FIRST DIVISION

G.R. No. 160071, June 06, 2016

ANDREW D. FYFE, RICHARD T. NUTTALL, AND RICHARD J. WALD, Petitioners, v. PHILIPPINE

AIRLINES, INC., Respondent.

DECISION

BERSAMIN, J.:

This case concerns the order issued by the Regional Trial Court granting the respondent's application to
vacate the adverse arbitral award of the panel of arbitrators, and the propriety of the recourse from
such order.

The Case

Under review are the resolutions promulgated in C.A.-G.R. No. 71224 entitled Andrew D. Fyfe, Richard
T. Nuttall and Richard J. Wald v. Philippine Airlines, Inc.  on May 30, 20031 and September 19,
2003,2whereby the Court of Appeals (CA) respectively granted the respondent's Motion to Dismiss
Appeal (without Prejudice to the Filing of Appellee's Brief), and denied the petitioners' Motion for
Reconsideration.

Antecedents

In 1998, the respondent underwent rehabilitation proceedings in the Securities and Exchange
Commission (SEC),3 which issued an order dated July 1, 1998 decreeing, among others, the suspension
of all claims for payment against the respondent. 4 To convince its creditors to approve the rehabilitation
plan, the respondent decided to hire technical advisers with recognized experience in the airline
industry. This led the respondent through its then Director Luis Juan K. Virata to consult with people in
the industry, and in due course came to meet Peter W. Foster, formerly of Cathay Pacific
Airlines.5 Foster, along with Michael R. Scantlebury, negotiated with the respondent on the details of a
proposed technical services agreement.6 Foster and Scantlebury subsequently organized Regent Star
Services Ltd. (Regent Star) under the laws of the British Virgin Islands. 7 On January 4, 1999, the
respondent and Regent Star entered into a Technical Services Agreement (TSA) for the delivery of
technical and advisory or management services to the respondent, 8 effective for five years, or from
January 4, 1999 until December 31, 2003.9 On the same date, the respondent, pursuant to Clause 6 of
the TSA,10 submitted a Side Letter," the relevant portions of which stated:

For and in consideration of the services to be faithfully performed by Regent Star in accordance with the
terms and conditions of the Agreement, the Company agrees to pay Regent Star as follows:
chanRoblesvirtualLawlibrary

1.1 Upon execution of the Agreement, Four Million Seven Hundred Thousand US Dollars
(US$4,700,000.00), representing advisory fees for two (2) years from the date of signature of the
Agreement, with an additional amount of not exceeding One Million Three Hundred Thousand US Dollars
(US$1,300,000.00) being due and demandable upon Regent Star's notice to the Company of its
engagement of an individual to assume the position of CCA under the Agreement;

x x x x

In addition to the foregoing, the Company agrees as follows:

x x x x 

In the event of a full or partial termination of the Agreement for whatever reason by either the Company
or a Senior Technical Adviser/Regent Star prior to the end of the term of the Agreement, the following
penalties are payable by the terminating party:

A. During the first 2 years

1. Senior Company Adviser (CCA) - US$800,000.00

2. Senior Commercial Adviser (SCA) - 800,000.00

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3. Senior Financial Adviser (FSA) - 700,000.00
4. Senior Ground Services and Training Adviser (SAG) 500,000.00
-
5. Senior Engineering and Maintenance Adviser (SAM) 500,000.00
-

x x x x

For the avoidance of doubt, it is understood and agreed that in the event that the terminating party is
an individual Senior Technical Adviser the liability to pay such Termination Amount to the Company shall
rest with that individual party, not with RSS. Similarly, if the terminating party is the Company, the
liability to the aggrieved party shall be the individual Senior Technical Adviser, not to RSS.12

Regent Star, through Foster, conformed to the terms stated in the Side Letter. 13 The SEC approved the
TSA on January 19, 1999.14

In addition to Foster and Scantlebury, Regent Star engaged the petitioners in respective capacities,
specifically: Andrew D. Fyfe as Senior Ground Services and Training Adviser; Richard J. Wald as Senior
Maintenance and Engineering Adviser; and Richard T. Nuttall as Senior Commercial Adviser. The
petitioners commenced to render their services to the respondent, immediately after the TSA was
executed.15

On July 26, 1999, the respondent dispatched a notice to Regent Star terminating the TSA on the ground
of lack of confidence effective July 31, 1999.16 In its notice, the respondent demanded the offsetting of
the penalties due to the petitioners with the two-year advance advisory fees it had paid to Regent Star,
thus:

The side letter stipulates that "[i]n the event of a full or partial termination of the Agreement for
whatever reason by either the Company or a Senior Technical Adviser/Regent Star prior to the end of
the term of the Agreement, the following penalties are payable by the terminating party:"

During the first 2 years:  

Senior Company Adviser - US$800,000.00
Senior Commercial Adviser - 800,000.00
Senior Financial Adviser - 700,000.00
Senior Ground Services and Training Adviser - 500.000.00
Senior Engineering and Maintenance Adviser - 500,000.00
TOTAL   US$3,300,000.00

There is, therefore, due to RSS from PAL the amount of US$3,300,000.00 by way of stipulated penalties.

However, RSS has been paid by PAL advance "advisory fee for two (2) years from date of signature of
the Agreement" the amount of US$5,700,000. Since RSS has rendered advisory services from 4 January
to 31 July 1999, or a period of seven months, it is entitled to retain only the advisory fees for seven
months. This is computed as follows:

US$5,700.000 - US$237,500/month x7 = US$1,662,500

  24 months

The remaining balance of the advance advisory fee, which corresponds to the unserved period of 17
months, or US$4,037,500, should be refunded by RSS to PAL.

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Off-setting the amount of US$3,300,000 due from PAL to RSS against the amount of US$4,037,500 due
from RSS to PAL, there remains a net balance of US$737,500 due and payable to PAL. Please settle this
amount at your early convenience, but not later than August 15, 1999.17 ChanRoblesVirtualawlibrary

On June 8, 1999, the petitioners, along with Scantlebury and Wald, wrote to the respondent, through its
President and Chief Operating Officer, Avelino Zapanta, to seek clarification on the status of the TSA in
view of the appointment of Foster, Scantleburry and Nuttall as members of the Permanent Rehabilitation
Receiver (PRR) for the respondent.18 A month later, Regent Star sent to the respondent another letter
expressing disappointment over the respondent's ignoring the previous letter, and denying the
respondent's claim for refund and set-off. Regent Star then proposed therein that the issue be submitted
to arbitration in accordance with Clause 1419 of the TSA.20

Thereafter, the petitioners initiated arbitration proceedings in the Philippine Dispute Resolution Center,
Inc. (PDRCI) pursuant to the TSA.

Ruling of the PDRCI

After due proceedings, the PDRCI rendered its decision ordering the respondent to pay termination
penalties,21viz.:

On issue No. 1 we rule that the Complainants are entitled to their claim for termination penalties.

When the PAL, terminated the Technical Services Agreement on July 26, 1999 which also resulted in the
termination of the services of the senior technical advisers including those of the Complainants it
admitted that the termination penalties in the amount of US$3,300,000.00 as provided in the Letter
dated January 4, 1999 are payable to the Senior Technical Advisers by PAL. Xxx. PAL's admission of its
liability to pay the termination penalties to the complainants was made also in its Answer. PAIAs counsel
even stipulated during the hearing that the airline company admits that it is liable to pay Complainants
the termination penalties.xxx.

However, PAL argued that although it is liable to pay termination penalties the Complainants are not
entitled to their respective claims because considering that PAL had paid RSS advance "advisory fees for
two (2) years" in the total amount of US$5,700,000.00 and RSS had rendered advisory services for only
seven (7) months from January 4, 1999 to July 31, 1999 that would entitle RSS to an (sic) advisory fees
of only US$1,662,500.00 and therefore the unserved period of 17 months equivalent to
US$4,037,500.00 should be refunded. And setting off the termination penalties of US$3,300,000.00 due
RSS from PAL against the amount of US$4,037,500.00 still due PAL from RSS there would remain a net
balance of US$737,500.00 still due PAL from RSS and/or the Senior Technical Advisers which the latter
should pay pro-rata as follows: Peter W. Forster, the sum of US$178,475.00; Richard T. Nuttall, the sum
of US$178,475.00; Michael R. Scantlebury; the sum of US$156,350.00, Andrew D. Fyfe, the sum of
US$111,362.50; and Richard J. Wald the sum of US$111,362.50. RSS is a special company which the
Senior Technical Advisers had utilized for the specific purpose of providing PAL with technical advisory
services they as a group had contracted under the Agreement. Hence when PAL signed the Agreement
with RSS, it was for all intents and purposes an Agreement signed individually with the Senior Technical
Advisers including the Complainants. The RSS and the five (5) Senior Technical Advisers should be
treated as one and the same,

The Arbitration Tribunals is not convinced.

x x x x

PAL cannot refuse to pay Complainants their termination penalties by setting off against the unserved
period of seventeen (17) months of their advance advisory fees as the Agreement and the Side Letter
clearly do not allow refund. This Arbitration Tribunal cannot read into the contract, which is the law
between the parties, what the contract docs not provide or what the parties did not intend. It is basic in
contract interpretation that contracts that are not ambiguous are to be interpreted according to their
literal meaning and should not be interpreted beyond their obvious intendment. x x x. The
penalties work as security for the Complainants against the uncertainties of their work at PAL whose
closure was a stark reality they were facing. (TSN Hearing on April 27, 2000, pp. 48-49) This would not
result in unjust enrichment for the Complainants because the termination of the services was initiated by
PAL itself without cause. In feet, PAL admitted that at the time their services were terminated the
Complainants were performing well in their respective assigned works,22 x x x.

PAL also presented hypothetical situations and certain computations that it claims would result to an
"injustice" to PAL which would then "lose a very substantial amount of money" if the claimed refund is
not allowed. PAL had chosen to prc-terminate the services of the complainants and must therefore pay

3
the termination penalties provided in the Side Letter. If it finds itself losing "substantial" sums of money
because of its contractual commitments, there is nothing this Arbitration Tribunal can do to remedy the
situation. Jurisprudence teaches us that neither the law nor the courts will extricate a party from an
unwise or undesirable contract that he or she entered into with all the required formalities and with full
awareness of its consequences. (Opulencia vs. Cowl of Appeals, 293 SCRA 385 (1998)23

Decision of the RTC

Dissatisfied with the outcome, the respondent filed its Application to Vacate Arbitral Award in the
Regional Trial Court, in Makati City (RTC), docketed as SP Proc. M-5147 and assigned to Branch
57,24arguing that the arbitration decision should be vacated in view of the July 1, 1998 order of the SEC
placing the respondent under a state of suspension of payment pursuant to Section 6(c) of Presidential
Decree No. 902-A, as amended by P.D. No. 1799.25 cralawred

The petitioners countered with their Motion to Dismiss, 26 citing the following grounds, namely: (a) lack of
jurisdiction over the persons of the petitioners due to the improper service of summons; (b) the
application did not state a cause of action; and (c) the application was an improper remedy because the
respondent should have filed an appeal in the CA pursuant to Rule 43 of the Rules of Court.27 cralawred

On March 7, 2001, the RTC granted the respondent's Application to Vacate Arbitral Award,28 disposing:

WHEREFORE, the subject arbitral award dated September 29, 2000 is hereby vacated and set aside,
without prejudice to the complainants' filing with the SEC rehabilitation receiver of PAL their subject
claim for appropriate adjudication. The panel of arbitrators composed of lawyers Beda Fajardo, Arturo de
Castro and Bienvenido Magnaye is hereby ordered discharged on the ground of manifest partiality.

No pronouncement as to cost and attorney's fees.

SO ORDERED.29 ChanRoblesVirtualawlibrary

Anent jurisdiction over the persons of the petitioners, the RTC opined:

On the objection that the Court has not acquired jurisdiction over the person of the complainants
because summonses were not issued and served on them, the Court rules that complainants have
voluntarily submitted themselves to the jurisdiction of the Court by praying the Court to grant them
affirmative relief, i.e., that the Court confirm and declare final and executory the subject arbitral award.
Moreover, under Sections 22 and 26 of the Arbitration Law (R.A. 876), an application or petition to
vacate arbitral award is deemed a motion and service of such motion on the adverse party or his counsel
is enough to confer jurisdiction upon the Court over the adverse party.

It is not disputed that complainants were duly served by personal delivery with copies of the application
to vacate. In feet, they have appeared through counsel and have filed pleadings. In line with this ruling,
the objection that the application to vacate does not state a cause of action against complainants must
necessarily fall inasmuch as this present case is a special proceeding (Sec. 22, Arbitration Law), and
Section 3(a), Rule 1 of the 1997 Rules of Civil Procedure is inapplicable here.30

On whether or not the application to vacate was an appropriate remedy under Sections 24 and 26 of the
Arbitration Law, and whether or not the July 1, 1998 order of the SEC deprived the Panel of Arbitrators
of the authority to hear the petitioners' claim, the RTC held:

The rationale for the suspension is to enable the rehabilitation receiver to exercise his powers without
any judicial or extra-judicial interference that might unduly hinder the rescue of the distressed
corporation, x x x. PD No. 902-A does not provide for the duration of the suspension; therefore, it is
deemed to be effective during the entire period that the corporate debtor is under SEC receivership.

There is no dispute that PAL is under receivership (Exhibits "1" and "2"). In its Order dated 1 July 1998,
the SEC declared that "all claims for payment against PAL are deemed suspended."' This Order
effectively deprived all other tribunals of jurisdiction to hear and decide all actions for claims against PAL
for the duration of the receivership.

x x x x

Unless and until the SEC lifts the Order dated 1 July 1998, the Panel of Arbitrators cannot take
cognizance of complainant' claims against PAL without violating the exclusive jurisdiction of the SEC. The
law has granted SEC the exclusive jurisdiction to pursue the rehabilitation of a private corporation

4
through the appointment of a rehabilitation receiver (Sec 6 (d), PD No. 902-A, as amended by PD
1799). "exclusive jurisdiction precludes the idea of co-existence and refers to jurisdiction possessed to
the exclusion of others, x x x. Thus, "(I)nstead of vexing the courts with suits against the distressed
firm, they are directed to file their claims with the receiver who is the duly appointed officer of the SEC.

x x x.31 ChanRoblesVirtualawlibrary

After their motion for reconsideration32 was denied,33 the petitioners appealed to the CA by notice of
appeal.

Resolution of the CA

The respondent moved to dismiss the appeal, 34 arguing against the propriety of the petitioners' remedy,
and positing that Section 29 of the Arbitration Law limited appeals from an order issued in a proceeding
under the Arbitration Law to a review on certiorari upon questions of law.35

On May 30, 2003, the CA promulgated the now assailed resolution granting the respondent's Motion to
Dismiss Appeal.36 It declared that the appropriate remedy against the order of the RTC vacating the
award was a petition for review on  certiorari under Rule 45, viz.:

The term "certiorari" in the aforequoted provision refers to an ordinary appeal under Rule 45, not the
special action of certiorari under Rule 65. As Section 29 proclaims, it is an "appeal." This being the case,
the proper forum for this action is, under the old and the new rules of procedure, the Supreme Court.
Thus, Section 2(c) of Rule 41 of the 1997 Rules of Civil Procedure states that,
"In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme
Court by petition for review on certiorari in accordance with Rule 45. "
Furthermore, Section 29 limits the appeal to "questions of law," another indication that it is referring to
an appeal by certiorari under Rule 45 which, indeed, is the customary manner of reviewing such issues.

Based on the foregoing, it is clear that complainants-in-arbitration/appellants filed the wrong action with
the wrong forum.

WHEREFORE, premises considered, the Motion to Dismiss Appeal (Without Prejudice to the Filing of
Appellee's Brief) is GRANTED and the instant appeal is hereby ordered DISMISSED.

SO ORDERED.37 ChanRoblesVirtualawlibrary

The petitioners moved for reconsideration,38 but the CA denied their motion.39

Hence, this appeal by the petitioners.

Issues

The petitioners anchor this appeal on the following grounds, namely:

SECTION 29 OF THE ARBITRATION LAW, WHICH LIMITS THE MODE OF APPEAL FROM THE ORDER OF A
REGIONAL TRIAL COURT IN A PROCEEDING MADE UNDER THE ARBITRATION LAW TO A PETITION FOR
REVIEW ON CERTIORARI UNDER RULE 45 OF THE RULES, IS UNCONSTITUTIONAL FOR UNDULY
EXPANDING THE JURISDICTION OF THIS HONORABLE COURT WITHOUT THIS HONORABLE COURT'S
CONCURRENCE;

II

THE COURT OF APPEALS HAD JURISDICTION OVER THE CA APPEAL BECAUSE:

A.

THIS HONORABLE COURT HAS PREVIOUSLY UPHELD THE EXERCISE BY THE COURT OF APPEALS OF
JURISDICTION OVER AN APPEAL INVOLVING QUESTIONS OF FACT OR OF MIXED QUESTIONS OF FACT
AND LAW FROM A REGIONAL TRIAL COURT'S ORDER VACATING AN ARBITRAL AWARD

B.

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WHERE, AS IN THIS CASE, TFIE ISSUES ON APPEAL CONCERNED THE ABSENCE OF EVIDENCE AND
LACK OF LEGAL BASIS TO SUPPORT THE REGIONAL TRIAL COURT'S ORDER VACATING THE ARBITRAL
AWARD, GRAVE MISCHIEF WOULD RESULT IF THE REGIONAL TRIAL COURT'S BASELESS FINDINGS OF
FACT OR MIXED FINDINGS OF FACT ARE PLACED BEYOND APPELLATE REVIEW; AND

C.

THE COURT OF APPEALS' DISMISSAL OF THE CA APPEAL V/OULD IN EFFECT RESULT IN THE
AFFIRMATION OF THE REGIONAL TRIAL COURT'S EXERCISE OF JURISDICTION, OVER PERSONS UPON
WHOM IT FAILED TO VALIDLY ACQUIRE SUCH JURISDICTION AND OF APPELLATE JURISDICTION OVER
THE PDRCI ARBITRAL AWARD EVEN IF SUCH APPELLATE POWER IS EXCLUSIVELY LODGED WITH THE
COURT OF APPEALS UNDER RULE 43 OF THE RULES

III

INSTEAD OF DISMISSING THE CA APPEAL OUTRIGHT, THE COURT OF APPEALS SHOULD HAVE
SHORTENED THE PROCEEDINGS AND EXPEDITED JUSTICE BY EXERCISING ORIGINAL JURISDICTION
OVER THE APPLICATION TO VACATE PURSUANT TO RULE 43 OF THE RULES, ESPECIALLY CONSIDERING
THAT THE PARTIES HAD IN FACT ALREADY FILED THEIR RESPECTIVE BRIEFS AND THE COMPLETE
RECORDS OF BOTH THE RTC APPLICATION TO VACATE AND THE PDRCI ARBITRATION WERE ALREADY
IN ITS POSSESSION; AND

IV

IN THE EVENT THAT AN APPEAL FROM AN ORDER VACATING AN ARBITRAL AWARD MAY BE MADE ONLY
IN CERTIORARI PROCEEDINGS AND ONLY TO THE SUPREME COURT, THE COURT OF APPEALS SHOULD
NOT HAVE DISMISSED THE CA APPEAL, BUT IN THE HIGHER INTEREST OF JUSTICE, SHOULD HAVE
INSTEAD ENDORSED THE SAME TO THIS HONORABLE COURT, AS WAS DONE IN SANTIAGO V.
GONZALES.40

The petitioners contend that an appeal from the order arising from arbitration proceedings cannot be by
petition for review on certiorari under Rule 45 of the Rules of Court  because the appeal inevitably
involves mixed questions of law and fact; that their appeal in the CA involved factual issues in view of
the RTC's finding that the panel of arbitrators had been guilty of evident partiality even without having
required the respondent to submit independent proof thereon; that the appropriate remedy was either a
petition for certiorari under Rule 65 of the Rules of Court, or an ordinary appeal under Rule 41 of the
Rules of Court, conformably with the rulings in Asset Privatization Trust v. Court of
Appeals41 and Adamson v. Court of Appeals,42 respectively; and that the CA erroneously upheld the
RTC's denial of their Motion To Dismiss Appeal on the basis of their counsel's voluntary appearance to
seek affirmative relief because under Section 20, Rule 14 of the Rules of Court their objection to the
personal jurisdiction of the court was not a voluntary appearance even if coupled with other grounds for
a motion to dismiss.

In riposte, the respondent avers that the petition for review on certiorari should be denied due course
because of the defective verification/certification signed by the petitioners' counsel; and that the special
powers of attorney (SPAs) executed by the petitioners in favor of their counsel did not sufficiently vest
the latter with the authority to execute the verification/certification in their behalf.

On the merits, the respondent maintains that: (a) the term certiorari used in Section 29 of the
Arbitration Law refers to a petition for review under Rule 45 of the Rules of Court; (b) the constitutional
challenge against Section 29 of the Arbitration Law was belatedly made; (c) the petitioners' claim of lack
of jurisdiction on the part of the RTC should fail because an application to vacate an arbitral award under
Sections 22 and 26 of the Arbitration Law is only required to be in the form of a motion; and ( d) the
complete record of the arbitration proceedings submitted to the RTC sufficiently proved the manifest
partiality and grave abuse of discretion on the part of the panel of arbitrators.

To be resolved are: (a) whether or not the petition for review should be dismissed for containing a
defective verification/certification; and (b) whether or not the CA erred in dismissing the appeal of the
petitioners for being an inappropriate remedy.

Ruling of the Court

We deny the petition for review on certiorari.

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I
There was sufficient compliance with the rule on
verification and certification against forum shopping

The respondent insists that the verification/certification attached to the petition was defective because it
was executed by the petitioners' counsel whose authority under the SPAs was only to execute the
certification of non-forum shopping; and that the signing by the counsel of the certification could not
also be allowed because the Rules of Court and the pertinent circulars and rulings of the Court require
that the petitioners must themselves execute the same.

The insistence of the respondent is unwarranted. The SPAs individually signed by the petitioners vested
in their counsel the authority, among others, "to do and perform on my behalf any act and deed relating
to the case, which it could legally do and perform, including any appeals or further legal proceedings ."
The authority was sufficiently broad to expressly and specially authorize their counsel, Atty. Ida Maureen
V. Chao-Kho, to sign the verification/certification on their behalf.

The purpose of the verification is to ensure that the allegations contained in the verified pleading are
true and correct, an d are not the product of the imagination or a matter of speculation; and that the
pleading is filed in good faith.43 This purpose was met by the verification/certification made by Atty.
Chao-Kho in behalf of the petitioners, which pertinently stated that:

2. Petitioners caused the preparation of the foregoing Petition for Review on Certiorari, and have read
and understood all the allegations contained therein. Further, said allegations are true and correct based
on their own knowledge and authentic records in their and the Finn's possession.44

The tenor of the verification/certification indicated that the petitioners, not Atty. Chao-Kho, were
certifying that the allegations were true and correct based on their knowledge and authentic records. At
any rate, a finding that the verification was defective would not render the petition for review invalid. It
is settled that the verification was merely a formal requirement whose defect did not ne gate the validity
or efficacy of the verified pleading, or affect the jurisdiction of the court. 45

We also uphold the efficacy of the certification on non-forum shopping executed by Atty. Chao-Kho on
the basis of the authorization bestowed under the SPAs by the petitioners. The lawyer of the party, in
order to validly execute the certification, must be "specifically authorized" by the client for that
purpose.46 With the petitioners being non-residents of the Philippines, the sworn certification on non-
forum shopping by Atty. Chao-Kho sufficiently complied with the objective of ensuring that no similar
action had been brought by them or the respondent against each other, to wit:

5. Significantly, Petitioners are foreign residents who reside and are presently abroad. Further, the Firm
is Petitioners' sole legal counsel in the Philippines, and hence, is in a position to know that Petitioners
have no other cases before any court o[r] tribunal in the Philippines;47

In this regard, we ought not to exact a literal compliance with Section 4, Rule 45, in relation to Section
2, Rule 42 of the  Rules of Court, that only the party himself should execute the certification. After all,
we have not been shown by the respondent any intention on the part of the petitioners and their counsel
to circumvent the requirement for the verification and certification on non-forum shopping.48

II
Appealing the RTC order 
vacating an arbitral award

The petitioners contend that the CA gravely erred in dismissing their appeal for being an inappropriate
remedy, and in holding that a petition for review on certiorari under Rule 45 was the sole remedy under
Section 29 of the Arbitration Law. They argue that the decision of the RTC involving arbitration could be
assailed either by petition for certiorari under Rule 65, as held in Asset Privatization Trust, or by an
ordinary appeal under Rule 41, as opined in Adamson.

The petitioners are mistaken.

Firstly, the assailed resolution of the CA did not expressly declare that the petition for review
on certiorariunder Rule 45 was the sole remedy from the RTC's order vacating the arbitral award. The
CA rather emphasized that the petitioners should have filed the petition for review on certiorari  under
Rule 45 considering that Section 29 of the Arbitration Law has limited the ground of review to "questions
of law." Accordingly, the CA correctly dismissed the appeal of the petitioners because pursuant to
Section 2,49Rule 41 of the Rules of Court an appeal of questions of law arising in the courts in the first

7
instance is by petition for review on certiorari under Rule 45.

It is noted, however, that since the promulgation of the assailed decision by the CA on May 30, 2003,
the law on the matter underwent changes. On February 4, 2004. Republic Act No. 9285 (Alternative
Dispute Resolution Act of 2004) was passed by Congress, and was approved by the President on April 2,
2004. Pursuant to Republic Act No. 9285, the Court promulgated on September 1, 2009 in A.M. No. 07-
11-08-SC the Special Rules of Court on Alternative Dispute Resolution, which are now the present rules
of procedure governing arbitration. Among others, the Special Rules of Court on Alternative Dispute
Resolution requires an appeal by petition for review to the CA of the final order of the RTC confirming,
vacating, correcting or modifying a domestic arbitral award, to wit:

Rule 19.12  Appeal to the Court of Appeals. - An appeal to the Court of Appeals through a petition for
review under this Special Rule shall only be allowed from the following orders of the Regional Trial
Court:

a. Granting or denying an interim measure of protection;

b. Denying a petition for appointment of an arbitrator;

c. Denying a petition for assistance in taking evidence;

d. Enjoining or refusing to enjoin a person from divulging confidential information;

e. Confirming, vacating or correcting/modifying a domestic arbitral award;

f. Setting aside an international commercial arbitration award;

g. Dismissing the petition to set aside an international commercial arbitration award even
if the court does not decide to recognize or enforce such award;

h. Recognizing and/or enforcing an international commercial arbitration award;

i. Dismissing a petition to enforce an international commercial arbitration award;

j. Recognizing and/or enforcing a foreign arbitral award;

k. Refusing recognition and/or enforcement of a foreign arbitral award;

l. Granting or dismissing a petition to enforce a deposited mediated settlement

agreement; and

m. Reversing the ruling of the arbitral tribunal upholding its jurisdiction.

Although the Special Rules of Court on Alternative Dispute Resolution provides that the appropriate
remedy from an order of the RTC vacating a domestic arbitral award is an appeal by petition for review
in the CA, not an ordinary appeal under Rule 41 of the Rules of Court, the Court cannot set aside and
reverse the assailed decision on that basis because the decision was in full accord with the law or rule in
force at the time of its promulgation.

The ruling in Asset Privatization Trust v. Court of Appeals 50 cannot be the governing rule with respect to
the order of the RTC vacating an arbitral award. Asset Privatization Trust justified the resort to the
petition for certiorari under Rule 65 only upon finding that the RTC had acted without jurisdiction or with
grave abuse of discretion in confirming the arbitral award. Nonetheless, it is worth reminding that the
petition for  certiorari  cannot be a substitute for a lost appeal. 51

Also, the petitioners have erroneously assumed that the appeal filed by the aggrieved party in Adamson
v. Court of Appeals52 was an ordinary one. Adamson concerned the correctness of the ruling of the CA in
reversing the decision of the trial court, not the propriety of the remedy availed of by the aggrieved
party. Nor did Adamson expressly declare that an ordinary appeal could be availed of to assail the RTC's
ruling involving arbitration. As such, the petitioners' reliance on Adamson to buttress their resort to the
erroneous remedy was misplaced.

We remind that the petitioners cannot insist on their chosen remedy despite its not being sanctioned by

8
the Arbitration Law. Appeal as a remedy is not a matter of right, but a mere statutory privilege to be
exercised only in the manner and strictly in accordance with the provisions of the law.53

III
Panel of Arbitrators had no jurisdiction
to hear and decide the petitioners' claim

The petitioners' appeal is dismissible also because the arbitration panel had no jurisdiction to hear their
claim. The RTC correctly opined that the SEC's suspension order effective July 1, 1998 deprived the
arbitration panel of the jurisdiction to hear any claims against the respondent. The Court has clarified
inCastillo v. Uniwide Warehouse Club, Inc.54 why the claim for payment brought against a distressed
corporation like the respondent should not prosper following the issuance of the suspension order by the
SEC, regardless of when the action was filed, to wit:

Jurisprudence is settled that the suspension of proceedings referred to in the law uniformly applies to all
actions for claims filed against a corporation, partnership or association under management or
receivership, without distinction, except only those expenses incurred in the ordinary course of business.
In the oft-cited case of Rubberworld (Phils.) Inc. v. NLRC, the Court noted that aside from the given
exception, the law is clear and makes no distinction as to the claims that are suspended once a
management committee is created or a rehabilitation receiver is appointed. Since the law makes no
distinction or exemptions, neither should this Court. Ubi lex non dislinguit nee nos distinguere
debemos. Philippine Airlines, Inc. v. Zamora declares that the automatic suspension of an action for
claims against a corporation under a rehabilitation receiver or management committee embraces all
phases of the suit, that is, the entire proceedings of an action or suit and not just the payment of claims.

The reason behind the imperative nature of a suspension or stay order in relation to the
creditors claims cannot be downplayed, for indeed the indiscriminate suspension of actions
for claims intends to expedite the rehabilitation of the distressed corporation by enabling the
management committee or the rehabilitation receiver to effectively exercise its/his powers
free from any judicial or extrajudicial interference that might unduly hinder or prevent the
rescue of the debtor company. To allow such other actions to continue would only add to the
burden of the management committee or rehabilitation receiver, whose time, effort and
resources would be wasted in defending claims against the corporation, instead of being
directed toward its restructuring and rehabilitation.

At this juncture, it must be conceded that the date when the claim arose, or when the action
was filed, has no bearing at all in deciding whether the given action or claim is covered by the
stay or suspension order. What matters is that as long as the corporation is under a
management committee or a rehabilitation receiver, all actions for claims against it, whether
for money or otherwise, must yield to the greater imperative of corporate revival, excepting
only, as already mentioned, claims for payment of obligations incurred by the corporation in
the ordinary course of business.55 (Bold emphasis supplied)

IV
The requirement of due process was observed

The petitioners' challenge against the jurisdiction of the RTC on the ground of the absence of the service
of the summons on them also fails.

Under Section 2256 of the Arbitration Law, arbitration is deemed a special proceeding, by virtue of which
any application should be made in the manner provided for the making and hearing of motions, except
as otherwise expressly provided in the Arbitration Law.

The RTC observed that the respondent's Application to Vacate Arbitral Award was duly served personally
on the petitioners, who then appeared by counsel and filed pleadings. The petitioners countered with
their Motion to Dismiss vis-a-vis the respondent's application, specifying therein the various grounds
earlier mentioned, including the lack of jurisdiction over their persons due to the improper service of
summons. Under the circumstances, the requirement of notice was fully complied with, for Section
2657of the Arbitration Law required the application to be served upon the adverse party or his counsel
within 30 days after the award was filed or delivered "as prescribed by law for the service upon an
attorney in an action."

V
Issue of the constitutionality of the
Arbitration Law is devoid of merit

9
The constitutionality of Section 29 of the Arbitration Law is being challenged on the basis that Congress
has thereby increased the appellate jurisdiction of the Supreme Court without its advice and
concurrence, as required by Section 30, Article VI of the 1987 Constitution, to wit:

Section 30. No law shall be passed increasing the appellate jurisdiction of the Supreme Court as
provided in this Constitution without its advice and concurrence.

The challenge is unworthy of consideration. Based on the tenor and text of Section 30, Article VI of the
1987 Constitution, the prohibition against increasing the appellate jurisdiction of the Supreme Court
without its advice and concurrence applies prospectively, not retrospectively. Considering that the
Arbitration Law had been approved on June 19, 1953, and took effect under its terms on December 19,
1953, while the Constitution was ratified only on February 2, 1987, Section 29 of the Arbitration Law
could not be declared unconstitutional.chanrobleslaw

WHEREFORE, the Court DENIES the petition for review on certiorari for lack of merit; AFFIRMS the
resolution promulgated on May 30, 2003 by the Court of Appeals in CA-G.R. CV No. 71224;
and ORDERSthe petitioners to pay the costs of suit.

SO ORDERED.

Leonardo-De
**
Castro, (Acting Chairperson), Perlas-Bernabe,  and Caguioa, JJ., concur.
Sereno, C.J., on leave.

G.R. No. 212426

RENE A.V. SAGUISAG, WIGBERTO E. TAÑADA, FRANCISCO "DODONG" NEMENZO, JR.,

SR. MARY JOHN MANANZAN, PACIFICO A. AGABIN, ESTEBAN "STEVE" SALONGA, H.
HARRY L. ROQUE, JR., EVALYN G. URSUA, EDRE U. OLALIA, DR. CAROL PAGADUAN-
ARAULLO, DR. ROLAND SIMBULAN, and TEDDY CASIÑO, Petitioners, 
vs
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., DEPARTMENT OF NATIONAL
DEFENSE SECRETARY VOLTAIRE GAZMIN, DEPARTMENT OF FOREIGN AFFAIRS
SECRETARY ALBERT DEL ROSARIO, JR., DEPARTMENT OF BUDGET AND
MANAGEMENT SECRETARY FLORENCIO ABAD, and ARMED FORCES OF THE
PHILIPPINES CHIEF OF STAFF GENERAL EMMANUEL T. BAUTISTA, Respondents.

x-----------------------x

G.R. No. 212444

BAGONG ALY ANSANG MAKABAYAN (BAYAN), REPRESENTED BY ITS SECRETARY

GENERAL RENATO M. REYES, JR., BAYAN MUNA PARTY-LIST REPRESENTATIVES NERI
J. COLMENARES, and CARLOS ZARATE, GABRIELA WOMEN'S PARTY-LIST
REPRESENTATIVES LUZ ILAGAN AND EMERENCIANA DE JESUS, ACT TEACHERS
PARTY-LIST REPRESENTATIVE ANTONIO L. TINIO, ANAKPAWIS PARTY-LIST
REPRESENTATIVE FERNANDO HICAP, KABATAAN PARTY-LIST REPRESENTATIVE
TERRY RIDON, MAKABAYANG KOALISYON NG MAMAMAYAN (MAKABAYAN),
REPRESENTED BY SATURNINO OCAMPO, and LIZA MAZA, BIENVENIDO LUMBERA,
JOEL C. LAMANGAN, RAFAEL MARIANO, SALVADOR FRANCE, ROGELIO M. SOLUTA,
and CLEMENTE G. BAUTISTA, Petitioners, 
vs.
DEPARTMENT OF NATIONAL DEFENSE (DND) SECRETARY VOLTAIRE GAZMIN,
DEPARTMENT OF FOREIGN AFFAIRS SECRETARY ALBERT DEL ROSARIO, EXECUTIVE
SECRETARY PAQUITO N. OCHOA, JR., ARMED FORCES OF THE PHILIPPINES CHIEF OF

10
STAFF GENERAL EMMANUEL T. BAUTISTA, DEFENSE UNDERSECRETARY PIO
LORENZO BATINO, AMBASSADOR LOURDES YPARRAGUIRRE, AMBASSADOR J.
EDUARDO MALAYA, DEPARTMENT OF JUSTICE UNDERSECRETARY FRANCISCO
BARAAN III, and DND ASSISTANT SECRETARY FOR STRATEGIC ASSESSMENTS
RAYMUND JOSE QUILOP AS CHAIRPERSON AND MEMBERS, RESPECTIVELY, OF THE
NEGOTIATING PANEL FOR THE PHILIPPINES ON EDCA, Respondents.

x-----------------------x

KILUSANG MAYO UNO, REPRESENTED BY ITS CHAIRPERSON, ELMER LABOG,

CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT
EMPLOYEES (COURAGE), REPRESENTED BY ITS NATIONAL PRESIDENT FERDINAND
GAITE, NATIONAL FEDERATION OF LABOR UNIONS-KILUSANG MAYO UNO,
REPRESENTED BY ITS NATIONAL PRESIDENT JOSELITO USTAREZ, NENITA GONZAGA,
VIOLETA ESPIRITU, VIRGINIA FLORES, and ARMANDO TEODORO, JR., Petitioners-in-
Intervention,
RENE A.Q. SAGUISAG, JR., Petitioner-in-Intervention.

RESOLUTION

SERENO, CJ:

The Motion for Reconsideration before us seeks to reverse the Decision of this Court
in Saguisag et. al., v. Executive Secretary dated 12 January 2016.  The petitions in Sasguisag,
1

et. al.  had questioned the constitutionality of the Enhanced Defense Cooperation Agreement
2

(EDCA) between the Republic of the Philippines and the United States of America (U.S.). There,
this Court ruled that the petitions be dismissed.
3

On 3 February 2016, petitioners in the Decision filed the instant Motion, asking for a
reconsideration of the Decision in Saguisag, et. al., questioning the ruling of the Court on both
procedural and substantive grounds, viz:

WHEREFORE, premises considered, petitioners respectfully pray that the Honorable Court
RECONSIDER, REVERSE, AND SET- ASIDE its Decision dated January 12, 2016, and issue a
new Decision GRANTING the instant consolidated petitions by declaring the Enhanced Defense
Cooperation Agreement (EDCA) entered into by the respondents for the Philippine government,
with the United States of America, UNCONSTITUTIONAL AND INVALID and to permanently
enjoin its implementation.

Other fonns of relief just and equitable under the premises are likewise prayed for.

At the outset, petitioners questioned the procedural findings of the Court despite acknowledging
the fact that the Court had given them standing to sue.  Therefore this issue is now irrelevant and
4

academic, and deserves no reconsideration.

As for the substantive grounds, petitioners claim this Court erred when it ruled that EDCA was
not a treaty.  In connection to this, petitioners move that EDCA must be in the form of a treaty in
5

order to comply with the constitutional restriction under Section 25, Article· XVIII of the 1987
Constitution on foreign military bases, troops, and facilities.  Additionally, they reiterate their
6

arguments on the issues of telecommunications, taxation, and nuclear weapons. 7

We deny the Motion for Reconsideration.

11
Petitioners do not present new arguments to buttress their claims of error on the part of this
Court. They have rehashed their prior arguments and made them responsive to the structure of
the Decision in Saguisag, yet the points being made are the same.

However, certain claims made by petitioners must be addressed.

On verba legis interpretation

Petitioners assert that this Court contradicted itself when it interpreted the word "allowed in" to
refer to the initial entry of foreign bases, troops, and facilities, based on the fact that the plain
meaning of the provision in question referred to prohibiting the return of foreign bases, troops,
and facilities except under a treaty concurred in by the Senate. 8

This argument fails to consider the function and application of the verba legis rule.

Firstly, verba legis is a mode of construing the provisions of law as they stand.  This takes into
9

account the language of the law, which is in English, and therefore includes reference to the
meaning of the words based on the actual use of the word in the language.

Secondly, by interpreting "allowed in" as referring to an initial entry, the Court has simply applied
the plain meaning of the words in the particular provision.  Necessarily, once entry has been
10

established by a subsisting treaty, latter instances of entry need not be embodied by a separate
treaty. After all, the Constitution did not state that foreign military bases, troops, and facilities
shall not subsist or exist in the Philippines.

Petitioners' own interpretation and application of the verba legis rule will in fact result in an
absurdity, which legal construction strictly abhors.  If this Court accept the essence of their
11

argument that every instance of entry by foreign bases, troops, and facilities must be set out in
detail in a new treaty, then the resulting bureaucratic impossibility of negotiating a treaty for the
entry of a head of State's or military officer's security detail, meetings of foreign military officials in
the country, and indeed military exercises such as Balikatan will occupy much of, if not all of the
official working time by various government agencies. This is precisely the reason why any valid
mode of interpretation must take into account how the law is exercised and its goals effected.  Ut 12

res magis valeat quam pereat.

The Constitution cannot be viewed solely as a list of prohibitions and limitations on governmental
power, but rather as an instrument providing the process of structuring government in order that
it may effectively serve the people. It is not simply a set of rules, but an entire legal framework
13

for Philippine society.

In this particular case, we find that EDCA did not go beyond the framework. The entry of US
troops has long been authorized under a valid and subsisting treaty, which is the Visiting Forces
Agreement (VFA).  Reading the VFA along with the longstanding Mutual Defense Treaty
14

(MDT)  led this Court to the conclusion that an executive agreement such as the EDCA was well
15

within the bounds of the obligations imposed by both treaties.

On strict construction of an exception

This Court agrees with petitioners' cited jurisprudence that exceptions are strictly
construed.  However, their patent misunderstanding of the Decision and the confusion this
16

creates behooves this Court to address this argument.

To be clear, the Court did not add an exception to Section 25 Article XVIII. The general rule is
that foreign bases, troops, and facilities are not allowed in the Philippines.  The exception to this
17

12
is authority granted to the foreign state in the form of a treaty duly concurred in by the Philippine
Senate. 18

It is in the operation of this exception that the Court exercised its power of review. The lengthy
legal analysis resulted in a proper categorization of EDCA: an executive cagreement authorized
by treaty. This Court undeniably considered the arguments asserting that EDCA was, in fact, a
treaty and not an executive agreement, but these arguments fell flat before the stronger legal
position that EDCA merely implemented the VFA and MDT. As we stated in the Decision:

x x x [I]t must already be clarified that the terms and details used by an implementing agreement
need not be found in the mother treaty. They must be sourced from the authority derived from the
treaty, but are not necessarily expressed word-for-word in the mother treaty. 19

Hence, the argument that the Court added an exception to the law is erroneous and potentially
misleading. The parties, both petitioners and respondents must therefore read the Decision
carefully in order to fully comply with its disposition.

On EDCA as a treaty

The principal reason for the Motion for Reconsideration is evidently petitioners' disagreement
with the Decision that EDCA implements the VFA

and MDT. They reiterate their arguments that EDCA's provisions fall outside the allegedly limited
scope of the VFA and MDT because it provides a wider arrangement than the VFA for military
bases, troops, and facilities, and it allows the establishment of U.S. military bases.
20

Specifically, petitioners cite the terms of the VFA referring to "joint exercises,"  such that
21

arrangements involving the individual States-parties such as exclusive use of prepositioned

materiel are not covered by the VFA. More emphatically, they state that prepositioning itself as
an activity is not allowed under the VFA.22

Evidently, petitioners left out of their quote the portion of the Decision which cited the Senate
report on the VFA. The full quote reads as follows:

Siazon clarified that it is not the VFA by itself that determines what activities will be conducted
between the armed forces of the U.S. and the Philippines. The VFA regulates and provides the
legal framework for the presence, conduct and legal status of U.S. personnel while they are in
the country for visits, joint exercises and other related activities. 23

Quite clearly, the VFA contemplated activities beyond joint exercises, which this Court had
already recognized and alluded to in Lim v. Executive Secretary, even though the Court in that
24

case was faced with a challenge to the Terms of Reference of a specific type of joint exercise,
the Balikatan Exercise.

One source petitioners used to make claims on the limitation of the VFA to joint exercises is the
alleged Department of Foreign Affairs (DFA) Primer on the VFA, which they claim states that:

Furthermore, the VFA does not involve access arrangements for United States armed forces or
the pre-positioning in the country of U.S. armaments and war materials. The agreement is about
personnel and not equipment or supplies. 25

Unfortunately, the uniform resource locator link cited by petitioners is inaccessible. However,
even if we grant its veracity, the text of the VFA itself belies such a claim. Article I of the VFA
states that "[a ]s used in this Agreement, "United States personnel" means United States military
and civilian personnel temporarily in the Philippines in connection with activities approved by the

13
Philippine Government."  These "activities" were, as stated in Lim, left to further implementing
26

agreements. It is true that Article VII on Importation did not indicate pre-positioned materiel, since
it referred to "United States Government equipment, materials, supplies, and other property
imported into or acquired in the Philippines by or on behalf of the United States armed forces in
connection with activities to which this agreement applies[.]" 27

Nonetheless, neither did the text of the VFA indicate "joint exercises" as the only activity, or even
as one of those activities authorized by the treaty. In fact, the Court had previously noted that

[n]ot much help can be had therefrom [VFA], unfortunately, since the terminology employed is
itself the source of the problem. The VFA permits United States personnel to engage, on an
impermanent basis, in "activities," the exact meaning of which was left undefined. The
expression is ambiguous, permitting a wide scope of undertakings subject only to the approval of
the Philippine government. The sole encumbrance placed on its definition is couched in the
negative, in that United States personnel must "abstain from any activity inconsistent with the
spirit of this agreement, and in particular, from any political activity." All other activities, in other
words, are fair game. 28

Moreover, even if the DFA Primer was accurate, properly cited, and offered as evidence, it is
quite clear that the DFA's opinion on the VFA is not legally binding nor conclusive.  It is the
29

exclusive duty of the Court to interpret with finality what the VFA can or cannot allow according to
its provisions.
30

In addition to this, petitioners detail their objections to EDCA in a similar way to their original
petition, claiming that the VFA and MDT did not allow EDCA to contain the following provisions:

1. Agreed Locations

2. Rotational presence of personnel

3. U.S. contractors

4. Activities of U.S. contractors 31

We ruled in Saguisag, et. al. that the EDCA is not a treaty despite the presence of these
provisions. The very nature of EDCA, its provisions and subject matter, indubitably categorize it
as an executive agreement - a class of agreement that is not covered by the Article XVIII Section
25 restriction - in painstaking detail.  To partially quote the Decision:
32

Executive agreements may dispense with the requirement of Senate concurrence because of the
legal mandate with which they are concluded. As culled from the afore-quoted deliberations of
the Constitutional Commission, past Supreme Court Decisions, and works of noted scholars,
executive agreements merely involve arrangements on the implementation of existing policies,
rules, laws, or agreements. They are concluded (1) to adjust the details of a treaty; (2) pursuant
to or upon confirmation by an act of the Legislature; or (3) in the exercise of the President's
independent powers under the Constitution. The raison d'etre of executive agreements hinges
on prior constitutional or legislative authorizations.

