REPUBLIC OF THE PHILiPPINES

DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE
Quezon City

ApLil I ,2077

REYEI{UE MEMORANDUM CIRCULAR No. 3 8 *n l7

SUBJECT: Circularizing the Full Text of the Decision of the Supreme

Court dated Novemb er 29, 2016 in the case of Secretar3, of
Finance Cesar B. Purisima and Commissioner of Internal
Revenue Kirn S. Jacinto-Henares \/s. Representative
Carnrelo F. Lazatin and Ecozone Plastic Enterprises
Corporation n,ith G.R. No. 210588.

TO: All Internal Revenue Officials, Employees and Others

Con cern ed

For the inforination and guidance of all internal revellue officiais, employees and otirers
concerned, attacired as Amex "A" heleof is the decision of the Supreme Court datedNovember
29,2016 in the case of Secretarl, e; Finance Cesar B. Purisitla and Commissioner of Intemal
Revenue Kim S. Jacinto-Henares, vs. Representative Carmelo F, Lazatin and Ecozone Plastic
Enterprises Corporation witir G.R. No. 210588. The Supreme Courl en banc has ruled in the
above case that Revenue Reguiations (RR) No. 2-2012 is znull and void for being
unconstitutional.

Ai1 internai revenue officials and employees are hereby enjoined to give this Circular
as wide a publicity as possible.

, ffie^fo$=ry
CAESAR R. DULAY
Comntiss ioner of ltgernal R.eyenu e
fr05e0 0
ii UBE4'U 0t? Ii:1'lEiii'iAl RUi;Irlf''' tj
MG?, Dl\iislGii
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SuprefiIe 6uurt
{,tInrt iln

EN I]ANC

-SECRETAII\' OF FINANCE G.R. No. 210588

CESAR I}. I'URISIMA AND Present:
CON{MTSSIONEIT OF I]qTtrRNAL
REVENLTtr I(tM S. JACINTO- SERENO , Chie.f Jttstice,
I-[EJ\,,\I].ES, CARPIO,
Petitioners, VELASCO. JR,
LEONARDO-D]] CASTRO,
BRION,
PilRAr_TA,
BERSAIVIIN.
DEL CASTILLO,
PEREZ,
VEI SLIS - VIE,NDOZA
REYES,
PERLAS-BEITNABI],
LEONLN,
JARDELEZ.A," and
CAGUIOA, J-I

Promulgated:
REPIIE,SENTATIVE CAIIMELO F.
29,
LAZATIN AND trCOZONtr November 201-6
l,--",--*-'-
PLASTIC I!NTtr RI'RISE,S lr"{i11.[*- "*
4,q
i)
CORPORATIOJ\,
Respondents.

BUBEu\U 0f EIIEII.I;I^I RnE!-r.lE

rlscoRl'l]Iiif;E a;u.,rffi?N
DtrCISION
hlAY 0 uZ$\i,rf,tzn
//)
Bti.loir{, -r.:
R.ECEIVES
This is a direct recourse to tl-ris Cor-rrt fi-om the Regional Trial Court
(RTC),Branc6 58, Angeies City, tl'irough a petition lor revieui on certiorari'
lr,cler Rule 45 oltire Rr-rles of Conrt o11 a pure questio^n of lau'.'lhe petition
seeks the reversal of the Novenlber 8,2013 decision'of the R-TC
in SCA

l",Joparr dLl. to prior acti<lrl iis Srllir:iLol'(lcrleral.

llollr;, pp.'17-85.
I)enne,J bv Il'l'C l)rcsiclittg.ltrdge PlriiLrer-t l. IiLrrralcie : id. at 9-5-ll5
Decision d -

G.R No ll058E
'--1- l,

Case No. l2-410. [n the assailed decision, the RTC declared Revenue
Regulation (R/?) No. 2-2012 r-tncoustitr-rtional and u,ithout force arid effect.

The Facts

ln response to reports of slnllggiing oi petloielit-u and pett'oleurn

prodLrcts and to eltsltre the correct taxes are ltaid and collected, petitioner
Secretarl, o1' Finance Cesar V. Pr-irisima pursLlant to his alltilorit\r to
interpret tax lavvss ancl Llpon the recoltllxendation of petitioner
Courrnissioner of Internal Revenue (C1fi) I(irn S. Jacir-rto-Heuares signed RR
2-2012 on Februarl, 17,?012.

The RR reqLrires the pa)/ment of value-added tar (l',47) and excise tax
on the ii-nportation of all petroleurn ancl petroleum products cotning directiv
fi'ortr abroad eind bror,rght into the Piriiippines, inclr,rding Freeport and
economic zones [FEZs).4 It then allou,s the creciit ot t'efi-rnd of an1, VAT or

Section 4 of the 1997 National lntenral Reveuue Code (Irzx Cotle) provides. "Tite p.1'111'sf is
intel'pl'et the ltlovisions clf this Code and otlier tax larvs slrall be Lrnder the exclusive and original
-iLirisdiction of'the Conrnrissioner, sub-|ect to ret,ieiv b,v
tlte Secretart'of Fitratlce."
SECl.lON 3. l-AX ]-IIEA.TNIENT OF ALL PETROLEUI\4 AND PETROLEUIVI PRODLJCI.S
gvtPORTED AND i'l'S SUBSEQLJENT EXPORTAI-ION OR SALES 1-O FREEPOI1T Ar.rtD
ECONON4IC ZONE I.OCATORS OR OTIIER PERSONS/EI.TITITIES: REFUND OF TAXES
PAID; ,.\U]'IIORITY l"O RELEASE IN/IPORTED GOODS (ATRIG) AND OTFIEIl
ADI\4lNISTRA1'IVE REQLIII{EIvIENTS. -The Value-,.\dded and Excise tares u,hich are due otr
all petroleuur arrd petroleiim products thaf are impor-ted attd/or brought directli'from abroad to the
Phiiippines. including Freeport arid Economic zones, shall be paid by the ittipofter thereof to the
BLueau of Custortrs (BOC).

1'[e sLrbseqLleltt expollatiou or saleldelivel-y of these petrolettm or pett'oleutri products to t'e"istered

entel'pl'ises ep_foy,ing rax privileges u,ithin tlre Freeport and Ecotiotrlic zortes. as rvell as the sale of
said goods to persons engaged iu international shipping or itttemational air trarlspol-t operatiotts.
shall be sLrb-ject to \ot'o VAT. With respect to the \zAT paid on petrolertn-i ot'petroleLtnt products trY
the inrportet' on accollltt of afot'esaid 09'o VAT trahsactions/entities and the Excise tares paid otl
accoLlnt of sales to interrational carriers of Phitippine or Foreign Registt'y'tbr use or constttnplion
outside the Philippines or exen.lpt entities or agencies covered by tax tieaties, convetttions attd
ipternational agreements for their Lrse or consttntptiou (covet'ed by'Ceni ficatiorr ill sr.rch eirtifl,'5
favor), as u,eli as entities."vhich are by lar.r,exetlpt fi'onr irdirect taxes, tiie irnpor-tet'mav file a
claini fo; ct'edit or refund witlr the BOC, u,hich shall process tlte clainl for refund, subject to the
favorable endorsement ol the BIIt, in accomlance tvith existirig rules and procedures: Pt'ovided,
t5at nq clairl for reflund shall be granted uttiess it is properly'shou'p to the satisfaction of the BIR
tirat said petroleunt or petroleun-l products have been sold to a dLriy t'egistered locator atld have
been r-rtiiized in the registered activity/operation of the locator, or thai such ltave been soid and
have lteerr Lrsed for international shipping or air transport operatio]'ls, ol'that tlre errtiiies to vrlticit
tjre saici goocls u,ere soid al'e statlrtorill'zero-rated for VAT, andior exenlpt {i-ont Excise ta\es.

lrr the event that the said Freeport/Ecouonric zone registered enterprise shall subsequentll'
sell/iptrodrrce tlre petroleurr or petroler-rrn prodrrcts, or part of the voiutue thereof- into the cllstollls
ter.ritor-y (exce1;t sales of firel lor use in inter-natiottal olterations) or another Freeportr'Econontic
zorie r.egistereci enterpr-ise not enjoying tax priVilegos, no rehrnd for excise taxes silall be grattted
to the irnpor-ter tbr the proclLrct sold.'lri any event, the possessor of pett'oleuttt or petl'olelll'i]
pr.oclucts urust be able to present sufficient evidence tlrat the ercise taxes due thereon have been
paid, otheriyise the excise taxes due on said goods shall be collected fi-otlr said possessor/user.

I, case of saleiintr-oductiorr of petroleurl ancl petroleum proclucts, or pat't of the voittlne thel'eof. bv
ar Freeport/Econontic zope regisfered enterprise, or pail/r,olurne thereof, into the cLlstollls territol'\'
or to a Fr-eeport/Econorlic zone I'egistered elrleiprise not enjoyirlg tar pril ilege-s. 0r an-\'sale to an
enriry,or enjoying 0,76 VAT raie. ihe seller shall be liable foi 11".6 VA-l'. In iiris instattce, ito
refiirrcl ior VA-l- shall be allou,ed ihe irnporter or an as-qessnteni for-\i.{T slrall be issued io tlie said
iiril,cri.ier., ii'the r.efLird hns already been grailled. and attcilret' assesslllsilt foI V,{ i- siliili be rl.}acje
:rgainst ilre siller'.
BtiftS/\ii (jit IiiT[BriAL ]j[,i;Dri'r
q:4d }lvil'
P-ECSfiES e{C'}: !'l}i'l
A-lLt,
i,iir'/ {lI ll\i /+
1,,//*'r'
E3- J.! L :i f- 'i t2 :.*v
 Decision D @ G.R No 2itli88

excise tax paid f the tcrxpat,er proves that the petroleuin previolrslv Lrlor-rqht
in lras been sold to a dr-rly registelecl FEZ locator ancl Lrsed pursllant to tire
registerecl actjvity of sucl-r locator'.'

