that unilaterally protect weak and inefficient domestic producers of goods and

WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of services. In the words of Peter Drucker, the well-known management guru,
the Philippine Senate and as taxpayers; GREGORIO ANDOLANA and Increased participation in the world economy has become the key to domestic
JOKER ARROYO as members of the House of Representatives and economic growth and prosperity.
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 Brief Historical Background
FOUNDATION, INC., PHILIPPINE RURAL RECONSTRUCTION
MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG
PILIPINAS, INC., and PHILIPPINE PEASANT INSTITUTE, in To hasten worldwide recovery from the devastation wrought by the Second
representation of various taxpayers and as non-governmental World War, plans for the establishment of three multilateral institutions -- inspired
organizations, petitioners, vs. EDGARDO ANGARA, ALBERTO by that grand political body, the United Nations -- were discussed at Dumbarton
ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ, Oaks and Bretton Woods. The first was the World Bank (WB) which was to
AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI GONZALES, address the rehabilitation and reconstruction of war-ravaged and later developing
ERNESTO HERRERA, JOSE LINA, GLORIA MACAPAGAL-ARROYO, countries; the second, the International Monetary Fund (IMF) which was to deal
ORLANDO MERCADO, BLAS OPLE, JOHN OSMEA, SANTANINA with currency problems; and the third, the International Trade Organization (ITO),
RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO TATAD and which was to foster order and predictability in world trade and to minimize
FREDDIE WEBB, in their respective capacities as members of the unilateral protectionist policies that invite challenge, even retaliation, from other
Philippine Senate who concurred in the ratification by the President states. However, for a variety of reasons, including its non-ratification by the United
of the Philippines of the Agreement Establishing the World Trade States, the ITO, unlike the IMF and WB, never took off. What remained was only
Organization; SALVADOR ENRIQUEZ, in his capacity as Secretary of GATT -- the General Agreement on Tariffs and Trade. GATT was a collection of
Budget and Management; CARIDAD VALDEHUESA, in her capacity treaties governing access to the economies of treaty adherents with no
as National Treasurer; RIZALINO NAVARRO, in his capacity as institutionalized body administering the agreements or dependable system of
Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his dispute settlement.
capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in his After half a century and several dizzying rounds of negotiations, principally the
capacity as Secretary of Finance; ROBERTO ROMULO, in his Kennedy Round, the Tokyo Round and the Uruguay Round, the world finally gave
capacity as Secretary of Foreign Affairs; and TEOFISTO T. birth to that administering body -- the World Trade Organization -- with the signing
GUINGONA, in his capacity as Executive Secretary, respondents. of the Final Act in Marrakesh, Morocco and the ratification of the WTO Agreement
by its members.[1]
DECISION
Like many other developing countries, the Philippines joined WTO as a
PANGANIBAN, J.: 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,
The emergence on January 1, 1995 of the World Trade Organization, abetted especially its major trading partners, through the reduction of tariffs on its exports,
by the membership thereto of the vast majority of countries has revolutionized particularly agricultural and industrial products. The President also saw in the WTO
international business and economic relations amongst states. It has irreversibly the opening of new opportunities for the services sector x x x, (the reduction of)
propelled the world towards trade liberalization and economic costs and uncertainty associated with exporting x x x, and (the attraction of) more
globalization. Liberalization, globalization, deregulation and privatization, the third- investments into the country. Although the Chief Executive did not expressly
millennium buzz words, are ushering in a new borderless world of business by mention it in his letter, the Philippines - - and this is of special interest to the legal
sweeping away as mere historical relics the heretofore traditional modes of profession - - will benefit from the WTO system of dispute settlement by judicial
promoting and protecting national economies like tariffs, export subsidies, import adjudication through the independent WTO settlement bodies called (1) Dispute
quotas, quantitative restrictions, tax exemptions and currency controls. Finding Settlement Panels and (2) Appellate Tribunal. Heretofore, trade disputes were
market niches and becoming the best in specific industries in a market-driven and settled mainly through negotiations where solutions were arrived at frequently on
export-oriented global scenario are replacing age-old beggar-thy-neighbor policies
the basis of relative bargaining strengths, and where naturally, weak and (a) to submit, as appropriate, the WTO Agreement for the consideration of their
underdeveloped countries were at a disadvantage. respective competent authorities, with a view to seeking approval of the
Agreement in accordance with their procedures; and

The Petition in Brief (b) to adopt the Ministerial Declarations and Decisions.

On August 12, 1994, the members of the Philippine Senate received a letter
Arguing mainly (1) that the WTO requires the Philippines to place nationals dated August 11, 1994 from the President of the Philippines, [3] stating among
and products of member-countries on the same footing as Filipinos and local others that the Uruguay Round Final Act is hereby submitted to the Senate for its
products and (2) that the WTO intrudes, limits and/or impairs the constitutional concurrence pursuant to Section 21, Article VII of the Constitution.
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 On August 13, 1994, the members of the Philippine Senate received another
Constitution to develop a self-reliant and independent national economy effectively letter from the President of the Philippines [4] likewise dated August 11, 1994, which
controlled by Filipinos x x x (to) give preference to qualified Filipinos (and to) stated among others that the Uruguay Round Final Act, the Agreement
promote the preferential use of Filipino labor, domestic materials and locally Establishing the World Trade Organization, the Ministerial Declarations and
produced goods. Decisions, and the Understanding on Commitments in Financial Services are
hereby submitted to the Senate for its concurrence pursuant to Section 21, Article
Simply stated, does the Philippine Constitution prohibit Philippine participation VII of the Constitution.
in worldwide trade liberalization and economic globalization? Does it prescribe
Philippine integration into a global economy that is liberalized, deregulated and On December 9, 1994, the President of the Philippines certified the necessity
privatized? These are the main questions raised in this petition for certiorari, of the immediate adoption of P.S. 1083, a resolution entitled Concurring in the
prohibition and mandamus under Rule 65 of the Rules of Court praying (1) for the Ratification of the Agreement Establishing the World Trade Organization.[5]
nullification, on constitutional grounds, of the concurrence of the Philippine Senate On December 14, 1994, the Philippine Senate adopted Resolution No. 97
in the ratification by the President of the Philippines of the Agreement Establishing which Resolved, as it is hereby resolved, that the Senate concur, as it hereby
the World Trade Organization (WTO Agreement, for brevity) and (2) for the concurs, in the ratification by the President of the Philippines of the Agreement
prohibition of its implementation and enforcement through the release and Establishing the World Trade Organization.[6] The text of the WTO Agreement is
utilization of public funds, the assignment of public officials and employees, as well written on pages 137 et seq. of Volume I of the 36-volume Uruguay Round of
as the use of government properties and resources by respondent-heads of Multilateral Trade Negotiations and includes various agreements and associated
various executive offices concerned therewith. This concurrence is embodied in legal instruments (identified in the said Agreement as Annexes 1, 2 and 3 thereto
Senate Resolution No. 97, dated December 14, 1994. and collectively referred to as Multilateral Trade Agreements, for brevity) as
follows:

