Oposa Law Office For Petitioners. The Solicitor General For Respondents

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 101083 July 30, 1993

JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and represented by their
parents ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor, represented by her parents CALVIN
and ROBERTA SADIUA, CARLO, AMANDA SALUD and PATRISHA, all surnamed FLORES, minors and
represented by their parents ENRICO and NIDA FLORES, GIANINA DITA R. FORTUN, minor, represented by her
parents SIGRID and DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and
represented by their parents GEORGE and MYRA MISA, BENJAMIN ALAN V. PESIGAN, minor, represented by his
parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO, minor, represented by her parents JOSE and
MARIA VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor, represented by her parents FREDENIL and
JANE CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor,
represented by his parents GREGORIO II and CRISTINE CHARITY NARVASA, MA. MARGARITA, JESUS IGNACIO,
MA. ANGELA and MARIE GABRIELLE, all surnamed SAENZ, minors, represented by their parents ROBERTO and
AURORA SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING, minors,
represented by their parents MARIO and HAYDEE KING, DAVID, FRANCISCO and THERESE VICTORIA, all
surnamed ENDRIGA, minors, represented by their parents BALTAZAR and TERESITA ENDRIGA, JOSE MA. and
REGINA MA., all surnamed ABAYA, minors, represented by their parents ANTONIO and MARICA ABAYA,
MARILIN, MARIO, JR. and MARIETTE, all surnamed CARDAMA, minors, represented by their parents MARIO and
LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all surnamed OPOSA, minors and represented
by their parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN JOHN and ISAIAH JAMES, all
surnamed QUIPIT, minors, represented by their parents JOSE MAX and VILMI QUIPIT, BUGHAW CIELO,
CRISANTO, ANNA, DANIEL and FRANCISCO, all surnamed BIBAL, minors, represented by their parents
FRANCISCO, JR. and MILAGROS BIBAL, and THE PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the Department of
Environment and Natural Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of the
RTC, Makati, Branch 66, respondents.
Oposa Law Office for petitioners.
The Solicitor General for respondents.
DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the petitioners
dramatically associate with the twin concepts of "inter-generational responsibility" and "inter-generational justice."
Specifically, it touches on the issue of whether the said petitioners have a cause of action to "prevent the misappropriation
or impairment" of Philippine rainforests and "arrest the unabated hemorrhage of the country's vital life support systems
and continued rape of Mother Earth."
The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro Manila) of the
Regional Trial Court (RTC), National Capital Judicial Region. The principal plaintiffs therein, now the principal petitioners,
are all minors duly represented and joined by their respective parents. Impleaded as an additional plaintiff is the Philippine
Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia,
engaging in concerted action geared for the protection of our environment and natural resources. The original defendant
was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department of Environment and Natural Resources
(DENR). His substitution in this petition by the new Secretary, the Honorable Angel C. Alcala, was subsequently ordered
upon proper motion by the petitioners. 1 The complaint 2 was instituted as a taxpayers' class suit 3 and alleges that the
plaintiffs "are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of
the natural resource treasure that is the country's virgin tropical forests." The same was filed for themselves and others
who are equally concerned about the preservation of said resource but are "so numerous that it is impracticable to bring
them all before the Court." The minors further asseverate that they "represent their generation as well as generations yet
unborn." 4 Consequently, it is prayed for that judgment be rendered:
. . . ordering defendant, his agents, representatives and other persons acting in his behalf to —
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements.
and granting the plaintiffs ". . . such other reliefs just and equitable under the premises." 5
The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area of
thirty million (30,000,000) hectares and is endowed with rich, lush and verdant rainforests in which varied, rare and unique
species of flora and fauna may be found; these rainforests contain a genetic, biological and chemical pool which is
irreplaceable; they are also the habitat of indigenous Philippine cultures which have existed, endured and flourished since
time immemorial; scientific evidence reveals that in order to maintain a balanced and healthful ecology, the country's land
area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest cover and forty-six per cent (46%) for
agricultural, residential, industrial, commercial and other uses; the distortion and disturbance of this balance as a
consequence of deforestation have resulted in a host of environmental tragedies, such as (a) water shortages resulting
from drying up of the water table, otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b)
salinization of the water table as a result of the intrusion therein of salt water, incontrovertible examples of which may be
found in the island of Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and the consequential loss of soil
fertility and agricultural productivity, with the volume of soil eroded estimated at one billion (1,000,000,000) cubic meters
per annum — approximately the size of the entire island of Catanduanes, (d) the endangering and extinction of the
country's unique, rare and varied flora and fauna, (e) the disturbance and dislocation of cultural communities, including the
disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds and consequential destruction of
corals and other aquatic life leading to a critical reduction in marine resource productivity, (g) recurrent spells of drought
as is presently experienced by the entire country, (h) increasing velocity of typhoon winds which result from the absence
of windbreakers, (i) the floodings of lowlands and agricultural plains arising from the absence of the absorbent mechanism
of forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams constructed and operated for the
purpose of supplying water for domestic uses, irrigation and the generation of electric power, and (k) the reduction of the
earth's capacity to process carbon dioxide gases which has led to perplexing and catastrophic climatic changes such as
the phenomenon of global warming, otherwise known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation are so capable of
unquestionable demonstration that the same may be submitted as a matter of judicial notice. This notwithstanding, they
expressed their intention to present expert witnesses as well as documentary, photographic and film evidence in the
course of the trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing allegations.
8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests
constituting roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of said
rainforests or four per cent (4.0%) of the country's land area.
10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left,
barely 2.8% of the entire land mass of the Philippine archipelago and about 3.0 million hectares of
immature and uneconomical secondary growth forests.
11. Public records reveal that the defendant's, predecessors have granted timber license agreements
('TLA's') to various corporations to cut the aggregate area of 3.89 million hectares for commercial logging
purposes.
A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A".
12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per hour —
nighttime, Saturdays, Sundays and holidays included — the Philippines will be bereft of forest resources
after the end of this ensuing decade, if not earlier.
13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this
continued trend of deforestation to the plaintiff minor's generation and to generations yet unborn are
evident and incontrovertible. As a matter of fact, the environmental damages enumerated in paragraph 6
hereof are already being felt, experienced and suffered by the generation of plaintiff adults.
14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest stands
will work great damage and irreparable injury to plaintiffs — especially plaintiff minors and their
successors — who may never see, use, benefit from and enjoy this rare and unique natural resource
treasure.
This act of defendant constitutes a misappropriation and/or impairment of the natural resource property
he holds in trust for the benefit of plaintiff minors and succeeding generations.
15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are entitled to
protection by the State in its capacity as the parens patriae.
16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2, 1990,
plaintiffs served upon defendant a final demand to cancel all logging permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".
17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious damage
and extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights of
plaintiffs, especially plaintiff minors who may be left with a country that is desertified (sic), bare, barren
and devoid of the wonderful flora, fauna and indigenous cultures which the Philippines had been
abundantly blessed with.
19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy
enunciated in the Philippine Environmental Policy which, in pertinent part, states that it is the policy of the
State —
(a) to create, develop, maintain and improve conditions under which man and nature can thrive in
productive and enjoyable harmony with each other;
(b) to fulfill the social, economic and other requirements of present and future generations of Filipinos
and;
(c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and well-
being. (P.D. 1151, 6 June 1977)
20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory to the
Constitutional policy of the State to —
a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and efficient
use of natural resources (sic)." (Section 1, Article XII of the Constitution);
b. "protect the nation's marine wealth." (Section 2, ibid);
c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article XIV,id.);
d. "protect and advance the right of the people to a balanced and healthful ecology in accord with the
rhythm and harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of humankind — the natural law — and violative
of plaintiffs' right to self-preservation and perpetuation.
22. There is no other plain, speedy and adequate remedy in law other than the instant action to arrest the
unabated hemorrhage of the country's vital life support systems and continued rape of Mother Earth. 6
On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint based on two (2)
grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue raised by the plaintiffs is a
political question which properly pertains to the legislative or executive branches of Government. In their 12 July 1990
Opposition to the Motion, the petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action,
(2) the motion is dilatory and (3) the action presents a justiciable question as it involves the defendant's abuse of
discretion.
On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. 7 In the said order,
not only was the defendant's claim — that the complaint states no cause of action against him and that it raises a political
question — sustained, the respondent Judge further ruled that the granting of the relief prayed for would result in the
impairment of contracts which is prohibited by the fundamental law of the land.
Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and ask this
Court to rescind and set aside the dismissal order on the ground that the respondent Judge gravely abused his discretion
in dismissing the action. Again, the parents of the plaintiffs-minors not only represent their children, but have also joined
the latter in this case. 8
On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their respective
Memoranda after the Office of the Solicitor General (OSG) filed a Comment in behalf of the respondents and the
petitioners filed a reply thereto.
Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient
allegations concerning their right to a sound environment based on Articles 19, 20 and 21 of the Civil Code (Human
Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree (P.D.) No.
1151 (Philippine Environmental Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the people to
a balanced and healthful ecology, the concept of generational genocide in Criminal Law and the concept of man's
inalienable right to self-preservation and self-perpetuation embodied in natural law. Petitioners likewise rely on the
respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard the people's right to a healthful
environment.
It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting Timber
License Agreements (TLAs) to cover more areas for logging than what is available involves a judicial question.
Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain that the
same does not apply in this case because TLAs are not contracts. They likewise submit that even if TLAs may be
considered protected by the said clause, it is well settled that they may still be revoked by the State when the public
interest so requires.
On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific legal right violated
by the respondent Secretary for which any relief is provided by law. They see nothing in the complaint but vague and
nebulous allegations concerning an "environmental right" which supposedly entitles the petitioners to the "protection by
the state in its capacity as parens patriae." Such allegations, according to them, do not reveal a valid cause of action.
They then reiterate the theory that the question of whether logging should be permitted in the country is a political
question which should be properly addressed to the executive or legislative branches of Government. They therefore
assert that the petitioners' resources is not to file an action to court, but to lobby before Congress for the passage of a bill
that would ban logging totally.
As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the State without
due process of law. Once issued, a TLA remains effective for a certain period of time — usually for twenty-five (25) years.
During its effectivity, the same can neither be revised nor cancelled unless the holder has been found, after due notice
and hearing, to have violated the terms of the agreement or other forestry laws and regulations. Petitioners' proposition to
have all the TLAs indiscriminately cancelled without the requisite hearing would be violative of the requirements of due
process.
Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No. 90-777 as
a class suit. The original defendant and the present respondents did not take issue with this matter. Nevertheless, We
hereby rule that the said civil case is indeed a class suit. The subject matter of the complaint is of common and general
interest not just to several, but to all citizens of the Philippines. Consequently, since the parties are so numerous, it,
becomes impracticable, if not totally impossible, to bring all of them before the court. We likewise declare that the plaintiffs
therein are numerous and representative enough to ensure the full protection of all concerned interests. Hence, all the
requisites for the filing of a valid class suit under Section 12, Rule 3 of the Revised Rules of Court are present both in the
said civil case and in the instant petition, the latter being but an incident to the former.
This case, however, has a special and novel element. Petitioners minors assert that they represent their generation as
well as generations yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their generation
and for the succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can
only be based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is
concerned. Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety. 9 Such rhythm and harmony
indispensably include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the
country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources to the end that their
exploration, development and utilization be equitably accessible to the present as well as future generations. 10 Needless
to say, every generation has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a
balanced and healthful ecology. Put a little differently, the minors' assertion of their right to a sound environment
constitutes, at the same time, the performance of their obligation to ensure the protection of that right for the generations
to come.
The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the petition.
After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the issues raised and
arguments adduced by the parties, We do not hesitate to find for the petitioners and rule against the respondent Judge's
challenged order for having been issued with grave abuse of discretion amounting to lack of jurisdiction. The pertinent
portions of the said order reads as follows:
xxx xxx xxx
After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with the
defendant. For although we believe that plaintiffs have but the noblest of all intentions, it (sic) fell short of
alleging, with sufficient definiteness, a specific legal right they are seeking to enforce and protect, or a
specific legal wrong they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the
Court notes that the Complaint is replete with vague assumptions and vague conclusions based on
unverified data. In fine, plaintiffs fail to state a cause of action in its Complaint against the herein
defendant.
Furthermore, the Court firmly believes that the matter before it, being impressed with political color and
involving a matter of public policy, may not be taken cognizance of by this Court without doing violence to
the sacred principle of "Separation of Powers" of the three (3) co-equal branches of the Government.
The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the
reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and
to cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements. For to do otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law. 11
We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient definiteness a specific
legal right involved or a specific legal wrong committed, and that the complaint is replete with vague assumptions and
conclusions based on unverified data. A reading of the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal right — the right to a balanced and healthful ecology which, for
the first time in our nation's constitutional history, is solemnly incorporated in the fundamental law. Section 16, Article II of
the 1987 Constitution explicitly provides:
Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful ecology
in accord with the rhythm and harmony of nature.
This right unites with the right to health which is provided for in the preceding section of the same article:
Sec. 15. The State shall protect and promote the right to health of the people and instill health
consciousness among them.
While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies
and not under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights
enumerated in the latter. Such a right belongs to a different category of rights altogether for it concerns nothing less than
self-preservation and self-perpetuation — aptly and fittingly stressed by the petitioners — the advancement of which may
even be said to predate all governments and constitutions. As a matter of fact, these basic rights need not even be written
in the Constitution for they are assumed to exist from the inception of humankind. If they are now explicitly mentioned in
the fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a balanced and
healthful ecology and to health are mandated as state policies by the Constitution itself, thereby highlighting their
continuing importance and imposing upon the state a solemn obligation to preserve the first and protect and advance the
second, the day would not be too far when all else would be lost not only for the present generation, but also for those to
come — generations which stand to inherit nothing but parched earth incapable of sustaining life.
The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment.
During the debates on this right in one of the plenary sessions of the 1986 Constitutional Commission, the following
exchange transpired between Commissioner Wilfrido Villacorta and Commissioner Adolfo Azcuna who sponsored the
section in question:
MR. VILLACORTA:
Does this section mandate the State to provide sanctions against all forms of pollution —
air, water and noise pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic) environment necessarily carries with it
the correlative duty of not impairing the same and, therefore, sanctions may be provided
for impairment of environmental balance. 12
The said right implies, among many other things, the judicious management and conservation of the country's forests.
Without such forests, the ecological or environmental balance would be irreversiby disrupted.
Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the other
related provisions of the Constitution concerning the conservation, development and utilization of the country's natural
resources, 13 then President Corazon C. Aquino promulgated on 10 June 1987 E.O. No. 192, 14 Section 4 of which
expressly mandates that the Department of Environment and Natural Resources "shall be the primary government agency
responsible for the conservation, management, development and proper use of the country's environment and natural
resources, specifically forest and grazing lands, mineral, resources, including those in reservation and watershed areas,
and lands of the public domain, as well as the licensing and regulation of all natural resources as may be provided for by
law in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the present and future
generations of Filipinos." Section 3 thereof makes the following statement of policy:
Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure the sustainable
use, development, management, renewal, and conservation of the country's forest, mineral, land, off-
shore areas and other natural resources, including the protection and enhancement of the quality of the
environment, and equitable access of the different segments of the population to the development and
the use of the country's natural resources, not only for the present generation but for future generations
as well. It is also the policy of the state to recognize and apply a true value system including social and
environmental cost implications relative to their utilization, development and conservation of our natural
resources.
This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987, 15specifically in
Section 1 thereof which reads:
Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the Filipino people, the full
exploration and development as well as the judicious disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other
natural resources, consistent with the necessity of maintaining a sound ecological balance and protecting
and enhancing the quality of the environment and the objective of making the exploration, development
and utilization of such natural resources equitably accessible to the different segments of the present as
well as future generations.
(2) The State shall likewise recognize and apply a true value system that takes into account social and
environmental cost implications relative to the utilization, development and conservation of our natural
resources.
The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and enhancing the
quality of the environment." Section 2 of the same Title, on the other hand, specifically speaks of the mandate of the
DENR; however, it makes particular reference to the fact of the agency's being subject to law and higher authority. Said
section provides:
Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall be primarily
responsible for the implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional
mandate to control and supervise the exploration, development, utilization, and conservation of the
country's natural resources.
Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases for policy
formulation, and have defined the powers and functions of the DENR.
It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid
special attention to the "environmental right" of the present and future generations. On 6 June 1977, P.D. No. 1151
(Philippine Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued. The former "declared a
continuing policy of the State (a) to create, develop, maintain and improve conditions under which man and nature can
thrive in productive and enjoyable harmony with each other, (b) to fulfill the social, economic and other requirements of
present and future generations of Filipinos, and (c) to insure the attainment of an environmental quality that is conducive
to a life of dignity and well-being." 16 As its goal, it speaks of the "responsibilities of each generation as trustee and
guardian of the environment for succeeding generations." 17 The latter statute, on the other hand, gave flesh to the said
policy.
Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear as the
DENR's duty — under its mandate and by virtue of its powers and functions under E.O. No. 192 and the Administrative
Code of 1987 — to protect and advance the said right.
A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the same gives
rise to a cause of action. Petitioners maintain that the granting of the TLAs, which they claim was done with grave abuse
of discretion, violated their right to a balanced and healthful ecology; hence, the full protection thereof requires that no
further TLAs should be renewed or granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the legal right or rights of the other; and its essential
elements are legal right of the plaintiff, correlative obligation of the defendant, and act or omission of the
defendant in violation of said legal right. 18
It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a cause of
action, 19 the question submitted to the court for resolution involves the sufficiency of the facts alleged in the complaint
itself. No other matter should be considered; furthermore, the truth of falsity of the said allegations is beside the point for
the truth thereof is deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such
alleged facts to be true, may the court render a valid judgment in accordance with the prayer in the
complaint? 20 InMilitante vs. Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the utmost care
and circumspection in passing upon a motion to dismiss on the ground of the absence thereof [cause of action] lest, by its
failure to manifest a correct appreciation of the facts alleged and deemed hypothetically admitted, what the law grants or
recognizes is effectively nullified. If that happens, there is a blot on the legal order. The law itself stands in disrepute."
After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative
allegations, as well as the specific averments under the sub-heading CAUSE OF ACTION, to be adequate enough to
show, prima facie, the claimed violation of their rights. On the basis thereof, they may thus be granted, wholly or partly,
the reliefs prayed for. It bears stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the
need to implead, as party defendants, the grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or determination
by the executive or legislative branches of Government is not squarely put in issue. What is principally involved is the
enforcement of a right vis-a-vis policies already formulated and expressed in legislation. It must, nonetheless, be
emphasized that the political question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power
or the impenetrable shield that protects executive and legislative actions from judicial inquiry or review. The second
paragraph of section 1, Article VIII of the Constitution states that:
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality
of the Government.
Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a distinguished member
of this Court, says:
The first part of the authority represents the traditional concept of judicial power, involving the settlement
of conflicting rights as conferred as law. The second part of the authority represents a broadening of
judicial power to enable the courts of justice to review what was before forbidden territory, to wit, the
discretion of the political departments of the government.
As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule
upon even the wisdom of the decisions of the executive and the legislature and to declare their acts
invalid for lack or excess of jurisdiction because tainted with grave abuse of discretion. The catch, of
course, is the meaning of "grave abuse of discretion," which is a very elastic phrase that can expand or
contract according to the disposition of the judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:
In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The
reason is that, even if we were to assume that the issue presented before us was political in nature, we
would still not be precluded from revolving it under the expanded jurisdiction conferred upon us that now
covers, in proper cases, even the political question. Article VII, Section 1, of the Constitution clearly
provides: . . .
The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause found in
the Constitution. The court a quo declared that:
The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the
reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and
to cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements. For to do otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law. 24
We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement. In the
first place, the respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-
impairment clause. If he had done so, he would have acted with utmost infidelity to the Government by providing undue
and unwarranted benefits and advantages to the timber license holders because he would have forever bound the
Government to strictly respect the said licenses according to their terms and conditions regardless of changes in policy
and the demands of public interest and welfare. He was aware that as correctly pointed out by the petitioners, into every
timber license must be read Section 20 of the Forestry Reform Code (P.D. No. 705) which provides:
. . . Provided, That when the national interest so requires, the President may amend, modify, replace or
rescind any contract, concession, permit, licenses or any other form of privilege granted herein . . .
Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property
or a property right protested by the due process clause of the Constitution. In Tan vs. Director of Forestry, 25 this
Court held:
. . . A timber license is an instrument by which the State regulates the utilization and disposition of forest
resources to the end that public welfare is promoted. A timber license is not a contract within the purview
of the due process clause; it is only a license or privilege, which can be validly withdrawn whenever
dictated by public interest or public welfare as in this case.
A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract
between the authority, federal, state, or municipal, granting it and the person to whom it is granted;
neither is it property or a property right, nor does it create a vested right; nor is it taxation (37 C.J. 168).
Thus, this Court held that the granting of license does not create irrevocable rights, neither is it property
or property rights (People vs. Ong Tin, 54 O.G. 7576).
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26
. . . Timber licenses, permits and license agreements are the principal instruments by which the State
regulates the utilization and disposition of forest resources to the end that public welfare is promoted. And
it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities,
and do not vest in the latter a permanent or irrevocable right to the particular concession area and the
forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief
Executive when national interests so require. Thus, they are not deemed contracts within the purview of
the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also,
Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302].
Since timber licenses are not contracts, the non-impairment clause, which reads:
Sec. 10. No law impairing, the obligation of contracts shall be passed. 27
cannot be invoked.
In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or