In other'\\,orc[s, an FEZ locator nrlist fir'st pav the requirecl tares Lrpolt
ertr1, into the FEZ oIa petroleunr prodL]ct. and n]LISt tirerealter pi'ove the use
of tlre petroleunr proclLrct for tire locator's registered actirrit), iLr order trr
secLil'e a credit [or the taxes paid.

On March 7, ?012, Carmelo F. Lazatin, in his capacitl, as Parlpanga

First District Representative, filecl a petition for prohibition and iniunctiont'
against the petitioners to annul and set aside RR 2-2012.

Lazatin posits that Republic Act No. (R {) 9400i treats tire Clarli
Special E,conouric Zone and ClaLIi Freeport Zone (together irereinalier
rei"errecl to zrs Clarlc IrEZ) as a selrarate customs territory and allours tar ar-id
clLrty-fi-ee iurportations of rau, materials, capitai and equiprnent iirto tire zor-ie.
'fhr:s, the imposition of VAT and ercise tax, even ou the impoi'tation of
petroler:rl prodr-rcts into FEZs (lilie Clarlt FEZ1, directly contratzertes the
larv.

'fire
respondent Ecozone Piastic Enterprises Cotporation (EPEC)
sor-igirt to intervene in the proceedings as a co-petitioner and accordingll,
entered its appearance and moved fbr leave of court to file its petition-iu-
interventiou.s

EPIIC ciaims that, as a Clarl<FEZ locator, it stands to suffet-u,heu RR

2-?01? is irnplen-iented. EPEC insists that RR 2-2A 12's uechanism of
reqr-riring even locators to pay ti-ie tax first and to subsequently clairn a credit
or to refi-rnd the tares paid effectively rerlo\/es the locators'tax-exetnpt
sta[u s.

tC initially issued a temporar1,

TIie R restraining order to sta)' the
irrrplerleutation of RR ?-?A1?. It eveirtually issued a r,r,rit of prelir-rtiuarv
ir-rirrrrction in its orcler clated April 4, 1011.

@H
b", i
t^ Cl
.::
u,
4
F:l For eacli aud every inrporlation of petroleuir ancl petroleLrttt pt-oducts, tlie ittlportel'tltereof slrall
seclit'e the prescribed ATRIC lt'onr the BIR's Excise Tar Reutrlator'y
piui lon (ETI1D), artd llar

n
,L
(-, tlre Vaiue-,A,ctcJed and excise taxes, as cou-tpttted, before tiie t'elease titeleof li'orli tlle BOC's
sfl; +'K .* custocil,. lp case of subsequetrt sale/infroduction to custolls territot-r,b1'a lrreepor-tiEcottot-rlic
l:=E
L I c=
o)O i5
zope-r-egistered enterprise o1' perroleurn'irnd prerroler-ttl prodrtcts, tire itrtltorter shall secltl'e tlte
.F r.Iecessar'), \\i ititdrarva I Certifi cate.
v,B r\) b.'
- E"r
F'or.ercise tax pul'poses, all inrporlels of petroleunr and peiroleutn products shall sectll'e a Pt?rl]lii
: N>5
.t''i"-I-i\ '\ l< to Operate r.vith the BIR's E"fltD. Suclt pelitrit shall prescribe tlre appropriate tenls and conditiotts
i:\..l \:tJ-
Lil
-a

wlriclr slrali include. anloug others, the issLrance ola \\iithdrarval Certifica'ie and the srtbniission of
-:1
H lj-J
H-
fe licluidatioir reports, fbr the Perrnitee's strict corltplia::ce.
L,n
L,
S\-{i
ld.
\ D
Rr.,llo, Pp. l3 l- l-13
,{iso prrtu,lt as "An ,4ct ,A.nterrdirrg I{cpLrLtlic Act }1o.7227. As ,{tnett.ieci. C)the r.r',isc' J'rilt)rYt} r\s
l-h t Ila-scs Ci)rtvelsior.r";\nci l)evelollt.]teirt Act Ol'1991, Arld }ror Oiher Purlltlses." iated Nlaicil 10. lOtt7
t O,t .\piil l, 20i2, IIPEC fllecl its Enu'1,of Appeaiance iviih ir4otron fbr l-eave to Fiie l)etiiitr:r-yi]- o
rr.irer'errri., (ti i-C ctecisiori. iit ar 106). L
{ lY
IM
u
!
Decision E G.R. No 210588

The petitioners questioned tl-re issltance of the writ. Oir Via,1, Il ,7017
[he1, filecl a pelition for certiorarie before the Colrrt of Appeals (C.4i
r0
assailing the RTC's order. The CA granted the petitioir and denied tl-re
I I
,espondlnts' sltbsecltrent motion for reconsicleration.

The respondents stood their ground bi, filing a petition for revielv ott
cerriorari before this Court (G R No. 108387) to reinstate the RTC's
irr.ir-rnction against tl-re impiementation of RR 2-2012, and Lr1' mot'ing for tire
issuance of a temporary restraining order and/or writ of prelitlinari'
ipjllrction. We denied the motion but neriertheless reqliired the petitioners to
coirlment on ti-re petition.

TI-re proceedin-e,s before tlie RTC in the meanu,hile continued. On

April 18, 2012, petitioner Lazattn amendecl his original petition, cortverting
it to a petition for cleclaratory relief.l2 Tl-re RTC admitted the ameuded
petition and allorved EPEC to itrterveue.

clecision clatecl Norrember 8, ?013, the RTC rtiled

in its in f-avor of
Lazatin and EPEC.

Fir.st, on ti-re procedilral aspect, tl-re RTC held that tlie origirial
petitiol's aineudment is allou,ed by the rules and that atnendments are
iar-gely preferred; it allou,ecl the amendmeut in the exercise of its soltnd
jLrclicial discretion to avoid mr-rltiplicity of suits and to give tire.parties an
LpportLurity to thresl-r out the issues ancl finally reach a conciusion.r3

Second, tlte RTC held that Lazatin and EPEC had legai standing to
qrrest.ioir the vaiiclity of RR 2-2An. Lazatin's allegatioi-r tl-rat RR 2-ZAI2
sflectively amencls ancl nroclifies RA 9400 gave him standing as a legislator.
the arnendment of a tar lar.r, is a po\ver tirat belongs exclusivell' to Congress.
Lazatrn's allegation, according to the RTC, sufficiently shorvs hou' his
rights, privileges, and plerogatives as a member of Congless \^/ere impaired
b), tl',e issttauce of RR l-2012.

The RTC also ruled tl-rat the case r.l,arrants a relaxation on the rltles or-t
Iegal stancling becanse the issues tor-rched Llpoil are of ttanscettdental
importalce. The trial court consiclered the encompassing effect that RR 2-
2012 rltay have in the nlrrrerous fi'eeport aud economic zones in the
philippir-ies, as rvell as its poter-rtial irlpact on hundreds of irtvestors
operating rvitirin the zones.

'l'he RTC then heict that even rf Lazatin cloes not have legal standing,
IIPEC's ir-iterventioir clirecl this defect: EPEC, as a locator witliin the Clark
FEZ, woulcl be adverseiy affecteci by the implernentation of RR 2-2012.

()
llollo, py';. 174-205.
I()
ln CA decrsion ciated Febntarv l-1, "01' id. at2A7-2
ll.
in C,{ resoltttiotr dated ltriy 29' 2013. id at 2)0-221 u
tL
ld ar.223-2-j8. ,{ frrt-
r3
li-l-C Decision. id. at ll6-117. ir\ ts
#1i
E
!
t
 s (e
\- G.R. No. :1t)58E
Decision

Finallv, the RTC declared RR 2-2012 Llnconstitr-itional. RR ?-201?

rriolates RA 9400 becar-rse it imposes tates that, b), larv, at'e not dr-le in tlte
lir.st place.rr Since RA 9400 clearly grants tar and dut1,-6'.e incentirres to
Clarli LIEZ locatrtrs, a re\/ocation o['these incentives by an RR directll'
contrarrenes the express intent of tlie Legislat.,r".'5 L-r el'fect, tl-ie petitioners
epcroaclrecl i-rpop the prerogative to enact, amend, or repeal lau's, H'iricl-r the
Constitr-rtion exclusivei;' granted to Congress.

The Petitiorr

The petitioners anchor tireir preseilt petition on trvo argutlents: 1)

respoudeuts have no legal stancling, and 2\ RR 2-2012 is vaLid and
c ct n.s t i t'ttt i o n.ct l .

lhe petitiopers sr-rbmit that the Lazatrn and EPEC do not harre legal
staircling to assail the valiclity of RR 7-2012.

Fit-,st, the petitioners claim that l-azatin does not have the reqtlisite
legal stariding as tre failed to exactly shorv hou, the implementation of RR 2-
ZO1Z wor-rlci iiupair the exercise his offrcial fi-inctiot-ts. Respondent Lazalrn
.rereiy gelerally alleged that iris constitntional prerogatirres to ilass or
arnepci laws were gravely irlpaired or were abor-rt to be irnpaired by
the
issirance of RIi 2-20i2' I-{e dicl not specifl' the power that he' as a legislator'
rl,,ou[d be enct'oached Llpoll.