The Facts ANNEX 1

Annex 1A: Multilateral Agreement on Trade in Goods

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 General Agreement on Tariffs and Trade 1994
Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay Round
of Multilateral Negotiations (Final Act, for brevity). Agreement on Agriculture

By signing the Final Act,[2] Secretary Navarro on behalf of the Republic of the Agreement on the Application of Sanitary and
Philippines, agreed:
Phytosanitary Measures
 Agreement on Textiles and Clothing 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
Agreement on Technical Barriers to Trade 15 April 1994, do hereby ratify and confirm the same and every Article and Clause
thereof.
Agreement on Trade-Related Investment Measures
To emphasize, the WTO Agreement ratified by the President of the
Agreement on Implementation of Article VI of the General Philippines is composed of the Agreement Proper and the associated legal
Agreement on Tariffs and Trade 1994 instruments included in Annexes one (1), two (2) and three (3) of that Agreement
which are integral parts thereof.
Agreement on Implementation of Article VII of the General On the other hand, the Final Act signed by Secretary Navarro embodies not
on Tariffs and Trade 1994 only the WTO Agreement (and its integral annexes aforementioned) but also (1)
the Ministerial Declarations and Decisions and (2) the Understanding on
Agreement on Pre-Shipment Inspection Commitments in Financial Services. In his Memorandum dated May 13,
1996,[8] the Solicitor General describes these two latter documents as follows:
Agreement on Rules of Origin
The Ministerial Decisions and Declarations are twenty-five declarations and
decisions on a wide range of matters, such as measures in favor of least
Agreement on Imports Licensing Procedures
developed countries, notification procedures, relationship of WTO with the
International Monetary Fund (IMF), and agreements on technical barriers to trade
Agreement on Subsidies and Coordinating Measures and on dispute settlement.

Agreement on Safeguards The Understanding on Commitments in Financial Services dwell on, among other
things, standstill or limitations and qualifications of commitments to existing non-
Annex 1B: General Agreement on Trade in Services and Annexes conforming measures, market access, national treatment, and definitions of non-
resident supplier of financial services, commercial presence and new financial
Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights service.

