G.R. No.

L-2662             March 26, 1949

SHIGENORI KURODA, petitioner,
vs.
Major General RAFAEL JALANDONI, Brigadier General CALIXTO DUQUE, Colonel MARGARITO TORALBA,
Colonel IRENEO BUENCONSEJO, Colonel PEDRO TABUENA, Major FEDERICO ARANAS, MELVILLE S.
HUSSEY and ROBERT PORT, respondents.

Pedro Serran, Jose G. Lukban, and Liberato B. Cinco for petitioner.

Fred Ruiz Castro Federico Arenas Mariano Yengco, Jr., Ricardo A. Arcilla and S. Melville Hussey for respondents.

MORAN, C.J.:

Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and Commanding General of the
Japanese Imperial Forces in The Philippines during a period covering 19433 and 19444 who is now charged before
a military Commission convened by the Chief of Staff of the Armed forces of the Philippines with having unlawfully
disregarded and failed "to discharge his duties as such command, permitting them to commit brutal atrocities and
other high crimes against noncombatant civilians and prisoners of the Imperial Japanese Forces in violation of the
laws and customs of war" — comes before this Court seeking to establish the illegality of Executive Order No. 68 of
the President of the Philippines: to enjoin and prohibit respondents Melville S. Hussey and Robert Port from
participating in the prosecution of petitioner's case before the Military Commission and to permanently prohibit
respondents from proceeding with the case of petitioners.

In support of his case petitioner tenders the following principal arguments.

First. — "That Executive Order No. 68 is illegal on the ground that it violates not only the provision of our
constitutional law but also our local laws to say nothing of the fact (that) the Philippines is not a signatory nor an
adherent to the Hague Convention on Rules and Regulations covering Land Warfare and therefore petitioners is
charged of 'crimes' not based on law, national and international." Hence petitioner argues — "That in view off the
fact that this commission has been empanelled by virtue of an unconstitutional law an illegal order this commission
is without jurisdiction to try herein petitioner."

Second. — That the participation in the prosecution of the case against petitioner before the Commission in behalf
of the United State of America of attorneys Melville Hussey and Robert Port who are not attorneys authorized by the
Supreme Court to practice law in the Philippines is a diminution of our personality as an independent state and their
appointment as prosecutor are a violation of our Constitution for the reason that they are not qualified to practice law
in the Philippines.

Third. — That Attorneys Hussey and Port have no personality as prosecution the United State not being a party in
interest in the case.

Executive Order No. 68, establishing a National War Crimes Office prescribing rule and regulation governing the trial
of accused war criminals, was issued by the President of the Philippines on the 29th days of July, 1947 This Court
holds that this order is valid and constitutional. Article 2 of our Constitution provides in its section 3, that —

The Philippines renounces war as an instrument of national policy and adopts the generally accepted
principles of international law as part of the of the nation.

In accordance with the generally accepted principle of international law of the present day including the Hague
Convention the Geneva Convention and significant precedents of international jurisprudence established by the
United Nation all those person military or civilian who have been guilty of planning preparing or waging a war of
aggression and of the commission of crimes and offenses consequential and incidental thereto in violation of the
laws and customs of war, of humanity and civilization are held accountable therefor. Consequently in the
promulgation and enforcement of Execution Order No. 68 the President of the Philippines has acted in conformity
with the generally accepted and policies of international law which are part of the our Constitution.
The promulgation of said executive order is an exercise by the President of his power as Commander in chief of all
our armed forces as upheld by this Court in the case of Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) 1 when we
said —
War is not ended simply because hostilities have ceased. After cessation of armed hostilities incident of war
may remain pending which should be disposed of as in time of war. An importance incident to a conduct of
war is the adoption of measure by the military command not only to repel and defeat the enemies but to
seize and subject to disciplinary measure those enemies who in their attempt to thwart or impede our
military effort have violated the law of war. (Ex parte Quirin 317 U.S., 1; 63 Sup. Ct., 2.) Indeed the power to
create a military commission for the trial and punishment of war criminals is an aspect of waging war. And in
the language of a writer a military commission has jurisdiction so long as a technical state of war continues.
This includes the period of an armistice or military occupation up to the effective of a treaty of peace and
may extend beyond by treaty agreement. (Cowles Trial of War Criminals by Military Tribunals, America Bar
Association Journal June, 1944.)

