drugs and medicines,

there is no inventive
step if the invention re-
sults from the mere dis-
covery of a new form or
new property of a
known substance which
does not result in the
enhancement of the
known efficacy of that
substance, or the mere
discovery of any new
property or new use for
a known substance, or
the mere use of a
known process unless
such known process re-
sults in a new product
that employs at least
one new reactant."

Section 72 of Republic
Act No. 8293, other-
wise known as the
Intellectual Property
Code of the Philip-
pines, is hereby
amended to read as
follows:

"SEC. 72. Limitations of
Patent Rights. - The own-
er of a patent has no
right to prevent third par-
ties from performing,
without his authorization,
the acts referred to in
Section 71 hereof in the
following circumstances:

"72.1. Using a patented
product which has been
put on the market in the
AMENDMENTS TO RE-
PUBLIC ACT NO. 8293,
OTHERWISE KNOWN
AS THE INTELLECTUAL
PROPERTY CODE OF
THE PHILIPPINES

Section 22 of Repub-
lic Act No. 8293, oth-
erwise known as the
Intellectual Property
Code of the Philip-
pines, is hereby
amended to read as
follows:


"SEC. 22. Non-
Patentable Inventions. -
The following shall be
excluded from patent
protection:

"22.1. Discoveries, sci-
entific theories and
mathematical methods,
and in the case of drugs
and medicines, the
mere discovery of a new
form or new property of
a known substance
which does not result in
the enhancement of the
known efficacy of that
substance, or the mere
discovery of any new
property or new use for
a known substance, or
the mere use of a
known process unless
such known process re-
sults in a new product
that employs at least
one new reactant.
"For the purpose of this
clause, salts, esters,
ethers, polymorphs,
metabolites, pure form,
particle size, isomers,
mixtures of isomers,
complexes, combina-
tions, and other deriva-
tives of a known sub-
stance shall be consid-
ered to be the same
substance, unless they
differ significantly in
properties with regard
to efficacy;
"22.2. x x x;
"22.3. x x x;
"22.4. x x x;
"22.5. x x x; and
"22.6. x x x.

"Section 26 of Re-
public Act No. 8293,
otherwise known as
the Intellectual
Property Code of the
Philippines, is here-
by amended to read
as follows:

"SEC. 26. Inventive
Step. - 26.1. An inven-
tion involves an in-
ventive step if, having
regard to prior art, it is
not obvious to a person
skilled in the art at the
time of the filing date or
priority date of the ap-
plication claiming the
invention. (n)
"26.2. In the case of

Republic Act No. 9502 June 6, 2008
AN ACT PROVIDING FOR CHEAPER AND QUALITY MEDICINES, AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 8293 OR THE INTELLECTUAL PROPERTY CODE, REPUBLIC ACT NO. 6675 OR
THE GENERICS ACT OF 1988, AND REPUBLIC ACT NO. 5921 OR THE PHARMACY LAW, AND FOR
OTHER PURPOSES
JULY 2009 VOLUME II, ISSUE No. 7
L C A L C A L C A
LINES LINES LINES
Inside this issue:
RA 9502 2
BIR Issuances 9
SEC issuance 13
Jurisprudence 14
JLs Corner 21


Philippines by the owner
of the product, or with
his express consent,
insofar as such use is
performed after that
product has been so put
on the said market: Pro-
vided, That, with regard
to drugs and medicines,
the limitation on patent
rights shall apply after a
drug or medicine has
been introduced in the
Philippines or anywhere
else in the world by the
patent owner, or by any
party authorized to use
the invention: Provided,
further, That the right to
import the drugs and
medicines contemplated
in this section shall be
available to any govern-
ment agency or any pri-
vate third party;

"72.2. Where the act is
done privately and on a
non-commercial scale or
for a non-commercial
purpose: Provided, That
it does not significantly
prejudice the economic
interests of the owner of
the patent;

"72.3. Where the act
consists of making or
using exclusively for
experimental use of the
invention for scientific
purposes or educational
purposes and such other
activities directly related
to such scientific or edu-
cational experimental
use;

"72.4. In the case of
drugs and medicines,
where the act includes
testing, using, making
or selling the invention
including any data relat-
ed thereto, solely for
any law of the Philip-
pines or of another
country that regulates
the manufacture, con-
struction, use or sale of
any product: Provided,
That, in order to pro-
tect the data submitted
by the original patent
holder from unfair
commercial use provid-
ed in Article 39.3 of the
Agreement on Trade-
Related Aspects of In-
tellectual Property
Rights (TRIPS Agree-
ment), the Intellectual
Property Office, in con-
sultation with the ap-
propriate government
agencies, shall issue
the appropriate rules
and regulations neces-
sary therein not later
than one hundred
twenty (120) days after
the enactment of this
law;

"72.5. Where the act
consists of the prepara-
tion for individual cas-
es, in a pharmacy or by
a medical professional,
of a medicine in ac-
cordance with a medi-
cal shall apply after a
drug or medicine has
been introduced in the
Philippines or anywhere
else in the world by the
patent owner, or by
any party authorized to
use the invention: Pro-
vided, further, That the
right to import the
drugs and medicines
contemplated in this
section shall be availa-
ble to any government
agency or any private
third party;

"74.3. All cases arising
from the implementa-
tion of this provision
shall be cognizable by
courts with appropriate
jurisdiction provided by
law.
"No court, except the
Supreme Court of the
Philippines, shall issue
any temporary re-
straining order or pre-
liminary injunction or
such other provisional
remedies that will pre-
vent its immediate exe-
cution.

"74.4. The Intellectual
Property Office (IPO),
in consultation with the
appropriate govern-
ment agencies, shall
issue the appropriate
implementing rules and
regulations for the use
or exploitation of pa-
tented inventions as
contemplated in this
section within one hun-
dred twenty (120) days
after the effectivity of
this law."

Section 76.1 of Re-
public Act No. 8293,
otherwise known as
the Intellectual
Property Code of the
Philippines, is here-
by amended to read
as follows:

"SEC. 76. Civil Action
for Infringement. - 76.1.
The making, using, of-
fering for sale, selling,
or importing a patented
product or a product
obtained directly or indi-
rectly from a patented
process, or the use of a
patented process with-
out the authorization of
the patentee constitutes
patent infringement:
Continuation of RA 9502
Page 2 L C A LINES
Provided, That, this
shall not apply to in-
stances covered by Sec-
tions 72.1 and 72.4
(Limitations of Patent
Rights); Section 74 (Use
of Invention by Govern-
ment); Section 93.6
(Compulsory Licensing);
and Section 93-A
(Procedures on Issuance
of a Special Compulsory
License under the TRIPS
Agreement) of this
Code.

"76.2. x x x;
"76.3. x x x;
"76.4. x x x;
"76.5. x x x; and
"76.6. x x x."


Section 93 of Re-
public Act No. 8293,
otherwise known as
the Intellectual
Property Code of the
Philippines, is here-
by amended to read
as follows:

"SEC. 93. Grounds for
Compulsory Licensing. -
The Director General of
the Intellectual Property
Office may grant a li-
cense to exploit a pa-
tented invention, even
without the agreement
of the patent owner, in
favor of any person who
has shown his capability
to exploit the invention,
under any of the follow-
ing circumstances:

"93.1. National emer-
gency or other circum-
stances of extreme ur-
gency;

"93.2. Where the public
interest, in particular,
national security, nutri-
tion, health or the de-
velopment of other vital
sectors of the national
economy as determined
by the appropriate
agency of the Govern-
ment, so requires; or

"93.3. Where a judicial
or administrative body
has determined that the
manner of exploitation
by the owner of the pa-
tent or his licensee is
anti-competitive; or

"93.4. In case of public
non-commercial use of
the patent by the pa-
tentee, without satisfac-
tory reason;

"93.5. If the patented
invention is not being
worked in the Philip-
pines on a commercial
scale, although capable
of being worked, with-
out satisfactory reason:
Provided, That the im-
portation of the patent-
ed article shall consti-
tute working or using
the patent; (Secs. 34,
34-A, 34-B, R.A. No.
165a) and

"93.6. Where the de-
mand for patented
drugs and medicines is
not being met to an ad-
equate extent and on
reasonable terms, as
determined by the Sec-
retary of the Depart-
ment of Health."