ANNEX 2 On December 29, 1994, the present petition was filed. After careful
deliberation on respondents comment and petitioners reply thereto, the Court
Understanding on Rules and Procedures Governing the resolved on December 12, 1995, to give due course to the petition, and the parties
Settlement of Disputes 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
ANNEX 3
Bautista Paper,[9] for brevity, (1) providing a historical background of and (2)
summarizing the said agreements.
Trade Policy Review Mechanism
During the Oral Argument held on August 27, 1996, the Court directed:
On December 16, 1994, the President of the Philippines signed [7] the
Instrument of Ratification, declaring: (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
NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the
Republic of the Philippines, after having seen and considered the aforementioned (b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine
Agreement Establishing the World Trade Organization and the agreements and treaties signed prior to the Philippine adherence to the WTO Agreement, which
derogate from Philippine sovereignty and (2) copies of the multi-volume WTO G. Whether the respondent members of the Senate acted in grave abuse of
Agreement and other documents mentioned in the Final Act, as soon as possible. discretion amounting to lack or excess of jurisdiction when they concurred
only in the ratification of the Agreement Establishing the World Trade
After receipt of the foregoing documents, the Court said it would consider the Organization, and not with the Presidential submission which included the
case submitted for resolution. In a Compliance dated September 16, 1996, the Final Act, Ministerial Declaration and Decisions, and the Understanding
Solicitor General submitted a printed copy of the 36-volume Uruguay Round of on Commitments in Financial Services.
Multilateral Trade Negotiations, and in another Compliance dated October 24,
1996, he listed the various bilateral or multilateral treaties or international On the other hand, the Solicitor General as counsel for respondents
instruments involving derogation of Philippine sovereignty. Petitioners, on the other synthesized the several issues raised by petitioners into the following: [10]
hand, submitted their Compliance dated January 28, 1997, on January 30, 1997.
1. Whether or not the provisions of the Agreement Establishing the World Trade
Organization and the Agreements and Associated Legal Instruments included in
The Issues 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.
In their Memorandum dated March 11, 1996, petitioners summarized the
issues as follows: 2. Whether or not certain provisions of the Agreement unduly limit, restrict or
impair the exercise of legislative power by Congress.
A. Whether the petition presents a political question or is otherwise not justiciable.
3. Whether or not certain provisions of the Agreement impair the exercise of
B. Whether the petitioner members of the Senate who participated in the judicial power by this Honorable Court in promulgating the rules of evidence.
deliberations and voting leading to the concurrence are estopped from
impugning the validity of the Agreement Establishing the World Trade 4. Whether or not the concurrence of the Senate in the ratification by the President
Organization or of the validity of the concurrence. of the Philippines of the Agreement establishing the World Trade Organization
implied rejection of the treaty embodied in the Final Act.
C. Whether the provisions of the Agreement Establishing the World Trade
Organization contravene the provisions of Sec. 19, Article II, and Secs. By raising and arguing only four issues against the seven presented by
10 and 12, Article XII, all of the 1987 Philippine Constitution. petitioners, the Solicitor General has effectively ignored three, namely: (1) whether
the petition presents a political question or is otherwise not justiciable; (2) whether
D. Whether provisions of the Agreement Establishing the World Trade petitioner-members of the Senate (Wigberto E. Taada and Anna Dominique
Organization unduly limit, restrict and impair Philippine sovereignty Coseteng) are estopped from joining this suit; and (3) whether the respondent-
specifically the legislative power which, under Sec. 2, Article VI, 1987 members of the Senate acted in grave abuse of discretion when they voted for
Philippine Constitution is vested in the Congress of the Philippines; concurrence in the ratification of the WTO Agreement. The foregoing
notwithstanding, this Court resolved to deal with these three issues thus:
E. Whether provisions of the Agreement Establishing the World Trade
Organization interfere with the exercise of judicial power. (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
F. Whether the respondent members of the Senate acted in grave abuse of case -- was deliberated upon by the Court and will thus be ruled upon as the first
discretion amounting to lack or excess of jurisdiction when they voted for issue;
concurrence in the ratification of the constitutionally-infirm Agreement
Establishing the World Trade Organization. (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, In seeking to nullify an act of the Philippine Senate on the ground that it
who are not vulnerable to the defense of estoppel; and contravenes the Constitution, the petition no doubt raises a justiciable
controversy. Where an action of the legislative branch is seriously alleged to have
(3) The issue of alleged grave abuse of discretion on the part of the respondent infringed the Constitution, it becomes not only the right but in fact the duty of the
senators will be taken up as an integral part of the disposition of the four issues judiciary to settle the dispute.The question thus posed is judicial rather than
raised by the Solicitor General. 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
During its deliberations on the case, the Court noted that the respondents did of a constitutional provision is raised before this Court (as in the instant case), it
not question the locus standi of petitioners. Hence, they are also deemed to have becomes a legal issue which the Court is bound by constitutional mandate to
decide.[13]
waived the benefit of such issue. They probably realized that grave constitutional
issues, expenditures of public funds and serious international commitments of the The jurisdiction of this Court to adjudicate the matters[14] raised in the petition
nation are involved here, and that transcendental public interest requires that the is clearly set out in the 1987 Constitution,[15] as follows:
substantive issues be met head on and decided on the merits, rather than skirted
or deflected by procedural matters.[11] Judicial power includes the duty of the courts of justice to settle actual
To recapitulate, the issues that will be ruled upon shortly are: controversies involving rights which are legally demandable and enforceable, and
to determine whether or not there has been a grave abuse of discretion amounting
(1) DOES THE PETITION PRESENT A JUSTICIABLE to lack or excess of jurisdiction on the part of any branch or instrumentality of the
CONTROVERSY? OTHERWISE STATED, DOES THE PETITION government.
INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT
HAS NO JURISDICTION? The foregoing text emphasizes the judicial departments duty and power to
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS strike down grave abuse of discretion on the part of any branch or instrumentality
THREE ANNEXES CONTRAVENE SEC. 19, ARTICLE II, AND of government including Congress. It is an innovation in our political law. [16] As
SECS. 10 AND 12, ARTICLE XII, OF THE PHILIPPINE explained by former Chief Justice Roberto Concepcion,[17] the judiciary is the final
CONSTITUTION? 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
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES as to constitute an abuse of discretion amounting to excess of jurisdiction. This is
LIMIT, RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE not only a judicial power but a duty to pass judgment on matters of this nature.
POWER BY CONGRESS?
As this Court has repeatedly and firmly emphasized in many cases,[18] it will
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH not shirk, digress from or abandon its sacred duty and authority to uphold the
THE EXERCISE OF JUDICIAL POWER BY THIS COURT IN Constitution in matters that involve grave abuse of discretion brought before it in
PROMULGATING RULES ON EVIDENCE? appropriate cases, committed by any officer, agency, instrumentality or department
of the government.
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO
AGREEMENT AND ITS ANNEXES SUFFICIENT AND/OR VALID, As the petition alleges grave abuse of discretion and as there is no other
CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT, plain, speedy or adequate remedy in the ordinary course of law, we have no
MINISTERIAL DECLARATIONS AND DECISIONS, AND THE hesitation at all in holding that this petition should be given due course and the vital
UNDERSTANDING ON COMMITMENTS IN FINANCIAL questions raised therein ruled upon under Rule 65 of the Rules of
SERVICES? 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.
The First Issue: Does the Court Have Jurisdiction Over the Controversy? 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 merits of trade liberalization
as a policy espoused by said international body. Neither will it rule on In the grant of rights, privileges, and concessions covering the national economy
the propriety of the governments economic policy of reducing/removing tariffs, and patrimony, the State shall give preference to qualified Filipinos.
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 xx xx xx xx
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.
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.
Second Issue: The WTO Agreement and Economic Nationalism
Petitioners aver that these sacred constitutional principles are desecrated by
the following WTO provisions quoted in their memorandum:[19]
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the letter, spirit and intent of the Constitution a) In the area of investment measures related to trade in goods (TRIMS, for
mandating economic nationalism are violated by the so-called parity provisions brevity):
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 Article 2
and in the Understanding on Commitments in Financial Services.
Specifically, the flagship constitutional provisions referred to are Sec. 19, National Treatment and Quantitative Restrictions.
Article II, and Secs. 10 and 12, Article XII, of the Constitution, which are worded as
follows: 1. Without prejudice to other rights and obligations under GATT 1994. no
Member shall apply any TRIM that is inconsistent with the provisions
Article II of Article III or Article XI of GATT 1994.

DECLARATION OF PRINCIPLES AND STATE POLICIES 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
xx xx xx xx
this Agreement. (Agreement on Trade-Related Investment Measures,
Vol. 27, Uruguay Round, Legal Instruments, p.22121, emphasis
Sec. 19. The State shall develop a self-reliant and independent national economy supplied).
effectively controlled by Filipinos.
The Annex referred to reads as follows:
xx xx xx xx
ANNEX
Article XII
Illustrative List
NATIONAL ECONOMY AND PATRIMONY
1. TRIMS that are inconsistent with the obligation of national treatment
xx xx xx xx provided for in paragraph 4 of Article III of GATT 1994 include those
which are mandatory or enforceable under domestic law or under
Sec. 10. x x x. The Congress shall enact measures that will encourage the administrative rulings, or compliance with which is necessary to
formation and operation of enterprises whose capital is wholly owned by Filipinos. obtain an advantage, and which require:
 (a) the purchase or use by an enterprise of products of domestic origin or b) In the area of trade related aspects of intellectual property rights (TRIPS,
from any domestic source, whether specified in terms of particular for brevity):
products, in terms of volume or value of products, or in terms of
proportion of volume or value of its local production; or 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
(b) that an enterprises purchases or use of imported products be limited protection of intellectual property... (par. 1, Article 3, Agreement on Trade-Related
to an amount related to the volume or value of local products that it Aspect of Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments,
exports. p.25432 (emphasis supplied)