Consequently, the President as Commander in Chief is fully empowered to consummate this unfinished aspect of
war namely the trial and punishment of war criminal through the issuance and enforcement of Executive Order No.
68.

Petitioner argues that respondent Military Commission has no Jurisdiction to try petitioner for acts committed in
violation of the Hague Convention and the Geneva Convention because the Philippines is not a signatory to the first
and signed the second only in 1947. It cannot be denied that the rules and regulation of the Hague and Geneva
conventions form, part of and are wholly based on the generally accepted principals of international law. In facts
these rules and principles were accepted by the two belligerent nation the United State and Japan who were
signatories to the two Convention, Such rule and principles therefore form part of the law of our nation even if the
Philippines was not a signatory to the conventions embodying them for our Constitution has been deliberately
general and extensive in its scope and is not confined to the recognition of rule and principle of international law as
continued inn treaties to which our government may have been or shall be a signatory.

Furthermore when the crimes charged against petitioner were allegedly committed the Philippines was under the
sovereignty of United States and thus we were equally bound together with the United States and with Japan to the
right and obligation contained in the treaties between the belligerent countries. These rights and obligation were not
erased by our assumption of full sovereignty. If at all our emergency as a free state entitles us to enforce the right on
our own of trying and punishing those who committed crimes against crimes against our people. In this connection it
is well to remember what we have said in the case of Laurel vs. Misa (76 Phil., 372):

. . . The change of our form government from Commonwealth to Republic does not affect the prosecution of
those charged with the crime of treason committed during then Commonwealth because it is an offense
against the same sovereign people. . . .

By the same token war crimes committed against our people and our government while we were a Commonwealth
are triable and punishable by our present Republic.

Petitioner challenges the participation of two American attorneys namely Melville S. Hussey and Robert Port in the
prosecution of his case on the ground that said attorney's are not qualified to practice law in Philippines in
accordance with our Rules of court and the appointment of said attorneys as prosecutors is violative of our national
sovereignty.

In the first place respondent Military Commission is a special military tribunal governed by a special law and not by
the Rules of court which govern ordinary civil court. It has already been shown that Executive Order No. 68 which
provides for the organization of such military commission is a valid and constitutional law. There is nothing in said
executive order which requires that counsel appearing before said commission must be attorneys qualified to
practice law in the Philippines in accordance with the Rules of Court. In facts it is common in military tribunals that
counsel for the parties are usually military personnel who are neither attorneys nor even possessed of legal training.

Secondly the appointment of the two American attorneys is not violative of our nation sovereignty. It is only fair and
proper that United States, which has submitted the vindication of crimes against her government and her people to
a tribunal of our nation should be allowed representation in the trial of those very crimes. If there has been any
relinquishment of sovereignty it has not been by our government but by the United State Government which has
yielded to us the trial and punishment of her enemies. The least that we could do in the spirit of comity is to allow
them representation in said trials.

Alleging that the United State is not a party in interest in the case petitioner challenges the personality of attorneys
Hussey and Port as prosecutors. It is of common knowledge that the United State and its people have been equally
if not more greatly aggrieved by the crimes with which petitioner stands charged before the Military Commission. It
can be considered a privilege for our Republic that a leader nation should submit the vindication of the honor of its
citizens and its government to a military tribunal of our country.

The Military Commission having been convened by virtue of a valid law with jurisdiction over the crimes charged
which fall under the provisions of Executive Order No. 68, and having said petitioner in its custody, this Court will not
interfere with the due process of such Military commission.

For all the foregoing the petition is denied with costs de oficio.

Paras, Feria, Pablo, Bengzon, Tuason, Montemayor and Reyes, JJ., concur.

Separate Opinions

PERFECTO, J., dissenting:

A military commission was empanelled on December 1, 1948 to try Lt. Gen. Shigenori Kuroda for Violation of the
laws and customs of land warfare.

Melville S. Hussey and Robert Port, American citizens and not authorized by the Supreme Court to practice law
were appointed prosecutor representing the American CIC in the trial of the case.