A new Section 93-A
is inserted after
Section 93 of Re-
public Act No. 8293,
otherwise known as
the Intellectual
Property Code of
the Philippines, to
read as follows:

"SEC. 93-A. Procedures
on Issuance of a Special
Compulsory License un-
der the TRIPS Agree-
ment. - 93-A.1. The Di-
rector General of the
Intellectual Property
Office, upon the written
recommendation of the
Secretary of the Depart-
ment of Health, shall,
upon filing of a petition,
grant a special compul-
sory license for the im-
portation of patented
drugs and medicines.
The special compulsory
license for the importa-
tion contemplated under
this provision shall be
an additional special
alternative procedure to
ensure access to quality
affordable medicines
and shall be primarily
for domestic consump-
tion: Provided, That ad-
equate remuneration
shall be paid to the pa-
tent owner either by the
exporting or importing
country. The compulso-
ry license shall also con-
tain a provision direct-
ing the grantee the li-
cense to exercise rea-
sonable measures to
prevent the re-
exportation of the prod-
ucts imported under this
provision.

"The grant of a special
compulsory license un-
der this provision shall
be an exception to Sec-
tions 100.4 and 100.6 of
Republic Act No. 8293
and shall be immediate-
ly executory.

"No court, except the
Supreme Court of the
Philippines, shall issue
any temporary restrain-
ing order or preliminary
injunction or such other
provisional remedies
that will prevent the
Page 3 VOLUME II, ISSUE No. 7
grant of the special
compulsory license.
"93-A.2. A compulso-
ry license shall also be
available for the man-
ufacture and export of
drugs and medicines
to any country having
insufficient or no
manufacturing capaci-
ty in the pharmaceuti-
cal sector to address
public health prob-
lems: Provided, That,
a compulsory license
has been granted by
such country or such
country has, by notifi-
cation or otherwise,
allowed importation
into its jurisdiction of
the patented drugs
and medicines from
the Philippines in
compliance with the
TRIPS Agreement.

"93-A.3. The right to
grant a special com-
pulsory license under
this section shall not
limit or prejudice the
rights, obligations and
flexibilities provided
under the TRIPS
Agreement and under
Philippine laws, partic-
ularly Section 72.1
and Section 74 of the
Intellectual Property
Code, as amended
under this Act. It is
also without prejudice
to the extent to which
drugs and medicines
produced under a
compulsory license
can be exported as
allowed in the TRIPS
Agreement and appli-
cable laws.

"Section 94 of
Republic Act No.
8293, otherwise
known as the In-
tellectual Property
Code of the Philip-
pines, is hereby
amended to read as
follows:

"SEC. 94. Period for Fil-
ing a Petition for a Com-
pulsory License. - 94.1. A
compulsory license may
not be applied for on the
ground stated in Subsec-
tion 93.5 before the expi-
ration of a period of four
(4) years from the date
of filing of the application
or three (3) years from
the date of the patent
whichever period expires
last.

"94.2. A compulsory li-
cense which is applied for
on any of the grounds
stated in Subsections
93.2, 93.3, 93.4, and
93.6 and Section 97 may
be applied for at any
time after the grant of
the patent. (Sec. 34(1),
R. A. No. 165)"

Section 95 of Repub-
lic Act No. 8293, oth-
erwise known as the
Intellectual Property
Code of the Philip-
pines, is hereby
amended to read as
follows:

"SEC. 95. Requirement
to Obtain a License on
Reasonable Commercial
Terms. - 95.1. The li-
cense will only be grant-
ed after the petitioner
has made efforts to ob-
tain authorization from
the patent owner on rea-
sonable commercial
terms and conditions but
such efforts have not
been successful within a
reasonable period of
time.

"95.2. The requirement
under Subsection 95.1
shall not apply in any of
the following cases:

"(a) Where the petition
for compulsory license
seeks to remedy a prac-
tice determined after
judicial or administrative
process to be anti-
competitive;

"(b) In situations of na-
tional emergency or
other circumstances of
extreme urgency;

"(c) In cases of public
non-commercial use;
and

"(d) In cases where the
demand for the patent-
ed drugs and medicines
in the Philippines is not
being met to an ade-
quate extent and on
reasonable terms, as
determined by the Sec-
retary of the Depart-
ment of Health.

"95.3. In situations of
national emergency or
other circumstances of
extreme urgency, the
right holder shall be no-
tified as soon as reason-
ably practicable.

"95.4. In the case of
public non-commercial
use, where the govern-
ment or contractor,
without making a patent
search, knows or has
demonstrable grounds
to know that a valid pa-
tent is or will be used by
or for the government,
the right holder shall be
informed promptly.

"95.5. Where the de-
mand for the patented
drugs and medicines in
the Philippines is not
Page 4 L C A LINES
being met to an ade-
quate extent and on
reasonable terms, as
determined by the
Secretary of the De-
partment of Health,
the right holder shall
be informed prompt-
ly."

Section 147 of
Republic Act No.
8293, otherwise
known as the In-
tellectual Property
Code of the Philip-
pines, is hereby
amended to read
as follows:

"SEC. 147. Rights
Conferred. - 147.1.
Except in cases of im-
portation of drugs and
medicines allowed
under Section 72.1 of
this Act and of off-
patent drugs and
medicines, the owner
of a registered mark
shall have the exclu-
sive right to prevent
all third parties not
having the owner's
consent from using in
the course of trade
identical or similar
signs or containers for
goods or services
which are identical or
similar to those in
respect of which the
trademark is regis-
tered where such use
would result in a like-
lihood of confusion. In
case of the use of an
identical sign for iden-
tical goods or ser-
vices, a likelihood of
confusion shall be
presumed.

"There shall be no
infringement of trade-
marks or tradenames
of imported or sold
patented drugs and
medicines allowed under
Section 72.1 of this Act,
as well as imported or
sold off-patent drugs
and medicines: Provid-
ed, That, said drugs and
medicines bear the reg-
istered marks that have
not been tampered, un-
lawfully modified, or
infringed upon, under
Section 155 of this
Code.

"147.2. x x x."

Section 159 of Re-
public Act No. 8293,
otherwise known as
the Intellectual
Property Code of
the Philippines, is
hereby amended to
read as follows:

"SEC. 159. Limitations
to Actions for Infringe-
ment. - Notwithstanding
any other provision of
this Act, the remedies
given to the owner of a
right infringed under
this Act shall be limited
as follows:

"159.1. x x x;
"159.2 x x x;
"159.3 x x x; and
"159.4 There shall be
no infringement of
trademarks or trade-
names of imported or
sold drugs and medi-
cines allowed under
Section 72.1 of this Act,
as well as imported or
sold off-patent drugs
and medicines: Provid-
ed, That said drugs and
medicines bear the reg-
istered marks that have
not been tampered, un-
lawfully modified, or
infringed upon as de-
fined under Section 155
of this Code."



CHAPTER 3--DRUGS AND
MEDICINES PRICE REGU-
LATION

The President of the Phil-
ippines, upon recommen-
dation of the Secretary of
the Department of
Health, shall have the
power to impose maxi-
mum retail prices over
any or all drugs and
medicines as enumerated
in the List of Drugs and
Medicines that are
Subject to Price Regu-
lation.

The power to impose
maximum retail prices
over drugs and medi-
cines shall be exercised
within such period of
time as the situation may
warrant as determined
by the President of the
Philippines. No court,
except the Supreme
Court of the Philippines,
shall issue any tempo-
rary restraining order or
preliminary injunction or
preliminary mandatory
injunction that will pre-
vent the immediate exe-
cution of the exercise of
this power of the Presi-
dent of the Philippines.
The Secretary of the De-
partment of Health is
authorized to establish
and initiate a price moni-
toring and regulation
system for drugs and
medicines. The Secre-
tary of the Department
of Health may also create
such bodies, consultative
councils, from which ad-
vice may be sought in
the implementation of a
drug or medicine price
monitoring and regula-
tion policy. Such bodies
Page 5 VOLUME II, ISSUE No. 7
or consultative coun-
cils created by the
Secretary of the De-
partment of Health
shall coordinate its
efforts together with
other government
agencies.
The Secretary of the
Department of Health
shall have the follow-
ing powers:

(A) Power to Recom-
mend the Maxi-
mum Retail Price
of Drugs and Med-
icines Subject to
Price Regulation -
(1) Upon applica-
tion or motu pro-
prio when the
public interest so
requires, the Sec-
retary of the De-
partment of
Health shall have
the power to de-
termine the maxi-
mum retail prices
of drugs and med-
icines which shall
be recommended
to the President of
the Philippines for
approval. In order
that affordable
prices of drugs
and medicines
from the different
manufacturers,
importers, trad-
ers, distributors,
wholesalers, or
retailers shall be
made available to
the public, the
Secretary of the
Department of
Health, as he/she
may deem fit and
after a proper de-
termination, shall
have such ap-
proved maximum
retail prices of
drugs and medi-
cines published;

(2) In recommending the
maximum retail
price, the Secretary
of the Department of
Health shall consider
the following factors:

(a) Retail prices of drugs
and medicines that are
subject to regulation in
the Philippines and in
other countries;

(b) The supply available
in the market;

(c) The cost to the man-
ufacturer, importer, trad-
er, distributor, wholesal-
er or retailer of the fol-
lowing, but not limited
to:

(i) The exchange rate of
the peso to the foreign
currency with which the
drug or any of its compo-
nent, ingredient or raw
material was paid for;

(ii) Any change in the
amortization cost of ma-
chinery brought about by
any change in the ex-
change rate of the peso
to the foreign currency
with which the machin-
ery was bought through
credit facilities;

(iii) Any change in the
cost of labor brought
about by a change in
minimum wage; or

(iv) Any change in the
cost of transporting or
distributing the medi-
cines to the area of des-
tination;

d) Such other factors or
conditions which will aid
in arriving at a just and
reasonable maximum
price; and

(3) No retailer shall sell
drugs and medicines
at a retail price ex-
ceeding the maxi-
mum retail price ap-
proved by the Presi-
dent of the Philip-
pines as provided in
Section 17 of this
Act: Provided, That,
the Secretary of the
Department of Health
shall immediately
undertake a study on
the prevailing prices
of drugs and medi-
cines subject to price
regulation and pro-
vide an initial list of
drugs and medicines,
which maximum re-
tail prices he/she
shall recommend to
the President of the
Philippines.

(B) Power to Include
Other Drugs and Medi-
cines in the List Subject
to Price Regulation - Up-
on application or motu
proprio when the public
interest so requires and
after proper determina-
tion, the Secretary of the
Department of Health
may order the inclusion
of drugs and medicines
to the list subject of price
regulation under Section
23 hereof.

(C) Power to Implement
Cost-Containment and
Other Measures - (1) The
Secretary of the Depart-
ment of Health shall
have the power to imple-
ment the fair price of
drugs and medicines for
purposes of public health
insurance and govern-
ment procurement based
on the order of the Presi-
dent of the Philippines
imposing maximum retail
prices; and

(2) The Secretary of
the Department of Health
shall have the power to
implement any other
measures that the gov-
ernment may avail of to
effectively reduce the
cost of drugs and medi-
cines that shall include,
but not limited to, com-
petitive bidding, price
volume negotiations, and
other appropriate mech-
anisms that influence
supply, demand and ex-
penditures on drugs and
medicines.

(D) Power to Impose Ad-
ministrative Fines and
Penalties - After due no-
tice and hearing, the
Secretary of the Depart-
ment of Health shall
have the power to im-
pose administrative fines
against any person,
manufacturer, importer,
trader, distributor,
wholesaler, retailer, or
any other entity, in such
amount as it may deem
reasonable, which in no
case shall be less than
Fifty thousand pesos
(Php50,000.00) nor more
than Five million pesos
(Php5,000,000.00) for
violations of the maxi-
mum retail price ap-
proved by the President
of the Philippines pursu-
ant to the provisions of
this Chapter.

Continuation...
Page 6 L C A LINES
(E) Power to Deputize
Government Entities -
The Secretary of the
Department of Health
shall have the power to
call upon and deputize
any official, agent, em-
ployee, agency, or in-
strumentality of the na-
tional and local govern-
ment for any assistance
that it may deem nec-
essary to carry out the
purposes of this Chap-
ter.

(F) Other Powers Nec-
essary to Implement
Provisions of this Chap-
ter - The Secretary of
the Department of
Health shall exercise
such powers and func-
tions as may be neces-
sary to implement and
enforce the provisions
of this Chapter of this
Act, including the power
to require the produc-
tion and submission of
records, documents,
books of account, bills
of lading, input docu-
ments, records of pur-
chase and sale, financial
statements, and such
other documents, infor-
mation and papers as
may be necessary to
enable the Secretary of
the Department of
Health to carry out its
functions, duties, and
responsibilities. Accord-
ingly, within thirty (30)
days from the effectivity
of this Act and every
December 31st of every
year thereafter, every
manufacturer, importer,
trader, distributor,
wholesaler, and retailer
of a drug and medicine
whether included in or
excluded from the list of
drugs and medicines that
are subject to price regu-
lation shall furnish the
Secretary of the Depart-
ment of Health a list,
containing on the mini-
mum the corresponding
prices and inventory, of
all drugs and medicines it
manufactures, imports,
trades, distributes,
wholesales, or retails,
data pertaining to the
factors enumerated un-
der Section 19(A)(2),
and any and all neces-
sary information that the
Secretary of the Depart-
ment of Health may re-
quire.

All decisions or orders of
the Secretary of the De-
partment of Health pur-
suant to Section 19 Para-
graphs (A) Power to Rec-
ommend the Maximum
Retail Price of Drugs and
Medicines Subject to
Price Regulation, (B)
Power to Include Other
Drugs and Medicines in
the List Subject to Price
Regulation, (C) Power to
Implement Cost-
Containment and Other
Measures, (D) Power to
Impose Administrative
Fines and Penalties, (E)
Power to Deputize Gov-
ernment Entities, or (F)
Other Powers Necessary
to Implement Provisions
of this Chapter, shall be
immediately operative.

Review of the Decisions
or Orders of the Secre-
tary of the Department
of Health.

A party adversely affect-
ed by a decision, order or
ruling of the Secretary of
the Department of Health
may, within thirty (30)
days from notice of such
decision, order or ruling,
or in case of a denial of a
motion for reconsidera-
tion thereof, within fif-
teen (15) days after no-
tice of such denial, file an
appeal with the Court of
Appeals, which shall
have jurisdiction to re-
view such decision, order
or ruling.

The filing of a petition for
a writ of certiorari or oth-
er special remedies in
the Supreme Court shall
in no case supersede or
stay any decision, order
or ruling of the Secretary
of the Department of
Health, unless the Su-
preme Court shall so di-
rect, and the petitioner
may be required by the
Supreme Court to give
bond in such form and of
such amount as may be
deemed proper.

List of Drugs and Medi-
cines that are Subject to
Price Regulation

The list of drugs and
medicines that are sub-
ject to price regulation
shall include, inter alia:

(a) All drugs and medi-
cines indicated for treat-
ment of chronic illnesses
and life threatening con-
ditions, such as, but not
limited to, endocrine dis-
orders, e.g., diabetes
mellitus; gastrointestinal
disorders, e.g., peptic
ulcer; urologic disorders,
e.g., benign prostatic
hyperplasia (BPH); cardi-
ovascular diseases, e.g.,
hypertension; pulmonary
diseases, e.g., pulmo-
nary tuberculosis (PTB),
asthma; auto-immune
diseases, e.g., systemic
lupus erythematosus
(SLE); skin diseases,
e.g., psoriasis; neuro-
psychiatric disorders;
other infectious diseases,
e.g., human immunodefi-
ciency virus-acquired
immune deficiency syn-
drome (HIV-AIDS); and
other conditions such as
organ transplants and
neoplasm;

(b) Drugs and medicines
indicated for prevention
of diseases, e.g., vac-
cines, immunoglobulin,
anti-sera;

(c) Drugs and medicines
indicated for prevention
of pregnancy, e.g., oral
contraceptives;

(d) Anesthetic agents;

(e) Intravenous fluids;

(f) Drugs and medicines
that are included in the
Philippine National Drug
Formulary (PNDF) Essen-
tial Drug List; and

(g) All other drugs and
medicines which, from
time to time, the Secre-
tary of the Department
of Health determines to
be in need of price regu-
lation.


Illegal Acts of Price Ma-
nipulation - Without prej-
udice to the provisions of
existing laws on goods
not covered by this Act,
Continuation...
it shall be unlawful for
any manufacturer, im-
porter, trader, distribu-
tor, wholesaler, retailer,
or any person engaged
in any method of dispo-
sition of drugs and
medicines to engage in
acts of price manipula-
tion such as hoarding,
profiteering, or illegal
combination or forming
cartel, as defined under
Section 5 of Republic
Act No. 7581, otherwise
known as the Price Act,
and all other acts com-
mitted in restraint of
trade.


AMENDMENTS TO RE-
PUBLIC ACT NO.
6675, OTHERWISE
KNOWN AS THE GE-
NERICS ACT OF 1988

Section 5 of Repub-
lic Act No. 6675,
otherwise known as
the Generics Act of
1988, is hereby
amended to read as
follows:

"SEC. 5. Posting and
Publication. - The De-
partment of Health shall
publish annually in ac-
ceptable means of pub-
lic dissemination in at
least two (2) newspa-
pers of general circula-
tion in the Philippines
the generic names, and
the corresponding brand
names under which
they are marketed, of
all drugs and medicines
available in the Philip-
pines."