2. TRIMS that are inconsistent with the obligations of general elimination of (c) In the area of the General Agreement on Trade in Services:
quantitative restrictions provided for in paragraph 1 of Article XI of GATT
1994 include those which are mandatory or enforceable under domestic National Treatment
laws or under administrative rulings, or compliance with which is
necessary to obtain an advantage, and which restrict:
1. In the sectors inscribed in its schedule, and subject to any conditions
and qualifications set out therein, each Member shall accord to
(a) the importation by an enterprise of products used in or related to the services and service suppliers of any other Member, in respect of all
local production that it exports; measures affecting the supply of services, treatment no less
favourable than it accords to its own like services and service
(b) the importation by an enterprise of products used in or related to its suppliers.
local production by restricting its access to foreign exchange inflows
attributable to the enterprise; or 2. A Member may meet the requirement of paragraph I by according to
services and service suppliers of any other Member, either formally
(c) the exportation or sale for export specified in terms of particular identical treatment or formally different treatment to that it accords to
products, in terms of volume or value of products, or in terms of a its own like services and service suppliers.
preparation of volume or value of its local production. (Annex to the
Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay 3. Formally identical or formally different treatment shall be considered to
Round Legal Documents, p.22125, emphasis supplied). be less favourable if it modifies the conditions of completion in favour
of services or service suppliers of the Member compared to like
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows: services or service suppliers of any other Member. (Article XVII,
General Agreement on Trade in Services, Vol. 28, Uruguay Round
The products of the territory of any contracting party imported into the territory of Legal Instruments, p.22610 emphasis supplied).
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 It is petitioners position that the foregoing national treatment and parity
and requirements affecting their internal sale, offering for sale, purchase, provisions of the WTO Agreement place nationals and products of member
transportation, distribution or use. the provisions of this paragraph shall not prevent countries on the same footing as Filipinos and local products, in contravention of
the application of differential internal transportation charges which are based the Filipino First policy of the Constitution. They allegedly render meaningless the
exclusively on the economic operation of the means of transport and not on the phrase effectively controlled by Filipinos. The constitutional conflict becomes more
nationality of the product. (Article III, GATT 1947, as amended by the Protocol manifest when viewed in the context of the clear duty imposed on the Philippines
Modifying Part II, and Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 as a WTO member to ensure the conformity of its laws, regulations and
in relation to paragraph 1(a) of the General Agreement on Tariffs and Trade 1994, administrative procedures with its obligations as provided in the annexed
Vol. 1, Uruguay Round, Legal Instruments p.177, emphasis supplied). 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 of the executive and the legislature through the language of the ballot. (Bernas,
and locally produced goods. Vol. II, p. 2).
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; The reasons for denying a cause of action to an alleged infringement of broad
(2) that these nationalistic portions of the Constitution invoked by petitioners constitutional principles are sourced from basic considerations of due process and
should not be read in isolation but should be related to other relevant provisions of the lack of judicial authority to wade into the uncharted ocean of social and
Art. XII, particularly Secs. 1 and 13 thereof; (3) that read properly, the cited WTO economic policy making. Mr. Justice Florentino P. Feliciano in his concurring
clauses do not conflict with the Constitution; and (4) that the WTO Agreement opinion in Oposa vs. Factoran, Jr.,[26] explained these reasons as follows:
contains sufficient provisions to protect developing countries like the Philippines
from the harshness of sudden trade liberalization. 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
We shall now discuss and rule on these arguments. 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
Declaration of Principles Not Self-Executing 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
By its very title, Article II of the Constitution is a declaration of principles and Philippine Environment Code, and that the trial court should have given petitioners
state policies. The counterpart of this article in the 1935 Constitution[21] is called an effective opportunity so to demonstrate, instead of aborting the proceedings on
the basic political creed of the nation by Dean Vicente Sinco.[22] These principles in a motion to dismiss.
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 It seems to me important that the legal right which is an essential component of a
exercise of its power of judicial review, and by the legislature in its enactment of cause of action be a specific, operable legal right, rather than a constitutional or
laws. As held in the leading case of Kilosbayan, Incorporated vs. Morato,[24] the statutory policy, for at least two (2) reasons. One is that unless the legal right
principles and state policies enumerated in Article II and some sections of Article claimed to have been violated or disregarded is given specification in operational
XII are not self-executing provisions, the disregard of which can give rise to a terms, defendants may well be unable to defend themselves intelligently and
cause of action in the courts. They do not embody judicially enforceable effectively; in other words, there are due process dimensions to this matter.
constitutional rights but guidelines for legislation.
In the same light, we held in Basco vs. Pagcor[25] that broad constitutional The second is a broader-gauge consideration -- where a specific violation of law or
principles need legislative enactments to implement them, thus: 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:
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, Section 1. x x x
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 Judicial power includes the duty of the courts of justice to settle actual
passed by Congress to clearly define and effectuate such principles. controversies involving rights which are legally demandable and enforceable, and
to determine whether or not there has been a grave abuse of discretion amounting
In general, therefore, the 1935 provisions were not intended to be self-executing to lack or excess of jurisdiction on the part of any branch or instrumentality of the
principles ready for enforcement through the courts. They were rather directives Government. (Emphases supplied)
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 When substantive standards as general as the right to a balanced and healthy
judicial but political. The electorate could express their displeasure with the failure 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, 1. A more equitable distribution of opportunities, income and wealth;
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 2. A sustained increase in the amount of goods and services provided by the
environmental protection and management, our courts have no claim to special nation for the benefit of the people; and
technical competence and experience and professional qualification. Where no 3. An expanding productivity as the key to raising the quality of life for all
specific, operable norms and standards are shown to exist, then the policy making especially the underprivileged.
departments -- the legislative and executive departments -- must be given a real
and effective opportunity to fashion and promulgate those norms and standards, With these goals in context, the Constitution then ordains the ideals of
and to implement them before the courts should intervene. 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
Economic Nationalism Should Be Read with Other Constitutional Mandates them competitive;[28] and (3) by requiring the State to develop a self-reliant and
to Attain Balanced Development of Economy 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
On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying
forms and arrangements of exchange on the basis of equality and
down general principles relating to the national economy and patrimony, should be
reciprocity;[30] and speaks of industries which are competitive in both domestic and
read and understood in relation to the other sections in said article, especially
foreign markets as well as of the protection of Filipino enterprises against unfair
Secs. 1 and 13 thereof which read:
foreign competition and trade practices.
Section 1. The goals of the national economy are a more equitable distribution of It is true that in the recent case of Manila Prince Hotel vs. Government
opportunities, income, and wealth; a sustained increase in the amount of goods Service Insurance System, et al.,[31] this Court held that Sec. 10, second par., Art.
and services produced by the nation for the benefit of the people; and an XII of the 1987 Constitution is a mandatory, positive command which is complete
expanding productivity as the key to raising the quality of life for all, especially the in itself and which needs no further guidelines or implementing laws or rules for its
underprivileged. 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
The State shall promote industrialization and full employment based on sound provision itself states, it is enforceable only in regard to the grants of rights,
agricultural development and agrarian reform, through industries that make full and privileges and concessions covering national economy and patrimony and not to
efficient use of human and natural resources, and which are competitive in both every aspect of trade and commerce. It refers to exceptions rather than the
domestic and foreign markets. However, the State shall protect Filipino enterprises rule. The issue here is not whether this paragraph of Sec. 10 of Art. XII is self-
against unfair foreign competition and trade practices. 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.
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 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
xxxxxxxxx business exchange with the rest of the world on the bases of equality and
reciprocity and limits protection of Filipino enterprises only against foreign
Sec. 13. The State shall pursue a trade policy that serves the general welfare and competition and trade practices that are unfair.[32] In other words, the Constitution
utilizes all forms and arrangements of exchange on the basis of equality and did not intend to pursue an isolationist policy. It did not shut out foreign
reciprocity. 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
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of
either. In fact, it allows an exchange on the basis of equality and reciprocity,
national economic development, as follows:
frowning only on foreign competition that is unfair.
WTO Recognizes Need to Protect Weak Economies a share in the growth in international trade commensurate with the needs of their
economic development,