The commission was empanelled under the authority of Executive Order No. 68 of the President of the Philippines
the validity of which is challenged by petitioner on constitutional grounds. Petitioner has also challenged the
personality of Attorneys Hussey and Port to appear as prosecutors before the commission.

The charges against petitioner has been filed since June 26, 1948 in the name of the people of the Philippines as
accusers.

We will consideration briefly the challenge against the appearance of Attorneys Hussey and Port. It appearing that
they are aliens and have not been authorized by the Supreme Court to practice law there could not be any question
that said person cannot appear as prosecutors in petitioner case as with such appearance they would be practicing
law against the law.

Said violation vanishes however into insignificance at the side of the momentous question involved in the challenge
against the validity of Executive Order No. 68. Said order is challenged on several constitutional ground. To get a
clear idea of the question raised it is necessary to read the whole context of said order which is reproduced as
follows:

EXECUTIVE ORDER NO. 68.

ESTABLISHING A NATIONAL WAR CRIMES OFFICE AND PRESCRIBING RULES AND

REGULATION GOVERNING THE TRIAL OF ACCUSED WAR CRIMINAL.

I, Manuel Roxas president of the Philippines by virtue of the power vested in me by the Constitution and
laws of the Philippines do hereby establish a National War Crimes Office charged with the responsibility of
accomplishing the speedy trial of all Japanese accused of war crimes committed in the Philippines and
prescribe the rules and regulation such trial.

The National War crimes office is established within the office of the Judge Advocate General of the Army of
the Philippines and shall function under the direction supervision and control of the Judge Advocate
General. It shall proceed to collect from all available sources evidence of war crimes committed in the
Philippines from the commencement of hostilities by Japan in December 1941, maintain a record thereof
and bring about the prompt trial maintain a record thereof and bring about the prompt trial of the accused.

The National War Crimes Office shall maintain direct liaison with the Legal Section General Headquarters,
Supreme Commander for the Allied power and shall exchange with the said Office information and evidence
of war crimes.

The following rules and regulation shall govern the trial off person accused as war criminals:

ESTABLISHMENT OF MILITARY COMMISSIONS

(a) General. — person accused as war criminal shall be tried by military commission to be convened by or
under the authority of the Philippines.

II. JURISDICTION

(a) Over Person. — Thee military commission appointed hereunder shall have jurisdiction over all persons
charged with war crimes who are in the custody of the convening authority at the time of the trial.

(b) Over Offenses. — The military commission established hereunder shall have jurisdiction over all
offenses including but not limited to the following:

(1) The planning preparation initiation or waging of a war of aggression or a war in violation of international
treaties agreement or assurance or participation in a common plan or conspiracy for the accomplishment of
any of the foregoing.

(2) Violation of the laws or customs of war. Such violation shall include but not be limited to murder ill-
treatment or deportation to slave labor or for other purpose of civilian population of or in occupied territory;
murder or ill-treatment of prisoners of war or internees or person on the seas or elsewhere; improper
treatment of hostage; plunder of public or private property wanton destruction of cities towns or village; or
devastation not justified by military necessity.

(3) Murder extermination enslavement deportation and other inhuman acts committed against civilian
population before or during the war or persecution on political racial or religion ground in executive of or in
connection with any crime defined herein whether or not in violation of the local laws.

III. MEMBERSHIP OF COMMISSIONS

(a) Appointment. — The members of each military commission shall be appointed by the President of the
Philippines or under authority delegated by him. Alternates may be appointed by the convening authority.
Such shall attend all session of the commission, and in case of illness or other incapacity of any principal
member, an alternate shall take the place of that member. Any vacancy among the members or alternates,
occurring after a trial has begun, may be filled by the convening authority but the substance of all proceeding
had evidence taken in that case shall be made known to the said new member or alternate. This facts shall
be announced by the president of the commission in open court.

(b) Number of Members. — Each commission shall consist of not less than three (3) members.

(c) Qualifications. — The convening authority shall appoint to the commission persons whom he determines
to be competent to perform the duties involved and not disqualified by personal interest or prejudice,
provided that no person shall be appointed to hear a case in which he personally investigated or wherein his
presence as a witness is required. One specially qualified member whose ruling is final in so far as concerns
the commission on an objection to the admissibility of evidence offered during the trial.