even an executive issuance declaring the cancellation or modification of existing timber licenses. Hence, the non-
impairment clause cannot as yet be invoked. Nevertheless, granting further that a law has actually been passed
mandating cancellations or modifications, the same cannot still be stigmatized as a violation of the non-impairment clause.
This is because by its very nature and purpose, such as law could have only been passed in the exercise of the police
power of the state for the purpose of advancing the right of the people to a balanced and healthful ecology, promoting
their health and enhancing the general welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:
The freedom of contract, under our system of government, is not meant to be absolute. The same is
understood to be subject to reasonable legislative regulation aimed at the promotion of public health,
moral, safety and welfare. In other words, the constitutional guaranty of non-impairment of obligations of
contract is limited by the exercise of the police power of the State, in the interest of public health, safety,
moral and general welfare.
The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American Life Insurance Co. vs.
Auditor General, 30 to wit:
Under our form of government the use of property and the making of contracts are normally matters of
private and not of public concern. The general rule is that both shall be free of governmental interference.
But neither property rights nor contract rights are absolute; for government cannot exist if the citizen may
at will use his property to the detriment of his fellows, or exercise his freedom of contract to work them
harm. Equally fundamental with the private right is that of the public to regulate it in the common interest.
In short, the non-impairment clause must yield to the police power of the state. 31
Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer
to enjoin the respondent Secretary from receiving, accepting, processing, renewing or approving new timber licenses for,
save in cases of renewal, no contract would have as of yet existed in the other instances. Moreover, with respect to
renewal, the holder is not entitled to it as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of
respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may therefore
amend their complaint to implead as defendants the holders or grantees of the questioned timber license agreements.
No pronouncement as to costs.
SO ORDERED.
Cruz, Padilla, Bidin, Griño-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ., concur.
Narvasa, C.J., Puno and Vitug, JJ., took no part.
Separate Opinions
FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is one
of the most important cases decided by this Court in the last few years. The seminal principles laid down in this decision
are likely to influence profoundly the direction and course of the protection and management of the environment, which of
course embraces the utilization of all the natural resources in the territorial base of our polity. I have therefore sought to
clarify, basically to myself, what the Court appears to be saying.
The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance of
this suit (Decision, pp. 11-12). Locus standi is not a function of petitioners' claim that their suit is properly regarded as
a class suit. I understand locus standi to refer to the legal interest which a plaintiff must have in the subject matter of the
suit. Because of the very broadness of the concept of "class" here involved — membership in this "class" appears to
embrace everyone living in the country whether now or in the
future — it appears to me that everyone who may be expected to benefit from the course of action petitioners seek to
require public respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to be
recognizing a beneficiaries' right of action in the field of environmental protection, as against both the public administrative
agency directly concerned and the private persons or entities operating in the field or sector of activity involved. Whether
such beneficiaries' right of action may be found under any and all circumstances, or whether some failure to act, in the
first instance, on the part of the governmental agency concerned must be shown ("prior exhaustion of administrative
remedies"), is not discussed in the decision and presumably is left for future determination in an appropriate case.
The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right — the
right to a balanced and healthful ecology" (Decision, p. 14). There is no question that "the right to a balanced and healthful
ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But although it is fundamental in
character, I suggest, with very great respect, that it cannot be characterized as "specific," without doing excessive
violence to language. It is in fact very difficult to fashion language more comprehensive in scope and generalized in
character than a right to "a balanced and healthful ecology." The list of particular claims which can be subsumed under
this rubic appears to be entirely open-ended: prevention and control of emission of toxic fumes and smoke from factories
and motor vehicles; of discharge of oil, chemical effluents, garbage and raw sewage into rivers, inland and coastal waters
by vessels, oil rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open land,
streets and thoroughfares; failure to rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn
farming; destruction of fisheries, coral reefs and other living sea resources through the use of dynamite or cyanide and
other chemicals; contamination of ground water resources; loss of certain species of fauna and flora; and so on. The other
statements pointed out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book
IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 — all appear to be formulations of policy, as
general and abstract as the constitutional statements of basic policy in Article II, Section 16 ("the right — to a balanced
and healthful ecology") and 15 ("the right to health").
P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a
compendious collection of more "specific environment management policies" and "environment quality standards" (fourth
"Whereas" clause, Preamble) relating to an extremely wide range of topics:
(a) air quality management;
(b) water quality management;
(c) land use management;
(d) natural resources management and conservation embracing:
(i) fisheries and aquatic resources;
(ii) wild life;
(iii) forestry and soil conservation;
(iv) flood control and natural calamities;
(v) energy development;
(vi) conservation and utilization of surface and ground water
(vii) mineral resources
Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the particular
provision or provisions (if any) of the Philippine Environment Code which give rise to a specific legal right which petitioners
are seeking to enforce. Secondly, the Philippine Environment Code identifies with notable care the particular government
agency charged with the formulation and implementation of guidelines and programs dealing with each of the headings
and sub-headings mentioned above. The Philippine Environment Code does not, in other words, appear to contemplate
action on the part of private persons who are beneficiaries of implementation of that Code.
As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the constitutional
statements above noted, the Court is in effect saying that Section 15 (and Section 16) of Article II of the Constitution are
self-executing and judicially enforceable even in their present form. The implications of this doctrine will have to be
explored in future cases; those implications are too large and far-reaching in nature even to be hinted at here.
My suggestion is simply that petitioners must, before the trial court, show a more specific legal right — a right cast in
language of a significantly lower order of generality than Article II (15) of the Constitution — that is or may be violated by
the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can validly render
judgment granting all or part of the relief prayed for. To my mind, the Court should be understood as simply saying that
such a more specific legal right or rights may well exist in our corpus of law, considering the general policy principles
found in the Constitution and the existence of the Philippine Environment Code, and that the trial court should have given
petitioners an effective opportunity so to demonstrate, instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable
legal right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless the legal right
claimed to have been violated or disregarded is given specification in operational terms, defendants may well be unable to
defend themselves intelligently and effectively; in other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration — where a specific violation of law or applicable regulation is not alleged or
proved, petitioners can be expected to fall back on the expanded conception of judicial power in the second paragraph of
Section 1 of Article VIII of the Constitution which reads:
Section 1. . . .
which are legally demandable and enforceable, and to determine whether or not there has been agrave
of the Government. (Emphasis supplied)
When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health"
are combined with remedial standards as broad ranging as "a grave abuse of discretion amounting to lack or
excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of
social and economic policy making. At least in respect of the vast area of environmental protection and
management, our courts have no claim to special technical competence and experience and professional
qualification. Where no specific, operable norms and standards are shown to exist, then the policy making
departments — the legislative and executive departments — must be given a real and effective opportunity to
fashion and promulgate those norms and standards, and to implement them before the courts should intervene.
My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's
petitioners demand public respondents should cancel, must be impleaded in the proceedings below. It might be asked
that, if petitioners' entitlement to the relief demanded is not dependent upon proof of breach by the timber companies of
one or more of the specific terms and conditions of their concession agreements (and this, petitioners implicitly assume),
what will those companies litigate about? The answer I suggest is that they may seek to dispute the existence of the
specific legal right petitioners should allege, as well as the reality of the claimed factual nexus between petitioners' specific
legal rights and the claimed wrongful acts or failures to act of public respondent administrative agency. They may also
controvert the appropriateness of the remedy or remedies demanded by petitioners, under all the circumstances which
exist.
I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our
territory, is of extreme importance for the country. The doctrines set out in the Court's decision issued today should,
however, be subjected to closer examination.
# Separate Opinions
FELICIANO, J., concurring
I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is one
of the most important cases decided by this Court in the last few years. The seminal principles laid down in this decision
are likely to influence profoundly the direction and course of the protection and management of the environment, which of
course embraces the utilization of all the natural resources in the territorial base of our polity. I have therefore sought to
clarify, basically to myself, what the Court appears to be saying.
The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance of
this suit (Decision, pp. 11-12). Locus standi is not a function of petitioners' claim that their suit is properly regarded as
a class suit. I understand locus standi to refer to the legal interest which a plaintiff must have in the subject matter of the
suit. Because of the very broadness of the concept of "class" here involved — membership in this "class" appears to
embrace everyone living in the country whether now or in the
future — it appears to me that everyone who may be expected to benefit from the course of action petitioners seek to
require public respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to be
recognizing a beneficiaries' right of action in the field of environmental protection, as against both the public administrative
agency directly concerned and the private persons or entities operating in the field or sector of activity involved. Whether
such beneficiaries' right of action may be found under any and all circumstances, or whether some failure to act, in the
first instance, on the part of the governmental agency concerned must be shown ("prior exhaustion of administrative
remedies"), is not discussed in the decision and presumably is left for future determination in an appropriate case.
The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right — the
right to a balanced and healthful ecology" (Decision, p. 14). There is no question that "the right to a balanced and healthful
ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But although it is fundamental in
character, I suggest, with very great respect, that it cannot be characterized as "specific," without doing excessive
violence to language. It is in fact very difficult to fashion language more comprehensive in scope and generalized in
character than a right to "a balanced and healthful ecology." The list of particular claims which can be subsumed under
this rubic appears to be entirely open-ended: prevention and control of emission of toxic fumes and smoke from factories
and motor vehicles; of discharge of oil, chemical effluents, garbage and raw sewage into rivers, inland and coastal waters
by vessels, oil rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open land,
streets and thoroughfares; failure to rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn
farming; destruction of fisheries, coral reefs and other living sea resources through the use of dynamite or cyanide and
other chemicals; contamination of ground water resources; loss of certain species of fauna and flora; and so on. The other
statements pointed out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book
IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 — all appear to be formulations of policy, as
general and abstract as the constitutional statements of basic policy in Article II, Section 16 ("the right — to a balanced
and healthful ecology") and 15 ("the right to health").
P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a
compendious collection of more "specific environment management policies" and "environment quality standards" (fourth
"Whereas" clause, Preamble) relating to an extremely wide range of topics:
(a) air quality management;
(b) water quality management;
(c) land use management;
(d) natural resources management and conservation embracing:
(i) fisheries and aquatic resources;
(ii) wild life;
(iii) forestry and soil conservation;
(iv) flood control and natural calamities;
(v) energy development;
(vi) conservation and utilization of surface and ground water
(vii) mineral resources
Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the particular
provision or provisions (if any) of the Philippine Environment Code which give rise to a specific legal right which petitioners
are seeking to enforce. Secondly, the Philippine Environment Code identifies with notable care the particular government
agency charged with the formulation and implementation of guidelines and programs dealing with each of the headings
and sub-headings mentioned above. The Philippine Environment Code does not, in other words, appear to contemplate
action on the part of private persons who are beneficiaries of implementation of that Code.
As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the constitutional
statements above noted, the Court is in effect saying that Section 15 (and Section 16) of Article II of the Constitution are
self-executing and judicially enforceable even in their present form. The implications of this doctrine will have to be
explored in future cases; those implications are too large and far-reaching in nature even to be hinted at here.
My suggestion is simply that petitioners must, before the trial court, show a more specific legal right — a right cast in
language of a significantly lower order of generality than Article II (15) of the Constitution — that is or may be violated by
judgment granting all or part of the relief prayed for. To my mind, the Court should be understood as simply saying that
The second is a broader-gauge consideration — where a specific violation of law or applicable regulation is not alleged or
Section 1. . . .
which are legally demandable and enforceable, and to determine whether or not there has been agrave
of the Government. (Emphasis supplied)
When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health"
are combined with remedial standards as broad ranging as "a grave abuse of discretion amounting to lack or
excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of
social and economic policy making. At least in respect of the vast area of environmental protection and
management, our courts have no claim to special technical competence and experience and professional
qualification. Where no specific, operable norms and standards are shown to exist, then the policy making
departments — the legislative and executive departments — must be given a real and effective opportunity to
fashion and promulgate those norms and standards, and to implement them before the courts should intervene.
My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's
petitioners demand public respondents should cancel, must be impleaded in the proceedings below. It might be asked
that, if petitioners' entitlement to the relief demanded is not dependent upon proof of breach by the timber companies of
one or more of the specific terms and conditions of their concession agreements (and this, petitioners implicitly assume),
what will those companies litigate about? The answer I suggest is that they may seek to dispute the existence of the
specific legal right petitioners should allege, as well as the reality of the claimed factual nexus between petitioners' specific
legal rights and the claimed wrongful acts or failures to act of public respondent administrative agency. They may also
controvert the appropriateness of the remedy or remedies demanded by petitioners, under all the circumstances which
exist.
I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our
territory, is of extreme importance for the country. The doctrines set out in the Court's decision issued today should,
however, be subjected to closer examination.
EN BANC
[G.R. No. 122156. February 3, 1997]
MANILA PRINCE HOTEL, petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL
CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE
COUNSEL, respondents.
DECISION
BELLOSILLO, J.:
The Filipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and concessions
covering the national economy and patrimony, the State shall give preference to qualified Filipinos,[1] is invoked by
petitioner in its bid to acquire 51% of the shares of the Manila Hotel Corporation (MHC) which owns the historic Manila
Hotel. Opposing, respondents maintain that the provision is not self-executing but requires an implementing legislation for
its enforcement. Corollarily, they ask whether the 51% shares form part of the national economy and patrimony covered
by the protective mantle of the Constitution.
The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization
program of the Philippine Government under Proclamation No. 50 dated 8 December 1986, decided to sell through public
bidding 30% to 51% of the issued and outstanding shares of respondent MHC. The winning bidder, or the eventual
strategic partner, is to provide management expertise and/or an international marketing/reservation system, and financial
support to strengthen the profitability and performance of the Manila Hotel.[2] In a close bidding held on 18 September
1995 only two (2) bidders participated: petitioner Manila Prince Hotel Corporation, a Filipino corporation, which offered to
buy 51% of the MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton
as its hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid of
petitioner.
Pertinent provisions of the bidding rules prepared by respondent GSIS state -
I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC -
1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November 3, 1995)
or the Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the Block of Shares to
the other Qualified Bidders:
a. The Highest Bidder must negotiate and execute with the GSIS/MHC the Management Contract, International
Marketing/Reservation System Contract or other type of contract specified by the Highest Bidder in its strategic plan for
the Manila Hotel x x x x
b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS x x x x
K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER -
The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met:
a. Execution of the necessary contracts with GSIS/MHC not later than October 23, 1995 (reset to November 3, 1995); and
b. Requisite approvals from the GSIS/MHC and COP (Committee on Privatization)/ OGCC (Office of the Government
Corporate Counsel) are obtained.[3]
Pending the declaration of Renong Berhard as the winning bidder/strategic partner and the execution of the
necessary contracts, petitioner in a letter to respondent GSIS dated 28 September 1995 matched the bid price of P44.00
per share tendered by Renong Berhad.[4] In a subsequent letter dated 10 October 1995 petitioner sent a managers check
issued by Philtrust Bank for Thirty-three Million Pesos (P33,000,000.00) as Bid Security to match the bid of the Malaysian
Group, Messrs. Renong Berhad x x x x[5] which respondent GSIS refused to accept.
On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid
and that the sale of 51% of the MHC may be hastened by respondent GSIS and consummated with Renong Berhad,
petitioner came to this Court on prohibition and mandamus. On 18 October 1995 the Court issued a temporary restraining
order enjoining respondents from perfecting and consummating the sale to the Malaysian firm.
On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by the First
Division. The case was then set for oral arguments with former Chief Justice Enrique M. Fernando and Fr. Joaquin G.
Bernas, S.J., as amici curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila
Hotel has been identified with the Filipino nation and has practically become a historical monument which reflects the
vibrancy of Philippine heritage and culture. It is a proud legacy of an earlier generation of Filipinos who believed in the
nobility and sacredness of independence and its power and capacity to release the full potential of the Filipino people. To
all intents and purposes, it has become a part of the national patrimony.[6] Petitioner also argues that since 51% of the
shares of the MHC carries with it the ownership of the business of the hotel which is owned by respondent GSIS, a
government-owned and controlled corporation, the hotel business of respondent GSIS being a part of the tourism industry
is unquestionably a part of the national economy. Thus, any transaction involving 51% of the shares of stock of the MHC
is clearly covered by the term national economy, to which Sec. 10, second par., Art. XII, 1987 Constitution, applies. [7]
It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also
unquestionably part of the national economy petitioner should be preferred after it has matched the bid offer of the
Malaysian firm. For the bidding rules mandate that if for any reason, the Highest Bidder cannot be awarded the Block of
Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified
Bidders are willing to match the highest bid in terms of price per share. [8]
Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a
statement of principle and policy since it is not a self-executing provision and requires implementing legislation(s) x x x x
Thus, for the said provision to operate, there must be existing laws to lay down conditions under which business may be
done.[9]
Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national
patrimony which only refers to 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 all marine wealth in its territorial sea,
and exclusive marine zone as cited in the first and second paragraphs of Sec. 2, Art. XII, 1987 Constitution. According to
respondents, while petitioner speaks of the guests who have slept in the hotel and the events that have transpired therein
which make the hotel historic, these alone do not make the hotel fall under the patrimony of the nation. What is more, the
mandate of the Constitution is addressed to the State, not to respondent GSIS which possesses a personality of its own
separate and distinct from the Philippines as a State.
Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision invoked is still
inapplicable since what is being sold is only 51% of the outstanding shares of the corporation, not the hotel building nor
the land upon which the building stands. Certainly, 51% of the equity of the MHC cannot be considered part of
the national patrimony. Moreover, if the disposition of the shares of the MHC is really contrary to the Constitution,
petitioner should have questioned it right from the beginning and not after it had lost in the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for any reason,
the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have
validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share,
is misplaced. Respondents postulate that the privilege of submitting a matching bid has not yet arisen since it only takes
place if for any reason, the Highest Bidder cannot be awarded the Block of Shares. Thus the submission by petitioner of a
matching bid is premature since Renong Berhad could still very well be awarded the block of shares and the condition
giving rise to the exercise of the privilege to submit a matching bid had not yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of discretion should fail since respondent GSIS did not
exercise its discretion in a capricious, whimsical manner, and if ever it did abuse its discretion it was not so patent and
gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. Similarly, the
petition for mandamus should fail as petitioner has no clear legal right to what it demands and respondents do not have
an imperative duty to perform the act required of them by petitioner.
We now resolve. A constitution is a system of fundamental laws for the governance and administration of a nation. It
is supreme, imperious, absolute and unalterable except by the authority from which it emanates. It has been defined
as the fundamental and paramount law of the nation.[10] It prescribes the permanent framework of a system of
government, assigns to the different departments their respective powers and duties, and establishes certain fixed
principles on which government is founded. The fundamental conception in other words is that it is a supreme law to
which all other laws must conform and in accordance with which all private rights must be determined and all public
authority administered.[11] Under the doctrine of constitutional supremacy, if a law or contract violates any norm of the
constitution that law or contract whether promulgated by the legislative or by the executive branch or entered into by
private persons for private purposes is null and void and without any force and effect. Thus, since the Constitution is the
fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract.
Admittedly, some constitutions are merely declarations of policies and principles. Their provisions command the
legislature to enact laws and carry out the purposes of the framers who merely establish an outline of government
providing for the different departments of the governmental machinery and securing certain fundamental and inalienable
rights of citizens.[12] A provision which lays down a general principle, such as those found in Art. II of the 1987
Constitution, is usually not self-executing. But a provision which is complete in itself and becomes operative without the
aid of supplementary or enabling legislation, or that which supplies sufficient rule by means of which the right it grants
may be enjoyed or protected, is self-executing. Thus a constitutional provision is self-executing if the nature and extent of
the right conferred and the liability imposed are fixed by the constitution itself, so that they can be determined by an
examination and construction of its terms, and there is no language indicating that the subject is referred to the legislature
for action.[13]
As against constitutions of the past, modern constitutions have been generally drafted upon a different principle and
have often become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to
that of statutory enactments, and the function of constitutional conventions has evolved into one more like that of a
legislative body. Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional
mandate, the presumption now is that all provisions of the constitution are self-executing. If the constitutional provisions
are treated as requiring legislation instead of self-executing, the legislature would have the power to ignore and practically
nullify the mandate of the fundamental law.[14] This can be cataclysmic. That is why the prevailing view is, as it has always
been, that -
x x x x in case of doubt, the Constitution should be considered self-executing rather than non-self-executing x x x x Unless
the contrary is clearly intended, the provisions of the Constitution should be considered self-executing, as a contrary rule
would give the legislature discretion to determine when, or whether, they shall be effective. These provisions would be
subordinated to the will of the lawmaking body, which could make them entirely meaningless by simply refusing to pass
the needed implementing statute.[15]
Respondents argue that Sec. 10, second par., Art. XII, of the 1987 Constitution is clearly not self-executing, as they
quote from discussions on the floor of the 1986 Constitutional Commission -
MR. RODRIGO. Madam President, I am asking this question as the Chairman of the Committee on Style. If the
wording of PREFERENCE is given to QUALIFIED FILIPINOS, can it be understood as a preference to
qualified Filipinos vis-a-vis Filipinos who are not qualified. So, why do we not make it clear? To qualified
Filipinos as against aliens?
THE PRESIDENT. What is the question of Commissioner Rodrigo? Is it to remove the word QUALIFIED?
MR. RODRIGO. No, no, but say definitely TO QUALIFIED FILIPINOS as against whom? As against aliens or
over aliens ?
MR. NOLLEDO. Madam President, I think that is understood. We use the word QUALIFIED because
the existing laws or prospective laws will always lay down conditions under which business may be
done. For example, qualifications on capital, qualifications on the setting up of other financial structures, et
cetera (underscoring supplied by respondents).
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO. Yes.[16]
Quite apparently, Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it is non-self-
executing but simply for purposes of style. But, certainly, the legislature is not precluded from enacting further laws to
enforce the constitutional provision so long as the contemplated statute squares with the Constitution. Minor details may
be left to the legislature without impairing the self-executing nature of constitutional provisions.
In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers
directly granted by the constitution, further the operation of such a provision, prescribe a practice to be used for its
enforcement, provide a convenient remedy for the protection of the rights secured or the determination thereof, or place
reasonable safeguards around the exercise of the right. The mere fact that legislation may supplement and add to or
prescribe a penalty for the violation of a self-executing constitutional provision does not render such a provision ineffective
in the absence of such legislation. The omission from a constitution of any express provision for a remedy for enforcing a
right or liability is not necessarily an indication that it was not intended to be self-executing. The rule is that a self-
executing provision of the constitution does not necessarily exhaust legislative power on the subject, but any legislation
must be in harmony with the constitution, further the exercise of constitutional right and make it more
available.[17] Subsequent legislation however does not necessarily mean that the subject constitutional provision is not, by
itself, fully enforceable.
Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is implied from the