Upon the other hand, respondents maintain that the WTO itself has some Being desirous of contributing to these objectives by entering into reciprocal and
built-in advantages to protect weak and developing economies, which comprise mutually advantageous arrangements directed to the substantial reduction of tariffs
the vast majority of its members. Unlike in the UN where major states have and other barriers to trade and to the elimination of discriminatory treatment in
permanent seats and veto powers in the Security Council, in the WTO, decisions international trade relations,
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
Resolved, therefore, to develop an integrated, more viable and durable multilateral
Council.
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
WTO decides by consensus whenever possible, otherwise, decisions of the Round of Multilateral Trade Negotiations,
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
Determined to preserve the basic principles and to further the objectives
obligation of a member which would require three fourths vote. Amendments would
underlying this multilateral trading system, x x x. (underscoring supplied.)
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] Specific WTO Provisos Protect Developing Countries

Hence, poor countries can protect their common interests more effectively
through the WTO than through one-on-one negotiations with developed So too, the Solicitor General points out that pursuant to and consistent with
countries. Within the WTO, developing countries can form powerful blocs to push the foregoing basic principles, the WTO Agreement grants developing countries a
their economic agenda more decisively than outside the Organization. This is not more lenient treatment, giving their domestic industries some protection from the
merely a matter of practical alliances but a negotiating strategy rooted in rush of foreign competition. Thus, with respect to tariffs in general, preferential
law. Thus, the basic principles underlying the WTO Agreement recognize the need treatment is given to developing countries in terms of the amount of tariff
of developing countries like the Philippines to share in the growth in international reduction and the period within which the reduction is to be spread
trade commensurate with the needs of their economic development. These basic out. Specifically, GATT requires an average tariff reduction rate of 36% for
principles are found in the preamble[34] of the WTO Agreement as follows: 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.
The Parties to this Agreement,
In respect to domestic subsidy, GATT requires developed countries to reduce
Recognizing that their relations in the field of trade and economic endeavour domestic support to agricultural products by 20% over six (6) years, as compared
should be conducted with a view to raising standards of living, ensuring full to only 13% for developing countries to be effected within ten (10) years.
employment and a large and steadily growing volume of real income and effective
In regard to export subsidy for agricultural products, GATT requires
demand, and expanding the production of and trade in goods and services, while
developed countries to reduce their budgetary outlays for export subsidy by
allowing for the optimal use of the worlds resources in accordance with the
36% and export volumes receiving export subsidy by 21% within a period of six (6)
objective of sustainable development, seeking both to protect and preserve the
years. For developing countries, however, the reduction rate is only two-thirds of
environment and to enhance the means for doing so in a manner consistent with
that prescribed for developed countries and a longer period of ten (10) years within
their respective needs and concerns at different levels of economic development,
which to effect such reduction.
Recognizing further that there is need for positive efforts designed to ensure that Moreover, GATT itself has provided built-in protection from unfair foreign
developing countries, and especially the least developed among them, secure 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 Constitution Favors Consumers, Not Industries or Enterprises
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 The Constitution has not really shown any unbalanced bias in favor of any
developing nations like the Philippines have been taken into account; thus, there business or enterprise, nor does it contain any specific pronouncement that Filipino
would be no basis to say that in joining the WTO, the respondents have gravely companies should be pampered with a total
abused their discretion. True, they have made a bold decision to steer the ship of proscription of foreign competition. On the other hand, respondents claim that
state into the yet uncharted sea of economic liberalization. But such decision WTO/GATT aims to make available to the Filipino consumer the best goods and
cannot be set aside on the ground of grave abuse of discretion, simply because we services obtainable anywhere in the world at the most reasonable
disagree with it or simply because we believe only in other economic policies. As prices. Consequently, the question boils down to whether WTO/GATT will favor the
earlier stated, the Court in taking jurisdiction of this case will not pass upon the general welfare of the public at large.
advantages and disadvantages of trade liberalization as an economic policy. It will
Will adherence to the WTO treaty bring this ideal (of favoring the general
only perform its constitutional duty of determining whether the Senate committed
welfare) to reality?
grave abuse of discretion.
Will WTO/GATT succeed in promoting the Filipinos general welfare because it
will -- as promised by its promoters -- expand the countrys exports and generate
Constitution Does Not Rule Out Foreign Competition more employment?
Will it bring more prosperity, employment, purchasing power and quality
products at the most reasonable rates to the Filipino public?
Furthermore, the constitutional policy of a self-reliant and independent
national economy[35] does not necessarily rule out the entry of foreign investments, The responses to these questions involve judgment calls by our policy
goods and services. It contemplates neither economic seclusion nor mendicancy in makers, for which they are answerable to our people during appropriate electoral
the international community. As explained by Constitutional Commissioner exercises.Such questions and the answers thereto are not subject to judicial
Bernardo Villegas, sponsor of this constitutional policy: pronouncements based on grave abuse of discretion.