The special nature of an executive agreement is not just a domestic variation in international
agreements. International practice has accepted the use of various forms and designations of
international agreements, ranging from the traditional notion of a treaty - which connotes a
formal, solemn instrument - to engagements concluded in modern, simplified forms that no
longer necessitate ratification. An international agreement may take different forms: treaty, act,
protocol, agreement, concordat, compromis d'arbitrage, convention, covenant, declaration,
exchange of notes, statute, pact, charter, agreed minute, memorandum of agreement, modus

14
vivendi, or some other form. Consequently, under international law, the distinction between a
treaty and an international agreement or even an executive agreement is irrelevant for purposes
of determining international rights and obligations.

However, this principle does not mean that the domestic law distinguishing treaties, international
agreements, and executive agreements is relegated to a mere variation in form, or that the
constitutional requirement of Senate concurrence is demoted to an optional constitutional
directive. There remain two very important features that distinguish treaties from executive
agreements and translate them into terms of art in the domestic setting.

First, executive agreements must remain traceable to an express or implied authorization

under the Constitution, statutes, or treaties. The absence of these precedents puts the
validity and effectivity of executive agreements under serious question for the main function of
the Executive is to enforce the Constitution and the laws enacted by the Legislature, not to defeat
or interfere in the performance of these rules. In turn, executive agreements cannot create new
international obligations that are not expressly allowed or reasonably implied in the law they
purport to implement.

Second, treaties are, by their very nature, considered superior to executive agreements. Treaties
are products of the acts of the Executive and the Senate unlike executive agreements, which are
solely executive actions. Because of legislative participation through the Senate, a treaty is
regarded as being on the same level as a statute. If there is an irreconcilable conflict, a later law
or treaty takes precedence over one that is prior. An executive agreement is treated differently.
Executive agreements that are inconsistent with either a law or a treaty are considered
ineffective. Both types of international agreement are nevertheless subject to the supremacy of
the Constitution.  (Emphasis supplied, citations omitted)
33

Subsequently, the Decision goes to great lengths to illustrate the source of EDCA's validity, in
that as an executive agreement it fell within the parameters of the VFA and MDT, and seamlessly
merged with the whole web of Philippine law. We need not restate the arguments here. It suffices
to state that this Court remains unconvinced that EDCA deserves treaty status under the law.

On EDCA as basing agreement

Petitioners claim that the Decision did not consider the similarity of EDCA to the previous Military
Bases Agreement (MBA) as grounds to declare it unconstitutional. 34

Firstly, the Court has discussed this issue in length and there is no need to rehash the analysis
leading towards the conclusion that EDCA is different from the MBA or any basing agreement for
that matter.

Secondly, the new issues raised by petitioners are not weighty enough to overturn the legal
distinction between EDCA and the MBA.

In disagreeing with the Court in respect of the MBA's jurisdictional provisions, petitioners cite an
exchange of notes categorized as an "amendment" to the MBA, as if to say it operated as a new
treaty and should be read into the MBA. 35

This misleadingly equates an exchange of notes with an amendatory treaty. Diplomatic

exchanges of notes are not treaties but rather formal communication tools on routine
agreements, akin to private law contracts, for the executive branch.  This cannot truly amend or
36

change the terms of the treaty,  but merely serve as private contracts between the executive
37

branches of government. They cannot ipso facto amend treaty obligations between States, but
may be treaty-authorized or treaty-implementing. 38

15
Hence, it is correct to state that the MBA as the treaty did not give the Philippines jurisdiction
over the bases because its provisions on U.S. jurisdiction were explicit. What the exchange of
notes did provide was effectively a contractual waiver of the jurisdictional rights granted to the
U.S. under the MBA, but did not amend the treaty itself.

Petitioners reassert that EDCA provisions on operational control, access to Agreed Locations,
various rights and authorities granted to the US "ensures, establishes, and replicates what MBA
had provided."  However, as thoroughly and individually discussed in Saguisag, et. al., the
39

significant differences taken as a whole result in a very different instrument, such that EDCA has
not re-introduced the military bases so contemplated under Article XVIII Section 25 of the
Constitution. 40

On policy matters

Petitioners have littered their motion with alleged facts on U.S. practices, ineffective provisions,
or even absent provisions to bolster their position that EDCA is invalid.  In this way, petitioners
41

essentially ask this Court to replace the prerogative of the political branches and rescind the
EDCA because it not a good deal for the Philippines. Unfortunately, the Court's only concern is
the legality of EDCA and not its wisdom or folly. Their remedy clearly belongs to the executive or
legislative branches of government.

EPILOGUE

While this Motion for Reconsideration was pending resolution, the United Nations Permanent
Court of Arbitration tribunal constituted under the Convention on the Law of the Sea (UNCLOS)
in Republic of the Philippines v. People's Republic of China released its monumental decision on
the afternoon of 12 July 2016.  The findings and declarations in this decision contextualizes the
42

security requirements of the Philippines, as they indicate an alarming degree of international law
violations committed against the Philippines' sovereign rights over its exclusive economic zone
(EEZ).

Firstly, the tribunal found China's claimed nine-dash line, which included sovereign claims over
most of the West Philippine, invalid under the UNCLOS for exceeding the limits of China's
maritime zones granted under the convention. 43

Secondly, the tribunal found that the maritime features within the West Philippine Sea/South
China Sea that China had been using as basis to claim sovereign rights within the Philippines'
EEZ were not entitled to independent maritime zones. 44

Thirdly, the tribunal found that the actions of China within the EEZ of the Philippines, namely:
forcing a Philippine vessel to cease-and-desist from survey operations,  the promulgation of a
45

fishing moratorium in 2012,  the failure to exercise due diligence in preventing Chinese fishing
46

vessels from fishing in the Philippines' EEZ without complying with Philippine regulations,  the47

failure to prevent Chinese fishing vessels from harvesting endangered species,  the prevention
48

of Filipino fishermen from fishing in traditional fishing grounds in Scarborough Shoal,  and the
49

island-building operations in various reefs, all violate its obligations to respect the rights of the
Philippines over its EEZ.50

Fourthly, the tribunal rejected Chinese claims of sovereignty over features within the Philippine's
EEZ,  and found that its construction of installations and structures, and later on the creation of
51

an artificial island, violated its international obligations.

52

Fifthly, the tribunal found that the behaviour of Chinese law enforcement vessels breached safe
navigation provisions of the UNCLOS in respect of near-collision instances within Scarborough
Shoal. 53

16
Finally, the tribunal found that since the arbitration was initiated in 2013, China has aggravated
the dispute by building a large artificial island on a low-tide elevation located in the EEZ of the
Philippines aggravated the Parties' dispute concerning the protection and preservation of the
marine environment at Mischief Reef by inflicting permanent, irreparable harm to the coral reef
habitat of that feature, extended the dispute concerning the protection and preservation of the
marine environment by commencing large-scale island-building and construction works at
Cuarteron Reef: Fiery Cross Reef, Gaven Reef (North), Johnson Reef, Hughes Reef, and Subi
Reef, aggravated the dispute concerning the status of maritime features in the Spratly Islands
and their capacity to generate entitlements to maritime zones by permanently destroying
evidence of the natural condition of Mischief Reef, Cuarteron Reef, Fiery Cross Reef, Gaven
Reef (North), Johnson Reef, Hughes Reef, and Subi Reef. 54

Taken as a whole, the arbitral tribunal has painted a harrowing picture of a major world power
unlawfully imposing its might against the Philippines, There are clear indications that these
violations of the Philippines' sovereign rights over its EEZ are continuing. The Philippine state is
constitutionally-bound to defend its sovereignty, and must thus prepare militarily.

No less than the 1987 Constitution demands that the "State shall protect the nation's marine
wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its
use and enjoyment exclusively to Filipino citizens. " 55

No less than the 1987 Constitution states that the principal role of the military under the
President as commander-in-chief shall be as protector of the people and the State to secure the
sovereignty of the State and the integrity of the national territory. 56

To recall, the Philippines and the U.S. entered into the MDT in 1951  with two things in mind,
57

first, it allowed for mutual assistance in maintaining and developing their individual and collective
capacities to resist an armed attack;  and second, it provided for their mutual self-defense in the
58

event of an armed attack against the ten-itory of either party.  The treaty was premised on their
59

recognition that an anned attack on either of them would equally be a threat to the security of the
other. 60

The EDCA embodies this very purpose. It puts into greater effect a treaty entered into more than
50 years ago in order to safeguard the sovereignty of the Philippines, and cement the military
friendship of the U.S. and Philippines that has thrived for decades through multiple presidents
and multiple treaties. While it is a fact that our country is now independent, and that the 1987
Constitution requires Senate consent for foreign military bases, troops, and facilities, the EDCA
as envisioned by the executive and as formulated falls within the legal regime of the MDT and
the VFA.

In the context of recent developments, the President is bound to defend the EEZ of the
Philippines and ensure its vast maritime wealth for the exclusive enjoyment of Filipinos. In this
light, he is obligated to equip himself with all resources within his power to command. With the
MDT and VFA as a blueprint and guide, EDCA strengthens the Armed Forces of the Philippines
and through them, the President's ability to respond to any potential military crisis with sufficient
haste and greater strength.

The Republic of Indonesia is strengthening its military presence and defences in the South China
Sea.  Vietnam has lent its voice in support of the settlement of disputes by peaceful means  but
61 62

still strongly asserts its sovereignty over the Paracel islands against China.  The international
63

community has given its voice in support of the tribunal's decision in the UNCLOS arbitration. 64

Despite all this, China has rejected the ruling.  Its ships have continued to drive off Filipino
65

fishermen from areas within the Philippines' EEZ.   Its military officials have promised to continue
66

its artificial island-building in the contested areas despite the ruling against these activities.
67

17
In this light, the Philippines must continue to ensure its ability to prevent any military aggression
that violates its sovereign rights. Whether the threat is internal or external is a matter for the
proper authorities to decide. President Rodrigo Roa Duterte has declared, in his inaugural
speech, that the threats pervading society are many: corruption, crime, drugs, and the
breakdown of law and order.  He has stated that the Republic of the Philippines will honor
68

treaties and international obligations.  He has also openly supported EDCA's continuation.
69 70

Thus, we find no reason for EDCA to be declared unconstitutional. It fully conforms to the
Philippines' legal regime through the MDT and VFA. It also fully conforms to the government's
continued policy to enhance our military capability in the face of various military and humanitarian
issues that may arise. This Motion for Reconsideration has not raised any additional legal
arguments that warrant revisiting the Decision.

WHEREFORE, we hereby DENY the Motion for Reconsideration.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Chief Justice

N BANC

G.R. No. 197146, December 06, 2016

HON. MICHAEL L. RAMA, IN HIS CAPACITY AS MAYOR OF CEBU CITY, METROPOLITAN CEBU
WATER DISTRICT (MCWD), REPRESENTED BY ITS GENERAL MANAGER, ARMANDO PAREDES;
THE BOARD OF DIRECTORS OF MCWD, REPRESENTED BY ITS CHAIR, ELIGIO A. PACANA; JOEL
MARI S. YU, IN HIS CAPACITY AS MEMBER OF THE MCWD BOARD; AND THE HONORABLE
TOMAS R. OSMEÑA, IN HIS CAPACITY AS CONGRESSIONAL REPRESENTATIVE OF THE SOUTH
DISTRICT, CEBU CITY, Petitioners, v. HON. GILBERT P. MOISES, IN HIS CAPACITY AS
PRESIDING JUDGE OF REGIONAL TRIAL COURT, BRANCH 18, CEBU CITY; AND HON.
GWENDOLYN F. GARCIA, IN HER CAPACITY AS GOVERNOR OF THE PROVINCE OF
CEBU, Respondents.

DECISION

BERSAMIN, J.:

A law enacted prior to the 1987 Constitution, like a presidential decree, is presumed to be valid and
constitutional on the theory that it was carefully studied by the Legislative and Executive Departments
prior to its enactment, and determined to be in accord with the Fundamental Law. However, the
presumption of validity and constitutionality is overturned and the law should be struck down once it
becomes inconsistent with the present Constitution and the later laws.

Antecedents

On May 25, 1973, President Ferdinand E. Marcos issued Presidential Decree No. 198 (Provincial Water
Utilities Act of 1973). By virtue of P. D. No. 198, Cebu City formed the Metro Cebu Water District
(MCWD) in 1974. Thereafter, the Cities of Mandaue, Lapu-Lapu and Talisay, and the Municipalities of
Liloan, Compostela, Consolacion, and Cordova turned over their waterworks systems and services to the
MCWD. Since then, the MCWD has distributed water and sold water services to said cities and
municipalities. From 1974 to 2002, the Cebu City Mayor appointed all the members of the MCWD Board
of Directors in accordance with Section 3 (b) of P. D. No. 198, to wit:
Section 3. Definitions. - As used in this Decree, the following words and terms shall have the meanings
herein set forth, unless a different meaning clearly appears from the context. The definition of a word or
term applies to any of its variants.

18
(a) Act. This is the Provincial Water Utilities Act of 1973.

(b) Appointing authority. The person empowered to appoint the members of the board of Directors of a
local water district, depending upon the geographic coverage and population make-up of the particular
district. In the event that more than seventy-five percent of the total active water service
connections of a local water district are within the boundary of any city or municipality, the
appointing authority shall be the mayor of that city or municipality, as the case may be;
otherwise, the appointing authority shall be the governor of the province within which the
district is located. If portions of more than one province are included within the boundary of the
district, and the appointing authority is to be the governors then the power to appoint shall rotate
between the governors involved with the initial appointments made by the governor in whose province
the greatest number of service connections exists. (bold underscoring supplied for emphasis)
In July 2002, Cebu Provincial Governor Pablo L. Garcia wrote to the MCWD to assert his authority and
intention to appoint the members of the MCWD Board of Directors. 1 He stated in his letter that since
1996, the active water service connections in Cebu City had been below 75% of the total active water
service connection of the MCWD; that no other city or municipality under the MCWD had reached the
required percentage of 75%; and that, accordingly, he, as the Provincial Governor of Cebu, was the
appointing authority for the members of the MCWD Board of Directors pursuant to Section 3 (b) of P. D.
No. 198.

Later on, the MCWD commenced in the Regional Trial Court in Cebu City (RTC) its action for declaratory
relief seeking to declare Section 3(b) of P.D. No. 198 unconstitutional; or, should the provision be
declared valid, it should be interpreted to mean that the authority to appoint the members of the MCWD
Board of Directors belonged solely to the Cebu City Mayor. 2

The RTC (Branch 7) dismissed the action for declaratory relief without any finding and declaration as to
the proper appointing authority for the members of the MCWD Board of Directors should none of the
cities and municipalities reach 75% of the total water service connections in the areas under the MCWD. 3

In the meanwhile, the terms of two members of the MCWD Board of Directors ended, resulting in two
vacancies. To avoid a vacuum and in the exigency of the service, Provincial Governor Gwendolyn F.
Garcia and Cebu City Mayor Tomas R. Osmeña jointly appointed Atty. Adelino Sitoy and Leo Pacaña to
fill the vacancies.4However, the position of Atty. Sitoy was deemed vacated upon his election as the
Municipal Mayor of Cordova, Cebu in the 2007 elections.

Consequently, Governor Garcia commenced an action for declaratory relief to seek the interpretation of
Section 3 (b) of P.D. No. 198 on the proper appointing authority for the members of the MCWD Board of
Directors.5

It appears that on February 7, 2008, the Cebu Provincial Legal Office, upon being informed that Mayor
Osmeña would be appointing Joel Mari S. Yu to replace Atty. Sitoy as a member of the MCWD Board of
Directors, formally advised in writing Cynthia A. Barrit, the MCWD Board Secretary, to defer the
submission of the list of nominees to any appointing authority until the RTC rendered its final ruling on
the issue of the proper appointing authority.6 On February 22, 2008, however, Mayor Osmeña appointed
Yu as a member of the MCWD Board of Directors.7 Accordingly, on May 20, 2008, the RTC dismissed the
action for declaratory relief on the ground that declaratory relief became improper once there was a
breach or violation of the provision.8

On June 13, 2008, Governor Garcia filed a complaint to declare the nullity of the appointment of Yu as a
member of the MCWD Board of Directors (docketed as Civil Case No. CEB-34459), alleging that the
appointment by Mayor Osmeña was illegal; that under Section 3(b) of P.D. No. 198, it was she as the
Provincial Governor of Cebu who was vested with the authority to appoint members of the MCWD Board
of Directors because the total active water service connections of Cebu City and of the other cities and
municipalities were below 75% of the total water service connections in the area of the MCWD.9 She
impleaded Mayor Osmeña, the MCWD, and Yu as defendants.

In his answer, Mayor Osmeña contended that the authority to appoint the members of the MCWD Board
of Directors solely belonged to him; that since the creation of the MCWD in 1974, it was the Cebu City
Mayor who had been appointing the members of the MCWD Board of Directors; that the Province of
Cebu had not invested or participated in the creation of the MCWD; and that Cebu City, being a highly
urbanized city (HUC), was independent from the Province of Cebu under the provisions on local
autonomy of the 1987 Constitution.10

The RTC (Branch 18), to which the case was raffled, required the parties to submit their memorandum.

In their joint memorandum, Osmeña and Yu posited that the Province of Cebu did not participate in the

19
organization of the MCWD; that the words and sentences of Section 3(b) of P.D. No. 198 should not be
read and understood or interpreted literally; and that the case should be dismissed because: (1) Section
3(b) of P.D. No. 198 was unconstitutional for being arbitrary and unreasonable; (2) Governor Garcia had
no authority to appoint any members of the MCWD Board of Directors; and (3) that the Mayor of the city
or municipality having the majority of water connections within the area under the MCWD had the power
to appoint the members of the MCWD Board of Directors. 11

On November 16, 2010, the RTC rendered the assailed judgment declaring the appointment of Yu as
illegal and void,12 holding as follows:
The questioned provision, paragraph (b) of Section 3 of P.O. 198 is clear enough that it needs no
interpretation. It expressly states in unequivocal terms the appointing authority in the water district's
board of directors --- if more than seventy-five percent of the total active water service connections of a
local water district are within the boundary of any city or municipality, the appointing authority shall be
the mayor of the city or municipality, as the case may be; otherwise, the appointing authority shall be
the governor of the province within which the district is located.

It has not been belied by defendants that the active water service connections of Cebu City in the
Metropolitan Cebu Water District (MCWD), at 61.28%, have gone below the required 75% required by
law for the city mayor to have the authority to appoint members of the board of directors of the water
district. Lacking such percentage requisite, the appointing power is now vested with the governor of the
Province of Cebu. While it may be true that the governor had not participated in organizing MCWD and
neither did the Province of Cebu invest in establishing waterworks in the component local governments,
the law, however, does not impose any condition or restriction in transferring the power to the governor
to appoint members of the board of directors when the percentage falls below 75%. Thus, there is no
doubt that when any of the water district's participating city or municipality could not obtain 75% of the
active water service connections, the governor shall appoint the members of the board of directors of
the water district, whether it is a participant or not, in its organization.

As to the constitutionality of the questioned provision, the Court finds that Sec. 3 of P.O. 198 does not
violate the Constitution or the Local Government Code. Vesting the authority in the governor to appoint
a member of the board of directors of a water district is not intruding into the affairs of the highly
urbanized cities and component cities which comprise the district, and neither is it a threat to their
autonomy. It does not interfere with their powers and functions and neither can it be considered an
exercise of the provincial government's supervisory powers. At most, it is simply giving the authority to
appoint the head of the government unit (the governor) where all the members of the water district are
geographically located, and only when none of these cities and municipalities has the required 75% of
the active water service connections. Nevertheless, the issue is not whether the governor took any part
in organizing the water district or has contributed to its formation, but that by law, she has been made
the appointing authority even if she has no participation or involvement in the cooperative effort of the
members of the water district. This may not be the most expedient and appropriate solution, but still, it
is not illegal. As to why this is so is a question only our lawmakers could answer.

All presumptions are indulged in favor of constitutionality, one who attacks a statute, alleging
constitutionality must prove its invalidity beyond a reasonable doubt; that a law may work hardship
does not render it unconstitutional, that if any reasonable basis may be conceived which supports the
statute, it will be upheld and the challenger must negate all possible bases; that the courts are not
concerned with the wisdom, justice, policy or expediency of a statute, and that a liberal interpretation of
the constitution in favour of the constitutionality of legislation should be adopted.

Notably, among the admissions found in the Answer for defendants Yu and MCWD states: "x x x with
respect to the two (2) vacancies in the Board of MCWD and that joint appointment was made by the
plaintiff and defendant Mayor Osmeña to Atty. Adelino Sitoy and Mr. Eligio Pacana." The Court surmises
from this statement that as early as the previous appointments (of Mr. Pacana and Atty. Sitoy)
defendants have already recognized the appointing authority of the governor for members of the MCWD
board of directors, considering Cebu City's failure to reach the 75% benchmark on active water service
connections.

In sum, the Court has not been able to find any constitutional infirmity in the questioned provision (Sec.
3) of Presidential Decree No. 198. The fundamental criterion is that all reasonable doubts should be
resolved in favor of the constitutionality of a statute. Every law has in its favor the presumption of
constitutionality. For a law to be nullified, there must be shown that there is a clear and unequivocal
breach of the Constitution. The ground for nullity must be clear and beyond reasonable doubt. Those
who seek to declare the law, or parts thereof unconstitutional, must clearly establish the basis therefore.
Otherwise, the arguments fall short.

Based on the grounds raised by defendants to challenge the constitutionality of Section 3 of P.D. 198,
the Court finds that defendants have failed to overcome the presumption of constitutionality of the law.

20
As to whether the questioned section constitutes a wise legislation, considering the issues being raised
by petitioners, is for Congress to determine.

WHEREFORE, Judgment is hereby rendered in favour of plaintiff and against defendants, finding the
appointment of defendant Joel Mari S. Yu as member of the Metropolitan Cebu Water District (MCWD) as
illegal, null and void.13
Mayor Osmeña and Yu jointly moved for reconsideration,14 but the RTC denied their motion.15

Issues

Hence, the petitioners have instituted this special civil action for certiorari,16 contending that:
I.

THE RESPONDENT COURT ABDICATED ITS CONSTITUTIONAL DUTY IN REFUSING TO DELVE

ON THE ISSUE OF CONSTITUTIONALITY.

II.

THE JUDGMENT IS VOID ON ITS FACE BECAUSE OF CLEAR CONSTITUTIONAL VIOLATIONS

APPARENT BY A MERE READING OF THE DECREE.

III.

THE JUDGMENT VIOLATES DUE PROCESS AND THE EQUAL PROTECTION CLAUSE OF THE
CONSTITUTION.17

Ruling of the Court

The petition for certiorari is granted.

1.
Preliminary Matter:
Yu's expiration of term did not render case moot and academic

We note that respondent Yu's term as a member of the MCWD Board of Directors expired on December
31, 2012.18 However, this fact does not justify the dismissal of the petition on the ground of its being
rendered moot and academic. The case should still be decided, despite the intervening developments
that could have rendered the case moot and academic, because public interest is involved, and because
the issue is capable of repetition yet evading review. 19

For sure, the appointment by the proper official of the individuals to manage the system of water
distribution and service for the consumers residing in the concerned cities and municipalities involves
the interest of their populations and the general public affected by the services of the MCWD as a public
utility. Moreover, the question on the proper appointing authority for the members of the MCWD Board
of Directors should none of the cities and municipalities have at least 75% of the water consumers will
not be definitively resolved with finality if we dismiss the petition on the ground of mootness. It is
notable that the two cases for declaratory relief filed for the purpose of determining the proper
appointing authority were dismissed without any definitive declaration or ultimate determination of the
merits of the issue. The issue festers. Hence, the Court needs to decide it now, not later.

2.
First Issue:
RTC explained its holding of the assailed provision as valid and constitutional but it thereby
erred nonetheless

The petitioners take the RTC to task for not explaining why it held Section 3(b) of P.D. No. 198 to be not
violative of the constitutional provision on local autonomy and HUCs, and why it only opined that the
question of constitutionality of the provision should be left to Congress; that it did not determine
whether the requisites for raising the constitutional issue had been met; that it did not discuss the
reasons for holding that the issue about Section 3(b) of P.D. No. 198 was a political question; that no
political question was involved because what was being inquired into was not the wisdom of the
provision but its validity; and that because it did not perform its constitutional duty of reviewing the
provision, its judgment was void.20

The petitioners are mistaken on the first issue. The records show that the RTC, which indisputably had

21
the power and the duty to determine and decide the issue of the constitutionality of Section 3(b) of P.D.
No. 198,21 fully discharged its duty. In its assailed decision of November 16, 2010, the RTC ruled as
follows:
As to the constitutionality of the questioned provision, the Court finds that Sec. 3 of P.D. 198 does not
violate the Constitution or the Local Government Code. Vesting the authority in the governor to appoint
a member of the board of directors of a water district is not intruding into the affairs of the highly
urbanized cities and component cities which comprise the district, and neither is it a threat to their
autonomy. It does not interfere with their powers and functions and neither can it be considered an
exercise of the provincial government's supervisory powers. At most, it is simply giving the authority to
appoint the head oftbe government unit (the governor) where all the members of the water district are
geographically located, and only when none of these cities and municipalities has the required  75% of
the active water  service connections. Nevertheless, the issue is not whether the governor took any part
in organizing the water district or has contributed to its formation, but that by law, she has been made
the appointing authority even if she has no participation or involvement in the cooperative effort of the
members of the water district. This may not be the most expedient and appropriate solution, but still, it
is not illegal. As to why this is so is a question only our lawmakers could answer.

All presumptions are indulged in favor of constitutionality; one who attacks a statute, alleging
constitutionality must prove its invalidity beyond a reasonable doubt; that a law may work hardship
does not render it unconstitutional; that if any reasonable basis may be conceived which supports the
statute, it will be upheld and the challenger must negate all possible bases, that the courts are not
concerned with the wisdom, justice, policy or expediency of a statute; and that a liberal interpretation of
the constitution in favor of the constitutionality of legislation should be adopted.

x x x x

In sum, the Court has not been able to find any constitutional infirmity in the questioned provision (Sec.
3) of Presidential Decree No. 198. The fundamental criterion is that all reasonable doubts should be
resolved in favor of the constitutionality of a statute. Every law has in its favor the presumption of
constitutionality. For a law to be nullified, there must be shown that there is a clear and unequivocal
breach of the Constitution. The ground for nullity must be clear and beyond reasonable doubt. Those
who seek to declare the law, or parts thereof, unconstitutional, must clearly establish the basis
therefore. Otherwise, the arguments fall short.22
Nonetheless, the petitioners rightly contend that the RTC improperly regarded the matter about Section
3(b) of P.D. No. 198 as a political question; hence, not justiciable. It was not.

Political questions refer to "those questions which, under the Constitution, are to be decided by the
people in their sovereign capacity; or in regard to which full discretionary authority has been delegated
to the legislature or executive branch of the government." 23 They are "neatly associated with the
wisdom" of a particular act.24

The difference between the political and the justiciable questions has been noted in Sanidad v.
Commission on Elections,25  as follows:
cralawred

x x x The implementing Presidential Decree Nos. 991, 1031, and 1033, which commonly purport to have
the force and effect of legislation are assailed as invalid, thus the issue of the validity of said
Decrees is plainly a justiciable one, within the competence of this Court to pass upon . Section
2 (2), Article X of the new Constitution provides: "All cases involving the constitutionality of a treaty,
executive agreement, or law may shall be heard and decided by the Supreme Court en bane and no
treaty, executive agreement, or law may be declared unconstitutional without the concurrence of at
least ten Members...." The Supreme Court has the last word in the construction not only of treaties and
statutes, but also of the Constitution itself. The amending, like all other powers organized in the
Constitution, is in form a delegated and hence a limited power, so that the Supreme Court is vested with
that authority to determine whether that power has been discharged within its limits. (Emphasis
supplied)
The petitioners have averred the unconstitutionality or invalidity of Section3 (b) of P.D. No 198 based on
the provision's arbitrariness in denying substantive due process and equal protection to the affected
local government units (LGUs). Such issue, being justiciable, comes within the power of judicial review.
As such, the RTC skirted its duty of judicial review by improperly relying on the political question
doctrine. It should have instead adhered to the pronouncement in Estrada v. Desierto,26 to wit:
To a great degree, the 1987 Constitution has narrowed the reach of the political question doctrine when
it expanded the power of judicial review of this court not only to settle actual controversies involving
rights which are legally demandable and enforceable but also to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of government. Heretofore, the judiciary has focused on the "thou shalt not's" of the
Constitution directed against the exercise of its jurisdiction. With the new provision, however, courts are
given a greater prerogative to determine what it can do to prevent grave abuse of discretion amounting

22
to lack or excess of jurisdiction on the part of any branch or instrumentality of government. Clearly, the
new provision did not just grant the Court power of doing nothing. x x x (Italics omitted)
3. 
Second Issue:
Section 3(b) of P.D. 198 is already superseded

The petitioners argue that the MCWD became a water district by the pooling of the water utilities
belonging to several HUCs and municipalities; that the active water connections in the MCWD have been
distributed as follows: Cebu City: 61.28%; Mandaue City: 16%; Lapulapu City: 6.8%; Talisay City and
the Municipalities of Liloan, Consolacion, Compostela, and Cordova: 16.92%; that Section 3 (b) of P.D.
No. 198 was unconstitutional on its face for being unreasonable and arbitrary because the determination
of who would exercise the power to appoint the members of the MCWD Board of Directors was thereby
made to depend on the shifting number of water users in the water district's component LGUs; that the
provision on the authority of the Provincial Governor to appoint in cases where the water connections of
any of the water district's cities or municipalities were below 75% was arbitrary for not distinguishing
whether or not the province had contributed any waterworks to the water district; that the provision did
not consider whether a city or municipality comprised the majority or more of the water consumers; that
the provision was irrational as it gave the Provincial Governor the power to appoint regardless of
whether the province had participated in the organization of the water district or not; that in a
democracy, the principle that if power or authority was conferred through determination of numerical
figures then the numerical superiority or the rule of the majority should apply; that the rule of the
majority was being applied in electing government leaders as well as in choosing the leaders in the
private sector; that the provision violated the rule of the majority; that at the time of the filing of this
case, the majority of MCWD water service connections were in Cebu City (61.28%); and that the
appointing power should necessarily remain in the City Mayor of Cebu City because the appointing power
was based on the number of water service connections.

The petitioners asseverate that the provision or any part of P.D. No. 198 did not state any reason for
departing from the rule of the majority; that the provision failed reasonableness as a standard of
substantive due process; that the appointing authority should be the mayor of the city or municipality
having the majority of the water connections; that if such majority could not be attained, there must be
a power sharing scheme among those having the largest number of water connections conformably with
the rule of the majority; that the temporary alternative was the Board  of Directors themselves, who,
under Section 10 of P.D. No. 198, could appoint upon failure of the appointing authority to do so; that
the assailed provision was void on its face for violating the constitutional provision on local autonomy
and independence of HUCs under Article X of the 1987 Constitution; that the provision unduly interfered
with the internal affairs of Cebu City, and diminished the autonomy of the LGUs; that the provision
undermined the independence of HUCs; that both the Office of the Government Corporate Counsel and
the Office of the Solicitor General have opined that because Cebu City was an HUC, the City Mayor of
Cebu City should retain the right to appoint the members of the MCWD Board of Directors; that the chief
executive of the LGU having the majority of water consumers was in the best position to exercise the
discretion of choosing the most competent persons who could best serve the constituents; that because
the largest number of water consumers were in Cebu City, any intrusion on the City Mayor's power to
appoint would violate its independence and autonomy; that the Province of Cebu could not exercise
powers that affected the constituents of HUCs; that providing water to constituents was the sole
responsibility of the concerned LGU; that the water utility of the LGU was a patrimonial property that
was not for public use; that as such, the operation, ownership and management of the public utility
should belong to the LGU; and that the operation of the water utilities involved the private rights of the
LGUs that could not be amended or altered by a statute.27

The Court opines that Section 3(b) of P.D. No. 198 should be partially struck down for being repugnant
to the local autonomy granted by the 1987 Constitution to LGUs, and for being inconsistent with R.A.
No. 7160 (1991 Local Government Code) and related laws on local governments.

P.D. No. 198 - issued by President Marcos in the exercise of his legislative power during the period of
Martial Law proclaimed under the 1973 Constitution - relevantly provided:
MALACAÑANG 
Manila

PRESIDENTIAL DECREE No. 198 May 25, 1973

DECLARING A NATIONAL POLICY FAVORING LOCAL OPERATION AND CONTROL OF WATER SYSTEMS;
AUTHORIZING THE FORMATION OF LOCAL WATER DISTRICTS AND PROVIDING FOR THE GOVERNMENT
AND ADMINISTRATION OF SUCH DISTRICTS; CHARTERING A NATIONAL ADMINISTRATION TO
FACILITATE IMPROVEMENT OF LOCAL WATER UTILITIES; GRANTING SAID ADMINISTRATION SUCH
POWERS AS ARE NECESSARY TO OPTIMIZE PUBLIC SERVICE FROM WATER UTILITY OPERATIONS, AND

23
FOR OTHER PURPOSES

WHEREAS, one of the pre-requisites to the orderly and well balanced growth of urban areas is an
effective system of local utilities, the absence of which is recognized as a deterrent to economic growth,
a hazard to public health and an irritant to the spirit and well-being of the citizenry;

WHEREAS, domestic water systems and sanitary sewers are two of the most basic and essential
elements of local utility system, which, with a few exceptions, do not exist in provincial areas in the
Philippines;

WHEREAS, existing domestic water utilities are not meeting the needs of the communities they serve;
water quality is unsatisfactory; pressure is inadequate; and reliability of service is poor; in fact, many
persons receive no piped water service whatsoever;

WHEREAS, conditions of service continue to worsen for two apparent reasons, namely: (1) that key
element of existing systems are deteriorating faster than they are being maintained or replaced, and (2)
that they are not being expanded at a rate sufficient to match population growth; and

WHEREAS, local water utilities should be locally-controlled and managed, as well as have support on the
national level in the area of technical advisory services and financing;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in my by the Constitution, as Commander-in-Chief of all the Armed Forces of the Philippines, and
pursuant to Proclamation No. 1081 dated September 21, 1972 and General Order No. 1 dated
September 22, 1972, as amended, do hereby decree, order and make as part of the law of the land the
following measure:

TITLE I 

PRELIMINARY PROVISIONS

Section 1. Title. - This Decree shall be known and referred to as the "Provincial Water Utilities Act of
1973."

Section 2. Declaration of Policy. - The creation, operation, maintenance and expansion of reliable and
economically viable and sound water supply and wastewater disposal system for population centers of
the Philippines is hereby declared to be an objective of national policy of high priority. For purpose of
achieving said objective, the formulation and operation of independent, locally controlled public water
districts is found and declared to be the most feasible and favored institutional structure. To this end, it
is hereby declared to be in the national interest that said districts be formed and that local water supply
and wastewater disposal systems be operated by and through such districts to the greatest extent
practicable. To encourage the formulation of such local water districts and the transfer thereto to
existing water supply and wastewater disposal facilities, this Decree provides the general act the
authority for the formation thereof, on a local option basis. It is likewise declared appropriate, necessary
and advisable that all funding requirements for such local water systems, other than those provided by
local revenues, should be channeled through and administered by an institution on the national level,
which institution shall be responsible for and have authority to promulgate and enforce certain rules and
regulations to achieve national goals and the objective of providing public waterworks services to the
greatest number at least cost, to effect system integration or joint investments and operations whenever
economically warranted and to assure the maintenance of uniform standards, training of personnel and
the adoption of sound operating and accounting procedures.

Section 3. Definitions. - As used in this Decree, the following words and terms shall have the meanings
herein set forth, unless a different meaning clearly appears from the context. The definition of a word or
term applies to any of its variants.

(a) Act. This Provincial Water Utilities Act of 1973.

(b) Appointing authority. The person empowered to appoint the members of the Board of Directors of a
local water district, depending upon the geographic coverage and population make-up of the particular
district. In the event that more than seventy-five percent of the total active water service
connections of a local water district are within the boundary of any city or municipality, the
appointing authority shall be the mayor of that city or municipality, as the case may
be; otherwise, the appointing authority shall be the governor of the province within which the
district is located. If portions of more than one province are included within the boundary of the
district, and the appointing authority is to be the governors then the power to appoint shall rotate
between the governors involved with the initial appointments made by the governor in whose province

24
the greatest number of service connections exists. (Emphasis supplied)

xxxx
The enactment of P.D. No. 198 on May 25, 1973 was prior to the enactment on December 22, 1979 of
Batas Pambansa Blg. 51 (An Act Providing for the Elective or Appointive Positions in Various Local
Governments and for Other Purposes) and antedated as well the effectivity of the 1991 Local
Government Code on January 1, 1992. At the time of the enactment of P.D. No. 198, Cebu City was still
a component city of Cebu Province. Section 3 28 of B.P. Blg. 51 reclassified the cities of the Philippines
based on well-defined criteria. Cebu City thus became an HUC, which immediately meant that its
inhabitants were ineligible to vote for the officials of Cebu Province. In accordance with Section 12 of
Article X of the 1987 Constitution, cities that are highly urbanized, as determined by law, and
component cities whose charters prohibit their voters from voting for provincial elective officials, shall
be independent of the province, but the voters of component cities within a province, whose charters
contain no such prohibition, shall not be deprived of their right to vote for elective provincial officials.
Later on, Cebu City, already an HUC, was further effectively rendered independent fromCebu Province
pursuant to Section 29 of the 1991 Local Government Code, viz.:
Section 29. Provincial Relations with Component Cities and Municipalities. - The province, through the
governor, shall ensure that every component city and municipality within its territorial jurisdiction acts
within the scope of its prescribed powers and functions. Highly urbanized cities and independent
component cities shall be independent of the province. (Emphasis supplied)
Hence, all matters relating to its administration, powers and functions were exercised through its local
executives led by the City Mayor, subject to the President's retained power of general supervision over
provinces, HUCs, and independent component cities pursuant to and in accordance with Section 25 29 of
the 1991 Local Government Code, a law enacted for the purpose of strengthening the autonomy of the
LGUs in accordance with the 1987 Constitution.

Article X of the 1987 Constitution guarantees and promotes the administrative and fiscal autonomy of
the LGUs.30 The foregoing statutory enactments enunciate and implement the local autonomy provisions
explicitly recognized under the 1987 Constitution. To conform with the guarantees of the Constitution in
favor of the autonomy of the LGUs, therefore, it becomes the duty of the Court to declare and
pronounce Section 3(b) of P.D. No. 198 as already partially unconstitutional. We note that this
pronouncement is also advocated by the National Government, as shown in the comment of the Solicitor
General.31

In Navarro v. Ermita,32 the Court has pointed out that the central policy considerations in the creation of
local government units are economic viability, efficient administration, and capability to deliver basic
services to their constituents. These considerations must be given importance as they ensure the
success of local autonomy. It is accepted that the LGUs, more than the National Government itself, know
the needs of their constituents, and cater to such needs based on the particular circumstances of their
localities. Where a particular law or statute affecting the LGUs infringes on their autonomy, and on their
rights and powers to efficiently and effectively address the needs of their constituents, we should lean in
favor of their autonomy, their rights and their powers.

Water and its efficient supply are among the primary concerns of every LGU. Issues that tend to reduce
or diminish the authority of the boards of directors to manage the water districts are imbued with public
interest. Bearing this in mind, and recalling that the MCWD had been established from the erstwhile
Osmeña Waterworks Systems (OWS) without any investment or contribution of funds and material from
the Province of Cebu towards the creation and maintenance of OWS and the MCWD,33 and considering
that it had always been the City Mayor of the City of Cebu who appointed the members of the MCWD
Board of Directors regardless of the percentage of the water subscribers, our pronouncement herein
rests on firm ground.

4.
Third Issue:
Section 3(b) of P.D. 198 is unconstitutional for violating the Due Process Clause and the Equal
Protection Clause

The petitioners assert that Section 3(b) of P.D. No. 198, being unfair, violated substantive due process;
that Governor Garcia could not determine the water needs of each of the LGUs within the MCWD; that
the provision allowed inequality of treatment of the cities and municipalities in relation to the province,
and thus violated the Equal Protection Clause of the Constitution; that the provision unduly deprived
Cebu City of the power to determine the membership in the MCWD Board of Directors despite Cebu City
having the majority of the water service connections; that the Province of Cebu was given unreasonable
and unwarranted benefit despite Cebu City being independent from the Province of Cebu; that Section
3(b) of P.D. No. 198 did not distinguish whether the province contributed any resource to the water
district or not; that under the provision, if two or more provinces contributed to the water district, they

25
were not subject to the 75% requirement to avail of the power of appointment, indicating that the power
to appoint devolved only in the provinces; that this violated the guarantee of equality of treatment in
favor of the participating LGUs; that the provision created a privileged class (the provinces) without any
justification in reason; and that "the classification is not germane to the purpose of the law and is not
based on substantial distinctions that make real differences." 34

Substantive due process "requires that the law itself, not merely the procedures by which the law would
be enforced, is fair, reasonable, and just."35 It demands the intrinsic validity of the law in interfering with
the rights of the person to life, liberty or property. In short, to be determined is whether the law has a
valid governmental objective, like the interest of the public as against that of a particular class. 36

On the other hand, the principle of equal protection enshrined in the Constitution does not require the
territorial uniformity of laws. According to Tiu v. Court of Appeals,37 the fundamental right of equal
protection of the law is not absolute, but subject to reasonable classification. Classification, to be valid,
must: (1) rest on substantial distinctions; (2) be germane to the purpose of the law; (3) not be limited
to existing conditions only; and (4) apply equally to all members of the same class.

We opine that although Section 3(b) of P.D. No. 198 provided for substantial distinction and was
germane to the purpose of P.D. No. 198 when it was enacted in 1973, the intervening reclassification of
the City of Cebu into an HUC and the subsequent enactment of the 1991 Local Government
Code rendered the continued application of Section 3(b) in disregard of the reclassification unreasonable
and unfair. Clearly, the assailed provision no longer provided for substantial distinction because, firstly,
it ignored that the MCWD was built without the participation of the provincial government; secondly, it
failed to consider that the MCWD existed to serve the community that represents the needs of the
majority of the active water service connections; and, thirdly, the main objective of the decree was to
improve the water service while keeping up with the needs of the growing population.

The Whereas Clauses of P.D. No. 198 essentially state the raison d'etre of its enactment, to wit:
WHEREAS, existing domestic water utilities are not meeting the needs of the communities they
serve; water quality is unsatisfactory; pressure is inadequate; and reliability of service is poor; in fact,
many persons receive no piped water service whatsoever;

WHEREAS, conditions of service continue to worsen for two apparent reasons, namely: (1) that key
element of existing systems are deteriorating faster than they are being maintained or replaced, and
(2) that they are not being expanded at a rate sufficient to match population growth; and

WHEREAS, local water utilities should be locally-controlled and managed, as well as have support
on the national level in the area of technical advisory services and financing; (bold emphasis supplied)
Verily, the decree was enacted to provide adequate, quality and reliable water and waste-water services
to meet the needs of the local communities and their growing populations. The needs of the
communities served were paramount. Hence, we deem it to be inconsistent with the true objectives of
the decree to still leave to the provincial governor the appointing authority if the provincial governor had
administrative supervision only over municipalities and component cities accounting for 16.92% of the
active water service connection in the MCWD. In comparison, the City of Cebu had 61.28% 38 of the
active service water connections; Mandaue, another HUC, 16%; and Lapu Lapu City, another HUC,
6.8%. There is no denying that the MCWD has been primarily serving the needs of Cebu City. Although
it is impermissible to inquire into why the decree set 75% as the marker for determining the proper
appointing authority, the provision has meanwhile become unfair for ignoring the needs and
circumstances of Cebu City as the LGU accounting for the majority of the active water service
connections, and whose constituency stood to be the most affected by the decisions made by the
MCWD's Board of Directors. Indeed, the classification has truly ceased to be germane or related to the
main objective for the enactment of P.D. No. 198 in 1973.