tenor of the first and third paragraphs of the same section which undoubtedly are not self-executing.[18]The argument is
flawed. If the first and third paragraphs are not self-executing because Congress is still to enact measures to encourage
the formation and operation of enterprises fully owned by Filipinos, as in the first paragraph, and the State still needs
legislation to regulate and exercise authority over foreign investments within its national jurisdiction, as in the third
paragraph, then a fortiori, by the same logic, the second paragraph can only be self-executing as it does not by its
language require any legislation in order to give preference to qualified Filipinos in the grant of rights, privileges and
concessions covering the national economy and patrimony. A constitutional provision may be self-executing in one part
and non-self-executing in another.[19]
Even the cases cited by respondents holding that certain constitutional provisions are merely statements of principles
and policies, which are basically not self-executing and only placed in the Constitution as moral incentives to legislation,
not as judicially enforceable rights - are simply not in point. Basco v. Philippine Amusements and Gaming
Corporation[20] speaks of constitutional provisions on personal dignity,[21] the sanctity of family life,[22] the vital role of the
youth in nation-building,[23] the promotion of social justice,[24] and the values of education.[25] Tolentino v. Secretary of
Finance[26] refers to constitutional provisions on social justice and human rights [27] and on education.[28] Lastly, Kilosbayan,
Inc. v. Morato[29] cites provisions on the promotion of general welfare,[30] the sanctity of family life,[31] the vital role of the
youth in nation-building[32] and the promotion of total human liberation and development. [33] A reading of these provisions
indeed clearly shows that they are not judicially enforceable constitutional rights but merely guidelines for legislation. The
very terms of the provisions manifest that they are only principles upon which legislations must be based. Res ipsa
loquitur.
On the other hand, Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is
complete in itself and which needs no further guidelines or implementing laws or rules for its enforcement. From its very
words the provision does not require any legislation to put it in operation. It is per se judicially enforceable. When our
Constitution mandates that [i]n the grant of rights, privileges, and concessions covering national economy and patrimony,
the State shall give preference to qualified Filipinos, it means just that - qualified Filipinos shall be preferred. And when
our Constitution declares that a right exists in certain specified circumstances an action may be maintained to enforce
such right notwithstanding the absence of any legislation on the subject; consequently, if there is no statute especially
enacted to enforce such constitutional right, such right enforces itself by its own inherent potency and puissance, and from
which all legislations must take their bearings. Where there is a right there is a remedy. Ubi jus ibi remedium.
As regards our national patrimony, a member of the 1986 Constitutional Commission[34] explains -
The patrimony of the Nation that should be conserved and developed refers not only to our rich natural
resources but also to the cultural heritage of our race. It also refers to our intelligence in arts, sciences and
letters. Therefore, we should develop not only our lands, forests, mines and other natural resources but also the
mental ability or faculty of our people.
We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage.[35] When the Constitution
speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have
very well used the term natural resources, but also to the cultural heritage of the Filipinos.
Manila Hotel has become a landmark - a living testimonial of Philippine heritage. While it was restrictively an
American hotel when it first opened in 1912, it immediately evolved to be truly Filipino. Formerly a concourse for the elite,
it has since then become the venue of various significant events which have shaped Philippine history. It was called
the Cultural Center of the 1930s. It was the site of the festivities during the inauguration of the Philippine
Commonwealth. Dubbed as the Official Guest House of the Philippine Government it plays host to dignitaries and official
visitors who are accorded the traditional Philippine hospitality.[36]
The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City.[37] During
World War II the hotel was converted by the Japanese Military Administration into a military headquarters. When the
American forces returned to recapture Manila the hotel was selected by the Japanese together with Intramuros as the two
(2) places for their final stand. Thereafter, in the 1950s and 1960s, the hotel became the center of political activities,
playing host to almost every political convention. In 1970 the hotel reopened after a renovation and reaped numerous
international recognitions, an acknowledgment of the Filipino talent and ingenuity. In 1986 the hotel was the site of a
failed coup d etat where an aspirant for vice-president was proclaimed President of the Philippine Republic.
For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves and
frustrations of the Filipinos; its existence is impressed with public interest; its own historicity associated with our struggle
for sovereignty, independence and nationhood. Verily, Manila Hotel has become part of our national economy and
patrimony. For sure, 51% of the equity of the MHC comes within the purview of the constitutional shelter for it comprises
the majority and controlling stock, so that anyone who acquires or owns the 51% will have actual control and management
of the hotel. In this instance, 51% of the MHC cannot be disassociated from the hotel and the land on which the hotel
edifice stands. Consequently, we cannot sustain respondents claim that the Filipino First Policy provision is not
applicable since what is being sold is only 51% of the outstanding shares of the corporation, not the Hotel building nor the
land upon which the building stands.[38]
The argument is pure sophistry. The term qualified Filipinos as used in our Constitution also includes corporations at
least 60% of which is owned by Filipinos. This is very clear from the proceedings of the 1986 Constitutional Commission -
THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. I would like to introduce an amendment to the Nolledo amendment. And the amendment would
consist in substituting the words QUALIFIED FILIPINOS with the following: CITIZENS OF THE
PHILIPPINES OR CORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL OR CONTROLLING STOCK
IS WHOLLY OWNED BY SUCH CITIZENS.
xxxx
MR. MONSOD. Madam President, apparently the proponent is agreeable, but we have to raise a
question. Suppose it is a corporation that is 80-percent Filipino, do we not give it preference?
MR. DAVIDE. The Nolledo amendment would refer to an individual Filipino. What about a corporation wholly
owned by Filipino citizens?
MR. MONSOD. At least 60 percent, Madam President.
MR. DAVIDE. Is that the intention?
MR. MONSOD. Yes, because, in fact, we would be limiting it if we say that the preference should only be 100-
percent Filipino.
MR. DAVIDE. I want to get that meaning clear because QUALIFIED FILIPINOS may refer only to individuals
and not to juridical personalities or entities.
MR. MONSOD. We agree, Madam President.[39]
xxxx
MR. RODRIGO. Before we vote, may I request that the amendment be read again.
MR. NOLLEDO. The amendment will read: IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS
COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE
TO QUALIFIED FILIPINOS. And the word Filipinos here, as intended by the proponents, will include not
only individual Filipinos but also Filipino-controlled entities or entities fully-controlled by Filipinos.[40]
The phrase preference to qualified Filipinos was explained thus -
MR. FOZ. Madam President, I would like to request Commissioner Nolledo to please restate his amendment so
that I can ask a question.
MR. NOLLEDO. IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE
NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED
FILIPINOS.
MR. FOZ. In connection with that amendment, if a foreign enterprise is qualified and a Filipino enterprise is also
qualified, will the Filipino enterprise still be given a preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be
preferred?
MR. NOLLEDO. The answer is yes.
MR. FOZ. Thank you.[41]
Expounding further on the Filipino First Policy provision Commissioner Nolledo continues
MR. NOLLEDO. Yes, Madam President. Instead of MUST, it will be SHALL - THE STATE SHALL GIVE
PREFERENCE TO QUALIFIED FILIPINOS. This embodies the so-called Filipino First policy. That means
that Filipinos should be given preference in the grant of concessions, privileges and rights covering the
national patrimony.[42]
The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was still
further clarified by Commissioner Nolledo[43] -
Paragraph 2 of Section 10 explicitly mandates the Pro-Filipino bias in all economic concerns. It is better known as the
FILIPINO FIRST Policy x x x x This provision was never found in previous Constitutions x x x x
The term qualified Filipinos simply means that preference shall be given to those citizens who can make a viable
contribution to the common good, because of credible competence and efficiency. It certainly does NOT mandate the
pampering and preferential treatment to Filipino citizens or organizations that are incompetent or inefficient, since such an
indiscriminate preference would be counterproductive and inimical to the common good.
In the granting of economic rights, privileges, and concessions, when a choice has to be made between a qualified
foreigner and a qualified Filipino, the latter shall be chosen over the former.
Lastly, the word qualified is also determinable. Petitioner was so considered by respondent GSIS and selected as
one of the qualified bidders. It was pre-qualified by respondent GSIS in accordance with its own guidelines so that the
sole inference here is that petitioner has been found to be possessed of proven management expertise in the hotel
industry, or it has significant equity ownership in another hotel company, or it has an overall management and marketing
proficiency to successfully operate the Manila Hotel.[44]
The penchant to try to whittle away the mandate of the Constitution by arguing that the subject provision is not self-
executory and requires implementing legislation is quite disturbing. The attempt to violate a clear constitutional provision -
by the government itself - is only too distressing. To adopt such a line of reasoning is to renounce the duty to ensure
faithfulness to the Constitution. For, even some of the provisions of the Constitution which evidently need implementing
legislation have juridical life of their own and can be the source of a judicial remedy. We cannot simply afford the
government a defense that arises out of the failure to enact further enabling, implementing or guiding legislation. In fine,
the discourse of Fr. Joaquin G. Bernas, S.J., on constitutional government is apt -
The executive department has a constitutional duty to implement laws, including the Constitution, even before Congress
acts - provided that there are discoverable legal standards for executive action. When the executive acts, it must be
guided by its own understanding of the constitutional command and of applicable laws. The responsibility for reading and
understanding the Constitution and the laws is not the sole prerogative of Congress. If it were, the executive would have
to ask Congress, or perhaps the Court, for an interpretation every time the executive is confronted by a constitutional
command. That is not how constitutional government operates.[45]
Respondents further argue that the constitutional provision is addressed to the State, not to respondent GSIS which
by itself possesses a separate and distinct personality. This argument again is at best specious. It is undisputed that the
sale of 51% of the MHC could only be carried out with the prior approval of the State acting through respondent
Committee on Privatization. As correctly pointed out by Fr. Joaquin G. Bernas, S.J., this fact alone makes the sale of the
assets of respondents GSIS and MHC a state action. In constitutional jurisprudence, the acts of persons distinct from the
government are considered state action covered by the Constitution (1) when the activity it engages in is a public
function; (2) when the government is so significantly involved with the private actor as to make the government
responsible for his action; and, (3) when the government has approved or authorized the action. It is evident that the act of
respondent GSIS in selling 51% of its share in respondent MHC comes under the second and third categories of state
action. Without doubt therefore the transaction, although entered into by respondent GSIS, is in fact a transaction of the
State and therefore subject to the constitutional command.[46]
When the Constitution addresses the State it refers not only to the people but also to the government as elements of
the State. After all, government is composed of three (3) divisions of power - legislative, executive and
judicial. Accordingly, a constitutional mandate directed to the State is correspondingly directed to the three (3) branches of
government. It is undeniable that in this case the subject constitutional injunction is addressed among others to the
Executive Department and respondent GSIS, a government instrumentality deriving its authority from the State.
It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning bidder. The bidding
rules expressly provide that the highest bidder shall only be declared the winning bidder after it has negotiated and
executed the necessary contracts, and secured the requisite approvals. Since the Filipino First Policy provision of the
Constitution bestows preference on qualified Filipinos the mere tending of the highest bid is not an assurance that the
highest bidder will be declared the winning bidder. Resultantly, respondents are not bound to make the award yet, nor are
they under obligation to enter into one with the highest bidder. For in choosing the awardee respondents are mandated to
abide by the dictates of the 1987 Constitution the provisions of which are presumed to be known to all the bidders and
other interested parties.
Adhering to the doctrine of constitutional supremacy, the subject constitutional provision is, as it should be, impliedly
written in the bidding rules issued by respondent GSIS, lest the bidding rules be nullified for being violative of the
Constitution. It is a basic principle in constitutional law that all laws and contracts must conform with the fundamental law
of the land. Those which violate the Constitution lose their reason for being.
Paragraph V. J. 1 of the bidding rules provides that [i]f for any reason the Highest Bidder cannot be awarded the
Block of Shares, GSIS may offer this to other Qualified Bidders that have validly submitted bids provided that these
Qualified Bidders are willing to match the highest bid in terms of price per share. [47] Certainly, the constitutional mandate
itself is reason enough not to award the block of shares immediately to the foreign bidder notwithstanding its submission
of a higher, or even the highest, bid. In fact, we cannot conceive of a stronger reason than the constitutional injunction
itself.
In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the grant of rights,
privileges and concessions covering the national economy and patrimony, thereby exceeding the bid of a Filipino, there is
no question that the Filipino will have to be allowed to match the bid of the foreign entity. And if the Filipino matches the
bid of a foreign firm the award should go to the Filipino. It must be so if we are to give life and meaning to the Filipino First
Policy provision of the 1987 Constitution. For, while this may neither be expressly stated nor contemplated in the bidding
rules, the constitutional fiat is omnipresent to be simply disregarded. To ignore it would be to sanction a perilous skirting of
the basic law.
This Court does not discount the apprehension that this policy may discourage foreign investors. But the Constitution
and laws of the Philippines are understood to be always open to public scrutiny. These are given factors which investors
must consider when venturing into business in a foreign jurisdiction. Any person therefore desiring to do business in the
Philippines or with any of its agencies or instrumentalities is presumed to know his rights and obligations under the
Constitution and the laws of the forum.
The argument of respondents that petitioner is now estopped from questioning the sale to Renong Berhad since
petitioner was well aware from the beginning that a foreigner could participate in the bidding is meritless.Undoubtedly,
Filipinos and foreigners alike were invited to the bidding. But foreigners may be awarded the sale only if no Filipino
qualifies, or if the qualified Filipino fails to match the highest bid tendered by the foreign entity. In the case before us, while
petitioner was already preferred at the inception of the bidding because of the constitutional mandate, petitioner had not
yet matched the bid offered by Renong Berhad. Thus it did not have the right or personality then to compel respondent
GSIS to accept its earlier bid. Rightly, only after it had matched the bid of the foreign firm and the apparent disregard by
respondent GSIS of petitioners matching bid did the latter have a cause of action.
Besides, there is no time frame for invoking the constitutional safeguard unless perhaps the award has been finally
made. To insist on selling the Manila Hotel to foreigners when there is a Filipino group willing to match the bid of the
foreign group is to insist that government be treated as any other ordinary market player, and bound by its mistakes or
gross errors of judgment, regardless of the consequences to the Filipino people. The miscomprehension of the
Constitution is regrettable. Thus we would rather remedy the indiscretion while there is still an opportunity to do so than let
the government develop the habit of forgetting that the Constitution lays down the basic conditions and parameters for its
actions.
Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the bidding rules,
respondent GSIS is left with no alternative but to award to petitioner the block of shares of MHC and to execute the
necessary agreements and documents to effect the sale in accordance not only with the bidding guidelines and
procedures but with the Constitution as well. The refusal of respondent GSIS to execute the corresponding documents
with petitioner as provided in the bidding rules after the latter has matched the bid of the Malaysian firm clearly constitutes
grave abuse of discretion.
The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987 Constitution not merely to
be used as a guideline for future legislation but primarily to be enforced; so must it be enforced. This Court as the ultimate
guardian of the Constitution will never shun, under any reasonable circumstance, the duty of upholding the majesty of the
Constitution which it is tasked to defend. It is worth emphasizing that it is not the intention of this Court to impede and
diminish, much less undermine, the influx of foreign investments. Far from it, the Court encourages and welcomes more
business opportunities but avowedly sanctions the preference for Filipinos whenever such preference is ordained by the
Constitution. The position of the Court on this matter could have not been more appropriately articulated by Chief Justice
Narvasa -
As scrupulously as it has tried to observe that it is not its function to substitute its judgment for that of the legislature or the
executive about the wisdom and feasibility of legislation economic in nature, the Supreme Court has not been spared
criticism for decisions perceived as obstacles to economic progress and development x x x x in connection with a
temporary injunction issued by the Courts First Division against the sale of the Manila Hotel to a Malaysian Firm and its
partner, certain statements were published in a major daily to the effect that that injunction again demonstrates that the
Philippine legal system can be a major obstacle to doing business here.
Let it be stated for the record once again that while it is no business of the Court to intervene in contracts of the kind
referred to or set itself up as the judge of whether they are viable or attainable, it is its bounden duty to make sure that
they do not violate the Constitution or the laws, or are not adopted or implemented with grave abuse of discretion
amounting to lack or excess of jurisdiction. It will never shirk that duty, no matter how buffeted by winds of unfair and ill-
informed criticism.[48]
Privatization of a business asset for purposes of enhancing its business viability and preventing further losses,
regardless of the character of the asset, should not take precedence over non-material values. A commercial, nay even a
budgetary, objective should not be pursued at the expense of national pride and dignity. For the Constitution enshrines
higher and nobler non-material values. Indeed, the Court will always defer to the Constitution in the proper governance of
a free society; after all, there is nothing so sacrosanct in any economic policy as to draw itself beyond judicial review when
the Constitution is involved.[49]
Nationalism is inherent in the very concept of the Philippines being a democratic and republican state, with
sovereignty residing in the Filipino people and from whom all government authority emanates. In nationalism, the
happiness and welfare of the people must be the goal. The nation-state can have no higher purpose. Any interpretation of
any constitutional provision must adhere to such basic concept. Protection of foreign investments, while laudible, is merely
a policy. It cannot override the demands of nationalism.[50]
The Manila Hotel or, for that matter, 51% of the MHC, is not just any commodity to be sold to the highest bidder
solely for the sake of privatization. We are not talking about an ordinary piece of property in a commercial district. We are
talking about a historic relic that has hosted many of the most important events in the short history of the Philippines as a
nation. We are talking about a hotel where heads of states would prefer to be housed as a strong manifestation of their
desire to cloak the dignity of the highest state function to their official visits to the Philippines. Thus the Manila Hotel has
played and continues to play a significant role as an authentic repository of twentieth century Philippine history and
culture. In this sense, it has become truly a reflection of the Filipino soul - a place with a history of grandeur; a most
historical setting that has played a part in the shaping of a country. [51]
This Court cannot extract rhyme nor reason from the determined efforts of respondents to sell the historical landmark
- this Grand Old Dame of hotels in Asia - to a total stranger. For, indeed, the conveyance of this epic exponent of the
Filipino psyche to alien hands cannot be less than mephistophelian for it is, in whatever manner viewed, a veritable
alienation of a nations soul for some pieces of foreign silver. And so we ask: What advantage, which cannot be equally
drawn from a qualified Filipino, can be gained by the Filipinos if Manila Hotel - and all that it stands for - is sold to a non-
Filipino? How much of national pride will vanish if the nations cultural heritage is entrusted to a foreign entity? On the
other hand, how much dignity will be preserved and realized if the national patrimony is safekept in the hands of
a qualified, zealous and well-meaning Filipino? This is the plain and simple meaning of the Filipino First Policy provision of
the Philippine Constitution. And this Court, heeding the clarion call of the Constitution and accepting the duty of being the
elderly watchman of the nation, will continue to respect and protect the sanctity of the Constitution.
WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION,
COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are directed to
CEASE and DESIST from selling 51% of the shares of the Manila Hotel Corporation to RENONG BERHAD, and to
ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL CORPORATION to purchase the subject 51% of the
shares of the Manila Hotel Corporation at P44.00 per share and thereafter to execute the necessary agreements and
documents to effect the sale, to issue the necessary clearances and to do such other acts and deeds as may be
necessary for the purpose.
SO ORDERED.
Regalado, Davide, Jr., Romero, Kapunan, Francisco, and Hermosisima, Jr., JJ, concur.
Narvasa, C.J., (Chairman), and Melo, J., joins J. Puno in his dissent.
Padilla, J., see concurring opinion.
Vitug, J., see separate concurring opinion
Mendoza, J., see concurring opinion
Torres, J., with separate opinion
Puno, J., see dissent.
Panganiban J., with separate dissenting opinion.
EN BANC
[G.R. No. 118295. May 2, 1997]
WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of the Philippine Senate and as
taxpayers; GREGORIO ANDOLANA and JOKER ARROYO as members of the House of Representatives
and as taxpayers; NICANOR P. PERLAS and HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES
UNION, NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION, CENTER FOR ALTERNATIVE
DEVELOPMENT INITIATIVES, LIKAS-KAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL
RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS, INC.,
and PHILIPPINE PEASANT INSTITUTE, in representation of various taxpayers and as non-governmental
organizations, petitioners, vs. EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI,
HEHERSON ALVAREZ, AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI GONZALES, ERNESTO
HERRERA, JOSE LINA, GLORIA MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS OPLE, JOHN
OSMEA, SANTANINA RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB,
in their respective capacities as members of the Philippine Senate who concurred in the ratification by
the President of the Philippines of the Agreement Establishing the World Trade Organization; SALVADOR
ENRIQUEZ, in his capacity as Secretary of Budget and Management; CARIDAD VALDEHUESA, in her
capacity as National Treasurer; RIZALINO NAVARRO, in his capacity as Secretary of Trade and Industry;
ROBERTO SEBASTIAN, in his capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in his
capacity as Secretary of Finance; ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs;
and TEOFISTO T. GUINGONA, in his capacity as Executive Secretary, respondents.
DECISION
PANGANIBAN, J.:
The emergence on January 1, 1995 of the World Trade Organization, abetted by the membership thereto of the vast
majority of countries has revolutionized international business and economic relations amongst states. It has irreversibly
propelled the world towards trade liberalization and economic globalization. Liberalization, globalization, deregulation and
privatization, the third-millennium buzz words, are ushering in a new borderless world of business by sweeping away as
mere historical relics the heretofore traditional modes of promoting and protecting national economies like tariffs, export
subsidies, import quotas, quantitative restrictions,tax exemptions and currency controls. Finding market niches and
becoming the best in specific industries in a market-driven and export-oriented global scenario are replacing age-old
beggar-thy-neighbor policies that unilaterally protect weak and inefficient domestic producers of goods and services. In
the words of Peter Drucker, the well-known management guru, Increased participation in the world economy has become
the key to domestic economic growth and prosperity.
Brief Historical Background
To hasten worldwide recovery from the devastation wrought by the Second World War, plans for the establishment of
three multilateral institutions -- inspired by that grand political body, the United Nations -- were discussed at Dumbarton
Oaks and Bretton Woods. The first was the World Bank (WB) which was to address the rehabilitation and reconstruction
of war-ravaged and later developing countries; the second, the International Monetary Fund (IMF) which was to deal with
currency problems; and the third, the International Trade Organization (ITO), which was to foster order and predictability
in world trade and to minimize unilateral protectionist policies that invite challenge, even retaliation, from other
states. However, for a variety of reasons, including its non-ratification by the United States, the ITO, unlike the IMF and
WB, never took off. What remained was only GATT -- the General Agreement on Tariffs and Trade. GATT was a
collection of treaties governing access to the economies of treaty adherents with no institutionalized body administering
the agreements or dependable system of dispute settlement.
After half a century and several dizzying rounds of negotiations, principally the Kennedy Round, the Tokyo Round
and the Uruguay Round, the world finally gave birth to that administering body -- the World Trade Organization -- with the
signing of the Final Act in Marrakesh, Morocco and the ratification of the WTO Agreement by its members.[1]
Like many other developing countries, the Philippines joined WTO as a founding member with the goal, as articulated
by President Fidel V. Ramos in two letters to the Senate (infra), of improving Philippine access to foreign markets,
especially its major trading partners, through the reduction of tariffs on its exports, particularly agricultural and industrial
products. The President also saw in the WTO the opening of new opportunities for the services sector x x x, (the reduction
of) costs and uncertainty associated with exporting x x x, and (the attraction of) more investments into the
country. Although the Chief Executive did not expressly mention it in his letter, the Philippines - - and this is of special
interest to the legal profession - - will benefit from the WTO system of dispute settlement by judicial adjudication through
the independent WTO settlement bodies called (1) Dispute Settlement Panels and (2) Appellate Tribunal. Heretofore,
trade disputes were settled mainly through negotiations where solutions were arrived at frequently on the basis of relative
bargaining strengths, and where naturally, weak and underdeveloped countries were at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines to place nationals and products of member-countries on the
same footing as Filipinos and local products and (2) that the WTO intrudes, limits and/or impairs the constitutional powers
of both Congress and the Supreme Court, the instant petition before this Court assails the WTO Agreement for violating
the mandate of the 1987 Constitution to develop a self-reliant and independent national economy effectively controlled by
Filipinos x x x (to) give preference to qualified Filipinos (and to) promote the preferential use of Filipino labor, domestic
materials and locally produced goods.
Simply stated, does the Philippine Constitution prohibit Philippine participation in worldwide trade liberalization and
economic globalization? Does it prescribe Philippine integration into a global economy that is liberalized, deregulated and
privatized? These are the main questions raised in this petition for certiorari, prohibition and mandamus under Rule 65 of
the Rules of Court praying (1) for the nullification, on constitutional grounds, of the concurrence of the Philippine Senate in
the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization (WTO
Agreement, for brevity) and (2) for the prohibition of its implementation and enforcement through the release and
utilization of public funds, the assignment of public officials and employees, as well as the use of government properties
and resources by respondent-heads of various executive offices concerned therewith. This concurrence is embodied in
Senate Resolution No. 97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of the Department of Trade and Industry (Secretary
Navarro, for brevity), representing the Government of the Republic of the Philippines, signed in Marrakesh, Morocco, the
Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations (Final Act, for brevity).
By signing the Final Act,[2] Secretary Navarro on behalf of the Republic of the Philippines, agreed:
(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities, with a
view to seeking approval of the Agreement in accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994 from the
President of the Philippines,[3] stating among others that the Uruguay Round Final Act is hereby submitted to the Senate
for its concurrence pursuant to Section 21, Article VII of the Constitution.
