenting Opinion - J. Leonardo-De Castro, J. Brion Separate Opinion - J. Azcuna, J. Tinga, J. Chico-Nazario, J. Reyes Dissenting Opinion - J. Velasco, Jr., J. Nachura

Footnotes 1 Eric Gutierrez and Abdulwahab Guialal, The Unfinished Jihad: The Moro Islamic Liberation Front and Peace in Mindanao in Rebels, Warlords and Ulama: A Reader on Muslim Separatism and the War in Southern Philippines 275 (1999). 2 Memorandum of Respondents dated September 24, 2008, p. 10. 3 Memorandum of Respondents dated September 24, 2008, pp. 10-11. 4 Vide Salah Jubair, The Long Road to Peace: Inside the GRP-MILF Peace Process 35-36 (2007). 5 Memorandum of Respondents dated September 24, 2008, p. 12. 6 Vide Salah Jubair, The Long Road to Peace: Inside the GRP-MILF Peace Process 40-41 (2007). 7 Composed of its Chairperson, Sec. Rodolfo Garcia, and members, Atty. Leah Armamento, Atty. Sedfrey Candelaria, with Mark Ryan Sullivan as Secretariat head. 8 Represented by Governor Jesus Sacdalan and/or Vice-Governor Emmanuel Piol. 9 Rollo (G.R. No. 183591), pp. 3-33.

10 Supplement to Petition (with motion for leave) of August 11, 2008, rollo (G.R. No. 183591), pp. 143162. 11 Rollo (G.R. No. 183752), pp. 3-28. 12 Represented by Mayor Celso L. Lobregat. 13 Rollo (G.R. No. 183591), pp. 132-135; rollo (G.R. No. 183752), pp. 68-71. 14 Rollo (G.R. No. 183591), pp. 130-131; rollo (G.R. No. 183752), pp. 66-67. 15 Rollo (G.R. No. 183752), pp. 173-246. 16 Represented by Mayor Lawrence Lluch Cruz. 17 Represented by Governor Rolando Yebes. 18 Namely, Seth Frederick Jaloslos, Fernando Cabigon, Jr., Uldarico Mejorada II, Edionar Zamoras, Edgar Baguio, Cedric Adriatico, Felixberto Bolando, Joseph Brendo Ajero, Norbideiri Edding, Anecito Darunday, Angelica Carreon, and Luzviminda Torrino. 19 Rollo (G.R. No. 183951), pp. 3-33. 20 Rollo (G.R. No. 183962), pp. 3- 20. 21 Represented by Mayor Cherrylyn Santos-Akbar. 22 Represented by Gov. Suharto Mangudadatu. 23 Represented by Mayor Noel Deano. 24 Rollo (G.R. No. 183591), pp. 451-453. 25 R.A. No. 6734, as amended by R.A. 9054 entitled An Act to Strengthen and Expand the organic act for the Autonomous Region in Muslim Mindanao, Amending for the purpose republic act no. 6734, entitled an act of providing for the autonomous region in muslim mindanao, as amended. 26 R.A. No. 8371, An act to recognize, protect and promote the rights of indigenous cultural communities/indigenous peoples, creating a national commission on indigenous peoples, establishing implementing mechanisms, appropriating funds therefor, and for other purposes, October 29, 1997. 27 Cesar Adib Majul, The General Nature of Islamic Law and its Application in the Philippines, lecture delivered as part of the Ricardo Paras Lectures, a series jointly sponsored by the Commission on Bar Integration of the Supreme Court, the Integrated Bar of the Philippines and the U.P. Law Center, September 24, 1977. 28 Ibid., vide M.A. Muqtedar Khan Ph.D., immigrant American Muslims and the Moral Dilemmas of Citizenship, http://www.islamfortoday.com/khan04.htm, visited on September 18, 2008, and Syed