(d) Voting. — Except as to the admissibility of evidence all rulings and finding of the Commission shall be by
majority vote except that conviction and sentence shall be by the affirmative vote of not less than conviction
and sentence shall be by the affirmative vote of not less than two-thirds (2\3) of the member present.

(e) Presiding Member. — In the event that the convening authority does not name one of the member as the
presiding member, the senior officer among the member of the Commission present shall preside.

IV. PROSECUTORS

(a) Appointment. — The convening authority shall designate one or more person to conduct the prosecution
before each commission.

(b) Duties. — The duties of the prosecutor are:

(1) To prepare and present charges and specifications for reference to a commission.

(2) To prepare cases for trial and to conduct the prosecution before the commission of all cases referred for
trial.

V. POWER AND PROCEDURE OF COMMISSION

(a) Conduct of the Trial. — A Commission shall:

(1) Confine each trial strictly to fair and expeditious hearing on the issues raised by the charges, excluding
irrelevant issues or evidence and preventing any unnecessary delay or interference.

(2) Deal summarily with any contumacy or contempt, imposing any appropriate punishment therefor.

(3) Hold public session when otherwise decided by the commission.

(4) Hold each session at such time and place as it shall determine, or as may be directed by the convening
authority.

(b) Rights of the Accused. — The accused shall be entitled:

(1) To have in advance of the trial a copy of the charges and specifications clearly worded so as to apprise
the accused of each offense charged.

(2) To be represented, prior to and during trial, by counsel appointed by the convening authority or counsel
of his own choice, or to conduct his own defense.

(3) To testify in his own behalf and have his counsel present relevant evidence at the trial in support of his
defense, and cross-examine each adverse witness who personally appears before the commission.

(4) To have the substance of the charges and specifications, the proceedings and any documentary
evidence translated, when he is unable otherwise to understand them.

(c) Witnesses. — The Commission shall have power:

(1) To summon witnesses and require their attendance and testimony; to administer oaths or affirmations to
witnesses and other persons and to question witnesses.

(2) To require the production of documents and other evidentiary material.

(3) To delegate the Prosecutors appointed by the convening authority the powers and duties set forth in (1)
and (2) above.

(4) To have evidence taken by a special commissioner appointed by the commission.

(d) Evidence.

(1) The commission shall admit such evidence as in its opinion shall be of assistance in proving or
disproving the charge, or such as in the commission's opinion would have probative value in the mind of a
reasonable man. The commission shall apply the rules of evidence and pleading set forth herein with the
greatest liberality to achieve expeditious procedure. In particular, and without limiting in any way the scope
of the foregoing general rules, the following evidence may be admitted:

(a) Any document, irrespective of its classification, which appears to the commission to have been signed or
issued by any officer, department, agency or member of the armed forces of any Government without proof
of the signature or of the issuance of the document.

(b) Any report which appears to the commission to have been signed or issued by the International Red
Cross or a member of any medical service personnel, or by any investigator or intelligence officer, or by any
other person whom commission considers as possessing knowledge of the matters contained in the report.

(c) Affidavits, depositions or other signed statements.

(d) Any diary, letter to other document, including sworn statements, appearing to the commission to contain
information relating to the charge.

(e) A copy of any document or other secondary evidence of the contents, if the original is not immediately
available.

(2) The commission shall take judicial notice of facts of common knowledge, official government documents
of any nation, and the proceedings, records and findings of military or other agencies of any of the United
Nation.

(3) A commission may require the prosecution and the defense to make a preliminary offer of proof
whereupon the commission may rule in advance on the admissibility of such evidence.

(4) The official position of the accused shall not absolve him from responsibility nor be considered in
mitigation of punishment. Further action pursuant to an order of the accused's superior, or of his
Government, shall not constitute a defense, but may be considered in mitigation of punishment if the
commission determines that justice so requires.

(5) All purposed confessions or statements of the accused shall bee admissible in evidence without any
showing that they were voluntarily made. If it is shown that such confession or statement was procured by
mean which the commission believe to have been of such a character that may have caused the accused to
make a false statement the commission may strike out or disregard any such portion thereof as was so
procured.