On August 13, 1994, the members of the Philippine Senate received another letter from the President of the
Philippines[4] likewise dated August 11, 1994, which stated among others that the Uruguay Round Final Act, the
Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions, and the Understanding
on Commitments in Financial Services are hereby submitted to the Senate for its concurrence pursuant to Section 21,
Article VII of the Constitution.
On December 9, 1994, the President of the Philippines certified the necessity of the immediate adoption of P.S.
1083, a resolution entitled Concurring in the Ratification of the Agreement Establishing the World Trade Organization. [5]
On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which Resolved, as it is hereby resolved,
that the Senate concur, as it hereby concurs, in the ratification by the President of the Philippines ofthe Agreement
Establishing the World Trade Organization.[6] The text of the WTO Agreement is written on pages 137 et seq. of Volume I
of the 36-volume Uruguay Round of Multilateral Trade Negotiations and includes various agreements and associated
legal instruments (identified in the said Agreement as Annexes 1, 2 and 3 thereto and collectively referred to as
Multilateral Trade Agreements, for brevity) as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in Goods
General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights
ANNEX 2
Understanding on Rules and Procedures Governing the Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
On December 16, 1994, the President of the Philippines signed [7] the Instrument of Ratification, declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic of the Philippines, after having seen
and considered the aforementioned Agreement Establishing the World Trade Organization and the agreements and
associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are integral parts
thereof, signed at Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm the same and every Article and
Clause thereof.
To emphasize, the WTO Agreement ratified by the President of the Philippines is composed of the Agreement Proper
and the associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are
integral parts thereof.
On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO Agreement (and its
integral annexes aforementioned) but also (1) the Ministerial Declarations and Decisions and (2) the Understanding on
Commitments in Financial Services. In his Memorandum dated May 13, 1996,[8] the Solicitor General describes these two
latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a wide range of matters, such as
measures in favor of least developed countries, notification procedures, relationship of WTO with the International
Monetary Fund (IMF), and agreements on technical barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services dwell on, among other things, standstill or limitations and
qualifications of commitments to existing non-conforming measures, market access, national treatment, and definitions of
non-resident supplier of financial services, commercial presence and new financial service.
On December 29, 1994, the present petition was filed. After careful deliberation on respondents comment and
petitioners reply thereto, the Court resolved on December 12, 1995, to give due course to the petition, and the parties
thereafter filed their respective memoranda. The Court also requested the Honorable Lilia R. Bautista, the Philippine
Ambassador to the United Nations stationed in Geneva, Switzerland, to submit a paper, hereafter referred to as Bautista
Paper,[9] for brevity, (1) providing a historical background of and (2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the Court directed:
(a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy and (2) the transcript of
proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties signed prior to the Philippine
adherence to the WTO Agreement, which derogate from Philippine sovereignty and (2) copies of the multi-volume WTO
Agreement and other documents mentioned in the Final Act, as soon as possible.
After receipt of the foregoing documents, the Court said it would consider the case submitted for resolution. In a
Compliance dated September 16, 1996, the Solicitor General submitted a printed copy of the 36-volumeUruguay Round
of Multilateral Trade Negotiations, and in another Compliance dated October 24, 1996, he listed the various bilateral or
multilateral treaties or international instruments involving derogation of Philippine sovereignty. Petitioners, on the other
hand, submitted their Compliance dated January 28, 1997, on January 30, 1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows:
A. Whether the petition presents a political question or is otherwise not justiciable.
B. Whether the petitioner members of the Senate who participated in the deliberations and voting leading to the
concurrence are estopped from impugning the validity of the Agreement Establishing the World Trade
Organization or of the validity of the concurrence.
C. Whether the provisions of the Agreement Establishing the World Trade Organization contravene the provisions of
Sec. 19, Article II, and Secs. 10 and 12, Article XII, all of the 1987 Philippine Constitution.
D. Whether provisions of the Agreement Establishing the World Trade Organization unduly limit, restrict and impair
Philippine sovereignty specifically the legislative power which, under Sec. 2, Article VI, 1987 Philippine
Constitution is vested in the Congress of the Philippines;
E. Whether provisions of the Agreement Establishing the World Trade Organization interfere with the exercise of
judicial power.
F. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of
jurisdiction when they voted for concurrence in the ratification of the constitutionally-infirm Agreement
Establishing the World Trade Organization.
G. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of
jurisdiction when they concurred only in the ratification of the Agreement Establishing the World Trade
Organization, and not with the Presidential submission which included the Final Act, Ministerial Declaration and
Decisions, and the Understanding on Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents synthesized the several issues raised by
petitioners into the following:[10]
1. Whether or not the provisions of the Agreement Establishing the World Trade Organization and the Agreements and
Associated Legal Instruments included in Annexes one (1), two (2) and three (3) of that agreement cited by petitioners
directly contravene or undermine the letter, spirit and intent of Section 19, Article II and Sections 10 and 12, Article XII of
the 1987 Constitution.
2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the exercise of legislative power by
Congress.
3. Whether or not certain provisions of the Agreement impair the exercise of judicial power by this Honorable Court in
promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate in the ratification by the President of the Philippines of the Agreement
establishing the World Trade Organization implied rejection of the treaty embodied in the Final Act.
By raising and arguing only four issues against the seven presented by petitioners, the Solicitor General has
effectively ignored three, namely: (1) whether the petition presents a political question or is otherwise not justiciable; (2)
whether petitioner-members of the Senate (Wigberto E. Taada and Anna Dominique Coseteng) are estopped from joining
this suit; and (3) whether the respondent-members of the Senate acted in grave abuse of discretion when they voted for
concurrence in the ratification of the WTO Agreement. The foregoing notwithstanding, this Court resolved to deal with
these three issues thus:
(1) The political question issue -- being very fundamental and vital, and being a matter that probes into the very
jurisdiction of this Court to hear and decide this case -- was deliberated upon by the Court and will thus be ruled upon as
the first issue;
(2) The matter of estoppel will not be taken up because this defense is waivable and the respondents have effectively
waived it by not pursuing it in any of their pleadings; in any event, this issue, even if ruled in respondents favor, will not
cause the petitions dismissal as there are petitioners other than the two senators, who are not vulnerable to the defense
of estoppel; and
(3) The issue of alleged grave abuse of discretion on the part of the respondent senators will be taken up as an integral
part of the disposition of the four issues raised by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents did not question the locus standi of
petitioners. Hence, they are also deemed to have waived the benefit of such issue. They probably realized that grave
constitutional issues, expenditures of public funds and serious international commitments of the nation are involved here,
and that transcendental public interest requires that the substantive issues be met head on and decided on the merits,
rather than skirted or deflected by procedural matters.[11]
To recapitulate, the issues that will be ruled upon shortly are:
(1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED, DOES THE
PETITION INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES CONTRAVENE SEC. 19,
ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR IMPAIR THE
EXERCISE OF LEGISLATIVE POWER BY CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF JUDICIAL POWER
BY THIS COURT IN PROMULGATING RULES ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS ANNEXES
SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT,
MINISTERIAL DECLARATIONS AND DECISIONS, AND THE UNDERSTANDING ON COMMITMENTS IN
FINANCIAL SERVICES?
The First Issue: Does the Court Have Jurisdiction Over the Controversy?
In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no
doubt raises a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the
Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. The question thus posed
is judicial rather than political. The duty (to adjudicate) remains to assure that the supremacy of the Constitution is
upheld.[12] Once a controversy as to the application or interpretation of a constitutional provision is raised before this Court
(as in the instant case), it becomes a legal issue which the Court is bound by constitutional mandate to decide.[13]
The jurisdiction of this Court to adjudicate the matters [14] raised in the petition is clearly set out in the 1987
Constitution,[15] as follows:
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 foregoing text emphasizes the judicial departments duty and power to strike down grave abuse of discretion on
the part of any branch or instrumentality of government including Congress. It is an innovation in our political law.[16] As
explained by former Chief Justice Roberto Concepcion,[17] the judiciary is the final arbiter on the question of whether or not
a branch of government or any of its officials has acted without jurisdiction or in excess of jurisdiction or so capriciously as
to constitute an abuse of discretion amounting to excess of jurisdiction. This is not only a judicial power but a duty to pass
judgment on matters of this nature.
As this Court has repeatedly and firmly emphasized in many cases, [18] it will not shirk, digress from or abandon its
sacred duty and authority to uphold the Constitution in matters that involve grave abuse of discretion brought before it in
appropriate cases, committed by any officer, agency, instrumentality or department of the government.
As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate remedy in the
ordinary course of law, we have no hesitation at all in holding that this petition should be given due course and the vital
questions raised therein ruled upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition and mandamus are
appropriate remedies to raise constitutional issues and to review and/or prohibit/nullify, when proper, acts of legislative
and executive officials. On this, we have no equivocation.
We should stress that, in deciding to take jurisdiction over this petition, this Court will not review the wisdom of the
decision of the President and the Senate in enlisting the country into the WTO, or pass upon the meritsof trade
liberalization as a policy espoused by said international body. Neither will it rule on the propriety of the governments
economic policy of reducing/removing tariffs, taxes, subsidies, quantitative restrictions, and other import/trade
barriers. Rather, it will only exercise its constitutional duty to determine whether or not there had been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the Senate in ratifying the WTO Agreement and its
three annexes.
Second Issue: The WTO Agreement and Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the letter, spirit and intent of the Constitution mandating economic nationalism are
violated by the so-called parity provisions and national treatment clauses scattered in various parts not only of the WTO
Agreement and its annexes but also in the Ministerial Decisions and Declarations and in the Understanding on
Commitments in Financial Services.
Specifically, the flagship constitutional provisions referred to are Sec. 19, Article II, and Secs. 10 and 12, Article XII,
of the Constitution, which are worded as follows:
Article II
DECLARATION OF PRINCIPLES AND STATE POLICIES
xx xx xx xx
Sec. 19. The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.
xx xx xx xx
Article XII
NATIONAL ECONOMY AND PATRIMONY
xx xx xx xx
Sec. 10. x x x. The Congress shall enact measures that will encourage the formation and operation of enterprises whose
capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give
preference to qualified Filipinos.
xx xx xx xx
Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods,
and adopt measures that help make them competitive.
Petitioners aver that these sacred constitutional principles are desecrated by the following WTO provisions quoted in
their memorandum:[19]
a) In the area of investment measures related to trade in goods (TRIMS, for brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under GATT 1994. no Member shall apply any TRIM that is
inconsistent with the provisions of Article III or Article XI of GATT 1994.
2. An Illustrative list of TRIMS that are inconsistent with the obligations of general elimination of quantitative
restrictions provided for in paragraph I of Article XI of GATT 1994 is contained in the Annex to this
Agreement.(Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay Round, Legal Instruments,
p.22121, emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article
III of GATT 1994 include those which are mandatory or enforceable under domestic law or under
administrative rulings, or compliance with which is necessary to obtain an advantage, and which require:
(a) the purchase or use by an enterprise of products of domestic origin or from any domestic source, whether
specified in terms of particular products, in terms of volume or value of products, or in terms of proportion of
volume or value of its local production; or
(b) that an enterprises purchases or use of imported products be limited to an amount related to the volume or
value of local products that it exports.
2. TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions provided for in
paragraph 1 of Article XI of GATT 1994 include those which are mandatory or enforceable under domestic laws or
under administrative rulings, or compliance with which is necessary to obtain an advantage, and which restrict:
(a) the importation by an enterprise of products used in or related to the local production that it exports;
(b) the importation by an enterprise of products used in or related to its local production by restricting its access
to foreign exchange inflows attributable to the enterprise; or
(c) the exportation or sale for export specified in terms of particular products, in terms of volume or value of
products, or in terms of a preparation of volume or value of its local production. (Annex to the Agreement on
Trade-Related Investment Measures, Vol. 27, Uruguay Round Legal Documents, p.22125, emphasis
supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:
The products of the territory of any contracting party imported into the territory of any other contracting party shall be
accorded treatment no less favorable than that accorded to like products of national origin in respect of laws,
regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or
use. the provisions of this paragraph shall not prevent the application of differential internal transportation charges which
are based exclusively on the economic operation of the means of transport and not on the nationality of the
product. (Article III, GATT 1947, as amended by the Protocol Modifying Part II, and Article XXVI of GATT, 14 September
1948, 62 UMTS 82-84 in relation to paragraph 1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay
Round, Legal Instruments p.177, emphasis supplied).
b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity):
Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to
its own nationals with regard to the protection of intellectual property... (par. 1, Article 3, Agreement on Trade-Related
Aspect of Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments, p.25432 (emphasis supplied)
(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to any conditions and qualifications set out therein, each
Member shall accord to services and service suppliers of any other Member, in respect of all measures
affecting the supply of services, treatment no less favourable than it accords to its own like services and
service suppliers.
2. A Member may meet the requirement of paragraph I by according to services and service suppliers of any
other Member, either formally identical treatment or formally different treatment to that it accords to its own
like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the
conditions of completion in favour of services or service suppliers of the Member compared to like services or
service suppliers of any other Member. (Article XVII, General Agreement on Trade in Services, Vol. 28,
Uruguay Round Legal Instruments, p.22610 emphasis supplied).
It is petitioners position that the foregoing national treatment and parity provisions of the WTO Agreement place
nationals and products of member countries on the same footing as Filipinos and local products, in contravention of the
Filipino First policy of the Constitution. They allegedly render meaningless the phrase effectively controlled by
Filipinos. The constitutional conflict becomes more manifest when viewed in the context of the clear duty imposed on the
Philippines as a WTO member to ensure the conformity of its laws, regulations and administrative procedures with its
obligations as provided in the annexed agreements.[20] Petitioners further argue that these provisions contravene
constitutional limitations on the role exports play in national development and negate the preferential treatment accorded
to Filipino labor, domestic materials and locally produced goods.
On the other hand, respondents through the Solicitor General counter (1) that such Charter provisions are not self-
executing and merely set out general policies; (2) that these nationalistic portions of the Constitution invoked by
petitioners should not be read in isolation but should be related to other relevant provisions of Art. XII, particularly Secs. 1
and 13 thereof; (3) that read properly, the cited WTO clauses do not conflict with the Constitution; and (4) that the WTO
Agreement contains sufficient provisions to protect developing countries like the Philippines from the harshness of sudden
trade liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles Not Self-Executing
By its very title, Article II of the Constitution is a declaration of principles and state policies. The counterpart of this
article in the 1935 Constitution[21] is called the basic political creed of the nation by Dean Vicente Sinco.[22] These
principles in Article II are not intended to be self-executing principles ready for enforcement through the courts.[23] They
are used by the judiciary as aids or as guides in the exercise of its power of judicial review, and by the legislature in its
enactment of laws. As held in the leading case of Kilosbayan, Incorporated vs. Morato,[24] the principles and state policies
enumerated in Article II and some sections of Article XII are not self-executing provisions, the disregard of which can give
rise to a cause of action in the courts. They do not embody judicially enforceable constitutional rights but guidelines for
legislation.
In the same light, we held in Basco vs. Pagcor[25] that broad constitutional principles need legislative enactments to
implement them, thus:
On petitioners allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12 (Family) and 13 (Role of Youth) of
Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987
Constitution, suffice it to state also that these are merely statements of principles and policies. As such, they are basically
not self-executing, meaning a law should be passed by Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing principles ready for enforcement through
the courts. They were rather directives addressed to the executive and to the legislature. If the executive and the
legislature failed to heed the directives of the article, the available remedy was not judicial but political. The electorate
could express their displeasure with the failure of the executive and the legislature through the language of the
ballot.(Bernas, Vol. II, p. 2).
The reasons for denying a cause of action to an alleged infringement of broad constitutional principles are sourced
from basic considerations of due process and the lack of judicial authority to wade into the uncharted ocean of social and
economic policy making. Mr. Justice Florentino P. Feliciano in his concurring opinion in Oposa vs. Factoran,
Jr.,[26] explained these reasons as follows:
My suggestion is simply that petitioners must, before the trial court, show a more specific legal right -- a right cast in
language of a significantly lower order of generality than Article II (15) of the Constitution -- that is or may be violated by
judgment granting all or part of the relief prayed for. To my mind, the court should be understood as simply saying that
The second is a broader-gauge consideration -- where a specific violation of law or applicable regulation is not alleged or
Section 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. (Emphases supplied)
When substantive standards as general as the right to a balanced and healthy ecology and the right to health are
combined with remedial standards as broad ranging as a grave abuse of discretion amounting to lack or excess of
jurisdiction, the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and economic
policy making. At least in respect of the vast area of environmental protection and management, our courts have no claim
to special technical competence and experience and professional qualification. Where no specific, operable norms and
standards are shown to exist, then the policy making departments -- the legislative and executive departments -- must be
given a real and effective opportunity to fashion and promulgate those norms and standards, and to implement them
before the courts should intervene.
Economic Nationalism Should Be Read with Other Constitutional Mandates to Attain Balanced Development of
Economy
On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down general principles relating to the
national economy and patrimony, should be read and understood in relation to the other sections in said article, especially
Secs. 1 and 13 thereof which read:
Section 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an
expanding productivity as the key to raising the quality of life for all, especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural development and agrarian
reform, through industries that make full and efficient use of human and natural resources, and which are competitive in
both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition
and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity
to develop. x x x
xxxxxxxxx
Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic development, as
follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the nation for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all especially the underprivileged.
With these goals in context, the Constitution then ordains the ideals of economic nationalism (1) by expressing
preference in favor of qualified Filipinos in the grant of rights, privileges and concessions covering the national economy
and patrimony[27] and in the use of Filipino labor, domestic materials and locally-produced goods; (2) by mandating the
State to adopt measures that help make them competitive;[28] and (3) by requiring the State to develop a self-reliant and
independent national economy effectively controlled by Filipinos. [29] In similar language, the Constitution takes into
account the realities of the outside world as it requires the pursuit of a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and reciprocity; [30] and speaks of industries which
are competitive in both domestic and foreign markets as well as of the protection of Filipino enterprises against unfair
foreign competition and trade practices.
It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System, et al.,[31] this Court
held that Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in
itself and which needs no further guidelines or implementing laws or rules for its enforcement. From its very words the
provision does not require any legislation to put it in operation. It is per se judicially enforceable. However, as the
constitutional provision itself states, it is enforceable only in regard to the grants of rights, privileges and concessions
covering national economy and patrimony and not to every aspect of trade and commerce. It refers to exceptions rather
than the rule. The issue here is not whether this paragraph of Sec. 10 of Art. XII is self-executing or not. Rather, the issue
is whether, as a rule, there are enough balancing provisions in the Constitution to allow the Senate to ratify the Philippine
concurrence in the WTO Agreement. And we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at
the same time, it recognizes the need for business exchange with the rest of the world on the bases of equality and
reciprocity and limits protection of Filipino enterprises only against foreign competition and trade practices that are
unfair.[32] In other words, the Constitution did not intend to pursue an isolationist policy. It did not shut out foreign
investments, goods and services in the development of the Philippine economy. While the Constitution does not
encourage the unlimited entry of foreign goods, services and investments into the country, it does not prohibit them
either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition that
is unfair.
WTO Recognizes Need to Protect Weak Economies
Upon the other hand, respondents maintain that the WTO itself has some built-in advantages to protect weak and
developing economies, which comprise the vast majority of its members. Unlike in the UN where major states have
permanent seats and veto powers in the Security Council, in the WTO, decisions are made on the basis of sovereign
equality, with each members vote equal in weight to that of any other. There is no WTO equivalent of the UN Security
Council.
WTO decides by consensus whenever possible, otherwise, decisions of the Ministerial Conference and the General
Council shall be taken by the majority of the votes cast, except in cases of interpretation of the Agreement or waiver of the
obligation of a member which would require three fourths vote. Amendments would require two thirds vote in
general. Amendments to MFN provisions and the Amendments provision will require assent of all members. Any member
may withdraw from the Agreement upon the expiration of six months from the date of notice of withdrawals. [33]
Hence, poor countries can protect their common interests more effectively through the WTO than through one-on-
one negotiations with developed countries. Within the WTO, developing countries can form powerful blocs to push their
economic agenda more decisively than outside the Organization. This is not merely a matter of practical alliances but a
negotiating strategy rooted in law. Thus, the basic principles underlying the WTO Agreement recognize the need of
developing countries like the Philippines to share in the growth in international trade commensurate with the needs of their
economic development. These basic principles are found in the preamble[34] of the WTO Agreement as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising
standards of living, ensuring full employment and a large and steadily growing volume of real income and effective
demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the
worlds resources in accordance with the objective of sustainable development, seeking both to protect and preserve the
environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at
different levels of economic development,
Recognizing further that there is need for positive efforts designed to ensure that developing countries, and especially the
least developed among them, secure a share in the growth in international trade commensurate with the needs of their
economic development,
Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements
directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment
in international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system encompassing the
General Agreement on Tariffs and Trade, the results of past trade liberalization efforts, and all of the results of the
Uruguay Round of Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further the objectives underlying this multilateral trading system, x x
x. (underscoring supplied.)
Specific WTO Provisos Protect Developing Countries
So too, the Solicitor General points out that pursuant to and consistent with the foregoing basic principles, the WTO
Agreement grants developing countries a more lenient treatment, giving their domestic industries some protection from
the rush of foreign competition. Thus, with respect to tariffs in general, preferential treatment is given to developing
countries in terms of the amount of tariff reduction and the period within which the reduction is to be spread
out. Specifically, GATT requires an average tariff reduction rate of 36% for developed countries to be effected within
a period of six (6) years while developing countries -- including the Philippines -- are required to effect an average tariff
reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to agricultural
products by 20% over six (6) years, as compared to only 13% for developing countries to be effected within ten (10)
years.
In regard to export subsidy for agricultural products, GATT requires developed countries to reduce their budgetary
outlays for export subsidy by 36% and export volumes receiving export subsidy by 21% within a period of six (6)
years. For developing countries, however, the reduction rate is only two-thirds of that prescribed for developed countries
and a longer period of ten (10) years within which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign competition and trade practices including
anti-dumping measures, countervailing measures and safeguards against import surges. Where local businesses are
jeopardized by unfair foreign competition, the Philippines can avail of these measures. There is hardly therefore any basis
for the statement that under the WTO, local industries and enterprises will all be wiped out and that Filipinos will be
deprived of control of the economy. Quite the contrary, the weaker situations of developing nations like the Philippines
have been taken into account; thus, there would be no basis to say that in joining the WTO, the respondents have gravely
abused their discretion. True, they have made a bold decision to steer the ship of state into the yet uncharted sea of
economic liberalization. But such decision cannot be set aside on the ground of grave abuse of discretion, simply because
we disagree with it or simply because we believe only in other economic policies. As earlier stated, the Court in taking
jurisdiction of this case will not pass upon the advantages and disadvantages of trade liberalization as an economic
policy. It will only perform its constitutional duty of determining whether the Senate committed grave abuse of discretion.
Constitution Does Not Rule Out Foreign Competition
Furthermore, the constitutional policy of a self-reliant and independent national economy[35] does not necessarily rule
out the entry of foreign investments, goods and services. It contemplates neither economic seclusion nor mendicancy in
the international community. As explained by Constitutional Commissioner Bernardo Villegas, sponsor of this
constitutional policy:
Economic self-reliance is a primary objective of a developing country that is keenly aware of overdependence on external
assistance for even its most basic needs. It does not mean autarky or economic seclusion; rather, it means avoiding
mendicancy in the international community. Independence refers to the freedom from undue foreign control of the national
economy, especially in such strategic industries as in the development of natural resources and public utilities.[36]
The WTO reliance on most favored nation, national treatment, and trade without discrimination cannot be struck
down as unconstitutional as in fact they are rules of equality and reciprocity that apply to all WTO members. Aside from
envisioning a trade policy based on equality and reciprocity,[37] the fundamental law encourages industries that are
competitive in both domestic and foreign markets, thereby demonstrating a clear policy against a sheltered domestic trade
environment, but one in favor of the gradual development of robust industries that can compete with the best in the foreign
markets. Indeed, Filipino managers and Filipino enterprises have shown capability and tenacity to compete
internationally. And given a free trade environment, Filipino entrepreneurs and managers in Hongkong have demonstrated
the Filipino capacity to grow and to prosper against the best offered under a policy of laissez faire.
Constitution Favors Consumers, Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor of any business or enterprise, nor does it contain
any specific pronouncement that Filipino companies should be pampered with a total
proscription offoreign competition. On the other hand, respondents claim that WTO/GATT aims to make available to the
Filipino consumer the best goods and services obtainable anywhere in the world at the most reasonable
prices.Consequently, the question boils down to whether WTO/GATT will favor the general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos general welfare because it will -- as promised by its promoters --
expand the countrys exports and generate more employment?
Will it bring more prosperity, employment, purchasing power and quality products at the most reasonable rates to the
Filipino public?
The responses to these questions involve judgment calls by our policy makers, for which they are answerable to our
people during appropriate electoral exercises. Such questions and the answers thereto are not subject to judicial
pronouncements based on grave abuse of discretion.
Constitution Designed to Meet Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence when the Constitution was drafted and ratified in 1987. That
does not mean however that the Charter is necessarily flawed in the sense that its framers might not have anticipated the
advent of a borderless world of business. By the same token, the United Nations was not yet in existence when the 1935
Constitution became effective. Did that necessarily mean that the then Constitution might not have contemplated a
diminution of the absoluteness of sovereignty when the Philippines signed the UN Charter, thereby effectively
surrendering part of its control over its foreign relations to the decisions of various UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are designed to meet not only the vagaries of contemporary
events. They should be interpreted to cover even future and unknown circumstances. It is to the credit of its drafters that a
Constitution can withstand the assaults of bigots and infidels but at the same time bend with the refreshing winds of
change necessitated by unfolding events. As one eminent political law writer and respected jurist[38] explains:
The Constitution must be quintessential rather than superficial, the root and not the blossom, the base and framework
only of the edifice that is yet to rise. It is but the core of the dream that must take shape, not in a twinkling by mandate of
our delegates, but slowly in the crucible of Filipino minds and hearts, where it will in time develop its sinews and gradually
gather its strength and finally achieve its substance. In fine, the Constitution cannot, like the goddess Athena, rise full-
grown from the brow of the Constitutional Convention, nor can it conjure by mere fiat an instant Utopia. It must grow with
the society it seeks to re-structure and march apace with the progress of the race, drawing from the vicissitudes of history
the dynamism and vitality that will keep it, far from becoming a petrified rule, a pulsing, living law attuned to the heartbeat
of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that (e)ach Member shall ensure the conformity of its laws, regulations and
administrative procedures with its obligations as provided in the annexed Agreements. [39] Petitioners maintain that this
undertaking unduly limits, restricts and impairs Philippine sovereignty, specifically the legislative power which under Sec.
2, Article VI of the 1987 Philippine Constitution is vested in the Congress of the Philippines.It is an assault on the
sovereign powers of the Philippines because this means that Congress could not pass legislation that will be good for our
national interest and general welfare if such legislation will not conform with the WTO Agreement, which not only relates
to the trade in goods x x x but also to the flow of investments and money x x x as well as to a whole slew of agreements
on socio-cultural matters x x x.[40]
More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in the
Congress.[41] And while the Constitution allows Congress to authorize the President to fix tariff rates, import and export
quotas, tonnage and wharfage dues, and other duties or imposts, such authority is subject to specified limits and x x x
such limitations and restrictions as Congress may provide, [42] as in fact it did under Sec. 401 of the Tariff and Customs
Code.
Sovereignty Limited by International Law and Treaties
This Court notes and appreciates the ferocity and passion by which petitioners stressed their arguments on this
issue. However, while sovereignty has traditionally been deemed absolute and all-encompassing on the domestic level, it
is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a
member of the family of nations. Unquestionably, the Constitution did not envision a hermit-type isolation of the country
from the rest of the world. In its Declaration of Principles and State Policies, the Constitution adopts the generally
accepted principles of international law as part of the law of the land, and adheres to the policy of peace, equality, justice,
freedom, cooperation and amity, with all nations."[43] By the doctrine of incorporation, the country is bound by generally
accepted principles of international law, which are considered to be automatically part of our own laws. [44] One of the
oldest and most fundamental rules in international law is pacta sunt servanda -- international agreements must be
performed in good faith. A treaty engagement is not a mere moral obligation but creates a legally binding obligation on the
parties x x x. A state which has contracted valid international obligations is bound to make in its legislations such
modifications as may be necessary to ensure the fulfillment of the obligations undertaken. [45]
By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations
may surrender some aspects of their state power in exchange for greater benefits granted by or derived from a convention
or pact. After all, states, like individuals, live with coequals, and in pursuit of mutually covenanted objectives and benefits,
they also commonly agree to limit the exercise of their otherwise absolute rights. Thus, treaties have been used to record
agreements between States concerning such widely diverse matters as, for example, the lease of naval bases, the sale or
cession of territory, the termination of war, the regulation of conduct of hostilities, the formation of alliances, the regulation
of commercial relations, the settling of claims, the laying down of rules governing conduct in peace and the establishment
of international organizations.[46] The sovereignty of a state therefore cannot in fact and in reality be considered
absolute. Certain restrictions enter into the picture: (1) limitations imposed by the very nature of membership in the family
of nations and (2) limitations imposed by treaty stipulations. As aptly put by John F. Kennedy, Today, no nation can build
its destiny alone. The age of self-sufficient nationalism is over. The age of interdependence is here.[47]
UN Charter and Other Treaties Limit Sovereignty
Thus, when the Philippines joined the United Nations as one of its 51 charter members, it consented to restrict its
sovereign rights under the concept of sovereignty as auto-limitation.47-A Under Article 2 of the UN Charter, (a)ll members
shall give the United Nations every assistance in any action it takes in accordance with the present Charter, and shall
refrain from giving assistance to any state against which the United Nations is taking preventive or enforcement
action. Such assistance includes payment of its corresponding share not merely in administrative expenses but also in
expenditures for the peace-keeping operations of the organization. In its advisory opinion of July 20, 1961, the
International Court of Justice held that money used by the United Nations Emergency Force in the Middle East and in the
Congo were expenses of the United Nations under Article 17, paragraph 2, of the UN Charter. Hence, all its members
must bear their corresponding share in such expenses. In this sense, the Philippine Congress is restricted in its power to
appropriate. It is compelled to appropriate funds whether it agrees with such peace-keeping expenses or not. So too,
under Article 105 of the said Charter, the UN and its representatives enjoy diplomatic privileges and immunities, thereby
limiting again the exercise of sovereignty of members within their own territory. Another example: although sovereign
equality and domestic jurisdiction of all members are set forth as underlying principles in the UN Charter,
suchprovisos are however subject to enforcement measures decided by the Security Council for the maintenance of
international peace and security under Chapter VII of the Charter. A final example: under Article 103, (i)n the event of a
conflict between the obligations of the Members of the United Nations under the present Charter and their obligations
under any other international agreement, their obligation under the present charter shall prevail, thus unquestionably
denying the Philippines -- as a member -- the sovereign power to make a choice as to which of conflicting obligations, if
any, to honor.
Apart from the UN Treaty, the Philippines has entered into many other international pacts -- both bilateral and
multilateral -- that involve limitations on Philippine sovereignty. These are enumerated by the Solicitor General in his
Compliance dated October 24, 1996, as follows:
(a) Bilateral convention with the United States regarding taxes on income, where the Philippines agreed, among
others, to exempt from tax, income received in the Philippines by, among others, the Federal Reserve Bank of
the United States, the Export/Import Bank of the United States, the Overseas Private Investment Corporation of
the United States. Likewise, in said convention, wages, salaries and similar remunerations paid by the United
States to its citizens for labor and personal services performed by them as employees or officials of the United
States are exempt from income tax by the Philippines.
(b) Bilateral agreement with Belgium, providing, among others, for the avoidance of double taxation with respect to
taxes on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation.
(d) Bilateral convention with the French Republic for the avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the Philippines agreed to exempt from all customs duties,
inspection fees and other duties or taxes aircrafts of South Korea and the regular equipment, spare parts and
supplies arriving with said aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt from customs duties, excise
taxes, inspection fees and other similar duties, taxes or charges fuel, lubricating oils, spare parts, regular
equipment, stores on board Japanese aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines granted Belgian air carriers the same
privileges as those granted to Japanese and Korean air carriers under separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and visitor visas where the Philippines exempted Israeli
nationals from the requirement of obtaining transit or visitor visas for a sojourn in the Philippines not exceeding
59 days.
(I) Bilateral agreement with France exempting French nationals from the requirement of obtaining transit and visitor
visa for a sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the Philippines agreed that premises of Special Missions in the
Philippines are inviolable and its agents can not enter said premises without consent of the Head of Mission
concerned.Special Missions are also exempted from customs duties, taxes and related charges.
(k) Multilateral Convention on the Law of Treaties. In this convention, the Philippines agreed to be governed by the
Vienna Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines accepting compulsory jurisdiction of the International Court of
Justice. The International Court of Justice has jurisdiction in all legal disputes concerning the interpretation of a
treaty, any question of international law, the existence of any fact which, if established, would constitute a breach
of international obligation.
In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of its sovereign powers of
taxation, eminent domain and police power. The underlying consideration in this partial surrender of sovereignty is the
reciprocal commitment of the other contracting states in granting the same privilege and immunities to the Philippines, its
officials and its citizens. The same reciprocity characterizes the Philippine commitments under WTO-GATT.
International treaties, whether relating to nuclear disarmament, human rights, the environment, the law of the sea, or
trade, constrain domestic political sovereignty through the assumption of external obligations. But unless anarchy in
international relations is preferred as an alternative, in most cases we accept that the benefits of the reciprocal obligations
involved outweigh the costs associated with any loss of political sovereignty. (T)rade treaties that structure relations by
reference to durable, well-defined substantive norms and objective dispute resolution procedures reduce the risks of
larger countries exploiting raw economic power to bully smaller countries, by subjecting power relations to some form of
legal ordering. In addition, smaller countries typically stand to gain disproportionately from trade liberalization. This is due
to the simple fact that liberalization will provide access to a larger set of potential new trading relationship than in case of
the larger country gaining enhanced success to the smaller countrys market. [48]
The point is that, as shown by the foregoing treaties, a portion of sovereignty may be waived without violating the
Constitution, based on the rationale that the Philippines adopts the generally accepted principles of international law as
part of the law of the land and adheres to the policy of x x x cooperation and amity with all nations.
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic Principles of the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS) [49] intrudes on the power of the Supreme Court to
promulgate rules concerning pleading, practice and procedures.[50]
To understand the scope and meaning of Article 34, TRIPS,[51] it will be fruitful to restate its full text as follows:
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner referred to in
paragraph 1(b) of Article 28, if the subject matter of a patent is a process for obtaining a product, the judicial
authorities shall have the authority to order the defendant to prove that the process to obtain an identical product is
different from the patented process. Therefore, Members shall provide, in at least one of the following circumstances,
that any identical product when produced without the consent of the patent owner shall, in the absence of proof to
the contrary, be deemed to have been obtained by the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product was made by the process and the owner of the
patent has been unable through reasonable efforts to determine the process actually used.
2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be on the alleged
infringer only if the condition referred to in subparagraph (a) is fulfilled or only if the condition referred to in
subparagraph (b) is fulfilled.
3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their manufacturing
and business secrets shall be taken into account.
From the above, a WTO Member is required to provide a rule of disputable (note the words in the absence of proof to
the contrary) presumption that a product shown to be identical to one produced with the use of a patented process shall
be deemed to have been obtained by the (illegal) use of the said patented process, (1) where such product obtained by
the patented product is new, or (2) where there is substantial likelihood that the identical product was made with the use
of the said patented process but the owner of the patent could not determine the exact process used in obtaining such
identical product. Hence, the burden of proof contemplated by Article 34 should actually be understood as the duty of the
alleged patent infringer to overthrow such presumption. Such burden, properly understood, actually refers to the burden of
evidence (burden of going forward) placed on the producer of the identical (or fake) product to show that his product was
produced without the use of the patented process.
The foregoing notwithstanding, the patent owner still has the burden of proof since, regardless of the presumption
provided under paragraph 1 of Article 34, such owner still has to introduce evidence of the existence of the alleged
identical product, the fact that it is identical to the genuine one produced by the patented process and the fact of newness
of the genuine product or the fact of substantial likelihood that the identical product was made by the patented process.
The foregoing should really present no problem in changing the rules of evidence as the present law on the subject,
Republic Act No. 165, as amended, otherwise known as the Patent Law, provides a similar presumption in cases of
infringement of patented design or utility model, thus:
SEC. 60. Infringement. - Infringement of a design patent or of a patent for utility model shall consist in unauthorized
copying of the patented design or utility model for the purpose of trade or industry in the article or product and in the
making, using or selling of the article or product copying the patented design or utility model. Identity or substantial identity
with the patented design or utility model shall constitute evidence of copying. (underscoring supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption applies only if (1)
the product obtained by the patented process is NEW or (2) there is a substantial likelihood that the identical product was
made by the process and the process owner has not been able through reasonable effort to determine the process
used. Where either of these two provisos does not obtain, members shall be free to determine the appropriate method of
implementing the provisions of TRIPS within their own internal systems and processes.
By and large, the arguments adduced in connection with our disposition of the third issue -- derogation of legislative
power - will apply to this fourth issue also. Suffice it to say that the reciprocity clause more than justifies such intrusion, if
any actually exists. Besides, Article 34 does not contain an unreasonable burden, consistent as it is with due process and
the concept of adversarial dispute settlement inherent in our judicial system.
So too, since the Philippine is a signatory to most international conventions on patents, trademarks and copyrights,
the adjustment in legislation and rules of procedure will not be substantial. [52]
Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other Documents Contained in the Final Act
Petitioners allege that the Senate concurrence in the WTO Agreement and its annexes -- but not in the other
documents referred to in the Final Act, namely the Ministerial Declaration and Decisions and the Understanding on
Commitments in Financial Services -- is defective and insufficient and thus constitutes abuse of discretion. They submit
that such concurrence in the WTO Agreement alone is flawed because it is in effect a rejection of the Final Act, which in
turn was the document signed by Secretary Navarro, in representation of the Republic upon authority of the
President. They contend that the second letter of the President to the Senate [53] which enumerated what constitutes the
Final Act should have been the subject of concurrence of the Senate.
A final act, sometimes called protocol de clture, is an instrument which records the winding up of the proceedings
of a diplomatic conference and usually includes a reproduction of the texts of treaties, conventions, recommendations and
other acts agreed upon and signed by the plenipotentiaries attending the conference. [54] It is not the treaty itself. It is rather
a summary of the proceedings of a protracted conference which may have taken place over several years. The text of the
Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations is contained in just one
page[55] in Vol. I of the 36-volume Uruguay Round of Multilateral Trade Negotiations. By signing said Final Act, Secretary
Navarro as representative of the Republic of the Philippines undertook:
"(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities
with a view to seeking approval of the Agreement in accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions."
The assailed Senate Resolution No. 97 expressed concurrence in exactly what the Final Act required from its
signatories, namely, concurrence of the Senate in the WTO Agreement.
The Ministerial Declarations and Decisions were deemed adopted without need for ratification. They were approved
by the ministers by virtue of Article XXV: 1 of GATT which provides that representatives of the members can meet to give
effect to those provisions of this Agreement which invoke joint action, and generally with a view to facilitating the operation
and furthering the objectives of this Agreement.[56]
The Understanding on Commitments in Financial Services also approved in Marrakesh does not apply to the
Philippines. It applies only to those 27 Members which have indicated in their respective schedules of commitments on
standstill, elimination of monopoly, expansion of operation of existing financial service suppliers, temporary entry of
personnel, free transfer and processing of information, and national treatment with respect to access to payment, clearing
systems and refinancing available in the normal course of business. [57]
On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed included as its
integral parts,[58] as follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional framework for the conduct of trade relations among its Members
in matters to the agreements and associated legal instruments included in the Annexes to this Agreement.
2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3 (hereinafter referred to as
Multilateral Agreements) are integral parts of this Agreement, binding on all Members.
3. The Agreements and associated legal instruments included in Annex 4 (hereinafter referred to as Plurilateral
Trade Agreements) are also part of this Agreement for those Members that have accepted them, and are binding on
those Members. The Plurilateral Trade Agreements do not create either obligation or rights for Members that have
not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter referred to as GATT
1994) is legally distinct from the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the
Final Act adopted at the conclusion of the Second Session of the Preparatory Committee of the United Nations
Conference on Trade and Employment, as subsequently rectified, amended or modified (hereinafter referred to as
GATT 1947).
It should be added that the Senate was well-aware of what it was concurring in as shown by the members
deliberation on August 25, 1994. After reading the letter of President Ramos dated August 11, 1994, [59] the senators of the
Republic minutely dissected what the Senate was concurring in, as follows: [60]
THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in the first day hearing of this
Committee yesterday. Was the observation made by Senator Taada that what was submitted to the Senate was not the
agreement on establishing the World Trade Organization by the final act of the Uruguay Round which is not the same as
the agreement establishing the World Trade Organization? And on that basis, Senator Tolentino raised a point of order
which, however, he agreed to withdraw upon understanding that his suggestion for an alternative solution at that time was
acceptable. That suggestion was to treat the proceedings of the Committee as being in the nature of briefings for
Senators until the question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President submitting a new... is he making a new submission which improves
on the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no misunderstanding, it was his
intention to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Taada and later on Senator Tolentino since they were the ones that raised this
question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now clearly appear that what is being submitted to the Senate for
ratification is not the Final Act of the Uruguay Round, but rather the Agreement on the World Trade Organization as well
as the Ministerial Declarations and Decisions, and the Understanding and Commitments in Financial Services.
I am now satisfied with the wording of the new submission of President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator Tolentino? And after him Senator Neptali
Gonzales and Senator Lina.
SEN TOLENTINO, Mr. Chairman, I have not seen the new submission actually transmitted to us but I saw the draft of his
earlier, and I think it now complies with the provisions of the Constitution, and with the Final Act itself. The Constitution
does not require us to ratify the Final Act. It requires us to ratify the Agreement which is now being submitted. The Final
Act itself specifies what is going to be submitted to with the governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit as appropriate the WTO Agreement for the
consideration of the respective competent authorities with a view to seeking approval of the Agreement in accordance
with their procedures.
In other words, it is not the Final Act that was agreed to be submitted to the governments for ratification or acceptance as
whatever their constitutional procedures may provide but it is the World Trade Organization Agreement. And if that is the
one that is being submitted now, I think it satisfies both the Constitution and the Final Act itself.
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record. And they had been adequately
reflected in the journal of yesterdays session and I dont see any need for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any comment on this?
SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of the abundance of
question. Then the new submission is, I believe, stating the obvious and therefore I have no further comment to make.
Epilogue
In praying for the nullification of the Philippine ratification of the WTO Agreement, petitioners are invoking this Courts
constitutionally imposed duty to determine whether or not there has been grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the Senate in giving its concurrence therein via Senate Resolution No.
97. Procedurally, a writ of certiorari grounded on grave abuse of discretion may be issued by the Court under Rule 65 of
the Rules of Court when it is amply shown that petitioners have no other plain, speedy and adequate remedy in the
ordinary course of law.
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction.[61] Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is
exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so
gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.[62] Failure on the part of the petitioner to show grave abuse of discretion will result in the dismissal of
the petition.[63]
In rendering this Decision, this Court never forgets that the Senate, whose act is under review, is one of two
sovereign houses of Congress and is thus entitled to great respect in its actions. It is itself a constitutional body
independent and coordinate, and thus its actions are presumed regular and done in good faith. Unless convincing proof
and persuasive arguments are presented to overthrow such presumptions, this Court will resolve every doubt in its
favor. Using the foregoing well-accepted definition of grave abuse of discretion and the presumption of regularity in the
Senates processes, this Court cannot find any cogent reason to impute grave abuse of discretion to the Senates exercise
of its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article VII of the Constitution. [64]
It is true, as alleged by petitioners, that broad constitutional principles require the State to develop an independent
national economy effectively controlled by Filipinos; and to protect and/or prefer Filipino labor, products, domestic
materials and locally produced goods. But it is equally true that such principles -- while serving as judicial and legislative
guides -- are not in themselves sources of causes of action. Moreover, there are other equally fundamental constitutional
principles relied upon by the Senate which mandate the pursuit of a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and reciprocity and the promotion of industries
which are competitive in both domestic and foreign markets, thereby justifying its acceptance of said treaty. So too, the
alleged impairment of sovereignty in the exercise of legislative and judicial powers is balanced by the adoption of the
generally accepted principles of international law as part of the law of the land and the adherence of the Constitution to
the policy of cooperationand amity with all nations.
That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent to the WTO
Agreement thereby making it a part of the law of the land is a legitimate exercise of its sovereign duty and power. We find
no patent and gross arbitrariness or despotism by reason of passion or personal hostility in such exercise. It is not
impossible to surmise that this Court, or at least some of its members, may even agree with petitioners that it is more
advantageous to the national interest to strike down Senate Resolution No. 97. But that is not a legal reason to attribute
grave abuse of discretion to the Senate and to nullify its decision. To do so would constitute grave abuse in the exercise
of our own judicial power and duty. Ineludably, what the Senate did was a valid exercise of its authority. As to whether
such exercise was wise, beneficial or viable is outside the realm of judicial inquiry and review. That is a matter between
the elected policy makers and the people. As to whether the nation should join the worldwide march toward trade
liberalization and economic globalization is a matter that our people should determine in electing their policy makers. After
all, the WTO Agreement allows withdrawal of membership, should this be the political desire of a member.
The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian Renaissance[65] where the
East will become the dominant region of the world economically, politically and culturally in the next century. He refers to
the free market espoused by WTO as the catalyst in this coming Asian ascendancy. There are at present about 31
countries including China, Russia and Saudi Arabia negotiating for membership in the WTO. Notwithstanding objections
against possible limitations on national sovereignty, the WTO remains as the only viable structure for multilateral trading
and the veritable forum for the development of international trade law. The alternative to WTO is isolation, stagnation, if
not economic self-destruction. Duly enriched with original membership, keenly aware of the advantages and
disadvantages of globalization with its on-line experience, and endowed with a vision of the future, the Philippines now
straddles the crossroads of an international strategy for economic prosperity and stability in the new millennium. Let the
people, through their duly authorized elected officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco, Hermosisima,
Jr., and Torres, Jr., JJ., concur.
Padilla, and Vitug, JJ., in the result.