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 Constitution Designed to Meet Future Events and Contingencies
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 No doubt, the WTO Agreement was not yet in existence when the
industries as in the development of natural resources and public utilities. [36] 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
The WTO reliance on most favored nation, national treatment, and trade anticipated the advent of a borderless world of business. By the same token, the
without discrimination cannot be struck down as unconstitutional as in fact they are United Nations was not yet in existence when the 1935 Constitution became
rules of equality and reciprocity that apply to all WTO members. Aside from effective. Did that necessarily mean that the then Constitution might not have
envisioning a trade policy based on equality and reciprocity, [37] the fundamental contemplated a diminution of the absoluteness of sovereignty when the Philippines
law encourages industries that are competitive in both domestic and foreign signed the UN Charter, thereby effectively surrendering part of its control over its
markets, thereby demonstrating a clear policy against a sheltered domestic trade foreign relations to the decisions of various UN organs like the Security Council?
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 It is not difficult to answer this question. Constitutions are designed to meet
Filipino enterprises have shown capability and tenacity to compete not only the vagaries of contemporary events. They should be interpreted to cover
internationally. And given a free trade environment, Filipino entrepreneurs and even future and unknown circumstances. It is to the credit of its drafters that a
managers in Hongkong have demonstrated the Filipino capacity to grow and to Constitution can withstand the assaults of bigots and infidels but at the same time
prosper against the best offered under a policy of laissez faire. 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 nations. Unquestionably, the Constitution did not envision a hermit-type isolation of
blossom, the base and framework only of the edifice that is yet to rise. It is but the the country from the rest of the world. In its Declaration of Principles and State
core of the dream that must take shape, not in a twinkling by mandate of our Policies, the Constitution adopts the generally accepted principles of international
delegates, but slowly in the crucible of Filipino minds and hearts, where it will in law as part of the law of the land, and adheres to the policy of peace, equality,
time develop its sinews and gradually gather its strength and finally achieve its justice, freedom, cooperation and amity, with all nations."[43] By the doctrine of
substance. In fine, the Constitution cannot, like the goddess Athena, rise full-grown incorporation, the country is bound by generally accepted principles of international
from the brow of the Constitutional Convention, nor can it conjure by mere fiat an law, which are considered to be automatically part of our own laws. [44] One of the
instant Utopia. It must grow with the society it seeks to re-structure and march oldest and most fundamental rules in international law is pacta sunt servanda --
apace with the progress of the race, drawing from the vicissitudes of history the international agreements must be performed in good faith. A treaty engagement is
dynamism and vitality that will keep it, far from becoming a petrified rule, a pulsing, not a mere moral obligation but creates a legally binding obligation on the parties x
living law attuned to the heartbeat of the nation. 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]
Third Issue: The WTO Agreement and Legislative Power 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
The WTO Agreement provides that (e)ach Member shall ensure the convention or pact. After all, states, like individuals, live with coequals, and in
conformity of its laws, regulations and administrative procedures with its pursuit of mutually covenanted objectives and benefits, they also commonly agree
obligations as provided in the annexed Agreements.[39] Petitioners maintain that to limit the exercise of their otherwise absolute rights. Thus, treaties have been
this undertaking unduly limits, restricts and impairs Philippine sovereignty, used to record agreements between States concerning such widely diverse
specifically the legislative power which under Sec. 2, Article VI of the 1987 matters as, for example, the lease of naval bases, the sale or cession of territory,
Philippine Constitution is vested in the Congress of the Philippines. It is an assault the termination of war, the regulation of conduct of hostilities, the formation of
on the sovereign powers of the Philippines because this means that Congress alliances, the regulation of commercial relations, the settling of claims, the laying
could not pass legislation that will be good for our national interest and general down of rules governing conduct in peace and the establishment of international
welfare if such legislation will not conform with the WTO Agreement, which not organizations.[46] The sovereignty of a state therefore cannot in fact and in reality
only relates to the trade in goods x x x but also to the flow of investments and be considered absolute. Certain restrictions enter into the picture: (1) limitations
money x x x as well as to a whole slew of agreements on socio-cultural matters x x imposed by the very nature of membership in the family of nations and (2)
x.[40] limitations imposed by treaty stipulations. As aptly put by John F. Kennedy, Today,
More specifically, petitioners claim that said WTO proviso derogates from the no nation can build its destiny alone. The age of self-sufficient nationalism is
power to tax, which is lodged in the Congress.[41] And while the Constitution allows over. The age of interdependence is here.[47]
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 UN Charter and Other Treaties Limit Sovereignty
provide,[42] as in fact it did under Sec. 401 of the Tariff and Customs Code.

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 Limited by International Law and Treaties
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
This Court notes and appreciates the ferocity and passion by which with the present Charter, and shall refrain from giving assistance to any state
petitioners stressed their arguments on this issue. However, while sovereignty has against which the United Nations is taking preventive or enforcement action. Such
traditionally been deemed absolute and all-encompassing on the domestic level, it assistance includes payment of its corresponding share not merely in
is however subject to restrictions and limitations voluntarily agreed to by the administrative expenses but also in expenditures for the peace-keeping operations
Philippines, expressly or impliedly, as a member of the family of 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 (e) Bilateral air transport agreement with Korea where the Philippines agreed
Middle East and in the Congo were expenses of the United Nations under Article to exempt from all customs duties, inspection fees and other duties or
17, paragraph 2, of the UN Charter. Hence, all its members must bear their taxes aircrafts of South Korea and the regular equipment, spare parts and
corresponding share in such expenses. In this sense, the Philippine Congress is supplies arriving with said aircrafts.
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 (f) Bilateral air service agreement with Japan, where the Philippines agreed to
said Charter, the UN and its representatives enjoy diplomatic privileges and exempt from customs duties, excise taxes, inspection fees and other
immunities, thereby limiting again the exercise of sovereignty of members within similar duties, taxes or charges fuel, lubricating oils, spare parts, regular
their own territory. Another example: although sovereign equality and domestic equipment, stores on board Japanese aircrafts while on Philippine soil.
jurisdiction of all members are set forth as underlying principles in the UN Charter,
such provisos are however subject to enforcement measures decided by the
(g) Bilateral air service agreement with Belgium where the Philippines granted
Security Council for the maintenance of international peace and security under
Belgian air carriers the same privileges as those granted to Japanese and
Chapter VII of the Charter. A final example: under Article 103, (i)n the event of a
Korean air carriers under separate air service agreements.
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 (h) Bilateral notes with Israel for the abolition of transit and visitor visas where
denying the Philippines -- as a member -- the sovereign power to make a choice the Philippines exempted Israeli nationals from the requirement of
as to which of conflicting obligations, if any, to honor. obtaining transit or visitor visas for a sojourn in the Philippines not
exceeding 59 days.
Apart from the UN Treaty, the Philippines has entered into many other
international pacts -- both bilateral and multilateral -- that involve limitations on (I) Bilateral agreement with France exempting French nationals from the
Philippine sovereignty. These are enumerated by the Solicitor General in his requirement of obtaining transit and visitor visa for a sojourn not
Compliance dated October 24, 1996, as follows: exceeding 59 days.

(a) Bilateral convention with the United States regarding taxes on income, (j) Multilateral Convention on Special Missions, where the Philippines agreed
where the Philippines agreed, among others, to exempt from tax, income that premises of Special Missions in the Philippines are inviolable and its
received in the Philippines by, among others, the Federal Reserve Bank agents can not enter said premises without consent of the Head of
of the United States, the Export/Import Bank of the United States, the Mission concerned. Special Missions are also exempted from customs
Overseas Private Investment Corporation of the United States.Likewise, duties, taxes and related charges.
in said convention, wages, salaries and similar remunerations paid by
the United States to its citizens for labor and personal services
(k) Multilateral Convention on the Law of Treaties. In this convention, the
performed by them as employees or officials of the United States are
Philippines agreed to be governed by the Vienna Convention on the Law
exempt from income tax by the Philippines.
of Treaties.