Grave abuse of discretion means either that the judicial or quasi judicial power was exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, or that the respondent judge,
tribunal or board evaded a positive duty, or virtually refused to perform the duty enjoined or to act in
contemplation of law, such as when such judge, tribunal or board exercising judicial or quasi-judicial
powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction. Mere abuse
of discretion is not enough to warrant the issuance of the writ. The abuse of discretion must be grave. 39

Under the foregoing circumstances, therefore, the RTC gravely abused its discretion in upholding Section
3(b) of P.D. No. 198. It thereby utterly disregarded the clear policies favoring local autonomy enshrined
in the 1987 Constitution and effected by the 1991 Local Government Code and related subsequent
statutory enactments, and for being violative of the Due Process Clause and the Equal Protection Clause
of the 1987 Constitution.

26
WHEREFORE, we GRANT the petition for certiorari; ANNUL and SET ASIDE the decision rendered in
Civil Case No. CEB-34459 on November 16, 2010 by the Regional Trial Court, Branch 18, in Cebu City;
and DECLARE as UNCONSTITUTIONAL Section 3(b) of Presidential Decree No. 198 to the extent that
it applies to highly urbanized cities like the City of Cebu and to component cities with charters expressly
providing for their voters not to be eligible to vote for the officials of the provinces to which they belong
for being in violation of the express policy of the 1987 Constitution on local autonomy, the 1991 Local
Government Codeand subsequent statutory enactments, and for being also in violation of the Due
Process Clause and the Equal Protection Clause.

ACCORDINGLY, the Mayor of the the City of Cebu is declared to be the appointing authority of the
Members of the Board of Directors of the Metro Cebu Water District.

No pronouncement on costs of suit.

EN BANC

G.R. No. 207132, December 06, 2016

ASSOCIATION OF MEDICAL CLINICS FOR OVERSEAS WORKERS, INC., (AMCOW),

REPRESENTED HEREIN BY ITS PRESIDENT, DR. ROLANDO VILLOTE, Petitioner, v. GCC
APPROVED MEDICAL CENTERS ASSOCIATION, INC. AND CHRISTIAN CANGCO, Respondents.

G.R. No. 207205

HON. ENRIQUE T. ONA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF

HEALTH, Petitioner, v. GCC APPROVED MEDICAL CENTERS ASSOCIATION, INC. AND CHRISTIAN
E. CANGCO, Respondents.

DECISION

BRION, J.:

In these consolidated petitions for review on certiorari1 filed under Rule 45 of the Rules of Court, by
the Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) in GR No. 207132, and by
Secretary Enrique T. Ona (Secretary Ona) of the Department of Health (DOH) in GR No. 207205, we
resolve the challenge to the August 10, 2012 decision2 and the April 12, 2013 order3 of the Regional
Trial Court (RTC) of Pasay City, Branch 108, in Sp. Civil Action No. R-PSY-10-04391-CV.4

The August 10, 2012 decision and April 12, 2013 order declared null and void ab initio the August 23,
2010 and November 2, 2010 orders issued by the DOH directing respondent GCC Approved Medical
Centers Association, Inc. (GAMCA) to cease and desist from implementing the referral decking system
(these orders shall be alternately referred to as DOH CDO letters).

I. The Antecedents

On March 8, 2001, the DOH issued Administrative Order No. 5, Series of 2001 5(AO 5-
01) which directed the decking or equal distribution of migrant workers among the several
clinics who are members of GAMCA.

AO 5-01 was issued to comply with the Gulf Cooperative Countries (GCC) States' requirement that only
GCC-accredited medical clinics/hospitals' examination results will be honored by the GCC States'
respective embassies. It required an OFW applicant to first go to a GAMCA Center which, in turn, will
refer the applicant to a GAMCA clinic or hospital.

Subsequently, the DOH issued AO No. 106, Series of 2002 6holding in abeyance the
implementation of the referral decking system. The DOH reiterated its directive suspending
the referral decking system in AO No. 159, Series of 2004.7

In 2004, the DOH issued AO No. 167, Series of 2004 8repealing AO 5-01, reasoning that the referral
decking system did not guarantee the migrant workers' right to safe and quality health service . AO 167-
04 pertinently reads:

27
WHEREAS, after a meticulous and deliberate study, examination, and consultation about the GAMCA
referral decking system, the DOH believes that its mandate is to protect and promote the health of the
Filipino people by ensuring the rights to safe and quality health service and reliable medical examination
results through the stricter regulation of medical clinics and other health facilities, which the referral
decking system neither assures nor guarantees.

NOW, THEREFORE, for and in consideration of the foregoing, the DOH hereby withdraws, repeals and/or
revokes Administrative Order No. 5, series of 2001, concerning the referral decking system. Hence, all
other administrative issuances, bureau circulars and memoranda related to A.O. No. 5, series of 2001,
are hereby withdrawn, repealed and/revoked accordingly.
In Department Memorandum No. 2008-0210,9 dated September 26, 2008, then DOH Secretary
Francisco T. Duque III expressed his concern about the continued implementation of the referral decking
system despite the DOH's prior suspension directives. The DOH directed the "OFW clinics, duly
accredited/licensed by the DOH and/or by the Philippine Health Insurance Corporation (PHILHEALTH)
belonging to and identified with GAMCA x x x to forthwith stop, terminate, withdraw or otherwise
end the x x x 'referral decking system.'"10

GAMCA questioned the DOH's Memorandum No. 2008-0210 before the Office of the President (OP). In a
decision11 dated January 14, 2010, the OP nullified Memorandum No. 2008-0210.

On March 8, 2010, Republic Act (RA) No. 1002212lapsed into law without the President's
signature. Section 16 of RA No. 10022 amended Section 23 of RA No. 8042, adding two new paragraphs
- paragraphs (c) and (d). The pertinent portions of the amendatory provisions read:
Section 16. Under Section 23 of Republic Act No. 8042, as amended, add new paragraphs (c) and (d)
with their corresponding subparagraphs to read as follows:

(c) Department of Health. - The Department of Health (DOH) shall regulate the activities and
operations of all clinics which conduct medical, physical, optical, dental, psychological and
other similar examinations, hereinafter referred to as health examinations, on Filipino
migrant workers as requirement for their overseas employment. Pursuant to this, the DOH shall
ensure that:

(c.1) The fees for the health examinations are regulated, regularly monitored and duly published to
ensure that the said fees are reasonable and not exorbitant;

(c.2) The Filipino migrant worker shall only be required to undergo health examinations when there is
reasonable certainty that he or she will be hired and deployed to the jobsite and only those health
examinations which are absolutely necessary for the type of job applied for or those specifically required
by the foreign employer shall be conducted;

(c.3) No group or groups of medical clinics shall have a monopoly of exclusively conducting
health examinations on migrant workers for certain receiving countries;

(c.4) Every Filipino migrant worker shall have the freedom to choose any of the DOH-
accredited or DOH-operated clinics that will conduct his/her health examinations and that his or her
rights as a patient are respected. The decking practice, which requires an overseas Filipino
worker to go first to an office for registration and then farmed out to a medical clinic located
elsewhere, shall not be allowed;

(c.5) Within a period of three (3) years from the effectivity of this Act, all DOH regional and/or provincial
hospitals shall establish and operate clinics that can serve the health examination requirements of
Filipino migrant workers to provide them easy access to such clinics all over the country and lessen their
transportation and lodging expenses; and

(c.6) All DOH-accredited medical clinics, including the DOH operated clinics, conducting health
examinations for Filipino migrant workers shall observe the same standard operating procedures and
shall comply with internationally accepted standards in their operations to conform with the
requirements of receiving countries or of foreign employers/principals.

Any Foreign employer who does not honor the results of valid health examinations conducted by a DOH-
accredited or DOH-operated clinic shall be temporarily disqualified from participating in the overseas
employment program, pursuant to POEA rules and regulations.

In case an overseas Filipino worker is found to be not medically fit upon his/her immediate arrival in the
country of destination, the medical clinic that conducted the health examinations of such overseas
Filipino worker shall pay for his or her repatriation back to the Philippines and the cost of deployment of

28
such worker.

Any government official or employee who violates any provision of this subsection shall be removed or
dismissed from service with disqualification to hold any appointive public office for five (5) years. Such
penalty is without prejudice to any other liability which he or she may have incurred under existing laws,
rules or regulations. [emphases and underscoring supplied]
On August 13, 2010, the Implementing Rules and Regulations13 (IRR) of RA No. 8042, as amended
by RA No. 10022, took effect.

Pursuant to Section 16 of RA No. 10022, the DOH, through its August 23, 2010 letter-
order,14directed GAMCA to cease and desist from implementing the referral decking system and
to wrap up their operations within three (3) days from receipt thereof. GAMCA received its copy of the
August 23, 2010 letter-order on August 25, 2010.

On August 26, 2010, GAMCA filed with the RTC of Pasig City a petition for certiorari and prohibition with
prayer for a writ of preliminary injunction and/or temporary restraining order (GAMCA's petition).15 It
assailed: (1) the DOH's August 23, 2010 letter-order on the ground of grave abuse of discretion; and
(2) paragraphs c.3 and c.4, Section 16 of RA No. 10022, as well as Section 1 (c) and (d), Rule XI of the
IRR, as unconstitutional.

Meanwhile, the DOH reiterated - through its November 2, 2010 order - its directive that GAMCA cease
and desist from implementing the referral decking system.16

On November 23, 2010, AMCOW filed an urgent motion for leave to intervene and to file an opposition-
in-intervention, attaching its opposition-in-intervention to its motion.17 In the hearing conducted the
following day, November 24, 2010, the RTC granted AMCOW's intervention; DOH and GAMCA did not
oppose AMCOW's motion.18 AMCOW subsequently paid the docket fees and submitted its
memorandum.19

In an order20 dated August 1, 2011, the RTC issued a writ of preliminary injunction21 directing the DOH
to cease and desist from implementing its August 23, 2010 and November 2, 2010 orders. The RTC
likewise issued an order denying the motion for inhibition/disqualification filed by AMCOW.

On August 18, 2011, the DOH sought reconsideration of the RTC's August 1, 2011 order.

The assailed RTC rulings

In its August 10, 2012 decision,22 the RTC granted GAMCA's certiorari petition and declared null and
void ab initio the DOH CDO letters. It also issued a writ of prohibition directing "the DOH Secretary and
all persons acting on his behalf to cease and desist from implementing the assailed Orders against the
[GAMCA]."

The RTC upheld the constitutionality of Section 16 of RA No. 10022 , amending Section 23 of RA
No. 8042, but ruled that Section 16 of RA No. 10022 does not apply to GAMCA.

The RTC reasoned out that the prohibition against the referral decking system under Section 16 of RA
No. 10022 must be interpreted as applying only to clinics that conduct health examination on migrant
workers bound for countries that do not require the referral decking system for the issuance of visas to
job applicants.

It noted that the referral decking system is part of the application procedure in obtaining visas to enter
the GCC States, a procedure made in the exercise of the sovereign power of the GCC States to protect
their nationals from health hazards, and of their diplomatic power to regulate and screen entrants to
their territories. Under the principle of sovereign equality and independence of States, the Philippines
cannot interfere with this system and, in fact, must respect the visa-granting procedures of foreign
states in the same way that they respect our immigration procedures.

Moreover, to restrain GAMCA which is a mere adjunct of HMC, the agent of GCC States, is to restrain the
GCC States themselves. To the RTC, the Congress was aware of this limitation, pursuant to the generally
accepted principles of international law under Article II, Section 2 of the 1987 Constitution, when it
enacted Section 16 of RA No. 10022.

The DOH and AMCOW separately sought reconsideration of the RTC's August 10, 2012 decision, which
motions the RTC denied.23 The DOH and AMCOW separately filed the present Rule 45 petitions.

On August 24, 2013, AMCOW filed a motion for consolidation24 of the two petitions; the Court granted

29
this motion and ordered the consolidation of the two petitions in a resolution dated September 17,
2013.25 cralawred

In the resolution26 of April 14, 2015, the Court denied: (1) GAMCA's most urgent motion for issuance of
temporary restraining order/writ of preliminary injunction/status quo ante order (with request for
immediate inclusion in the Honorable Court's agenda of March 3, 2015, its motion dated March 2,
2015);27 and (2) the most urgent reiterating motion for issuance of temporary restraining order/writ of
preliminary injunction/status quo ante order dated March 11, 2015.28

The Court also suspended the implementation of the permanent injunction issued by the RTC of Pasay
City, Branch 108 in its August 10, 2012 decision.

II. The Issues

The consolidated cases before us present the following issues:

First, whether the Regional Trial Court legally erred in giving due course to the petition for certiorari and
prohibition against the DOH CDO letters;

Second, whether the DOH CDO letters prohibiting GAMCA from implementing the referral decking
system embodied under Section 16 of Republic Act No. 10022 violates Section 3, Article II of the 1987
Constitution for being an undue taking of property;

Third, whether the application of Section 16 of Republic Act No.10022 to the GAMCA violates the
international customary principles of sovereign independence and equality.

III. Our Ruling

A. The RTC legally erred when it gave due course to GAMCA's petition for  certiorari  and
prohibition.

The present case reached us through an appeal by certiorari (pursuant to Rule 45) of an RTC ruling,
assailing the decision based solely on questions of law. The RTC decision, on the other hand, involves
the grant of the petitions for certiorari and prohibition (pursuant to Rule 65) assailing the DOH CDO
letters for grave abuse of discretion.

The question before us asks whether the RTC made a reversible error of law when it issued
writs of certiorari and prohibition against the DOH CDO letters.

AMCOW questions the means by which GAMCA raised the issue of the legality of RA No. 10022 before
the RTC. AMCOW posits that GAMCA availed of an improper remedy, as certiorari and prohibition lie only
against quasi-judicial acts, and quasi-judicial and ministerial acts, respectively. Since the disputed cease
and desist order is neither, the RTC should have dismissed the petition outright for being an improper
remedy.

We agree with the petitioners' assertion that the RTC erred when it gave due course to GAMCA's
petition for certiorari and prohibition, but we do so for different reasons.

1. Certiorari under Rules of Court and under the courts' expanded jurisdiction under Art VIII,
Section 1 of the Constitution, as recognized by jurisprudence.

A.1.a. The Current Certiorari Situation

The use of petitions for certiorari and prohibition under Rule 65 is a remedy that judiciaries have used
long before our Rules of Court existed.29 As footnoted below, these writs - now recognized and regulated
as remedies under Rule 65 of our Rules of Court - have been characterized a "supervisory writs" used by
superior courts to keep lower courts within the confines of their granted jurisdictions, thereby ensuring
orderliness in lower courts' rulings.

We confirmed this characterization in Madrigal Transport v. Lapanday Holdings Corporation,30 when we

held that a writ is founded on the supervisory jurisdiction of appellate courts over inferior courts, and is
issued to keep the latter within the bounds of their jurisdiction. Thus, the writ corrects only errors of
jurisdiction of judicial and quasi-judicial bodies, and cannot be used to correct errors of law or fact. For
these mistakes of judgment, the appropriate remedy is an appeal.31

This situation changed after 1987 when the new Constitution "expanded" the scope of judicial power by
providing that -

30
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government. (italics supplied)32
In Francisco v. The House of Representatives,33 we recognized that this expanded jurisdiction was meant
"to ensure the potency of the power of judicial review to curb grave abuse of discretion by 'any branch
or instrumentalities of government.'" Thus, the second paragraph of Article VIII, Section 1 engraves, for
the first time in its history, into black letter law the "expanded certiorari jurisdiction" of this Court,
whose nature and purpose had been provided in the sponsorship speech of its proponent, former Chief
Justice Constitutional Commissioner Roberto Concepcion:
xxxx

The first section starts with a sentence copied from former

Constitutions. It says:

The judicial power shall be vested in one Supreme Court and in such lower courts as may be established
by law.

I suppose nobody can question it.

The next provision is new in our constitutional law. I will read it first and explain.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the government.

Fellow Members of this Commission, this is actually a product of our experience during martial law. As a
matter of fact, it has some antecedents in the past, but the role of the judiciary during the deposed
regime was marred considerably by the circumstance that in a number of cases against the government,
which then had no legal defense at all, the solicitor general set up the defense of political question and
got away with it. As a consequence, certain principles concerning particularly the writ of habeas corpus,
that is, the authority of courts to order the release of political detainees, and other matters related to
the operation and effect of martial law failed because the government set up the defense of political
question. And the Supreme Court said: "Well, since it is political, we have no authority to pass upon it."
The Committee on the Judiciary feels that this was not a proper solution of the questions involved. It did
not merely request an encroachment upon the rights of the people, but it, in effect, encouraged further
violations thereof during the martial law regime. x x x

xxxx

Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on the
question whether or not a branch of government or any of its officials has acted without jurisdiction or in
excess of jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to excess of
jurisdiction or lack of jurisdiction. This is not only a judicial power but a duty to pass judgment on
matters of this nature.

This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter evade
the duty to settle matters of this nature, by claiming that such matters constitute a political
question.34 (italics in the original; emphasis and underscoring supplied)
Meanwhile that no specific procedural rule has been promulgated to enforce this "expanded"
constitutional definition of judicial power and because of the commonality of "grave abuse of discretion"
as a ground for review under Rule 65 and the courts expanded jurisdiction, the Supreme Court based on
its power to relax its rules35 allowed Rule 65 to be used as the medium for petitions invoking the courts'
expanded jurisdiction based on its power to relax its Rules.36 This is however an ad hoc approach that
does not fully consider the accompanying implications, among them, that Rule 65 is an essentially
distinct remedy that cannot simply be bodily lifted for application under the judicial power's expanded
mode. The terms of Rule 65, too, are not fully aligned with what the Court's expanded jurisdiction
signifies and requires.37

On the basis of almost thirty years' experience with the courts' expanded jurisdiction, the Court should
now fully recognize the attendant distinctions and should be aware that the continued use of Rule 65 on
an ad hoc basis as the operational remedy in implementing its expanded jurisdiction may, in the longer
term, result in problems of uneven, misguided, or even incorrect application of the courts' expanded

31
mandate.

The present case is a prime example of the misguided reading that may take place in constitutional
litigation: the procedural issues raised apparently spring from the lack of proper understanding of what a
petition for certiorari assails under the traditional and expanded modes, and the impact of these
distinctions in complying with the procedural requirements for a valid petition.

2. The Basic Distinctions

A.2.a. Actual Case or Controversy

Basic in the exercise of judicial power whether under the traditional or in the expanded setting - is the
presence of an actual case or controversy. For a dispute to be justiciable, a legally demandable and
enforceable right must exist as basis, and must be shown to have been violated. 38

Whether a case actually exists depends on the pleaded allegations, as affected by the elements
of standing (translated in civil actions as the status of being a "real-party-in-interest," in
criminal actions as "offended party" and in special proceedings as "interested
party"),39ripeness,40prematurity, and the moot and academic principle that likewise interact with
one another. These elements and their interactions are discussed m greater detail below.

The Court's expanded jurisdiction - itself an exercise of judicial power - does not do away with the
actual case or controversy requirement in presenting a constitutional issue, but effectively simplifies this
requirement by merely requiring a prima facie showing of grave abuse of discretion in the assailed
governmental act.

A.2.b. Actions Correctable by Certiorari

A basic feature of the expanded jurisdiction under the constitutional definition of judicial power, is the
authority and command for the courts to act on petitions involving the commission by any branch or
instrumentality of government of grave abuse of discretion amounting to lack or excess of jurisdiction.

This command distinctly contrasts with the terms of Rule 65 which confines court certiorari action solely
to the review of judicial and quasi-judicial acts.41 These differing features create very basic distinctions
that must necessarily result in differences in the application of remedies.

While actions by lower courts do not pose a significant problem because they are necessarily acting
judicially when they adjudicate, a critical question comes up for the court acting on certiorari petitions
when governmental agencies are involved - under what capacity does the agency act?

This is a critical question as the circumstances of the present case show. When the government entity
acts quasi-judicially, the petition for certiorari challenging the action falls under Rule 65; in other
instances, the petition must be filed based on the courts' expanded jurisdiction.

A.2.c. Grave Abuse of Discretion

Another distinction, a seeming one as explained below, relates to the cited ground of a certiorari petition
under Rule 65 which speaks of lack or excess of jurisdiction or grave abuse of discretion amounting to
lack or excess of jurisdiction, as against the remedy under the courts' expanded jurisdiction which
expressly only mentions grave abuse of discretion amounting to lack or excess of jurisdiction.

This distinction is apparently not legally significant when it is considered that action outside of or in
excess of the granted authority necessarily involves action with grave abuse of discretion: no discretion
is allowed in areas outside of an agency's granted authority so that any such action would be a gravely
abusive exercise of power. The constitutional grant of power, too, pointedly addresses grave abuse of
discretion when it amounts to lack or excess of jurisdiction,42 thus establishing that the presence of
jurisdiction is the critical element; failure to comply with this requirement necessarily leads to
the certiorari petition's immediate dismissal.43

As an added observation on a point that our jurisprudence has not fully explored, the result of the action
by a governmental entity (e.g., a law or an executive order) can be distinguished from the perspective
of its legality as tested against the terms of the Constitution or of another law (where subordinate action
like an executive order is involved), vis-a-vis the legality of the resulting action where grave abuse of
discretion attended the governmental action or the exercise of the governmental function.

In the former, the conclusion may be plain illegality or legal error that characterized the law or exec
order (as tested, for example, under the established rules of interpretation); no consideration is made of

32
how the governmental entity exercised its function. In the latter case, on the other hand, it is the
governmental entity's exercise of its function that is examined and adjudged independently of the result,
with impact on the legality of the result of the gravely abusive action.

Where the dispute in a case relates to plain legal error, ordinary court action and traditional mode are
called for and this must be filed in the lower courts based on rules of jurisdiction while observing the
hierarchy of courts.

Where grave abuse of discretion is alleged to be involved, the expanded jurisdiction is brought into play
based on the express wording of the Constitution and constitutional implications may be involved (such
as grave abuse of discretion because of plain oppression or discrimination), but this must likewise be
filed with the lowest court of concurrent jurisdiction, unless the court highest in the hierarchy grants
exemption. Note that in the absence of express rules, it is only the highest court, the Supreme Court,
that can only grant exemptions.

From these perspectives, the use of grave abuse of discretion can spell the difference in deciding
whether a case filed directly with the Supreme Court has been properly filed.

A.2.d. Exhaustion of Available Remedies

A basic requirement under Rule 65 is that there be "no other plain, speedy and adequate remedy found
in law,"44 which requirement the expanded jurisdiction provision does not expressly carry. Nevertheless,
this requirement is not a significant distinction in using the remedy of certiorari under the traditional and
the expanded modes. The doctrine of exhaustion of administrative remedies applies to a petition
for certiorari, regardless of the act of the administrative agency concerned, i.e., whether the act
concerns a quasi-judicial, or quasi-legislative function, or is purely regulatory. 45

Consider in this regard that once an administrative agency has been empowered by Congress to
undertake a sovereign function, the agency should be allowed to perform its function to the full extent
that the law grants. This full extent covers the authority of superior officers in the administrative
agencies to correct the actions of subordinates, or for collegial bodies to reconsider their own decisions
on a motion for reconsideration. Premature judicial intervention would interfere with this administrative
mandate, leaving administrative action incomplete; if allowed, such premature judicial action through a
writ of certiorari, would be a usurpation that violates the separation of powers principle that underlies
our Constitution.46

In every case, remedies within the agency's administrative process must be exhausted before external
remedies can be applied. Thus, even if a governmental entity may have committed a grave abuse of
discretion, litigants should, as a rule, first ask reconsideration from the body itself, or a review thereof
before the agency concerned. This step ensures that by the time the grave abuse of discretion issue
reaches the court, the administrative agency concerned would have fully exercised its jurisdiction and
the court can focus its attention on the questions of law presented before it.

Additionally, the failure to exhaust administrative remedies affects the ripeness to adjudicate

the constitutionality of a governmental act, which in turn affects the existence of the need for
an actual case or controversy for the courts to exercise their power of judicial review.47 The
need for ripeness - an aspect of the timing of a case or controversy does not change regardless of
whether the issue of constitutionality reaches the Court through the traditional means, or through the
Court's expanded jurisdiction. In fact, separately from ripeness, one other concept pertaining to judicial
review is intrinsically connected to it; the concept of a case being moot and academic.48

Both these concepts relate to the timing of the presentation of a controversy before the Court ripeness
relates to its prematurity, while mootness relates to a belated or unnecessary judgment on the issues.
The Court cannot preempt the actions of the parties, and neither should it (as a rule) render judgment
after the issue has already been resolved by or through external developments.

The importance of timing in the exercise of judicial review highlights and reinforces the need for an
actual case or controversy an act that may violate a party's right. Without any completed action or a
concrete threat of injury to the petitioning party, the act is not yet ripe for adjudication. It is merely a
hypothetical problem. The challenged act must have been accomplished or performed by either branch
or instrumentality of government before a court may come into the picture, and the petitioner must
allege the existence of an immediate or threatened injury to itself as a result of the challenged action.

In these lights, a constitutional challenge, whether presented through the traditional route or through
the Court's expanded jurisdiction, requires compliance with the ripeness requirement. In the case of
administrative acts, ripeness manifests itself through compliance with the doctrine of exhaustion of
administrative remedies.

33
In like manner, an issue that was once ripe for resolution but whose resolution, since then, has been
rendered unnecessary, needs no resolution from the Court, as it presents no actual case or controversy
and likewise merely presents a hypothetical problem. In simpler terms, a case is moot and academic
when an event supervenes to render a judgment over the issues unnecessary and superfluous.

Without the element of ripeness or a showing that the presented issue is moot and academic, petitions
challenging the constitutionality of a law or governmental act are vulnerable to dismissal.

Not to be forgotten is that jurisprudence also prohibits litigants from immediately seeking judicial relief
without first exhausting the available administrative remedies for practical reasons.49

From the perspective of practicality, immediate resort to the courts on issues that are within the
competence of administrative agencies to resolve, would unnecessarily clog the courts' dockets. These
issues, too, usually involve technical considerations that are within the agency's specific competence and
which, for the courts, would require additional time and resources to study and consider.50 Of course, the
Supreme Court cannot really avoid the issues that a petition for certiorari, filed with the lower courts
may present; the case may be bound ultimately to reach the Court, albeit as an appeal from the rulings
of the lower courts.

3. Situations Where a Petition for Certiorari May Be Used

There are two distinct situations where a writ of certiorari or prohibition may be sought. Each situation
carries requirements, peculiar to the nature of each situation, that lead to distinctions that should be
recognized in the use of certiorari under Rule 65 and under the courts' expanded jurisdiction.

The two situations differ in the type of questions raised. The first is the constitutional situation where
the constitutionality of acts are questioned. The second is the non-constitutional situation where acts
amounting to grave abuse of discretion are challenged without raising constitutional questions or
violations.

The process of questioning the constitutionality of a governmental action provides a notable area of
comparison between the use of certiorari in the traditional and the expanded modes.

Under the traditional mode, plaintiffs question the constitutionality of a governmental action through
the cases they file before the lower courts; the defendants may likewise do so when they interpose the
defense of unconstitutionality of the law under which they are being sued. A petition for declaratory
relief may also be used to question the constitutionality or application of a legislative (or quasi-
legislative) act before the court.51

For quasi-judicial actions, on the other hand, certiorari is an available remedy, as acts or exercise of
functions that violate the Constitution are necessarily committed with grave abuse of discretion for being
acts undertaken outside the contemplation of the Constitution. Under both remedies, the petitioners
should comply with the traditional requirements of judicial review, discussed below. 52 In both cases, the
decisions of these courts reach the Court through an appeal by certiorari under Rule 45.

In contrast, existing Court rulings in the exercise of its expanded jurisdiction have allowed the direct
filing of petitions for certiorari and prohibition with the Court to question, for grave abuse of discretion,
actions or the exercise of a function that violate the Constitution. 53 The governmental action may be
questioned regardless of whether it is quasi-judicial, quasi-legislative, or administrative in nature. The
Court's expanded jurisdiction does not do away with the actual case or controversy requirement for
presenting a constitutional issue, but effectively simplifies this requirement by merely requiring a prima
facie showing of grave abuse of discretion in the exercise of the governmental act.54

To return to judicial review heretofore mentioned, in constitutional cases where the question of
constitutionality of a governmental action is raised, the judicial power the courts exercise is likewise
identified as the power of judicial review - the power to review the constitutionality of the actions of
other branches of government. 55 As a rule, as required by the hierarchy of courts principle, these
cases are filed with the lowest court with jurisdiction over the matter. The judicial review that the courts
undertake requires:

1) there be an actual case or controversy calling for the exercise of

judicial power;
(2) the person challenging the act must have "Standing" to challenge;
he must have a personal and substantial interest in the case such

34
 that he has sustained, or will sustain, direct injury as a result of its
enforcement;
(3) the question of constitutionality must be raised at the earliest
possible opportunity; and
(4) the issue of constitutionality must be the very lis mota of the
case.56
The lower court's decision under the constitutional situation reaches the Supreme Court through the
appeal process, interestingly, through a petition for review on certiorari under Rule 45 of the Rules of
Court.

In the non-constitutional situation, the same requirements essentially apply, less the requirements
specific to the constitutional issues. In particular, there must be an actual case or controversy and the
compliance with requirements of standing, as affected by the hierarchy of courts, exhaustion of
remedies, ripeness, prematurity, and the moot and academic principles.

A.3.a. The "Standing" Requirement

Under both situations, the party bringing suit must have the necessary "standing." This means that this
party has, in its favor, the demandable and enforceable right or interest giving rise to a justiciable
controversy after the right is violated by the offending party.

The necessity of a person's standing to sue derives from the very definition of judicial power. Judicial
power includes the duty of the courts to settle actual controversies involving rights which are legally
demandable and enforceable. Necessarily, the person availing of a judicial remedy must show that he
possesses a legal interest or right to it, otherwise, the issue presented would be purely hypothetical and
academic. This concept has been translated into the requirement to have "standing" in judicial
review,57or to be considered as a "real-party-in-interest" in civil actions, 58 as the "offended party" in
criminal actions59 and the "interested party" in special proceedings.60

While the Court follows these terms closely in both non-constitutional cases and constitutional cases
under the traditional mode, it has relaxed the rule in constitutional cases harrdled under the expanded
jurisdiction mode. in the latter case, a prima facie showing that the questioned governmental act
violated the Constitution, effectively disputably shows an injury to the sovereign Filipino nation who
approved the Constitution and endowed it with authority, such that the challenged act may be
questioned by any Philippine citizen before the Supreme Court.61 In this manner, the "standing"
requirement is relaxed compared with the standard of personal stake or injury that the traditional
petition requires.

The relaxation of the standing requirement has likewise been achieved through the application of the
"transcendental importance doctrine" under the traditional mode for constitutional cases.62 (Under the
traditional mode, "transcendental importance" not only relaxes the standing requirement, but also allows
immediate access to this Court, thus exempting the petitioner from complying with the hierarchy of
courts requirement.)63

More importantly perhaps, the prima facie showing of grave abuse of discretion in constitutional cases
also implies that the injury alleged is actual or imminent, and not merely hypothetical.

Through this approach, the Court's attention is directed towards the existence of an actual case or
controversy - that is, whether the government indeed violated the Constitution to the detriment of the
Filipino people without the distractions of determining the existence of transcendental importance
indicators unrelated to the dispute and which do not at all determine whether the Court properly
exercises its power of judicial review.

Parenthetically, in the traditional mode, the determination of the transcendental importance of the issue
presented,64 aside from simply relaxing the standing requirement, may result in the dilution of the actual
case or controversy element because of the inextricable link between standing and the existence of an
actual case or controversy.

Consider, in this regard, that an actual case or controversy that calls for the exercise of judicial power
necessarily requires that the party presenting it possesses the standing to mount a challenge to a
governmental act. A case or controversy exists when there is an actual dispute between parties over
their legal rights, which remains in conflict at the time the dispute is presented before the

35
court.65 Standing, on the other hand, involves a personal and substantial interest in the case because
the petitioner has sustained, or will sustain, direct injury as a result of the violation of its right.66

With the element of "standing" (or the petitioner's personal or substantial stake or interest in the case)
relaxed, the practical effect is to dilute the need to show that an immediate actual dispute over legal
rights did indeed take place and is now the subject of the action before the court.67

In both the traditional and the expanded modes, this relaxation carries a ripple effect under established
jurisprudential rulings,68 affecting not only the actual case or controversy requirement, but compliance
with the doctrine of hierarchy of courts, discussed in greater detail below.

A.3.b. The Hierarchy of Courts Principle

Another requirement that a certiorari petition carries, springs from the principle of "hierarchy of courts"
which recognizes the various levels of courts in the country as they are established under the
Constitution and by law, their ranking and effect of their rulings in relation with one another, and how
these different levels of court interact with one another.69 Since courts are established and given their
defined jurisdictions by law, the hierarchy of the different levels of courts should leave very little opening
for flexibility (and potential legal questions), but for the fact that the law creates courts at different and
defined levels but with concurrent jurisdictions.

The Constitution itself has partially determined the judicial hierarchy in the Philippine legal system by
designating the Supreme Court as the highest court with irreducible powers; its rulings serve as
precedents that other courts must follow70 because they form part of the law of the land. 71 As a rule, the
Supreme Court is not a trial court and rules only on questions of law, in contrast with the Court of
Appeals and other intermediate courts72 which rule on both questions of law and of fact. At the lowest
level of courts are the municipal and the regional trial courts which handle questions of fact and law at
the first instance according to the jurisdiction granted to them by law.

Petitions for certiorari and prohibition fall under the concurrent jurisdiction of the regional trial courts
and the higher courts, all the way up to the Supreme Court. As a general rule, under the hierarchy of
courts principle, the petition must be brought to the lowest court with jurisdiction; 73 the petition brought
to the higher courts may be dismissed based on the hierarchy principle. Cases, of course, may ultimately
reach the Supreme Court through the medium of an appeal.

The recognition of exceptions to the general rule is provided by the Supreme Court through
jurisprudence, i.e., through the cases that recognized the propriety of filing cases directly with the
Supreme Court. This is possible as the Supreme Court has the authority to relax the application of its
own rules.74

As observed above, this relaxation waters down other principles affecting the remedy of certiorari. While
the relaxation may result in greater and closer supervision by the Court over the lower courts and quasi-
judicial bodies under Rule 65, the effect may not always be salutary in the long term when it is
considered that this may affect the constitutional standards for the exercise of judicial power,
particularly the existence of an actual case or controversy.

The "transcendental importance" standard, in particular, is vague, open-ended and value-laden, and
should be limited in its use to exemptions from the application of the hierarchy of courts principle. It
should not carry any ripple effect on the constitutional requirement for the presence of an actual case or
controversy.

4. The petition for  certiorari and prohibition against the DOH Letter was filed before the
wrong court.

In the present case, the act alleged to be unconstitutional refers to the cease and desist order that the
DOH issued against GAMCA's referral decking system. Its constitutionality was questioned through a
petition for certiorari and prohibition before the RTC. The case reached this Court through a Rule 45
appeal by certiorari under the traditional route.

In using a petition for certiorari and prohibition to assail the DOHCDO letters, GAMCA committed
several procedural lapses that rendered its petition readily dismissible by the RTC. Not only did the
petitioner present a premature challenge against an administrative act; it also committed the
grave jurisdictional error of filing the petition before the wrong court.

A.4.a. The DOH CDO letters were issued in the exercise of the DOH's quasi-judicial functions,
and could be assailed through Rule 65 on  certiorari and prohibition.

36
A cease and desist order is quasi-judicial in nature, as it applies a legislative policy to an individual or
group within the coverage of the law containing the policy.

The Court, in Municipal Council of Lemery, Batangas v. Provincial Board of Batangas,75 recognized the
difficulty of d fining the precise demarcation line between what are judicial and what are administrative
or ministerial functions, as the exercise of judicial functions may involve the performance of legislative
or administrative duties, and the performance of administrative or ministerial duties may, to some
extent, involve the exercise of functions judicial in character. Thus, the Court held that the nature of
the act to be performed, rather than of the office, board, or body which performs it , should
determine whether or not an action is in the discharge of a judicial or a quasi-judicial function. 76

Generally, the exercise of judicial functions involves the determination of what the law is, and what the
legal rights of parties are under this law with respect to a matter in controversy. Whenever an officer is
clothed with this authority and undertakes to determine those questions, he acts judicially. 77

In the administrative realm, a government officer or body exercises a quasi-judicial function when it
hears and determines questions of fact to which the legislative policy is to apply, and decide, based on
the law's standards, matters relating to the enforcement and administration of the law.78

The DOH CDO letter directed GAMCA to cease and desist from engaging in the referral decking system
practice within three days from receipt of the letter. By issuing this CDO letter implementing Section 16
of RA No. 10022, the DOH (1) made the finding of fact that GAMCA implements the referral decking
system, and (2) applied Section 16 of RA No. 10022, to conclude that GAMCA's practice is prohibited by
law and should be stopped.

From this perspective, the DOH acted in a quasi-judicial capacity: its CDO letter determined a question
of fact, and applied the legislative policy prohibiting the referral decking system practice.

Notably, cease and desist orders have been described and treated as quasi-judicial acts in past cases,
and had even been described as similar to the remedy of injunction granted by the courts. 79

A.4.b. The petitions for  certiorari and prohibition against the DOH CDO letters fall within the
jurisdiction of the Court of Appeals.

Since the CDO Letter was a quasi-judicial act, the manner by which GAMCA assailed it before the courts
of law had been erroneous; the RTC should not have entertained GAMCA's petition.

First, acts or omissions by quasi-judicial agencies, regardless of whether the remedy involves a Rule 43
appeal or a Rule 65 petition for certiorari, is cognizable by the Court of Appeals. In particular, Section 4,
Rule 65 of the Rules of Court provides:
Section 4. When and where petition filed. The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely
filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of
the denial of said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court
or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or
not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate
jurisdiction. If it involves the acts or omissions of a  quasi-judicial agency, unless otherwise
provided by law or these Rules, the petition shall be filed in and cognizable only by the Court
of Appeals. (emphasis, italics, and underscoring supplied)
Since the DOH is part of the Executive Department and has acted in its quasi-judicial capacity, the
petition challenging its CDO letter should have been filed before the Court of Appeals. The RTC thus did
not have jurisdiction over the subject matter of the petitions and erred in giving due course to the
petition for certiorari and prohibition against the DOH CDO letters. In procedural terms, petitions
for certiorari and prohibition against a government agency are remedies avaiJable to assail its quasi-
judicial acts, and should thus have been filed before the CA.

The provision in Section 4, Rule 65 requiring that certiorari petitions challenging quasi-judicial acts to be

filed with the CA is in full accord with Section 9 of Batas Pambansa Blg. 129 80 on the same point. Section
9 provides:
Section 9. Jurisdiction.- The Court of Appeals shall exercise:

1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo
warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;

37
xxxx

3. Exclusive appellate jurisdiction over all final judgments, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commission,
including the Securities and Exchange Commission, the Social Security Commission, the Employees
Compensation Commission and the Civil Service Commission, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines
under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of
the third paragraph and subparagraph 4 of the fourth paragraph of Section 17 of the Judiciary Act of
1948.

xxxx

(emphases, italics, and underscoring supplied)

Thus, by law and by Supreme Court Rules, the CA is the court with the exclusive original jurisdiction to
entertain petitions for certiorari and prohibition against quasi-judicial agencies. In short, GAMCA filed its
remedy with the wrong court.

A.4.c The petitions for  certiorari and prohibition against the DOH CDO letters were premature
challenges - they failed to comply with the requirement that there be "no other plain, speedy
and adequate remedy" and with the doctrine of exhaustion of administrative remedies.

Second, the Regional Trial Court of Pasay City unduly disregarded the requirements that there be "no
other plain, speedy and adequate remedy at law" and the doctrine of exhaustion of administrative
remedies, when it gave due course to the certiorari and prohibition petition against the DOH's CDO.

Under Chapter 8, Book IV of Executive Order (EO) No. 292,81 series of 1987, the DOH Secretary "shall
have supervision and control over the bureaus, offices, and agencies under him"82 and "shall have
authority over and responsibility for x x x operation" of the Department.

Section 1, Chapter 1, Title I, Book III of EO No. 292 in relation with Article VII, Sections 1 and 17 of the
Constitution,83 on the other hand, provides that the "President shall have control of all the executive
departments, bureaus, and offices."

These provisions both signify that remedies internal to the Executive Branch exist before resorting to
judicial remedies: GAMCA could ask the DOH Secretary to reconsider or clarify its letter-order, after
which it could appeal, should the ruling be unfavorable, to the Office of the President.

Significantly, this was what GAMCA did in the past when the DOH issued Memorandum Order No. 2008-
0210 that prohibited the referral decking system. GAMCA then asked for the DOH Secretary's
reconsideration, and subsequently appealed the DOH's unfavorable decision with the Office of the
President. The OP then reversed Memorandum Order No. 2008-0210 and allowed the referral decking
system to continue.

That GAMCA had earlier taken this course indicates that it was not unaware of the administrative
remedies available to it; it simply opted to disregard the doctrine of exhaustion of administrative
remedies and the requirement that there be no other plain, speedy, and adequate remedy in law when it
immediately filed its petition for certiorari with the RTC.

This blatant disregard of the Rule 65 requirements clearly places GAMCA's petition outside the
exceptions that we recognized in the past in relaxing strict compliance with the exhaustion of
administrative remedies requirement.

Jurisprudence84 shows that this Court never hesitated in the past in relaxing the application of the rules
of procedure to accommodate exceptional circumstances when their strict application would result in
injustice. These instances, founded as they are on equitable considerations, do not include the undue
disreiard of administrative remedies, particularly when they are readily available. 85

A.4.d. The petitions for  certiorari and prohibition against the DOH CDO letters should have
been dismissed outright, as Rule 65 Petitions for Certiorari and Prohibition are extraordinary
remedies given due course only upon compliance with the formal and substantive
requirements.

Note, at this point, that Rule 65 petitions for certiorari and prohibition are discretionary writs, and that
the handling court possesses the authority to dismiss them outright for failure to comply with the form
and substance requirements. Section 6, Rule 65 of the Rules of Court in this regard provides:

38
Section 6. Order to comment. - If the petition is sufficient in form and substance to justify suclr
process, the court shall issue an order requiring the respondent or respondents to comment on the
petition within ten (10) days from receipt of a copy thereof. Such order shall be served on the
respondents in such manner as the court may direct together with a copy of the petition and any
annexes thereto. (emphasis, italics, and underscoring supplied)
Thus, even before requiring the DOH to comment, the RTC could have assessed the petition
for certiorariand prohibition for its compliance with the Rule 65 requirements. At that point, the petition
for certiorariand prohibition should have been dismissed outright, for failing to comply with Section 1
and Section 4 of Rule 65. When the court instead took cognizance of the petition, it acted on a matter
outside its jurisdiction.

Consequently, the RTC's resulting judgment is void and carries no legal effect. The decision exempting
GAMCA from the application of the referral decking system should equally have no legal effect.

Noncompliance with the Section 1, Rule 65 requirement that there be no other plain, speedy, and
adequate remedy in law, on the other hand, is more than just a pro-forma requirement in the present
case. Since the petitions for certiorari and prohibition challenge a governmental act - i.e. action under
the DOH CDO letters, as well as the validity of the instruments under which these letters were issued -
compliance with Section 1, Rule 65 and the doctrine of exhaustion of administrative remedies that
judicial review requires is also mandatory. To recall a previous discussion, the exhaustion of
administrative remedies is also an aspect of ripeness in deciding a constitutional issue.

Thus, GAMCA's disregard of the Rules of Court not only renders the petition dismissible for failure to first
exhaust administrative remedies; the constitutional issues GAMCA posed before the RTC were not also
ripe for adjudication.

5. The Regional Trial Court erred in finding grave abuse of discretion on the part of the DOH's
issuance of the DOH CDO letters.

On the merits, we find that the RTC of Pasay reversibly erred in law when it held that the DOH acted
with grave abuse of discretion m prohibiting GAMCA from implementing the referral decking system.

In exempting GAMCA from the referral decking system that RA No. 10022 prohibits, the RTC of Pasay
City noted that the regulation per se was not unconstitutional, but its application to GAMCA would
violate the principle of sovereign equality and independence.

While we agree with the RTC's ultimate conclusion upholding the constitutionality of the prohibition
against the referral decking system under RA No. 10022, our agreement proceeds from another reason;
we disagree that the prohibition does not apply to GAMCA and with the consequent ruling nullifying the
DOH's CDO Letter.

A.5.a. The prohibition against the referral decking system under Section 16, RA No. 10022, is
a valid exercise of police power.