While tire Clark FEZ is within tl-ie district tirat respoudent Lazatir-r
represents, the petitioners ernphasize thalLazatin failed to shou'tirat
he is
ar-rtlrorizecl to fiie a case on behaif of the locators in the FEZ,
the local
goveprnent unit, or his constituents in general.'u To tl-re petitioners, if RR 2-
?0lZ ever causecl injury to the locators or to any of Lazaltn's constituents.
o,ly tl-iese ipjr-rreci parties possess the personality to question tl're petitioners'
actions; responcle ni]^-azatln cannot clainr this right orrtheir beiralf .r7

petitioners clairn, too, tirat the trtTC sl-roi-rld not irave brushed aside
1-he
the r-ules on stauding on accollnt of transcendental importance. To
them, this
case cloes r-iot in.',,olve public tui-rcis, orrly a speculative ioss of
protits !pon
tlre irnplementation of RR ?-2012; nor is Lazatin a parl)'rvith rnore direct
ancl speciiic interest to raise the issues in hjs petition,rE Citir-rg
Senate 1".
relared'
lir.nti{'ct,"'tl-,. petitioners al'gliethat fhe rules on standing cannot be

not har''e legal staridirrg

Seconcl., petitioners also arglle that EPEC does
to inte^/ene. That EpEc rvili,lti,rately bear tire vAT and excise tax
as ait
is urisguiclecl.20 The burden of payll]ellt of vAT and excise tax
encl-r-rser,

l1
ld. at I 12.
l5
Id. at I 14

v
l/J
I)eririo,. i,i. 31 _59-60.
i'-
Id. at 6tl. 0F iiffEBi\li Ril'YT'i'ir.,E
BUHBLIU
I ti"
fktllo, o. 62. ft}ic{flt}.}$ LUGT. D-iVISiJ'l{
j
r.)
C.ii. No ibt)117,,{pril 20, 2006, 488 SCR'{ 1, q :{.{ A./u{,
lil
Rr:lio,pp 5-l-61.
l,'iAY 0 S ?B\7
1,
,uu*r
F.TCEl"dF,ffi
L)ecision G.R. No. 2ltl)88

ptay be sltiftecl ro the br-ryer2l and tiris br-rrden, fi'our the point ol vier,r' of the
trapsfb;ee, is ucl iotrget' a tax btlt merel)' a cotnponent of the cost of goods
pr-p-chasecl. The statntor'1, liabilit),{or the tax retnains u,it}r tile seiler. Tilus,
BPIIC caunot sa\/ that u,i-ien the burcieu is passed oll to it, ILR 2-?012
efl'ectively imposes tax on it as a Clarl<TrEZ locator.

The petitioners poir-rt out tirat RR 2-20i2 imposes all "advanc.e tax"
o1i1, Lrpon iilporters of petroleum prodr-rcts. If EPEC is indeed a locator, then
it enjo),s [ax apci clr-it1z etorlptions granted b"v RA 9400 so lons as it does not
bring the petrolenm or petroieum products to the Philippine customs
terrt tclrli. --

Tite petitioners iegall1, arglle that RR 2-7017 is Valid and

con stitlttior-ral.

First, petitioners sr:brnit tl-rat RR Z-2A1?'s issuarice atrd

i*rplerlentation are r.vithin their ilowers to unclertake.23 RR 2-2012 is an
acl,ri'istrative issuance tirat enjoys the ilreslrlrrption of Validib' in tire lrannet'
that statr-rtes enjoy tl-ris preslurlltion; th.,r",.,it cannot be nr-rliifred rvitiroi-tt ciear
zrncl couvir-rcii-tg el'idence to tlie contrary'-*

Seconcl, pe[itiopers contencl that rvhile I{{ 9400 does

grant tax aud
clrston-rs dut1, incentiyes to Clark FEZ locators, the.re are
conditions before
these benefrts lnay be availecl of. The locators carutot involie ourtright
exernption fi-onr VA-f ancl excise rax on its importations u'ithor-rt
first
must not be
satisfyi*g the conclitions set by [L{ 9400, tirat is, the importation
renrovecl fi.om the FEZ anci intr odr-rced into the Philippine cttstolns
. 25
IeIntol')'.

Tlrese locators edoy wirat petitioners call a qualified tcLx

exen'tpttot\.
Tl-rey must first pay the correspondipg taxes on its irnported petrolelim'
Trren, tirey must ir-rbrlit tire ciocr-rments required r-rnder
RR 2-2012' If thev
have not been ret,oved
have syfJlcientll, 51-'o*1 that the imporlecl prodr:cts
to a refrurd'
{l-onr the FEZ, their earlier payment shall be subject

Thepetitionerslastll,argr-retlratRR2-20l2doesnotrvithcirailzthe
t:quit-": proof t-hat
loceitors' tax exernption prii,itege. Tlie regr'rlatioi-r simply
a locator has .o.pli"cl with the conclitions for tar exemption-
If tire locator
ivitirir-r the irEZ,
cannot shou, that ihe goocls \^iere retaiirecl ar-rd/or consullled
such failr_rre creates the presr-r.rption that the goods
hal'e been introdr-rced
into the custonrs territory rvithor-it the upp.olrilate permits.26 0n the oti-rer
Irancl, if the1, haye c|-r11,' ]lroven the clisposition
of the goods u'ithi, tl-re FEZ'

]I 'l'hc petrtiorler poitlts otrt [hai VA'[ arrd excise taix ?u'e itldirect laxes.
.:2
Rollo, p. 67 .

73
Id. at 68.
r. Cottrtttisstott oit ,,!uait, G.l(. No. E9145. April 3 L99l'
t9,-i scR-{ 7i0
lcl. at 67-6's crting Esluo
li Id. at 7i. tsiliiEtrl Ctr ltffgP'iil'L Etrit;\l'I
Itl.;it l#.':',.ffi.rts
a+ +'1l "' Ir'iQT. Qiv.lslc:r"i
1;'rl-d A 'fil '
75.

i'',lA'i 0lZij\:j /+. ,

-r?aA -{3 fi
/ju'7^
TT T' 8.7 E pt
E{u -61 4.* frt i. v }) i''
 .\) ,s
Decision
s 7 G.R. No. 210-s88

their "advarlce payureut" is si-tbject to a refi-ir-rd. Thi-rs, to the petitioners. to

tlre extent that a refilncl is allowable, tirer:e is in reaiity er ta>l exetilptio,t."

Co rr n ter'-a rgtt rtr etrts

Respor-rclelts Lazatitr ancl EPEC, maintainii-rg that thel' have stai-iding

to qr-restion its vaiiclity, insist ti-rat RR 2-ZL\12 is uucotrstitr-ttional.

Respctndents have stancling as

lcnvmalcei' and FEZ locator.

The responclents arglre that a metlber of Congress has standir-rg to

Lrrotect t5e prrerogatives, po\\/ers, and pri",ileges vested
b)'the Constitr-ttioti in
iiis otij"".'8 ,A.s a rneurber of Congress, his stancling to question erecutive
issuapces thart inli-inge on the riglrt ol Congress to enact, atneitd, or repeal
larrvs6as alreaciy beep recognizecl.2e I-Ie sr-rtTers substantial injr:r1''^r-r'ltenet'er
tire executive o.,"rsteps zrncllnfr-rcles into his po\\ier as a latvuraker.30

O1 tl-re otirer hancl, the r'espondents point out that RR 2-20 i 2 erplicitly
co\/ers FEZs. Thus, being a Clark FEZ locator, EPEC is aurotrg the lrlanlr
businesses that rryoulci have been cfirectly affecteci by its iilplementation.ir

Rrt 2-2012 illegallf ilnposes taxes

on Cl.ark FEZs.

l-he respondents unclerscore tirat R{ 9400 provides FEZ locators

certain inceltives, such as tar- and duty-fiee importations of ra\lr tlaterials
ancl capital equipu-ient. These provisions of the law must be interpreted in a
vr,zy that wili gir. fuli effect to lau,'s policy and objective, whicli is to
maxitnize the benefrts cierivecl fronr the FEZs in promotir-rg ecolloillic
and

soci al clevelopitteut.32

-[]-rey aclrlit that tl-re lau, sr-rbjects to tares and duties tire goods that
\\iere bror-rght into tire Ff.Z ancl sr-rbsequentl1, ir-rtrodr:ced to tire Pl-riiippir"re
custo,rs territory. Florvever, contlary to petitiollers' position that locators'
tax and clr-rt,v ereprptions are qtLalrfiecl, their incentjves apply atLtctntctticalfi''

According to the lespondents, petitiollers' interpretation of ti-re

lau'
corrtrnrvenes thJ policy laicr clou,, by R-A 9400, becalise
it nral<es tl-re
that the corlditior-r
incenti,es si,rbject to a sr-rspensive coriclition. They claim
their subseqlteut introdtlction
!D
F?.; flre ..,-,-,o.,ol of the goods fi-orn theFEZ ancl
N
d yt! - tire cnsto,rs territory
frt=
is resolutorl'; locators enjoy the grantecl
Llf{
qr-,
to
=4 -*
kq

E*XE A.D. Gtret't'ero,G.l(. No- L20812, Sep:errrber2),1961'?l scRA

180' i83'
=
ad --l+ryE
4n rJ
ar s.:: r.{
r\1i-i
i/+ tsl
11

l3 -
Itl. atl6citing
Ict. at i 6-i
C1R y.

ld. at 166 ciLing llit.rtogo t,

'l'he l'hi!ipoine'[t'urh C.otittttissictt,65l Phii 37 I (2010)
rci , 15i 79
r>l *'u
t'f: '4ss'ociatioit 1'- [77f iqttez, G'R' No 11-1105' Augirst i9'
- n: Irl. at 361 citing Pltilipitii'te ()O,t.stittitiott
'- -*f * >- 199-r. l3i scliA -506-i07
:'t\ FSH ri ]d ar i68.
--
>\ -.-*fi 1ci. c I{' No'
at i69 citing C'1li \). SaLt,gLtte TechiiolctE" C
j
A-\ SL ii:'l-t
i, i:,
1 32- I i3 . C tR t'. 'l'os'Ltibtt' i(13 Piril 321-82 (2005)

)*
 Decision
t[. G.R. No. ?10-588
ri\

irrcentives upotl bringing the goods into the FEZ, It is onlt,tvhen the goods
are ,shotvn to /tat,e. been brotLght i.nto the crtstortts territor'1, u,ill the proper
taxes and clr-rties lrave to be paic1.33 RR- Z-ZA2 re\/e.rses this process b),
reqLriring the iocators to lla), "advance" tares and dr:ties frrst and to
srrbsequentll, prove tl-rat they, are entitlecl to a refi-incl, thereafte..tt RR 2-2Ol?
incieed allor.vs a reftu-rd, blit a refr-urci of taxes that \\iel'e not due iir the fust
' -lj
ll tace.