Section 6 of Repub-
lic Act No. 6675,
Page 7 VOLUME II, ISSUE No. 7
products, the generic
name shall appear prom-
inently and immediately
above the brand name in
all product labels as well
as in advertising and
other promotional mate-
rials.

"(d) Drug outlets, includ-
ing drugstores, hospital
and non-hospital phar-
macies and nontradition-
al outlets such as super-
markets and stores, shall
inform any buyer about
any and all other drug
products having the
same generic name, to-
gether with their corre-
sponding prices so that
the buyer may adequate-
ly exercise his option.
Within one (1) year after
the approval of this Act,
the drug outlets referred
to herein shall post in
conspicuous places in
their establishments a
list of drug products with
the same generic name
and their corresponding
prices.

"(e) There shall appear
prominently on the label
of a generic drug the fol-
lowing statement: this
product has the same
therapeutic efficacy as
any other generic prod-
uct of the same name."

Section 8 of Republic
Act No. 6675, other-
wise known as the
Generics Act of 1988,
is hereby amended
to read as follows:


"SEC. 8. Required Pro-
duction. - Subject to the
rules and regulations
promulgated by the Sec-
retary of Health, every
drug manufacturing com-
pany operating in the
Philippines shall be re-
quired to produce, dis-
tribute and make widely
available to the general
public an unbranded ge-
neric counterpart of their
branded product."


Section 12 of Repub-
lic Act No. 6675, oth-
erwise known as the
Generics Act of 1988,
is hereby amended
to read as follows:

"SEC. 12. Penalty. - (A)
Any person who shall
violate Section 6(a) or 6
(b) of this Act shall suffer
the penalty graduated
hereunder, viz:

"(a) for the first convic-
tion, he shall suffer the
penalty of reprimand
which shall be officially
recorded in the appropri-
ate books of the Profes-
sional Regulation Com-
mission.

"(b) for the second con-
viction, the penalty of
fine in the amount of not
less than Ten thousand
pesos (Php10,000.00)
but not exceeding Twen-
ty-five thousand pesos
(Php25,000.00), at the
discretion of the court.

"(c) for the third convic-
tion, the penalty of fine
in the amount of not less
than Twenty-five thou-
s a n d p e s o s
(Php25,000.00) but not
exceeding Fifty thousand
pesos (Php50,000.00)
and suspension of his
license to practice his
profession for sixty (60)
days at the discretion of
the court.

"(d) for the fourth and
subsequent convictions,
the penalty of fine of not
less than One hundred
t h o u s a n d p e s o s
(Php100,000.00) and
suspension of his license
to practice his profession
for one (1) year or long-
er at the discretion of the
court.

"(B) Any juridical person
who violates Sections 6
(c), 6(d), 7 or 8 shall
suffer the penalty of a
fine of not less than One
hundred thousand pesos
(Php100,000.00) and
suspension or revocation
of license to operate
such drug establishment
or drug outlet at the dis-
cretion of the court: Pro-
vided, That its officers
directly responsible for
the violation shall suffer
the penalty of fine of at
least Forty thousand pe-
sos (Php40,000.00) and
suspension or revocation
of license to practice pro-
fession, if applicable, and
by imprisonment of not
less than six (6) months
nor more than one (1)
year or both fine and
imprisonment at the dis-
cretion of the court: and,
a list of drug products
with the same generic
name and their corre-
sponding prices.

Provided, further, That if
the guilty party is an al-
ien, he shall be ipso facto
deported after service of
sentence without need of
further proceedings.

"(C) The Secretary of
Health shall have the
authority to impose ad-
ministrative sanctions
such as suspension or
cancellation of license to
otherwise known
as the Generics
Act of 1988, is
hereby amended
to read as follows:

"SEC. 6. Who Shall
Use Generic Terminol-
ogy. - (a) All govern-
ment health agencies
and their personnel as
well as other govern-
ment agencies shall
use generic terminolo-
gy or generic names
in all transactions re-
lated to purchasing,
prescribing, dispens-
ing and administering
of drugs and medi-
cines.

"(b) All medical, den-
tal and veterinary
practitioners, includ-
ing private practition-
ers, shall write pre-
scriptions using the
generic name. The
brand name may be
included if so desired.

"(c) Any organization
or company involved
in the manufacture,
importation, repack-
ing, marketing and/or
distribution of drugs
and medicines shall
indicate prominently
the generic name of
the product. In the
case of brand name
L C A LINES
operate or recommend
suspension of license to
practice profession to the
Professional Regulation
Commission as the case
may be for the violation
of this Act.

"The administrative sanc-
tions that shall be im-
posed by the Secretary
of the Department of
Health shall be in a grad-
uated manner in accord-
ance with Section 12.A.

"An administrative case
may be instituted inde-
pendently from the crim-
inal case: Provided, That,
the dismissal of the crim-
inal case or the with-
drawal of the same shall
in no instance be a
ground for the dismissal
of the administrative
case."


AMENDMENTS TO RE-
PUBLIC ACT NO. 5921,
AS AMENDED, OTHER-
WISE KNOWN AS THE
PHARMACY LAW

Section 25 of Republic
Act No. 5921, as amend-
ed, otherwise known as
the Pharmacy Law, is
hereby amended to read
as follows:

"SEC. 25. Sale of medi-
cine, pharmaceuticals,
drugs and devices. - No
medicine, pharmaceuti-
cal, or drug, except for
those which are non-
prescription or over-the-
counter, of whatever na-
ture and kind or device
shall be compounded,
dispensed, sold or resold,
or otherwise be made
available to the consum-
ing public except through
a prescription drugstore
or hospital pharmacy,
duly established in ac-
cordance with the provi-
sions of this Act. Non-
prescription or over-the-
counter drugs may be
sold in their original
packages, bottles, con-
tainers or in small quan-
tities, not in their original
containers to the con-
suming public through
supermarkets, conven-
ience stores and other
retail establishments.

"Pharmaceutical, drug or
biological manufacturing
establishments, import-
ers and wholesalers of
drugs, medicines, or bio-
logic products, shall not
sell their products for re-
sale except only to retail
drug outlets, hospital
pharmacies or to other
drug wholesalers under
the supervision of a reg-
istered pharmacist, and
supermarkets, conven-
ience stores, other retail
establishments for over-
the-counter drugs, duly
licensed by the Bureau of
Food and Drugs."













REVENUE MEMORAN-
DUM ORDER NO. 22-
2009

Issued to further amend
Revenue Memorandum
Order No. 68-94, as
amended by RMO No. 24
-2007 on the preparation
and consolidation of BIR
Form No. 1770Monthly
Summary of Tax Returns
Filed.

Procedures

(1) The Data Processing
Section in the Revenue
District Offices/
concerned divisions in
Large Taxpayers Service
(LTS) shall:

A. Prepare BIR Form
No. 1770 in triplicate
copies.

B. Submit the origi-
nal copy duly signed
by Revenue District
Offi cer/Di vi si on
Chief to the Assis-
tant Commissioner,
Policy and Planning
Service, Attention:
Chiefs, Statistics Di-
vision, not later
than the 15
th
day
of the following
month, copy fur-
nished the Regional
Di rector/Assi stant
Commissioner, Large
Taxpayer Service.
The duplicate copy
shall be retained as
file.

C. Submit thru email
to the Chief, Statis-
tics Division on or
before deadline stat-
ed in II.1.b the re-
port that matches
with the hard copy
duly signed by the
Revenue District Of-
ficer/Division Chief.

(2) The Statistics Divi-
sion shall:

A. Require/monitor
timely submission of
BIR Form No. 1770
from the RDO/Division
Chief.

B. Prepare a con-
solidated report on
tax returns
(monthly and cumu-
lative) on or before
the last working day
of each month.

(3) The report format
of BIR Form No.
1770 is hereby modi-
fied as follows:

A. Additional col-
umns for the num-
ber of returns filed
in previous year.

B. Columns for the
increase/(decrease)
in the number of
returns filed were
provided.

C. Columns for the
per cent age i n-
crease/(decrease) in
the number of re-
turns filed were re-
quired.




REVENUE MEMO-
RANDUM ORDER NO.
23-2009


In carrying out
audit and investigation
activities in accordance
with this Order, the
following policies and
guidelines shall be ob-
served.

A. Coverage

1. The National Inves-
tigation Division (NID)
shall have the authori-
ty, subject to the ap-
proval of the Commis-
sioner, to conduct an
Page 9 VOLUME II, ISSUE No. 7
BIR ISSUANCES
holding and remittance
of taxes.


Procedures


1. To initiate an audit/
investigation, the NID
shall submit a memo-
randumrequest direct-
ly to the Office of the
Commissioner (OCIR),
identifying the conglom-
erate/group of compa-
nies that is to be audit-
ed, and providing a brief
background of the con-
glomerate/group, as
well as the justifications
for the conduct of an
audit/investigation.