In its comment, GAMCA asserts that implementing the prohibition against the referral decking system
would amount to an undue taking of property that violates Article II, Section 2 of the 1987 Constitution.

It submits that the Securities and Exchange Commission had in fact approved its Articles of
Incorporation and Bylaws that embody the referral decking system; thus, the DOH cannot validly
prohibit the implementation of this system.

GAMCA further claims that its members made substantial investments to upgrade their facilities and
equipment. From this perspective, the August 23, 2010 order constitutes taking of property without due
process of law as its implementation would deprive GAMCA members of their property.

AMCOW responded to these claims with the argument that the DOH CDO letters implementing RA No.
10022 are consistent with the State's exercise of the police power to prescribe regulations to promote
the health, safety, and general welfare of the people. Public interest justifies the State's interference in
health matters, since the welfare of migrant workers is a legitimate public concern. The DOH thus
merely performed its duty of upholding the migrant workers' freedom to consult their chosen clinics for
the conduct of health examinations.

We agree with AMCOW.

The State's police power86 is vast and plenary87 and the operation of a business,88 especially one that is
imbued with public interest (such as healthcare services),89 falls within the scope of governmental

39
exercise of police power through regulation.

As defined, police power includes (1) the imposition of restraint on liberty or property, (2) in order to
foster the common good.90 The exercise of police power involves the "state authority to enact legislation
that may interfere with personal liberty or property in order to promote the general welfare."91

By its very nature, the exercise of the State's police power limits individual rights and liberties, and
subjects them to the "far more overriding demands and requirements of the greater number." 92 Though
vast and plenary, this State power also carries limitations, specifically, it may not be exercised arbitrarily
or unreasonably. Otherwise, it defeats the purpose for which it is exercised, that is, the advancement of
the public good.93

To be considered reasonable, the government's exercise of police power must satisfy the "valid object
and valid means" method of analysis: first, the interest of the public generally, as distinguished from
those of a particular class, requires interference; and second, the means employed are reasonably
necessary to attain the objective sought and not unduly oppressive upon individuals. 94

These two elements of reasonableness are undeniably present in Section 16 of RA No. 10022. The
prohibition against the referral decking system is consistent with the State's exercise of the police power
to prescribe regulations to promote the health, safety, and general welfare of the people. Public interest
demands State interference on health matters, since the welfare of migrant workers is a legitimate
public concern.

We note that RA No. 10022 expressly reflects the declared State policies to "uphold the dignity of its
citizens whether in the country or overseas, in general, and Filipino migrant workers," and to "afford full
protection to labor, local and overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all. Towards this end, the State shall provide adequate and
timely social, economic and legal services to Filipino migrant workers." The prohibition against the
referral decking system in Section 16 of RA No. 10022 is an expression and implementation of these
state policies.

The guarantee under Section 16 for OFWs to be given the option to choose a quality healthcare service
provider as expressed in Section 16 (c)95 of RA No. 10022 is guaranteed by the prohibition against the
decking practice and against monopoly practices in OFW health examinations.96

Section 16 likewise requires employers to accept health examinations from any DOH-accredited health
facility; a refusal could lead to their temporary disqualification under pertinent rules to be formulated by
the Philippine Overseas Employment Authority (POEA).97

These rules are part of the larger legal framework to ensure the Overseas Filipino Workers' (OFW)
access to quality healthcare services, and to curb existing practices that limit their choices to specific
clinics and facilities.

Separately from the Section 16 prohibition against the referral decking system, RA No. 10022 also
prohibits and penalizes the imposition of a compulsory exclusive arrangement requiring OFWs to
undergo health examinations only from specifically designated medical clinics, institutions, entities or
persons. Section 5, in relation to Section 6 of RA No. 10022, penalizes compulsory, exclusive
arrangements98 by imprisonment and fine and by the automatic revocation of the participating medical
clinic's license.

The DOH's role under this framework is to regulate the activities and operations of all clinics conducting
health examinations on Filipino migrant workers as a requirement for their overseas employment. The
DOH is tasked to ensure that:
(c.3) No group or groups of medical clinics shall have a monopoly of exclusively conducting health
examinations on migrant workers for certain receiving countries;

(c.4) Every Filipino migrant worker shall have the freedom to choose any of the DOH-accredited or DOH-
operated clinics that will conduct his/her health examinations and that his or her rights as a patient are
respected. The decking practice, which requires an overseas Filipino worker to go first to an office for
registration and then farmed out to a medical clinic located elsewhere, shall not be allowed;99
While Section 16 of RA No. 10022 does not specifically define the consequences of violating the
prohibition against the referral decking system, Republic Act No. 4226 (Hospital Licensure Act), which
governs the licensure and regulation of hospitals and health facilities, authorizes the DOH to suspend,
revoke, or refuse to renew the license of hospitals and clinics violating the law. 100

These consequences cannot but apply to the violation of the prohibition against the referral decking

40
system under RA No. 10022. If, under the law, the DOH can suspend, revoke, or refuse to renew the
license of these hospitals upon the finding that they violated any provision of law (whether those found
in RA No. 4226 or in RA No. 10022), it follows- as a necessarily included lesser power - that the DOH
can likewise order these clinics and their association to cease and desist from practices that the law
deems to be undesirable.

A.5.b. The DOH did not gravely abuse its discretion in issuing the assailed DOH CDO letters.

As discussed above, the letter-order implementing the prohibition against the referral decking system is
quasi-judicial in nature. This characteristic requires that procedural due process be observed - that is,
that the clinics concerned be given the opportunity to be heard before the standard found in the law can
be applied to them.

Thus, prior to the issuance of the disputed CDO letter, the DOH should have given GAMCA the
opportunity to be heard on whether the prohibition applies to it. Lest this opportunity to be heard be
misunderstood, this DOH obligation raises an issue different from the question of whether Congress can,
under the exercise of police power, prohibit the referral decking system; this latter issue lies outside the
scope of the DOH to pass upon. The required hearing before the DOH relates solely to whether it
properly implemented, based on the given standards under the law, the prohibition that Congress
decreed under RA No. 10022.

Under normal circumstances, the issuance of a CDO without a prior hearing would violate GAMCA's
procedural due process rights, and would amount to more than a legal error, i.e., an error equivalent to
action without jurisdiction. Rendering a decision quasi-judicial in nature without providing the
opportunity to be heard amounts to a grave abuse of discretion that divests a quasi-judicial agency of its
jurisdiction.

Factual circumstances unique to the present case, however, lead us to conclude that while it was an
error of law for the DOH to issue a CDO without complying with the requirements of procedural due
process, its action did not amount to a grave abuse of discretion.

Grave abuse of discretion amounts to more than an error of law; it refers to an act that is so capricious,
arbitrary, and whimsical that it amounts to a clear evasion of a positive duty or a virtual refusal to
perform a duty enjoined by law, as where the power is exercised in an arbitrary and despotic manner
because of passion or hostility.101

Prior to the issuance of its CDO Letter, the DOH had more than sufficient basis to determine that GAMCA
practices the prohibited referral decking system under RA No. 10022. Notably, the DOH had earlier
allowed and recognized the referral decking system that GAMCA practiced through AO 5-01. This
recognition was made with GAMCA's practice in mind. The subsequent administrative orders and
department memorandum suspending and terminating the referral decking system, respectively, all
pertain to the practice that the DOH had authorized under AO 5-01. Even the subject matter of these
issuances do not just pertain to any other referral decking system, but to the "GAMCA referral decking
system."

GAMCA likewise had more than several opportunities to contest the suspension and eventual revocation
of the referral decking system initially pe1mitted under AO 5-01. Its appeal even reached the Office of
the President, which overturned the DOH Memorandum Order terminating the referral decking system.

That the referral decking system had been subsequently prohibited by law shows the intent of Congress
to prevent and prohibit the practice that GAMCA initiated and which the President had allowed. The
President's duty under our political system is to implement the law; hence, when Congress subsequently
prohibited the practice that GAMCA initiated, the Executive - including the President -has no choice but
to implement it.

Based on these circumstances, while the DOH erred when it issued its CDO letters without first giving
GAMCA the opportunity to prove whether the practice conducted by GAMCA is the same practice
prohibited under RA No. 10022, the DOH conclusion to so act, in our view, did not constitute grave
abuse of discretion that would have divested it of jurisdiction.

We note that the DOH had sufficient basis when it determined that the referral decking system
prohibited under RA No. 10022 was the same decking system practiced by GAMCA. To reiterate, the
referral decking system was not something new; it was an old system that GAMCA practiced and was
known to all in its scope and operating details. That GAMCA had previously questioned the DOH
prohibition and had been given ample opportunity to be heard when it filed an appeal before the OP,
negate the conclusion that GAMCA had been aggrieved by precipitate and unfair DOH action.

41
To be sure, these factual circumstances do not make the CDO letter compliant with procedural due
process. They mitigate, however, the error committed and render it less than the capricious, arbitrary,
and patent refusal to comply with a positive legal duty that characterizes an act committed with grave
abuse of discretion.

The Court furthermore, in several instances,102 has recognized that an administrative agency may issue
an ex parte cease and desist order, where vital public interests outweigh the need for procedural due
process." In these instances, the Court noted that the affected establishment may contest the ex
parteorder, upon which the administrative agency concerned must conduct a hearing and allow the
establishment to be heard. While jurisprudence has so far used the "vital public interests" standard to
pollution cases, it had not been a grave abuse of discretion on the part of the DOH to consider that
GAMCA's referral decking practice falls within this category. The DOH has long made the factual finding
that the referral decking system hinders our Filipino seafarers' access to quality and affordable
healthcare in its A.O. No. 106, series of 2002.

These circumstances further mitigate whatever legal error the DOH has committed and render the
conclusion that grave abuse of discretion had taken place misplaced.

Since the writs of certiorari and prohibition do not issue against legal errors, but to acts of grave abuse
of discretion, the RTC erred in issuing these writs against the DOH CDO letters.

6. The prohibition against the referral decking system against GAMCA does not violate the
principle of sovereign equality and independence.

The RTC based its decision to grant the writs of certiorari and prohibition against the DOH letter-order
on the principle of sovereign equality and independence; applying the referral decking system
prohibition against GAMCA violates this principle.

The RTC reasoned out that the prohibition against the referral decking system under Section 16 of RA
No. 10022 must be interpreted to apply only to clinics conducting health examinations on migrant
workers bound for countries that do not require the referral decking system for the issuance of visas to
job applicants.

The RTC observed, too, that the refer al decking system is part of the application procedure in obtaining
visas to enter the GCC States, a procedure made in the exercise of the sovereign power of the GCC
States to protect their nationals from health hazards, and of their diplomatic power to regulate and
screen entrants to their territories.

It also reasoned out that under the principle of sovereign equality and independence of States, the
Philippines cannot interfere with this system and in fact must respect the visa-granting procedures of
foreign states in the same way that they respect our immigration procedures. Moreover, to restrain
GAMCA which is a mere adjunct of HMC (an agent of GCC States) is to restrain the GCC States
themselves.

AMCOW contests the RTC's conclusion, arguing that the principles of sovereign equality and
independence of States do not apply to the present case. According to AMCOW, the subject matter of
this case pertains to a domestic concern as the law and the regulations that GAMCA assails relate to the
operation of medical clinics in the Philippines.

It points out that the Philippines gave GAMCA and its members the privilege of conducting their
businesses domestically; hence, their operations are governed by Philippine laws, specifically by RA No.
10022 which serves as one of the limitations on the privilege granted to them. GAMCA's right to engage
in business should yield to the State's exercise of police power. In legal contemplation, therefore, the
DOH CDO letters did not prejudice GAMCA's right to engage in business; nor did they hamper the
GAMCA members' business operations.

AMCOW further insists that the August 23, 2010 and November 2, 2010 orders are consistent with the
State's exercise of the police power to prescribe regulations to promote the health, safety, and general
welfare of the people. Public interest demands State interference on health matters, since the welfare of
migrant workers is a legitimate public concern. The DOH thus merely performed its duty of upholding
the migrant workers' freedom to choose any of its accredited or operated clinics that will conduct health
examinations.

The DOH, for its part, adds that the implementation of RA No. 10022 cannot be defeated by agreements
entered into by GAMCA with the GCC States. The GCC States, the DOH points out, are not empowered
to determine the Philippines' courses of action with respect to the operation, within Philippine territory,
of medical clinics; the conduct of health examinations; and the freedom of choice of Filipino migrant

42
workers.

GAMCA responds to these arguments by asserting that the referral decking system is a part of the
application procedure for obtaining visas to enter the GCC States. Hence, it is an exercise of the
sovereign power of the GCC States to protect their nationals from health hazards, and their diplomatic
power to regulate and screen entrants to their territories. To restrain an agent of the GCC States under
the control and acting in accordance with the direction of these GCC States, restrains the GCC States.

GAMCA also points out that the OFWs would suffer grave and irreparable damage and injury if the DOH
CDO letters would be implemented as the GCC States would not issue working visas without the GAMCA
seal attesting that the OFWs had been medically examined by GAMCA member clinics.

After considering all these arguments, we find that the RTC's decision misapplied the principle of
sovereign independence and equality to the present case. While the principles of sovereign
independence and equality have been recognized in Philippine jurisprudence, our recogmtmn of this
principle does not extend to the exemption of States and their affiliates from compliance with Philippine
regulatory laws.

A.6. The principle of sovereign equality and independence of states does not exempt
GAMCAfrom the referral decking system prohibition under RA No. 10022.

In Republic of Indonesia v. Vinzon,103 we recognized the principle of sovereign independence and

equality as part of the law of the land. We used this principle to justify the recognition of the principle of
sovereign immunity which exempts the State - both our Government and foreign governments - from
suit. We held:
International law is founded largely upon the principles of reciprocity, comity, independence, and
equality of States which were adopted as part of the law of our land under Article II, Section 2 of the
1987 Constitution. The rule that a State may not be sued without its consent is a necessary
consequence of the principles of independence and equality of States. As enunciated in Sanders v.
Veridiano II, the practical justification for the doctrine of sovereign immunity is that there can be no
legal right against the authority that makes the law on which the right depends. In the case of foreign
States, the rule is derived from the principle of the sovereign equality of States, as expressed in the
maxim par in parem non habet imperium. All states are sovereign equals and cannot assert jurisdiction
over one another. A contrary attitude would "unduly vex the peace of nations."
Our recognition of sovereign immunity, however, has never been unqualified. While we recognized the
principles of independence and equality of States to justify a State's sovereign immunity from suit, we
also restricted state immunity to acts jus imperii, or public acts. We said that once a State enters into
commercial transactions (jus gestionis), then it descends to the level of a private individual, and is thus
not immune from the resulting liability and consequences of its actions. 104

By this recognition, we acknowledge that a foreign government acting in its jus imperii function cannot
be held liable in a Philippine court. Philippine courts, as part of the Philippine government, cannot and
should not take jurisdiction over cases involving the public acts of a foreign government. Taking
jurisdiction would amount to authority over a foreign government, and would thus violate the principle of
sovereign independence and equality.105

This recognition is altogether different from exempting governments whose agents are in the Philippines
from complying with our domestic laws.106 We have yet to declare in a case that the principle of
sovereign independence and equality exempts agents of foreign governments from compliance with the
application of Philippine domestic law.

In the present case, GAMCA has not adduced any evidence in the court below, nor has it presented any
argument before us showing that the principle of sovereign equality and independence has developed
into an international custom shielding state agents from compliance with another state's domestic laws.
Under this situation, the Court is in no position to determine whether the practice that GAMCA alleges
has indeed crystallized into an international custom.

GAMCA has never proven in this case, too, that the GCC has extended its sovereign immunity to
GAMCA. Sovereign immunity belongs to the State, and it must first be extended to its agents before the
latter may be considered to possess sovereign immunity.

Significantly, the Court has even adopted a restrictive approach in recognizing state immunity, by
distinguishing between a State's jus imperii and jus gestionis. It is only when a State acts in its jus
imperii function that we recognize state immunity. 107

We point out furthermore that the prohibition against the referral decking system applies to hospitals

43
and clinics, as well as to OFW employers, and does not seek to interfere with the GCC's visa requirement
processes. RA 10022 prohibits hospitals and clinics in the Philippines from practicing the referral decking
system, and employers from requiring OFWs to procure their medical examinations from hospitals and
clinics practicing the referral decking system.

The regulation applies to Philippine hospitals and clinics, as well as to employers of OFWs. It does not
apply to the GCCs and their visa processes. That the regulation could affect the OFWs' compliance with
the visa requirements imposed by GCCs does not place it outside the regulatory powers of the Philippine
government.

In the same manner, GCC states continue to possess the prerogative to apply their visa requirements to
any foreign national, including our OFWs, who seeks to enter their territory; they may refuse to grant
them entry for failure to comply with the referral decking system, or they may adjust to the prohibition
against the referral decking system that we have imposed. These prerogatives lie with the GCC member-
states and do not affect at all the legality of the prohibition against the referral decking system.

Lastly, the effect of the prohibition against the referral decking system is beyond the authority of this
Court to consider. The wisdom of this prohibition has been decided by Congress, through the enactment
of RA No. 10022. Our role in this case is merely to determine whether our government has the authority
to enact the law's prohibition against the referral decking system, and whether this prohibition is being
implemented legally. Beyond these lies the realm of policy that, under our Constitution's separation of
powers, this Court cannot cross.

WHEREFORE, in the light of these considerations, we hereby GRANT the petitions. Accordingly,

we REVERSE and SET ASIDE the orders dated August 10, 2012 and April 12, 2013 of the Regional Trial
Court of Pasay City, Branch 108, in Sp. Civil Action No. R-PSY-10-04391-CV.

Costs against respondent GAMCA.

ECOND DIVISION

G.R. No. 180110, May 30, 2016

CAPITOL WIRELESS, INC., Petitioner, v. THE PROVINCIAL TREASURER OF BATANGAS, THE

PROVINCIAL ASSESSOR OF BATANGAS, THE MUNICIPAL TREASURER AND ASSESSOR OF
NASUGBU, BATANGAS, Respondents.

DECISION

PERALTA, J.:

Before the Court is a petition for review on  certiorari under Rule 45 of the Rules of Court seeking to
annul and set aside the Court of Appeals' Decision1 dated May 30, 2007 and Resolution2 dated October
8, 2007 in CA-G.R. SP No. 82264, which both denied the appeal of petitioner against the decision of the
Regional Trial Court.

Below are the facts of the case.

Petitioner Capitol Wireless Inc. (Capwire) is a Philippine corporation in the business of providing
international telecommunications services.3 As such provider, Capwire has signed agreements with other
local and foreign telecommunications companies covering an international network of submarine cable
systems such as the Asia Pacific Cable Network System (APCN) (which connects Australia, Thailand,
Malaysia, Singapore, Hong Kong, Taiwan, Korea, Japan, Indonesia and the Philippines); the Brunei-
Malaysia-Philippines Cable Network System (BMP-CNS), the Philippines-Italy (SEA-ME-WE-3 CNS), and
the Guam Philippines (GP-CNS) systems.4 The agreements provide for co-ownership and other rights
among the parties over the network.5

Petitioner Capwire claims that it is co-owner only of the so-called "Wet Segment" of the APCN, while the
landing stations or terminals and Segment E of APCN located in Nasugbu, Batangas are allegedly owned
by the Philippine Long Distance Telephone Corporation (PLDT).6 Moreover, it alleges that the Wet

44
Segment is laid in international, and not Philippine, waters. 7

Capwire claims that as co-owner, it does not own any particular physical part of the cable system but,
consistent with its financial contributions, it owns the right to use a certain capacity of the said
system.8This property right is allegedly reported in its financial books as "Indefeasible Rights in Cable
Systems."9

However, for loan restructuring purposes, Capwire claims that "it was required to register the value of
its right," hence, it engaged an appraiser to "assess the market value of the international submarine
cable system and the cost to Capwire."10 On May 15, 2000, Capwire submitted a Sworn Statement of
True Value of Real Properties at the Provincial Treasurer's Office, Batangas City, Batangas Province, for
the Wet Segment of the system, stating:

System Sound Value

APCN P 203,300,000.00
BMP-CNS P 65,662,000.00
SEA-ME-WE-3 CNS P P 7,540,000.00
GP-CNS P1,789,000.00

Capwire claims that it also reported that the system "interconnects at the PLDT Landing Station in
Nasugbu, Batangas," which is covered by a transfer certificate of title and tax declarations in the name
of PLDT.11

As a result, the respondent Provincial Assessor of Batangas (Provincial Assessor) issued the following
Assessments of Real Property (ARP) against Capwire:

ARP Cable System Assessed Value

019-00967 BMP-CNS P 52,529,600.00
019-00968 APCN P 162,640,000.00
019-00969 SEA-ME-WE3-CNS P 6,032,000.00
019-00970 GP-CNS P 1,431,200.00

In essence, the Provincial Assessor had determined that the submarine cable systems described in
Capwire's Sworn Statement of True Value of Real Properties are taxable real property, a determination
that was contested by Capwire in an exchange of letters between the company and the public
respondent.12 The reason cited by Capwire is that the cable system lies outside of Philippine
territory, i.e., on international waters.13

On February 7, 2003 and March 4, 2003, Capwire received a Warrant of Levy and a Notice of Auction
Sale, respectively, from the respondent Provincial Treasurer of Batangas (Provincial Treasurer).14

On March 10, 2003, Capwire filed a Petition for Prohibition and Declaration of Nullity of Warrant of Levy,
Notice of Auction Sale and/or Auction Sale with the Regional Trial Court (RTC) of Batangas City.15

Alter the filing of the public respondents' Comment, 16 on May 5, 2003, the RTC issued an Order
dismissing the petition for failure of the petitioner Capwire to follow the requisite of payment under
protest as well as failure to appeal to the Local Board of Assessment Appeals (LBAA), as provided for in
Sections 206 and 226 of Republic Act (R.A.) No. 7160, or the Local Government Code. 17

Capwire filed a Motion for Reconsideration, but the same was likewise dismissed by the RTC in an
Order19dated August 26, 2003. It then filed an appeal to the Court of Appeals. 20

On May 30, 2007, the Court of Appeals promulgated its Decision dismissing the appeal filed by Capwire
and affirming the order of the trial court. The dispositive portion of the CA's decision states:

45
WHEREFORE, premises considered, the assailed Orders dated May 5, 2003 and August 26, 2003 of the
Regional Trial Court, Branch 11 of Batangas City, are AFFIRMED.

SO ORDERED.21

The appellate court held that the trial court correctly dismissed Capwire's petition because of the latter's
failure to comply with the requirements set in Sections 226 and 229 of the Local Government Code, that
is, by not availing of remedies before administrative bodies like the LBAA and the Central Board of
Assessment Appeals (CBAA).22 Although Capwire claims that it saw no need to undergo administrative
proceedings because its petition raises purely legal questions, the appellate court did not share this view
and noted that the case raises questions of fact, such as the extent to which parts of the submarine
cable system lie within the territorial jurisdiction of the taxing authorities, the public
respondents.23 Further, the CA noted that Capwire failed to pay the tax assessed against it under
protest, another strict requirement under Section 252 of the Local Government Code.24

Hence, the instant petition for review of Capwire.

Petitioner Capwire asserts that recourse to the Local Board of Assessment Appeals, or payment of the
tax under protest, is inapplicable to the case at bar since there is no question of fact involved, or that
the question involved is not the reasonableness of the amount assessed but, rather, the authority and
power of the assessor to impose the tax and of the treasurer to collect it.25 It contends that there is only
a pure question of law since the issue is whether its submarine cable system, which it claims lies in
international waters, is taxable.26 Capwire holds the position that the cable system is not subject to
tax.27
cralawred

Respondents assessors and treasurers of the Province of Batangas ana Municipality of Nasugbu,
Batangas disagree with Capwire and insist that the case presents questions of fact such as the extent
and portion of the submarine cable system that lies within the jurisdiction of the said local governments,
as well as the nature of the so-called indefeasible rights as property of Capwire. 28 Such questions are
allegedly resolvable only before administrative agencies like the Local Board of Assessment Appeals. 29

The Court confronts the following issues: Is the case cognizable by the administrative agencies and
covered by the requirements in Sections 226 and 229 of the Local Government Code which makes the
dismissal of Capwire's petition by the RTC proper? May submarine communications cables be classified
as taxable real property by the local governments?

The petition is denied. No error attended the ruling of the appellate court that the case involves factual
questions that should have been resolved before the appropriate administrative bodies.

In disputes involving real property taxation, the general rule is to require the taxpayer to first avail of
administrative remedies and pay the tax under protest before allowing any resort to a judicial action,
except when the assessment itself is alleged to be illegal or is made without legal authority. 30 For
example, prior resort to administrative action is required when among the issues raised is an allegedly
erroneous assessment, like when the reasonableness of the amount is challenged, while direct court
action is permitted when only the legality, power, validity or authority of the assessment itself is in
question.31 Stated differently, the general rule of a prerequisite recourse to administrative remedies
applies when questions of fact are raised, but the exception of direct court action is allowed when purely
questions of law are involved.32

This Court has previously and rather succinctly discussed the difference between a question of fact and a
question of law. In Cosmos Bottling Corporation v. Nagrama, Jr.,33 it held:

The Court has made numerous dichotomies between questions of law and fact. A reading of these
dichotomies shows that labels attached to law and fact are descriptive rather than definitive. We are not
alone in Our difficult task of clearly distinguishing questions of feet from questions of law. The United
States Supreme Court has ruled that: "we [do not| yet know of any other rule or principle that will
unerringly distinguish a tactual finding from a legal conclusion."

In Ramos v. Pepsi-Cola Bottling Co. of the P.I., the Court ruled:

There is a question of law in a given case when the doubt or difference arises as to what the law is on a
certain state of facts; there is a question of fact when the doubt or difference arises as to the truth or
the falsehood of alleged facts.

We shall label this the doubt dichotomy.

46
In Republic v. Sandiganbayan, the Court ruled:

x x x A question of law exists when the doubt or controversy concerns the correct application of law or
jurisprudence to a certain set of facts; or when the issue docs not call for an examination of the
probative value of the evidence presented, the truth or falsehood of facts being admitted. In contrast, a
question of fact exists when the doubt or difference arises as to the truth or falsehood of facts or when
the query invites calibration of the whole evidence considering mainly the credibility of the witnesses,
the existence and relevancy of specific surrounding circumstances as well as their relation to each other
and to the whole, and the probability of the situation.

For the sake of brevity, We shall label this the law application and calibration dichotomy.

In contrast, the dynamic legal scholarship in the United States has birthed many commentaries on the
question of law and question of fact dichotomy. As early as 1944, the law was described as growing
downward toward "roots of fact" which grew upward to meet it. In 1950, the late Professor Louis Jaffe
saw fact and law as a spectrum, with one shade blending imperceptibly into the other. Others have
defined questions of law as those that deal with the general body of legal principles; questions of fact
deal with "all other phenomena x x x." Kenneth Gulp Davis also weighed in and noted that the difference
between fact and law has been characterized as that between "ought" questions and "is" questions.34

Guided by the quoted pronouncement, the Court sustains the CA's finding that petitioner's case is one
replete with questions of fact instead of pure questions of law, which renders its filing in a judicial forum
improper because it is instead cognizable by local administrative bodies like the Board of Assessment
Appeals, which are the proper venues for trying these factual issues. Verily, what is alleged by Capwire
in its petition as "the crux of the controversy," that is, "whether or not an indefeasible right over a
submarine cable system that lies in international waters can be subject to real property tax in the
Philippines,"35 is not the genuine issue that the case presents - as it is already obvious and fundamental
that real property that lies outside of Philippine territorial jurisdiction cannot be subjected to its domestic
and sovereign power of real property taxation - but, rather, such factual issues as the extent and status
of Capwire's ownership of the system, the actual length of the cable/s that lie in Philippine territory, and
the corresponding assessment and taxes due on the same, because the public respondents imposed and
collected the assailed real property tax on the finding that at least a portion or some portions of the
submarine cable system that Capwire owns or co-owns lies inside Philippine territory. Capwire's
disagreement with such findings of the administrative bodies presents little to no legal question that only
the courts may directly resolve.

Instead, Capwire argues and makes claims on mere assumptions of certain facts as if they have been
already admitted or established, when they have not, since no evidence of such have yet been
presented in the proper agencies and even in the current petition. As such, it remains unsettled whether
Capwire is a mere co-owner, not full owner, of the subject submarine cable and, if the former, as to
what extent; whether all or certain portions of the cable are indeed submerged in water; and whether
the waters wherein the cable/s is/are laid are entirely outside of Philippine territorial or inland
waters, i.e., in international waters. More simply, Capwire argues based on mere legal conclusions,
culminating on its claim of illegality of respondents' acts, but the conclusions are yet unsupported by
facts that should have been threshed out quasi-judicially before the administrative agencies. It has been
held that "a bare characterization in a petition of unlawfulness, is merely a legal conclusion and a wish of
the pleader, and such a legal conclusion unsubstantiated by facts which could give it life, has no
standing in any court where issues must be presented and determined by facts in ordinary and concise
language."36 Therefore, Capwire's resort to judicial action, premised on its legal conclusion that its cables
(the equipment being taxed) lie entirely on international waters, without first administratively
substantiating such a factual premise, is improper and was rightly denied. Its proposition that the cables
lie entirely beyond Philippine territory, and therefore, outside of Philippine sovereignty, is a fact that is
not subject to judicial notice since, on the contrary, and as will be explained later, it is in fact certain
that portions of the cable would definitely lie within Philippine waters. Jurisprudence on the Local
Government Code is clear that facts such as these must be threshed out administratively, as the courts
in these types of cases step in at the first instance only when pure questions of law are involved.

Nonetheless, We proceed to decide on whether submarine wires or cables used for communications may
be taxed like other real estate.

We hold in the affirmative.

Submarine or undersea communications cables are akin to electric transmission lines which this Court
has recently declared in  Manila Electric Company v. City Assessor and City Treasurer of Lucena City,37 as
"no longer exempted from real property tax" and may qualify as "machinery" subject to real property

47
tax under the Local Government Code. To the extent that the equipment's location is determinable to be
within the taxing authority's jurisdiction, the Court sees no reason to distinguish between submarine
cables used for communications and aerial or underground wires or lines used for electric transmission,
so that both pieces of property do not merit a different treatment in the aspect of real property taxation.
Both electric lines and communications cables, in the strictest sense, are not directly adhered to the soil
but pass through posts, relays or landing stations, but both may be classified under the term
"machinery" as real property under Article 415(5)38 of the Civil Code for the simple reason that such
pieces of equipment serve the owner's business or tend to meet the needs of his industry or works that
are on real estate. Even objects in or on a body of water may be classified as such, as "waters" is
classified as an immovable under Article 415(8)39 of the Code. A classic example is a boathouse which,
by its nature, is a vessel and, therefore, a personal property but, if it is tied to the shore and used as a
residence, and since it floats on waters which is immovable, is considered real property.40 Besides, the
Court has already held that "it is a familiar phenomenon to see things classed as real property for
purposes of taxation which on general principle might be considered personal property."41

Thus, absent any showing from Capwire of any express grant of an exemption for its lines and cables
from real property taxation, then this interpretation applies and Capwire's submarine cable may be held
subject to real property tax.

Having determined that Capwire is liable, and public respondents have the right to impose a real
property tax on its submarine cable, the issue that is unresolved is how much of such cable is taxable
based on the extent of Capwire's ownership or co-ownership of it and the length that is laid within
respondents' taxing jurisdiction. The matter, however, requires a factual determination that is best
performed by the Local and Central Boards of Assessment Appeals, a remedy which the petitioner did
not avail of.

At any rate, given the importance of the issue, it is proper to lay down the other legal bases for the local
taxing authorities' power to tax portions of the submarine cables of petitioner. It is not in dispute that
the submarine cable system's Landing Station in Nasugbu, Batangas is owned by PLDT and not by
Capwire. Obviously, Capwire is not liable for the real property tax on this Landing Station. Nonetheless,
Capwire admits that it co-owns the submarine cable system that is subject of the tax assessed and being
collected by public respondents. As the Court takes judicial notice that Nasugbu is a coastal town and
the surrounding sea falls within what the United Nations Convention on the Law of the Sea (UNCLOS)
would define as the country's territorial sea (to the extent of 12 nautical miles outward from the nearest
baseline, under Part II, Sections 1 and 2) over which the country has sovereignty, including the seabed
and subsoil, it follows that indeed a portion of the submarine cable system lies within Philippine territory
and thus falls within the jurisdiction of the said local taxing authorities. 42 It easily belies Capwire's
contention that the cable system is entirely in international waters. And even if such portion does not lie
in the 12-nautical-mile vicinity of the territorial sea but further inward, in Prof. Magallona v. Hon.
Ermita, et al.43 this Court held that "whether referred to as Philippine 'internal waters' under Article I of
the Constitution44 or as 'archipelagic waters' under UNCLOS Part III, Article 49(1, 2, 4), 45 the Philippines
exercises sovereignty over the body of water lying landward of (its) baselines, including the air space
over it and the submarine areas underneath." Further, under Part VI, Article 79 46 of the UNCLOS, the
Philippines clearly has jurisdiction with respect to cables laid in its territory that are utilized in support of
other installations and structures under its jurisdiction.

And as far as local government units are concerned, the areas described above are to be considered
subsumed under the term "municipal waters" which, under the Local Government Code, includes "not
only streams, lakes, and tidal waters within the municipality, not being the subject of private ownership
and not comprised within the national parks, public forest, timber lands, forest reserves or fishery
reserves, but also marine waters included between two lines drawn perpendicularly to the general
coastline from points where the boundary lines of the municipality or city touch the sea at low tide and a
third line parallel with the general coastline and fifteen (15) kilometers from it." 47 Although the term
"municipal waters" appears in the Code in the context of the grant of quarrying and fisheries privileges
for a fee by local governments, 48 its inclusion in the Code's Book II which covers local taxation means
that it may also apply as guide in determining the territorial extent of the local authorities' power to levy
real property taxation.

Thus, the jurisdiction or authority over such part of the subject submarine cable system lying within
Philippine jurisdiction includes the authority to tax the same, for taxation is one of the three basic and
necessary attributes of sovereignty,49 and such authority has been delegated by the national legislature
to the local governments with respect to real property taxation. 50

As earlier stated, a way for Capwire to claim that its cable system is not covered by such authority is by
showing a domestic enactment or even contract, or an international agreement or treaty exempting the
same from real property taxation. It failed to do so, however, despite the fact that the burden of proving
exemption from local taxation is upon whom the subject real property is declared. 51 Under the Local

48
Government Code, every person by or for whom real property is declared, who shall claim tax
exemption for such property from real property taxation "shall file with the provincial, city or municipal
assessor within thirty (30) days from the date of the declaration of real property sufficient documentary
evidence in support of such claim."52 Capwire omitted to do so. And even under Capwire's legislative
franchise, RA 4387, which amended RA 2037, where it may be derived that there was a grant of real
property tax exemption for properties that are part of its franchise, or directly meet the needs of its
business,53 such had been expressly withdrawn by the Local Government Code, which took effect on
January 1, 1992, Sections 193 and 234 of which provide:54

Section 193. Withdrawal of Tax Exemption Privileges. - Unless otherwise provided in this Code, tax
exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or
juridical, including government-owned or controlled corporations, except local water
districts, cooperatives duly registered under R.A. No. 6938, nonstock and nonprofit hospitals
and educational institutions, are hereby withdrawn upon the effectivity of this Code.

x x x x

Section 234. Exemptions from Real Property Tax. - The following arc exempted from payment of the real
property tax:

(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except
when the beneficial use thereof has been granted, for consideration of otherwise, to a taxable person;

(b) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, nonprofit
or religious cemeteries and all lands, buildings, and improvements actually, directly, and exclusively
used for religious, charitable or educational purposes;

(c) All machineries and equipment that are actually, directly and exclusively used by local water districts
and government-owned or controlled corporations engaged in the supply and distribution of water
and/or generation and transmission of electric power;

(d) All real property owned by duly registered cooperatives as provided for under R.A. No. 6938; and

(c) Machinery and equipment used for pollution control and environmental protection.

Except as provided herein, any exemption from payment of real property tax previously
granted to, or presently enjoyed by, all persons, whether natural or juridical, including all
government-owned or controlled corporations arc hereby withdrawn upon the effectivity of
this Code.55

Such express withdrawal had been previously held effective upon exemptions bestowed by legislative
franchises granted prior to the effectivity of the Local Government Code. 56 Capwire fails to allege or
provide any other privilege or exemption that were granted to it by the legislature after the enactment
of the Local Government Code. Therefore, the presumption stays that it enjoys no such privilege or
exemption. Tax exemptions are strictly construed against the taxpayer because taxes are considered the
lifeblood of the nation.57

WHEREFORE, the petition is DENIED. The Court of Appeals' Decision dated May 30, 2007 and
Resolution dated October 8, 2007 are AFFIRMED.

G.R. No. 212426

RENE A.V. SAGUISAG, WIGBERTO E. TAÑADA, FRANCISCO "DODONG" NEMENZO, JR.,

SR. MARY JOHN MANANZAN, PACIFICO A. AGABIN, ESTEBAN "STEVE" SALONGA, H.
HARRY L. ROQUE, JR., EVALYN G. URSUA, EDRE U. OLALIA, DR. CAROL PAGADUAN-
ARAULLO, DR. ROLAND SIMBULAN, AND TEDDY CASIÑO, Petitioners, 
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., DEPARTMENT OF NATIONAL
DEFENSE SECRETARY VOLTAIRE GAZMIN, DEPARTMENT OF FOREIGN AFFAIRS
SECRETARY ALBERT DEL ROSARIO, JR., DEPARTMENT OF BUDGET AND

49
MANAGEMENT SECRETARY FLORENCIO ABAD, AND ARMED FORCES OF THE
PHILIPPINES CHIEF OF STAFF GENERAL EMMANUEL T. BAUTISTA, Respondents.

x-----------------------x

G.R. No. 212444

BAGONG ALYANSANG MAKABAYAN (BAYAN), REPRESENTED BY ITS SECRETARY

GENERAL RENATO M. REYES, JR., BAYAN MUNA PARTY-LIST REPRESENTATIVES NERI
J. COLMENARES AND CARLOS ZARATE, GABRIELA WOMEN'S PARTY-LIST
REPRESENTATIVES LUZ ILAGAN AND EMERENCIANA DE JESUS, ACT TEACHERS
PARTY-LIST REPRESENTATIVE ANTONIO L. TINIO, ANAKPAWIS PARTY-LIST
REPRESENTATIVE FERNANDO HICAP, KABATAAN PARTY-LIST REPRESENTATIVE
TERRY RIDON, MAKABAYANG KOALISYON NG MAMAMAYAN (MAKABAYAN),
REPRESENTED BY SATURNINO OCAMPO AND LIZA MAZA, BIENVENIDO LUMBERA,
JOEL C. LAMANGAN, RAFAEL MARIANO, SALVADOR FRANCE, ROGELIO M. SOLUTA,
AND CLEMENTE G. BAUTISTA, Petitioners, 
vs.
DEPARTMENT OF NATIONAL DEFENSE (DND) SECRETARY VOLTAIRE GAZMIN,
DEPARTMENT OF FOREIGN AFFAIRS SECRETARY ALBERT DEL ROSARIO, EXECUTIVE
SECRETARY PAQUITO N. OCHOA, JR., ARMED FORCES OF THE PHILIPPINES CHIEF OF
STAFF GENERAL EMMANUEL T. BAUTISTA, DEFENSE UNDERSECRETARY PIO
LORENZO BATINO, AMBASSADOR LOURDES YPARRAGUIRRE, AMBASSADOR J.
EDUARDO MALAYA, DEPARTMENT OF JUSTICE UNDERSECRETARY FRANCISCO
BARAAN III, AND DND ASSISTANT SECRETARY FOR STRATEGIC ASSESSMENTS
RAYMUND JOSE QUILOP AS CHAIRPERSON AND MEMBERS, RESPECTIVELY, OF THE
NEGOTIATING PANEL FOR THE PHILIPPINES ON EDCA, Respondents.

x-----------------------x

KILUSANG MAYO UNO, REPRESENTED BY ITS CHAIRPERSON, ELMER LABOG,

CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT
EMPLOYEES (COURAGE), REPRESENTED BY ITS NATIONAL PRESIDENT FERDINAND
GAITE, NATIONAL FEDERATION OF LABOR UNIONS-KILUSANG MAYO UNO,
REPRESENTED BY ITS NATIONAL PRESIDENT JOSELITO USTAREZ, NENITA GONZAGA,
VIOLETA ESPIRITU, VIRGINIA FLORES, AND ARMANDO TEODORO, JR., Petitioners-in-
Intervention, 
RENE A.Q. SAGUISAG, JR., Petitioner-in-Intervention.

DECISION

SERENO, J.:

The petitions  before this Court question the constitutionality of the Enhanced Defense
1

Cooperation Agreement (EDCA) between the Republic of the Philippines and the United States
of America (U.S.). Petitioners allege that respondents committed grave abuse of discretion
amounting to lack or excess of jurisdiction when they entered into EDCA with the U.S.,  claiming
2

that the instrument violated multiple constitutional provisions.  In reply, respondents argue that
3

petitioners lack standing to bring the suit. To support the legality of their actions, respondents
invoke the 1987 Constitution, treaties, and judicial precedents.
4

A proper analysis of the issues requires this Court to lay down at the outset the basic parameters
of the constitutional powers and roles of the President and the Senate in respect of the above
issues. A more detailed discussion of these powers and roles will be made in the latter portions.

50
I. BROAD CONSTITUTIONAL CONTEXT OF THE POWERS OF THE PRESIDENT: DEFENSE,
FOREIGN RELATIONS, AND EDCA

A. The Prime Duty of the State and the Consolidation of Executive Power in the President

Mataimtim kong pinanunumpaan (o pinatotohanan) na tutuparin ko nang buong katapatan at

sigasig ang aking mga tungkulin bilang Pangulo (o Pangalawang Pangulo o Nanunungkulang
Pangulo) ng Pilipinas, pangangalagaan at ipagtatanggol ang kanyang Konstitusyon, ipatutupad
ang mga batas nito, magiging makatarungan sa bawat tao, at itatalaga ang aking sarili sa
paglilingkod sa Bansa. Kasihan nawa aka ng Diyos.

- Panunumpa sa Katungkulan ng Pangulo ng Pilipinas ayon sa Saligang Batas 5

The 1987 Constitution has "vested the executive power in the President of the Republic of the
Philippines."  While the vastness of the executive power that has been consolidated in the person
6

of the President cannot be expressed fully in one provision, the Constitution has stated the prime
duty of the government, of which the President is the head:

The prime duty of the Government is to serve and protect the people. The Government may
call upon the people to defend the State and, in the fulfillment thereof, all citizens may be
required, under conditions provided by law, to render personal military or civil
service.  (Emphases supplied)
7

B. The duty to protect the territory and the citizens of the Philippines, the power to call
upon the people to defend the State, and the President as Commander-in-Chief

The duty to protect the State and its people must be carried out earnestly and effectively
throughout the whole territory of the Philippines in accordance with the constitutional provision on
national territory. Hence, the President of the Philippines, as the sole repository of executive
power, is the guardian of the Philippine archipelago, including all the islands and waters
embraced therein and all other territories over which it has sovereignty or jurisdiction. These
territories consist of its terrestrial, fluvial, and aerial domains; including its territorial sea, the
seabed, the subsoil, the insular shelves, and other submarine areas; and the waters around,
between, and connecting the islands of the archipelago, regardless of their breadth and
dimensions. 8

To carry out this important duty, the President is equipped with authority over the Armed Forces
of the Philippines (AFP),  which is the protector of the people and the state. The AFP's role is to
9

secure the sovereignty of the State and the integrity of the national territory.  In addition, the
10

Executive is constitutionally empowered to maintain peace and order; protect life, liberty, and
property; and promote the general welfare. 11

In recognition of these powers, Congress has specified that the President must oversee, ensure,
and reinforce our defensive capabilities against external and internal threats  and, in the same
12

vein, ensure that the country is adequately prepared for all national and local emergencies
arising from natural and man-made disasters. 13

To be sure, this power is limited by the Constitution itself. To illustrate, the President may call out
the AFP to prevent or suppress instances of lawless violence, invasion or rebellion,  but not14

suspend the privilege of the writ of habeas corpus for a period exceeding 60 days, or place the
Philippines or any part thereof under martial law exceeding that same span. In the exercise of
these powers, the President is also duty-bound to submit a report to Congress, in person or in
writing, within 48 hours from the proclamation of martial law or the suspension of the privilege of
the writ of habeas corpus; and Congress may in turn revoke the proclamation or suspension. The
same provision provides for the Supreme Court's review of the factual basis for the proclamation
or suspension, as well as the promulgation of the decision within 30 days from filing.

51
C. The power and duty to conduct foreign relations

The President also carries the mandate of being the sole organ in the conduct of foreign
relations.  Since every state has the capacity to interact with and engage in relations with other
15

sovereign states,  it is but logical that every state must vest in an agent the authority to represent
16

its interests to those other sovereign states.