(b) Bilateral agreement with Belgium, providing, among others, for the
(l) Declaration of the President of the Philippines accepting compulsory
avoidance of double taxation with respect to taxes on income.
jurisdiction of the International Court of Justice. The International Court of
Justice has jurisdiction in all legal disputes concerning the interpretation
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of of a treaty, any question of international law, the existence of any fact
double taxation. which, if established, would constitute a breach of international obligation.

(d) Bilateral convention with the French Republic for the avoidance of double In the foregoing treaties, the Philippines has effectively agreed to limit the
taxation. 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 Members shall provide, in at least one of the following circumstances, that
reciprocity characterizes the Philippine commitments under WTO-GATT. 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
International treaties, whether relating to nuclear disarmament, human rights, the obtained by the patented process:
environment, the law of the sea, or trade, constrain domestic political sovereignty
through the assumption of external obligations. But unless anarchy in international (a) if the product obtained by the patented process is new;
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 (b) if there is a substantial likelihood that the identical product was made
political sovereignty. (T)rade treaties that structure relations by reference to by the process and the owner of the patent has been unable through
durable, well-defined substantive norms and objective dispute resolution reasonable efforts to determine the process actually used.
procedures reduce the risks of larger countries exploiting raw economic power to
bully smaller countries, by subjecting power relations to some form of legal
2. Any Member shall be free to provide that the burden of proof indicated in
ordering. In addition, smaller countries typically stand to gain disproportionately paragraph 1 shall be on the alleged infringer only if the condition referred to in
from trade liberalization. This is due to the simple fact that liberalization will provide subparagraph (a) is fulfilled or only if the condition referred to in
access to a larger set of potential new trading relationship than in case of the
subparagraph (b) is fulfilled.
larger country gaining enhanced success to the smaller countrys market. [48]
3. In the adduction of proof to the contrary, the legitimate interests of
The point is that, as shown by the foregoing treaties, a portion of sovereignty defendants in protecting their manufacturing and business secrets shall be
may be waived without violating the Constitution, based on the rationale that the taken into account.
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. 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,
Fourth Issue: The WTO Agreement and Judicial Power (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
Petitioners aver that paragraph 1, Article 34 of the General Provisions and exact process used in obtaining such identical product. Hence, the burden of proof
Basic Principles of the Agreement on Trade-Related Aspects of Intellectual contemplated by Article 34 should actually be understood as the duty of the
Property Rights (TRIPS)[49] intrudes on the power of the Supreme Court to alleged patent infringer to overthrow such presumption. Such burden, properly
promulgate rules concerning pleading, practice and procedures.[50] understood, actually refers to the burden of evidence (burden of going forward)
To understand the scope and meaning of Article 34, TRIPS, [51] it will be fruitful placed on the producer of the identical (or fake) product to show that his product
to restate its full text as follows: was produced without the use of the patented process.
The foregoing notwithstanding, the patent owner still has the burden of proof
Article 34 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
Process Patents: Burden of Proof 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
1. For the purposes of civil proceedings in respect of the infringement of the likelihood that the identical product was made by the patented process.
rights of the owner referred to in paragraph 1(b) of Article 28, if the subject The foregoing should really present no problem in changing the rules of
matter of a patent is a process for obtaining a product, the judicial authorities evidence as the present law on the subject, Republic Act No. 165, as amended,
shall have the authority to order the defendant to prove that the process to otherwise known as the Patent Law, provides a similar presumption in cases of
obtain an identical product is different from the patented process. Therefore, infringement of patented design or utility model, thus:
SEC. 60. Infringement. - Infringement of a design patent or of a patent for utility other acts agreed upon and signed by the plenipotentiaries attending the
model shall consist in unauthorized copying of the patented design or utility model conference.[54] It is not the treaty itself. It is rather a summary of the proceedings of
for the purpose of trade or industry in the article or product and in the making, a protracted conference which may have taken place over several years. The text
using or selling of the article or product copying the patented design or utility of the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade
model. Identity or substantial identity with the patented design or utility model shall Negotiations is contained in just one page[55] in Vol. I of the 36-
constitute evidence of copying. (underscoring supplied) volume Uruguay Round of Multilateral Trade Negotiations. By signing said Final
Act, Secretary Navarro as representative of the Republic of the Philippines
Moreover, it should be noted that the requirement of Article 34 to provide a undertook:
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 "(a) to submit, as appropriate, the WTO Agreement for the consideration of
was made by the process and the process owner has not been able through their respective competent authorities with a view to seeking approval of
reasonable effort to determine the process used. Where either of these the Agreement in accordance with their procedures; and
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 (b) to adopt the Ministerial Declarations and Decisions."
and processes.
By and large, the arguments adduced in connection with our disposition of the The assailed Senate Resolution No. 97 expressed concurrence in exactly
third issue -- derogation of legislative power - will apply to this fourth issue what the Final Act required from its signatories, namely, concurrence of the Senate
also. Suffice it to say that the reciprocity clause more than justifies such intrusion, if in the WTO Agreement.
any actually exists. Besides, Article 34 does not contain an unreasonable burden, The Ministerial Declarations and Decisions were deemed adopted without
consistent as it is with due process and the concept of adversarial dispute need for ratification. They were approved by the ministers by virtue of Article XXV:
settlement inherent in our judicial system.
1 of GATT which provides that representatives of the members can meet to give
So too, since the Philippine is a signatory to most international conventions on effect to those provisions of this Agreement which invoke joint action, and
patents, trademarks and copyrights, the adjustment in legislation and rules of generally with a view to facilitating the operation and furthering the objectives of
procedure will not be substantial.[52] 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
Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other which have indicated in their respective schedules of commitments on standstill,
Documents Contained in the Final Act 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
Petitioners allege that the Senate concurrence in the WTO Agreement and its systems and refinancing available in the normal course of business.[57]
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 On the other hand, the WTO Agreement itself expresses what multilateral
Financial Services -- is defective and insufficient and thus constitutes abuse of agreements are deemed included as its integral parts,[58] as follows:
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 Article II
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 Scope of the WTO
the Senate[53] which enumerated what constitutes the Final Act should have been
the subject of concurrence of the Senate. 1. The WTO shall provide the common institutional framework for the conduct
A final act, sometimes called protocol de clture, is an instrument which of trade relations among its Members in matters to the agreements and
records the winding up of the proceedings of a diplomatic conference and usually associated legal instruments included in the Annexes to this Agreement.
includes a reproduction of the texts of treaties, conventions, recommendations and
 2. The Agreements and associated legal instruments included in Annexes 1, Can this Committee hear from Senator Taada and later on Senator Tolentino since
2, and 3 (hereinafter referred to as Multilateral Agreements) are integral parts they were the ones that raised this question yesterday?
of this Agreement, binding on all Members.
Senator Taada, please.
3. The Agreements and associated legal instruments included in Annex 4
(hereinafter referred to as Plurilateral Trade Agreements) are also part of this SEN. TAADA: Thank you, Mr. Chairman.
Agreement for those Members that have accepted them, and are binding on
those Members. The Plurilateral Trade Agreements do not create either Based on what Secretary Romulo has read, it would now clearly appear that what
obligation or rights for Members that have not accepted them.
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
4. The General Agreement on Tariffs and Trade 1994 as specified in annex Ministerial Declarations and Decisions, and the Understanding and Commitments
1A (hereinafter referred to as GATT 1994) is legally distinct from the General in Financial Services.
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
I am now satisfied with the wording of the new submission of President Ramos.
Committee of the United Nations Conference on Trade and Employment, as
subsequently rectified, amended or modified (hereinafter referred to as GATT
1947). SEN. TAADA. . . . of President Ramos, Mr. Chairman.