Shahabuddin, Muslim World and the contemporary Ijma' on rules of governance - ii, http://www.milligazette.com/Archives/2004/01-15May04-Print-Edition/0105200471.htm, visited on September 18, 2008. 29 MOA-AD Terms of Reference. 30 MOA-AD, Concepts and Principles, par. 1. 31 A traditional Muslim historical account of the acts of Shariff Kabungsuwan is quoted by historian Cesar Adib Majul in his book, Muslims in the Philippines (1973): After a time it came to pass that Mamalu, who was the chief man next to Kabungsuwan, journeyed to Cotabato. He found there that many of the people had ceased to regard the teachings of the Koran and had fallen into evil ways. Mamamlu sent to Kabungsuwan word of these things. Kabungsuwan with a portion of his warriors went from Malabang to Cotabato and found that the word sent to him by Mamamlu was true. Then he assembled together all the people. Those of them, who had done evilly and disregarded the teachings of the Koran thenceforth, he drove out of the town into the hills, with their wives and children. Those wicked one who were thus cast out were the beginnings of the tribes of the Tirurais and Manobos, who live to the east of Cotabato in the country into which their evil forefathers were driven. And even to this day they worship not God; neither do they obey the teachings of the Koran . . . But the people of Kabungsuwan, who regarded the teachings of the Koran and lived in fear of God, prospered and increased, and we Moros of today are their descendants. (Citation omitted, emphasis supplied). 32 Id., par. 2. 33 Id., par. 3. 34 Id., par. 4. 35 Francisco L. Gonzales, Sultans of a Violent Land, in Rebels, Warlords and Ulama: A Reader on Muslim Separatism and the War in Southern Philippines 99, 103 (1999). 36 The Charter of the Assembly of First Nations, the leading advocacy group for the indigenous peoples of Canada, adopted in 1985, begins thus: "WE THE CHIEFS OF THE INDIAN FIRST NATIONS IN CANADA HAVING DECLARED: THAT our peoples are the original peoples of this land having been put here by the Creator; x x x." 37 Id., par. 6. 38 MOA-AD, Territory, par. 1. 39 Id., par. 2(c). 40 Id., par. 2(d).

41 Id., par. 2(e). 42 Id., par. 2(f). 43 Id., par, 2(g)(1). 44 Id., par. 2(h). 45 Id., par. 2(i). 46 MOA-AD, Resources, par. 4. 47 Ibid. 48 Id., par. 5. 49 Id., par. 6. 50 Id., par. 7. 51 Id., par. 9. 52 MOA-AD, Governance, par. 3. 53 "IN WITNESS WHEREOF, the undersigned, being the representatives of the Parties[,] hereby affix their signatures." 54 Vide 1987 Constitution, Article VIII, Section 1. 55 Vide Muskrat v. US, 219 US 346 (1911). 56 Flast v. Cohen, 88 S.Ct. 1942, 1950 (1968). 57 Didipio Earth Savers' Multi-Purpose Association, Incorporated (DESAMA) v. Gozun, G.R. No. 157882, March 30, 2006, 485 SCRA 286. 58 Vide U.S. v. Muskrat, 219 U.S. 346, 357 (1902). 59 Guingona, Jr. v. Court of Appeals, 354 Phil. 415, 427-428 (1998). 60 Francisco, Jr. v. House of Representatives, 460 Phil. 830, 901-902 (2003) (citation omitted). 61 Vide Warth v. Seldin, 422 US 490, 511 (1975). 62 Vide id. at 526. 63 Solicitor General's Comment to G.R. No. 183752, pp. 9-11. 64 MOA-AD, pp. 3-7, 10.