The conduct of foreign relations is full of complexities and consequences, sometimes with life
and death significance to the nation especially in times of war. It can only be entrusted to that
department of government which can act on the basis of the best available information and can
decide with decisiveness. x x x It is also the President who possesses the most comprehensive
and the most confidential information about foreign countries for our diplomatic and consular
officials regularly brief him on meaningful events all over the world. He has also unlimited access
to ultra-sensitive military intelligence data. In fine, the presidential role in foreign affairs is
dominant and the President is traditionally accorded a wider degree of discretion in the conduct
of foreign affairs. The regularity, nay, validity of his actions are adjudged under less stringent
standards, lest their judicial repudiation lead to breach of an international obligation, rupture of
state relations, forfeiture of confidence, national embarrassment and a plethora of other problems
with equally undesirable consequences. 17

The role of the President in foreign affairs is qualified by the Constitution in that the Chief
Executive must give paramount importance to the sovereignty of the nation, the integrity of its
territory, its interest, and the right of the sovereign Filipino people to self-determination.  In18

specific provisions, the President's power is also limited, or at least shared, as in Section 2 of
Article II on the conduct of war; Sections 20 and 21 of Article VII on foreign loans, treaties, and
international agreements; Sections 4(2) and 5(2)(a) of Article VIII on the judicial review of
executive acts; Sections 4 and 25 of Article XVIII on treaties and international agreements
entered into prior to the Constitution and on the presence of foreign military troops, bases, or
facilities.

D. The relationship between the two major presidential functions and the role of the
Senate

Clearly, the power to defend the State and to act as its representative in the international sphere
inheres in the person of the President. This power, however, does not crystallize into absolute
discretion to craft whatever instrument the Chief Executive so desires. As previously mentioned,
the Senate has a role in ensuring that treaties or international agreements the President enters
into, as contemplated in Section 21 of Article VII of the Constitution, obtain the approval of two-
thirds of its members.

Previously, treaties under the 1973 Constitution required ratification by a majority of

the Batasang Pambansa, except in instances wherein the President "may enter into international
19

treaties or agreements as the national welfare and interest may require."  This left a large margin
20

of discretion that the President could use to bypass the Legislature altogether. This was a
departure from the 1935 Constitution, which explicitly gave the President the power to enter into
treaties only with the concurrence of two-thirds of all the Members of the Senate.  The 1987
21

Constitution returned the Senate's power  and, with it, the legislative's traditional role in foreign
22

affairs.
23

The responsibility of the President when it comes to treaties and international agreements under
the present Constitution is therefore shared with the Senate. This shared role, petitioners claim,
is bypassed by EDCA.

II. HISTORICAL ANTECEDENTS OF EDCA

52
A. U.S. takeover of Spanish colonization and its military bases, and the transition to
Philippine independence

The presence of the U.S. military forces in the country can be traced to their pivotal victory in the
1898 Battle of Manila Bay during the Spanish-American War.  Spain relinquished its sovereignty
24

over the Philippine Islands in favor of the U.S. upon its formal surrender a few months later.  By 25

1899, the Americans had consolidated a military administration in the archipelago. 26

When it became clear that the American forces intended to impose colonial control over the
Philippine Islands, General Emilio Aguinaldo immediately led the Filipinos into an all-out war
against the U.S.  The Filipinos were ultimately defeated in the Philippine-American War, which
27

lasted until 1902 and led to the downfall of the first Philippine Republic.  The Americans 28

henceforth began to strengthen their foothold in the country.  They took over and expanded the
29

former Spanish Naval Base in Subic Bay, Zambales, and put up a cavalry post called Fort
Stotsenberg in Pampanga, now known as Clark Air Base. 30

When talks of the eventual independence of the Philippine Islands gained ground, the U.S.
manifested the desire to maintain military bases and armed forces in the country.  The U.S. 31

Congress later enacted the Hare-Hawes-Cutting Act of 1933, which required that the proposed
constitution of an independent Philippines recognize the right of the U.S. to maintain the latter's
armed forces and military bases.  The Philippine Legislature rejected that law, as it also gave the
32

U.S. the power to unilaterally designate any part of Philippine territory as a permanent military or
naval base of the U.S. within two years from complete independence. 33

The U.S. Legislature subsequently crafted another law called the Tydings-McDuffie Act or the
Philippine Independence Act of 1934. Compared to the old Hare-Hawes-Cutting Act, the new law
provided for the surrender to the Commonwealth Government of "all military and other
reservations" of the U.S. government in the Philippines, except "naval reservations and refueling
stations."  Furthermore, the law authorized the U.S. President to enter into negotiations for the
34

adjustment and settlement of all questions relating to naval reservations and fueling stations
within two years after the Philippines would have gained independence.  Under the Tydings-
35

McDuffie Act, the U.S. President would proclaim the American withdrawal and surrender of
sovereignty over the islands 10 years after the inauguration of the new government in the
Philippines.  This law eventually led to the promulgation of the 1935 Philippine Constitution.
36

The original plan to surrender the military bases changed.  At the height of the Second World
37

War, the Philippine and the U.S. Legislatures each passed resolutions authorizing their
respective Presidents to negotiate the matter of retaining military bases in the country after the
planned withdrawal of the U.S.  Subsequently, in 1946, the countries entered into the Treaty of
38

General Relations, in which the U.S. relinquished all control and sovereignty over the Philippine
Islands, except the areas that would be covered by the American military bases in the
country.  This treaty eventually led to the creation of the post-colonial legal regime on which
39

would hinge the continued presence of U.S. military forces until 1991: the Military Bases
Agreement (MBA) of 1947, the Military Assistance Agreement of 1947, and the Mutual Defense
Treaty (MDT) of 1951. 40

B. Former legal regime on the presence of U.S. armed forces in the territory of an
independent Philippines (1946-1991)

Soon after the Philippines was granted independence, the two countries entered into their first
military arrangement pursuant to the Treaty of General Relations - the 1947 MBA.  The Senate 41

concurred on the premise of "mutuality of security interest,"  which provided for the presence and
42

operation of 23 U.S. military bases in the Philippines for 99 years or until the year 2046.  The 43

treaty also obliged the Philippines to negotiate with the U.S. to allow the latter to expand the
existing bases or to acquire new ones as military necessity might require. 44

53
A number of significant amendments to the 1947 MBA were made.  With respect to its duration,
45

the parties entered into the Ramos-Rusk Agreement of 1966, which reduced the term of the
treaty from 99 years to a total of 44 years or until 1991.  Concerning the number of U.S. military
46

bases in the country, the Bohlen-Serrano Memorandum of Agreement provided for the return to
the Philippines of 17 U.S. military bases covering a total area of 117,075 hectares.  Twelve years 47

later, the U.S. returned Sangley Point in Cavite City through an exchange of notes.  Then, 48

through the Romulo-Murphy Exchange of Notes of 1979, the parties agreed to the recognition of
Philippine sovereignty over Clark and Subic Bases and the reduction of the areas that could be
used by the U.S. military.  The agreement also provided for the mandatory review of the treaty
49

every five years.  In 1983, the parties revised the 1947 MBA through the Romualdez-Armacost
50

Agreement.  The revision pertained to the operational use of the military bases by the U.S.
51

government within the context of Philippine sovereignty,  including the need for prior consultation
52

with the Philippine government on the former' s use of the bases for military combat operations
or the establishment of long-range missiles. 53

Pursuant to the legislative authorization granted under Republic Act No. 9,  the President also
54

entered into the 1947 Military Assistance Agreement  with the U.S. This executive agreement
55

established the conditions under which U.S. military assistance would be granted to the
Philippines,  particularly the provision of military arms, ammunitions, supplies, equipment,
56

vessels, services, and training for the latter's defense forces.  An exchange of notes in 1953
57

made it clear that the agreement would remain in force until terminated by any of the parties. 58

To further strengthen their defense and security relationship,  the Philippines and the U.S. next
59

entered into the MDT in 1951. Concurred in by both the Philippine  and the U.S.  Senates, the
60 61

treaty has two main features: first, it allowed for mutual assistance in maintaining and developing
their individual and collective capacities to resist an armed attack;  and second, it provided for
62

their mutual self-defense in the event of an armed attack against the territory of either party.  The 63

treaty was premised on their recognition that an armed attack on either of them would equally be
a threat to the security of the other.64

C. Current legal regime on the presence of U.S. armed forces in the country

In view of the impending expiration of the 1947 MBA in 1991, the Philippines and the U.S.
negotiated for a possible renewal of their defense and security relationship.  Termed as the 65

Treaty of Friendship, Cooperation and Security, the countries sought to recast their military ties
by providing a new framework for their defense cooperation and the use of Philippine
installations.  One of the proposed provisions included an arrangement in which U.S. forces
66

would be granted the use of certain installations within the Philippine naval base in Subic.  On 16 67

September 1991, the Senate rejected the proposed treaty. 68

The consequent expiration of the 1947 MBA and the resulting paucity of any formal agreement
dealing with the treatment of U.S. personnel in the Philippines led to the suspension in 1995 of
large-scale joint military exercises. In the meantime, the respective governments of the two
69

countries agreed  to hold joint exercises at a substantially reduced level.  The military
70 71

arrangements between them were revived in 1999 when they concluded the first Visiting Forces
Agreement (VFA). 72

As a "reaffirm[ation] [of the] obligations under the MDT,"  the VFA has laid down the regulatory
73

mechanism for the treatment of U.S. military and civilian personnel visiting the country.  It 74

contains provisions on the entry and departure of U.S. personnel; the purpose, extent, and
limitations of their activities; criminal and disciplinary jurisdiction; the waiver of certain claims; the
importation and exportation of equipment, materials, supplies, and other pieces of property
owned by the U.S. government; and the movement of U.S. military vehicles, vessels, and aircraft
into and within the country.  The Philippines and the U.S. also entered into a second counterpart
75

agreement (VFA II), which in turn regulated the treatment of Philippine military and civilian
personnel visiting the U.S.  The Philippine Senate concurred in the first VFA on 27 May 1999.
76 77

54
Beginning in January 2002, U.S. military and civilian personnel started arriving in Mindanao to
take part in joint military exercises with their Filipino counterparts.  Called Balikatan, these
78

exercises involved trainings aimed at simulating joint military maneuvers pursuant to the MDT. 79

In the same year, the Philippines and the U.S. entered into the Mutual Logistics Support
Agreement to "further the interoperability, readiness, and effectiveness of their respective military
forces"  in accordance with the MDT, the Military Assistance Agreement of 1953, and the
80

VFA.  The new agreement outlined the basic terms, conditions, and procedures for facilitating
81

the reciprocal provision of logistics support, supplies, and services between the military forces of
the two countries.  The phrase "logistics support and services" includes billeting, operations
82

support, construction and use of temporary structures, and storage services during an approved
activity under the existing military arrangements.  Already extended twice, the agreement will last
83

until 2017. 84

D. The Enhanced Defense Cooperation Agreement

EDCA authorizes the U.S. military forces to have access to and conduct activities within certain
"Agreed Locations" in the country. It was not transmitted to the Senate on the executive's
understanding that to do so was no longer necessary.  Accordingly, in June 2014, the
85

Department of Foreign Affairs (DFA) and the U.S. Embassy exchanged diplomatic notes
confirming the completion of all necessary internal requirements for the agreement to enter into
force in the two countries. 86

According to the Philippine government, the conclusion of EDCA was the result of intensive and
comprehensive negotiations in the course of almost two years.  After eight rounds of
87

negotiations, the Secretary of National Defense and the U.S. Ambassador to the Philippines
signed the agreement on 28 April 2014.  President Benigno S. Aquino III ratified EDCA on 6
88

June 2014.  The OSG clarified during the oral arguments  that the Philippine and the U.S.
89 90

governments had yet to agree formally on the specific sites of the Agreed Locations mentioned in
the agreement.

Two petitions for certiorari were thereafter filed before us assailing the constitutionality of EDCA.
They primarily argue that it should have been in the form of a treaty concurred in by the Senate,
not an executive agreement.

On 10 November 2015, months after the oral arguments were concluded and the parties ordered
to file their respective memoranda, the Senators adopted Senate Resolution No. (SR) 105.  The 91

resolution expresses the "strong sense"  of the Senators that for EDCA to become valid and
92

effective, it must first be transmitted to the Senate for deliberation and concurrence.

III. ISSUES

Petitioners mainly seek a declaration that the Executive Department committed grave abuse of
discretion in entering into EDCA in the form of an executive agreement. For this reason, we cull
the issues before us:

A. Whether the essential requisites for judicial review are present

B. Whether the President may enter into an executive agreement on foreign

military bases, troops, or facilities

C. Whether the provisions under EDCA are consistent with the Constitution, as
well as with existing laws and treaties

IV. DISCUSSION

55
A. Whether the essential requisites for judicial review have been satisfied

Petitioners are hailing this Court's power of judicial review in order to strike down EDCA for
violating the Constitution. They stress that our fundamental law is explicit in prohibiting the
presence of foreign military forces in the country, except under a treaty concurred in by the
Senate. Before this Court may begin to analyze the constitutionality or validity of an official act of
a coequal branch of government, however, petitioners must show that they have satisfied all the
essential requisites for judicial review.
93

Distinguished from the general notion of judicial power, the power of judicial review specially
refers to both the authority and the duty of this Court to determine whether a branch or an
instrumentality of government has acted beyond the scope of the latter's constitutional
powers.  As articulated in Section 1, Article VIII of the Constitution, the power of judicial review
94

involves the power to resolve cases in which the questions concern the constitutionality or
validity of any treaty, international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation.  In Angara v. Electoral
95

Commission, this Court exhaustively discussed this "moderating power" as part of the system of
checks and balances under the Constitution. In our fundamental law, the role of the Court is to
determine whether a branch of government has adhered to the specific restrictions and
limitations of the latter's power:
96

The separation of powers is a fundamental principle in our system of government. It obtains not
through express provision but by actual division in our Constitution. Each department of the
government has exclusive cognizance of matters within its jurisdiction, and is supreme
within its own sphere. But it does not follow from the fact that the three powers are to be kept
separate and distinct that the Constitution intended them to be absolutely unrestrained and
independent of each other. The Constitution has provided for an elaborate system of
checks and balances to secure coordination in the workings of the various departments of the
government. x x x. And the judiciary in turn, with the Supreme Court as the final
arbiter, effectively checks the other departments in the exercise of its power to determine
the law, and hence to declare executive and legislative acts void if violative of the
Constitution.

xxxx

As any human production, our Constitution is of course lacking perfection and perfectibility, but
as much as it was within the power of our people, acting through their delegates to so provide,
that instrument which is the expression of their sovereignty however limited, has
established a republican government intended to operate and function as a harmonious
whole, under a system of checks and balances, and subject to specific limitations and
restrictions provided in the said instrument. The Constitution sets forth in no uncertain
language the restrictions and limitations upon governmental powers and agencies. If
these restrictions and limitations are transcended it would be inconceivable if the
Constitution had not provided for a mechanism by which to direct the course of
government along constitutional channels, for then the distribution of powers would be
mere verbiage, the bill of rights mere expressions of sentiment, and the principles of good
government mere political apothegms. Certainly, the limitations and restrictions embodied in
our Constitution are real as they should be in any living constitution. x x x. In our case, this
moderating power is granted, if not expressly, by clear implication from section 2 of article VIII of
[the 1935] Constitution.

The Constitution is a definition of the powers of government. Who is to determine the nature,
scope and extent of such powers? The Constitution itself has provided for the instrumentality of
the judiciary as the rational way. And when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other departments; it does not in
reality nullify or invalidate an act of the legislature, but only asserts the solemn and

56
sacred obligation assigned to it by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in an actual controversy
the rights which that instrument secures and guarantees to them. This is in truth all that is
involved in what is termed "judicial supremacy" which properly is the power of judicial review
under the Constitution. x x x x. (Emphases supplied)

The power of judicial review has since been strengthened in the 1987 Constitution. The scope of
that power has been extended to the determination of whether in matters traditionally considered
to be within the sphere of appreciation of another branch of government, an exercise of
discretion has been attended with grave abuse.  The expansion of this power has made the
97

political question doctrine "no longer the insurmountable obstacle to the exercise of judicial
power or the impenetrable shield that protects executive and legislative actions from judicial
inquiry or review." 98

This moderating power, however, must be exercised carefully and only if it cannot be completely
avoided. We stress that our Constitution is so incisively designed that it identifies the spheres of
expertise within which the different branches of government shall function and the questions of
policy that they shall resolve.  Since the power of judicial review involves the delicate exercise of
99

examining the validity or constitutionality of an act of a coequal branch of government, this Court
must continually exercise restraint to avoid the risk of supplanting the wisdom of the
constitutionally appointed actor with that of its own.100

Even as we are left with no recourse but to bare our power to check an act of a coequal branch
of government - in this case the executive - we must abide by the stringent requirements for the
exercise of that power under the Constitution. Demetria v. Alba  and Francisco v. House of
101

Representatives  cite the "pillars" of the limitations on the power of judicial review as enunciated
102

in the concurring opinion of U.S. Supreme Court Justice Brandeis in Ashwander v. Tennessee
Valley Authority.  Francisco  redressed these "pillars" under the following categories:
103 104

1. That there be absolute necessity of deciding a case

2. That rules of constitutional law shall be formulated only as required by the facts of
the case

3. That judgment may not be sustained on some other ground

4. That there be actual injury sustained by the party by reason of the operation of the
statute

5. That the parties are not in estoppel

6. That the Court upholds the presumption of constitutionality

(Emphases supplied)

These are the specific safeguards laid down by the Court when it exercises its power of judicial
review.  Guided by these pillars, it may invoke the power only when the following four stringent
105

requirements are satisfied: (a) there is an actual case or controversy; (b) petitioners
possess locus standi; (c) the question of constitutionality is raised at the earliest opportunity; and
(d) the issue of constitutionality is the lis mota of the case.  Of these four, the first two conditions
106

will be the focus of our discussion.

1. Petitioners have shown the presence of an actual case or controversy.

57
The OSG maintains  that there is no actual case or controversy that exists, since the Senators
107

have not been deprived of the opportunity to invoke the privileges of the institution they are
representing. It contends that the nonparticipation of the Senators in the present petitions only
confirms that even they believe that EDCA is a binding executive agreement that does not
require their concurrence.

It must be emphasized that the Senate has already expressed its position through SR
105.  Through the Resolution, the Senate has taken a position contrary to that of the OSG. As
108

the body tasked to participate in foreign affairs by ratifying treaties, its belief that EDCA infringes
upon its constitutional role indicates that an actual controversy - albeit brought to the Court by
non-Senators, exists.

Moreover, we cannot consider the sheer abstention of the Senators from the present
proceedings as basis for finding that there is no actual case or controversy before us. We point
out that the focus of this requirement is the ripeness for adjudication of the matter at hand, as
opposed to its being merely conjectural or anticipatory.  The case must involve a definite and
109

concrete issue involving real parties with conflicting legal rights and legal claims admitting of
specific relief through a decree conclusive in nature.  It should not equate with a mere request
110

for an opinion or advice on what the law would be upon an abstract, hypothetical, or contingent
state of facts.  As explained in Angara v. Electoral Commission:
111 112

[The] power of judicial review is limited to actual cases and controversies to be exercised
after full opportunity of argument by the parties, and limited further to the constitutional
question raised or the very lis mota presented. Any attempt at abstraction could only lead to
dialectics and barren legal questions and to sterile conclusions of wisdom, justice or
expediency of legislation. More than that, courts accord the presumption of constitutionality to
legislative enactments, not only because the legislature is presumed to abide by the Constitution
but also because the judiciary in the determination of actual cases and controversies must
reflect the wisdom and justice of the people as expressed through their representatives in
the executive and legislative departments of the government. (Emphases supplied)

We find that the matter before us involves an actual case or controversy that is already ripe for
adjudication. The Executive Department has already sent an official confirmation to the U.S.
Embassy that "all internal requirements of the Philippines x x x have already been complied
with."  By this exchange of diplomatic notes, the Executive Department effectively performed the
113

last act required under Article XII(l) of EDCA before the agreement entered into force. Section
25, Article XVIII of the Constitution, is clear that the presence of foreign military forces in the
country shall only be allowed by virtue of a treaty concurred in by the Senate. Hence, the
performance of an official act by the Executive Department that led to the entry into force of an
executive agreement was sufficient to satisfy the actual case or controversy requirement.

2. While petitioners Saguisag et. al., do not have legal standing, they nonetheless raise
issues involving matters of transcendental importance.

The question of locus standi or legal standing focuses on the determination of whether those
assailing the governmental act have the right of appearance to bring the matter to the court for
adjudication.  They must show that they have a personal and substantial interest in the case,
114

such that they have sustained or are in immediate danger of sustaining, some direct injury as a
consequence of the enforcement of the challenged governmental act.  Here, "interest" in the
115

question involved must be material - an interest that is in issue and will be affected by the official
act - as distinguished from being merely incidental or general.  Clearly, it would be insufficient to
116

show that the law or any governmental act is invalid, and that petitioners stand to suffer in some
indefinite way.  They must show that they have a particular interest in bringing the suit, and that
117

they have been or are about to be denied some right or privilege to which they are lawfully
entitled, or that they are about to be subjected to some burden or penalty by reason of the act
complained of.  The reason why those who challenge the validity of a law or an international
118

58
agreement are required to allege the existence of a personal stake in the outcome of the
controversy is "to assure the concrete adverseness which sharpens the presentation of issues
upon which the court so largely depends for illumination of difficult constitutional questions."119

The present petitions cannot qualify as citizens', taxpayers', or legislators' suits; the Senate as a
body has the requisite standing, but considering that it has not formally filed a pleading to join the
suit, as it merely conveyed to the Supreme Court its sense that EDCA needs the Senate's
concurrence to be valid, petitioners continue to suffer from lack of standing.

In assailing the constitutionality of a governmental act, petitioners suing as citizens may dodge
the requirement of having to establish a direct and personal interest if they show that the act
affects a public right.  In arguing that they have legal standing, they claim  that the case they
120 121

have filed is a concerned citizen's suit. But aside from general statements that the petitions
involve the protection of a public right, and that their constitutional rights as citizens would be
violated, they fail to make any specific assertion of a particular public right that would be violated
by the enforcement of EDCA. For their failure to do so, the present petitions cannot be
considered by the Court as citizens' suits that would justify a disregard of the
aforementioned requirements.

In claiming that they have legal standing as taxpayers, petitioners  aver that the implementation
122

of EDCA would result in the unlawful use of public funds. They emphasize that Article X(1) refers
to an appropriation of funds; and that the agreement entails a waiver of the payment of taxes,
fees, and rentals. During the oral arguments, however, they admitted that the government had
not yet appropriated or actually disbursed public funds for the purpose of implementing the
agreement.  The OSG, on the other hand, maintains that petitioners cannot sue as
123

taxpayers. Respondent explains that EDCA is neither meant to be a tax measure, nor is it
124

directed at the disbursement of public funds.

A taxpayer's suit concerns a case in which the official act complained of directly involves the
illegal disbursement of public funds derived from taxation.  Here, those challenging the act must
125

specifically show that they have sufficient interest in preventing the illegal expenditure of public
money, and that they will sustain a direct injury as a result of the enforcement of the assailed
act.  Applying that principle to this case, they must establish that EDCA involves the exercise by
126

Congress of its taxing or spending powers. 127

We agree with the OSG that the petitions cannot qualify as taxpayers' suits. We emphasize that
a taxpayers' suit contemplates a situation in which there is already an appropriation or a
disbursement of public funds.  A reading of Article X(l) of EDCA would show that there has been
128

neither an appropriation nor an authorization of disbursement of funds. The cited provision reads:

All obligations under this Agreement are subject to the availability of appropriated

funds authorized for these purposes. (Emphases supplied)

This provision means that if the implementation of EDCA would require the disbursement of
public funds, the money must come from appropriated funds that are specifically authorized for
this purpose. Under the agreement, before there can even be a disbursement of public funds,
there must first be a legislative action. Until and unless the Legislature appropriates funds
for EDCA, or unless petitioners can pinpoint a specific item in the current budget that
allows expenditure under the agreement, we cannot at this time rule that there is in fact an
appropriation or a disbursement of funds that would justify the filing of a taxpayers' suit.

Petitioners Bayan et al. also claim  that their co-petitioners who are party-list representatives
129

have the standing to challenge the act of the Executive Department, especially if it impairs the
constitutional prerogatives, powers, and privileges of their office. While they admit that there is no
incumbent Senator who has taken part in the present petition, they nonetheless assert that they
also stand to sustain a derivative but substantial injury as legislators. They argue that under the

59
Constitution, legislative power is vested in both the Senate and the House of Representatives;
consequently, it is the entire Legislative Department that has a voice in determining whether or
not the presence of foreign military should be allowed. They maintain that as members of the
Legislature, they have the requisite personality to bring a suit, especially when a constitutional
issue is raised.

The OSG counters  that petitioners do not have any legal standing to file the suits concerning
130

the lack of Senate concurrence in EDCA. Respondent emphasizes that the power to concur in
treaties and international agreements is an "institutional prerogative" granted by the Constitution
to the Senate. Accordingly, the OSG argues that in case of an allegation of impairment of that
power, the injured party would be the Senate as an institution or any of its incumbent members,
as it is the Senate's constitutional function that is allegedly being violated.

The legal standing of an institution of the Legislature or of any of its Members has already been
recognized by this Court in a number of cases.  What is in question here is the alleged
131

impairment of the constitutional duties and powers granted to, or the impermissible intrusion
upon the domain of, the Legislature or an institution thereof.  In the case of suits initiated by the
132

legislators themselves, this Court has recognized their standing to question the validity of any
official action that they claim infringes the prerogatives, powers, and privileges vested by the
Constitution in their office.  As aptly explained by Justice Perfecto in Mabanag v. Lopez Vito:
133 134

Being members of Congress, they are even duty bound to see that the latter act within the
bounds of the Constitution which, as representatives of the people, they should uphold,
unless they are to commit a flagrant betrayal of public trust. They are representatives of the
sovereign people and it is their sacred duty to see to it that the fundamental law embodying
the will of the sovereign people is not trampled upon. (Emphases supplied)

We emphasize that in a legislators' suit, those Members of Congress who are challenging the
official act have standing only to the extent that the alleged violation impinges on their right to
participate in the exercise of the powers of the institution of which they are
members.  Legislators have the standing "to maintain inviolate the prerogatives, powers, and
135

privileges vested by the Constitution in their office and are allowed to sue to question the validity
of any official action, which they claim infringes their prerogatives as legislators."  As legislators,
136

they must clearly show that there was a direct injury to their persons or the institution to which
they belong. 137

As correctly argued by respondent, the power to concur in a treaty or an international agreement

is an institutional prerogative granted by the Constitution to the Senate, not to the entire
Legislature. In Pimentel v. Office of the Executive Secretary, this Court did not recognize the
standing of one of the petitioners therein who was a member of the House of Representatives.
The petition in that case sought to compel the transmission to the Senate for concurrence of the
signed text of the Statute of the International Criminal Court. Since that petition invoked the
power of the Senate to grant or withhold its concurrence in a treaty entered into by the Executive
Department, only then incumbent Senator Pimentel was allowed to assert that authority of the
Senate of which he was a member.

Therefore, none of the initial petitioners in the present controversy has the standing to
maintain the suits as legislators.

Nevertheless, this Court finds that there is basis for it to review the act of the Executive for the
following reasons.

In any case, petitioners raise issues involving matters of transcendental importance.

Petitioners  argue that the Court may set aside procedural technicalities, as the present petition
138

tackles issues that are of transcendental importance. They point out that the matter before us is

60
about the proper exercise of the Executive Department's power to enter into international
agreements in relation to that of the Senate to concur in those agreements. They also assert that
EDCA would cause grave injustice, as well as irreparable violation of the Constitution and of the
Filipino people's rights.

The OSG, on the other hand, insists  that petitioners cannot raise the mere fact that the present
139

petitions involve matters of transcendental importance in order to cure their inability to comply
with the constitutional requirement of standing. Respondent bewails the overuse of
"transcendental importance" as an exception to the traditional requirements of constitutional
litigation. It stresses that one of the purposes of these requirements is to protect the Supreme
Court from unnecessary litigation of constitutional questions.

In a number of cases,  this Court has indeed taken a liberal stance towards the requirement of
140

legal standing, especially when paramount interest is involved. Indeed, when those who
challenge the official act are able to craft an issue of transcendental significance to the people,
the Court may exercise its sound discretion and take cognizance of the suit. It may do so in spite
of the inability of the petitioners to show that they have been personally injured by the operation
of a law or any other government act.

While this Court has yet to thoroughly delineate the outer limits of this doctrine, we emphasize
that not every other case, however strong public interest may be, can qualify as an issue of
transcendental importance. Before it can be impelled to brush aside the essential requisites for
exercising its power of judicial review, it must at the very least consider a number of factors: (1)
the character of the funds or other assets involved in the case; (2) the presence of a clear case
of disregard of a constitutional or statutory prohibition by the public respondent agency or
instrumentality of the government; and (3) the lack of any other party that has a more direct and
specific interest in raising the present questions.
141

An exhaustive evaluation of the memoranda of the parties, together with the oral arguments,
shows that petitioners have presented serious constitutional issues that provide ample
justification for the Court to set aside the rule on standing. The transcendental importance of the
issues presented here is rooted in the Constitution itself. Section 25, Article XVIII thereof, cannot
be any clearer: there is a much stricter mechanism required before foreign military troops,
facilities, or bases may be allowed in the country. The DFA has already confirmed to the U.S.
Embassy that "all internal requirements of the Philippines x x x have already been complied
with."  It behooves the Court in this instance to take a liberal stance towards the rule on standing
142

and to determine forthwith whether there was grave abuse of discretion on the part of the
Executive Department.

We therefore rule that this case is a proper subject for judicial review.

B. Whether the President may enter into an executive agreement on foreign

military bases, troops, or facilities

C. Whether the provisions under EDCA are consistent with the Constitution, as
well as with existing laws and treaties

Issues B and C shall be discussed together infra.

1. The role of the President as the executor of the law includes the duty to defend the
State, for which purpose he may use that power in the conduct of foreign relations

Historically, the Philippines has mirrored the division of powers in the U.S. government. When
the Philippine government was still an agency of the Congress of the U.S., it was as an agent
entrusted with powers categorized as executive, legislative, and judicial, and divided among

61
these three great branches.  By this division, the law implied that the divided powers cannot be
143

exercised except by the department given the power. 144

This divide continued throughout the different versions of the Philippine Constitution and
specifically vested the supreme executive power in the Governor-General of the Philippines,  a 145

position inherited by the President of the Philippines when the country attained independence.
One of the principal functions of the supreme executive is the responsibility for the faithful
execution of the laws as embodied by the oath of office.  The oath of the President prescribed
146

by the 1987 Constitution reads thus:

I do solemnly swear (or affirm) that I will faithfully and conscientiously fulfill my duties as
President (or Vice-President or Acting President) of the Philippines, preserve and defend its
Constitution, execute its laws, do justice to every man, and consecrate myself to the service of
the Nation. So help me God. (In case of affirmation, last sentence will be omitted.)  (Emphases
147

supplied)

This Court has interpreted the faithful execution clause as an obligation imposed on the
President, and not a separate grant of power.  Section 1 7, Article VII of the Constitution,
148

expresses this duty in no uncertain terms and includes it in the provision regarding the
President's power of control over the executive department, viz:

The President shall have control of all the executive departments, bureaus, and offices. He shall
ensure that the laws be faithfully executed.

The equivalent provisions in the next preceding Constitution did not explicitly require this oath
from the President. In the 1973 Constitution, for instance, the provision simply gives the
President control over the ministries.  A similar language, not in the form of the President's oath,
149

was present in the 1935 Constitution, particularly in the enumeration of executive functions.  By
150

1987, executive power was codified not only in the Constitution, but also in the Administrative
Code: 151

SECTION 1. Power of Control. - The President shall have control of all the executive
departments, bureaus, and offices. He shall ensure that the laws be faithfully executed.
(Emphasis supplied)

Hence, the duty to faithfully execute the laws of the land is inherent in executive power and is
intimately related to the other executive functions. These functions include the faithful execution
of the law in autonomous regions;  the right to prosecute crimes;  the implementation of
152 153

transportation projects;  the duty to ensure compliance with treaties, executive agreements and
154

executive orders;  the authority to deport undesirable aliens;  the conferment of national awards
155 156

under the President's jurisdiction;  and the overall administration and control of the executive
157

department. 158

These obligations are as broad as they sound, for a President cannot function with crippled
hands, but must be capable of securing the rule of law within all territories of the Philippine
Islands and be empowered to do so within constitutional limits. Congress cannot, for instance,
limit or take over the President's power to adopt implementing rules and regulations for a law it
has enacted. 159

More important, this mandate is self-executory by virtue of its being inherently executive in
nature.  As Justice Antonio T. Carpio previously wrote,
160 161

[i]f the rules are issued by the President in implementation or execution of self-executory
constitutional powers vested in the President, the rule-making power of the President is not a
delegated legislative power. The most important self-executory constitutional power of the
President is the President's constitutional duty and mandate to "ensure that the laws be faithfully

62
executed." The rule is that the President can execute the law without any delegation of power
from the legislature.

The import of this characteristic is that the manner of the President's execution of the law,
even if not expressly granted by the law, is justified by necessity and limited only by law,
since the President must "take necessary and proper steps to carry into execution the
law."  Justice George Malcolm states this principle in a grand manner:
162 163

The executive should be clothed with sufficient power to administer efficiently the affairs of state.
He should have complete control of the instrumentalities through whom his responsibility is
discharged. It is still true, as said by Hamilton, that "A feeble executive implies a feeble execution
of the government. A feeble execution is but another phrase for a bad execution; and a
government ill executed, whatever it may be in theory, must be in practice a bad government."
The mistakes of State governments need not be repeated here.

xxxx

Every other consideration to one side, this remains certain - The Congress of the United States
clearly intended that the Governor-General's power should be commensurate with his
responsibility. The Congress never intended that the Governor-General should be saddled with
the responsibility of administering the government and of executing the laws but shorn of the
power to do so. The interests of the Philippines will be best served by strict adherence to the
basic principles of constitutional government.

In light of this constitutional duty, it is the President's prerogative to do whatever is legal and
necessary for Philippine defense interests. It is no coincidence that the constitutional provision on
the faithful execution clause was followed by that on the President's commander-in-chief
powers,  which are specifically granted during extraordinary events of lawless violence,
164

invasion, or rebellion. And this duty of defending the country is unceasing, even in times when
there is no state of lawlesss violence, invasion, or rebellion. At such times, the President has full
powers to ensure the faithful execution of the laws.

It would therefore be remiss for the President and repugnant to the faithful-execution clause of
the Constitution to do nothing when the call of the moment requires increasing the military's
defensive capabilities, which could include forging alliances with states that hold a common
interest with the Philippines or bringing an international suit against an offending state.

The context drawn in the analysis above has been termed by Justice Arturo D. Brion's Dissenting
Opinion as the beginning of a "patent misconception."  His dissent argues that this approach
165

taken in analyzing the President's role as executor of the laws is preceded by the duty to
preserve and defend the Constitution, which was allegedly overlooked. 166

In arguing against the approach, however, the dissent grossly failed to appreciate the nuances of
the analysis, if read holistically and in context. The concept that the President cannot function
with crippled hands and therefore can disregard the need for Senate concurrence in
treaties  was never expressed or implied. Rather, the appropriate reading of the preceding
167

analysis shows that the point being elucidated is the reality that the President's duty to execute
the laws and protect the Philippines is inextricably interwoven with his foreign affairs powers,
such that he must resolve issues imbued with both concerns to the full extent of his powers,
subject only to the limits supplied by law. In other words, apart from an expressly mandated limit,
or an implied limit by virtue of incompatibility, the manner of execution by the President must be
given utmost deference. This approach is not different from that taken by the Court in situations
with fairly similar contexts.

Thus, the analysis portrayed by the dissent does not give the President authority to bypass
constitutional safeguards and limits. In fact, it specifies what these limitations are, how these

63
limitations are triggered, how these limitations function, and what can be done within the sphere
of constitutional duties and limitations of the President.

Justice Brion's dissent likewise misinterprets the analysis proffered when it claims that the
foreign relations power of the President should not be interpreted in isolation.  The analysis itself
168

demonstrates how the foreign affairs function, while mostly the President's, is shared in several
instances, namely in Section 2 of Article II on the conduct of war; Sections 20 and 21 of Article
VII on foreign loans, treaties, and international agreements; Sections 4(2) and 5(2)(a) of Article
VIII on the judicial review of executive acts; Sections 4 and 25 of Article XVIII on treaties and
international agreements entered into prior to the Constitution and on the presence of foreign
military troops, bases, or facilities.

In fact, the analysis devotes a whole subheading to the relationship between the two major
presidential functions and the role of the Senate in it.

This approach of giving utmost deference to presidential initiatives in respect of foreign affairs is
not novel to the Court. The President's act of treating EDCA as an executive agreement is not
the principal power being analyzed as the Dissenting Opinion seems to suggest. Rather, the
preliminary analysis is in reference to the expansive power of foreign affairs. We have long
treated this power as something the Courts must not unduly restrict. As we stated recently
in Vinuya v. Romulo:

To be sure, not all cases implicating foreign relations present political questions, and courts
certainly possess the authority to construe or invalidate treaties and executive agreements.
However, the question whether the Philippine government should espouse claims of its nationals
against a foreign government is a foreign relations matter, the authority for which is demonstrably
committed by our Constitution not to the courts but to the political branches. In this case, the
Executive Department has already decided that it is to the best interest of the country to waive all
claims of its nationals for reparations against Japan in the Treaty of Peace of 1951. The wisdom
of such decision is not for the courts to question. Neither could petitioners herein assail the said
determination by the Executive Department via the instant petition for certiorari.

In the seminal case of US v. Curtiss-Wright Export Corp., the US Supreme Court held that "[t]he
President is the sole organ of the nation in its external relations, and its sole representative with
foreign relations."

It is quite apparent that if, in the maintenance of our international relations,

embarrassment - perhaps serious embarrassment - is to be avoided and success
for our aims achieved, congressional legislation which is to be made effective
through negotiation and inquiry within the international field must often accord
to the President a degree of discretion and freedom from statutory
restriction which would not be admissible where domestic affairs alone
involved. Moreover, he, not Congress, has the better opportunity of knowing the
conditions which prevail in foreign countries, and especially is this true in time of
war. He has his confidential sources of information. He has his agents in the form
of diplomatic, consular and other officials ....

This ruling has been incorporated in our jurisprudence through Bavan v. Executive

Secretary  and Pimentel v. Executive Secretary; its overreaching principle was, perhaps, best
articulated in (now Chief) Justice Puno's dissent in Secretary of Justice v. Lantion:

. . . The conduct of foreign relations is full of complexities and consequences,

sometimes with life and death significance to the nation especially in times of
war. It can only be entrusted to that department of government which can act on
the basis of the best available information and can decide with decisiveness .... It
is also the President who possesses the most comprehensive and the most

64
 confidential information about foreign countries for our diplomatic and consular
officials regularly brief him on meaningful events all over the world. He has also
unlimited access to ultra-sensitive military intelligence data. In fine, the
presidential role in foreign affairs is dominant and the President is
traditionally accorded a wider degree of discretion in the conduct of foreign
affairs. The regularity, nay, validity of his actions are adjudged under less
stringent standards, lest their judicial repudiation lead to breach of an
international obligation, rupture of state relations, forfeiture of confidence,
national embarrassment and a plethora of other problems with equally
undesirable consequences.  (Emphases supplied)
169

Understandably, this Court must view the instant case with the same perspective and
understanding, knowing full well the constitutional and legal repercussions of any judicial
overreach.

2. The plain meaning of the Constitution prohibits the entry of foreign military bases,
troops or facilities, except by way of a treaty concurred in by the Senate - a clear limitation
on the President's dual role as defender of the State and as sole authority in foreign
relations.

Despite the President's roles as defender of the State and sole authority in foreign relations, the
1987 Constitution expressly limits his ability in instances when it involves the entry of foreign
military bases, troops or facilities. The initial limitation is found in Section 21 of the provisions on
the Executive Department: "No treaty or international agreement shall be valid and effective
unless concurred in by at least two-thirds of all the Members of the Senate." The specific
limitation is given by Section 25 of the Transitory Provisions, the full text of which reads as
follows:

SECTION 25. After the expiration in 1991 of the Agreement between the Republic of the
Philippines and the United States of America concerning Military Bases, foreign military bases,
troops, or facilities shall not be allowed in the Philippines except under a treaty duly concurred in
by the Senate and, when the Congress so requires, ratified by a majority of the votes cast by the
people in a national referendum held for that purpose, and recognized as a treaty by the other
contracting State.

It is quite plain that the Transitory Provisions of the 1987 Constitution intended to add to the
basic requirements of a treaty under Section 21 of Article VII. This means that both provisions
must be read as additional limitations to the President's overarching executive function in matters
of defense and foreign relations.

3. The President, however, may enter into an executive agreement on foreign military
bases, troops, or facilities, if (a) it is not the instrument that allows the presence of foreign
military bases, troops, or facilities; or (b) it merely aims to implement an existing law or
treaty.

Again we refer to Section 25, Article XVIII of the Constitution:

SECTION 25. After the expiration in 1991 of the Agreement between the Republic of the
Philippines and the United States of America concerning Military Bases, foreign military bases,
troops, or facilities shall not be allowed in the Philippines except under a
treaty duly concurred in by the Senate and, when the Congress so requires, ratified by a
majority of the votes cast by the people in a national referendum held for that purpose, and
recognized as a treaty by the other contracting State. (Emphases supplied)

In view of this provision, petitioners argue  that EDCA must be in the form of a "treaty" duly
170

concurred in by the Senate. They stress that the Constitution is unambigous in mandating the

65
transmission to the Senate of all international agreements concluded after the expiration of the
MBA in 1991 - agreements that concern the presence of foreign military bases, troops, or
facilities in the country. Accordingly, petitioners maintain that the Executive Department is not
given the choice to conclude agreements like EDCA in the form of an executive agreement.

This is also the view of the Senate, which, through a majority vote of 15 of its members - with 1
against and 2 abstaining - says in SR 105  that EDCA must be submitted to the Senate in the
171

form of a treaty for concurrence by at least two-thirds of all its members.

The Senate cites two constitutional provisions (Article VI, Section 21 and Article XVIII, Section
25) to support its position. Compared with the lone constitutional provision that the Office of the
Solicitor General (OSG) cites, which is Article XVIII, Section 4(2), which includes the
constitutionality of "executive agreement(s)" among the cases subject to the Supreme Court's
power of judicial review, the Constitution clearly requires submission of EDCA to the Senate.
Two specific provisions versus one general provision means that the specific provisions prevail.
The term "executive agreement" is "a term wandering alone in the Constitution, bereft of
provenance and an unidentified constitutional mystery."

The author of SR 105, Senator Miriam Defensor Santiago, upon interpellation even added that
the MDT, which the Executive claims to be partly implemented through EDCA, is already
obsolete.

There are two insurmountable obstacles to this Court's agreement with SR 105, as well as with
the comment on interpellation made by Senator Santiago.

First, the concept of "executive agreement" is so well-entrenched in this Court's pronouncements

on the powers of the President. When the Court validated the concept of "executive agreement,"
it did so with full knowledge of the Senate's role in concurring in treaties. It was aware of the
problematique of distinguishing when an international agreement needed Senate concurrence for
validity, and when it did not; and the Court continued to validate the existence of "executive
agreements" even after the 1987 Constitution.  This follows a long line of similar decisions
172

upholding the power of the President to enter into an executive agreement. 173

Second, the MDT has not been rendered obsolescent, considering that as late as 2009,  this 174

Court continued to recognize its validity.

Third, to this Court, a plain textual reading of Article XIII, Section 25, inevitably leads to the
conclusion that it applies only to a proposed agreement between our government and a foreign
government, whereby military bases, troops, or facilities of such foreign government would be
"allowed" or would "gain entry" Philippine territory.

Note that the provision "shall not be allowed" is a negative injunction. This wording signifies that
the President is not authorized by law to allow foreign military bases, troops, or facilities to enter
the Philippines, except under a treaty concurred in by the Senate. Hence, the constitutionally
restricted authority pertains to the entry of the bases, troops, or facilities, and not to the activities
to be done after entry.