2. In the event that the
Commissioner should
approve the conduct of
the requested audit/
investigation, the OCIR
shall cause the prepara-
tion of the correspond-
ing Letter of Authority
(LA) for the concerned
conglomerate/group, for
the signature of the
Commissioner.

3. To avoid the double-
issuance of LAs for a
single conglomerate/
group of companies, the
NID shall inform the
Large Taxpayers Service
(LTS) of the Regional
Office having original
jurisdiction over the
concerned taxpayer(s)
that the NID has been
authorized to conduct
an audit/investigation
on the taxpayer.

3.1. In notifying the
LTS or the Regional
Office concerned, the
NID shall make use
of the pro-forma no-
tification provided in
Annex A of this Or-
d e r .

4. The NID shall, imme-
diately upon receipt of
the signed LA from the
OCIR, notify the con-
investigation/on the fol-
lowing taxpayers and their
respective officers:

Inter-related compa-
nies and conglomer-
ates, including related
individual taxpayers,
from certain indus-
tries;
Local Government
Units (LGUs);
National Government
Agencies (NGAs); and
Government Owned
and Controlled Corpo-
rations (GOCCs)

2. The audit of inter-
related companies and
conglomerates, including
related individual taxpay-
ers, shall be undertaken
to ensure that such tax-
payers are clearly reflect-
ing income and expenses
that are attributable to
controlled and inter-
related transactions.
Various schemes being
employed by conglomer-
ates and group of com-
panies to reduce the
amount of taxes due
shall be identified, such
as (but not limited to):
the use of tax-exempt
entities of those with
special tax privileges;
inter-related company
loans and advances; cost
sharing; and the supply
of goods and services.

2.1. In the conduct of
audits of inter-related
companies and con-
glomerates, particular
attention should be
given to transfer pric-
ing issues, which
should be considered
in the audit findings of
the aforesaid estab-
lishments.

3. The audit of LGUs,
NGAs and GOCCs shall
be undertaken to ensure
strict compliance with the
requirements of internal
revenue laws and regula-
tions on the correct with-
cerned taxpayer(s) of the
change of jurisdiction for
the audit/investigation,
using pro-forma Notice
of Change of Jurisdic-
tion.

5. In the event that an
LA [including Tax Verifi-
cation Notices (TVNs)]
has already been issued
by the LTS or the Re-
gional Office, the same
shall be considered as
automatically invalidat-
ed. The investigating
unit concerned shall
then, upon receipt of the
Notification from the
NID, forward the entire
docket of their investiga-
tion to the NID, for con-
solidation.

5.1. In the event that
no LA has yet been
issued, the LTS or the
Regional Office con-
cerned shall desist
from issuing an LA (or
TVN) to the taxpayer
(s) identified by the
NID.

6. In the conduct of au-
dits/investigations under
this Order, and in order
to facilitate the develop-
ment of cases for the
RATE Program, the NID
is hereby authorized to
obtain, from any Bureau
office, any internal reve-
nue information that may
assist in the conduct of
s u c h a u d i t s /
investigations.

6.1. The Division may
also communi cate
with other Govern-
ment offices, agencies
and instrumentalities
in gathering data per-
tinent to an audit/
investigation. In such
instance, the NID
shall prepare, for the
signature of the Com-
missioner, the appro-
priate communication
to request from the
concerned Govern-
ment office the infor-
mation needed in for
a particular audit/
investigation.

7. All other subsequent
activities following the
conduct of an audit/
investigation (i.e. sub-
mission of audit reports,
issuance of Assessment
Notices, etc.) shall ob-
serve the established
rules and regulations for
the conduct of such ac-
tivities, subject to final
review and approval by
the Commissioner.

8. Cases that are found
to be qualified for the
RATE Program, following
the conduct of an audit/
investigation under this
Order, shall be given pri-
ority, and all concerned
Offices must take the
necessary action therein
within ten (10) days
from their receipt of the
report of investigation.





REVENUE MEMORAN-
DUM ORDER NO. 24-
2009


Issued to facilitate the
proper identification and
monitoring of certain tax
payments subject to Ex-
panded Withholding Tax,
the Bureau of Internal
Revenue created the Al-
phanumeric Tax Code
(ATC) of selected revenue
source per Revenue Regu-
lation No. 2-2009.






KIND OF TAX ISSUANCE/
LEGAL BA-
SIS/
REASONS
BIR
FORM
NO.
ATC
Withholding Tax at source
Subject to creditable withholding tax
Withholding on gross amount of interest on the refund of me-
ter deposit whether paid directly to the customers or
applied against customers billings of:
Residential and General
Service customers
whose monthly elec-
tricity consumption
exceeds 200 kwh as
classified by
MERALCO





RR No. 2-
2009




1601 E

Individual WI660
Corporate WC660
Non-Residential cus-
tomers whose
monthly electricity
consumption ex-
ceeds 200 kwh as
classified by
MERALCO


RR No. 2-
2009


1601 E

Individual WI661
Corporate WC661
Withholding Tax at source
Subject to creditable withholding tax
Withholding on gross amount of interest on the refund of meter
deposit whether paid directly to the customers or applied against
customers billings of:
Residential and General
Service customers
whose monthly elec-
tricity consumption
exceeds 200 kwh as
classified by other
electric Distribution
Utilities (DU)




RR No. 2-
2009




1601 E

Individual WI662
Corporate WI662
Non-Residential cus-
tomers whose
monthly electricity
consumption ex-
ceeds 200 kwh as
classified by other
DUs



RR No. 2-
2009




1601 E

Individual WI663
Corporate WI663

Page 12
REVENUE MEMORAN-
DUM ORDER 26-2009

The existing eTIN
System is enhanced to
cater to the growing de-
mands of the public for an
on-line facility for TIN is-
suance, and hereby re-
named to eRegistration
System. The improve-
ments on the system in-
clude:
A.Security features that
properly identify the fol-
lowing category of users:
i. Self-employed individ-
uals such as Single Pro-
prietors and Profession-
als, and Mixed Income
Earners (e.g. employee
and single proprietor
and/or professional at
the same time);
ii. Employers applying
TINs in behalf of their
employees;
iii. Authorized Govern-
ment Agencies and In-
strumentalities (GAIs)
for Executive Order
(EO) No. 98 applicants.
B. Additional registration
services such as on-line
payment facility for pay-
ment of the Annual Regis-
tration Fee (ARF) and
Generation of the Certifi-
cate of Registration
(COR).
C. A more user-friendly
and effective eRegistra-
tion System.
The following shall be
identified as users of
the eRegistration Sys-
tem:
i. Self-employed Individu-
als:
A.Single Proprietora
natural person engaged
in trade or business
B.Professionala natu-
ral person engaged in
the performance of ser-
vice for others for a fee
C.Mixed Income Earn-
eremployee deriving
income from compensa-
tion who is also a single
proprietor and/or prac-
ticing his/her profession
at the same time.
ii. Third Party users:
1. Employers applying
for TINs in behalf of
their employees.
2. Authorized GAIs ap-
plying TINs in behalf
of taxpayers transact-
ing with their office
pursuant to EO No.
98, which requires
that a TIN be issued
to parties transacting
with government
agencies. The GAI is
identified as an entity
responsible for pro-
cessing permits, li-
censes, clearance,
official paper and doc-
uments.
3. Other Authorized Us-
ers who are granted
access to the System
by the BIR.
iii. Revenue District Office
(RDO) users:
1. Taxpayer Service Sec-
tion (TSS) Personnel
of:
A. N o n -
computerized Reve-
nue District Offices
(RDOs) to generate
TIN, encode pre-
generated TINs and
generate reports from
eRegistration System.
B. Comput er i zed
RDOs to generate re-
ports from eRegistra-
tion System.
2. Personnel detailed in job
fairs in coordination with
the Local Government
Units (LGUs) and other
parties.
A penalty of P1,000.00
for every instance but
n o t t o e x c e e d
P25,000.00 shall be
imposed on eRegistra-
tion System users who
supplied erroneous/
invalid information.
Penalty provided under
Section 236 and Section
275 of the Tax Code are
likewise reiterated in
this Order. To wit:
SEC. 236. Registration Re-
quirements.
Only one Taxpayer Identifica-
tion Number (TIN) shall be
assigned to a taxpayer. Any
person who shall secure more
than one Tax Identification
Number shall be criminally lia-
ble under the provision of Sec-
tion 275 on Violation of Other
Provisions of this Code or Reg-
ulations in General
SEC. 275. Violation of Other
Provisions of this Code or Rules
and Regulations in General.
Any person who violates any
provision of this Code or any
rule or regulation promulgated
by the Department of Finance,
for which no specific penalty is
provided by law, shall, upon
conviction for each act or
omission, be punished by a
fine of not more than One
Thousand Pesos (P1,000.00)
or suffer imprisonment of not
more than six (6) months, or
both.
above for the preced-
ing year;
F. Gross purchases of
P5,000,000 and above
for the preceding
year;
G. Total excise tax pay-
ment of at least
P100,000 for the pre-
ceding year.