Supreme Court
Manila
EN BANC
BUREAU OF FISHERIES AND AQUATIC G.R. No. 169815

RESOURCES (BFAR) EMPLOYEES UNION, Present:
REGIONAL OFFICE NO. VII, CEBU CITY, Puno, C.J.,
Petitioner, Quisumbing,
Ynares-Santiago,
Carpio,
Austria-Martinez,
Corona,
Carpio Morales,
Azcuna,
Tinga,
- versus - Chico-Nazario,
Velasco, Jr.,
Nachura,*
Reyes,
Leonardo-De Castro,
Brion, JJ.
Promulgated:
COMMISSION ON AUDIT, August 13, 2008

Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
PUNO, C.J.:
On appeal are the Decision[1] dated April 8, 2005 of respondent Commission on Audit (COA) in LAO-N-2005-119
upholding the disallowance by the COA Legal and Adjudication Office (COA-LAO), Regional Office No. VII, Cebu City of
the P10,000.00 Food Basket Allowance granted by BFAR to each of its employees in 1999, and COA Resolution [2] dated
August 5, 2005, denying petitioners motion for reconsideration of said Decision.
First, the facts:
On October 18, 1999, petitioner Bureau of Fisheries and Aquatic Resources (BFAR) Employees Union, Regional
Office No. VII, Cebu City issued Resolution No. 01, series of 1999 requesting the BFAR Central Office for a Food Basket
Allowance. It justified its request on the high cost of living, i.e., the increase in prices of petroleum products which
catapulted the cost of food commodities, has greatly affected the economic conditions and living standard of the
government employees of BFAR Region VII and could hardly sustain its need to cope up with the four (4) basic needs,
i.e., food, shelter, clothing and education.[3] It also relied on the Employees Suggestions and Incentive Awards System
(ESIAS), pursuant to Book V of Executive Order No. 292, or the Administrative Code of 1987, and approved by the Civil
Service Commission on December 3, 1996. The ESIAS includes the granting of incentives that will help employees
overcome present economic difficulties, boost their morale, and further commitment and dedication to public
service.[4] Regional Director Corazon M. Corrales of BFAR Region VII indorsed the Resolution, and Malcolm I. Sarmiento,
Jr., Director of BFAR recommended its approval.Honorable Cesar M. Drilon, Jr., Undersecretary for Fisheries and
Livestock of the Department of Agriculture, approved the request for Authority to Grant a Gift Check or the Food Basket
Allowance at the rate of P10,000.00 each to the 130 employees of BFAR Region VII, or in the total amount
of P1,322,682.00.[5] On the strength of the approval, Regional Director Corrales released the allowance to the BFAR
employees.
On post audit, the Commission on Audit Legal and Adjudication Office (COA-LAO) Regional Office No.
VII, Cebu City disallowed the grant of Food Basket Allowance under Notice of Disallowance No. 2003-022-101 (1999)
dated September 19, 2003. It ruled that the allowance had no legal basis and that it violated: a) Sec. 15(d) of the General
Appropriations Act of 1999, prohibiting the payment of honoraria, allowances, or other forms of compensation to any
government official or employee, except those specifically authorized by law; b) par. 4.5 of Budget Circular No. 16 dated
November 28, 1998, prohibiting the grant of food, rice, gift checks, or any other form of incentives/allowances, except
those authorized via Administrative Order by the Office of the President; and c) Sec. 12 of Republic Act (R.A.) No. 6758,
or the Salary Standardization Law of 1989, which includes all allowances in the standardized salary rates, subject to
certain exceptions.
On February 26, 2004, BFAR Regional Office No. VII, through Regional Director Corrales, moved for
reconsideration and prayed for the lifting of the disallowance. It argued that the grant of Food Basket Allowance would
enhance the welfare and productivity of the employees. Further, it contended that the approval by the Honorable Drilon,
Undersecretary for Fisheries and Livestock, of the said benefit was the law itself which vested the specific authority for its
release. The Commission on Audit Legal and Adjudication Office (COA-LAO) Regional Office No. VII, Cebu City denied
the motion.
Petitioner appealed to the Commission on Audit Legal and Adjudication Office (COA-LAO) National, Quezon
City. The appeal was denied in a Decision dated April 8, 2005. Petitioners motion for reconsideration was likewise denied
in a Resolution dated August 5, 2005.
Hence, this appeal.
Petitioner cites the following grounds for its appeal:
1. The disallowance in question is unconstitutional as it contravenes the fundamental principle of the
State enshrined under Sections 9 and 10, Article II of the 1987 Constitution, which provide as follows:
SEC. 9. The State shall promote a just and dynamic social order that will ensure the prosperity
and independence of the nation and free the people from poverty through policies that provide
adequate social services, promote full employment, a rising standard of living, and an improved
quality of life for all.
SEC. 10. The State shall promote social justice in all phases of national development. [6]
2. The Undersecretary for Fisheries and Livestock is an extension of the Secretary of Agriculture who
is an alter-ego of the President. His approval was tantamount to the authority from the Office of the
President, as contemplated in DBM Budget Circular No. 16, dated November 28, 1998.[7]
3. The grant of the Food Basket Allowance is in conformity with Sec. 12 of the Salary Standardization
Law.[8]
We deny the petition.

First, we rule on the issue of constitutionality. Petitioner invokes the provisions of the 1987 Constitution on social
justice to warrant the grant of the Food Basket Allowance. Time and again, we have ruled that the social justice provisions
of the Constitution are not self-executing principles ready for enforcement through the courts. They are merely statements
of principles and policies. To give them effect, legislative enactment is required. As we held in Kilosbayan, Incorporated
v. Morato,[9] the principles and state policies enumerated in Article II and some sections of Article XII are "not self-
executing provisions, the disregard of which can give rise to a cause of action in the courts. They do not embody judicially
enforceable constitutional rights but guidelines for legislation."[10]
Second, petitioner contends that the approval of the Department of Agriculture (DA) Undersecretary for Fisheries
and Livestock of the Food Basket Allowance is the law which authorizes its release. It is crystal clear that the DA
Undersecretary has no authority to grant any allowance to the employees of BFAR. Section 4.5 of Budget Circular No. 16
dated November 28, 1998 states:
All agencies are hereby prohibited from granting any food, rice, gift checks, or any other form of
incentives/allowances except those authorized via Administrative Order by the Office of the
President.
In the instant case, no Administrative Order has been issued by the Office of the President to exempt BFAR from
the express prohibition against the grant of any food, rice, gift checks, or any other form of incentive/allowance to its
employees.
Petitioner argues that the grant of the Food Basket Allowance does not violate Sec. 12 of R.A. No. 6758 or the
Salary Standardization Law. This law was passed to standardize salary rates among government personnel and do away
with multiple allowances and other incentive packages and the resulting differences in compensation among them.[11] Sec.
12 of the law provides:
Consolidation of Allowances and Compensation. All allowances, except for representation and
transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and
crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service
personnel stationed abroad; and such other additional compensation not otherwise specified herein as
may be determined by the DBM [Department of Budget and Management], shall be deemed included in
the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or
in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary
rates shall continue to be authorized.
Existing additional compensation of any national government official or employee paid from local
funds of a local government unit shall be absorbed into the basic salary of said official or employee and
shall be paid by the National Government.
Under Sec. 12, as quoted, all kinds of allowances are integrated in the standardized salary rates. The exceptions
are:
1. representation and transportation allowance (RATA);
2. clothing and laundry allowance;
3. subsistence allowance of marine officers and crew on board government vessels;
4. subsistence allowance of hospital personnel;
5. hazard pay;
6. allowances of foreign service personnel stationed abroad; and
7. such other additional compensation not otherwise specified herein as may be determined by the
DBM.
Petitioner contends that the Food Basket Allowance falls under the 7 th category above, that of other additional
compensation not otherwise specified herein as may be determined by the DBM.
The Court has had the occasion to interpret Sec. 12 of R.A. No. 6758. In National Tobacco Administration v.
Commission on Audit,[12] we held that under the first sentence of Section 12, the benefits excluded from the
standardized salary rates are the "allowances" or those which are usually granted to officials and employees of the
government to defray or reimburse the expenses incurred in the performance of their official functions. These are
the RATA, clothing and laundry allowance, subsistence allowance of marine officers and crew on board government
vessels and hospital personnel, hazard pay, and others, as enumerated in the first sentence of Section 12. We further
ruled that the phrase "and such other additional compensation not otherwise specified herein as may be determined by
the DBM" is a catch-all proviso for benefits in the nature of allowances similar to those enumerated. In Philippine Ports
Authority v. Commission on Audit,[13] we explained that if these allowances were consolidated with the standardized
salary rates, then government officials or employees would be compelled to spend their personal funds in attending to
their duties.
In the instant case, the Food Basket Allowance is definitely not in the nature of an allowance to reimburse
expenses incurred by officials and employees of the government in the performance of their official functions. It is not
payment in consideration of the fulfillment of official duty. It is a form of financial assistance to all officials and employees
of BFAR. Petitioner itself stated that the Food Basket Allowance has the purpose of alleviating the economic condition of
BFAR employees.
Next, petitioner relies on National Compensation Circular No. 59 dated September 30, 1989, issued by the DBM,
which is the List of Allowances/Additional Compensation of Government Officials and Employees which shall be Deemed
Integrated into the Basic Salary. The list enumerates the following allowances/additional compensation which shall be
incorporated in the basic salary, hence, may no longer be granted to government employees:
1. Cost of Living Allowance (COLA);
2. Inflation connected allowance;
3. Living Allowance;
4. Emergency Allowance;
5. Additional Compensation of Public Health Nurses assigned to public health nursing;
6. Additional Compensation of Rural Health Physicians;
7. Additional Compensation of Nurses in Malacaang Clinic;
8. Nurses Allowance in the Air Transportation Office;
9. Assignment Allowance of School Superintendents;
10. Post allowance of Postal Service Office employees;
11. Honoraria/allowances which are regularly given except the following:
a. those for teaching overload;
b. in lieu of overtime pay;
c. for employees on detail with task forces/special projects;
d. researchers, experts and specialists who are acknowledged authorities in their field of
specialization;
e. lecturers and resource persons;
f. Municipal Treasurers deputized by the Bureau of Internal Revenue to collect and remit
internal revenue collections; and
g. Executive positions in State Universities and Colleges filled by designation from among their
faculty members.
12. Subsistence Allowance of employees except those authorized under EO [Executive Order] No.
346 and uniformed personnel of the Armed Forces of the Philippines and Integrated National
Police;
13. Laundry Allowance of employees except those hospital/sanitaria personnel who attend directly to
patients and who by the nature of their duties are required to wear uniforms, prison guards and
uniformed personnel of the Armed Forces of the Philippines and Integrated National Police; and
14. Incentive allowance/fee/pay except those authorized under the General Appropriations Act and
Section 33 of P.D. No. 807.
Petitioner invokes the rule of statutory construction that what is not included is excluded. Inclusio unius est
exclusio alterius. Petitioner claims that the Food Basket Allowance is distinct and separate from the specific
allowances/additional compensation listed in the circular.
Again, we reject petitioners contention. The Food Basket Allowance falls under the 14th category, that of incentive
allowance/fee/pay. Petitioner itself justified the Food Basket Allowance as an incentive to the employees to encourage
them to be more productive and efficient.[14] Under National Compensation Circular No. 59, exceptions to the incentive
allowance/fee/pay category are those authorized under the General Appropriations Act (GAA) and Section 33 of
Presidential Decree (P.D.) No. 807. Sec. 15(d) of the GAA for Fiscal Year 1999 or R.A. No. 8745 clearly prohibits the
payment of honoraria, allowances or other forms of compensation to any government official or employee, except those
specifically authorized by law. There is no law authorizing the grant of the subject Food Basket Allowance.Further, Sec.
33 of P.D. No. 807 or the Civil Service Decree of the Philippines does not exempt the Food Basket Allowance from the
general rule. Sec. 33 states:
Section 33. Employee Suggestions and Incentive Award System. There shall be established a
government-wide employee suggestions and incentive awards system which shall be administered under
such rules, regulations, and standards as may be promulgated by the Commission.
In accordance with rules, regulations, and standards promulgated by the Commission, the
President or the head of each department or agency is authorized to incur whatever necessary expenses
involved in the honorary recognition of subordinate officers and employees of the government who by
their suggestions, inventions, superior accomplishment, and other personal efforts contribute to the
efficiency, economy, or other improvement of government operations, or who perform such other
extraordinary acts or services in the public interest in connection with, or in relation to, their official
employment.
We are not convinced that the Food Basket Allowance falls under the incentive award system contemplated
above. The decree speaks of suggestions, inventions, superior accomplishments, and other personal efforts contributed
by an employee to the efficiency, economy, or other improvement of government operations, or other extraordinary acts or
services performed by an employee in the public interest in connection with, or in relation to, his official employment. In
the instant case, the Food Basket Allowance was granted to all BFAR employees, without distinction. It was not granted
due to any extraordinary contribution or exceptional accomplishment by an employee. The Food Basket Allowance was
primarily an economic monetary assistance to the employees.
Lastly, we note, as the Office of the Solicitor General, on behalf of respondent did, that petitioner failed to exhaust
its administrative remedies. It stopped seeking remedies at the level of respondents Legal and Adjudication Office. It failed
to appeal the latters adverse decision to the Commission on Audit proper. The consequence for failure to exhaust
administrative remedies is clear: the disallowance, as ruled by the Commission on Audit Legal and Adjudication
Office Regional Office No. VII, Cebu City and upheld by the Commission on Audit Legal and Adjudication Office
National, Quezon City, became final and executory. Sections 48 and 51 of Presidential Decree No. 1445, or the
Government Auditing Code of the Philippines provide:
Section 48. Appeal from decision of auditors. Any person aggrieved by the decision of an auditor
of any government agency in the settlement of an account or claim may, within six months from receipt of
a copy of the decision, appeal in writing to the Commission.
Section 51. Finality of decisions of the Commission or any auditor. A decision of the Commission
or of any auditor upon any matter within its or his jurisdiction, if not appealed as herein provided, shall be
final and executory.
IN VIEW WHEREOF, the petition is DENIED. The Decision and Resolution of the Commission on Audit Legal and
Adjudication Office dated April 8, 2005 and August 5, 2005, respectively, in LAO-N-2005-119, are AFFIRMED.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. L-14639 March 25, 1919
ZACARIAS VILLAVICENCIO, ET AL., petitioners,

vs.
JUSTO LUKBAN, ET AL., respondents.
Alfonso Mendoza for petitioners.