Under the principles of constitutional construction, of paramount consideration is the plain

meaning of the language expressed in the Constitution, or the verba legis rule.  It is presumed
175

that the provisions have been carefully crafted in order to express the objective it seeks to
attain.  It is incumbent upon the Court to refrain from going beyond the plain meaning of the
176

words used in the Constitution. It is presumed that the framers and the people meant what they
said when they said it, and that this understanding was reflected in the Constitution and
understood by the people in the way it was meant to be understood when the fundamental law
was ordained and promulgated.  As this Court has often said:
177

66
We look to the language of the document itself in our search for its meaning. We do not of course
stop there, but that is where we begin. It is to be assumed that the words in which constitutional
provisions are couched express the objective sought to be attained. They are to be given their
ordinary meaning except where technical terms are employed in which case the significance
thus attached to them prevails. As the Constitution is not primarily a lawyer's document, it
being essential for the rule of law to obtain that it should ever be present in the people's
consciousness, its language as much as possible should be understood in the sense they
have in common use. What it says according to the text of the provision to be construed
compels acceptance and negates the power of the courts to alter it, based on the postulate
that the framers and the people mean what they say. Thus, these are the cases where the
need for construction is reduced to a minimum. (Emphases supplied)
178

It is only in those instances in which the constitutional provision is unclear, ambiguous, or silent
that further construction must be done to elicit its meaning.  In Ang Bagong Bayani-OFW v.
179

Commission on Elections,  we reiterated this guiding principle:

180

it [is] safer to construe the Constitution from what appears upon its face. The proper
interpretation therefore depends more on how it was understood by the people adopting it
than in the framers' understanding thereof. (Emphases supplied)

The effect of this statement is surprisingly profound, for, if taken literally, the phrase "shall not be
allowed in the Philippines" plainly refers to the entry of bases, troops, or facilities in the country.
The Oxford English Dictionary defines the word "allow" as a transitive verb that means "to permit,
enable"; "to give consent to the occurrence of or relax restraint on (an action, event, or activity)";
"to consent to the presence or attendance of (a person)"; and, when with an adverbial of place,
"to permit (a person or animal) to go, come, or be in, out, near, etc."  Black's Law 181

Dictionary defines the term as one that means "[t]o grant, approve, or permit." 182

The verb "allow" is followed by the word "in," which is a preposition used to indicate "place or
position in space or anything having material extension: Within the limits or bounds of, within
(any place or thing)."  That something is the Philippines, which is the noun that follows.
183

It is evident that the constitutional restriction refers solely to the initial entry of the foreign military
bases, troops, or facilities. Once entry is authorized, the subsequent acts are thereafter subject
only to the limitations provided by the rest of the Constitution and Philippine law, and not to the
Section 25 requirement of validity through a treaty.

The VFA has already allowed the entry of troops in the Philippines. This Court stated in Lim v.
Executive Secretary:

After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the
word "activities" arose from accident. In our view, it was deliberately made that way to give both
parties a certain leeway in negotiation. In this manner, visiting US forces may sojourn in
Philippine territory for purposes other than military. As conceived, the joint exercises may
include training on new techniques of patrol and surveillance to protect the nation's marine
resources, sea search-and-rescue operations to assist vessels in distress, disaster relief
operations, civic action projects such as the building of school houses, medical and humanitarian
missions, and the like.

Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only
logical to assume that "Balikatan 02-1," a "mutual anti- terrorism advising, assisting and training
exercise," falls under the umbrella of sanctioned or allowable activities in the context of the
agreement. Both the history and intent of the Mutual Defense Treaty and the VFA support the
conclusion that combat-related activities -as opposed to combat itself-such as the one subject of
the instant petition, are indeed authorized.  (Emphasis supplied)
184

67
Moreover, the Court indicated that the Constitution continues to govern the conduct of foreign
military troops in the Philippines,  readily implying the legality of their initial entry into the
185

country.

The OSG emphasizes that EDCA can be in the form of an executive agreement, since it merely
involves "adjustments in detail" in the implementation of the MDT and the VFA.  It points out that
186

there are existing treaties between the Philippines and the U.S. that have already been
concurred in by the Philippine Senate and have thereby met the requirements of the Constitution
under Section 25. Because of the status of these prior agreements, respondent emphasizes that
EDCA need not be transmitted to the Senate.

The aforecited Dissenting Opinion of Justice Brion disagrees with the ponencia's application

of verba legis construction to the words of Article XVIII, Section 25.  It claims that the provision
187

is "neither plain, nor that simple."  To buttress its disagreement, the dissent states that the
188

provision refers to a historical incident, which is the expiration of the 1947 MBA.  Accordingly,
189

this position requires questioning the circumstances that led to the historical event, and the
meaning of the terms under Article XVIII, Section 25.

This objection is quite strange. The construction technique of verba legis is not inapplicable just
because a provision has a specific historical context. In fact, every provision of the Constitution
has a specific historical context. The purpose of constitutional and statutory construction is to set
tiers of interpretation to guide the Court as to how a particular provision functions. Verba legis is
of paramount consideration, but it is not the only consideration. As this Court has often said:

We look to the language of the document itself in our search for its meaning. We do not of
course stop there, but that is where we begin. It is to be assumed that the words in which
constitutional provisions are couched express the objective sought to be attained. They are to
be given their ordinary meaning except where technical terms are employed in which case
the significance thus attached to them prevails. As the Constitution is not primarily a lawyer's
document, it being essential for the rule of law to obtain that it should ever be present in the
people's consciousness, its language as much as possible should be understood in the
sense they have in common use. What it says according to the text of the provision to be
construed compels acceptance and negates the power of the courts to alter it, based on the
postulate that the framers and the people mean what they say. Thus, these are the cases
where the need for construction is reduced to a minimum. (Emphases supplied)
190

As applied, verba legis aids in construing the ordinary meaning of terms. In this case, the phrase
being construed is "shall not be allowed in the Philippines" and not the preceding one referring to
"the expiration in 1991 of the Agreement between the Republic of the Philippines and the United
States of America concerning Military Bases, foreign military bases, troops, or facilities." It is
explicit in the wording of the provision itself that any interpretation goes beyond the text itself and
into the discussion of the framers, the context of the Constitutional Commission's time of drafting,
and the history of the 1947 MBA. Without reference to these factors, a reader would not
understand those terms. However, for the phrase "shall not be allowed in the Philippines," there
is no need for such reference. The law is clear. No less than the Senate understood this when it
ratified the VFA.

4. The President may generally enter into executive agreements subject to limitations
defined by the Constitution and may be in furtherance of a treaty already concurred in by
the Senate.

We discuss in this section why the President can enter into executive agreements.

It would be helpful to put into context the contested language found in Article XVIII, Section 25.
Its more exacting requirement was introduced because of the previous experience of the country
when its representatives felt compelled to consent to the old MBA.  They felt constrained to
191

68
agree to the MBA in fulfilment of one of the major conditions for the country to gain
independence from the U.S.  As a result of that experience, a second layer of consent for
192

agreements that allow military bases, troops and facilities in the country is now articulated in
Article XVIII of our present Constitution.

This second layer of consent, however, cannot be interpreted in such a way that we completely
ignore the intent of our constitutional framers when they provided for that additional layer, nor the
vigorous statements of this Court that affirm the continued existence of that class of international
agreements called "executive agreements."

The power of the President to enter into binding executive agreements without Senate

concurrence is already well-established in this jurisdiction.  That power has been alluded to in
193

our present and past Constitutions,  in various statutes,  in Supreme Court decisions,  and
194 195 196

during the deliberations of the Constitutional Commission.  They cover a wide array of subjects
197

with varying scopes and purposes,  including those that involve the presence of foreign military
198

forces in the country.

199

As the sole organ of our foreign relations  and the constitutionally assigned chief architect of our
200

foreign policy, the President is vested with the exclusive power to conduct and manage the
201

country's interface with other states and governments. Being the principal representative of the
Philippines, the Chief Executive speaks and listens for the nation; initiates, maintains, and
develops diplomatic relations with other states and governments; negotiates and enters into
international agreements; promotes trade, investments, tourism and other economic relations;
and settles international disputes with other states. 202

As previously discussed, this constitutional mandate emanates from the inherent power of the
President to enter into agreements with other states, including the prerogative to
conclude binding executive agreements that do not require further Senate concurrence. The
existence of this presidential power  is so well-entrenched that Section 5(2)(a), Article VIII of the
203

Constitution, even provides for a check on its exercise. As expressed below, executive
agreements are among those official governmental acts that can be the subject of this Court's
power of judicial review:

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the
Rules of Court may provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or

validity of any treaty, international or executive agreement, law, presidential
decree, proclamation, order, instruction, ordinance, or regulation is in question.
(Emphases supplied)

In Commissioner of Customs v. Eastern Sea Trading, executive agreements are defined as

"international agreements embodying adjustments of detail carrying out well-established national
policies and traditions and those involving arrangements of a more or less temporary
nature."  In Bayan Muna v. Romulo, this Court further clarified that executive agreements can
204

cover a wide array of subjects that have various scopes and purposes.  They are no longer
205

limited to the traditional subjects that are usually covered by executive agreements as identified
in Eastern Sea Trading. The Court thoroughly discussed this matter in the following manner:

The categorization of subject matters that may be covered by international

agreementsmentioned in Eastern Sea Trading is not cast in stone. x x x.

As may be noted, almost half a century has elapsed since the Court rendered its decision
in Eastern Sea Trading. Since then, the conduct of foreign affairs has become more
complex and the domain of international law wider, as to include such subjects as human
rights, the environment, and the sea. In fact, in the US alone, the executive agreements executed

69
by its President from 1980 to 2000 covered subjects such as defense, trade, scientific
cooperation, aviation, atomic energy, environmental cooperation, peace corps, arms
limitation, and nuclear safety, among others. Surely, the enumeration in Eastern Sea
Trading cannot circumscribe the option of each state on the matter of which
the international agreement format would be convenient to serve its best interest. As
Francis Sayre said in his work referred to earlier:

. . . It would be useless to undertake to discuss here the large variety of executive

agreements as such concluded from time to time. Hundreds of executive agreements, other
than those entered into under the trade-agreement act, have been negotiated with foreign
governments. . . . They cover such subjects as the inspection of vessels, navigation dues,
income tax on shipping profits, the admission of civil air craft, custom matters and commercial
relations generally, international claims, postal matters, the registration of trademarks and
copyrights, etc .... (Emphases Supplied)

One of the distinguishing features of executive agreements is that their validity and effectivity are
not affected by a lack of Senate concurrence.  This distinctive feature was recognized as early
206

as in Eastern Sea Trading (1961), viz:

Treaties are formal documents which require ratification with the approval of two-thirds of

the Senate. Executive agreements become binding through executive action without the
need of a vote by the Senate or by Congress.

xxxx

[T]he right of the Executive to enter into binding agreements without the necessity of

subsequent Congressional approval has been confirmed by long usage. From the earliest
days of our history we have entered into executive agreements covering such subjects as
commercial and consular relations, most-favored-nation rights, patent rights, trademark and
copyright protection, postal and navigation arrangements and the settlement of
claims. The validity of these has never been seriously questioned by our
courts. (Emphases Supplied)

That notion was carried over to the present Constitution. In fact, the framers specifically
deliberated on whether the general term "international agreement" included executive
agreements, and whether it was necessary to include an express proviso that would exclude
executive agreements from the requirement of Senate concurrence. After noted constitutionalist
Fr. Joaquin Bernas quoted the Court's ruling in Eastern Sea Trading, the Constitutional
Commission members ultimately decided that the term "international agreements" as
contemplated in Section 21, Article VII, does not include executive agreements, and that a
proviso is no longer needed. Their discussion is reproduced below: 207

MS. AQUINO: Madam President, first I would like a clarification from the Committee. We have
retained the words "international agreement" which I think is the correct judgment on the matter
because an international agreement is different from a treaty. A treaty is a contract between
parties which is in the nature of international agreement and also a municipal law in the sense
that the people are bound. So there is a conceptual difference. However, I would like to be
clarified if the international agreements include executive agreements.

MR. CONCEPCION: That depends upon the parties. All parties to these international
negotiations stipulate the conditions which are necessary for the agreement or whatever it may
be to become valid or effective as regards the parties.

MS. AQUINO: Would that depend on the parties or would that depend on the nature of the
executive agreement? According to common usage, there are two types of executive
agreement: one is purely proceeding from an executive act which affects external

70
relations independent of the legislative and the other is an executive act in pursuance of
legislative authorization. The first kind might take the form of just conventions or exchanges
of notes or protocol while the other, which would be pursuant to the legislative
authorization, may be in the nature of commercial agreements.

MR. CONCEPCION: Executive agreements are generally made to implement a treaty

already enforced or to determine the details for the implementation of the treaty. We are
speaking of executive agreements, not international agreements.

MS. AQUINO: I am in full agreement with that, except that it does not cover the first kind of
executive agreement which is just protocol or an exchange of notes and this would be in the
nature of reinforcement of claims of a citizen against a country, for example.

MR. CONCEPCION: The Commissioner is free to require ratification for validity insofar as the
Philippines is concerned.

MS. AQUINO: It is my humble submission that we should provide, unless the Committee

explains to us otherwise, an explicit proviso which would except executive agreements from
the requirement of concurrence of two-thirds of the Members of the Senate. Unless I am
enlightened by the Committee I propose that tentatively, the sentence should read. "No treaty or
international agreement EXCEPT EXECUTIVE AGREEMENTS shall be valid and effective."

FR. BERNAS: I wonder if a quotation from the Supreme Court decision [in Eastern Sea
Trading] might help clarify this:

The right of the executive to enter into binding agreements without the necessity of
subsequent Congressional approval has been confirmed by long usage. From the earliest
days of our history, we have entered into executive agreements covering such subjects as
commercial and consular relations, most favored nation rights, patent rights, trademark and
copyright protection, postal and navigation arrangements and the settlement of claims. The
validity of this has never been seriously questioned by our Courts.

Agreements with respect to the registration of trademarks have been concluded by the executive
of various countries under the Act of Congress of March 3, 1881 (21 Stat. 502) . . . International
agreements involving political issues or changes of national policy and those involving
international agreements of a permanent character usually take the form of treaties. But
international agreements embodying adjustments of detail, carrying out well established
national policies and traditions and those involving arrangements of a more or less
temporary nature usually take the form of executive agreements.

MR. ROMULO: Is the Commissioner, therefore, excluding the executive agreements?

FR. BERNAS: What we are referring to, therefore, when we say international agreements
which need concurrence by at least two-thirds are those which are permanent in nature.

MS. AQUINO: And it may include commercial agreements which are executive agreements
essentially but which are proceeding from the authorization of Congress. If that is our
understanding, then I am willing to withdraw that amendment.

FR. BERNAS: If it is with prior authorization of Congress, then it does not need
subsequent concurrence by Congress.

MS. AQUINO: In that case, I am withdrawing my amendment.

MR. TINGSON: Madam President.

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THE PRESIDENT: Is Commissioner Aquino satisfied?

MS. AQUINO: Yes. There is already an agreement among us on the definition of "executive
agreements" and that would make unnecessary any explicit proviso on the matter.

xxx

MR. GUINGONA: I am not clear as to the meaning of "executive agreements" because I heard
that these executive agreements must rely on treaties. In other words, there must first be
treaties.

MR. CONCEPCION: No, I was speaking about the common use, as executive agreements being
the implementation of treaties, details of which do not affect the sovereignty of the State.

MR. GUINGONA: But what about the matter of permanence, Madam President? Would 99 years
be considered permanent? What would be the measure of permanency? I do not conceive of a
treaty that is going to be forever, so there must be some kind of a time limit.

MR. CONCEPCION: I suppose the Commissioner's question is whether this type of agreement
should be included in a provision of the Constitution requiring the concurrence of Congress.

MR. GUINGONA: It depends on the concept of the executive agreement of which I am not
clear. If the executive agreement partakes of the nature of a treaty, then it should also be
included.

MR. CONCEPCION: Whether it partakes or not of the nature of a treaty, it is within the power of
the Constitutional Commission to require that.

MR. GUINGONA: Yes. That is why I am trying to clarify whether the words "international
agreements" would include executive agreements.

MR. CONCEPCION: No, not necessarily; generally no.

xxx

MR. ROMULO: I wish to be recognized first. I have only one question. Do we take it, therefore,
that as far as the Committee is concerned, the term "international agreements" does not
include the term "executive agreements" as read by the Commissioner in that text?

FR. BERNAS: Yes. (Emphases Supplied)

The inapplicability to executive agreements of the requirements under Section 21 was again
recognized in Bayan v. Zamora and in Bayan Muna v. Romulo. These cases, both decided
under the aegis of the present Constitution, quoted Eastern Sea Trading in reiterating that
executive agreements are valid and binding even without the concurrence of the Senate.

Executive agreements may dispense with the requirement of Senate concurrence because of the
legal mandate with which they are concluded. As culled from the afore-quoted deliberations of
the Constitutional Commission, past Supreme Court Decisions, and works of noted
scholars,  executive agreements merely involve arrangements on the implementation
208

of existing policies, rules, laws, or agreements. They are concluded (1) to adjust the details of a
treaty;  (2) pursuant to or upon confirmation by an act of the Legislature;  or (3) in the exercise
209 210

of the President's independent powers under the Constitution.  The raison d'etre of executive
211

agreements hinges on prior constitutional or legislative authorizations.

72
The special nature of an executive agreement is not just a domestic variation in international
agreements. International practice has accepted the use of various forms and designations of
international agreements, ranging from the traditional notion of a treaty - which connotes a
formal, solemn instrument - to engagements concluded in modem, simplified forms that no longer
necessitate ratification.  An international agreement may take different forms: treaty, act,
212

protocol, agreement, concordat, compromis d'arbitrage, convention, covenant, declaration,

exchange of notes, statute, pact, charter, agreed minute, memorandum of agreement, modus
vivendi, or some other form.  Consequently, under international law, the distinction between a
213

treaty and an international agreement or even an executive agreement is irrelevant for purposes
of determining international rights and obligations.

However, this principle does not mean that the domestic law distinguishing treaties, international
agreements, and executive agreements is relegated to a mere variation in form, or that the
constitutional requirement of Senate concurrence is demoted to an optional constitutional
directive. There remain two very important features that distinguish treaties from executive
agreements and translate them into terms of art in the domestic setting.

First, executive agreements must remain traceable to an express or implied authorization under

the Constitution, statutes, or treaties. The absence of these precedents puts the validity and
effectivity of executive agreements under serious question for the main function of the Executive
is to enforce the Constitution and the laws enacted by the Legislature, not to defeat or interfere in
the performance of these rules.  In turn, executive agreements cannot create new international
214

obligations that are not expressly allowed or reasonably implied in the law they purport to
implement.

Second, treaties are, by their very nature, considered superior to executive agreements. Treaties
are products of the acts of the Executive and the Senate  unlike executive agreements, which
215

are solely executive actions. Because of legislative participation through the Senate, a treaty is
216

regarded as being on the same level as a statute.  If there is an irreconcilable conflict, a later
217

law or treaty takes precedence over one that is prior.  An executive agreement is treated
218

differently. Executive agreements that are inconsistent with either a law or a treaty are
considered ineffective.  Both types of international agreement are nevertheless subject to the
219

supremacy of the Constitution. 220

This rule does not imply, though, that the President is given carte blanche to exercise this
discretion. Although the Chief Executive wields the exclusive authority to conduct our foreign
relations, this power must still be exercised within the context and the parameters set by the
Constitution, as well as by existing domestic and international laws. There are constitutional
provisions that restrict or limit the President's prerogative in concluding international agreements,
such as those that involve the following:

a. The policy of freedom from nuclear weapons within Philippine territory 221

b. The fixing of tariff rates, import and export quotas, tonnage and wharfage dues, and
other duties or imposts, which must be pursuant to the authority granted by Congress 222

c. The grant of any tax exemption, which must be pursuant to a law concurred in by a
majority of all the Members of Congress 223

d. The contracting or guaranteeing, on behalf of the Philippines, of foreign loans that

must be previously concurred in by the Monetary Board 224

e. The authorization of the presence of foreign military bases, troops, or facilities in the
country must be in the form of a treaty duly concurred in by the Senate. 225

73
 f. For agreements that do not fall under paragraph 5, the concurrence of the Senate is
required, should the form of the government chosen be a treaty.

5. The President had the choice to enter into EDCA by way of an executive agreement or a
treaty.

No court can tell the President to desist from choosing an executive agreement over a treaty to
embody an international agreement, unless the case falls squarely within Article VIII, Section 25.

As can be gleaned from the debates among the members of the Constitutional Commission, they
were aware that legally binding international agreements were being entered into by countries in
forms other than a treaty. At the same time, it is clear that they were also keen to preserve the
concept of "executive agreements" and the right of the President to enter into such agreements.

What we can glean from the discussions of the Constitutional Commissioners is that they
understood the following realities:

1. Treaties, international agreements, and executive agreements are all constitutional

manifestations of the conduct of foreign affairs with their distinct legal characteristics.

a. Treaties are formal contracts between the Philippines and other States-parties,
which are in the nature of international agreements, and also of municipal laws in
the sense of their binding nature. 226

b. International agreements are similar instruments, the provisions of which may

require the ratification of a designated number of parties thereto. These
agreements involving political issues or changes in national policy, as well as
those involving international agreements of a permanent character, usually take
the form of treaties. They may also include commercial agreements, which are
executive agreements essentially, but which proceed from previous authorization
by Congress, thus dispensing with the requirement of concurrence by the
Senate. 227

c. Executive agreements are generally intended to implement a treaty already

enforced or to determine the details of the implementation thereof that do not
affect the sovereignty of the State. 228

2. Treaties and international agreements that cannot be mere executive agreements

must, by constitutional decree, be concurred in by at least two-thirds of the Senate.

3. However, an agreement - the subject of which is the entry of foreign military troops,
bases, or facilities - is particularly restricted. The requirements are that it be in the form of
a treaty concurred in by the Senate; that when Congress so requires, it be ratified by a
majority of the votes cast by the people in a national referendum held for that purpose;
and that it be recognized as a treaty by the other contracting State.

4. Thus, executive agreements can continue to exist as a species of international

agreements.

That is why our Court has ruled the way it has in several cases.

In Bayan Muna v. Romulo, we ruled that the President acted within the scope of her
constitutional authority and discretion when she chose to enter into the RP-U.S. Non-Surrender
Agreement in the form of an executive agreement, instead of a treaty, and in ratifying the

74
agreement without Senate concurrence. The Court en banc discussed this intrinsic presidential
prerogative as follows:

Petitioner parlays the notion that the Agreement is of dubious validity, partaking as it does of the
nature of a treaty; hence, it must be duly concurred in by the Senate. x x x x. Pressing its point,
petitioner submits that the subject of the Agreement does not fall under any of the subject-
categories that xx x may be covered by an executive agreement, such as commercial/consular
relations, most-favored nation rights, patent rights, trademark and copyright protection, postal
and navigation arrangements and settlement of claims.

The categorization of subject matters that may be covered by international agreements

mentioned in Eastern Sea Trading is not cast in stone. There are no hard and fast rules on the
propriety of entering, on a given subject, into a treaty or an executive agreement as an
instrument of international relations. The primary consideration in the choice of the form of
agreement is the parties' intent and desire to craft an international agreement in the form
they so wish to further their respective interests. Verily, the matter of form takes a back
seat when it comes to effectiveness and binding effect of the enforcement of a treaty or an
executive agreement, as the parties in either international agreement each labor under the pacta
sunt servanda principle.

xxxx

But over and above the foregoing considerations is the fact that - save for the situation and
matters contemplated in Sec. 25, Art. XVIII of the Constitution - when a treaty is required, the
Constitution does not classify any subject, like that involving political issues, to be in the
form of, and ratified as, a treaty. What the Constitution merely prescribes is that treaties need
the concurrence of the Senate by a vote defined therein to complete the ratification process.

xxxx

x x x. As the President wields vast powers and influence, her conduct in the external affairs of the
nation is, as Bayan would put it, "executive altogether." The right of the President to enter into
or ratify binding executive agreements has been confirmed by long practice.

In thus agreeing to conclude the Agreement thru E/N BF0-028-03, then President Gloria
Macapagal-Arroyo, represented by the Secretary of Foreign Affairs, acted within the scope of
the authority and discretion vested in her by the Constitution. At the end of the day, the
President - by ratifying, thru her deputies, the non-surrender agreement - did nothing
more than discharge a constitutional duty and exercise a prerogative that pertains to her
office. (Emphases supplied)

Indeed, in the field of external affairs, the President must be given a larger measure of authority
and wider discretion, subject only to the least amount of checks and restrictions under the
Constitution.  The rationale behind this power and discretion was recognized by the Court
229

in Vinuya v. Executive Secretary, cited earlier.

230

Section 9 of Executive Order No. 459, or the Guidelines in the Negotiation of International
Agreements and its Ratification, thus, correctly reflected the inherent powers of the President
when it stated that the DFA "shall determine whether an agreement is an executive agreement or
a treaty."

Accordingly, in the exercise of its power of judicial review, the Court does not look into whether
an international agreement should be in the form of a treaty or an executive agreement, save in
cases in which the Constitution or a statute requires otherwise. Rather, in view of the vast
constitutional powers and prerogatives granted to the President in the field of foreign affairs, the

75
task of the Court is to determine whether the international agreement is consistent with the
applicable limitations.

6. Executive agreements may cover the matter of foreign military forces if it merely
involves detail adjustments.

The practice of resorting to executive agreements in adjusting the details of a law or a treaty that
already deals with the presence of foreign military forces is not at all unusual in this jurisdiction.
In fact, the Court has already implicitly acknowledged this practice in Lim v. Executive
Secretary.  In that case, the Court was asked to scrutinize the constitutionality of the Terms of
231

Reference of the Balikatan 02-1 joint military exercises, which sought to implement the VFA.
Concluded in the form of an executive agreement, the Terms of Reference detailed the coverage
of the term "activities" mentioned in the treaty and settled the matters pertaining to the
construction of temporary structures for the U.S. troops during the activities; the duration and
location of the exercises; the number of participants; and the extent of and limitations on the
activities of the U.S. forces. The Court upheld the Terms of Reference as being consistent with
the VFA. It no longer took issue with the fact that the Balikatan Terms of Reference was not in
the form of a treaty concurred in by the Senate, even if it dealt with the regulation of the activities
of foreign military forces on Philippine territory.

In Nicolas v. Romulo,  the Court again impliedly affirmed the use of an executive agreement in
232

an attempt to adjust the details of a provision of the VFA. The Philippines and the U.S. entered
into the Romulo-Kenney Agreement, which undertook to clarify the detention of a U.S. Armed
Forces member, whose case was pending appeal after his conviction by a trial court for the crime
of rape. In testing the validity of the latter agreement, the Court precisely alluded to one of the
inherent limitations of an executive agreement: it cannot go beyond the terms of the treaty it
purports to implement. It was eventually ruled that the Romulo-Kenney Agreement was "not in
accord" with the VFA, since the former was squarely inconsistent with a provision in the treaty
requiring that the detention be "by Philippine authorities." Consequently, the Court ordered the
Secretary of Foreign Affairs to comply with the VFA and "forthwith negotiate with the United
States representatives for the appropriate agreement on detention facilities under Philippine
authorities as provided in Art. V, Sec. 10 of the VFA. "233

Culling from the foregoing discussions, we reiterate the following pronouncements to guide us in
resolving the present controversy:

1. Section 25, Article XVIII of the Constitution, contains stringent requirements that must
be fulfilled by the international agreement allowing the presence of foreign military bases,
troops, or facilities in the Philippines: (a) the agreement must be in the form of a treaty,
and (b) it must be duly concurred in by the Senate.

2. If the agreement is not covered by the above situation, then the President may choose
the form of the agreement (i.e., either an executive agreement or a treaty), provided that
the agreement dealing with foreign military bases, troops, or facilities is not the principal
agreement that first allows their entry or presence in the Philippines.

3. The executive agreement must not go beyond the parameters, limitations, and
standards set by the law and/or treaty that the former purports to implement; and must
not unduly expand the international obligation expressly mentioned or necessarily implied
in the law or treaty.

4. The executive agreement must be consistent with the Constitution, as well as with
existing laws and treaties.

In light of the President's choice to enter into EDCA in the form of an executive agreement,
respondents carry the burden of proving that it is a mere implementation of existing laws and

76
treaties concurred in by the Senate. EDCA must thus be carefully dissected to ascertain if it
remains within the legal parameters of a valid executive agreement.

7. EDCA is consistent with the content, purpose, and framework of the MDT and the VFA

The starting point of our analysis is the rule that "an executive agreement xx x may not be used
to amend a treaty."  In Lim v. Executive Secretary and in Nicolas v. Romulo, the Court
234

approached the question of the validity of executive agreements by comparing them with the
general framework and the specific provisions of the treaties they seek to implement.

In Lim, the Terms of Reference of the joint military exercises was scrutinized by studying "the
framework of the treaty antecedents to which the Philippines bound itself,"  i.e., the MDT and
235

the VFA. The Court proceeded to examine the extent of the term "activities" as contemplated in
Articles 1  and II  of the VFA. It later on found that the term "activities" was deliberately left
236 237

undefined and ambiguous in order to permit "a wide scope of undertakings subject only to the
approval of the Philippine government"  and thereby allow the parties "a certain leeway in
238

negotiation."  The Court eventually ruled that the Terms of Reference fell within the sanctioned
239

or allowable activities, especially in the context of the VFA and the MDT.

The Court applied the same approach to Nicolas v. Romulo. It studied the provisions of the VFA
on custody and detention to ascertain the validity of the Romulo-Kenney Agreement.  It 240

eventually found that the two international agreements were not in accord, since the Romulo-
Kenney Agreement had stipulated that U.S. military personnel shall be detained at the U.S.
Embassy Compound and guarded by U.S. military personnel, instead of by Philippine authorities.
According to the Court, the parties "recognized the difference between custody during the trial
and detention after conviction."  Pursuant to Article V(6) of the VFA, the custody of a U.S.
241

military personnel resides with U.S. military authorities during trial. Once there is a finding of guilt,
Article V(l0) requires that the confinement or detention be "by Philippine authorities."

Justice Marvic M.V.F. Leonen's Dissenting Opinion posits that EDCA "substantially modifies or
amends the VFA" and follows with an enumeration of the differences between EDCA and the
242

VFA. While these arguments will be rebutted more fully further on, an initial answer can already
be given to each of the concerns raised by his dissent.

The first difference emphasized is that EDCA does not only regulate visits as the VFA does, but
allows temporary stationing on a rotational basis of U.S. military personnel and their contractors
in physical locations with permanent facilities and pre-positioned military materiel.

This argument does not take into account that these permanent facilities, while built by U.S.
forces, are to be owned by the Philippines once constructed.  Even the VFA allowed
243

construction for the benefit of U.S. forces during their temporary visits.

The second difference stated by the dissent is that EDCA allows the prepositioning of military
materiel, which can include various types of warships, fighter planes, bombers, and vessels, as
well as land and amphibious vehicles and their corresponding ammunition. 244

However, the VFA clearly allows the same kind of equipment, vehicles, vessels, and aircraft to
be brought into the country. Articles VII and VIII of the VFA contemplates that U.S. equipment,
materials, supplies, and other property are imported into or acquired in the Philippines by or on
behalf of the U.S. Armed Forces; as are vehicles, vessels, and aircraft operated by or for U.S.
forces in connection with activities under the VFA. These provisions likewise provide for the
waiver of the specific duties, taxes, charges, and fees that correspond to these equipment.

The third difference adverted to by the Justice Leonen's dissent is that the VFA contemplates the
entry of troops for training exercises, whereas EDCA allows the use of territory for launching
military and paramilitary operations conducted in other states.  The dissent of Justice Teresita J.
245

77
Leonardo-De Castro also notes that VFA was intended for non-combat activides only, whereas
the entry and activities of U.S. forces into Agreed Locations were borne of military necessity or
had a martial character, and were therefore not contemplated by the VFA. 246

This Court's jurisprudence however established in no uncertain terms that combat-related

activities, as opposed to actual combat, were allowed under the MDT and VFA, viz:

Both the history and intent of the Mutual Defense Treaty and the VFA support the conclusion that
combat-related activities as opposed to combat itself such as the one subject of the instant
petition, are indeed authorized.247

Hence, even if EDCA was borne of military necessity, it cannot be said to have strayed from the
intent of the VFA since EDCA's combat-related components are allowed under the treaty.

Moreover, both the VFA and EDCA are silent on what these activities actually are. Both the VFA
and EDCA deal with the presence of U.S. forces within the Philippines, but make no mention of
being platforms for activity beyond Philippine territory. While it may be that, as applied, military
operations under either the VFA or EDCA would be carried out in the future the scope of judicial
review does not cover potential breaches of discretion but only actual occurrences or blatantly
illegal provisions. Hence, we cannot invalidate EDCA on the basis of the potentially abusive use
of its provisions.

The fourth difference is that EDCA supposedly introduces a new concept not contemplated in the
VFA or the MDT: Agreed Locations, Contractors, Pre-positioning, and Operational Control. 248

As previously mentioned, these points shall be addressed fully and individually in the latter
analysis of EDCA's provisions. However, it must already be clarified that the terms and details
used by an implementing agreement need not be found in the mother treaty. They must be
sourced from the authority derived from the treaty, but are not necessarily expressed word-for-
word in the mother treaty. This concern shall be further elucidated in this Decision.

The fifth difference highlighted by the Dissenting Opinion is that the VFA does not have
provisions that may be construed as a restriction on or modification of obligations found in
existing statues, including the jurisdiction of courts, local autonomy, and taxation. Implied in this
argument is that EDCA contains such restrictions or modifications. 249

This last argument cannot be accepted in view of the clear provisions of EDCA. Both the VFA
and EDCA ensure Philippine jurisdiction in all instances contemplated by both agreements, with
the exception of those outlined by the VFA in Articles III-VI. In the VFA, taxes are clearly waived
whereas in EDCA, taxes are assumed by the government as will be discussed later on. This fact
does not, therefore, produce a diminution of jurisdiction on the part of the Philippines, but rather a
recognition of sovereignty and the rights that attend it, some of which may be waived as in the
cases under Articles III-VI of the VFA.

Taking off from these concerns, the provisions of EDCA must be compared with those of the
MDT and the VFA, which are the two treaties from which EDCA allegedly draws its validity.

"Authorized presence" under the VFA versus "authorized activities" under EDCA: (1) U.S.
personnel and (2) U.S. contractors

The OSG argues  that EDCA merely details existing policies under the MDT and the VFA. It
250

explains that EDCA articulates the principle of defensive preparation embodied in Article II of the

MDT; and seeks to enhance the defensive, strategic, and technological capabilities of both
parties pursuant to the objective of the treaty to strengthen those capabilities to prevent or resist
a possible armed attack. Respondent also points out that EDCA simply implements Article I of

78
the VFA, which already allows the entry of U.S. troops and personnel into the country.
Respondent stresses this Court's recognition in Lim v. Executive Secretary that U.S. troops and
personnel are authorized to conduct activities that promote the goal of maintaining and
developing their defense capability.

Petitioners contest  the assertion that the provisions of EDCA merely implement the MDT.
251

According to them, the treaty does not specifically authorize the entry of U.S. troops in the
country in order to maintain and develop the individual and collective capacities of both the
Philippines and the U.S. to resist an armed attack. They emphasize that the treaty was
concluded at a time when there was as yet no specific constitutional prohibition on the presence
of foreign military forces in the country.

Petitioners also challenge the argument that EDCA simply implements the VFA. They assert that
the agreement covers only short-term or temporary visits of U.S. troops "from time to time" for
the specific purpose of combined military exercises with their Filipino counterparts. They stress
that, in contrast, U.S. troops are allowed under EDCA to perform activities beyond combined
military exercises, such as those enumerated in Articles 111(1) and IV(4) thereof. Furthermore,
there is some degree of permanence in the presence of U.S. troops in the country, since the
effectivity of EDCA is continuous until terminated. They proceed to argue that while troops have
a "rotational" presence, this scheme in fact fosters their permanent presence.

a. Admission of U.S. military and civilian personnel into Philippine territory is already allowed
under the VFA

We shall first deal with the recognition under EDCA of the presence in the country of three
distinct classes of individuals who will be conducting different types of activities within the Agreed
Locations: (1) U.S. military personnel; (2) U.S. civilian personnel; and (3) U.S. contractors. The
agreement refers to them as follows:

"United States personnel" means United States military and civilian personnel temporarily

in the territory of the Philippines in connection with activities approved by the Philippines, as
those terms are defined in the VFA. 252

"United States forces" means the entity comprising United States personnel and all property,

equipment, and materiel of the United States Armed Forces present in the territory of the
Philippines.253

"United States contractors" means companies and firms, and their employees, under

contract or subcontract to or on behalf of the United States Department of Defense. United
States contractors are not included as part of the definition of United States personnel in this
Agreement, including within the context of the VFA. 254

United States forces may contract for any materiel, supplies, equipment, and

services (including construction) to be furnished or undertaken in the territory of the Philippines
without restriction as to choice of contractor, supplier, or person who provides such materiel,
supplies, equipment, or services. Such contracts shall be solicited, awarded, and administered
in accordance with the laws and regulations of the United States.  (Emphases Supplied)
255

A thorough evaluation of how EDCA is phrased clarities that the agreement does not deal
with the entry into the country of U.S. personnel and contractors per se. While Articles I(l)
(b)  and II(4)  speak of "the right to access and use" the Agreed Locations, their wordings
256 257

indicate the presumption that these groups have already been allowed entry into Philippine
territory, for which, unlike the VFA, EDCA has no specific provision. Instead, Article II of the latter
simply alludes to the VFA in describing U.S. personnel, a term defined under Article I of the
treaty as follows:

79
As used in this Agreement, "United States personnel" means United States military and civilian
personnel temporarily in the Philippines in connection with activities approved by the
Philippine Government. Within this definition:

1. The term "military personnel" refers to military members of the United

States Army, Navy, Marine Corps, Air Force, and Coast Guard.

2. The term "civilian personnel" refers to individuals who are neither nationals

of nor ordinarily resident in the Philippines and who are employed by the
United States armed forces or who are accompanying the United States
armed forces, such as employees of the American Red Cross and the United
Services Organization. 258

Article II of EDCA must then be read with Article III of the VFA, which provides for the entry
accommodations to be accorded to U.S. military and civilian personnel:

1. The Government of the Philippines shall facilitate the admission of United States

personnel and their departure from the Philippines in connection with activities covered
by this agreement.

2. United States military personnel shall be exempt from passport and visa

regulations upon enteringand departing the Philippines.

3. The following documents only, which shall be required in respect of United States
military personnel who enter the Philippines; xx xx.

4. United States civilian personnel shall be exempt from visa requirements but shall

present, upon demand, valid passports upon entry and departure of the Philippines.
(Emphases Supplied)

By virtue of Articles I and III of the VFA, the Philippines already allows U.S. military and civilian
personnel to be "temporarily in the Philippines," so long as their presence is "in connection with
activities approved by the Philippine Government." The Philippines, through Article III, even
guarantees that it shall facilitate the admission of U.S. personnel into the country and grant
exemptions from passport and visa regulations. The VFA does not even limit their temporary
presence to specific locations.

Based on the above provisions, the admission and presence of U.S. military and civilian
personnel in Philippine territory are already allowed under the VFA, the treaty supposedly
being implemented by EDCA. What EDCA has effectively done, in fact, is merely provide the
mechanism to identify the locations in which U.S. personnel may perform allowed activities
pursuant to the VFA. As the implementing agreement, it regulates and limits the presence of U.S.
personnel in the country.

b. EDCA does not provide the legal basis for admission of U.S. contractors into Philippine
territory; their entry must be sourced from extraneous Philippine statutes and regulations for the
admission of alien employees or business persons.

Of the three aforementioned classes of individuals who will be conducting certain activities within
the Agreed Locations, we note that only U.S. contractors are not explicitly mentioned in the VFA.
This does not mean, though, that the recognition of their presence under EDCA is ipso facto an
amendment of the treaty, and that there must be Senate concurrence before they are allowed to
enter the country.

80
Nowhere in EDCA are U.S. contractors guaranteed immediate admission into the Philippines.
Articles III and IV, in fact, merely grant them the right of access to, and the authority to conduct
certain activities within the Agreed Locations. Since Article II(3) of EDCA specifically leaves
out U.S. contractors from the coverage of the VFA, they shall not be granted the same entry
accommodations and privileges as those enjoyed by U.S. military and civilian personnel under
the VFA.

Consequently, it is neither mandatory nor obligatory on the part of the Philippines to admit U.S.
contractors into the country.  We emphasize that the admission of aliens into Philippine territory
259

is "a matter of pure permission and simple tolerance which creates no obligation on the part of
the government to permit them to stay."  Unlike U.S. personnel who are accorded entry
260

accommodations, U.S. contractors are subject to Philippine immigration laws. The latter must
261

comply with our visa and passport regulations  and prove that they are not subject to exclusion
262

under any provision of Philippine immigration laws.  The President may also deny them entry
263

pursuant to his absolute and unqualified power to prohibit or prevent the admission of aliens
whose presence in the country would be inimical to public interest. 264

In the same vein, the President may exercise the plenary power to expel or deport U.S.
contractors  as may be necessitated by national security, public safety, public health, public
265

morals, and national interest.  They may also be deported if they are found to be illegal or
266

undesirable aliens pursuant to the Philippine Immigration Act  and the Data Privacy Act.  In
267 268

contrast, Article 111(5) of the VFA requires a request for removal from the Philippine government
before a member of the U.S. personnel may be "dispos[ed] xx x outside of the Philippines."

c. Authorized activities of U.S. military and civilian personnel within Philippine territory are in
furtherance of the MDT and the VFA

We begin our analysis by quoting the relevant sections of the MDT and the VFA that pertain to
the activities in which U.S. military and civilian personnel may engage:

MUTUAL DEFENSE TREATY

Article II

In order more effectively to achieve the objective of this Treaty, the Parties separately and jointly
byself-help and mutual aid will maintain and develop their individual and collective capacity
to resist armed attack.

Article III

The Parties, through their Foreign Ministers or their deputies, will consult together from

time to time regarding the implementation of this Treaty and whenever in the opinion of either
of them the territorial integrity, political independence or security of either of the Parties is
threatened by external armed attack in the Pacific.

VISITING FORCES AGREEMENT

Preamble

xxx

Reaffirming their obligations under the Mutual Defense Treaty of August 30, 1951;

Noting that from time to time elements of the United States armed forces may visit the Republic
of the Philippines;

81
Considering that cooperation between the United States and the Republic of the
Philippines promotes their common security interests;

xxx

Article I - Definitions

As used in this Agreement, "United States personnel" means United States military and civilian
personnel temporarily in the Philippines in connection with activities approved by the
Philippine Government. Within this definition: xx x

Article II - Respect for Law

It is the duty of United States personnel to respect the laws of the Republic of the
Philippines and to abstain from any activity inconsistent with the spirit of this agreement,
and, in particular, from any political activity in the Philippines. The Government of the United
States shall take all measures within its authority to ensure that this is done.

Article VII - Importation and Exportation

1. United States Government equipment, materials, supplies, and other property imported

into or acquired in the Philippines by or on behalf of the United States armed forces in
connection with activities to which this agreement applies, shall be free of all Philippine
duties, taxes and other similar charges. Title to such property shall remain with the United States,
which may remove such property from the Philippines at any time, free from export duties, taxes,
and other similar charges. x x x.

Article VIII - Movement of Vessels and Aircraft

1. Aircraft operated by or for the United States armed forces may enter the Philippines
upon approval of the Government of the Philippines in accordance with procedures stipulated
in implementing arrangements.

2. Vessels operated by or for the United States armed forces may enter the Philippines upon
approval of the Government of the Philippines. The movement of vessels shall be in
accordance with international custom and practice governing such vessels, and such
agreed implementing arrangements as necessary. x x x (Emphases Supplied)

Manifest in these provisions is the abundance of references to the creation of further

"implementing arrangements" including the identification of "activities [to be] approved by the
Philippine Government." To determine the parameters of these implementing arrangements and
activities, we referred to the content, purpose, and framework of the MDT and the VFA.

By its very language, the MDT contemplates a situation in which both countries shall engage
in joint activities, so that they can maintain and develop their defense capabilities. The wording
itself evidently invites a reasonable construction that the joint activities shall involve joint military
trainings, maneuvers, and exercises. Both the interpretation  and the subsequent practice  of
269 270

the parties show that the MDT independently allows joint military exercises in the country. Lim v.
Executive Secretary  and Nicolas v. Romulo  recognized that Balikatan exercises, which are
271 272

activities that seek to enhance and develop the strategic and technological capabilities of the
parties to resist an armed attack, "fall squarely under the provisions of the RP-US
MDT."  In Lim, the Court especially noted that the Philippines and the U.S. continued to conduct
273

joint military exercises even after the expiration of the MBA and even before the conclusion of the
VFA.  These activities presumably related to the Status of Forces Agreement, in which the
274

82
parties agreed on the status to be accorded to U.S. military and civilian personnel while
conducting activities in the Philippines in relation to the MDT.
275

Further, it can be logically inferred from Article V of the MDT that these joint activities may be
conducted on Philippine or on U.S. soil. The article expressly provides that the term armed
attack includes "an armed attack on the metropolitan territory of either of the Parties, or on
the island territories under its jurisdiction in the Pacific or on its armed forces, public
vessels or aircraft in the Pacific." Surely, in maintaining and developing our defense
capabilities, an assessment or training will need to be performed, separately and jointly by self-
help and mutual aid, in the territories of the contracting parties. It is reasonable to conclude that
the assessment of defense capabilities would entail understanding the terrain, wind flow patterns,
and other environmental factors unique to the Philippines.

It would also be reasonable to conclude that a simulation of how to respond to attacks in

vulnerable areas would be part of the training of the parties to maintain and develop their
capacity to resist an actual armed attack and to test and validate the defense plan of the
Philippines. It is likewise reasonable to imagine that part of the training would involve an analysis
of the effect of the weapons that may be used and how to be prepared for the eventuality. This
Court recognizes that all of this may require training in the area where an armed attack might be
directed at the Philippine territory.