Tire respondents add tl-rat e\/en tire reftind urechanism r-rnder RR

2-7012 is problematic. The1, clairn that RR 2-20 1 2 onll, allou's a
refilnd vviren the petrolelim prodr-rcts bt'ougirt into the FEZ are sltbsequenti\1
sold to FEZ locators or to entities that similariy enjoy exemption fi'otn
direct and indirect taxes. The issuance does not eurzision a siti-tatiott
u,lrere the petroleum proclucts are dilectii, bror-rght into tl-re FEZ and
are cortsttnteci Lry the same entity/locator.36 Furtiter, tl-re refrrncl process
takes a consiclerable length of time to seci-tre, thlts requiring cash outlay
ou tire part ol locators;37 even rvlleu the claim for refund is glartted, tire
lefi-inci u,ill not be in cash, br:t in tire fortn of a Tax Credit Certificate
,-^^t J8
(1LL).

As thechallenged regurlation directll' contravenes incentives

Iegitimately granted b1, a legislative act, the respondettts argue that in issuing
RII ?-2012, the petitioners not only encroached Llpoll collgressional
prre;ogatives anci arrogated pou,ers unto tiremseives; they also effectivel)'
vioiatecl, brushed aside, and rendered nugatory the rigorous ilrocess required
in enacting or atlencliug latvs.3e

Issu es

l. Whetlier responclents Lazatin and EPEC have legal star-rdiiig

to briirq the actioll of declaratory reiief and

II, Wlreti-ier-RR 2-?A12 is vaiid and constitr-rtional.

TIle Cqg rt's Ruling

We clo not find the petition meritorious.

BUBE/IIJ 0F INTEBI'IAL F,EiOli-ilD

nrtc,;rurl yf, t;:i;:#N
05 20i7 /+
,- ll
Itl. at 311.
MAY
Wr
l{
.lj
ld
lci.
at 375.
at 37S
tr.ECtrE\'i$W
-i0
ld. at 311 .

)7
Id.
.j5
l.l.
t9
Ir1. at 3[i l. [\'i

N"
l')

Decisiorr
s G.R. No.210588

I. Respondents hat'e legal

stancling to file petition for
cleclat'atory relief.

The parb, seeking cleciaratory reiief ilust itave a legal interest in tlre
u0
contro\/ersy 1o. the actiou to prosper. Tl-tis interest urust be material r-rot
rurerely incidental. It must be an iuterest tl-rat rviricir will be afTected by the
cl-rallengecl decree, lau, or regulation. It mi-rst be a present substantial interest,
as opposed to a trere expectanc), or a fllture, contitrgent, sltbordinate, or
I
con seqLrential interest.a

Moreover, ir-r case the petition for cleclaratorl' relief specifrcalll'

invoives a qr-restroir of constitr-rtionaiity, the coutts r-vill not assllme
jr-rrisciictiol over the case linless the person chalienging the validitv of the act
porr.rr.s the reqLrisite legctl stattclingto pose the ci-rallei-,ge.o'

Loctts standi is a personal and substantial interest in a case such ti'iat

tire party has sustained or rvill sustain direct ir1ur1, as a result of the
chalier-rgecl governmental act. The question is u,hether tl-re challengii-rg partl'
aileges such personal stake in the outcome of the controversy so as to assllre
the existence of concrete aclverselless that urottld sharpen the presentation of
issues ancl illuminate tire courl in ruling on the constitutionai qliestion
poseo.'
4-3

We n-rle tirat the respondents satis0'these star-idards.

Lazatin has legal standing as

a legis lator.

Lazattn fiieci the petition for cieclaratorlr p"1i"f before the RTC in his
capacity as a melrber of Congress.aa He allegeci that RR 7-7A12 u'as issi-red
clirectly coi-rtr-aveninq RA 9400, a legislative euacttlent. Thus, tire regr-ilation
epcroached upon tire Congress'exclusive povver to ettact, atleild, or repeal
iarvs.oj Accoiding to Lazattn, a tlember of Congress has standing
to
chailenge the .,ulidity of a1 erecutive issuance if it tends to iilpair
l-ris

1r,'.,'oguiives as a legislator.a6

We agree witl-r Lazatrn.

'r0 Cr-ntrrtrissionet'r-tj Custortts 1'. flypertttix Feecls Corp',

G'11' No' 119519' February l' 2012' 6(t4
SCI{A 666
.lr Galicto t,. ,4quino, G.R. No. lg3gi8. FebrLrary 28, 2012, 661
SCTLA. l-50-l-52, citing A'lifioza v'

C.k. No. I 709 14, April 13, 20 I I , 648 SCRA 684'

Lo1tcz,, et ttl.,
it' Jrrntotnilt,. CaJb, G.lt. No. 144510, Se,tetnber ?1,2005,70 SCRA 47)
-rl)r,,i,ru, , ,-
'rr GctLict, ,,. suprLl, citit'tg 'SL;irthern Hemisphere Engagetncnl )ietv'ttt'k' lnc' lr 'J'nti
I'i9157 and 179161- October- -i' 2010' 6il
Terrorisitr Cruitcil.G.li. t,\os. 178--i-i2. tZSiSq. 17858i, i78890,
SCR,q I46
.i.{
llc,lltt. p. 224
.l
-i
ld at ll8.
-1 {r
lcl. ar. 2?9 .

-l^l ?'1 ,.1'i -: -U li il

$* "f.:, ii. :-, :i r'
Decisior-r 10 d G.R. No. 210588
}

ln Birctogo ),. The Philippine Trtult Cornmissio,r,4l we ruled that

legislators l-iave.the legai standing to ensure that the prerogatirres, powers,
and plirrileges vested b), the Constitr-ition in tireir office retnaitt inviolate. To
this end, mernbers of Congress are allou,ed to question the valiclity of attv
oftrcial action ti-rat infringes on their prerogatirres as legislators.{8

Thus, members of Congress possess the legal standing to qllestion acts

that amoLrnt to a usurpatior-r of the legislative po\\ier of Congress.re
Legisiative po\ver is exch-rsively vested in the Legislatr-rre. \\rhen tl-re
implementing rules and regulations issr-red b), the Erecutirie contradict oI'
acld to u,irat Congress has provided b), legislation, tire issuar-ice of these rules
arnolrnts to an undne erercise of legislatirre power and an encroachment of
Congress' prerogatives,

To tl-re salre extent that tire Legisiatlire cannot surrender or abdicate

its legislative power r.r,ithoi-rt violating the Constitutiou,s0 so also is a
constitr-rtional violation committed q,hen r-ules and regulatior-rs iirrpiementing
legislatit,e enactments are contrary to existing statutes. No lau' cal'l be
aprendecl by a mere administrative rnle issued for its impleinentation;
aclministrative or execlrtive acts are invalid if they contratrene the lau's or to
the Constitr-rtion.''

Thus, tire allegation that RR Z-?An an executive issuance

purporting to implement the provisions of the Tax Code directll'
tontravenes RA 94OA clothes a mernber of Congress with iegal stauding tcr
the issuapce to prerzent uirdue encroachment of legislative porver by
c1r-restion
the executive.

EPE,C has legal standing as a

Clctrk FEZ locator.

EPEC ipterveneci in the proceedings before the RTC based on tire

allegatiop tirat, as a Ciark FEZ locator, it will be clirectl,v affected b1' 1l'1s
inlpiern.ntation of RR 2-2012.52

We agree witli EPEC.

It is not clispLited that RR 2-2012 relates to the iinposition of \iAT and

excise tax ancl applies to atl petroier-rm and petroleum products that are
iurporteci clirectly frorn abroad to the Philippi.,.r, in.ltrcling FEZs.i3

11 .\trnt'ct note 29.

4s td. clting Sertctte o-/'the Pltilippinest, Ermita, G.R. No. 169111, April 20' 2006,488 SCR-{ l, i5,
and [.'t'oncisco t,.
Hortse o.f Representalit'es,460 Phil. 830, 842 (2003)'
1e Id. citing philippine Constittttion.-lssocia{ionv. Eririqttez,G.R. No. 113105- AugLrst 19, 1994, li5
scRA _i06, 520.
50 !-oltin t,. Contelec,C.il. Nos. l7g43l-32, June 22,2010, 621 SCLiA 385

ff{-
 f)ecision o i1 G.R, No 210588

As alt enterprise located in the Clark FF,Z, its impoitations of

petrolelrm and pgtrolenm prochrcts will be directly afi'ected by RR 2-2012.
-[hus, its interest in tire subject rnatter a persoltal aird sui:statltial one
girres it legal standing to qtiestiotl the -
issltance's validit)'. -

in sllm, the respondents'respectirze interests in tl-ris case are

sr.rfiicier-rtly sr-rbstantial to be directly affected by the irnplerr-rentatiot-r oi'RR
2-201?. Tite RTC therefore did not elT when it gave due coltrse to Lazatin's
petition for cleclaratorlu relief as well as EPEC's petition-in-irrterveution.

In iight of this ruling, we see no need to rttle on the claimed

transceudental importance of the issues raised'

II. RR Z-ZA0 is invalicl and

tunconstitutional.