65 391 Phil. 43 (2000). 66 Id. at 107-108. 67 530 US 290 (2000). 68 Id. at 292. 69 505 U.S. 144 (1992). 70 Id. at 175. 71 Although only one petition is denominated a petition for certiorari, most petitions pray that the MOA-AD be declared unconstitutional/null and void. 72 Vide Rules of Court, Rule 65, Secs. 1 and 2. 73 Vide Rules of Court, Rule 65, Sec. 3. 74 Taada v. Angara, 338 Phil. 546, 575 (1997). 75 Entitled Defining Policy and Administrative Structure for Government's Peace Efforts which reaffirms and reiterates Executive Order No. 125 of September 15, 1993. 76 E.O. No. 3, (2001), Sec. 1. 77 Vide Taada v. Angara, supra note 74. 78 Baker v. Carr, 369 U.S. 186 (1962). 79 Vicente V. Mendoza , Judicial Review of Constitutional Questions 137 (2004). 80 Francisco, Jr. v. The House of Representatives, 460 Phil. 830, 896 (2003). 81 David v. Macapagal-Arroyo, G.R. No. 171396, May 3, 2006, 489 SCRA 160, 223. 82 Kilosbayan, Inc. v. Morato, 320 Phil. 171 (1995). 83 Macasiano v. NHA, G.R. No. 107921, July 1, 1993, 224 SCRA 236. 84 Del Mar v. Phil. Amusement and Gaming Corp., 400 Phil. 307, 328-329 (2000) citing Phil. Constitution Ass'n., Inc. v. Mathay, et al., 124 Phil. 890 (1966). 85 Vide NAACP v. Alabama, 357 U.S. 449 (1958). 86 Francisco, Jr. v. The House of Representatives, supra note 80. 87 Province of Batangas v. Romulo, G.R. No. 152774, May 27, 2004, 429 SCRA 736.

88 Firestone Ceramics, Inc. v. Court of Appeals, 372 Phil. 401 (1999) citing Gibson v. Judge Revilla, 180 Phil. 645 (1979). 89 Supra note 81. 90 Integrated Bar of the Phils. v. Hon. Zamora, 392 Phil. 618 (2000). 91 Tatad v. Secretary of Energy, 346 Phil. 321 (1997). 92 Vide Compliance of September 1, 2008 of respondents. 93 Vide Manifestation of September 4, 2008 of respondents. 94 Supra note 81. 95 Id. citing Province of Batangas v. Romulo, supra note 87. 96 Id. citing Lacson v. Perez, 410 Phil. 78 (2001). 97 Id. citing Province of Batangas v. Romulo, supra note 87. 98 Id. citing Albaa v. Comelec, 478 Phil. 941 (2004); Chief Supt. Acop v. Guingona Jr., 433 Phil. 62 (2002); SANLAKAS v. Executive Secretary Reyes, 466 Phil. 482 (2004). 99 US v. W.T. Grant Co., 345 U.S. 629 (1953); US v. Trans-Missouri Freight Assn, 166 U.S. 290, 308-310 (1897); Walling v. Helmerich & Payne, Inc., 323 U.S. 37, 43 (1944); Gray v. Sanders, 372 U.S. 368, 376 (1963); Defunis v. Odegaard, 416 U.S. 312 (1974).

100 Supra note 87. 101 G.R. No. 178920, October 15, 2007, 536 SCRA 290. 102 Chavez v. PCGG, 366 Phil. 863, 871 (1999). 103 G.R. No. 178830, July 14, 2008. 104 Supra note 98. 105 Ortega v. Quezon City Government, G.R. No. 161400, September 2, 2005, 469 SCRA 388. 106 Alunan III v. Mirasol, 342 Phil. 476 (1997); Viola v. Alunan III, 343 Phil. 184 (1997); Chief Superintendent Acop v. Guingona, Jr., supra note 98; Roble Arrastre, Inc. v. Villaflor, G.R. No. 128509, August 22, 2006, 499 SCRA 434, 447. 107 Constitution, Article III, Sec. 7. 108 80 Phil. 383 (1948).