Mandatory Electronic
Filing and Payment

The top 5,000 Individual
taxpayers engaged in
trade or business or prac-
tice of profession are re-
quired to file returns and
remit the taxes withheld
thru the Electronic Filing
and Payment System
(EFPS).



SECURITIES and EX-
CHANGE COMMISSION
No. 10
SERIES of 2009

To further protect the in-
terests of planholders and
enable Pre-Need Compa-
nies to efficiently meet
their contractual obliga-
tions to them, the Com-
mission resolved to
amend Rules 16.2 and
16.3 of the New Rules on
the Registration and Sale
of Pre-Need Plans as fol-
lows:


Rule 16.2:
16.2. The minimum con-
tributions to the Trust
Fund shall be 50% of the
amount collected for life
plans and 60% of the to-
tal amount collected for
other plans unless a high-
er deposit contribution is
determined by the actu-
ary and approved by the
Commission.

Rule 16.3:

16.3. In case of install-
ment payments, the mini-
mum contributions to the
trust funds shall be in ac-
cordance with the follow-
ing schedule:


The foregoing contribution
rates to the trust fund
shall apply to the follow-
ing pre-need plans:

(a) Existing Plans

1. Additional plans regis-
tered on or after July
15, 2009;
2. Unsold balance of pre-
viously registered
plans subject of an
application for price
increase filed on or
after July 15, 2009;
and
3.Unsold balance of previ-
ously registered plans
subject of an application
for conversion to another
type of plan filed on or
after July 15, 2009.

(b) New plans registered
on or after July 15, 2009

Applications for in-
crease in price and
conversion of previ-
ously registered plans
filed before July 15,
2009 shall not be cov-
ered by this Memo-
randum Circular.























Hundred Thousand
Pesos (P300,000)
within the same taxa-
ble year. For this
purpose, agricultural
products in their origi-
nal state as used in
these regulations,
shall only include
corn, coconut, copra,
palay, rice, cassava,
sugar cane, coffee,
fruits, vegetables,
marine food products,
poultry livestocks.
Supplier of goods-One
percent (1%)

Supplier of services-Two
Percent (2%)

Top 20,000 private corpo-
rations shall include a cor-
porate taxpayer who has
been determined and no-
tified by the Bureau of
Internal Revenue (BIR) as
having satisfied any of the
following criteria:

A. Classified and duly
notified by the Com-
missioner as a large
taxpayer under Reve-
nue Regulations No. 1
-98, as amended, or
belonging to the five
thousand (5,000) pri-
vate corporations un-
der RR 12-94, or to
the top ten thousand
(10,000) private cor-
porations under RR 17
-2003, unless previ-
ously de-classified as
such or had already
ceased business oper-
ations (automatic in-
clusion)
B. VAT payment or paya-
ble, whichever is
higher, of at least
P100,000 for the pre-
ceding year;
C. Annual income tax
due of at least
P200,000 for the pre-
ceding year;
D. Total percentage tax
paid of at least
P100,000 for the pre-
ceding year;
E. Gross sales of
P10,000,000 and

REVENUE REGULA-
TIONS NO. 6-2009

Section 2.57.2. of Reve-
nue Regulations No. 2-98,
as amended, is hereby
further amended to read
as follows:
Sec. 2.57.2.Income
payments subject to
creditable withholding
tax and rates pre-
scribed thereon.
Except as herein other-
wise provided, there shall
be withheld a creditable
income tax at the rates
herein specified for each
class of payee from the
following items on income
payments to persons re-
siding in the Philippines:
xxx xxx xxx

(M) Income payments
made by the top
twenty thousand
(20,000) private
corporations of
their local/resident
supplier of goods
and local/resident
supplier of goods
and local/resident
supplier of services
other than those
covered by other
rates of withholding
tax.-Income pay-
ments made by any of
the top 20,000 private
corporations, as de-
termined by the Com-
missioner, to their
local/resident supplier
of goods and local/
resident supplier of
services, including
non-resident aliens
engaged in trade or
business in the Philip-
pines. Provided, how-
ever, that for pur-
chases involving agri-
cultural products in
their original state,
the tax required to be
withheld under this
sub-section shall only
apply to purchases in
excess of the cumula-
tive amount of Three























PEOPLE OF THE
PHILIPPINES
vs.
JOJO MUSA y SAN-
TOS, ROBERT CARI-
O y FERRERAS, AU-
GUST DAYRIT y HER-
NANDEZ, CESAR DO-
MONDON, JR. y
SACRIZ, and MI-
CHAEL GARCIA y
DELA CRUZ
July 3, 2009, G.R.
No. 170472



FACTS: On or about 11
June 2001, Jojo Musa y
Santos (Musa), Robert
Carino y Ferreras
(Carino), August Dayrit y
Hernandez (Dayrit), Cesar
Domondon, Jr. y Sacriz
(Domondon) and Michael
Garcia y Dela Cruz
(Garcia), conspiring and
confederating together
rob and divest from Nan-
cy Bonifacio y Galvo
(Bonifacio) of her belong-
ings. And on the occasion
and by reason of said rob-
bery, accused Roberto
Barredo (Barredo) armed
with a gun, assault and
shoot Bonifacios boy-
friend Harold Herrera
(Herrera), which directly
caused the latters death.

The prosecution and the
defense agreed at the pre
-trial that the deceased
Barredo would be exclud-
ed from the Information.

The defense presented a
different version of
events.

The Regional Trial Court
(RTC) convicted Musa,
Carino, Dayrit, Domondon
and Garcia for having
committed the crime of
Robbery with Homicide.

On appeal, the Court of
Appeals (CA) affirmed the
RTC decision with the
modification that the
awarded moral damages
be increased.

ISSUE: Whether or not
the People proved Musa,
Carino, Dayrit, Domondon
and Garcias guilt beyond
reasonable doubt.

RULING: The People
proved Musa, Carino,
Dayrit, Domondon and
Garcias guilt beyond rea-
sonable doubt.

Bonifacios testimony
finds full support and cor-
roboration from the testi-
mony of another passen-
ger. The narration of
events by the other wit-
ness coincided with Boni-
facios testimony on ma-
terial points.
These testimonies, when
considered together, lead
to no conclusion other than
Musa, Carino, Dayrit, Do-
mondon and Garcias direct
participation in the robbery
where Herrera was shot and
killed.

The totality test has been
formulated precisely to as-
sure fairness as well as
compliance with constitu-
tional due process require-
ments in out-of-court iden-
tification. Applying this
test, the SC found Boni-
facios out-of-court identifi-
cation to be reliable and,
hence, admissible. First,
she testified that she was
seated on the first seat of
the jeepneys left rear side.
From this vantage point,
she had a good view of the
faces of the four persons
clinging to the jeepney as
well as the two who were
seated inside. Second, no
competing event took place
to draw her attention from
the hold-up. Nothing in the
records shows the presence
of any distraction that could
have disrupted her atten-
tion at the time of the rob-
bery or that could have pre-
vented her from having a
clear view of the faces and
appearances of the robbers.
Third, the identification took
place within five days after
the robbery; Fourth, she
described the suspects to a
L C A LINES JURISPRUDENCE
Page 14
police inspector prior to
identifying them in the
police station. Finally,
nothing persuasive sup-
ports Musa, Carino, Day-
rit, Domondon and Garci-
as contention that their
identification at the police
station was the result of
an unduly suggestive pro-
cedure. When Bonifacio
went to the Marikina Po-
lice Station, the police
merely informed her of
the date when Musa, Ca-
rino, Dayrit, Domondon
and Garcia were arrested.
Afterwards, she identified
them as the persons who
were her co-passengers
and who participated in
the robbery.
Alibi is generally viewed
with suspicion because of
its inherent weakness and
unreliability. For this de-
fense to prosper, jurispru-
dence demands the physi-
cal impossibility of the
presence of the accused
at the locus criminis or its
immediate vicinity at the
time of the incident.
Where the least chance
exists for the accused to
be present at the crime
scene, the defense of alibi
fails.

