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Garcia vs.

Board of Investments
G.R. No, 92024, November 9, 1990
Gutierrez Jr, J.


Bataan Refining Corporation, a wholly government owned corporation is a producer of

naphtha, a type of petrochemical. Consequently, in 1988 a group of Taiwanese investors formed
Bataan Petrochemical Corporation and applied to BOI for registration, Bataan being the plant site.
BPC was accorded pioneer status and was given fiscal and other incentives. Additionally, Bataan
Cong. Garcia introduced a bill eliminating 48% ad valorem tax on naphtha which was passed by
the House of Representatives.
However, in 1989 one of the major investors of BPC sent a letter to BOI expressing the
desire to amend the original registration by changing the site from Bataan to Batangas and from
changing the feed stock from “naphtha only” to “naphtha/LPG”. The congressmen in Bataan
expressed strong opposition to this amendment. Regardless of these disagreements, the BOI
approved the amendment allowing the transfer of plant site.
Cong. Garcia filed a case to prohibit said transfer alleging that BOI, allowing the transfer
of the plant site to Batangas, is in violation of PD Nos. 949 and 1803 which establishes Bataan as
the Petrochemical Zone of the Philippines.


Whether or not BOI should allow the transfer of plant site of BPC.


The Supreme Court held that Bataan should be maintained as the plant site of BPC. It
reasoned that, unlike other industries, the petrochemical industry is deemed essential to national
interest. The SC ruled that it is the duty of the State to "regulate and exercise authority over foreign
investments within its national jurisdiction and in accordance with its national goals and priorities."
The development of a self-reliant and independent national economy effectively controlled by
Filipinos is mandated in Section 19, Article II of the Constitution.
Also, if the plant site is maintained in Bataan, the PNOC shall be a partner in the venture
to the great benefit and advantage of the government which shall have a participation in the
management of the project instead of a firm which is a huge multinational corporation.