On tfte merits of the case) u,e rnle that RR 2-2012 is invalici and
unconstitr-rtiopal because: a) it illegally imposes taxes Llpon FEZ euterprises,
whicl-r, by larv, enioy tat-etempt status, and b) it effectively amends tlte lau'
(i."., k\ 7227, as amended by RA 9400) and thereby encloaches upon the
iegislative authority reserved exclr.rsively by the Constitution for Cougress'

FEZ enterprises enjolt tax- and

du4t-free incentittes on its
i.tnportations.

lgg2, Congress enacted RA l2?1 otherwise knowtr as the "Bases

In
Corrversion ancl Derrelopment Act of 7992" to enhance the benefits to be
clerirred fi.om tire Sr-rbic and Clark rnilitary reservatious.5u R.,'\ 7??1
establisheci the Sr-ibic Special economic zone and granted such special
territory various tax and dr-rty incentives.

To effbctively extend the same benefits enjol,si ir-r Sr-ibic to the Clarli
FEZ, the legislature enacted RA 9400 to amend R,4. 1227." Srb."quentl1',
the Departrnent of Fir-rar-ice issued Department Order No. 3-2008-t6 to
in-rplenrent RA 9400 (lruplententing Rules)'

Li,der RA 9400 ar-rcl its Iinplerlenting Ruies, Clark FEZ is considered

a crrstonrs territory separate and distinct iiom the Philippines cttstoms
terr-itory. Thr-rs, as opposecl to itnportations into and establisltntenis in the
piriiippines customs territory,5T rvhich are fr,rlly subject to Philippine customs
*id
WHE
# qra
, *.;a

54
Sectiorr ?, R,\ 1227
.

accorded to FEZs, in
I-lereinafler-, we r.vill refer' to RA 1221, as arriended, r.vhen ciisctrssing benefits
!t Jq 55
iJ'*

N E*H=
-<*
gerteral. On
Ciark Fl:2.
the otirer irand, lve tvill refer to RA 9400 when discussing benefits specifically in relation to tlte

Ed S== i6 Eirtrtled "Rttles and Resulatioiis to Iinpletllerrt Repr-rblic Act No. 9400"
(,[ntplemetititig Rules)
---
i-^J .-\1.1 .i
(r- <I'i.--j 2008, ancl signed b)'tllert Secretar)' o1'Finance
13,
Fe- T-'7.: issuecl [,r,' tire DePartnlent of Fiirfnce, clated FebrLtarv
f-J\ {:k-:,f-i ;-
' N4arearito B Teves
as "ilte.national -territory tri tile
-<__vq t:= _, ._..:]
-4,
I*,-*=
-.-r<.a-" 5i Section 2(oo) of,rhe lrnplenrentiug RLrles clefirres clrsto])is tet'ritory
\
q.)::a of tlie Ecozorres or Irleeporl zones, dUiv ii'ntitled or pi'oclaitlled iil
t--j N\_
-i
l=,t:d
r ;:r 1I lrlrilippircs oLrtsicie of:the bour-,riaries
d \
(-:
;*,.:C accordarrce rvith RA J227,v,here
'e-:---.. tar larvs of the Philippines are in lirliibrce ot ei'fect' attd
tlre cusio:r-lS 3r')d
"=f\R* E=
Decision \l l?. G.R No 210588

ar-rd tax lau,s, irnportcttions tnto and establishnter?rs located u'ithiu the Clark
FEZ IFEZ Ente,rprises)i8 en1oy special incentives, including tax and dutr'-
lr-ee iurportation." N4o.. specificali1,, Ciark FEZ enterprises shall be errtitied
tct the.fi.eeport stahLs of the zone and a -5% prefe\ential income tax rate on its
gross ir-rcome, ir-r lieti ol't-rational and local tares.60

RA 9400 ancl its hnpleilenting ltuies grant the 1'ollou'it-tg:

Fiyst, the larv provicles that intportations of ravt ntatet'ials and capitaL
e(lLtil)tnet'Lt into tire FEZs shall be tax- and du4;-f"ee. it is the specific
transctction (i.e., ir-nportatior-r) ti-rat is exempt from taxes and duties.

the larv also grants FEZ enterprises tax- and dttry-free

Seconcl,
intportation and a pref-erential rate in the pal,rnent of incotle tax, iu lier-r of
ali riatiolal ancl local tares. These incentives exentpt the establisltntenf itsell'
liom taxation.
-fhus, the Legislature intencled FEZs to en3oy tax incentives in general
l4ij1efi-ier rvith respect to tire transactions lhat take place ivithin its special
-jLrrisdiction, or the persctns/establishrnenls vvithin the jr-rrisdiction. Frorl this
perspectiye, tl-re tax incentirres enjol'ed by FEZ enterpris'es rni-tst be
r_rnclerstood to necessarily incltLcle the tax erenrption of irttportations o.f
seLected drticles into the FEZ.

We have n-ilecl in the past thatFEZ enterprises' tax ereilptions tnltst

be ipterpreteci u,ithin tlie context and in a lltanner that promotes the
legislative intent of R4. 722761 and, b1, ertension, RA 9400. Thus, \\ie
,.rog,rizecl that trEZ enterprises are exempt frorn both dir^ect and indirect
internal revenLte taxes.62 In particular, tl-rey are considered VAT-exerupt
entities.63

with this cornprehensive interpretation, rve rule that the tax

ln lir-re
e.xemption enjoltecl btt FEZ enterprises covers internal re\)et'tLLe taxes
imposecl op gooCs brottght into the FEZ, incltLding the Clark FEZ, such as
L';IT and excise tax.

RR 2-20l2 iltegalll' l"roses l/ilT ancl ercise

trtx on gctods brot'tght into the FEZs '

Sectior-r i of RR 2-20 i 2 p|ovides the following:

proclantations to have rhe

oLrrsicle of tSose areas specifically deciared by other lau,s and/or pr-esidential
stirtus of special econotlric zones atld/ol' fi'eeporls'')
;u l:lie parties in this case have liberally used the ternr "locator" to dettote atl entity
locatec tYithin tlie
defined and used b)'tlre
FEZ FIou,ever. \ve shall lrereiuafler use "irEZ entetprise" as explicitly
I ntplerrtentiilg Rul:s.
ie Sectiort 2(aa), Irllplelllerltiilg Rules'
60 Section -l(cl), trlpletleniitio llr'rles c/ Seclion l5' RA 9400'
or y-or,.nr, G.R' No. 1-i25)7. JLi11'29,:OO-:, +6i SCR{ 17' 61-
Ct-tco,ttt Oit Re.finet's ,4ss,ciutro,r r.
6 _i.
irf Suoi'rt rloie 32 EijiiEA iJ 0P l f,i1-'iiBi{,o,L' Rf',lti\tlB
RtsCOitJJS IIIG'C ilii,Tgl*l'{
6Jl rtr
Itl.
q:+{ A-/4'
liiY c: ZfrlZ .li.
y/*-r
REeEY"i,ifui$
ht,- '
!i. r

Es.'J':;-
Ei I
E':
E]:' Decision l3 G.R. No 2i058E
ltj
i: ,'
!:rj

I
i
First, vvheltever petrolelrlTl and petroleutl proclLlcts are imported
arrcl/or Ltrought, clirectl1, to the Pl-rilippines, the importer- of these goods is
required to pay the corresponcling VAT and ercise tax due on the
in-rportation.

Seconcl, the importer, as the pa)/or of the taxes, iila1r sr-rbseqr-ientll' seelt
a refLmd oi'the atlount previor-rsly paicl b), filir-rg a corresponding claim rvith
tlre Bureau of Custotns (BOC).

Tltircl, the claim shall only be granted Llpon shor,t'ins ti-rat the
necessat'), conclition b,as been flilfilled.

At first glance, this imposition mere tax administratioll measLlre

accorcling to the petitioners appears to be consistent rvith the taratiou of
-
siurilar irnported articles uncler the Tax Code,_specifrcal,l)' .,,-tder its Sections
10764 un.l ir+B6i (in relation u,ith Sections 12966 and 13 iu')

()d SEC. i07. Value-Adcieci Tax on lnrportatiorr of Goods - (A) In Getteral - There shall be levied,
assessecl and collectecl on every importation of goods a value-added tax eqttiValent to ten percellt (i0.zb)
147] basecl o1 tlre total value usecl by the Bureau of Custours in deternritiing tariff and cusioms duties plirs
.urio,r-,, duties, excise taxes, if any, and otlier charges, sucli tax to be paid by the importer prior to the
release ol sr-rclt goocls fi.om custorns cr-rstody: Provided, Tlrat where the customs dLrties are detenriitled
on

the basis of tlre qLrantrty or volunre of the goods, tlre value-added tax shall be based on the landed cost
plus
excise taxes, ifany xxx

(B) Transier of Goocls by Tax-exenrpt Persons. - ln tlte case of tax-fi'ee iutportation of goods into the
philippiges by persons, entities or ageucies exelrpt fuotr tax rvhere such goods are subsequerttll'sold,
trausf,err-eci or exchanged in the Philippines to non-exempt persons or entities, tlte
purchasers, transfet'ees or
r.ecipierrts s5all be corlsidered tlre iniporters thereof, rvho shall be liable for any internal re\ielllle tax on sucit
intpor-tatio.. l'lre tax clue on such impor-tation shall constitllte a lien on the goods superior
to all charges or
iiens on the goocls, irt'espective of the possessor thereof.
65 SE6. l4g. Nrlarufactur.ed Oils and Other Fueis. - Tlrere shall be col]ected ott refitred and
rnarrufactured nrineral oils aucl nrotor fi:els, the follou,ing excise taxes which shall attach
to tlte goods
greases, including
her.er:rder enuurerated as soon as they are in existence as sLrch: (a) Lubricating oils and
extracls, and otlter
but not linrited ro. basestock [or. lube oils and greases, higir vacur-rrn distillates, arottlatic
and aclditives fbr iLrbricating oils and greases. rt'hether sLrch additives are petroleuttt
sir,ilar prepar-atiols,
based or. no[, per iiter and liilogram respectrvely, ol volurne capacity or
rveisht. Four pesos and fift1'
cer.rtavos (1r4.50): provided, hou,ever, That the excise taxes paid on the purcltased t-eedstock (br-rnl<er) Lrsed
in tlre rranufhctLrre of.excisable articles and folnring par-t tirereof shali be credited asainst ihe excise tax dtte
thereli,or,: provicleci. furt5er, Tirat lubricating oils and greases produced iloni basestocks attd additives on
ri,liicli the excise tax has air-eady, been paid slrall no ionger be subject to excise tax. Provided, finall1', Thai
locally pr.oduceci or irrrportecl oiis previotrsl;, 13vsi as slich but ale sltbsequetrtll'reprocessed- l'e-tetttled
oi'

,"..,.i.d shall liliervise be subjeci to tlre tax imposed ttudet-this Sectiorl.