City Fiscal Diaz for respondents.
MALCOLM, J.:
The annals of juridical history fail to reveal a case quite as remarkable as the one which this application forhabeas
corpus submits for decision. While hardly to be expected to be met with in this modern epoch of triumphant
democracy, yet, after all, the cause presents no great difficulty if there is kept in the forefront of our minds the basic
principles of popular government, and if we give expression to the paramount purpose for which the courts, as an
independent power of such a government, were constituted. The primary question is — Shall the judiciary permit a
government of the men instead of a government of laws to be set up in the Philippine Islands?
Omitting much extraneous matter, of no moment to these proceedings, but which might prove profitable reading for
other departments of the government, the facts are these: The Mayor of the city of Manila, Justo Lukban, for the
best of all reasons, to exterminate vice, ordered the segregated district for women of ill repute, which had been
permitted for a number of years in the city of Manila, closed. Between October 16 and October 25, 1918, the women
were kept confined to their houses in the district by the police. Presumably, during this period, the city authorities
quietly perfected arrangements with the Bureau of Labor for sending the women to Davao, Mindanao, as laborers;
with some government office for the use of the coastguard cutters Corregidor and Negros, and with the
Constabulary for a guard of soldiers. At any rate, about midnight of October 25, the police, acting pursuant to orders
from the chief of police, Anton Hohmann and the Mayor of the city of Manila, Justo Lukban, descended upon the
houses, hustled some 170 inmates into patrol wagons, and placed them aboard the steamers that awaited their
arrival. The women were given no opportunity to collect their belongings, and apparently were under the impression
that they were being taken to a police station for an investigation. They had no knowledge that they were destined
for a life in Mindanao. They had not been asked if they wished to depart from that region and had neither directly nor
indirectly given their consent to the deportation. The involuntary guests were received on board the steamers by a
representative of the Bureau of Labor and a detachment of Constabulary soldiers. The two steamers with their
unwilling passengers sailed for Davao during the night of October 25.
The vessels reached their destination at Davao on October 29. The women were landed and receipted for as
laborers by Francisco Sales, provincial governor of Davao, and by Feliciano Yñigo and Rafael Castillo. The
governor and the hacendero Yñigo, who appear as parties in the case, had no previous notification that the women
were prostitutes who had been expelled from the city of Manila. The further happenings to these women and the
serious charges growing out of alleged ill-treatment are of public interest, but are not essential to the disposition of
this case. Suffice it to say, generally, that some of the women married, others assumed more or less clandestine
relations with men, others went to work in different capacities, others assumed a life unknown and disappeared, and
a goodly portion found means to return to Manila.
To turn back in our narrative, just about the time the Corregidor and the Negros were putting in to Davao, the
attorney for the relatives and friends of a considerable number of the deportees presented an application forhabeas
corpus to a member of the Supreme Court. Subsequently, the application, through stipulation of the parties, was
made to include all of the women who were sent away from Manila to Davao and, as the same questions concerned
them all, the application will be considered as including them. The application set forth the salient facts, which need
not be repeated, and alleged that the women were illegally restrained of their liberty by Justo Lukban, Mayor of the
city of Manila, Anton Hohmann, chief of police of the city of Manila, and by certain unknown parties. The writ was
made returnable before the full court. The city fiscal appeared for the respondents, Lukban and Hohmann, admitted
certain facts relative to sequestration and deportation, and prayed that the writ should not be granted because the
petitioners were not proper parties, because the action should have been begun in the Court of First Instance for
Davao, Department of Mindanao and Sulu, because the respondents did not have any of the women under their
custody or control, and because their jurisdiction did not extend beyond the boundaries of the city of Manila.
According to an exhibit attached to the answer of the fiscal, the 170 women were destined to be laborers, at good
salaries, on the haciendas of Yñigo and Governor Sales. In open court, the fiscal admitted, in answer to question of
a member of the court, that these women had been sent out of Manila without their consent. The court awarded the
writ, in an order of November 4, that directed Justo Lukban, Mayor of the city of Manila, Anton Hohmann, chief of
police of the city of Manila, Francisco Sales, governor of the province of Davao, and Feliciano Yñigo,
an hacendero of Davao, to bring before the court the persons therein named, alleged to be deprived of their liberty,
on December 2, 1918.
Before the date mentioned, seven of the women had returned to Manila at their own expense. On motion of counsel
for petitioners, their testimony was taken before the clerk of the Supreme Court sitting as commissioners. On the
day named in the order, December 2nd, 1918, none of the persons in whose behalf the writ was issued were
produced in court by the respondents. It has been shown that three of those who had been able to come back to
Manila through their own efforts, were notified by the police and the secret service to appear before the court. The
fiscal appeared, repeated the facts more comprehensively, reiterated the stand taken by him when pleading to the
original petition copied a telegram from the Mayor of the city of Manila to the provincial governor of Davao and the
answer thereto, and telegrams that had passed between the Director of Labor and the attorney for that Bureau then
in Davao, and offered certain affidavits showing that the women were contained with their life in Mindanao and did
not wish to return to Manila. Respondents Sales answered alleging that it was not possible to fulfill the order of the
Supreme Court because the women had never been under his control, because they were at liberty in the Province
of Davao, and because they had married or signed contracts as laborers. Respondent Yñigo answered alleging that
he did not have any of the women under his control and that therefore it was impossible for him to obey the
mandate. The court, after due deliberation, on December 10, 1918, promulgated a second order, which related that
the respondents had not complied with the original order to the satisfaction of the court nor explained their failure to
do so, and therefore directed that those of the women not in Manila be brought before the court by respondents
Lukban, Hohmann, Sales, and Yñigo on January 13, 1919, unless the women should, in written statements
voluntarily made before the judge of first instance of Davao or the clerk of that court, renounce the right, or unless
the respondents should demonstrate some other legal motives that made compliance impossible. It was further
stated that the question of whether the respondents were in contempt of court would later be decided and the
reasons for the order announced in the final decision.
Before January 13, 1919, further testimony including that of a number of the women, of certain detectives and
policemen, and of the provincial governor of Davao, was taken before the clerk of the Supreme Court sitting as
commissioner and the clerk of the Court of First Instance of Davao acting in the same capacity. On January 13,
1919, the respondents technically presented before the Court the women who had returned to the city through their
own efforts and eight others who had been brought to Manila by the respondents. Attorneys for the respondents, by
their returns, once again recounted the facts and further endeavored to account for all of the persons involved in
the habeas corpus. In substance, it was stated that the respondents, through their representatives and agents, had
succeeded in bringing from Davao with their consent eight women; that eighty-one women were found in Davao
who, on notice that if they desired they could return to Manila, transportation fee, renounced the right through sworn
statements; that fifty-nine had already returned to Manila by other means, and that despite all efforts to find them
twenty-six could not be located. Both counsel for petitioners and the city fiscal were permitted to submit memoranda.
The first formally asked the court to find Justo Lukban, Mayor of the city of Manila, Anton Hohmann, chief of police
of the city of Manila, Jose Rodriguez and Fernando Ordax, members of the police force of the city of Manila,
Feliciano Yñigo, an hacendero of Davao, Modesto Joaquin, the attorney for the Bureau of Labor, and Anacleto Diaz,
fiscal of the city of Manila, in contempt of court. The city fiscal requested that the replica al memorandum de los
recurridos, (reply to respondents' memorandum) dated January 25, 1919, be struck from the record.
In the second order, the court promised to give the reasons for granting the writ of habeas corpus in the final
decision. We will now proceed to do so.
One fact, and one fact only, need be recalled — these one hundred and seventy women were isolated from society,
and then at night, without their consent and without any opportunity to consult with friends or to defend their rights,
were forcibly hustled on board steamers for transportation to regions unknown. Despite the feeble attempt to prove
that the women left voluntarily and gladly, that such was not the case is shown by the mere fact that the presence of
the police and the constabulary was deemed necessary and that these officers of the law chose the shades of night
to cloak their secret and stealthy acts. Indeed, this is a fact impossible to refute and practically admitted by the
respondents.
With this situation, a court would next expect to resolve the question — By authority of what law did the Mayor and
the Chief of Police presume to act in deporting by duress these persons from Manila to another distant locality within
the Philippine Islands? We turn to the statutes and we find —
Alien prostitutes can be expelled from the Philippine Islands in conformity with an Act of congress. The Governor-
General can order the eviction of undesirable aliens after a hearing from the Islands. Act No. 519 of the Philippine
Commission and section 733 of the Revised Ordinances of the city of Manila provide for the conviction and
punishment by a court of justice of any person who is a common prostitute. Act No. 899 authorizes the return of any
citizen of the United States, who may have been convicted of vagrancy, to the homeland. New York and other
States have statutes providing for the commitment to the House of Refuge of women convicted of being common
prostitutes. Always a law! Even when the health authorities compel vaccination, or establish a quarantine, or place a
leprous person in the Culion leper colony, it is done pursuant to some law or order. But one can search in vain for
any law, order, or regulation, which even hints at the right of the Mayor of the city of Manila or the chief of police of
that city to force citizens of the Philippine Islands — and these women despite their being in a sense lepers of
society are nevertheless not chattels but Philippine citizens protected by the same constitutional guaranties as are
other citizens — to change their domicile from Manila to another locality. On the contrary, Philippine penal law
specifically punishes any public officer who, not being expressly authorized by law or regulation, compels any
person to change his residence.
In other countries, as in Spain and Japan, the privilege of domicile is deemed so important as to be found in the Bill
of Rights of the Constitution. Under the American constitutional system, liberty of abode is a principle so deeply
imbedded in jurisprudence and considered so elementary in nature as not even to require a constitutional sanction.
Even the Governor-General of the Philippine Islands, even the President of the United States, who has often been
said to exercise more power than any king or potentate, has no such arbitrary prerogative, either inherent or
express. Much less, therefore, has the executive of a municipality, who acts within a sphere of delegated powers. If
the mayor and the chief of police could, at their mere behest or even for the most praiseworthy of motives, render
the liberty of the citizen so insecure, then the presidents and chiefs of police of one thousand other municipalities of
the Philippines have the same privilege. If these officials can take to themselves such power, then any other official
can do the same. And if any official can exercise the power, then all persons would have just as much right to do so.
And if a prostitute could be sent against her wishes and under no law from one locality to another within the country,
then officialdom can hold the same club over the head of any citizen.
Law defines power. Centuries ago Magna Charta decreed that — "No freeman shall be taken, or imprisoned, or be
disseized of his freehold, or liberties, or free customs, or be outlawed, or exiled, or any other wise destroyed; nor will
we pass upon him nor condemn him, but by lawful judgment of his peers or by the law of the land. We will sell to no
man, we will not deny or defer to any man either justice or right." (Magna Charta, 9 Hen., 111, 1225, Cap. 29; 1 eng.
stat. at Large, 7.) No official, no matter how high, is above the law. The courts are the forum which functionate to
safeguard individual liberty and to punish official transgressors. "The law," said Justice Miller, delivering the opinion
of the Supreme Court of the United States, "is the only supreme power in our system of government, and every man
who by accepting office participates in its functions is only the more strongly bound to submit to that supremacy, and
to observe the limitations which it imposes upon the exercise of the authority which it gives." (U.S. vs. Lee [1882],
106 U.S., 196, 220.) "The very idea," said Justice Matthews of the same high tribunal in another case, "that one man
may be compelled to hold his life, or the means of living, or any material right essential to the enjoyment of life, at
the mere will of another, seems to be intolerable in any country where freedom prevails, as being the essence of
slavery itself." (Yick Wo vs. Hopkins [1886], 118 U.S., 356, 370.) All this explains the motive in issuing the writ
of habeas corpus, and makes clear why we said in the very beginning that the primary question was whether the
courts should permit a government of men or a government of laws to be established in the Philippine Islands.
What are the remedies of the unhappy victims of official oppression? The remedies of the citizen are three: (1) Civil
action; (2) criminal action, and (3) habeas corpus.
The first is an optional but rather slow process by which the aggrieved party may recoup money damages. It may
still rest with the parties in interest to pursue such an action, but it was never intended effectively and promptly to
meet any such situation as that now before us.
As to criminal responsibility, it is true that the Penal Code in force in these Islands provides:
Any public officer not thereunto authorized by law or by regulations of a general character in force in the
Philippines who shall banish any person to a place more than two hundred kilometers distant from his
domicile, except it be by virtue of the judgment of a court, shall be punished by a fine of not less than three
hundred and twenty-five and not more than three thousand two hundred and fifty pesetas.
Any public officer not thereunto expressly authorized by law or by regulation of a general character in force
in the Philippines who shall compel any person to change his domicile or residence shall suffer the penalty
of destierro and a fine of not less than six hundred and twenty-five and not more than six thousand two
hundred and fifty pesetas. (Art. 211.)
We entertain no doubt but that, if, after due investigation, the proper prosecuting officers find that any public officer
has violated this provision of law, these prosecutors will institute and press a criminal prosecution just as vigorously
as they have defended the same official in this action. Nevertheless, that the act may be a crime and that the
persons guilty thereof can be proceeded against, is no bar to the instant proceedings. To quote the words of Judge
Cooley in a case which will later be referred to — "It would be a monstrous anomaly in the law if to an application by
one unlawfully confined, ta be restored to his liberty, it could be a sufficient answer that the confinement was a
crime, and therefore might be continued indefinitely until the guilty party was tried and punished therefor by the slow
process of criminal procedure." (In the matter of Jackson [1867], 15 Mich., 416, 434.) The writ of habeas corpus was
devised and exists as a speedy and effectual remedy to relieve persons from unlawful restraint, and as the best and
only sufficient defense of personal freedom. Any further rights of the parties are left untouched by decision on the
writ, whose principal purpose is to set the individual at liberty.
Granted that habeas corpus is the proper remedy, respondents have raised three specific objections to its issuance
in this instance. The fiscal has argued (l) that there is a defect in parties petitioners, (2) that the Supreme Court
should not a assume jurisdiction, and (3) that the person in question are not restrained of their liberty by
respondents. It was finally suggested that the jurisdiction of the Mayor and the chief of police of the city of Manila
only extends to the city limits and that perforce they could not bring the women from Davao.
The first defense was not presented with any vigor by counsel. The petitioners were relatives and friends of the
deportees. The way the expulsion was conducted by the city officials made it impossible for the women to sign a
petition for habeas corpus. It was consequently proper for the writ to be submitted by persons in their behalf. (Code
of Criminal Procedure, sec. 78; Code of Civil Procedure, sec. 527.) The law, in its zealous regard for personal
liberty, even makes it the duty of a court or judge to grant a writ of habeas corpus if there is evidence that within the
court's jurisdiction a person is unjustly imprisoned or restrained of his liberty, though no application be made
therefor. (Code of Criminal Procedure, sec. 93.) Petitioners had standing in court.
The fiscal next contended that the writ should have been asked for in the Court of First Instance of Davao or should
have been made returnable before that court. It is a general rule of good practice that, to avoid unnecessary
expense and inconvenience, petitions for habeas corpus should be presented to the nearest judge of the court of
first instance. But this is not a hard and fast rule. The writ of habeas corpus may be granted by the Supreme Court
or any judge thereof enforcible anywhere in the Philippine Islands. (Code of Criminal Procedure, sec. 79; Code of
Civil Procedure, sec. 526.) Whether the writ shall be made returnable before the Supreme Court or before an inferior
court rests in the discretion of the Supreme Court and is dependent on the particular circumstances. In this instance
it was not shown that the Court of First Instance of Davao was in session, or that the women had any means by
which to advance their plea before that court. On the other hand, it was shown that the petitioners with their
attorneys, and the two original respondents with their attorney, were in Manila; it was shown that the case involved
parties situated in different parts of the Islands; it was shown that the women might still be imprisoned or restrained
of their liberty; and it was shown that if the writ was to accomplish its purpose, it must be taken cognizance of and
decided immediately by the appellate court. The failure of the superior court to consider the application and then to
grant the writ would have amounted to a denial of the benefits of the writ.
The last argument of the fiscal is more plausible and more difficult to meet. When the writ was prayed for, says
counsel, the parties in whose behalf it was asked were under no restraint; the women, it is claimed, were free in
Davao, and the jurisdiction of the mayor and the chief of police did not extend beyond the city limits. At first blush,
this is a tenable position. On closer examination, acceptance of such dictum is found to be perversive of the first
principles of the writ of habeas corpus.
A prime specification of an application for a writ of habeas corpus is restraint of liberty. The essential object and
purpose of the writ of habeas corpus is to inquire into all manner of involuntary restraint as distinguished from
voluntary, and to relieve a person therefrom if such restraint is illegal. Any restraint which will preclude freedom of
action is sufficient. The forcible taking of these women from Manila by officials of that city, who handed them over to
other parties, who deposited them in a distant region, deprived these women of freedom of locomotion just as
effectively as if they had been imprisoned. Placed in Davao without either money or personal belongings, they were
prevented from exercising the liberty of going when and where they pleased. The restraint of liberty which began in
Manila continued until the aggrieved parties were returned to Manila and released or until they freely and truly
waived his right.
Consider for a moment what an agreement with such a defense would mean. The chief executive of any
municipality in the Philippines could forcibly and illegally take a private citizen and place him beyond the boundaries
of the municipality, and then, when called upon to defend his official action, could calmly fold his hands and claim
that the person was under no restraint and that he, the official, had no jurisdiction over this other municipality. We
believe the true principle should be that, if the respondent is within the jurisdiction of the court and has it in his power
to obey the order of the court and thus to undo the wrong that he has inflicted, he should be compelled to do so.
Even if the party to whom the writ is addressed has illegally parted with the custody of a person before the
application for the writ is no reason why the writ should not issue. If the mayor and the chief of police, acting under
no authority of law, could deport these women from the city of Manila to Davao, the same officials must necessarily
have the same means to return them from Davao to Manila. The respondents, within the reach of process, may not
be permitted to restrain a fellow citizen of her liberty by forcing her to change her domicile and to avow the act with
impunity in the courts, while the person who has lost her birthright of liberty has no effective recourse. The great writ
of liberty may not thus be easily evaded.
It must be that some such question has heretofore been presented to the courts for decision. Nevertheless, strange
as it may seem, a close examination of the authorities fails to reveal any analogous case. Certain decisions of
respectable courts are however very persuasive in nature.
A question came before the Supreme Court of the State of Michigan at an early date as to whether or not a writ
ofhabeas corpus would issue from the Supreme Court to a person within the jurisdiction of the State to bring into the
State a minor child under guardianship in the State, who has been and continues to be detained in another State.
The membership of the Michigan Supreme Court at this time was notable. It was composed of Martin, chief justice,
and Cooley, Campbell, and Christiancy, justices. On the question presented the court was equally divided.
Campbell, J., with whom concurred Martin, C. J., held that the writ should be quashed. Cooley, J., one of the most
distinguished American judges and law-writers, with whom concurred Christiancy, J., held that the writ should issue.
Since the opinion of Justice Campbell was predicated to a large extent on his conception of the English decisions,
and since, as will hereafter appear, the English courts have taken a contrary view, only the following eloquent
passages from the opinion of Justice Cooley are quoted:
I have not yet seen sufficient reason to doubt the power of this court to issue the present writ on the petition
which was laid before us. . . .
It would be strange indeed if, at this late day, after the eulogiums of six centuries and a half have been
expended upon the Magna Charta, and rivers of blood shed for its establishment; after its many
confirmations, until Coke could declare in his speech on the petition of right that "Magna Charta was such a
fellow that he will have no sovereign," and after the extension of its benefits and securities by the petition of
right, bill of rights and habeas corpus acts, it should now be discovered that evasion of that great clause for
the protection of personal liberty, which is the life and soul of the whole instrument, is so easy as is claimed
here. If it is so, it is important that it be determined without delay, that the legislature may apply the proper
remedy, as I can not doubt they would, on the subject being brought to their notice. . . .
The second proposition — that the statutory provisions are confined to the case of imprisonment within the
state — seems to me to be based upon a misconception as to the source of our jurisdiction. It was never the
case in England that the court of king's bench derived its jurisdiction to issue and enforce this writ from the
statute. Statutes were not passed to give the right, but to compel the observance of rights which existed. . . .
The important fact to be observed in regard to the mode of procedure upon this writ is, that it is directed to
and served upon, not the person confined, but his jailor. It does not reach the former except through the
latter. The officer or person who serves it does not unbar the prison doors, and set the prisoner free, but the
court relieves him by compelling the oppressor to release his constraint. The whole force of the writ is spent
upon the respondent, and if he fails to obey it, the means to be resorted to for the purposes of compulsion
are fine and imprisonment. This is the ordinary mode of affording relief, and if any other means are resorted
to, they are only auxiliary to those which are usual. The place of confinement is, therefore, not important to
the relief, if the guilty party is within reach of process, so that by the power of the court he can be compelled
to release his grasp. The difficulty of affording redress is not increased by the confinement being beyond the
limits of the state, except as greater distance may affect it. The important question is, where the power of
control exercised? And I am aware of no other remedy. (In the matter of Jackson [1867], 15 Mich., 416.)
The opinion of Judge Cooley has since been accepted as authoritative by other courts. (Rivers vs. Mitchell [1881],
57 Iowa, 193; Breene vs. People [1911], Colo., 117 Pac. Rep., 1000; Ex parte Young [1892], 50 Fed., 526.)
The English courts have given careful consideration to the subject. Thus, a child had been taken out of English by
the respondent. A writ of habeas corpus was issued by the Queen's Bench Division upon the application of the
mother and her husband directing the defendant to produce the child. The judge at chambers gave defendant until a
certain date to produce the child, but he did not do so. His return stated that the child before the issuance of the writ
had been handed over by him to another; that it was no longer in his custody or control, and that it was impossible
for him to obey the writ. He was found in contempt of court. On appeal, the court, through Lord Esher, M. R., said:
A writ of habeas corpus was ordered to issue, and was issued on January 22. That writ commanded the
defendant to have the body of the child before a judge in chambers at the Royal Courts of Justice
immediately after the receipt of the writ, together with the cause of her being taken and detained. That is a
command to bring the child before the judge and must be obeyed, unless some lawful reason can be shown
to excuse the nonproduction of the child. If it could be shown that by reason of his having lawfully parted
with the possession of the child before the issuing of the writ, the defendant had no longer power to produce
the child, that might be an answer; but in the absence of any lawful reason he is bound to produce the child,
and, if he does not, he is in contempt of the Court for not obeying the writ without lawful excuse. Many
efforts have been made in argument to shift the question of contempt to some anterior period for the
purpose of showing that what was done at some time prior to the writ cannot be a contempt. But the
question is not as to what was done before the issue of the writ. The question is whether there has been a
contempt in disobeying the writ it was issued by not producing the child in obedience to its commands. (The
Queen vs. Bernardo [1889], 23 Q. B. D., 305. See also to the same effect the Irish case of In re Matthews,
12 Ir. Com. Law Rep. [N. S.], 233; The Queen vs. Barnardo, Gossage's Case [1890], 24 Q. B. D., 283.)
A decision coming from the Federal Courts is also of interest. A habeas corpus was directed to the defendant to
have before the circuit court of the District of Columbia three colored persons, with the cause of their detention.
Davis, in his return to the writ, stated on oath that he had purchased the negroes as slaves in the city of
Washington; that, as he believed, they were removed beyond the District of Columbia before the service of the writ
of habeas corpus, and that they were then beyond his control and out of his custody. The evidence tended to show
that Davis had removed the negroes because he suspected they would apply for a writ of habeas corpus. The court
held the return to be evasive and insufficient, and that Davis was bound to produce the negroes, and Davis being
present in court, and refusing to produce them, ordered that he be committed to the custody of the marshall until he
should produce the negroes, or be otherwise discharged in due course of law. The court afterwards ordered that
Davis be released upon the production of two of the negroes, for one of the negroes had run away and been lodged
in jail in Maryland. Davis produced the two negroes on the last day of the term. (United States vs. Davis [1839], 5
Cranch C.C., 622, Fed. Cas. No. 14926. See also Robb vs. Connolly [1883], 111 U.S., 624; Church on Habeas, 2nd
ed., p. 170.)
We find, therefore, both on reason and authority, that no one of the defense offered by the respondents constituted
a legitimate bar to the granting of the writ of habeas corpus.
There remains to be considered whether the respondent complied with the two orders of the Supreme Court
awarding the writ of habeas corpus, and if it be found that they did not, whether the contempt should be punished or
be taken as purged.
The first order, it will be recalled, directed Justo Lukban, Anton Hohmann, Francisco Sales, and Feliciano Yñigo to
present the persons named in the writ before the court on December 2, 1918. The order was dated November 4,
1918. The respondents were thus given ample time, practically one month, to comply with the writ. As far as the
record discloses, the Mayor of the city of Manila waited until the 21st of November before sending a telegram to the
provincial governor of Davao. According to the response of the attorney for the Bureau of Labor to the telegram of
his chief, there were then in Davao women who desired to return to Manila, but who should not be permitted to do
so because of having contracted debts. The half-hearted effort naturally resulted in none of the parties in question
being brought before the court on the day named.
For the respondents to have fulfilled the court's order, three optional courses were open: (1) They could have
produced the bodies of the persons according to the command of the writ; or (2) they could have shown by affidavit
that on account of sickness or infirmity those persons could not safely be brought before the court; or (3) they could
have presented affidavits to show that the parties in question or their attorney waived the right to be present. (Code
of Criminal Procedure, sec. 87.) They did not produce the bodies of the persons in whose behalf the writ was
granted; they did not show impossibility of performance; and they did not present writings that waived the right to be
present by those interested. Instead a few stereotyped affidavits purporting to show that the women were contended
with their life in Davao, some of which have since been repudiated by the signers, were appended to the return.
That through ordinary diligence a considerable number of the women, at least sixty, could have been brought back
to Manila is demonstrated to be found in the municipality of Davao, and that about this number either returned at
their own expense or were produced at the second hearing by the respondents.
The court, at the time the return to its first order was made, would have been warranted summarily in finding the
respondents guilty of contempt of court, and in sending them to jail until they obeyed the order. Their excuses for the
non-production of the persons were far from sufficient. The, authorities cited herein pertaining to somewhat similar
facts all tend to indicate with what exactitude a habeas corpus writ must be fulfilled. For example, in Gossage's
case, supra, the Magistrate in referring to an earlier decision of the Court, said: "We thought that, having brought
about that state of things by his own illegal act, he must take the consequences; and we said that he was bound to
use every effort to get the child back; that he must do much more than write letters for the purpose; that he must
advertise in America, and even if necessary himself go after the child, and do everything that mortal man could do in
the matter; and that the court would only accept clear proof of an absolute impossibility by way of excuse." In other
words, the return did not show that every possible effort to produce the women was made by the respondents. That
the court forebore at this time to take drastic action was because it did not wish to see presented to the public gaze
the spectacle of a clash between executive officials and the judiciary, and because it desired to give the
respondents another chance to demonstrate their good faith and to mitigate their wrong.
In response to the second order of the court, the respondents appear to have become more zealous and to have
shown a better spirit. Agents were dispatched to Mindanao, placards were posted, the constabulary and the
municipal police joined in rounding up the women, and a steamer with free transportation to Manila was provided.
While charges and counter-charges in such a bitterly contested case are to be expected, and while a critical reading
of the record might reveal a failure of literal fulfillment with our mandate, we come to conclude that there is a
substantial compliance with it. Our finding to this effect may be influenced somewhat by our sincere desire to see
this unhappy incident finally closed. If any wrong is now being perpetrated in Davao, it should receive an executive
investigation. If any particular individual is still restrained of her liberty, it can be made the object of separate habeas
corpus proceedings.
Since the writ has already been granted, and since we find a substantial compliance with it, nothing further in this
connection remains to be done.
The attorney for the petitioners asks that we find in contempt of court Justo Lukban, Mayor of the city of Manila,
Anton Hohmann, chief of police of the city of Manila, Jose Rodriguez, and Fernando Ordax, members of the police
force of the city of Manila, Modesto Joaquin, the attorney for the Bureau of Labor, Feliciano Yñigo, anhacendero of
Davao, and Anacleto Diaz, Fiscal of the city of Manila.
The power to punish for contempt of court should be exercised on the preservative and not on the vindictive
principle. Only occasionally should the court invoke its inherent power in order to retain that respect without which
the administration of justice must falter or fail. Nevertheless when one is commanded to produce a certain person
and does not do so, and does not offer a valid excuse, a court must, to vindicate its authority, adjudge the
respondent to be guilty of contempt, and must order him either imprisoned or fined. An officer's failure to produce
the body of a person in obedience to a writ of habeas corpus when he has power to do so, is a contempt committed
in the face of the court. (Ex parte Sterns [1888], 77 Cal., 156; In re Patterson [1888], 99 N. C., 407.)
With all the facts and circumstances in mind, and with judicial regard for human imperfections, we cannot say that
any of the respondents, with the possible exception of the first named, has flatly disobeyed the court by acting in
opposition to its authority. Respondents Hohmann, Rodriguez, Ordax, and Joaquin only followed the orders of their
chiefs, and while, under the law of public officers, this does not exonerate them entirely, it is nevertheless a powerful
mitigating circumstance. The hacendero Yñigo appears to have been drawn into the case through a misconstruction
by counsel of telegraphic communications. The city fiscal, Anacleto Diaz, would seem to have done no more than to
fulfill his duty as the legal representative of the city government. Finding him innocent of any disrespect to the court,
his counter-motion to strike from the record the memorandum of attorney for the petitioners, which brings him into
this undesirable position, must be granted. When all is said and done, as far as this record discloses, the official who
was primarily responsible for the unlawful deportation, who ordered the police to accomplish the same, who made
arrangements for the steamers and the constabulary, who conducted the negotiations with the Bureau of Labor, and
who later, as the head of the city government, had it within his power to facilitate the return of the unfortunate
women to Manila, was Justo Lukban, the Mayor of the city of Manila. His intention to suppress the social evil was
commendable. His methods were unlawful. His regard for the writ of habeas corpus issued by the court was only
tardily and reluctantly acknowledged.
It would be possible to turn to the provisions of section 546 of the Code of Civil Procedure, which relates to the
penalty for disobeying the writ, and in pursuance thereof to require respondent Lukban to forfeit to the parties
aggrieved as much as P400 each, which would reach to many thousands of pesos, and in addition to deal with him
as for a contempt. Some members of the court are inclined to this stern view. It would also be possible to find that
since respondent Lukban did comply substantially with the second order of the court, he has purged his contempt of
the first order. Some members of the court are inclined to this merciful view. Between the two extremes appears to
lie the correct finding. The failure of respondent Lukban to obey the first mandate of the court tended to belittle and
embarrass the administration of justice to such an extent that his later activity may be considered only as
extenuating his conduct. A nominal fine will at once command such respect without being unduly oppressive — such
an amount is P100.
In resume — as before stated, no further action on the writ of habeas corpus is necessary. The respondents
Hohmann, Rodriguez, Ordax, Joaquin, Yñigo, and Diaz are found not to be in contempt of court. Respondent
Lukban is found in contempt of court and shall pay into the office of the clerk of the Supreme Court within five days
the sum of one hundred pesos (P100). The motion of the fiscal of the city of Manila to strike from the record
the Replica al Memorandum de los Recurridos of January 25, 1919, is granted. Costs shall be taxed against
respondents. So ordered.
In concluding this tedious and disagreeable task, may we not be permitted to express the hope that this decision
may serve to bulwark the fortifications of an orderly government of laws and to protect individual liberty from illegal
encroachment.
Arellano, C.J., Avanceña and Moir, JJ., concur.