109 Legaspi v. Civil Service Commission, G.R. No. L-72119, May 29, 1987, 150 SCRA 530. 110 162 Phil. 868 (1976). 111 Baldoza v. Dimaano, supra at 876. 112 Legaspi v. Civil Service Commission, supra note 109. 113 Chavez v. PCGG, 360 Phil 133, 164 (1998). 114 In Legaspi v. Civil Service Commission, supra note 109 at 541, it was held that: In determining whether or not a particular information is of public concern there is no rigid test which can be applied. `Public concern' like `public interest' is a term that eludes exact definition. Both terms embrace a broad spectrum of subjects which the public may want to know, either because these directly affect their lives, or simply because such matters naturally arouse the interest of an ordinary citizen. In the final analysis, it is for the courts to determine on a case by case basis whether the matter at issue is of interest or importance, as it relates to or affects the public. 115 Respondents' Comment of August 4, 2008, p. 9. 116 Subido v. Ozaeta, supra note 108. 117 Taada, et al. v. Hon. Tuvera, et al., 220 Phil. 422 (1985); Taada, v. Hon. Tuvera, 230 Phil. 528 (1986). 118 Legaspi v. Civil Service Commission, supra note 109. 119 Valmonte v. Belmonte, Jr., G.R. No. 74930, February 13, 1989, 170 SCRA 256. 120 Chavez v. PCGG, supra note 113; Chavez v. PCGG, supra note 102. 121 Bantay Republic Act or BA-RA 7941 v. Commission on Elections, G.R. 177271, May 4, 2007, 523 SCRA 1. 122 Chavez v. Public Estates Authority, 433 Phil. 506, 532-533 (2002). 123 Vide V Record, Constitutional Commission 26-28 (September 24, 1986) which is replete with such descriptive phrase used by Commissioner Blas Ople. 124 Constitution, Article II, Sec. 28. 125 Bernas, Joaquin, The 1987 Constitution of the Republic of the Philippines: A Commentary 100 (2003). 126 Vide Bernas, Joaquin, The Intent of the 1986 Constitution Writers 155 (1995). 127 Vide Chavez v. Public Estates Authority, supra note 122.

128 V Record, Constitutional Commission 25 (September 24, 1986). 129 V Record, Constitutional Commission 28-29 (September 24, 1986). The phrase "safeguards on national interest" that may be provided by law was subsequently replaced by "reasonable conditions," as proposed by Commissioner Davide [vide V Record, Constitutional Commission 30 (September 24, 1986)]. 130 In Chavez v. National Housing Authority, G.R. No. 164527, August 15, 2007, 530 SCRA 235, 331, the Court stated: x x x The duty to disclose covers only transactions involving public interest, while the duty to allow access has a broader scope of information which embraces not only transactions involving public interest, but any matter contained in official communications and public documents of the government agency. (Underscoring supplied) 131 Valmonte v. Belmonte, Jr., supra note 119. 132 V Record, Constitutional Commission 28, 30 (September 24, 1986). 133 Supra note 55. 134 Executive Order No. 3 (2001), Sec. 3 (a). 135 Executive Order No. 3 (2001), Sec. 4 (b). 136 Respondents' Memorandum of September 24, 2008, p. 44. 137 Executive Order No. 3 (2001), Sec. 5 (b), par. 6. 138 Executive Order No. 3 (2001), Sec. 8, see also Sec. 10. 139 Cf. Garcia v. Board of Investments, G.R. No. 88637, September 7, 1989, 177 SCRA 374, 382-384 where it was held that the Omnibus Investment Code of 1987 mandates the holding of consultations with affected communities, whenever necessary, on the acceptability of locating the registered enterprise within the community. 140 In their Memorandum, respondents made allegations purporting to show that consultations were conducted on August 30, 2001 in Marawi City and Iligan City, on September 20, 2001 in Midsayap, Cotabato, and on January 18-19, 2002 in Metro Manila. (Memorandum of September 24, 2008, p. 13) 141 Cf. Chavez v. Public Estates Authority, supra note 120. 142 Republic Act No. 7160, Sec. 2(c). 143 Republic Act No. 7160, Sec. 27. 144 416 Phil. 438 (2001).