(b) lrrocesse ci gas, per- liter of Yolullte capacity, Five cenravos (P0.0-5):

(c) \Vaxes anci ltetlolatLult, per liilogrzirl,'i'ltree pesos apd ['tl'tY centayos (P3'50);

(P0.0-il:
(d) O, denatured aicoltol to be used lbr inotive power, per liter of voli:trie capacitl', Five centavos
- r-A
pr.ovidecl. That unless other-u,ise provitJed by special laq,s, if the denatured alcoiiol is mixed $'itir gasoline.
HU/
t5e excise tax op whicS has alreacly been paicl, only the alcohol content shall be subject
to the tax he|eirt
# rfr
*4 the removal of denatLu'ed alcohol of not less tltan otte ltundt'ed
9N t I !..-r
r">- ,r.escr.ibed. For-pLrrposes of tiris Subsection,
eighty rJegrees (lg0o) proof (ninety percenr (g0%) absolute alcohol) shall be deented to have
beeti rettioved
*d V-
L<s '*
e, E *',7t-''t
\> "^H?
lbt' nrotive polveI, ttnless shorvl't othertvise;
LI :.{'- _:
(e) i{aplrtha. r-esrrlar gasoline and otlrer sinriiar' lrloducts ol distillation. pel liter of voltttr.ie
+'t-rFc {l
-.-?
*. capacitr', I--otrr
?-&d- * - ,Ar=1
l+! -=l 'f[rat naplitha, rvhelt Ltsed as a i.a\\r ttialet'ial ili
g, t:E a:t-"t'/ p"sos a,.}d tirirtl, fi,,g;er.Itavos (p4.35): Proviilcd, horvever,
'c= \Y-i :E-
Fa-:, ii," proci,ction oi. petrochen-lical products or as replacerrrcnt iLrel tbr natLrral-gas-fired-cot:lbitted c':'cie
i* rlre non-ai'ailal;ilit1'lhereof- strbleci to the nl les
;> .-i
lro\\!er.piar,.t, irr lieu oi locally-extr-actecl rratural gas clLrr-ing
of in corlsuitatic:l rr'itil ihe Secr-etal'1 t-ri
-=-
frl.,j aucl regLrlatio,s ro L-,. ytro,lrlgated by the SeCI'eterr)/ Energr'.
>=\= - ''!: r.--)
-;;< Fi,apcJ, p-er lrteL ol'r,olLrpte capacitl,, Zeio (P0.00): Provided, furiliet', Tilat rl:e bY-prociLict
iriclLrding ir-rel
N_
5
',-\
fi
'i"a oil. ijiesel lucl. perosene, p1,r-ol,,,,sis gasoline, liqrrefied petroleLrm gases and siniilat'oils hai'illg tll0t'e ot-lbss

tr"
 l'-r
Decision \_/ t4 o G.R. No. 2i0588
-a

RR 2-2012 explicitly covers et)en petroletLtn and petrolewn

i-lora,ever,
prodltcts irnpor.ted at'td/or brotrght into the varioLLs FEZs in the Phili24sines.
I-lence, \\/hel-r an FEZ e]lterprise brings petrolelurl and petrolelul-) prodllcts
ir-rto the FEZ, Lrnder RR 2-20'?,it shall be considered an importer liable for-
the taxes due ou these prodLlcts.

-fhe crlrx of tl-re controversv can be for,u-rd in this featltre of tire

chal I enged regulation.

Tire petitioners asseil tirat RR ?-2012 simpili itnplements tire

protrisions of tlie Tax Code on collection of internal re\/enlle taxes, Irlore
specifrcaliy VAT and excise tax, on tire imporlation of petr"oleutn and
petroleirm prodlrcts. To them, FEZ enterprises enjoy a qualified tex
exentption sr-rch that they have to pay tire tax dlte on tl-re importation first, and
thereafter claim a reftind, rvhich sl-rall be allou,ed only Llpon shou,ing that the
goods \ /ere not introdr-rced to the Philippine cllstotls teritory.

On tl-re other hand, the respondents contend that RR 2-201? irnposes

taxes on FEZ enterprises, rvhich in the first place are not liable for tares.

the same geperating po\.ver, n,hich are produced in the processing of naphtha irtto petrochemical prodilcts
slrall be sLrb.iect to the applicable excise tax specified in this Section, except whell such bv-products are
trausf'err-ed to apy of the local oil refineries through sale, barter or exchange, for the purpose of ftlrther
pl-ocessipg or b)ending into Fruishecl products rvhich are sutrject to excise tax under this Section;

L-eacled preuriun'r gasoline, per liter of volunre capacity, Five pesos and thirry-five celltavos
(f) (P5.35);
,lleacled premiuni gasoline, per liter of volume capacity,, Four pesos and thirtl'-five centavos iP4.35);

(g) Aviatiol turbo jetfuel, per liter of volunre capacity, Three pesos and sixty-seven centavos (P3.67),

(ir) Kerose.e) per liter of volurle capacity, Zero (P0.00): Provided, That keroserte, ri'hen used as aviatiotr
ftrel, shall be subject to the san're tax on aviation rurbo jet fi-rel under the preceding paragraph (g), such tax
to be assessed on the user tltereof;

(i) Diesel fuel oil, and on similar firel oils lrat,ing lrore or less tlie satlte senerating porver, per liter of
volunre capacity, One peso aud zet't-l (P0 00)'

() Liquefied perroleum gas, per liter,Zero (P0.00): Provided, That liquefied petroleuni gas used for motir'e
tax on diesel fuel oil;
fo*,.,:shall be taxed at the eqLrivalent rate as tlie excise

(k) Asphalts, per lcilogi-am, Fift1'-5ix cetrtavos (P0'56); and

(l) BLrnker fuel oil, aud on sintilar fr-rel oils having n]ore or less the sanle genel'ating por.ver.
pel'lite| of
volunre capacity, zero (P0.00).
60 SEC.l29 Coocls subject to Excise l-axes. - Excise taxes apply, to goods nlanufactured or prodrtced
i, the irhilippines for domestic sales or consunrption or fbr any other disposition and to things inrporred.
'l'he excise iax inrposecl lrerein slrall be in acidition to tire value-added tax intposed under Title IV.

For purposes of this Title, excise taxes herein inrposecl arrd based olt r.i'eight or volLttlle capacitt'ol'
all)i
.
FU
Prr+ othei physicai unit ol'nreasurenient shall be referred to as 'specific tax' and an excise tax hei'ein intposed
ffid= as'ad valoretr tax.'
ld a{t ancl based on sellipg price or other specified value olthe good shall bc refetr-ed to
d,
L-r
?
saa\ )-i
r-z
u, (e) persons Liabie. - Excise taxes on irnported arlicles shall be paid by lhe ovvtrer ol'itrtportet'to the
Cristonr Officers, confbrnrably ivith the regulations of tlre Department olFinance
and before ihe release oF
fr ;!.s6;; sLrch articles fi-our the custorrs house, or by the person u,ho is found in possessiort of articles u'hich at'e
exenlilI it'oni excise taxes other tltan tl:ose legalll'erltitled io exetttptiolr'
H-r -1
f#
i- j
<=
-.-
-r-.''-a
I:i
41 Fj
i/ --
. i \Jl 4-;?-
- i\l
t,- 7,
'> L ol tax-fi-ee articles broLiglrt or inrpolied into ilre Philippines b,r'Dersotts, entities, or agencies
tire case
-.4" .<F *;
c) t- f- exe,tpt lio* iax rvSich are subseqLrenill,soJd, transfen-ed or'.e-rcitanged iri the P.irllippines io ilon-3\elrpi.
1r.rroi,, or.entitles, the pLrrcliasers or i'ecipieuts sliallbe
coirsiciered tlre intporiet's thereoi. and sirall be liablc At
''=\
i---a

y=n'-*-
I\i'sJ ,
t
\

Sfr.i
d-Z
'\;t

v.4
,-A
fbr the cltrt,v and internal re\l3llLle lax dtre olt sttch iilporiation
H-IP'
F+
(-\ A
-\_\N
a =
L-)
f'r
a
x
 rr )
v'

Decision 15 G.R. No.210588

Tirey ernphasize thal the tax incentives ltnder RA 9400 appll' autorttaticallt,
Lrpon the importation of the goods. Tlie proper taxes ou the itnportation sirall
only be clue if the enterpl ises calr latet shour tirat tire goods \\rere
subseqr-rently introduced to the Philippine custotrts tert'itor1u.