Johnson, and Street, JJ., concur in the result.
Separate Opinions
TORRES, J., dissenting:
The undersigned does not entirely agree to the opinion of the majority in the decision of the habeas
corpusproceeding against Justo Lukban, the mayor of this city.
There is nothing in the record that shows the motive which impelled Mayor Lukban to oblige a great number of
women of various ages, inmates of the houses of prostitution situated in Gardenia Street, district of Sampaloc, to
change their residence.
We know no express law, regulation, or ordinance which clearly prohibits the opening of public houses of
prostitution, as those in the said Gardenia Street, Sampaloc. For this reason, when more than one hundred and fifty
women were assembled and placed aboard a steamer and transported to Davao, considering that the existence of
the said houses of prostitution has been tolerated for so long a time, it is undeniable that the mayor of the city, in
proceeding in the manner shown, acted without authority of any legal provision which constitutes an exception to the
laws guaranteeing the liberty and the individual rights of the residents of the city of Manila.
We do not believe in the pomp and obstentation of force displayed by the police in complying with the order of the
mayor of the city; neither do we believe in the necessity of taking them to the distant district of Davao. The said
governmental authority, in carrying out his intention to suppress the segregated district or the community formed by
those women in Gardenia Street, could have obliged the said women to return to their former residences in this city
or in the provinces, without the necessity of transporting them to Mindanao; hence the said official is obliged to bring
back the women who are still in Davao so that they may return to the places in which they lived prior to their
becoming inmates of certain houses in Gardenia Street.
As regards the manner whereby the mayor complied with the orders of this court, we do not find any apparent
disobedience and marked absence of respect in the steps taken by the mayor of the city and his subordinates, if we
take into account the difficulties encountered in bringing the said women who were free at Davao and presenting
them before this court within the time fixed, inasmuch as it does not appear that the said women were living together
in a given place. It was not because they were really detained, but because on the first days there were no houses
in which they could live with a relative independent from one another, and as a proof that they were free a number of
them returned to Manila and the others succeeded in living separate from their companions who continued living
together.
To determine whether or not the mayor acted with a good purpose and legal object and whether he has acted in
good or bad faith in proceeding to dissolve the said community of prostitutes and to oblige them to change their
domicile, it is necessary to consider not only the rights and interests of the said women and especially of the patrons
who have been directing and conducting such a reproachable enterprise and shameful business in one of the
suburbs of this city, but also the rights and interests of the very numerous people of Manila where relatively a few
transients accidentally and for some days reside, the inhabitants thereof being more than three hundred thousand
(300,000) who can not, with indifference and without repugnance, live in the same place with so many unfortunate
women dedicated to prostitution.
If the material and moral interests of the community as well as the demands of social morality are to be taken into
account, it is not possible to sustain that it is legal and permissible to establish a house of pandering or prostitution
in the midst of an enlightened population, for, although there were no positive laws prohibiting the existence of such
houses within a district of Manila, the dictates of common sense and dictates of conscience of its inhabitants are
sufficient to warrant the public administration, acting correctly, in exercising the inevitable duty of ordering the
closing and abandonment of a house of prostitution ostensibly open to the public, and of obliging the inmates
thereof to leave it, although such a house is inhabited by its true owner who invokes in his behalf the protection of
the constitutional law guaranteeing his liberty, his individual rights, and his right to property.
A cholera patient, a leper, or any other person affected by a known contagious disease cannot invoke in his favor
the constitutional law which guarantees his liberty and individual rights, should the administrative authority order his
hospitalization, reclusion, or concentration in a certain island or distant point in order to free from contagious the
great majority of the inhabitants of the country who fortunately do not have such diseases. The same reasons exist
or stand good with respect to the unfortunate women dedicated to prostitution, and such reasons become stronger
because the first persons named have contracted their diseases without their knowledge and even against their will,
whereas the unfortunate prostitutes voluntarily adopted such manner of living and spontaneously accepted all its
consequences, knowing positively that their constant intercourse with men of all classes, notwithstanding the
cleanliness and precaution which they are wont to adopt, gives way to the spread or multiplication of the disease
known as syphilis, a venereal disease, which, although it constitutes a secret disease among men and women, is
still prejudicial to the human species in the same degree, scope, and seriousness as cholera, tuberculosis, leprosy,
pest, typhoid, and other contagious diseases which produce great mortality and very serious prejudice to poor
humanity.
If a young woman, instead of engaging in an occupation or works suitable to her sex, which can give her sufficient
remuneration for her subsistence, prefers to put herself under the will of another woman who is usually older than
she is and who is the manager or owner of a house of prostitution, or spontaneously dedicates herself to this
shameful profession, it is undeniable that she voluntarily and with her own knowledge renounces her liberty and
individual rights guaranteed by the Constitution, because it is evident that she can not join the society of decent
women nor can she expect to get the same respect that is due to the latter, nor is it possible for her to live within the
community or society with the same liberty and rights enjoyed by every citizen. Considering her dishonorable
conduct and life, she should therefore be comprised within that class which is always subject to the police and
sanitary regulations conducive to the maintenance of public decency and morality and to the conservation of public
health, and for this reason it should not permitted that the unfortunate women dedicated to prostitution evade the
just orders and resolutions adopted by the administrative authorities.
It is regrettable that unnecessary rigor was employed against the said poor women, but those who have been
worrying so much about the prejudice resulting from a governmental measure, which being a very drastic remedy
may be considered arbitrary, have failed to consider with due reflection the interests of the inhabitants of this city in
general and particularly the duties and responsibilities weighing upon the authorities which administer and govern it;
they have forgotten that many of those who criticize and censure the mayor are fathers of families and are in duty
bound to take care of their children.
For the foregoing reasons, we reach the conclusion that when the petitioners, because of the abnormal life they
assumed, were obliged to change their residence not by a private citizen but by the mayor of the city who is directly
responsible for the conservation of public health and social morality, the latter could take the step he had taken,
availing himself of the services of the police in good faith and only with the purpose of protecting the immense
majority of the population from the social evils and diseases which the houses of prostitution situated in Gardenia
Street have been producing, which houses have been constituting for years a true center for the propagation of
general diseases and other evils derived therefrom. Hence, in ordering the dissolution and abandonment of the said
houses of prostitution and the change of the domicile of the inmates thereof, the mayor did not in bad faith violate
the constitutional laws which guarantees the liberty and the individual rights of every Filipino, inasmuch as the
women petitioners do not absolutely enjoy the said liberty and rights, the exercise of which they have voluntarily
renounced in exchange for the free practice of their shameful profession.
In very highly advanced and civilized countries, there have been adopted by the administrative authorities similar
measures, more or less rigorous, respecting prostitutes, considering them prejudicial to the people, although it is
true that in the execution of such measures more humane and less drastic procedures, fortiter in re et suaviter in
forma, have been adopted, but such procedures have always had in view the ultimate object of the Government for
the sake of the community, that is, putting an end to the living together in a certain place of women dedicated to
prostitution and changing their domicile, with the problematical hope that they adopt another manner of living which
is better and more useful to themselves and to society.
In view of the foregoing remarks, we should hold, as we hereby hold, that Mayor Justo Lukban is obliged to take
back and restore the said women who are at present found in Davao, and who desire to return to their former
respective residences, not in Gardenia Street, Sampaloc District, with the exception of the prostitutes who should
expressly make known to the clerk of court their preference to reside in Davao, which manifestation must be made
under oath. This resolution must be transmitted to the mayor within the shortest time possible for its due
compliance. The costs shall be charged de officio.
ARAULLO, J., dissenting in part:
I regret to dissent from the respectable opinion of the majority in the decision rendered in these proceedings, with
respect to the finding as to the importance of the contempt committed, according to the same decision, by Justo
Lukban, Mayor of the city of Manila, and the consequent imposition upon him of a nominal fine of P100.
In the said decision, it is said:

The first order, it will be recalled, directed Justo Lukban, Anton Hohmann, Francisco Sales, and Feliciano
Yñigo to present the persons named in the writ before the court on December 2, 1918. The order was dated
November 4, 1918. The respondents were thus given ample time, practically one month, to comply with the
writ. As far as the record disclosed, the mayor of the city of Manila waited until the 21st of November before
sending a telegram to the provincial governor of Davao. According to the response of the Attorney for the
Bureau of Labor to the telegram of his chief, there were then in Davao women who desired to return to
Manila, but who should not be permitted to do so because of having contracted debts. The half-hearted
effort naturally resulted in none of the parties in question being brought before the court on the day named.
In accordance with section 87 of General Orders No. 58, as said in the same decision, the respondents, for the
purpose of complying with the order of the court, could have, (1) produced the bodies of the persons according to
the command of the writ; (2) shown by affidavits that on account of sickness or infirmity the said women could not
safely be brought before this court; and (3) presented affidavits to show that the parties in question or their lawyers
waived their right to be present. According to the same decision, the said respondents ". . . did not produce the
bodies of the persons in whose behalf the writ was granted; did not show impossibility of performance; and did not
present writings, that waived the right to be present by those interested. Instead, a few stereotyped affidavits
purporting to show that the women were contented with their life in Davao, some of which have since been
repudiated by the signers, were appended to the return. That through ordinary diligence a considerable number of
the women, at least sixty, could have been brought back to Manila is demonstrated by the fact that during this time
they were easily to be found in the municipality of Davao, and that about this number either returned at their own
expense or were produced at the second hearing by the respondents."
The majority opinion also recognized that, "That court, at the time the return to its first order was made, would have
been warranted summarily in finding the respondent guilty of contempt of court, and in sending them to jail until they
obeyed the order. Their excuses for the non production of the persons were far from sufficient." To corroborate this,
the majority decision cites the case of the Queen vs. Barnardo, Gossage's Case ([1890], 24 Q. B. D., 283) and
added "that the return did not show that every possible effort to produce the women was made by the respondents."
When the said return by the respondents was made to this court in banc and the case discussed, my opinion was
that Mayor Lukban should have been immediately punished for contempt. Nevertheless, a second order referred to
in the decision was issued on December 10, 1918, requiring the respondents to produce before the court, on
January 13, 1919, the women who were not in Manila, unless they could show that it was impossible to comply with
the said order on the two grounds previously mentioned. With respect to this second order, the same decision has
the following to say:
In response to the second order of the court, the respondents appear to have become more zealous and to
have shown a better spirit. Agents were dispatched to Mindanao, placards were posted, the constabulary
and the municipal police joined in rounding up the women, and a steamer with free transportation to Manila
was provided. While charges and countercharges in such a bitterly contested case are to be expected, and
while a critical reading of the record might reveal a failure of literal fulfillment with our mandate, we come to
conclude that there is a substantial compliance with it.
I do not agree to this conclusion.
The respondent mayor of the city of Manila, Justo Lukban, let 17 days elapse from the date of the issuance of the
first order on November 4th till the 21st of the same month before taking the first step for compliance with the
mandate of the said order; he waited till the 21st of November, as the decision says, before he sent a telegram to
the provincial governor o f Davao and naturally this half-hearted effort, as is so qualified in the decision, resulted in
that none of the women appeared before this court on December 2nd. Thus, the said order was not complied with,
and in addition to this noncompliance there was the circumstances that seven of the said women having returned to
Manila at their own expense before the said second day of December and being in the antechamber of the court
room, which fact was known to Chief of Police Hohmann, who was then present at the trial and to the attorney for
the respondents, were not produced before the court by the respondents nor did the latter show any effort to present
them, in spite of the fact that their attention was called to this particular by the undersigned.
The result of the said second order was, as is said in the same decision, that the respondents, on January 13th, the
day fixed for the protection of the women before this court, presented technically the seven (7) women above-
mentioned who had returned to the city at their own expense and the other eight (8) women whom the respondents
themselves brought to Manila, alleging moreover that their agents and subordinates succeeded in bringing them
from Davao with their consent; that in Davao they found eighty-one (81) women who, when asked if they desired to
return to Manila with free transportation, renounced such a right, as is shown in the affidavits presented by the
respondents to this effect; that, through other means, fifty-nine (59) women have already returned to Manila, but
notwithstanding the efforts made to find them it was not possible to locate the whereabouts of twenty-six (26) of
them. Thus, in short, out of the one hundred and eighty-one (181) women who, as has been previously said, have
been illegally detained by Mayor Lukban and Chief of Police Hohmann and transported to Davao against their will,
only eight (8) have been brought to Manila and presented before this court by the respondents in compliance with
the said two orders. Fifty-nine (59) of them have returned to Manila through other means not furnished by the
respondents, twenty-six of whom were brought by the attorney for the petitioners, Mendoza, on his return from
Davao. The said attorney paid out of his own pocket the transportation of the said twenty-six women. Adding to
these numbers the other seven (7) women who returned to this city at their own expense before January 13 we
have a total of sixty-six (66), which evidently proves, on the one hand, the falsity of the allegation by the
respondents in their first answer at the trial of December 2, 1918, giving as one of the reasons for their inability to
present any of the said women that the latter were content with their life in Mindanao and did not desire to return to
Manila; and, on the other hand, that the respondents, especially the first named, that is Mayor Justo Lukban, who
acted as chief and principal in all that refers to the compliance with the orders issued by this court, could bring
before December 2nd, the date of the first hearing of the case, as well as before January 13th, the date fixed for the
compliance with the second order, if not the seventy-four (74) women already indicated, at least a great number of
them, or at least sixty (60) of them, as is said in the majority decision, inasmuch as the said respondent could count
upon the aid of the Constabulary forces and the municipal police, and had transportation facilities for the purpose.
But the said respondent mayor brought only eight (8) of the women before this court on January 13th. This fact can
not, in my judgment, with due respect to the majority opinion, justify the conclusion that the said respondent has
substantially complied with the second order of this court, but on the other hand demonstrates that he had not
complied with the mandate of this court in its first and second orders; that neither of the said orders has been
complied with by the respondent Justo Lukban, Mayor of the city of Manila, who is, according to the majority
decision, principally responsible for the contempt, to which conclusion I agree. The conduct of the said respondent
with respect to the second order confirms the contempt committed by non-compliance with the first order and
constitutes a new contempt because of non-compliance with the second, because of the production of only eight (8)
of the one hundred and eighty-one (181) women who have been illegally detained by virtue of his order and
transported to Davao against their will, committing the twenty-six (26) women who could not be found in Davao,
demonstrates in my opinion that, notwithstanding the nature of the case which deals with the remedy of habeas
corpus, presented by the petitioners and involving the question whether they should or not be granted their liberty,
the respondent has not given due attention to the same nor has he made any effort to comply with the second order.
In other words, he has disobeyed the said two orders; has despised the authority of this court; has failed to give the
respect due to justice; and lastly, he has created and placed obstacles to the administration of justice in the
said habeas corpus proceeding, thus preventing, because of his notorious disobedience, the resolution of the said
proceeding with the promptness which the nature of the same required.
Contempt of court has been defined as a despising of the authority, justice, or dignity of the court; and he is
guilty of contempt whose conduct is such as tends to bring the authority and administration of the law into
disrespect or disregard. . . ." (Ruling Case Law, vol. 6, p. 488.)
It is a general principle that a disobedience of any valid order of the court constitutes contempt, unless the
defendant is unable to comply therewith. (Ruling Case Law, vol. 6, p. 502.)
It is contempt to employ a subterfuge to evade the judgment of the court, or to obstruct or attempt to obstruct
the service of legal process. If a person hinders or prevents the service of process by deceiving the officer or
circumventing him by any means, the result is the same as though he had obstructed by some direct means.
(Ruling Case Law, vol. 6, p. 503.)
While it may seem somewhat incongruous to speak, as the courts often do, of enforcing respect for the law
and for the means it has provided in civilized communities for establishing justice, since true respect never
comes in that way, it is apparent nevertheless that the power to enforce decorum in the courts and
obedience to their orders and just measures is so essentially a part of the life of the courts that it would be
difficult to conceive of their usefulness or efficiency as existing without it. Therefore it may be said generally
that where due respect for the courts as ministers of the law is wanting, a necessity arises for the use of
compulsion, not, however, so much to excite individual respect as to compel obedience or to remove an
unlawful or unwarranted interference with the administration of justice. (Ruling Case Law, vol. 6, p. 487.)
The power to punish for contempt is as old as the law itself, and has been exercised from the earliest times.
In England it has been exerted when the contempt consisted of scandalizing the sovereign or his ministers,
the law-making power, or the courts. In the American states the power to punish for contempt, so far as the
executive department and the ministers of state are concerned, and in some degree so far as the legislative
department is concerned, is obsolete, but it has been almost universally preserved so far as regards the
judicial department. The power which the courts have of vindicating their own authority is a necessary
incident to every court of justice, whether of record or not; and the authority for issuing attachments in a
proper case for contempts out of court, it has been declared, stands upon the same immemorial usage as
supports the whole fabric of the common law. . . . (Ruling Case Law, vol. 6, p. 489.)
The undisputed importance of the orders of this court which have been disobeyed; the loss of the prestige of the
authority of the court which issued the said orders, which loss might have been caused by noncompliance with the
same orders on the part of the respondent Justo Lukban; the damages which might have been suffered by some of
the women illegally detained, in view of the fact that they were not brought to Manila by the respondents to be
presented before the court and of the further fact that some of them were obliged to come to this city at their own
expense while still others were brought to Manila by the attorney for the petitioners, who paid out of his own pocket
the transportation of the said women; and the delay which was necessarily incurred in the resolution of the petition
interposed by the said petitioners and which was due to the fact that the said orders were not opportunately and
duly obeyed and complied with, are circumstances which should be taken into account in imposing upon the
respondent Justo Lukban the penalty corresponding to the contempt committed by him, a penalty which, according
to section 236 of the Code of Civil Procedure, should consist of a fine not exceeding P1,000 or imprisonment not
exceeding months, or both such fine and imprisonment. In the imposition of the penalty, there should also be taken
into consideration the special circumstance that the contempt was committed by a public authority, the mayor of the
city of Manila, the first executive authority of the city, and consequently, the person obliged to be the first in giving an
example of obedience and respect for the laws and the valid and just orders of the duly constituted authorities as
well as for the orders emanating from the courts of justice, and in giving help and aid to the said courts in order that
justice may be administered with promptness and rectitude.
I believe, therefore, that instead of the fine of one hundred pesos (P100), there should be imposed upon the
respondent Justo Lukban a fine of five hundred pesos (P500), and all the costs should be charged against him.
Lastly, I believe it to be my duty to state here that the records of this proceeding should be transmitted to the
Attorney-General in order that, after a study of the same and deduction from the testimony which he may deem
necessary, and the proper transmittal of the same to the fiscal of the city of Manila and to the provincial fiscal of
Davao, both the latter shall present the corresponding informations for the prosecution and punishment of the
crimes which have been committed on the occasion when the illegal detention of the women was carried into effect
by Mayor Justo Lukban of the city of Manila and Chief of Police Anton Hohmann, and also of those crimes
committed by reason of the same detention and while the women were in Davao. This will be one of the means
whereby the just hope expressed in the majority decision will be realized, that is, that in the Philippine Islands there
should exist a government of laws and not a government of men and that this decision may serve to bulwark the
fortifications of an orderly Government of laws and to protect individual liberty from illegal encroachments.

Oposa Law Office For Petitioners. The Solicitor General For Respondents

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Republic of the Philippines

G.R. No. 101083 July 30, 1993

DAVIDE, JR., J.:

FELICIANO, J., concurring

Republic of the Philippines

BUREAU OF FISHERIES AND AQUATIC G.R. No. 169815

COMMISSION ON AUDIT, August 13, 2008

We deny the petition.

Republic of the Philippines

G.R. No. L-14639 March 25, 1919

ZACARIAS VILLAVICENCIO, ET AL., petitioners,

Alfonso Mendoza for petitioners.

Arellano, C.J., Avanceña and Moir, JJ., concur.

TORRES, J., dissenting:

ARAULLO, J., dissenting in part:

In the said decision, it is said:

I do not agree to this conclusion.

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