145 Id.; vide Alvarez v. PICOP Resources, Inc., G.R. No. 162243, November 29, 2006, 508 SCRA 498; Cf. Bangus Fry Fisherfolk v. Lanzanas, 453 Phil. 479 (2002). 146 Vide MOA-AD "Concepts and Principles," pars. 2 & 7 in relation to "Resources," par. 9 where vested property rights are made subject to the cancellation, modification and review by the Bangsamoro Juridical Entity. 147 Republic Act No. 8371 or "The Indigenous Peoples Rights Act of 1997," Sec. 16. 148 Id., Sec. 3 (g), Chapter VIII, inter alia. 149 Taada v. Tuvera, No. L-63915, December 29, 1986, 146 SCRA 446, 456. 150 C.I. Keitner and W.M. Reisman, Free Association: The United States Experience, 39 Tex. Int'l L.J. 1 (2003). 151 "The former Trust Territory of the Pacific Islands is made up of the Caroline Islands, the Marshall Islands, and the Northern Mariana Islands, which extend east of the Philippines and northeast of Indonesia in the North Pacific Ocean." (Ibid.) 152 H. Hills, Free Association for Micronesia and the Marshall islands: A Political Status Model, 27 U. Haw. L. Rev. 1 (2004). 153 Henkin, et al., International Law: Cases and Materials, 2nd ed., 274 (1987). 154 Convention on Rights and Duties of States, Dec. 26, 1933, 49 Stat. 3097, 165 L.N.T.S. 19. 155 G.R. No. 158088, July 6, 2005, 462 SCRA 622, 632. 156 An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, Amending for the purpose Republic Act No. 6734, Entitled An Act Providing for the Autonomous Region in Muslim Mindanao,' as Amended, March 31, 2001. 157 An Act To Recognize, Protect And Promote The Rights Of Indigenous Cultural Communities/Indigenous Peoples, Creating A National Commission On Indigenous Peoples, Establishing Implementing Mechanisms, Appropriating Funds Therefor, And For Other Purposes, October 29, 1997. 158 90 Phil. 70, 73-74 (1951). 159 177 Phil. 160, 178-179 (1979). 160 2 S.C.R. 217 (1998). 161 999 U.N.T.S. 171 (March 23, 1976). 162 993 U.N.T.S. 3 (January 3, 1976). 163 League of Nations Official Journal, Special Supp. No. 3 (October 1920).

164 Lorie M. Graham, Resolving Indigenous Claims To Self-Determination, 10 ILSA J. Int'l & Comp. L. 385 (2004). Vide S. James Anaya, Superpower Attitudes Toward Indigenous Peoples And Group Rights, 93 Am. Soc'y Int'l L. Proc. 251 (1999): "In general, the term indigenous is used in association with groups that maintain a continuity of cultural identity with historical communities that suffered some form of colonial invasion, and that by virtue of that continuity of cultural identity continue to distinguish themselves from others." 165 Catherine J. Iorns, Indigenous Peoples And Self Determination: Challenging State Sovereignty, 24 Case W. Res. J. Int'l L. 199 (1992). 166 Federico Lenzerini, "Sovereignty Revisited: International Law And Parallel Sovereignty Of Indigenous Peoples," 42 Tex. Int'l L.J. 155 (2006). Vide Christopher J. Fromherz, Indigenous Peoples' Courts: Egalitarian Juridical Pluralism, Self-Determination, And The United Nations Declaration On The Rights Of Indigenous Peoples, 156 U. Pa. L. Rev. 1341 (2008): "While Australia and the United States made much of the distinction between self-government' and self-determination' on September 13, 2007, the U.S. statement to the UN on May 17, 2004, seems to use these two concepts interchangeably. And, indeed, under the DRIP [Declaration on the Rights of Indigenous Peoples], all three terms should be considered virtually synonymous. Self-determination under the DRIP means internal self -determination' when read in conjunction with Article 46, and self-government,' articulated in Article 4, is the core of the self determination.'" 167 Defining The Approach And Administrative Structure For Government's Comprehensive Peace Efforts, September 15, 1993. 168 466 Phil. 482, 519-520 (2004). 169 Constitution, Article VII, Sec. 18. 170 Kirsti Samuels, Post-Conflict Peace-Building And Constitution-Making, 6 Chi. J. Int'l L. 663 (2006). 171 Christine Bell, Peace Agreements: Their Nature And Legal Status, 100 Am. J. Int'l L. 373 (2006). 172 Constitution, Article X, Sections 15-21. 173 III Record, Constitutional Commission, 180 (August 11, 1986). 174 165 Phil. 303 (1976). 175 Id. at 412. 176 Id. at 413. 177 G.R. No. 174153, October 25, 2006, 505 SCRA 160, 264-265. 178 Constitution, Art. VII, Sec. 5. 179 Article VI, Section 25 (1) of the Constitution states as follows: "The Congress may not increase the appropriations recommended by the President for the operation of the Government as specified in the budget. The form, content, and manner of preparation of the budget shall be prescribed by law."