It should be added that the Senate was well-aware of what it was concurring THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator
in as shown by the members deliberation on August 25, 1994. After reading the Tolentino? And after him Senator Neptali Gonzales and Senator Lina.
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] 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 CHAIRMAN: Yes. Now, the question of the validity of the submission came the provisions of the Constitution, and with the Final Act itself. The Constitution
up in the first day hearing of this Committee yesterday. Was the observation made does not require us to ratify the Final Act. It requires us to ratify the Agreement
by Senator Taada that what was submitted to the Senate was not the agreement which is now being submitted. The Final Act itself specifies what is going to be
on establishing the World Trade Organization by the final act of the Uruguay submitted to with the governments of the participants.
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, In paragraph 2 of the Final Act, we read and I quote:
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 By signing the present Final Act, the representatives agree: (a) to submit as
proceedings of the Committee as being in the nature of briefings for Senators until appropriate the WTO Agreement for the consideration of the respective competent
the question of the submission could be clarified. authorities with a view to seeking approval of the Agreement in accordance with
their procedures.
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? 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
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be procedures may provide but it is the World Trade Organization Agreement. And if
no misunderstanding, it was his intention to clarify all matters by giving this letter. that is the one that is being submitted now, I think it satisfies both the Constitution
and the Final Act itself.
THE CHAIRMAN: Thank you.
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales. 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
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of the Constitution.[64]
record. And they had been adequately reflected in the journal of yesterdays It is true, as alleged by petitioners, that broad constitutional principles require
session and I dont see any need for repeating the same. the State to develop an independent national economy effectively controlled by
Filipinos; and to protect and/or prefer Filipino labor, products, domestic materials
Now, I would consider the new submission as an act ex abudante cautela. 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
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to causes of action. Moreover, there are other equally fundamental constitutional
make any comment on this? 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
SEN. LINA. Mr. President, I agree with the observation just made by Senator exchange on the basis of equality and reciprocity and the promotion of industries
Gonzales out of the abundance of question. Then the new submission is, I believe, which are competitive in both domestic and foreign markets, thereby justifying its
stating the obvious and therefore I have no further comment to make. 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 cooperation and amity with all
Epilogue nations.
That the Senate, after deliberation and voting, voluntarily and overwhelmingly
In praying for the nullification of the Philippine ratification of the WTO gave its consent to the WTO Agreement thereby making it a part of the law of the
Agreement, petitioners are invoking this Courts constitutionally imposed duty to land is a legitimate exercise of its sovereign duty and power. We find no patent
determine whether or not there has been grave abuse of discretion amounting to and gross arbitrariness or despotism by reason of passion or personal hostility in
lack or excess of jurisdiction on the part of the Senate in giving its concurrence such exercise. It is not impossible to surmise that this Court, or at least some of its
therein via Senate Resolution No. 97. Procedurally, a writ of certiorari grounded on members, may even agree with petitioners that it is more advantageous to the
grave abuse of discretion may be issued by the Court under Rule 65 of the Rules national interest to strike down Senate Resolution No. 97. But that is not a legal
of Court when it is amply shown that petitioners have no other plain, speedy and reason to attribute grave abuse of discretion to the Senate and to nullify its
adequate remedy in the ordinary course of law. 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
By grave abuse of discretion is meant such capricious and whimsical exercise authority. As to whether such exercise was wise, beneficial or viable is outside the
of judgment as is equivalent to lack of jurisdiction.[61] Mere abuse of discretion is realm of judicial inquiry and review. That is a matter between the elected policy
not enough. It must be grave abuse of discretion as when the power is exercised in makers and the people. As to whether the nation should join the worldwide march
an arbitrary or despotic manner by reason of passion or personal hostility, and toward trade liberalization and economic globalization is a matter that our people
must be so patent and so gross as to amount to an evasion of a positive duty or to should determine in electing their policy makers. After all, the WTO Agreement
a virtual refusal to perform the duty enjoined or to act at all in contemplation of allows withdrawal of membership, should this be the political desire of a member.
law.[62] Failure on the part of the petitioner to show grave abuse of discretion will
result in the dismissal of the petition.[63] The eminent futurist John Naisbitt, author of the best seller Megatrends,
predicts an Asian Renaissance[65] where the East will become the dominant region
In rendering this Decision, this Court never forgets that the Senate, whose act of the world economically, politically and culturally in the next century. He refers to
is under review, is one of two sovereign houses of Congress and is thus entitled to the free market espoused by WTO as the catalyst in this coming Asian
great respect in its actions. It is itself a constitutional body independent and ascendancy. There are at present about 31 countries including China, Russia and
coordinate, and thus its actions are presumed regular and done in good Saudi Arabia negotiating for membership in the WTO. Notwithstanding objections
faith. Unless convincing proof and persuasive arguments are presented to against possible limitations on national sovereignty, the WTO remains as the only
overthrow such presumptions, this Court will resolve every doubt in its favor. Using viable structure for multilateral trading and the veritable forum for the development
the foregoing well-accepted definition of grave abuse of discretion and the of international trade law. The alternative to WTO is isolation, stagnation, if not
presumption of regularity in the Senates processes, this Court cannot find any
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.