In the present case, Mu-
sa, Carino, Dayrit, Do-
mondon and Garcia failed
dia Dailisan (Dalisan) filed a
Complaint for Annulment of
Contract of Sale involving a
parcel of land. They alleged
that Spouses Henry O (O)
and Pacita Cheng (Cheng)
took advantage of Javiers
illiteracy and deceived him
to sign a Deed of Sale over
the subject property and
that Sps. O and Cheng did
not pay in full the contract
price.

The Regional Trial Court
(RTC) rendered a decision
in favor of Sps. Javier and
Dailisan declaring as null
and void the Deed of Sale,
ordering the Register of
Deeds to cancel the Trans-
fer Certificate of Title issued
in favor of Sps. O and
Cheng and ordering Sps. O
and Cheng to return the
sum of P20,000.00 to Sps.
Javier and Dailisan.

Sps. O and Cheng filed a
Notice of Appeal which was
denied by the RTC for hav-
ing been belatedly filed. On
the other hand, Sps. Javier
and Dailisan filed a Motion
for Reconsideration but the
same was also denied in an
Order dated October 16,
1989.
Thirteen years thereafter,
Sps. O and Cheng allegedly
discovered that no copy of
the October 16, 1989 Order
was sent to Sps. Javier and
to demonstrate by clear
and convincing evidence
that they were so far
away from the scene of
the crime so that it was
physically impossible for
them to have been at the
crime scene at the time of
its commission. In other
words, their alibi did not
meet the requirements of
time and place. Thus,
their alibi cannot also
stand in the face of their
positive identification by
credible witnesses as the
perpetrators of the crime.
The well-settled rule is
that positive identifica-
tion, when categorical,
consistent, and not at-
tended by any showing of
ill-motive on the part of
the witnesses, prevails
over an alibi that is not
substantiated by clear and
convincing evidence; alibi,
under these circumstanc-
es, becomes a negative
and self-serving evidence
undeserving of any weight
in law.

SPS. HENRY O and
PACITA CHENG,
vs.
SPS. JOSE JAVIER and
CLAUDIA DAILISAN,
July 3, 2009, G.R. No.
182485


FACTS: Spouses Jose
Javier (Javier) and Clau-
Dailisan; hence they filed
an Urgent Ex-Parte Motion
for the transmittal of the
said Order to Sps. Javier
and Dailisan and their
counsel of record which
was granted by the RTC.

Meanwhile, Sps. O and
Cheng filed a Manifesta-
tion that their previous
counsel received a copy of
the October 16, 1989 Or-
der sometime in Novem-
ber 1989 thus making the
service of another copy
superfluous and unneces-
sary. Nonetheless, a copy
of the October 16, 1989
Order was still served up-
on them. Thereafter, Sps.
Javier and Dailisan moved
for the execution of judg-
ment but the same was
denied by the RTC.

Sps. Javier and Dailisan
appealed to the Court of
Appeals (CA) which set
aside the RTC Order and
directed the RTC to issue
a writ of execution.

The Court of Appeals de-
nied Sps. O and Chengs
Motion for Reconsidera-
tion.

ISSUES:
1. Whether or not the De-
cision dated 29 October
1987 became Final and
Executory only in 2002;
2. Whether or not Sps.
Javier and Dailisan are
guilty of estoppel in pais
or laches.

RULING:
With regard to the first
issue, the Decision dated
29 October 1987 did not
become Final and Execu-
tory only in 2002.

Section 8, Rule 13 of the
Rules of Court states that:
SEC. 8. Completeness of
service. Personal service
is complete upon actual
delivery. Service by ordi-
nary mail is complete up-
on the expiration of five
(5) days after mailing,
unless the court otherwise
provides. Service by reg-
istered mail is complete
upon actual receipt by the
addressee; but if he fails
to claim his mail from the
post office within five (5)
days from the date of first
notice of the postmaster,
service shall take effect at
the expiration of such
time.

Pursuant to the foregoing
rule, when Sps. O and
Chengs former counsel
received in November of
1989 a copy of the Octo-
ber 16, 1989 Order by
registered mail, service is
deemed completed. Since
they chose not to file an
appeal, the October 29,
1987 Decision became
final and executory after
the lapse of 15 days from
the date of receipt of the
October 16, 1989 Order.

With regard to the second
issue, Sps. Javier and
Dailisan were found guilty
of laches, the essence of
which is the failure or ne-
glect, for an unreasonable
and unexplained length of
time to do that which, by
exercising due diligence,
could or should have been
done earlier; it is the neg-
ligence or omission to
assert a right within a
reasonable time, warrant-
ing a presumption that
the party entitled to as-
sert it either has aban-
doned it or declined to
assert it. Laches is not
concerned with the mere
lapse of time, rather, the
party must have been
afforded an opportunity to
pursue his claim in order
that the delay may suffi-
ciently constitute laches.

In the instant case, the
October 29, 1987 Deci-
sion became final and ex-
ecutory in 1989. Howev-
er, Sps. Javier and Dai-
lisan moved for its execu-
tion only on January 24,
2003. Having slept on
their right to enforce the
judgment for more than
13 years, Sps. Javier and
Dailisan are now barred
by the statute of limita-
tions from asking for its
execution.

COMMISSIONER OF IN-
TERNAL REVENUE
vs.
BANK OF THE PHILIP-
PINE ISLANDS
July 7, 2009, G.R. No.
178490

FACTS: On 15 April
1999, BPI filed with the
Bureau of Internal Reve-
nue (BIR) its final adjust-
ed Corporate Annual In-
come Tax Return (ITR) for
the taxable year ending
on 31 December 1998.
For the same taxable year
1998, BPI already made
income tax payments for
the first three quarters.
The bank also received
income in 1998 from vari-
ous third persons, which,
were already subjected to
expanded withholding
taxes. BPI additionally
acquired foreign tax credit
when it paid the United
States government taxes
on the operations of for-
L C A LINES
Page 16
mers New York Branch.
Finally, respondent BPI
had carried over excess
tax credit from the prior
year, 1997.
Crediting the aforemen-
tioned amounts against
the total tax due from it
at the end of 1998, BPI
computed an overpay-
ment to the BIR of income
taxes.
BPI opted to carry over its
1998 excess tax credit to
the succeeding taxable
year ending 31 December
1999. For 1999, howev-
er, BPI ended up with (1)
a net loss; (2) still unap-
plied excess tax credit
carried over from 1998;
and (3) more excess tax
credit, acquired in 1999.
So in 1999, the total ex-
cess tax credits of BPI
increased, which it once
more opted to carry over
to the following taxable
year.
For the taxable year end-
ing 31 December 2000,
BPI declared in its Corpo-
rate Annual ITR: (1) zero
taxable income; (2) ex-
cess tax credit carried
over from 1998 and
1999; and (3) even more
excess tax credit, gained
in 2000. This time, BPI
failed to indicate in its ITR
its choice of whether to
carry over its excess tax
credits or to claim the
mitted reversible error in
holding that the
irrevocability rule under
Section 76 of the Tax
Code does not operate to
bar BPI from asking for a
tax refund
The taxpayer with excess
income tax are given the
option to either (1) refund
the amount; or (2) credit
the same to its tax liabil-
ity for succeeding taxable
periods.
Section 76 of the NIRC of
1997, laid down the ir-
revocability rule:

Section 76. Final Adjust-
ment Return. - Every cor-
poration liable to tax un-
der Section 24 shall file a
final adjustment return
covering the total net in-
come for the preceding
calendar or fiscal year. If
the sum of the quarterly
tax payments made dur-
ing the said taxable year
is not equal to the total
tax due on the entire tax-
able net income of that
year the corporation shall
either:
(a) Pay the excess tax
still due; or
(b) (b) Be refunded the
excess amount paid,
as the case may be.

In case the corporation is
entitled to a refund of
the excess estimated
quarterly income taxes
paid, the refundable
amount shown on its final
adjustment return may be
credited against the esti-
mated quarterly income
tax liabilities for the taxa-
ble quarters of the suc-
ceeding taxable years.
Once the option to car-
ry-over and apply the
excess quarterly in-
come tax against in-
come tax due for the
taxable quarters of the
succeeding taxable
years has been made,
such option shall be
considered irrevocable
for that taxable period
and no application for
tax refund or issuance
of a tax credit certifi-
cate shall be allowed
therefor.

Section 76 remains
clear and unequivo-
cal. Once the carry-
over option is taken,
actually or construc-
tively, it becomes ir-
revocable. There is no
exception or qualification
to the irrevocability rule.