The provisions of the MDT must then be read in conjunction with those of the VFA.

Article I of the VFA indicates that the presence of U.S. military and civilian personnel in the
Philippines is "in connection with activities approved by the Philippine Government." While the
treaty does not expressly enumerate or detail the nature of activities of U.S. troops in the country,
its Preamble makes explicit references to the reaffirmation of the obligations of both countries
under the MDT. These obligations include the strengthening of international and regional security
in the Pacific area and the promotion of common security interests.

The Court has already settled in Lim v. Executive Secretary that the phrase "activities approved
by the Philippine Government" under Article I of the VFA was intended to be ambiguous in order
to afford the parties flexibility to adjust the details of the purpose of the visit of U.S.
personnel.  In ruling that the Terms of Reference for the Balikatan Exercises in 2002 fell within
276

the context of the treaty, this Court explained:

After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of

the word "activities" arose from accident. In our view, it was deliberately made that way to
give both parties a certain leeway in negotiation. In this manner, visiting US forces may
sojourn in Philippine territory for purposes other than military. As conceived, the joint
exercises may include training on new techniques of patrol and surveillance to protect the
nation's marine resources, sea search-and-rescue operations to assist vessels in distress,
disaster relief operations, civic action projects such as the building of school houses, medical and
humanitarian missions, and the like.

Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only
logical to assume that "Balikatan 02-1," a "mutual anti-terrorism advising, assisting and
training exercise," falls under the umbrella of sanctioned or allowable activities in the
context of the agreement. Both the history and intent of the Mutual Defense Treaty and the
VFA support the conclusion that combat-related activities - as opposed to combat itself- such as
the one subject of the instant petition, are indeed authorized. (Emphases Supplied)

The joint report of the Senate committees on foreign relations and on national defense and
security further explains the wide range and variety of activities contemplated in the VFA, and
how these activities shall be identified:
277

83
These joint exercises envisioned in the VFA are not limited to combat-related activities; they
have a wide range and variety. They include exercises that will reinforce the AFP's ability
to acquire new techniques of patrol and surveillance to protect the country's maritime
resources; sea-search and rescue operations to assist ships in distress; and disaster-relief
operations to aid the civilian victims of natural calamities, such as earthquakes, typhoons and
tidal waves.

xxxx

Joint activities under the VFA will include combat maneuvers; training in aircraft maintenance
and equipment repair; civic-action projects; and consultations and meetings of the Philippine-
U.S. Mutual Defense Board. It is at the level of the Mutual Defense Board-which is headed
jointly by the Chief of Staff of the AFP and the Commander in Chief of the U.S. Pacific
Command-that the VFA exercises are planned. Final approval of any activity involving U.S.
forces is, however, invariably given by the Philippine Government.

xxxx

Siazon clarified that it is not the VFA by itself that determines what activities will be
conductedbetween the armed forces of the U.S. and the Philippines. The VFA regulates and
provides the legal framework for the presence, conduct and legal status of U.S.
personnel while they are in the country for visits, joint exercises and other related activities.
(Emphases Supplied)

What can be gleaned from the provisions of the VFA, the joint report of the Senate
committees on foreign relations and on national defense and security, and the ruling of
this Court in Lim is that the "activities" referred to in the treaty are meant to be specified
and identified infurther agreements. EDCA is one such agreement.

EDCA seeks to be an instrument that enumerates the Philippine-approved activities of U.S.

personnel referred to in the VFA. EDCA allows U.S. military and civilian personnel to perform
"activities approved by the Philippines, as those terms are defined in the VFA"  and clarifies that
278

these activities include those conducted within the Agreed Locations:

1. Security cooperation exercises; joint and combined training activities; humanitarian assistance
and disaster relief activities; and such other activities as may be agreed upon by the Parties
279

2. Training; transit; support and related activities; refueling of aircraft; bunkering of vessels;
temporary maintenance of vehicles, vessels, and aircraft; temporary accommodation of
personnel; communications; prepositioning of equipment, supplies, and materiel; deployment of
forces and materiel; and such other activities as the Parties may agree 280

3. Exercise of operational control over the Agreed Locations for construction activities and other
types of activity, including alterations and improvements thereof281

4. Exercise of all rights and authorities within the Agreed Locations that are necessary for their
operational control or defense, including the adoption of apfropriate measures to protect U.S.
forces and contractors 282

5. Use of water, electricity, and other public utilities 283

6. Operation of their own telecommunication systems, including the utilization of such means and
services as are required to ensure the full ability to operate telecommunication systems, as well
as the use of the necessary radio spectrum allocated for this purpose 284

84
According to Article I of EDCA, one of the purposes of these activities is to maintain and develop,
jointly and by mutual aid, the individual and collective capacities of both countries to resist an
armed attack. It further states that the activities are in furtherance of the MDT and within the
context of the VFA.

We note that these planned activities are very similar to those under the Terms of
Reference  mentioned in Lim. Both EDCA and the Terms of Reference authorize the U.S. to
285

perform the following: (a) participate in training exercises; (b) retain command over their forces;
(c) establish temporary structures in the country; (d) share in the use of their respective
resources, equipment and other assets; and (e) exercise their right to self-defense. We quote the
relevant portion of the Terms and Conditions as follows:286

I. POLICY LEVEL

xxxx

No permanent US basing and support facilities shall be established. Temporary structures such

as those for troop billeting, classroom instruction and messing may be set up for use by
RP and US Forces during the Exercise.

The Exercise shall be implemented jointly by RP and US Exercise Co-Directors under the
authority of the Chief of Staff, AFP. In no instance will US Forces operate independently during
field training exercises (FTX). AFP and US Unit Commanders will retain command over their
respective forces under the overall authority of the Exercise Co-Directors. RP and US
participants shall comply with operational instructions of the AFP during the FTX.

The exercise shall be conducted and completed within a period of not more than six months, with
the projected participation of 660 US personnel and 3,800 RP Forces. The Chief of Staff, AFP
shall direct the Exercise Co-Directors to wind up and terminate the Exercise and other activities
within the six month Exercise period.

The Exercise is a mutual counter-terrorism advising, assisting and training

Exercise relative to Philippine efforts against the ASG, and will be conducted on the Island of
Basilan. Further advising, assisting and training exercises shall be conducted in Malagutay and
the Zamboanga area. Related activities in Cebu will be for support of the Exercise.

xx xx.

US exercise participants shall not engage in combat, without prejudice to their right of self-
defense.

These terms of Reference are for purposes of this Exercise only and do not create additional
legal obligations between the US Government and the Republic of the Philippines.

II. EXERCISE LEVEL

1. TRAINING

a. The Exercise shall involve the conduct of mutual military assisting, advising
and trainingof RP and US Forces with the primary objective of enhancing the
operational capabilities of both forces to combat terrorism.

b. At no time shall US Forces operate independently within RP territory.

85
 c. Flight plans of all aircraft involved in the exercise will comply with the local air
traffic regulations.

2. ADMINISTRATION & LOGISTICS

xxxx

a. RP and US participating forces may share, in accordance with their respective laws and
regulations, in the use of their resources, equipment and other assets. They will use their
respective logistics channels. x x x. (Emphases Supplied)

After a thorough examination of the content, purpose, and framework of the MDT and the VFA,
we find that EDCA has remained within the parameters set in these two treaties. Just like the
Terms of Reference mentioned in Lim, mere adjustments in detail to implement the MDT and the
VFA can be in the form of executive agreements.

Petitioners assert  that the duration of the activities mentioned in EDCA is no longer consistent
287

with the temporary nature of the visits as contemplated in the VFA. They point out that Article
XII(4) of EDCA has an initial term of 10 years, a term automatically renewed unless the
Philippines or the U.S. terminates the agreement. According to petitioners, such length of time
already has a badge of permanency.

In connection with this, Justice Teresita J. Leonardo-De Castro likewise argues in her Concurring
and Dissenting Opinion that the VFA contemplated mere temporary visits from U.S. forces,
whereas EDCA allows an unlimited period for U.S. forces to stay in the Philippines. 288

However, the provisions of EDCA directly contradict this argument by limiting itself to 10 years of
effectivity. Although this term is automatically renewed, the process for terminating the
agreement is unilateral and the right to do so automatically accrues at the end of the 10 year
period. Clearly, this method does not create a permanent obligation.

Drawing on the reasoning in Lim, we also believe that it could not have been by chance that the
VFA does not include a maximum time limit with respect to the presence of U.S. personnel in the
country. We construe this lack of specificity as a deliberate effort on the part of the Philippine and
the U.S. governments to leave out this aspect and reserve it for the "adjustment in detail" stage
of the implementation of the treaty. We interpret the subsequent, unconditional concurrence of
the Senate in the entire text of the VFA as an implicit grant to the President of a margin of
appreciation in determining the duration of the "temporary" presence of U.S. personnel in the
country.

Justice Brion's dissent argues that the presence of U.S. forces under EDCA is "more permanent"
in nature. However, this argument has not taken root by virtue of a simple glance at its
289

provisions on the effectivity period. EDCA does not grant permanent bases, but rather temporary
rotational access to facilities for efficiency. As Professor Aileen S.P. Baviera notes:

The new EDCA would grant American troops, ships and planes rotational access to facilities of
the Armed Forces of the Philippines – but not permanent bases which are prohibited under the
Philippine Constitution - with the result of reducing response time should an external threat from
a common adversary crystallize. 290

EDCA is far from being permanent in nature compared to the practice of states as shown in other
defense cooperation agreements. For example, Article XIV(l) of the U.S.-Romania defense
agreement provides the following:

86
This Agreement is concluded for an indefinite period and shall enter into force in accordance
with the internal laws of each Party x x x. (emphasis supplied)

Likewise, Article 36(2) of the US-Poland Status of Forces Agreement reads:

This Agreement has been concluded for an indefinite period of time. It may be terminated by
written notification by either Party and in that event it terminates 2 years after the receipt of the
notification. (emphasis supplied)

Section VIII of US.-Denmark Mutual Support Agreement similarly provides:

8.1 This Agreement, which consists of a Preamble, SECTIONs I-VIII, and Annexes A and B, shall
become effective on the date of the last signature affixed below and shall remain in force until
terminated by the Parties, provided that it may be terminated by either Party upon 180 days
written notice of its intention to do so to the other Party. (emphasis supplied)

On the other hand, Article XXI(3) of the US.-Australia Force Posture Agreement provides a

longer initial term:

3. This Agreement shall have an initial term of 25 years and thereafter shall continue in
force, but may be terminated by either Party at any time upon one year's written notice to the
other Party through diplomatic channels. (emphasis supplied)

The phrasing in EDCA is similar to that in the U.S.-Australia treaty but with a term less than half
of that is provided in the latter agreement. This means that EDCA merely follows the practice of
other states in not specifying a non-extendible maximum term. This practice, however, does not
automatically grant a badge of permanency to its terms. Article XII(4) of EDCA provides very
clearly, in fact, that its effectivity is for an initial term of 10 years, which is far shorter than the
terms of effectivity between the U.S. and other states. It is simply illogical to conclude that the
initial, extendible term of 10 years somehow gives EDCA provisions a permanent character.

The reasoning behind this interpretation is rooted in the constitutional role of the President who,
as Commander-in-Chief of our armed forces, is the principal strategist of the nation and, as such,
duty-bound to defend our national sovereignty and territorial integrity;  who, as chief architect of
291

our foreign relations, is the head policymaker tasked to assess, ensure, and protect our national
security and interests;  who holds the most comprehensive and most confidential information
292

about foreign countries  that may affect how we conduct our external affairs; and who has
293

unrestricted access to highly classified military intelligence data  that may threaten the life of the
294

nation. Thus, if after a geopolitical prognosis of situations affecting the country, a belief is
engendered that a much longer period of military training is needed, the President must be given
ample discretion to adopt necessary measures including the flexibility to set an extended
timetable.

Due to the sensitivity and often strict confidentiality of these concerns, we acknowledge that the
President may not always be able to candidly and openly discuss the complete situation being
faced by the nation. The Chief Executive's hands must not be unduly tied, especially if the
situation calls for crafting programs and setting timelines for approved activities. These activities
may be necessary for maintaining and developing our capacity to resist an armed attack,
ensuring our national sovereignty and territorial integrity, and securing our national interests. If
the Senate decides that the President is in the best position to define in operational terms the
meaning of temporary in relation to the visits, considered individually or in their totality, the Court
must respect that policy decision. If the Senate feels that there is no need to set a time limit to
these visits, neither should we.

Evidently, the fact that the VFA does not provide specificity in regard to the extent of the
"temporary" nature of the visits of U.S. personnel does not suggest that the duration to which the

87
President may agree is unlimited. Instead, the boundaries of the meaning of the
term temporary in Article I of the treaty must be measured depending on the purpose of each
visit or activity.  That purpose must be analyzed on a case-by-case basis depending on the
295

factual circumstances surrounding the conclusion of the implementing agreement. While the
validity of the President's actions will be judged under less stringent standards, the power of this
Court to determine whether there was grave abuse of discretion remains unimpaired.

d. Authorized activities performed by US. contractors within Philippine territory - who were

legitimately permitted to enter the country independent of EDCA - are subject to relevant
Philippine statutes and regulations and must be consistent with the MDT and the VFA

Petitioners also raise  concerns about the U.S. government's purported practice of hiring private
296

security contractors in other countries. They claim that these contractors - one of which has
already been operating in Mindanao since 2004 - have been implicated in incidents or scandals
in other parts of the globe involving rendition, torture and other human rights violations. They also
assert that these contractors employ paramilitary forces in other countries where they are
operating.

Under Articles III and IV of EDCA, U.S. contractors are authorized to perform only the following
activities:

1. Training; transit; support and related activities; refueling of aircraft; bunkering of

vessels; temporary maintenance of vehicles, vessels, and aircraft; temporary
accommodation of personnel; communications; prepositioning of equipment, supplies,
and materiel; deployment of forces and materiel; and such other activities as the Parties
may agree 297

2. Prepositioning and storage of defense equipment, supplies, and materiel, including

delivery, management, inspection, use, maintenance, and removal of such equipment,
supplies and materiel 298

3. Carrying out of matters in accordance with, and to the extent permissible under, U.S.
laws, regulations, and policies 299

EDCA requires that all activities within Philippine territory be in accordance with Philippine law.
This means that certain privileges denied to aliens are likewise denied to foreign military
contractors. Relevantly, providing security and carrying, owning, and possessing firearms  are
300 301

illegal for foreign civilians.

The laws in place already address issues regarding the regulation of contractors. In the 2015
Foreign Investment Negative list,  the Executive Department has already identified corporations
302

that have equity restrictions in Philippine jurisdiction. Of note is No. 5 on the list - private security
agencies that cannot have any foreign equity by virtue of Section 4 of Republic Act No.
5487;  and No. 15, which regulates contracts for the construction of defense-related structures
303

based on Commonwealth Act No. 541.

Hence, any other entity brought into the Philippines by virtue of EDCA must subscribe to
corporate and civil requirements imposed by the law, depending on the entity's corporate
structure and the nature of its business.

That Philippine laws extraneous to EDCA shall govern the regulation of the activities of U.S.
contractors has been clear even to some of the present members of the Senate.

For instance, in 2012, a U.S. Navy contractor, the Glenn Marine, was accused of spilling fuel in
the waters off Manila Bay.  The Senate Committee on Foreign Relations and the Senate
304

88
Committee on Environment and Natural Resources chairperson claimed environmental and
procedural violations by the contractor.  The U.S. Navy investigated the contractor and promised
305

stricter guidelines to be imposed upon its contractors.  The statement attributed to Commander
306

Ron Steiner of the public affairs office of the U.S. Navy's 7th Fleet - that U.S. Navy contractors
are bound by Philippine laws - is of particular relevance. The statement acknowledges not just
the presence of the contractors, but also the U.S. position that these contractors are bound by
the local laws of their host state. This stance was echoed by other U.S. Navy representatives. 307

This incident simply shows that the Senate was well aware of the presence of U.S. contractors
for the purpose of fulfilling the terms of the VFA. That they are bound by Philippine law is clear to
all, even to the U.S.

As applied to EDCA, even when U.S. contractors are granted access to the Agreed Locations, all
their activities must be consistent with Philippine laws and regulations and pursuant to the MDT
and the VFA.

While we recognize the concerns of petitioners, they do not give the Court enough justification to
strike down EDCA. In Lim v. Executive Secretary, we have already explained that we cannot
take judicial notice of claims aired in news reports, "not because of any issue as to their truth,
accuracy, or impartiality, but for the simple reason that facts must be established in accordance
with the rules of evidence."  What is more, we cannot move one step ahead and speculate that
308

the alleged illegal activities of these contractors in other countries would take place in the
Philippines with certainty. As can be seen from the above discussion, making sure that U.S.
contractors comply with Philippine laws is a function of law enforcement. EDCA does not stand in
the way of law enforcement.

Nevertheless, we emphasize that U.S. contractors are explicitly excluded from the coverage of
the VFA. As visiting aliens, their entry, presence, and activities are subject to all laws and treaties
applicable within the Philippine territory. They may be refused entry or expelled from the country
if they engage in illegal or undesirable activities. There is nothing that prevents them from being
detained in the country or being subject to the jurisdiction of our courts. Our penal laws,  labor
309

laws,  and immigrations laws  apply to them and therefore limit their activities here. Until and
310 311

unless there is another law or treaty that specifically deals with their entry and activities, their
presence in the country is subject to unqualified Philippine jurisdiction.

EDCA does not allow the presence of U.S.-owned or -controlled military facilities and
bases in the Philippines

Petitioners Saguisag et al. claim that EDCA permits the establishment of U.S. military bases
through the "euphemistically" termed "Agreed Locations. "  Alluding to the definition of this term
312

in Article II(4) of EDCA, they point out that these locations are actually military bases, as the
definition refers to facilities and areas to which U.S. military forces have access for a variety of
purposes. Petitioners claim that there are several badges of exclusivity in the use of the Agreed
Locations by U.S. forces. First, Article V(2) of EDCA alludes to a "return" of these areas once
they are no longer needed by U.S. forces, indicating that there would be some transfer of
use. Second, Article IV(4) ofEDCA talks about American forces' unimpeded access to the
Agreed Locations for all matters relating to the prepositioning and storage of U.S. military
equipment, supplies, and materiel. Third, Article VII of EDCA authorizes U.S. forces to use public
utilities and to operate their own telecommunications system.

a. Preliminary point on badges of exclusivity

As a preliminary observation, petitioners have cherry-picked provisions of EDCA by presenting

so-called "badges of exclusivity," despite the presence of contrary provisions within the text of
the agreement itself.

89
First, they clarify the word "return" in Article V(2) of EDCA. However, the use of the word "return"
is within the context of a lengthy provision. The provision as a whole reads as follows:

The United States shall return to the Philippines any Agreed Locations, or any portion thereof,
including non-relocatable structures and assemblies constructed, modified, or improved by the
United States, once no longer required by United States forces for activities under this
Agreement. The Parties or the Designated Authorities shall consult regarding the terms of return
of any Agreed Locations, including possible compensation for improvements or construction.

The context of use is "required by United States forces for activities under this Agreement."
Therefore, the return of an Agreed Location would be within the parameters of an activity that the
Mutual Defense Board (MDB) and the Security Engagement Board (SEB) would authorize. Thus,
possession by the U.S. prior to its return of the Agreed Location would be based on the authority
given to it by a joint body co-chaired by the "AFP Chief of Staff and Commander, U.S. PACOM
with representatives from the Philippines' Department of National Defense and Department of
Foreign Affairs sitting as members."  The terms shall be negotiated by both the Philippines and
313

the U.S., or through their Designated Authorities. This provision, seen as a whole, contradicts
petitioners' interpretation of the return as a "badge of exclusivity." In fact, it shows the
cooperation and partnership aspect of EDCA in full bloom.

Second, the term "unimpeded access" must likewise be viewed from a contextual perspective.
Article IV(4) states that U.S. forces and U.S. contractors shall have "unimpeded access to
Agreed Locations for all matters relating to the prepositioning and storage of defense equipment,
supplies, and materiel, including delivery, management, inspection, use, maintenance, and
removal of such equipment, supplies and materiel."

At the beginning of Article IV, EDCA states that the Philippines gives the U.S. the authority to
bring in these equipment, supplies, and materiel through the MDB and SEB security mechanism.
These items are owned by the U.S.,  are exclusively for the use of the U.S.  and, after going
314 315

through the joint consent mechanisms of the MDB and the SEB, are within the control of the
U.S.  More importantly, before these items are considered prepositioned, they must have gone
316

through the process of prior authorization by the MDB and the SEB and given proper notification
to the AFP.317

Therefore, this "unimpeded access" to the Agreed Locations is a necessary adjunct to the
ownership, use, and control of the U.S. over its own equipment, supplies, and materiel and must
have first been allowed by the joint mechanisms in play between the two states since the time of
the MDT and the VFA. It is not the use of the Agreed Locations that is exclusive per se; it is mere
access to items in order to exercise the rights of ownership granted by virtue of the Philippine
Civil Code.318

As for the view that EDCA authorizes U.S. forces to use public utilities and to operate their own
telecommunications system, it will be met and answered in part D, infra.

Petitioners also point out  that EDCA is strongly reminiscent of and in fact bears a one-to-one
319

correspondence with the provisions of the 1947 MBA. They assert that both agreements (a) allow
similar activities within the area; (b) provide for the same "species of ownership" over facilities;
and (c) grant operational control over the entire area. Finally, they argue  that EDCA is in fact an
320

implementation of the new defense policy of the U.S. According to them, this policy was not what
was originally intended either by the MDT or by the VFA.

On these points, the Court is not persuaded.

The similar activities cited by petitioners  simply show that under the MBA, the U.S. had the right
321

to construct, operate, maintain, utilize, occupy, garrison, and control the bases. The so-called
parallel provisions of EDCA allow only operational control over the Agreed Locations specifically

90
for construction activities. They do not allow the overarching power to operate, maintain, utilize,
occupy, garrison, and control a base with full discretion. EDCA in fact limits the rights of the U.S.
in respect of every activity, including construction, by giving the MDB and the SEB the power to
determine the details of all activities such as, but not limited to, operation, maintenance, utility,
occupancy, garrisoning, and control. 322

The "species of ownership" on the other hand, is distinguished by the nature of the property. For
immovable property constructed or developed by the U.S., EDCA expresses that ownership will
automatically be vested to the Philippines.  On the other hand, for movable properties brought
323

into the Philippines by the U.S., EDCA provides that ownership is retained by the latter. In
contrast, the MBA dictates that the U.S. retains ownership over immovable and movable
properties.

To our mind, both EDCA and the MBA simply incorporate what is already the law of the land in
the Philippines. The Civil Code's provisions on ownership, as applied, grant the owner of a
movable property full rights over that property, even if located in another person's property. 324

The parallelism, however, ends when the situation involves facilities that can be considered
immovable. Under the MBA, the U.S. retains ownership if it paid for the facility.  Under EDCA,
325

an immovable is owned by the Philippines, even if built completely on the back of U.S.
funding.  This is consistent with the constitutional prohibition on foreign land ownership.
326 327

Despite the apparent similarity, the ownership of property is but a part of a larger whole that must
be considered before the constitutional restriction is violated. Thus, petitioners' points on
operational control will be given more attention in the discussion below. The arguments on policy
are, however, outside the scope of judicial review and will not be discussed

Moreover, a direct comparison of the MBA and EDCA will result in several important distinctions
that would allay suspicion that EDCA is but a disguised version of the MBA.

b. There are substantial matters that the US. cannot do under EDCA, but which it was authorized
to do under the 1947 MBA

The Philippine experience with U.S. military bases under the 1947 MBA is simply not possible
under EDCA for a number of important reasons.

First, in the 1947 MBA, the U.S. retained all rights of jurisdiction in and over Philippine territory
occupied by American bases. In contrast, the U.S. under EDCA does not enjoy any such right
over any part of the Philippines in which its forces or equipment may be found. Below is a
comparative table between the old treaty and EDCA:

1947 MBA/ 1946 Treaty of General EDCA

Relations

1947 MBA, Art. I(1): EDCA, preamble:

The Government of the Republic of Affirming that the Parties share an

the Philippines (hereinafter referred to as the understanding for the United States not to
Philippines) grants to the Government of establish a permanent military presence or
the United States of America (hereinafter base in the territory of the Philippines;
referred to as the United States) the right to
retain the use of the bases in the xxxx
Philippines listed in Annex A attached hereto.
Recognizing that all United States access to
and use of facilities and areas will be at the

91
1947 MBA, Art. XVII(2): invitation of the Philippines and with full
respect for the Philippine Constitution and
All buildings and structures which Philippine laws;
are erected by the United States in the
bases shall be the property of the United x x x x
States and may be removed by it before the
expiration of this Agreement or the earlier EDCA, Art. II(4):
relinquishment of the base on which the
structures are situated. There shall be no "Agreed Locations" means facilities and
obligation on the part of the Philippines or of areas that are provided by the Government
the United States to rebuild or repair any of the Philippines through the AFP and that
destruction or damage inflicted from any United States forces, United States
cause whatsoever on any of the said buildings contractors, and others as mutually agreed,
or structures owned or used by the United shall have the right to access and use
States in the bases. x x x x. pursuant to this Agreement. Such Agreed
Locations may be listed in an annex to be
1946 Treaty of Gen. Relations, Art. I: appended to this Agreement, and may be
further described in implementing
The United States of America agrees to arrangements.
withdraw and surrender, and does hereby
withdraw and surrender, all rights of EDCA, Art. V:
possession, supervision, jurisdiction,
control or sovereignty existing and 1. The Philippines shall retain ownership of
exercised by the United States of America in and title to Agreed Locations.
and over the territory and the people of the
Philippine Islands, except the use of such
xxxx
bases, necessary appurtenances to such
bases, and the rights incident thereto, as
the United States of America, by agreement 4. All buildings, non-relocatable structures,
with the Republic of the Philippines may deem and assemblies affixed to the land in the
necessary to retain for the mutual protection of Agreed Locations, including ones altered or
the Republic of the Philippines and of the improved by United States forces, remain
United States of America. x x x. the property of the Philippines.Permanent
buildings constructed by United States forces
become the property of the Philippines, once
constructed, but shall be used by United
States forces until no longer required by
United States forces.

Second, in the bases agreement, the U.S. and the Philippines were visibly not on equal footing
when it came to deciding whether to expand or to increase the number of bases, as the
Philippines may be compelled to negotiate with the U.S. the moment the latter requested an
expansion of the existing bases or to acquire additional bases. In EDCA, U.S. access is purely at
the invitation of the Philippines.

1947 MBA/ 1946 Treaty of General EDCA

Relations

1947 MBA, Art.I(3): EDCA, preamble:

The Philippines agree to enter into Recognizing that all United States access to

negotiations with the United States at the and use of facilities and areas will be at the

92
latter's request, to permit the United invitation of the Philippines and with full
States to expand such bases, to exchange respect for the Philippine Constitution and
such bases for other bases, to acquire Philippine laws;
additional bases, or relinquish rights to
bases, as any of such exigencies may be xxxx
required by military necessity.
EDCA. Art. II(4):
1946 Treaty of Gen. Relations, Art. I:
"Agreed Locations" means facilities and
The United States of America agrees to areas that are provided by the Government
withdraw and surrender, and does hereby of the Philippines through the AFP and that
withdraw and surrender, all rights of United States forces, United States
possession, supervision, jurisdiction, contractors, and others as mutually agreed,
control or sovereignty existing and shall have the right to access and use
exercised by the United States of America in pursuant to this Agreement. Such Agreed
and over the territory and the people of the Locations may be listed in an annex to be
Philippine Islands, except the use of such appended to this Agreement, and may be
bases, necessary appurtenances to such further described in implementing
bases, and the rights incident thereto, as the arrangements.
United States of America, by agreement
with the Republic of the Philippines may
deem necessary to retain for the mutual
protection of the Republic of the Philippines
and of the United States of America. x x x.

Third, in EDCA, the Philippines is- guaranteed access over the entire area of the Agreed
Locations. On the other hand, given that the U.S. had complete control over its military bases
under the 1947 MBA, the treaty did not provide for any express recognition of the right of access
of Philippine authorities. Without that provision and in light of the retention of U.S. sovereignty
over the old military bases, the U.S. could effectively prevent Philippine authorities from entering
those bases.

1947 MBA EDCA

No equivalent provision. EDCA, Art. III(5):

The Philippine Designated Authority and its

authorized representative shall have access
to the entire area of the Agreed Locations.
Such access shall be provided promptly
consistent with operational safety and security
requirements in accordance with agreed
procedures developed by the Parties.

Fourth, in the bases agreement, the U.S. retained the right, power, and authority over the
establishment, use, operation, defense, and control of military bases, including the limits of
territorial waters and air space adjacent to or in the vicinity of those bases. The only standard
used in determining the extent of its control was military necessity. On the other hand, there is no
such grant of power or authority under EDCA. It merely allows the U.S. to exercise operational
control over the construction of Philippine-owned structures and facilities:

1947 MBA EDCA

93
1947 MBA, Art.I(2): EDCA, Art. III(4):

The Philippines agrees to permit the United The Philippines hereby grants to the United
States, upon notice to the Philippines, to use States, through bilateral security
such of those bases listed in Annex B as the mechanisms, such as the MDB and
United States determines to be required by SEB, operational control of Agreed
military necessity. Locations for construction
activities and authority to undertake such
1947 MBA, Art. III(1): activities on, and make alterations and
improvements to, Agreed Locations. United
It is mutually agreed that the United States forces shall consult on issues
Statesshall have the rights, power and regarding such construction, alterations,
authority within the bases which and improvements based on the Parties'
are necessary for the establishment, use, shared intent that the technical requirements
operation and defense thereof or and construction standards of any such
appropriate for the control thereof and all projects undertaken by or on behalf of United
the rights, power and authority within the States forces should be consistent with the
limits of territorial waters and air space requirements and standards of both Parties.
adjacent to, or in the vicinity of, the bases
which are necessary to provide access to
them, or appropriate for their control.

Fifth, the U.S. under the bases agreement was given the authority to use Philippine territory for
additional staging areas, bombing and gunnery ranges. No such right is given under EDCA, as
seen below:

1947 MBA EDCA

1947 MBA, Art. VI: EDCA, Art. III(1):

The United States shall, subject to previous With consideration of the views of

agreement with the Philippines, have the right the Parties,
to use land and coastal sea areas of the Philippines hereby authorizes and
appropriate size and location for periodic agrees that United States forces, United
maneuvers, for additional staging areas, States contractors, and vehicles, vessels, and
bombing and gunnery ranges, and for such aircraft operated by or for United States forces
intermediate airfields as may be required for may conduct the following activities with
safe and efficient air operations. Operations in
respect to Agreed Locations: training; transit;
such areas shall be carried on with due regard support and related activities; refueling of
and safeguards for the public safety. aircraft; bunkering of vessels; temporary
maintenance of vehicles, vessels, and aircraft;
1947 MBA, Art.I(2): temporary accommodation of personnel;
communications; prepositioning of equipment,
The Philippines agrees to permit the United supplies, and materiel; deploying forces and
States, upon notice to the Philippines, to use materiel; and such other activities as the
such of those bases listed in Annex B as the Parties may agree.
United States determines to be required by
military necessity.

Sixth, under the MBA, the U.S. was given the right, power, and authority to control and prohibit
the movement and operation of all types of vehicles within the vicinity of the bases. The U.S.
does not have any right, power, or authority to do so under EDCA.

94
1947 MBA EDCA

1947 MBA, Art. 111(2)(c) No equivalent provision.

Such rights, power and authority shall

include, inter alia, the right, power and
authority: x x x x to control (including the
right to prohibit) in so far as may be required
for the efficient operation and safety of the
bases, and within the limits of military
necessity, anchorages, moorings, landings,
takeoffs, movements and operation of
ships and water-borne craft, aircraft and
other vehicles on water, in the air or on
land comprising

Seventh, under EDCA, the U.S. is merely given temporary access to land and facilities
(including roads, ports, and airfields). On the other hand, the old treaty gave the U.S. the right to
improve and deepen the harbors, channels, entrances, and anchorages; and to construct or
maintain necessary roads and bridges that would afford it access to its military bases.

1947 MBA EDCA

1947 MBA, Art. III(2)(b): EDCA, Art. III(2):

Such rights, power and authority shall When requested, the Designated Authority of
include, inter alia, the right, power and the Philippines shall assist in facilitating
authority: x x x x to improve and deepen transit or temporary access by United
the harbors, channels, entrances and States forces to public land and facilities
anchorages, and to construct or maintain (including roads, ports, and airfields), including
necessary roadsand bridges affording access those owned or controlled by local
to the bases. governments, and to other land and facilities
(including roads, ports, and airfields).

Eighth, in the 1947 MBA, the U.S. was granted the automatic right to use any and all public
utilities, services and facilities, airfields, ports, harbors, roads, highways, railroads, bridges,
viaducts, canals, lakes, rivers, and streams in the Philippines in the same manner that Philippine
military forces enjoyed that right. No such arrangement appears in EDCA. In fact, it merely
extends to U.S. forces temporary access to public land and facilities when requested:

1947 MBA EDCA

1947 MBA, Art. VII: EDCA, Art. III(2):

It is mutually agreed that the United States When requested, the Designated Authority of
may employ and use for United States the Philippines shall assist in facilitating
military forces any and all public utilities, transit or temporary access by United
other services and facilities, airfields, ports, States forces to public land and facilities
harbors, roads, highways, railroads, bridges, (including roads, ports, and airfields), including
viaducts, canals, lakes, rivers and streams in those owned or controlled by local
the Philippines under conditions no less governments, and to other land and facilities
favorable than those that may (including roads, ports, and airfields).
be applicablefrom time to time to the military
forces of the Philippines.

95
Ninth, under EDCA, the U.S. no longer has the right, power, and authority to construct, install,
maintain, and employ any type of facility, weapon, substance, device, vessel or vehicle, or
system unlike in the old treaty. EDCA merely grants the U.S., through bilateral security
mechanisms, the authority to undertake construction, alteration, or improvements on the
Philippine-owned Agreed Locations.

1947 MBA EDCA

1947 MBA, Art. III(2)(e): EDCA, Art. III(4):

Such rights, power and authority shall The Philippines hereby grants to the United
include, inter alia, the right, power and States, through bilateral security
authority: x x x x to construct, install, mechanisms, such as the MDB and SEB,
maintain, and employ on any base any operational control of Agreed Locations for
type of facilities, weapons, substance, construction activities and authority to
device, vessel or vehicle on or under the undertake such activities on, and make
ground, in the air or on or under the water that alterations and improvements to, Agreed
may be requisite or appropriate, including Locations. United States forces shall consult
meteorological systems, aerial and water on issues regarding such construction,
navigation lights, radio and radar apparatus alterations, and improvements based on the
and electronic devices, of any desired power, Parties' shared intent that the technical
type of emission and frequency. requirements and construction standards of
any such projects undertaken by or on behalf
of United States forces should be consistent
with the requirements and standards of both
Parties.

Tenth, EDCA does not allow the U.S. to acquire, by condemnation or expropriation proceedings,
real property belonging to any private person. The old military bases agreement gave this right to
the U.S. as seen below:

1947 MBA EDCA

1947 MBA, Art. XXII(l): No equivalent provision.

Whenever it is necessary to acquire by

condemnation or expropriation
proceedings real property belonging to any
private persons, associations or corporations
located in bases named in Annex A and
Annex B in order to carry out the purposes of
this Agreement, the Philippines will institute
and prosecute such condemnation or
expropriation proceedings in accordance with
the laws of the Philippines. The United States
agrees to reimburse the Philippines for all the
reasonable expenses, damages and costs
therebv incurred, including the value of the
property as determined by the Court. In
addition, subject to the mutual agreement of
the two Governments, the United States will
reimburse the Philippines for the reasonable
costs of transportation and removal of any
occupants displaced or ejected by reason of

96
the condemnation or expropriation.

Eleventh, EDCA does not allow the U.S. to unilaterally bring into the country non-Philippine
nationals who are under its employ, together with their families, in connection with the
construction, maintenance, or operation of the bases. EDCA strictly adheres to the limits under
the VFA.

1947 MBA EDCA

1947 MBA, Art. XI(l): EDCA, Art. II:

It is mutually agreed that the United States 1. "United States personnel" means United

shall have the right to bring into the States military and civilian
Philippines members of the United States personneltemporarily in the territory of the
military forces and the United States Philippines in connection with activities
nationals employed by or under a contract approved by the Philippines, as those terms
with the United States together with their are defined in the VFA.
families, and technical personnel of other
nationalities (not being persons excluded by x xx x
the laws of the Philippines) in connection with
the construction, maintenance, or operation of 3. "United States contractors" means
the bases. The United States shall make companies and firms, and their employees,
suitable arrangements so that such persons under contract or subcontract to or on behalf
may be readily identified and their status of the United States Department of Defense.
established when necessary by the Philippine United States contractors are not includedas
authorities. Such persons, other than part of the definition of United States
members of the United States armed forces in personnel in this Agreement, including
uniform, shall present their travel documents within the context of the VFA.
to the appropriate Philippine authorities for
visas, it being understood that no objection
 
will be made to their travel to the
Philippines as non-immigrants.

Twelfth, EDCA does not allow the U.S. to exercise jurisdiction over any offense committed by
any person within the Agreed Locations, unlike in the former military bases:

1947 MBA EDCA

1947 MBA, Art. XIII(l)(a): No equivalent provision.

The Philippines consents that the United

States shall have the right to exercise

jurisdiction over the following offenses:
(a) Any offense committed by any
person within any base except where the
offender and offended parties are both
Philippine citizens (not members of the armed
forces of the United States on active duty) or
the offense is against the security of the
Philippines.

97
Thirteenth, EDCA does not allow the U.S. to operate military post exchange (PX) facilities,
which is free of customs duties and taxes, unlike what the expired MBA expressly allowed.
Parenthetically, the PX store has become the cultural icon of U.S. military presence in the
country.

1947 MBA EDCA

1947 MBA, Art. XVIII(l): No equivalent provision.

It is mutually agreed that the United States

shall have the right to establish on bases,

free of all licenses; fees; sales, excise or
other taxes, or imposts; Government
agencies, including concessions, such
as sales commissaries and post
exchanges; messes and social clubs, for the
exclusive use of the United States military
forces and authorized civilian personnel
and their families. The merchandise or
services sold or dispensed by such agencies
shall be free of all taxes, duties and
inspection by the Philippine
authorities. Administrative measures shall be
taken by the appropriate authorities of the
United States to prevent the resale of goods
which are sold under the provisions of this
Article to persons not entitled to buy goods at
such agencies and, generally, to prevent
abuse of the privileges granted under this
Article. There shall be cooperation between
such authorities and the Philippines to this
end.

In sum, EDCA is a far cry from a basing agreement as was understood by the people at the time
that the 1987 Constitution was adopted.

Nevertheless, a comprehensive review of what the Constitution means by "foreign military bases"
and "facilities" is required before EDCA can be deemed to have passed judicial scrutiny.

c. The meaning of military facilities and bases

An appreciation of what a military base is, as understood by the Filipino people in 1987, would be
vital in determining whether EDCA breached the constitutional restriction.

Prior to the drafting of the 1987 Constitution, the last definition of "military base" was provided
under Presidential Decree No. (PD) 1227.  Unlawful entry into a military base is punishable
328

under the decree as supported by Article 281 of the Revised Penal Code, which itself prohibits
the act of trespass.

Section 2 of the law defines the term in this manner: "'[M]ilitary base' as used in this
decree means any military, air, naval, or coast guard reservation, base, fort, camp, arsenal, yard,
station, or installation in the Philippines."

98
Commissioner Tadeo, in presenting his objections to U.S. presence in the Philippines before the
1986 Constitutional Commission, listed the areas that he considered as military bases:

1,000 hectares Camp O'Donnel

20,000 hectares Crow Valley Weapon's Range

55,000 hectares Clark Air Base

150 hectares Wallace Air Station

400 hectares John Hay Air Station

15,000 hectares Subic Naval Base

1,000 hectares San Miguel Naval Communication

750 hectares Radio Transmitter in Capas, Tarlac

900 hectares Radio Bigot Annex at Bamban, Tarlac 329

The Bases Conversion and Development Act of 1992 described its coverage in its Declaration of
Policies:

Sec. 2. Declaration of Policies. - It is hereby declared the policy of the Government to accelerate
the sound and balanced conversion into alternative productive uses of the Clark and Subic
military reservations and their extensions (John Hay Station, Wallace Air Station, O'Donnell
Transmitter Station, San Miguel Naval Communications Station and Capas Relay Station), to
raise funds by the sale of portions of Metro Manila military camps, and to apply said funds as
provided herein for the development and conversion to productive civilian use of the lands
covered under the 194 7 Military Bases Agreement between the Philippines and the United
States of America, as amended. 330

The result of the debates and subsequent voting is Section 25, Article XVIII of the Constitution,
which specifically restricts, among others, foreign military facilities or bases. At the time of its
crafting of the Constitution, the 1986 Constitutional Commission had a clear idea of what exactly
it was restricting. While the term "facilities and bases" was left undefined, its point of reference
was clearly those areas covered by the 1947 MBA as amended.

Notably, nearly 30 years have passed since then, and the ever-evolving world of military
technology and geopolitics has surpassed the understanding of the Philippine people in 1986.
The last direct military action of the U.S. in the region was the use of Subic base as the staging
ground for Desert Shield and Desert Storm during the Gulf War. In 1991, the Philippine Senate
331

rejected the successor treaty of the 1947 MBA that would have allowed the continuation of U.S.
bases in the Philippines.

Henceforth, any proposed entry of U.S. forces into the Philippines had to evolve likewise, taking
into consideration the subsisting agreements between both parties, the rejection of the 1991
proposal, and a concrete understanding of what was constitutionally restricted. This trend birthed
the VFA which, as discussed, has already been upheld by this Court.

The latest agreement is EDCA, which proposes a novel concept termed "Agreed Locations."

By definition, Agreed Locations are

99
facilities and areas that are provided by the Government of the Philippines through the AFP and
that United States forces, United States contractors, and others as mutually agreed, shall have
the right to access and use pursuant to this Agreement. Such Agreed Locations may be listed in
an annex to be appended to this Agreement, and may be further described in implementing
arrangements. 332

Preliminarily, respondent already claims that the proviso that the Philippines shall retain
ownership of and title to the Agreed Locations means that EDCA is "consistent with Article II of
the VFA which recognizes Philippine sovereignty and jurisdiction over locations within Philippine
territory.
333

By this interpretation, respondent acknowledges that the contention of petitioners springs from an
understanding that the Agreed Locations merely circumvent the constitutional restrictions.
Framed differently, the bone of contention is whether the Agreed Locations are, from a legal
perspective, foreign military facilities or bases. This legal framework triggers Section 25, Article
XVIII, and makes Senate concurrence a sine qua non.

Article III of EDCA provides for Agreed Locations, in which the U.S. is authorized by the
Philippines to "conduct the following activities: "training; transit; support and related activities;
refueling of aircraft; bunkering of vessels; temporary maintenance of vehicles, vessels and
aircraft; temporary accommodation of personnel; communications; prepositioning of equipment,
supplies and materiel; deploying forces and materiel; and such other activities as the Parties may
agree."

This creation of EDCA must then be tested against a proper interpretation of the Section 25
restriction.

d. Reasons for the constitutional requirements and legal standards for constitutionally compatible
military bases and facilities

Section 25 does not define what is meant by a "foreign military facility or base." While it
specifically alludes to U.S. military facilities and bases that existed during the framing of the
Constitution, the provision was clearly meant to apply to those bases existing at the time and to
any future facility or base. The basis for the restriction must first be deduced from the spirit of the
law, in order to set a standard for the application of its text, given the particular historical events
preceding the agreement.

Once more, we must look to the 1986 Constitutional Commissioners to glean, from their
collective wisdom, the intent of Section 25. Their speeches are rich with history and wisdom and
present a clear picture of what they considered in the crafting the provision.

SPEECH OF COMMISSIONER REGALADO 334

xxxx

We have been regaled here by those who favor the adoption of the anti-bases provisions with
what purports to be an objective presentation of the historical background of the military bases in
the Philippines. Care appears, however, to have been taken to underscore the inequity in their
inception as well as their implementation, as to seriously reflect on the supposed objectivity of
the report. Pronouncements of military and civilian officials shortly after World War II are quoted
in support of the proposition on neutrality; regrettably, the implication is that the same remains
valid today, as if the world and international activity stood still for the last 40 years.