180 Prosecutor v. Kallon and Kamara [Case No. SCSL-2004-15-AR72(E), SCSL-2004-16-AR72(E), March 13, 2004]. 181 1974 I.C.J. 253, 1974 WL 3 (I.C.J.). 182 M. Janis and J. Noyes, International Law, Cases and Commentary, 3rd ed. 280 (2006). 183 1986 I.C.J. 554, 1986 WL 15621 (I.C.J.), December 22, 1986. 184 Planas v. COMELEC, 151 Phil. 217, 249 (1973).

The Lawphil Project - Arellano Law Foundation --------------------------------------------------------------------------------

EN BANC [G.R. No. 135385. December 6, 2000] ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL COMMISSION ON INDIGENOUS PEOPLES, respondents. HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU BALITUNGTUNG-ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN, TIMUAY JOSE ANOY, TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING, DATU SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA SAWAY, BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY, LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE CARANTESVIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ, RODOLFO C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B. GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY, RICO O. SULATAN, RAFFY MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H. MANGKULINTAS, SAMIE SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO S. LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY, JIMMY UGYUB, SALVADOR TIONGSON, VENANCIO APANG, MADION MALID, SUKIM MALID, NENENG MALID, MANGKATADONG AUGUSTO DIANO, JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELAY DIAMILING, SALOME P. SARZA, FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P. GERADA, RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH L. MENDI, MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, represented by her father CORNELIO MALID, MARCELINO M. LADRA, represented by her father MONICO D. LADRA, JENNYLYN MALID, represented by her father TONY MALID, ARIEL M. EVANGELISTA, represented by her mother LINAY BALBUENA, EDWARD M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO BLAAN TRIBAL FARMERS ASSOCIATION, INTER-PEOPLES EXCHANGE, INC. and GREEN FORUM-WESTERN VISAYAS, intervenors. COMMISSION ON HUMAN RIGHTS, intervenor. IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE CONSERVATION OF NATURAL RESOURCES, INC., intervenor. RESOLUTION PER CURIAM: Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371 (R.A. 8371),

otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and Regulations (Implementing Rules). In its resolution of September 29, 1998, the Court required respondents to comment.[1] In compliance, respondents Chairperson and Commissioners of the National Commission on Indigenous Peoples (NCIP), the government agency created under the IPRA to implement its provisions, filed on October 13, 1998 their Comment to the Petition, in which they defend the constitutionality of the IPRA and pray that the petition be dismissed for lack of merit. On October 19, 1998, respondents Secretary of the Department of Environment and Natural Resources (DENR) and Secretary of the Department of Budget and Management (DBM) filed through the Solicitor General a consolidated Comment. The Solicitor General is of the view that the IPRA is partly unconstitutional on the ground that it grants ownership over natural resources to indigenous peoples and prays that the petition be granted in part. On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission, and the leaders and members of 112 groups of indigenous peoples (Flavier, et. al), filed their Motion for Leave to Intervene. They join the NCIP in defending the constitutionality of IPRA and praying for the dismissal of the petition. On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an expression of the principle of parens patriae and that the State has the responsibility to protect and guarantee the rights of those who are at a serious disadvantage like indigenous peoples. For this reason it prays that the petition be dismissed. On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a motion to Intervene with attached Comment-in-Intervention. They agree with the NCIP and Flavier, et al. that IPRA is consistent with the Constitution and pray that the petition for prohibition and mandamus be dismissed. The motions for intervention of the aforesaid groups and organizations were granted. Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their respective memoranda in which they reiterate the arguments adduced in their earlier pleadings and during the hearing. Petitioners assail the constitutionality of the following provisions of the IPRA and its Implementing Rules on the ground that they amount to an unlawful deprivation of the States ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution: (1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b) which, in turn, defines ancestral lands; (2) Section 5, in relation to section 3(a), which provides that ancestral domains including inalienable public lands, bodies of water, mineral and other resources found within ancestral domains are private but community property of the indigenous peoples;