Hence, the controlling
factor for the operation of
the irrevocability rule is
that the taxpayer chose
an option; and once it had
already done so, it could
refund of or issuance of a
tax credit certificate for
the amounts thereof.
BPI filed with the Com-
missioner of Internal Rev-
enue (CIR) an administra-
tive claim for refund, rep-
resenting its excess cred-
itable income tax for
1998.
The CIR failed to act on
the claim for tax refund of
BPI. Hence, BPI filed a
Petition for Review before
the Court of Tax Appeals
(CTA).
The CTA ruled that since
BPI had opted to carry
over its 1998 excess tax
credit to 1999 and 2000,
it was barred from filing a
claim for the refund of the
same.
BPI filed a Motion for Re-
consideration, but the
CTA denied the same.
BPI filed an appeal with
the Court of Appeals (CA),
which reversed the deci-
sion of the CTA, holding
that BPI was entitled to a
refund of the excess in-
come tax it paid for 1998.

ISSUE: Whether or not
the CA committed reversi-
ble error in holding that
the irrevocability rule
under Section 76 of the
Tax Code does not oper-
ate to bar BPI from asking
for a tax refund
RULING: The CA com-
no longer make another
one. Consequently, after
the taxpayer opts to carry
over its excess tax credit
to the following taxable
period, the question of
whether or not it actually
gets to apply said tax
credit is irrelevant. Sec-
tion 76 of the NIRC of
1997 is explicit in stating
that once the option to
carry over has been
made, no application for
tax refund or issuance of
a tax credit certificate
shall be allowed therefor.
In the present case, the
excess income tax credit,
which BPI opted to carry
over, was acquired by the
said bank during the taxa-
ble year 1998. The option
of BPI to carry over its
1998 excess income tax
credit is irrevocable; it
cannot later on opt to ap-
ply for a refund of the
very same 1998 excess
income tax credit.
The choice by BPI of the
option to carry over its
1998 excess income tax
credit to succeeding taxa-
ble years, which it explic-
itly indicated in its 1998
ITR, is irrevocable, re-
gardless of whether it was
able to actually apply the
said amount to a tax lia-
bility. The reiteration by
BPI of the carry over op-
tion in its ITR for 1999
was already a superfluity,
as far as its 1998 excess
income tax credit was
concerned, given the ir-
revocability of the initial
choice made by the bank
to carry over the said
amount.




LAND BANK OF THE
PHILIPPINES,
vs.
ROWENA O. PADEN
July 7, 2009, G.R. No.
157607

FACTS: Land Bank of
the Philippines (LBP) hired
Rowena O. Paden (Paden)
as Contractual Secretary
III in its Bansalan Branch
in Davao del Sur. Prior to
her regularization, the
Paden assumed the posi-
tion of Executive Assistant
I as a probationary em-
ployee pending receipt of
the background investiga-
tion on her. As a require-
ment to her assumption
of the position of Execu-
tive Assistant I, Paden
executed an Affidavit with
Waiver of Rights.
In the documents that she
submitted to support her
application, Paden indicat-
ed that she had no chil-
dren and designated one
Cyril Rose O. Paden (Cyril
Rose) as her sister. A
subsequent background
investigation revealed
that Cyril Rose is not the
Padens sister but is really
her daughter. Shortly
thereafter, Paden, in an
Affidavit sought to explain
the discrepancy.
In response to the exe-
cuted Affidavit, LBP gave
notice to the Paden that
she would be dropped
from the rolls indicating
that the probationary pe-
riod has already expired.
Paden sought reconsider-
ation, but the LBP denied
her request.
Paden filed an appeal with
the CSC. The CSC dis-
missed the appeal out-
right for having been filed
beyond the reglementary
period, and for failure to
pay the appeal fee.
Paden filed a motion for
reconsideration. The
same was granted and
ordered LBP for Padens
reinstatement to her for-
mer position as Executive
Assistant I under perma-
nent status.

LBP filed a motion for re-
consideration before the
CSC, but the same was
denied.
The CA dismissed the
LBPs petition and af-
firmed the findings of the
CSC.

ISSUE: Whether or not
LBP deprived Paden of
due process.

RULING: LBP deprived
Paden of due process.
LBP did not give Paden
sufficient notice of termi-
nation or a notice of un-
satisfactory conduct prior
to the expiration of her
probationary period, and
that there was no basis to
drop Paden from the rolls
on the cited ground.
Article IX (B), Section 2
(3) of the 1987 Constitu-
tion expressly provides
that no officer or em-
ployee of the civil service
shall be removed or sus-
pended except for cause
provided by law. The
aforementioned constitu-
tional provision does not
distinguish between a
regular employee and a
probationary employee.
The constitutional guaran-
ty of security of tenure in
the civil service has two
legal ramifications. The
prohibition against sus-
pension or dismissal of an
L C A LINES
officer or employee of the
Civil Service except for
cause provided by law is
a guaranty of both
procedural and sub-
stantive due process.
Not only must removal or
suspension be in accord-
ance with the procedure
prescribed by law, but
also they can only be
made on the basis of a
valid cause provided by
law.
Procedural due process
basically requires that
suspension or dismissal
comes only after notice
and hearing. Thus, the
minimum requirements of
due process are: (1) that
the employees or officers
must be informed of the
charges preferred against
them, and the formal way
by which the employees
or officers are informed is
by furnishing them with a
copy of the charges made
against them; and (2)
that they must have a
reasonable opportunity to
present their side of the
matter, that is to say,
their defenses against the
charges and to present
evidence in support of
their defenses.
Measured against these
standards, the notice giv-
en to Paden clearly does
not amount to a valid no-
tice of termination, as it
and YOLANDA DELOS
REYES,
vs.
RENE R. RELOS
July 3, 2009, G.R. No.
164315

FACTS: Alcatel offered
Rene R. Relos (Relos) nu-
merous work projects
with their company.
On the last project given
to Relos, Alcatel informed
Relos that the project
would be completed and
that his contract with Al-
catel would expire. Al-
catel asked Relos to settle
all his accountabilities
with the company and
advised him that he would
be called if it has future
projects that require his
expertise.
Relos filed a complaint for
illegal dismissal, separa-
tion pay, unpaid wages,
unpaid overtime pay,
damages, and attorneys
fees against Alcatel. Re-
los alleged that he was a
regular employee of Al-
catel and that he was dis-
missed during the exist-
ence of the project.
The Labor Arbiter (LA)
declared that Relos was a
regular employee of Al-
catel and ruled that he
was illegally dismissed
and, therefore, entitled to
back wages.
Alcatel appealed to the
National Labor Relations
Commission (NLRC) which
reversed the LAs decision
and dismissed Relos com-
plaint for illegal dismissal.
It declared that Relos was
a project employee and
that he was not illegally
dismissed but that his
employment contract ex-
pired.
Relos filed a motion for
reconsideration however
the same was denied.
The Court of Appeals (CA)
set aside the NLRCs Deci-
sion and reinstated the
LAs Decision.

ISSUES: 1. Whether or
not Relos was a regular
employee or a project
employee;
2. Whether or not Relos
was illegally dismissed.

RULING: With regard to
the first issue, Relos is
considered a project em-
ployee.
The specific projects for
which Relos was hired and
the periods of employ-
ment were specified in his
employment contracts.
The services he rendered,
the duration and scope of
each employment are
clear indications that Re-
los was hired as a project
employee.
The principal test for de-
termining whether a par-
ticular employee is a pro-
merely stated that the
Paden was being dropped
from the rolls; nowhere
in the notice was a
specification of the
LBPs factual and legal
reasons for terminating
the respondents ser-
vices. This is a violation
of due process since it
strikes at its essence
the opportunity to be
heard or the opportuni-
ty for Paden to adequately
and intelligently mount a
defense against the
charges made by LBP.
Thus, Paden was com-
pletely left in the dark on
why her services were
being summarily termi-
nated. In addition, the
records of this case are
bereft of any evidence
that the LBPs notice to
Paden was supported by
any document justifying
the notice of termination.
The ground LBP invoked is
not sufficient basis for
Padens dismissal, and
that her dismissal was
effected without the ob-
servance of both proce-
dural and substantive due
process.




ALCATEL PHILIPPINES,
INC.,
ject employee or a regular
employee is whether the
project employee was as-
signed to carry out a spe-
cific project or undertak-
ing, the duration and
scope of which were spec-
ified at the time the em-
ployee is engaged for the
project. Project may
refer to a particular job or
undertaking that is within
the regular or usual busi-
ness of the employer, but
which is distinct and sep-
arate and identifiable as
such from the undertak-
ings of the company.
Such job or undertaking
begins and ends at deter-
mined or determinable
times.
With respect to the se-
cond issue, Relos cannot
considered as illegally
dismissed.
The employment of a pro-
ject employee ends on the
date specified in the em-
ployment contract.
Therefore, being a project
employee, Relos was not
illegally dismissed but his
employment terminated
upon the expiration of his
employment contract.




L C A LINES
Page 20
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