(e) Trial Procedure. — The proceedings of each trial shall be conducted substantially as follows unless
modified by the commission to suit the particular circumstances:

(1) Each charge and specification shall be read or its substance stated in open court.

(2) The presiding member shall ask each accused whether he pleads "Guilty" or "Not guilty."
(3) The prosecution shall make its opening statement."(4) The presiding member may at this or any other
time require the prosecutor to state what evidence he proposes to submit to the commission and the
commission thereupon may rule upon the admissibility of such evidence.

(4) The witnesses and other evidence for the prosecution shall be heard or presented. At the close of the
case for the prosecution, the commission may, on motion of the defense for a finding of not guilty, consider
and rule whether he evidence before the commission may defer action on any such motion and permit or
require the prosecution to reopen its case and produce any further available evidence.

(5) The defense may make an opening statement prior to presenting its case. The presiding member may, at
this any other time require the defense to state what evidence it proposes to submit to the commission
where upon the commission may rule upon the admissibility of such evidence.

(6) The witnesses and other evidence for the defense shall be heard or presented. Thereafter, the
prosecution and defense may introduce such evidence in rebuttal as the commission may rule as being
admissible.

(7) The defense and thereafter the prosecution shall address the commission.

(8) The commission thereafter shall consider the case in closed session and unless otherwise directed by
the convening authority, announce in open court its judgment and sentence if any. The commission may
state the reason on which judgment is based.

( f ) Record of Proceedings. — Each commission shall make a separate record of its proceeding in the trial
of each case brought before it. The record shall be prepared by the prosecutor under the direction of the
commission and submitted to the defense counsel. The commission shall be responsible for its accuracy.
Such record, certified by the presiding member of the commission or his successor, shall be delivered to the
convening authority as soon as possible after the trial.

(g) Sentence. — The commission may sentence an accused, upon conviction to death by hanging or
shooting, imprisonment for life or for any less term, fine or such other punishment as the commission shall
determine to be proper.

(h) Approval of Sentence. — No. sentence of a military commission shall be carried into effect until approved
by the chief off Staff: Provided, That no sentence of death or life imprisonment shall be carried into
execution until confirmed by the President of the Philippines. For the purpose of his review the Chief of Staff
shall create a Board of Review to be composed of not more than three officers none of whom shall be on
duty with or assigned to the Judge Advocate General's Office. The Chief of Staff shall have authority to
approve, mitigate remit in whole or in part, commute, suspend, reduce or otherwise alter the sentence
imposed, or (without prejudice to the accused) remand the case for rehearing before a new military
commission; but he shall not have authority to increase the severity of the sentence. Except as herein
otherwise provided the judgment and sentence of a commission shall final and not subject to review by any
other tribunal.

VI. RULE-MAKING POWER

Supplementary Rule and Forms. — Each commission shall adopt rules and forms to govern its procedure,
not inconsistent with the provision of this Order, or such rules and forms as may be prescribed by the
convening authority]or by the President of the Philippines.

VII. The amount of amount of seven hundred thousand pesos is hereby set aside out of the appropriations
for the Army of the Philippines for use by the National War Crimes Office in the accomplishment of its
mission as hereinabove set forth, and shall be expended in accordance with the recommendation of the
Judge Advocate General as approved by the President. The buildings, fixtures, installations, messing, and
billeting equipment and other property herefore used by then Legal Section, Manila Branch, of the General
Headquarters, Supreme Commander for the Allied Power, which will be turned over by the United States
 Army to the Philippines Government through the Foreign Liquidation Commission and the Surplus Property
Commission are hereby specification reserved for use off the National War Crimes Office.

Executive Order No. 64, dated August 16, 1945, is hereby repealed.

Done in the City of Manila, this 29th day of July in the year of Our Lord, nineteen hundred and forty-seven,
and of the Independence of the Philippines, the second.

MANUEL ROXAS
President of the Philippines

By the President:

EMILIO ABELLO
Chief of the Executive Office

EXECUTIVE LEGISLATION

Executive Order No. 68 is a veritable piece of Legislative measure, without the benefit of congressional enactment.

The first question that is trust at our face spearheading a group of other no less important question, is whether or
not the President of the Philippines may exercise the legislative power expressly vested in Congress by the
Constitution. .