Sirrce the tax ererrrptions et!oyed b\, FEZ enterprises undet. tlie lau,
extencl even to VAT and excise tax, as \\/e discurssed above, it follou's attd
we accordingly rule tirat the taxes imposed bt,Sectiort 3 of RR 2-2012
clirectllt coltrattene these exentptiorus. First, the reguiation erroneouslY
coirsiclers petrolenm ancl petroleum products brought into a FEZ as taxable
irrrportations. Seconr{, it lurreasonably br-u'dens FEZ enterprises by making
them pay the corresponding taxes an obligation from u'irich the lau'
speciticaliy exempts them e\/en if there is a subsequent opportllnitl' 1o
refirnd the payrr-rents tlade.
-

Peiro letLm and petrolettrtt prodatcts brotLght

into the FEZ arud u'hich rentain tlterein are
not taxab le intportations.

RR 2-2012 cleariy imposes VAT and excise tax on the irlportation o['
petr.oler-rm ald petroleurn prodr-rcts ir-ito FEZs. Strictly speaking, hov'etter,
articles byottght into these FEZs are nof taxable iruportatiorts ttnder the latr
basecl on the following considerations:

First:, importation refers to bringing goods fi'om abroad irtto the

philippi,re cttst)ms jtu.iscliction It begins fiom the time the goods enter the
philippine .ir-iriscliction and is cleerned tenninated when the applicable tares
and clr-rties have been paid or the goods have lrft the iu'isdictiott of the
6E
BOC

Second, uncler tlie Tax Cocle, importecl goods are sr-rbject to VAT and
excise tax. These taxes shall be paid prior to the reiease of the goocls from
cltstotl,ts cr,stodv.69 Also, for VAT an importer refers to any
1*.por.r,'O
person u,iro brings goocls into the Philippines'

Tltird, the philippine VAT system adheres to tire cross border

cloctrine.'' U,rcler tiris mle, no VAT shall be irnposed to foril part of the cost
of tlre goocls clestined for consumption ot.Ltside the Philippine custortts
territortl." Ti-,.,s, rve have already n-rled before that an FEZ etlterl:t ise caunot
be clit"el,ctlv chargecl for t1-re VAT on its sales, nor can VAT be passecl ou
to
thern inclirectllz as adclecl cost to their purchases.'3

66 59, Septe*ber 23' i966' l3

Generctl'ft'ot,el Sert,ice, Ltcl. t,. Dat'id, G.R. No. L-19259, I8 SCRA
SCRA :9
ite Scction 4.10i-l(b), RR i6-2005, oiherwise liiroi,,,n as the Consolidaied
\/AT Resttlation-q of 20O-tr'

lvell otlter provisions periainittg to VAT'

pt'omultalecl io Tiiie iV of tlre'[ax Cocle, as as
1tt Section 4.107- l(a), ItR 16-20()5,;A '''
it c,,,.,.,
'rLtt,t l?.
J:.
L. .nrc
rL,ru . . Y+iii 0f ii:,TTi7,l;itl Bfr,El'i;fl
12 ld.
.RICCi{.y}g !iG,i. Ery/Isi.L1ii
i) r.l ,1.i,*{ t1-i,r,
I'{AY 05- lrJil /i
Rrtg,aYwfi //Mol^
/t W
 ( -.r ' -+,

Decision \l 16 C G.R. No. 210588

Foau'th, larvs slrch as RA 7227, R-{ 7916, and R-{ 9400 irave
establishecl certain speciai areas as sepcu-cfie cLtstotlls tet'ritories.l4 in this
regarcl, we ha\/e alleacl1, helci that suchjLrrisdictious,, sllch as the Ciark FEZ,
urJ, ir1' legat [iction, foreign territories'15

F-{th, the Implernentirrg Rr-rles provides that goocls initialh' introdtLced

irrto the pEZs and szlbseqttentl.l, hrotLgltt otLt titerefiotrt and intloduced into
tlre philippile cnstoms tenitory shall be considered as intportatiotts aud
thereby s,-itj."t to tl-re \/AT.76 One such instance is the saie b)' all)/ FEZ
eilterprise to a cnstomer located in the custo,ms territory, rvhich tlie \tAT
regniations refet' to as a technical intportation'71

We fincl it clear frorn ali these that u,iren goods (e g., petroleum aud
petroieum irrodncts) are brought into an FEZ., the goods remain to be in
goods introduced-into Philippine
.^foreign territon; ancl are not tirerefore
customs territory sr-rbject to Philippine custotns aud tax larvs'78

into and traded u'ithirl an FEZ are

Statecl clifferently, goods bror-rght
ger-rerally beyoncl the reach of national internal reventte taxes and cttstot-us
c1-rties enforcecl i1 the Philippine custorns tenitor)'. This is
consistent u'ith
tl-re incentive grantecl to FEZs exempting the importation
itself from tares
and dr-rties.

Therefot,e, the act of bringing the goods into an FEZ is not a taxable
intportatiort. As lortg as the goocls remain (e.g.,sale and/or const'mtptiott
o.f *, ar.ticle trtithin the FEZ) in the FEZ or re-expor;,r"d-ro
anotlter foreign
jt,u.iscliction, thelt shalt contintrc to be tax-ft"ee.'' Hou'ever, oitce tire
goods are introciucecl ilto the Phiiippine customs territory, it ceases
to enjoy
ii.,. tax priviieges accorcled to FEZs. It shall then be considered as an
intpor.tation surf,ject to all applicabie national internal revenue
tares and
ct stoms duties r$3'y-3itl-T3tJlt,{ffi*$
Q:,lf A./t4,
MAy 0 5 Zsltilbfri,A

RFTCEEVE,W
i4 wirh respect to tlie SLrbic Special EcononricZone, RA 7916
l\A-l27i
rvith respecl to Ecozones as
procranrations, ancr RA 9400 u,ith respect to clark FEZ a.d Poro Poi't Freepo't
rcJentitred by presidentiar
Lone.
15 Sttpra note 32.
76 provid es'. "Tax Treatntent of Gctods lntraclucecl
Section 7 of the Inrplenrenting RLrles of RA 9400
Zones-A' A' Raw maiel-ials' capital goods' and
ltrt6 anrl Brotrgltt Ouf of the Ecozones ancl Freeport
of dornestic origin v'hic'are brought o,t of the Ecozone or Freeport Zone introduced iuto
cor.rs.*er iter,s
irnpoiations into tl're custortrs territory and the bttl'st'o{'the
the cLrstorns territory sliall be considered as
t'eated as itrporler thereof, hence subject to the vAl on itlpottatiotr' I, all itlstatlces' raiv
goocls shall be
ite,.,',s and foreig, articles i,troduced iuto the cLrsto*rs
*raterials, capital goods, equiprnent and cousun.,"r
undel applicable Iaivs, rules ancl resttlatio,s shall be^sLrbiect to taxes artd drrties
territtrry. unless authorized
and b1, the Tariff ancl crr-sror,s code of the
irrcler the Nationar Inter.nar Rever,e cocre of r991,
as ar,encieJ,
Plr il ippines, as atlletlded-"
Supi ti ntlte 69.
,Stri,rrt note -5 7.
.'1';'socitttiotr v Tot't'es' sLt{)1.d note 5i citrng Seitator
Enrile h'o|rr the recot-ds
.-
t)
()octtttttt () il tiefiners
ol- the Se nate contairtitlg the discLrssicn ol'the collcepi of ''special econott-iic 70il3'"
t. I

Decision D 17
E G.R. No. 210588

Tlte tax exetttPtiott g'anted to FEZ

enter7tr.ises is an. iruuttt Lnill; .irctrtr tax liabil.itl'
onil tlte Pct1t11'"''t of tlte tax'
f-rttn
rvas issued, petroleu,"r
The respor-rdents clainr tirat wl-rer-r RR 2-2012
and petroleuur products bror-rght into tire FE'Z
by FEZ enterprises sr-rddenl;'
Lreca're sr_rbject to vAT ancr Jrcise tax, in
direct contrarrentioi-r of R-{ 9400
Sr-rcir impositior-r is r-rot auti-rorized
lu,itir respect to clark FEZ enterprises).
r-rncler ut"ty llq', inclucling the Tax Code'n"

On tire otirer hancl, tire petitionet's argLre that

RR 7-2017 does not
withcirau, tire tax exemption privileges of
FEZ enterprises' As their tax
or-rtright exemption' Th,s'
exenrption is merely qua-lified, ir-,"y cannot i'r,oke
revenlle taxes first on their'
FEZ enterprises are requirecl to pay interr-ral
ir-nported petroleu,r,ncler RR 2-2b12. They
lnay tiren'eftind their prerzior-rs
pay*re,t Lrpoll sirorving that the co,ditiou .incler
RA 9400 has beeu satisFred
_ trrat is, the goocls rra,e not been i.trocruced to the Philippir-res clrstours
a refi-rnd is allorvable, there is
,.rriro,.r,.;i io'rii. p"iirl.r.rr,,,q rhe ertenr that
still in reality a tax exernption'u'

We clisagree u'ith tiris contention'

First,FEZentetprisesbringinggoodsintotlreFEZsi-ror-ildnotbe
tire same manner that the rrer-v act
coirsider.ed as intporte,s sr-rbject to-tax in
does not *rake the, taxable
of brir-rgi*g goois into these special territories
fiorn taxes a,d dr-rties lulder
inrportations. we ernprrasize ti-rat trre exernption
the FEZ' but also
RA g4AO are granted uot only to i"po)tationstheinto tax exet,ption enjolis6l
specitically to eaci-, FEZ erter.pr:ise. As dir".rrr.cl,
byFEZenterprisesrrecessarilyinclurclestlretaxeremptionoftl-re
impot"tations of sele'tecl articles into theFEZ'

Seconcl, the essence of a tar exenrption

is tire inununill' or f"eedont
fi.o.r a charge or burcren to wr-ricrr othe*
ui. subjected.o'It is a u'aii'ei'of tire
that urould irave bee'collectible
go\/e,ureut,s right to corlectdi th" amounts if shr-ttLld
rca,v spearcs of a tax exernptio,,
rrncler our tax rau,s . Tltus, t,vhen trte
be u,derstoocl as .fi.eeclont frorn the
intpositio, ancl pavrnent of a pa,tic'lar
iax.
p,ovided by
o, this prer,ise, we *rre that rrte reft,ur ,tecrtanisr,
Basecr
RR )-20 I 2 coes not antount to a rLlx
exemptio,, lIT if tl-re possibiiitl' s6 u
that FEZ enterprises r,r'rst stili
srrbseque,t refuncl exists, the fact remai,s thel' shor-rld be
other resolirces to pay for so,retiring
" and
soend money
BUN,&IIJ OF IT'TT]BX'AL HWTN'LE
llucoiu}| 1t:\ry31*N
fff',
h'iAY o 28i7ffin,
, ft,,,;;//*,,r?I s

s,i Lleer.J.lPhii j94(1946).