We have been given inspired lectures on the effect of the presence of the military bases
on our sovereignty - whether in its legal or political sense is not clear - and the theory that

100
any country with foreign bases in its territory cannot claim to be fully sovereign or
completely independent. I was not aware that the concepts of sovereignty and independence
have now assumed the totality principle, such that a willing assumption of some delimitations in
the exercise of some aspects thereof would put that State in a lower bracket of nationhood.

xxxx

We have been receiving a continuous influx of materials on the pros and cons on the advisability
of having military bases within our shores. Most of us who, only about three months ago, were
just mulling the prospects of these varying contentions are now expected, like armchair generals,
to decide not only on the geopolitical aspects and contingent implications of the military bases
but also on their political, social, economic and cultural impact on our national life. We are asked
to answer a plethora of questions, such as: 1) whether the bases are magnets of nuclear attack
or are deterrents to such attack; 2) whether an alliance or mutual defense treaty is a derogation
of our national sovereignty; 3) whether criticism of us by Russia, Vietnam and North Korea is
outweighed by the support for us of the ASEAN countries, the United States, South Korea,
Taiwan, Australia and New Zealand; and 4) whether the social, moral and legal problems
spawned by the military bases and their operations can be compensated by the economic
benefits outlined in papers which have been furnished recently to all of us.335

xxxx

Of course, one side of persuasion has submitted categorical, unequivocal and forceful assertions
of their positions. They are entitled to the luxury of the absolutes. We are urged now to adopt
the proposed declaration as a "golden," "unique" and "last" opportunity for Filipinos to
assert their sovereign rights. Unfortunately, I have never been enchanted by superlatives,
much less for the applause of the moment or the ovation of the hour. Nor do I look forward to any
glorious summer after a winter of political discontent. Hence, if I may join Commissioner Laurel, I
also invoke a caveat not only against the tyranny of labels but also the tyranny of slogans. 336

xxxx

SPEECH OF COMMISSIONER SUAREZ 337

MR. SUAREZ: Thank you, Madam President.

I am quite satisfied that the crucial issues involved in the resolution of the problem of the removal
of foreign bases from the Philippines have been adequately treated by previous speakers. Let
me, therefore, just recapitulate the arguments adduced in favor of a foreign bases-free
Philippines:

1. That every nation should be free to shape its own destiny without outside
interference;

2. That no lasting peace and no true sovereignty would ever be achieved so long as

there are foreign military forces in our country;

3. That the presence of foreign military bases deprives us of the very substance of

national sovereigntyand this is a constant source of national embarrassment and an
insult to our national dignity and selfrespect as a nation;

4. That these foreign military bases unnecessarily expose our country to devastating

nuclear attacks;

101
 5. That these foreign military bases create social problems and are designed to
perpetuate the strangle-hold of United States interests in our national economy and
development;

6. That the extraterritorial rights enjoyed by these foreign bases operate to deprive

our country of jurisdiction over civil and criminal offenses committed within our own
national territory and against Filipinos;

7. That the bases agreements are colonial impositions and dictations upon our

helpless country; and

8. That on the legal viewpoint and in the ultimate analysis, all the bases agreements are
null and void ab initio, especially because they did not count the sovereign consent and
will of the Filipino people.
338

xxxx

In the real sense, Madam President, if we in the Commission could accommodate the provisions
I have cited, what is our objection to include in our Constitution a matter as priceless as the
nationalist values we cherish? A matter of the gravest concern for the safety and survival of
this nation indeed deserves a place in our Constitution.

xxxx

x x x Why should we bargain away our dignity and our self-respect as a nation and the future
of generations to come with thirty pieces of silver? 339

SPEECH OF COMMISSIONER BENNAGEN 340

xxxx

The underlying principle of military bases and nuclear weapons wherever they are found and
whoever owns them is that those are for killing people or for terrorizing humanity. This
objective by itself at any point in history is morally repugnant. This alone is reason enough for us
to constitutionalize the ban on foreign military bases and on nuclear weapons. 341

SPEECH OF COMMISSIONER BACANI 342

xxxx

x x x Hence, the remedy to prostitution does not seem to be primarily to remove the

bases because even if the bases are removed, the girls mired in poverty will look for their
clientele elsewhere. The remedy to the problem of prostitution lies primarily elsewhere - in an
alert and concerned citizenry, a healthy economy and a sound education in values. 343

SPEECH OF COMMISSIONER JAMIR 344

xxxx

One of the reasons advanced against the maintenance of foreign military bases here is
that they impair portions of our sovereignty. While I agree that our country's sovereignty
should not be impaired, I also hold the view that there are times when it is necessary to do so
according to the imperatives of national interest. There are precedents to this effect. Thus, during
World War II, England leased its bases in the West Indies and in Bermuda for 99 years to the

102
United States for its use as naval and air bases. It was done in consideration of 50 overaged
destroyers which the United States gave to England for its use in the Battle of the Atlantic.

A few years ago, England gave the Island of Diego Garcia to the United States for the latter's use
as a naval base in the Indian Ocean. About the same time, the United States obtained bases in
Spain, Egypt and Israel. In doing so, these countries, in effect, contributed to the launching of a
preventive defense posture against possible trouble in the Middle East and in the Indian Ocean
for their own protection. 345

SPEECH OF COMMISSIONER TINGSON 346

xxxx

In the case of the Philippines and the other Southeast Asian nations, the presence of American
troops in the country is a projection of America's security interest. Enrile said that nonetheless,
they also serve, although in an incidental and secondary way, the security interest of the
Republic of the Philippines and the region. Yes, of course, Mr. Enrile also echoes the sentiments
of most of us in this Commission, namely: It is ideal for us as an independent and sovereign
nation to ultimately abrogate the RP-US military treaty and, at the right time, build our own
air and naval might. 347

xxxx

Allow me to say in summation that I am for the retention of American military bases in the
Philippines provided that such an extension from one period to another shall be
concluded upon concurrence of the parties, and such extension shall be based on justice,
the historical amity of the people of the Philippines and the United States and their
common defense interest. 348

SPEECH OF COMMISSIONER ALONTO 349

xxxx

Madam President, sometime ago after this Commission started with this task of framing a
constitution, I read a statement of President Aquino to the effect that she is for the removal of the
U.S. military bases in this country but that the removal of the U.S. military bases should not be
done just to give way to other foreign bases. Today, there are two world superpowers, both vying
to control any and all countries which have importance to their strategy for world domination. The
Philippines is one such country.

Madam President, I submit that I am one of those ready to completely remove any vestiges
of the days of enslavement, but not prepared to erase them if to do so would merely leave a
vacuum to be occupied by a far worse type. 350

SPEECH OF COMMISSIONER GASCON 351

xxxx

Let us consider the situation of peace in our world today. Consider our brethren in the Middle
East, in Indo-China, Central America, in South Africa - there has been escalation of war in some
of these areas because of foreign intervention which views these conflicts through the narrow
prism of the East-West conflict. The United States bases have been used as springboards
for intervention in some of these conflicts. We should not allow ourselves to be party to
the warlike mentality of these foreign interventionists. We must always be on the side of
peace – this means that we should not always rely on military solution. 352

103
xxxx

x x x The United States bases, therefore, are springboards for intervention in our own
internal affairs and in the affairs of other nations in this region.

xxxx

Thus, I firmly believe that a self-respecting nation should safeguard its fundamental freedoms
which should logically be declared in black and white in our fundamental law of the land - the
Constitution. Let us express our desire for national sovereignty so we may be able to
achieve national self-determination. Let us express our desire for neutrality so that we may be
able to follow active nonaligned independent foreign policies. Let us express our desire for peace
and a nuclear-free zone so we may be able to pursue a healthy and tranquil existence, to have
peace that is autonomous and not imposed.  353

xxxx

SPEECH OF COMMISSIONER TADEO 354

Para sa magbubukid, ano ha ang kahulugan ng U.S. military bases? Para sa

magbubukid, ang kahulugan nito ay pagkaalipin. Para sa magbubukid, ang pananatili ng U.S.
military bases ay tinik sa dibdib ng sambayanang Pilipinong patuloy na nakabaon. Para sa
sambayanang magbubukid, ang ibig sabihin ng U.S. military bases ay batong pabigat na
patuloy na pinapasan ng sambayanang Pilipino. Para sa sambayanang magbubukid, ang
pananatili ng U.S. military bases ay isang nagdudumilat na katotohanan ng patuloy na
paggahasa ng imperyalistang Estados Unidos sa ating Inang Bayan - economically,
politically and culturally. Para sa sambayanang magbubukid ang U.S. military
bases ay kasingkahulugan ng nuclear weapon - ang kahulugan ay magneto ng
isang nuclear war. Para sa sambayanang magbubukid, ang kahulugan ng U.S. military
bases ay isang salot. 355

SPEECH OF COMMISSIONER QUESADA 356

xxxx

The drift in the voting on issues related to freeing ourselves from the instruments of
domination and subservience has clearly been defined these past weeks.

xxxx

So for the record, Mr. Presiding Officer, I would like to declare my support for the committee's
position to enshrine in the Constitution a fundamental principle forbidding foreign military bases,
troops or facilities in any part of the Philippine territory as a clear and concrete manifestation
of our inherent right to national self-determination, independence and sovereignty.

Mr. Presiding Officer, I would like to relate now these attributes of genuine nationhood to the
social cost of allowing foreign countries to maintain military bases in our country. Previous
speakers have dwelt on this subject, either to highlight its importance in relation to the other
issues or to gloss over its significance and !llake this a part of future negotiations.
357

xxxx

Mr. Presiding Officer, I feel that banning foreign military bases is one of the solutions and is the
response of the Filipino people against this condition and other conditions that have already

104
been clearly and emphatically discussed in past deliberations. The deletion, therefore, of Section
3 in the Constitution we are drafting will have the following implications:

First, the failure of the Constitutional Commission to decisively respond to the continuing

violation of our territorial integrity via the military bases agreement which permits the
retention of U.S. facilities within the Philippine soil over which our authorities have no
exclusive jurisdiction contrary to the accepted definition of the exercise of sovereignty.

Second, consent by this forum, this Constitutional Commission, to an exception in the

application of a provision in the Bill of Rights that we have just drafted regarding equal
application of the laws of the land to all inhabitants, permanent or otherwise, within its territorial
boundaries.

Third, the continued exercise by the United States of extraterritoriality despite the

condemnations of such practice by the world community of nations in the light of overwhelming
international approval of eradicating all vestiges of colonialism.
358

xxxx

Sixth, the deification of a new concept called pragmatic sovereignty, in the hope that such can
be wielded to force the United States government to concede to better terms and conditions
concerning the military bases agreement, including the transfer of complete control to the
Philippine government of the U.S. facilities, while in the meantime we have to suffer all
existing indignities and disrespect towards our rights as a sovereign nation.

xxxx

Eighth, the utter failure of this forum to view the issue of foreign military bases as
essentially a question of sovereignty which does not require in-depth studies or analyses and
which this forum has, as a constituent assembly drafting a constitution, the expertise and
capacity to decide on except that it lacks the political will that brought it to existence and now
engages in an elaborate scheme of buck-passing.

xxxx

Without any doubt we can establish a new social order in our country, if we reclaim, restore,
uphold and defend our national sovereignty. National sovereignty is what the military bases
issue is all about. It is only the sovereign people exercising their national sovereignty who can
design an independent course and take full control of their national destiny. 359

SPEECH OF COMMISSIONER P ADILLA 360

xxxx

Mr. Presiding Officer, in advocating the majority committee report, specifically Sections 3 and 4
on neutrality, nuclear and bases-free country, some views stress sovereignty of the Republic
and even invoke survival of the Filipino nation and people. 361

REBUTTAL OF COMMISSIONER NOLLEDO 362

xxxx

The anachronistic and ephemeral arguments against the provisions of the committee report to
dismantle the American bases after 1991 only show the urgent need to free our country from
the entangling alliance with any power bloc. 363

105
xxxx

xx x Mr. Presiding Officer, it is not necessary for us to possess expertise to know that the so-
called RP-US Bases Agreement will expire in 1991, that it infringes on our sovereignty and
jurisdiction as well as national dignity and honor, that it goes against the UN policy of
disarmament and that it constitutes unjust intervention in our internal affairs.  (Emphases
364

Supplied)

The Constitutional Commission eventually agreed to allow foreign military bases, troops, or
facilities, subject to the provisions of Section 25. It is thus important to read its discussions
carefully. From these discussions, we can deduce three legal standards that were articulated by
the Constitutional Commission Members. These are characteristics of any agreement that the
country, and by extension this Court, must ensure are observed. We can thereby determine
whether a military base or facility in the Philippines, which houses or is accessed by foreign
military troops, is foreign or remains a Philippine military base or facility. The legal standards we
find applicable are: independence from foreign control, sovereignty and applicable law, and
national security and territorial integrity.

i. First standard: independence from foreign control

Very clearly, much of the opposition to the U.S. bases at the time of the Constitution's drafting
was aimed at asserting Philippine independence from the U.S., as well as control over our
country's territory and military.

Under the Civil Code, there are several aspects of control exercised over property.

Property is classified as private or public.  It is public if "intended for public use, such as roads,
365

canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads,
and others of similar character[,]" or "[t]hose which belong to the State, without being for public
use, and are intended for some public service or for the development of the national wealth. " 366

Quite clearly, the Agreed Locations are contained within a property for public use, be it within a
government military camp or property that belongs to the Philippines. 1avvphi1

Once ownership is established, then the rights of ownership flow freely. Article 428 of the Civil
Code provides that "[t]he owner has the right to enjoy and dispose of a thing, without other
limitations than those established by law." Moreover, the owner "has also a right of action against
the holder and possessor of the thing in order to recover it."

Philippine civil law therefore accords very strong rights to the owner of property, even against
those who hold the property. Possession, after all, merely raises a disputable presumption of
ownership, which can be contested through normal judicial processes. 367

In this case, EDCA explicitly provides that ownership of the Agreed Locations remains with the
Philippine govemment.  What U.S. personnel have a right to, pending mutual agreement, is
368

access to and use of these locations. 369

The right of the owner of the property to allow access and use is consistent with the Civil Code,
since the owner may dispose of the property in whatever way deemed fit, subject to the limits of
the law. So long as the right of ownership itself is not transferred, then whatever rights are
transmitted by agreement does not completely divest the owner of the rights over the property,
but may only limit them in accordance with law.

Hence, even control over the property is something that an owner may transmit freely. This act
does not translate into the full transfer of ownership, but only of certain rights. In Roman Catholic

106
Apostolic Administrator of Davao, Inc. v. Land Registration Commission, we stated that the
constitutional proscription on property ownership is not violated despite the foreign national's
control over the property.370

EDCA, in respect of its provisions on Agreed Locations, is essentially a contract of use and
access. Under its pertinent provisions, it is the Designated Authority of the Philippines that shall,
when requested, assist in facilitating transit or access to public land and facilities.  The activities
371

carried out within these locations are subject to agreement as authorized by the Philippine
govemment.  Granting the U.S. operational control over these locations is likewise subject to
372

EDCA' s security mechanisms, which are bilateral procedures involving Philippine consent and
cooperation.  Finally, the Philippine Designated Authority or a duly designated representative is
373

given access to the Agreed Locations. 374

To our mind, these provisions do not raise the spectre of U.S. control, which was so feared by
the Constitutional Commission. In fact, they seem to have been the product of deliberate
negotiation from the point of view of the Philippine government, which balanced constitutional
restrictions on foreign military bases and facilities against the security needs of the country. In
the 1947 MBA, the U.S. forces had "the right, power and authority x x x to construct (including
dredging and filling), operate, maintain, utilize, occupy, garrison and control the bases."  No 375

similarly explicit provision is present in EDCA.

Nevertheless, the threshold for allowing the presence of foreign military facilities and bases has
been raised by the present Constitution. Section 25 is explicit that foreign military bases, troops,
or facilities shall not be allowed in the Philippines, except under a treaty duly concurred in by the
Senate. Merely stating that the Philippines would retain ownership would do violence to the
constitutional requirement if the Agreed Locations were simply to become a less obvious
manifestation of the U.S. bases that were rejected in 1991.

When debates took place over the military provisions of the Constitution, the committee rejected
a specific provision proposed by Commissioner Sarmiento. The discussion illuminates and
provides context to the 1986 Constitutional Commission's vision of control and independence
from the U.S., to wit:

MR. SARMIENTO: Madam President, my proposed amendment reads as follows: "THE STATE
SHALL ESTABLISH AND MAINTAIN AN INDEPENDENT AND SELF-RELIANT ARMED
FORCES OF THE PHILIPPINES." Allow me to briefly explain, Madam President. The Armed
Forces of the Philippines is a vital component of Philippine society depending upon its training,
orientation and support. It will either be the people's protector or a staunch supporter of a usurper
or tyrant, local and foreign interest. The Armed Forces of the Philippines' past and recent
experience shows it has never been independent and self-reliant. Facts, data and statistics
will show that it has been substantially dependent upon a foreign power. In March 1968,
Congressman Barbero, himself a member of the Armed Forces of the Philippines, revealed top
secret documents showing what he described as U.S. dictation over the affairs of the Armed
Forces of the Philippines. He showed that under existing arrangements, the United States
unilaterally determines not only the types and quantity of arms and equipments that our
armed forces would have, but also the time when these items are to be made available to
us. It is clear, as he pointed out, that the composition, capability and schedule of
development of the Armed Forces of the Philippines is under the effective control of the
U.S. government.  (Emphases supplied)
376

Commissioner Sarmiento proposed a motherhood statement in the 1987 Constitution that would
assert "independent" and "self-reliant" armed forces. This proposal was rejected by the
committee, however. As Commissioner De Castro asserted, the involvement of the
Philippine military with the U.S. did not, by itself, rob the Philippines of its real
independence. He made reference to the context of the times: that the limited resources of the
Philippines and the current insurgency at that time necessitated a strong military relationship with

107
the U.S. He said that the U.S. would not in any way control the Philippine military despite this
relationship and the fact that the former would furnish military hardware or extend military
assistance and training to our military. Rather, he claimed that the proposal was in compliance
with the treaties between the two states.

MR. DE CASTRO: If the Commissioner will take note of my speech on U.S. military bases on 12
September 1986, I spoke on the selfreliance policy of the armed forces. However, due to very
limited resources, the only thing we could do is manufacture small arms ammunition. We cannot
blame the armed forces. We have to blame the whole Republic of the Philippines for failure to
provide the necessary funds to make the Philippine Armed Forces self-reliant. Indeed that is a
beautiful dream. And I would like it that way. But as of this time, fighting an insurgency case, a
rebellion in our country - insurgency - and with very limited funds and very limited number of
men, it will be quite impossible for the Philippines to appropriate the necessary funds
therefor. However, if we say that the U.S. government is furnishing us the military
hardware, it is not control of our armed forces or of our government. It is in compliance
with the Mutual Defense Treaty. It is under the military assistance program that it becomes the
responsibility of the United States to furnish us the necessary hardware in connection with the
military bases agreement. Please be informed that there are three (3) treaties connected with the
military bases agreement; namely: the RP-US Military Bases Agreement, the Mutual Defense
Treaty and the Military Assistance Program.

My dear Commissioner, when we enter into a treaty and we are furnished the military
hardware pursuant to that treaty, it is not in control of our armed forces nor control of our
government. True indeed, we have military officers trained in the U.S. armed forces school. This
is part of our Military Assistance Program, but it does not mean that the minds of our military
officers are for the U.S. government, no. I am one of those who took four courses in the United
States schools, but I assure you, my mind is for the Filipino people. Also, while we are sending
military officers to train or to study in U.S. military schools, we are also sending our officers to
study in other military schools such as in Australia, England and in Paris. So, it does not mean
that when we send military officers to United States schools or to other military schools, we will
be under the control of that country. We also have foreign officers in our schools, we in the
Command and General Staff College in Fort Bonifacio and in our National Defense College, also
in Fort Bonifacio.  (Emphases supplied)
377

This logic was accepted in Tañada v. Angara, in which the Court ruled that independence does
not mean the absence of foreign participation:

Furthermore, the constitutional policy of a "self-reliant and independent national economy" does

not necessarily rule out the entry of foreign investments, goods and services. It
contemplates neither "economic seclusion" nor "mendicancy in the international community." As
explained by Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional
policy:

Economic self reliance is a primary objective of a developing country that is keenly aware of
overdependence on external assistance for even its most basic needs. It does not mean autarky
or economic seclusion; rather, it means avoiding mendicancy in the international
community. Independence refers to the freedom from undue foreign control of the national
economy, especially in such strategic industries as in the development of natural resources and
public utilities.  (Emphases supplied)
378

The heart of the constitutional restriction on foreign military facilities and bases is therefore the
assertion of independence from the U.S. and other foreign powers, as independence is exhibited
by the degree of foreign control exerted over these areas.  The essence of that independence is
1âwphi1

self-governance and self-control.  Independence itself is "[t]he state or condition of being free
379

from dependence, subjection, or control. " 380

108
Petitioners assert that EDCA provides the U.S. extensive control and authority over Philippine
facilities and locations, such that the agreement effectively violates Section 25 of the 1987
Constitution.381

Under Article VI(3) of EDCA, U.S. forces are authorized to act as necessary for "operational
control and defense." The term "operational control" has led petitioners to regard U.S. control
over the Agreed Locations as unqualified and, therefore, total.  Petitioners contend that the word
382

"their" refers to the subject "Agreed Locations."

This argument misreads the text, which is quoted below:

United States forces are authorized to exercise all rights and authorities within Agreed Locations
that are necessary for their operational control or defense, including taking appropriate measure
to protect United States forces and United States contractors. The United States should
coordinate such measures with appropriate authorities of the Philippines.

A basic textual construction would show that the word "their," as understood above, is a
possessive pronoun for the subject "they," a third-person personal pronoun in plural form. Thus,
"their" cannot be used for a non-personal subject such as "Agreed Locations." The simple
grammatical conclusion is that "their" refers to the previous third-person plural noun, which is
"United States forces." This conclusion is in line with the definition of operational control.

a. U.S. operational control as the exercise of authority over U.S. personnel, and not over the
Agreed Locations

Operational control, as cited by both petitioner and respondents, is a military term referring to

[t]he authority to perform those functions of command over subordinate forces involving
organizing and employing commands and forces, assigning tasks, designating objective, and
giving authoritative direction necessary to accomplish the mission. 383

At times, though, operational control can mean something slightly different. In JUSMAG
Philippines v. National Labor Relations Commission, the Memorandum of Agreement between
the AFP and JUSMAG Philippines defined the term as follows: 384

The term "Operational Control" includes, but is not limited to, all personnel administrative actions,
such as: hiring recommendations; firing recommendations; position classification; discipline;
nomination and approval of incentive awards; and payroll computation.

Clearly, traditional standards define "operational control" as personnel control. Philippine law, for
instance, deems operational control as one exercised by police officers and civilian authorities
over their subordinates and is distinct from the administrative control that they also exercise over
police subordinates.  Similarly, a municipal mayor exercises operational control over the police
385

within the municipal government,  just as city mayor possesses the same power over the police
386

within the city government.387

Thus, the legal concept of operational control involves authority over personnel in a commander-
subordinate relationship and does not include control over the Agreed Locations in this particular
case. Though not necessarily stated in EDCA provisions, this interpretation is readily implied by
the reference to the taking of "appropriate measures to protect United States forces and United
States contractors."

It is but logical, even necessary, for the U.S. to have operational control over its own forces, in
much the same way that the Philippines exercises operational control over its own units.

109
For actual operations, EDCA is clear that any activity must be planned and pre-approved by the
MDB-SEB.  This provision evinces the partnership aspect of EDCA, such that both stakeholders
388

have a say on how its provisions should be put into effect.

b. Operational control vis-à-vis effective command and control

Petitioners assert that beyond the concept of operational control over personnel, qualifying
access to the Agreed Locations by the Philippine Designated Authority with the phrase
"consistent with operational safety and security requirements in accordance with agreed
procedures developed by the Parties" leads to the conclusion that the U.S. exercises effective
control over the Agreed Locations.  They claim that if the Philippines exercises possession of
389

and control over a given area, its representative should not have to be authorized by a special
provision.
390

For these reasons, petitioners argue that the "operational control" in EDCA is the "effective
command and control" in the 1947 MBA.  In their Memorandum, they distinguish effective
391

command and control from operational control in U.S. parlance.  Citing the Doctrine for the
392

Armed Forces of the United States, Joint Publication 1, "command and control (C2)" is defined
as "the exercise of authority and direction by a properly designated commander over assigned
and attached forces in the accomplishment of the mission x x x."  Operational control, on the
393

other hand, refers to "[t]hose functions of command over assigned forces involving the
composition of subordinate forces, the assignment of tasks, the designation of objectives, the
overall control of assigned resources, and the full authoritative direction necessary to accomplish
the mission." 394

Two things demonstrate the errors in petitioners' line of argument.

Firstly, the phrase "consistent with operational safety and security requirements in accordance
with agreed procedures developed by the Parties" does not add any qualification beyond that
which is already imposed by existing treaties. To recall, EDCA is based upon prior treaties,
namely the VFA and the MDT.  Treaties are in themselves contracts from which rights and
395

obligations may be claimed or waived.  In this particular case, the Philippines has already
396

agreed to abide by the security mechanisms that have long been in place between the U.S. and
the Philippines based on the implementation of their treaty relations. 397

Secondly, the full document cited by petitioners contradicts the equation of "operational control"
with "effective command and control," since it defines the terms quite differently, viz:
398

Command and control encompasses the exercise of authority, responsibility, and direction by a
commander over assigned and attached forces to accomplish the mission. Command at all levels
is the art of motivating and directing people and organizations into action to accomplish missions.
Control is inherent in command. To control is to manage and direct forces and functions
consistent with a commander's command authority. Control of forces and functions helps
commanders and staffs compute requirements, allocate means, and integrate efforts. Mission
command is the preferred method of exercising C2. A complete discussion of tenets,
organization, and processes for effective C2 is provided in Section B, "Command and Control of
Joint Forces," of Chapter V "Joint Command and Control."

Operational control is defined thus: 399

OPCON is able to be delegated from a lesser authority than COCOM. It is the authority to
perform those functions of command over subordinate forces involving organizing and employing
commands and forces, assigning tasks, designating objectives, and giving authoritative direction
over all aspects of military operations and joint training necessary to accomplish the mission. It
should be delegated to and exercised by the commanders of subordinate organizations;
normally, this authority is exercised through subordinate JFCs, Service, and/or functional

110
component commanders. OPCON provides authority to organize and employ commands and
forces as the commander considers necessary to accomplish assigned missions. It does not
include authoritative direction for logistics or matters of administration, discipline, internal
organization, or unit training. These elements of COCOM must be specifically delegated by the
CCDR. OPCON does include the authority to delineate functional responsibilities and operational
areas of subordinate JFCs.

Operational control is therefore the delegable aspect of combatant command, while command
and control is the overall power and responsibility exercised by the commander with reference to
a mission. Operational control is a narrower power and must be given, while command and
control is plenary and vested in a commander. Operational control does not include the planning,
programming, budgeting, and execution process input; the assignment of subordinate
commanders; the building of relationships with Department of Defense agencies; or the directive
authority for logistics, whereas these factors are included in the concept of command and
control.400

This distinction, found in the same document cited by petitioners, destroys the very foundation of
the arguments they have built: that EDCA is the same as the MBA.

c. Limited operational control over the Agreed Locations only for construction activitites

As petitioners assert, EDCA indeed contains a specific provision that gives to the U.S.
operational control within the Agreed Locations during construction activities.  This exercise of
401

operational control is premised upon the approval by the MDB and the SEB of the construction
activity through consultation and mutual agreement on the requirements and standards of the
construction, alteration, or improvement. 402

Despite this grant of operational control to the U.S., it must be emphasized that the grant is only
for construction activities. The narrow and limited instance wherein the U.S. is given operational
control within an Agreed Location cannot be equated with foreign military control, which is so
abhorred by the Constitution.

The clear import of the provision is that in the absence of construction activities, operational
control over the Agreed Location is vested in the Philippine authorities. This meaning is implicit in
the specific grant of operational control only during construction activities. The principle of
constitutional construction, "expressio unius est exclusio alterius," means the failure to mention
the thing becomes the ground for inferring that it was deliberately excluded. Following this
403

construction, since EDCA mentions the existence of U.S. operational control over the Agreed
Locations for construction activities, then it is quite logical to conclude that it is not exercised over
other activities.

Limited control does not violate the Constitution. The fear of the commissioners was total control,
to the point that the foreign military forces might dictate the terms of their acts within the
Philippines.  More important, limited control does not mean an abdication or derogation of
404

Philippine sovereignty and legal jurisdiction over the Agreed Locations. It is more akin to the
extension of diplomatic courtesies and rights to diplomatic agents,  which is a waiver of control
405

on a limited scale and subject to the terms of the treaty.

This point leads us to the second standard envisioned by the framers of the Constitution: that the
Philippines must retain sovereignty and jurisdiction over its territory.

ii. Second standard: Philippine sovereignty and applicable law

EDCA states in its Preamble the "understanding for the United States not to establish a
permanent military presence or base in the territory of the Philippines." Further on, it likewise
states the recognition that "all United States access to and use of facilities and areas will be at

111
the invitation of the Philippines and with full respect for the Philippine Constitution and Philippine
laws."

The sensitivity of EDCA provisions to the laws of the Philippines must be seen in light of
Philippine sovereignty and jurisdiction over the Agreed Locations.

Sovereignty is the possession of sovereign power,  while jurisdiction is the conferment by law of
406

power and authority to apply the law.  Article I of the 1987 Constitution states:
407

The national territory comprises the Philippine archipelago, with all the islands and waters
embraced therein, and all other territories over which the Philippines has sovereignty or
jurisdiction, consisting of its terrestrial, fluvial, and aerial domains, including its territorial sea,
the seabed, the subsoil, the insular shelves, and other submarine areas. The waters around,
between, and connecting the islands of the archipelago, regardless of their breadth and
dimensions, form part of the internal waters of the Philippines. (Emphasis supplied)

From the text of EDCA itself, Agreed Locations are territories of the Philippines that the U.S.
forces are allowed to access and use.  By withholding ownership of these areas and retaining
408

unrestricted access to them, the government asserts sovereignty over its territory. That
sovereignty exists so long as the Filipino people exist. 409

Significantly, the Philippines retains primary responsibility for security with respect to the Agreed
Locations. Hence, Philippine law remains in force therein, and it cannot be said that jurisdiction
410

has been transferred to the U.S. Even the previously discussed necessary measures for
operational control and defense over U.S. forces must be coordinated with Philippine
authorities.411

Jurisprudence bears out the fact that even under the former legal regime of the MBA, Philippine
laws continue to be in force within the bases.  The difference between then and now is that
412

EDCA retains the primary jurisdiction of the Philippines over the security of the Agreed Locations,
an important provision that gives it actual control over those locations. Previously, it was the
provost marshal of the U.S. who kept the peace and enforced Philippine law in the bases. In this
instance, Philippine forces act as peace officers, in stark contrast to the 1947 MBA provisions on
jurisdiction.413

iii. Third standard: must respect national security and territorial integrity

The last standard this Court must set is that the EDCA provisions on the Agreed Locations must
not impair or threaten the national security and territorial integrity of the Philippines.

This Court acknowledged in Bayan v. Zamora that the evolution of technology has essentially
rendered the prior notion of permanent military bases obsolete.

Moreover, military bases established within the territory of another state is no longer viable
because of the alternatives offered by new means and weapons of warfare such as nuclear
weapons, guided missiles as well as huge sea vessels that can stay afloat in the sea even for
months and years without returning to their home country. These military warships are actually
used as substitutes for a land-home base not only of military aircraft but also of military personnel
and facilities. Besides, vessels are mobile as compared to a land-based military headquarters. 414

The VFA serves as the basis for the entry of U.S. troops in a limited scope. It does not allow, for
instance, the re-establishment of the Subic military base or the Clark Air Field as U.S. military
reservations. In this context, therefore, this Court has interpreted the restrictions on foreign
bases, troops, or facilities as three independent restrictions. In accord with this interpretation,
each restriction must have its own qualification.

112
Petitioners quote from the website http://en.wikipedia.org to define what a military base
is.  While the source is not authoritative, petitioners make the point that the Agreed Locations,
415

by granting access and use to U.S. forces and contractors, are U.S. bases under a different
name.  More important, they claim that the Agreed Locations invite instances of attack on the
416

Philippines from enemies of the U.S. 417

We believe that the raised fear of an attack on the Philippines is not in the realm of law, but of
politics and policy. At the very least, we can say that under international law, EDCA does not
provide a legal basis for a justified attack on the Philippines.

In the first place, international law disallows any attack on the Agreed Locations simply because
of the presence of U.S. personnel. Article 2(4) of the United Nations Charter states that "All
Members shall refrain in their international relations from the threat or use of force against the
territorial integrity or political independence of any state, or in any other manner inconsistent with
the Purposes of the United Nations."  Any unlawful attack on the Philippines breaches the treaty,
418

and triggers Article 51 of the same charter, which guarantees the inherent right of individual or
collective self-defence.

Moreover, even if the lawfulness of the attack were not in question, international humanitarian
law standards prevent participants in an armed conflict from targeting non-participants.
International humanitarian law, which is the branch of international law applicable to armed
conflict, expressly limits allowable military conduct exhibited by forces of a participant in an
armed conflict.  Under this legal regime, participants to an armed conflict are held to specific
419

standards of conduct that require them to distinguish between combatants and non-
combatants,  as embodied by the Geneva Conventions and their Additional Protocols.
420 421

Corollary to this point, Professor John Woodcliffe, professor of international law at the University
of Leicester, noted that there is no legal consensus for what constitutes a base, as opposed to
other terms such as "facilities" or "installation."  In strategic literature, "base" is defined as an
422

installation "over which the user State has a right to exclusive control in an extraterritorial
sense."  Since this definition would exclude most foreign military installations, a more important
423

distinction must be made.

For Woodcliffe, a type of installation excluded from the definition of "base" is one that does not
fulfill a combat role. He cites an example of the use of the territory of a state for training
purposes, such as to obtain experience in local geography and climactic conditions or to carry
out joint exercises.  Another example given is an advanced communications technology
424

installation for purposes of information gathering and communication.  Unsurprisingly, he deems

425

these non-combat uses as borderline situations that would be excluded from the functional
understanding of military bases and installations. 426

By virtue of this ambiguity, the laws of war dictate that the status of a building or person is
presumed to be protected, unless proven otherwise.  Moreover, the principle of distinction
427

requires combatants in an armed conflict to distinguish between lawful targets  and protected
428

targets.  In an actual armed conflict between the U.S. and a third state, the Agreed Locations
429

cannot be considered U.S. territory, since ownership of territory even in times of armed conflict
does not change. 430

Hence, any armed attack by forces of a third state against an Agreed Location can only be
legitimate under international humanitarian law if it is against a bona fide U.S. military base,
facility, or installation that directly contributes to the military effort of the U.S. Moreover, the third
state's forces must take all measures to ensure that they have complied with the principle of
distinction (between combatants and non-combatants).

There is, then, ample legal protection for the Philippines under international law that would
ensure its territorial integrity and national security in the event an Agreed Location is subjected to

113
attack. As EDCA stands, it does not create the situation so feared by petitioners - one in which
the Philippines, while not participating in an armed conflict, would be legitimately targeted by an
enemy of the U.S. 431

In the second place, this is a policy question about the wisdom of allowing the presence of U.S.
personnel within our territory and is therefore outside the scope of judicial review.

Evidently, the concept of giving foreign troops access to "agreed" locations, areas, or facilities
within the military base of another sovereign state is nothing new on the international plane. In
fact, this arrangement has been used as the framework for several defense cooperation
agreements, such as in the following:

1. 2006 U.S.-Bulgaria Defense Cooperation Agreement 432

2. 2009 U.S.-Colombia Defense Cooperation Agreement 433

3. 2009 U.S.-Poland Status of Forces Agreement 434

4. 2014 U.S.-Australia Force Posture Agreement 435

5. 2014 U.S.-Afghanistan Security and Defense Cooperation Agreement 436

In all of these arrangements, the host state grants U.S. forces access to their military
bases.  That access is without rental or similar costs to the U.S.  Further, U.S. forces are
437 438

allowed to undertake construction activities in, and make alterations and improvements to, the
agreed locations, facilities, or areas.  As in EDCA, the host states retain ownership and
439

jurisdiction over the said bases.

440

In fact, some of the host states in these agreements give specific military-related rights to the
U.S. For example, under Article IV(l) of the US.-Bulgaria Defense Cooperation Agreement, "the
United States forces x x x are authorized access to and may use agreed facilities and areas x x x
for staging and deploying of forces and materiel, with the purpose of conducting x x x
contingency operations and other missions, including those undertaken in the framework of the
North Atlantic Treaty." In some of these agreements, host countries allow U.S. forces to
construct facilities for the latter’s exclusive use.
441

Troop billeting, including construction of temporary structures, is nothing new. In Lim v.

Executive Secretary, the Court already upheld the Terms of Reference of Balikatan 02-1, which
authorized U.S. forces to set up "[t]emporary structures such as those for troop billeting,
classroom instruction and messing x x x during the Exercise." Similar provisions are also in the
Mutual Logistics Support Agreement of 2002 and 2007, which are essentially executive
agreements that implement the VFA, the MDT, and the 1953 Military Assistance Agreement.
These executive agreements similarly tackle the "reciprocal provision of logistic support,
supplies, and services,"  which include "[b ]illeting, x x x operations support (and construction
442

and use of temporary structures incident to operations support), training services, x x x storage
services, x x x during an approved activity."  These logistic supplies, support, and services
443

include temporary use of "nonlethal items of military equipment which are not designated as
significant military equipment on the U.S. Munitions List, during an approved activity."  The first
444

Mutual Logistics Support Agreement has lapsed, while the second one has been extended until
2017 without any formal objection before this Court from the Senate or any of its members.

The provisions in EDCA dealing with Agreed Locations are analogous to those in the
aforementioned executive agreements. Instead of authorizing the building of temporary
structures as previous agreements have done, EDCA authorizes the U.S. to build permanent
structures or alter or improve existing ones for, and to be owned by, the Philippines.  EDCA is
445

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clear that the Philippines retains ownership of altered or improved facilities and newly
constructed permanent or non-relocatable structures.  Under EDCA, U.S. forces will also be
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allowed to use facilities and areas for "training; x x x; support and related activities; x x x;
temporary accommodation of personnel; communications" and agreed activities. 447

Concerns on national security problems that arise from foreign military equipment being present
in the Philippines must likewise be contextualized. Most significantly, the VFA already
authorizes the presence of U.S. military equipment in the country. Article VII of the VFA
already authorizes the U.S. to import into or acquire in the Philippines "equipment, materials,
supplies, and other property" that will be used "in connection with activities" contemplated
therein. The same section also recognizes that "[t]itle to such property shall remain" with the US
and that they have the discretion to "remove such property from the Philippines at any time."

There is nothing novel, either, in the EDCA provision on the prepositioning and storing of
"defense equipment, supplies, and materiel,"  since these are sanctioned in the VFA. In fact, the
448

two countries have already entered into various implementing agreements in the past that are
comparable to the present one. The Balikatan 02-1 Terms of Reference mentioned in Lim v.
Executive Secretary specifically recognizes that Philippine and U.S. forces "may share x x x in
the use of their resources, equipment and other assets." Both the 2002 and 2007 Mutual
Logistics Support Agreements speak of the provision of support and services, including the
"construction and use of temporary structures incident to operations support" and "storage
services" during approved activities.  These logistic supplies, support, and services include the
449

"temporary use of x x x nonlethal items of military equipment which are not designated as
significant military equipment on the U.S. Munitions List, during an approved activity." Those 450

activities include "combined exercises and training, operations and other deployments" and
"cooperative efforts, such as humanitarian assistance, disaster relief and rescue operations, and
maritime anti-pollution operations" within or outside Philippine territory.  Under EDCA, the
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equipment, supplies, and materiel that will be prepositioned at Agreed Locations include
"humanitarian assistance and disaster relief equipment, supplies, and materiel. "  Nuclear 452

weapons are specifically excluded from the materiel that will be prepositioned.

Therefore, there is no basis to invalidate EDCA on fears that it increases the threat to our
national security. If anything, EDCA increases the likelihood that, in an event requiring a
defensive response, the Philippines will be prepared alongside the U.S. to defend its islands and
insure its territorial integrity pursuant to a relationship built on the MDT and VFA.

8. Others issues and concerns raised

A point was raised during the oral arguments that the language of the MDT only refers to mutual
help and defense in the Pacific area.  We believe that any discussion of the activities to be
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undertaken under EDCA vis-a-vis the defense of areas beyond the Pacific is premature. We note
that a proper petition on that issue must be filed before we rule thereon. We also note that none
of the petitions or memoranda has attempted to discuss this issue, except only to theorize that
the U.S. will not come to our aid in the event of an attack outside of the Pacific. This is a matter
of policy and is beyond the scope of this judicial review.

In reference to the issue on telecommunications, suffice it to say that the initial impression of the
facility adverted to does appear to be one of those that require a public franchise by way of
congressional action under Section 11, Article XII of the Constitution. As respondents submit,
however, the system referred to in the agreement does not provide telecommunications services
to the public for compensation.  It is clear from Article VIl(2) of EDCA that the telecommunication
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system is solely for the use of the U.S. and not the public in general, and that this system will not
interfere with that which local operators use. Consequently, a public franchise is no longer
necessary.

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Additionally, the charge that EDCA allows nuclear weapons within Philippine territory is entirely
speculative. It is noteworthy that the agreement in fact specifies that the prepositioned materiel
shall not include nuclear weapons. Petitioners argue that only prepositioned nuclear weapons
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are prohibited by EDCA; and that, therefore, the U.S. would insidiously bring nuclear weapons to
Philippine territory.  The general prohibition on nuclear weapons, whether prepositioned or not,
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is already expressed in the 1987 Constitution.  It would be unnecessary or superfluous to

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include all prohibitions already in the Constitution or in the law through a document like EDCA.

Finally, petitioners allege that EDCA creates a tax exemption, which under the law must originate
from Congress. This allegation ignores jurisprudence on the government's assumption of tax
liability. EDCA simply states that the taxes on the use of water, electricity, and public utilities are
for the account of the Philippine Government.  This provision creates a situation in which a
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contracting party assumes the tax liability of the other.  In National Power Corporation v.
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Province of Quezon, we distinguished between enforceable and unenforceable stipulations on

the assumption of tax liability. Afterwards, we concluded that an enforceable assumption of tax
liability requires the party assuming the liability to have actual interest in the property
taxed.  This rule applies to EDCA, since the Philippine Government stands to benefit not only
460

from the structures to be built thereon or improved, but also from the joint training with U.S.
forces, disaster preparation, and the preferential use of Philippine suppliers.  Hence, the
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provision on the assumption of tax liability does not constitute a tax exemption as petitioners
have posited.

Additional issues were raised by petitioners, all relating principally to provisions already
sufficiently addressed above. This Court takes this occasion to emphasize that the agreement
has been construed herein as to absolutely disauthorize the violation of the Constitution or any
applicable statute. On the contrary, the applicability of Philippine law is explicit in EDCA.

EPILOGUE

The fear that EDCA is a reincarnation of the U.S. bases so zealously protested by noted
personalities in Philippine history arises not so much from xenophobia, but from a genuine desire
for self-determination, nationalism, and above all a commitment to ensure the independence of
the Philippine Republic from any foreign domination.

Mere fears, however, cannot curtail the exercise by the President of the Philippines of his
Constitutional prerogatives in respect of foreign affairs. They cannot cripple him when he deems
that additional security measures are made necessary by the times. As it stands, the Philippines
through the Department of Foreign Affairs has filed several diplomatic protests against the
actions of the People's Republic of China in the West Philippine Sea;  initiated arbitration
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against that country under the United Nations Convention on the Law of the Sea;  is in the 463

process of negotiations with the Moro Islamic Liberation Front for peace in Southern
Philippines,  which is the subject of a current case before this Court; and faces increasing
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incidents of kidnappings of Filipinos and foreigners allegedly by the Abu Sayyaf or the New
People's Army.  The Philippine military is conducting reforms that seek to ensure the security
465

and safety of the nation in the years to come.  In the future, the Philippines must navigate a
466

world in which armed forces fight with increasing sophistication in both strategy and technology,
while employing asymmetric warfare and remote weapons.

Additionally, our country is fighting a most terrifying enemy: the backlash of Mother Nature. The
Philippines is one of the countries most directly affected and damaged by climate change. It is no
coincidence that the record-setting tropical cyclone Yolanda (internationally named Haiyan), one
of the most devastating forces of nature the world has ever seen hit the Philippines on 8
November 2013 and killed at least 6,000 people.  This necessitated a massive rehabilitation
467

project.  In the aftermath, the U.S. military was among the first to extend help and support to the
468

Philippines.

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That calamity brought out the best in the Filipinos as thousands upon thousands volunteered
their help, their wealth, and their prayers to those affected. It also brought to the fore the value of
having friends in the international community.

In order to keep the peace in its archipelago in this region of the world, and to sustain itself at the
same time against the destructive forces of nature, the Philippines will need friends. Who they
are, and what form the friendships will take, are for the President to decide. The only restriction is
what the Constitution itself expressly prohibits. It appears that this overarching concern for
balancing constitutional requirements against the dictates of necessity was what led to EDCA.

As it is, EDCA is not constitutionally infirm. As an executive agreement, it remains consistent with
existing laws and treaties that it purports to implement.

WHEREFORE, we hereby DISMISS the petitions.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Chief Justice

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