(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral domains and ancestral lands; (4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the ancestral domains; (5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the ancestral lands; (6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting, extraction, development or exploration of minerals and other natural resources within the areas claimed to be their ancestral domains, and the right to enter into agreements with nonindigenous peoples for the development and utilization of natural resources therein for a period not exceeding 25 years, renewable for not more than 25 years; and (7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop, pro tect and conserve the ancestral domains and portions thereof which are found to be necessary for critical watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover or reforestation.[2] Petitioners also content that, by providing for an all-encompassing definition of ancestral domains and ancestral lands which might even include private lands found within said areas, Sections 3(a) and 3(b) violate the rights of private landowners.[3]

In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of the NCIP and making customary law applicable to the settlement of disputes involving ancestral domains and ancestral lands on the ground that these provisions violate the due process clause of the Constitution.[4] These provisions are: (1) sections 51 to 53 and 59 which detail the process of delineation and recognition of ancestral domains and which vest on the NCIP the sole authority to delineate ancestral domains and ancestral lands; (2) Section 52[i] which provides that upon certification by the NCIP that a particular area is an ancestral domain and upon notification to the following officials, namely, the Secretary of Environment and Natural Resources, Secretary of Interior and Local Governments, Secretary of Justice and Commissioner of the National Development Corporation, the jurisdiction of said officials over said area terminates; (3) Section 63 which provides the customary law, traditions and practices of indigenous peoples shall b e applied first with respect to property rights, claims of ownership, hereditary succession and settlement of land disputes, and that any doubt or ambiguity in the interpretation thereof shall be resolved in favor of the indigenous peoples; (4) Section 65 which states that customary laws and practices shall be used to resolve disputes involving indigenous peoples; and (5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes involving rights of the indigenous peoples.[5]

Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative Order No. 1, series of 1998, which provides that the administrative relationship of the NCIP to the Office of the President is characterized as a lateral but autonomous relationship for purposes of policy and program coordination. They contend that said Rule infringes upon the Presidents power of control over executive departments under Section 17, Article VII of the Constitution.[6] Petitioners pray for the following: (1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related provisions of R.A. 8371 are unconstitutional and invalid; (2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the NCIP to cease and desist from implementing the assailed provisions of R.A. 8371 and its Implementing Rules; (3) The issuance of a writ of prohibition directing the Secretary of the Department of Environment and Natural Resources to cease and desist from implementing Department of Environment and Natural Resources Circular No. 2, series of 1998; (4) The issuance of a writ of prohibition directing the Secretary of Budget and Management to cease and desist from disbursing public funds for the implementation of the assailed provisions of R.A. 8371; and (5) The issuance of a writ of mandamus commanding the Secretary of Environment and Natural Resources to comply with his duty of carrying out the States constitutional mandate to control and supervise the exploration, development, utilization and conservation of Philippine natural resources.[7] After due deliberation on the petition, the members of the Court voted as follows: Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged provisions of R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged provisions of the law with the exception of Section 1, Part II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57 of the IPRA which he contends should be interpreted as dealing with the large-scale exploitation of natural resources and should be read in conjunction with Section 2, Article XII of the 1987 Constitution. On the other hand, Justice Mendoza voted to dismiss the petition solely on the ground that it does not raise a justiciable controversy and petitioners do not have standing to question the constitutionality of R.A. 8371. Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are unconstitutional. He reserves judgment on the constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases by those whose rights may have been violated by the IPRA. Justice Vitug also filed a separate opinion expressing the view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of Justices Panganiban and Vitug. As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.

Attached hereto and made integral parts thereof are the separate opinions of Justices Puno, Vitug, Kapunan, Mendoza, and Panganiban. SO ORDERED. Davide, Jr., C.J., Bellosillo, Melo, Quisumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr., JJ., concur. Puno, Vitug, Kapunan, Mendoza and Panganiban JJ., see separate opinion

-------------------------------------------------------------------------------[1] Rollo, p. 114. [2] Petition, Rollo, pp. 16-23. [3] Id. at 23-25. [4] Section 1, Article III of the Constitution states: No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws. [5] Rollo, pp. 25-27. [6] Id. at 27-28. [7] Transcript of Stenographic Notes of the hearing held on April 13, 1999, pp. 5-6.