Gt.eerrjidtc)t,. _, n^,._r^^..?r roA* scR'A 912 citine CiRt'
sr octotrer 31, 1968,25
C!lit, f,hil.,lce littes, lrc., G.R.'Nos.'L-20960-61,
Bothelo'9lti1l1;illgCol.pot.ciiio;t,G'R.No.L-21633.j1r11e79.196.1.20SCI{A487.

th,
 i.
Decisior-r r8 G.R No 2t 0588

irnnupe to in tl-re first place. Tiris completely contradicts ti-ie esseuce of tireir
tax eretnption.

in the saile rreir-r, \\/e cannot agree u,iih the rrierv that FEZ enterprises
have the clLrty to prorie tireir entitlemeut to tax eletnption 11st before fLrll;"
enjoyipg t5e salne; \\/e t-incl it illogical to determine rvirether a person is
exernptecl from tax r.r,ithout lirst detennining if he is subject to tl-re tar being
i,rposecl. We have rerninciecl the tax authorities to determine first iFa person
is iiable for a particr-rlaL tax, appl,ving the n-rle of strict interpretation of tax
lau,s, before urLirrg him to pio,o his exemption therefi'o,r.8' Incleed, as
entities exempteci on taxes on importations, FEZ enterprises are clearly
L-re1,sncl the correrage of any larv imposing those rrel'Y charges'
There is no
juistifiable reason to require them to prove that they are exelrlpted fiom it'

N4ore ir-irportantiy, u,e have also recognized that the eremptiotl frotl
Iocal ancl national taxes grantecl uncler RA 7277, as aureirded b1' R{ 9400,
are ipso /bcto accorclec] to FEZs. In case of doubt, conflicts u'ith respect
to
such tax exemption privilege shall be resolved iri favor of these special
territories.86

RR 2-20I2 is rtnconstittttional.

Accorcling to the responclents, the porver to ettact, atttend, or repeal

lau,s beiong exclusively to Congress.sT In passing RR 2-?01?,
petitiot-rers
illegally amepclecl the lar.r, power solely vested on tfue Legislature'

We agree rvith the resPondents'

The pou,er of the petitioners to interpret tax iarvs is not absoli-rte.

The
*ile is tl-rat regulations may not enlarge, aiter, restrict, or othenvise go
be1,611,1 the proyisions of the lau, the.7 adurinister;
adrninislrators and
inrpre,rentors g.a,,ot engraft acrditional requiremerts not conte,rplated b1'
the legislatttre.stt

It is rvortl-ry to note that RR 2-2A12 does not even refer to a specific

-far Cocle provision it rvishes to irlplement. W/hite it pt.u'portedht estcLblislt'es
fttere acrtttinistration illeasltres -fo, tlte collectiort qf [i,4T
attd excise tax ort
the importatiol of petrolettttt cmcl petrolettm pr"o'lttcts' not once
did it
excise tcx'
ntention tl'te perti,r",ri cl'rapters of the Tctx Code on l/AT ancl

\^rhile \ve recognize petitioners' essential ratiortale in issuing

ttR 2-
2aj?.. tl-re procedures proposecl by the issnance cannot
be implemented at tlie
fru tax inrrnunit\'.
Pd
*l r<
W4 exllense oi entities that harre been cleariy granted statr-itory
ts, (1-g .---

*! t-r=.
e-

t-i I='{
-

a F.SH';1
8,i scRA 60i
o/R y. Cottrt of ,4ppeals. c.R. ].1o. 1 15349, ,liprii I 8, 1991,271
N-P-d

r{*, ,
,* H-*
--}*.-:-
-) , -
LFi
Gr=-=*
tlj::; so Strot.cr note 31. C/.sectiorr b. lt.{ ,1221,as' atrieniied b,'RA 9400.
4 ,"-..2- ii7 'Rolio. p.379.
r.J \ :>- ,{pril li. 1005 .1i6
4 c? :-=;;-*1 3d L'tt:tttit'is.rioner r,ti /ttlerititl i-let'eitrre t'. Centt'ul Luzoit Dt'ug,
G 11' No' t-;qe +7,
r:,_
-]n p1 =
\ >d-,--:
rl; SCRr\ -{ l-i
,.--r. \-'\ -\ --;
r-,i
-
i-L 7,7-

ff'
r-..-r
' a Yl::i
--\
 Decisittn
ITE\/ISED PACE
I9 O' G.R. No. I10588

Tax exenrptious at'e granted for specific public interests that the
Legislature considers sufficient to ofTset the rnoi-retai-1, ioss in the grant of
erenrp[io,-,s.t' To ]iiuit the tar-free intportation privilege oi'FEZ e,r[rprises
by reqltiring tltem to pa), sirbject to a retr-rncl clearly rlurs coLurter to tfte
Legislatttre's intent to create a fi'ee port u,here the "tree flou, of goocls or
capitaI u,ithin, into, and out of tire zones" is ensLrrecl.t"'

Finalll', the State's inherent powel to tar is rrested erclusivell,in the

Legislature.e' W" have since rLrlecl that tire power to tax ir-rcir-rcles tire pou,er
to grant tax exemptions.t" T1,l',r, the imposition of taxes, as r,l,el1 as the grant
anc/ li,itirdrawal of tax eremptions, shall onlv be valid jrLrsLrant to a
I egislative enactrnen[.

As RR 2-2012, an executive issilance, attempts to rvithdrau, tl-ie tax

itrcentives clearly accorcled by the legislative to FEZ enterprises, rhe
* petitioners have at'rogated r-ipon themselr/es a power resenred exclusiveft, to
Congress, in violation o1'the doctrine of separation of pou,ers.

ln these iights, rve hereby rr-ile and declare tirat RR 2-2012 is nuli ancl
voi d.

vYI{EittrFORE,, rve irereby DISMISS the petition tbr lacic trf nrerit,
and accordir-rgly AF FIRM decision of the Regional Trial Court dated
Novcrul:er 8, zAfi 2001 in SCA Case No. 1 2-410.

SO ORt}trRED.

6^wfrfrr*
ARTURO D. BR.ION
,{ssociate Justice

\\,E C]ONCUR

VTAI{L{ LOURDtrS P. A. SERENO

Chiel'Justice R LinEAU 0f ii'JEi.r:li,U, LilT"'",ri.E
l,iliCORlS h{GT" f}i=!,}.SIGi.i
Q:4r /+ t4,
MAY 05 ?n\t / .f_

:'tq
')it
Su1trtl rtot-e
Supt'l nolc
'34.
6 i.
RECE H\ffff
':)r Filrn Det't:l()pment Cotttcrl ,y'the Phi!ipprne.s v. Co!on l-lzrltage Realr.,. Coi'ooratioir. C.R. No.
20-l 7t-!. .lrir:e I 6. l,J i -:, sc.iudiciar'),.qor'.i-;ir.
er .Air,:-zttit u'i/.l, r, ,.tts,1-(-lBi; bt.rtuiluustitt! (l.ct'1.;r;r,:.;,:r.'-ri:, C.11. No.' 166-+08, Ociobei 6,. l(rt-r8, -ioS
iCti.,\ 4:)6.
"' il.;sprin,-lenis charngecl t() I-re-ritioners.

Ei\i i3ANC
 Decision 20 G.R. No. 110588

iINTONIO T. CARPIO PRE,SBITE J. \/trLASCO,.IR.

Associate Jr-rstice A ociate Jr-rstice

W,fuM,4"M, Associate Justice

DIOSDAD M. PtrR*AL'fA
Associa e .iustice

SAMIN
Associate Justice

/
L JosE
O---.
ca$nel vfcxDozA
JO E
ssociate ustice Assdbiate Jtr/stice

t'at
ffiI'rnlas-Blr.llN ARE
ItrNVEI{IDO L. REYtr,S trsrtrLa nC.'

Associate .lustice Associate Jr-rstice

(No Part)
FRA]YCIS H. JARDELE,ZA
Assc,ciate Jr-rstice Associate Jr-rstice

RII A
^/ rate US

CtrRTTFICATIOI{

purs,ant ro Sectior-r i3, Article VIII of the Cor-rstitr-ttion, it is herebl'

had been reached i,
certif-iecl tirat ti-re co,ciusions i* tlie above Decision
co.sr_rltatio^ before tire case rvas assigned to the
u'riter of the opinion of tire
Court.

tslii.E/iu 0I IiiTI?i{;L IifiE{I_;E

it];,c{if;.nS i';iGi MAIII.T LOURT}E,S P. A. SERtri'{O
q 4f A t4, D,iT/ISIGII
Cirief Jr-istice
u'ayol2ui7 ^/t .
W,qo
HECHTVb,"il