The Constitution provides:

The Legislative powers shall be vested in a Congress of the Philippines which shall consist of a Senate and
House of Representatives. (Section 1, Article VI.)

While there is no express provision in the fundamental law prohibiting the exercise of legislative power by agencies
other than Congress, a reading of the whole context of the Constitution would dispel any doubt as to the
constitutional intent that the legislative power is to be exercised exclusively by Congress, subject only to the veto
power of the President of the President of the Philippines, to the specific provision which allow the president of the
Philippines to suspend the privileges of the writ of habeas corpus and to place any part of the Philippines under
martial law, and to the rule-making power expressly vested by the Constitution in the Supreme Court.

There cannot be any question that the member of the Constitutional Convention were believers in the tripartite
system of government as originally enunciated by Aristotle, further elaborated by Montequieu and accepted and
practiced by modern democracies, especially the United State of America, whose Constitution, after which ours has
been patterned, has allocated the three power of government — legislative, executive, judicial — to distinct and
separate department of government.

Because the power vested by our Constitution to the several department of the government are in the nature of
grants, not recognition of pre-existing power, no department of government may exercise any power or authority not
expressly granted by the Constitution or by law by virtue express authority of the Constitution.

Executive Order No. 68 establishes a National War Crimes Office and the power to establish government office is
essentially legislative.

The order provides that person accused as war criminals shall be tried by military commissions. Whether such a
provision is substantive or adjective, it is clearly legislative in nature. It confers upon military commissions
jurisdiction to try all persons charge with war crimes. The power to define and allocate jurisdiction for the
prosecution of person accused of any crime is exclusively vested by the Constitution in Congress. .

It provides rules of procedure for the conduct of trial of trial. This provision on procedural subject constitutes a
usurpation of the rule-making power vested by Constitution in the Supreme Court.
It authorized military commission to adopt additional rule of procedure. If the President of the Philippines cannot
exercise the rule -making power vested by the Constitution in the Supreme Court, he cannot, with more reason,
delegate that power to military commission.

It appropriates the sum of P7000,000 for the expenses of the National War Crimes office established by the said
Executive Order No. 68. This constitutes another usurpation of legislative power as the power to vote appropriations
belongs to Congress.

Executive Order No. 68., is, therefore, null and void, because, though it the President of the Philippines usurped
power expressly vested by the Constitution in Congress and in the Supreme Court.

Challenged to show the constitutional or legal authority under which the President issued Executive Order No. 68,
respondent could not give any definite answer. They attempted, however, to suggest that the President of the
Philippines issued Executive Order No. 68 under the emergency power granted to him by Commonwealth Act No.
600, as amended by Commonwealth Act No. 620, and Commonwealth Act No. 671, both of which are transcribed
below:

COMMONWEALTH ACT NO. 600.

AN ACT DECLARING A STATE OF EMERGENCY AND AUTHORIZING THE PRESIDENT TO

PROMULGATE RULES AND REGULATION TO SAFEGUARD THE INTEGRITY OF THE
PHILIPPINES AND TO INSURE THE TRANQUILITY OF ITS INHABITANTS.

Be it enacted by the National Assembly of the Philippines:

SECTION 1. The existence of war in many parts of the world has created a national emergency which
makes it necessary to invest the President of the Philippines with extraordinary power in order to safeguard
the integrity of the Philippines and to insure the tranquility of its inhabitants, by suppressing espionage,
lawlessness, and all subversive to the people adequate shelter and clothing and sufficient food supply, and
by providing means for the speedy evacuation of the civilian population the establishment of an air protective
service and the organization of volunteer guard units, and to adopt such other measures as he may deem
necessary for the interest of the public. To carry out this policy the President is authorized to promulgate
rules and regulations which shall have the force and effect off law until the date of adjournment of the next
regulation which shall have the force and effect of law until the date of adjournment of the next regular
session of the First Congress of the Philippines, unless sooner amended or repealed by the Congress of
Philippines. Such rules and regulation may embrace the following objects: (1) to suppress espionage and
other subversive activities; (2) to require all able-bodied citizens (a) when not engaged in any lawful
occupation, to engage in farming or other productive activities or (b) to perform such services as may bee
necessary in the public interest; (3) to take over farm lands in order to prevent or shortage of crops and
hunger and destitution; (4) to take over industrial establishment in order to insure adequate production,
controlling wages and profits therein; (5) to prohibit lockouts and strikes whenever necessary to prevent the
unwarranted suspension of work in productive enterprises or in the interest of national security; (6) to
regulate the normal hours of work for wage-earning and salaried employees in industrial or business
undertakings of all kinds; (7) to insure an even distribution of labor among the productive enterprises; (8) to
commandership and other means of transportation in order to maintain, as much as possible, adequate and
continued transportation facilities; (9) to requisition and take over any public service or enterprise for use or
operation by the Government;(10) to regulate rents and the prices of articles or commodities of prime
necessity, both imported and locally produced or manufactured; and (11) to prevent, locally or generally,
scarcity, monopolization, hoarding injurious speculations, and private control affecting the supply,
distribution and movement of foods, clothing, fuel, fertilizer, chemical, building, material, implements,
machinery, and equipment required in agriculture and industry, with power to requisition these commodities
subject to the payment of just compensation. (As amended by Com. Act No. 620.)
SEC. 2. For the purpose of administering this Act and carrying out its objective, the President may designate
any officer, without additional compensation, or any department, bureau, office, or instrumentality of the
National Government.

SEC. 3. Any person, firm, or corporation found guilty of the violation of any provision of this Act or of this Act
or any of the rules or regulations promulgated by the President under the authority of section one of this Act
shall be punished by imprisonment of not more than ten years or by a fine of not more than ten thousand
pesos, or by both. If such violation is committed by a firm or corporation, the manager, managing director, or
person charge with the management of the business of such firm, or corporation shall be criminally
responsible therefor.

SEC. 4. The President shall report to the national Assembly within the first ten days from the date of the
opening of its next regular session whatever action has been taken by him under the authority herein
granted.

SEC. 5. To carry out the purposed of this Act, the President is authorized to spend such amounts as may be
necessary from the sum appropriated under section five Commonwealth Act Numbered four hundred and
ninety-eight.

SEC. 6. If any province of this Act shall be declared by any court of competent jurisdiction to be
unconstitutional and void, such declaration shall not invalidate the remainder of this Act.

SEC. 7. This Act shall take upon its approval.

Approved, August 19, 1940.

COMMONWEALTH ACT NO. 671

AN ACT DECLARING A STATE OF TOTAL EMERGENCY AS A RESULT OF WAR INVOLVING

THE PHILIPPINES AND AUTHORIZING THE PRESIDENT TO PROMULGATE RULE AND
REGULATIONS TO MEET SUCH EMERGENCY.

Be it enacted the National Assembly of the Philippines;

SECTION 1. The existed of war between the United State and other countries of Europe and Asia, which
involves the Philippines, makes it necessary to invest the President with extraordinary powers in order to
meet the resulting emergency.

SEC. 2. Pursuant to the provision of Article VI, section 16, of the Constitution, the President is hereby
authorized, during the existence of the emergency, to promulgate such rules and regulation as he may deem
necessary to carry out the national policy declared in section 1 hereof. Accordingly, he is, among other
things, empowered (a) to transfer the seat of the Government or any of its subdivisions, branches,
department, offices, agencies or instrumentalities; (b) to reorganize the Government of the Commonwealth
including the determination of the order of precedence of the heads of the Executive Department; (c) to
create new subdivision, branches, departments, offices, agency or instrumentalities of government and to
abolish any of those already existing; (d) to continue in force laws and appropriation which would lapse or
otherwise became inoperative, and to modify or suspend the operation or application of those of an
administrative character; (e) to imposed new taxes or to increase, reduce, suspend, or abolish those in
existence; (f) to raise funds through the issuance of bonds or otherwise, and to authorize the expensive of
the proceeds thereof; (g) to authorize the National, provincial, city or municipal governments to incur in
overdrafts for purposes that he may approve; (h) to declare the suspension of the collection of credits or the
payment of debts; and (i) to exercise such other power as he may deem necessary to enable the
Government to fulfill its responsibilities and to maintain and enforce its authority.
 SEC. 3. The President of the Philippines report thereto all the rules and regulation promulgated by him
under the power herein granted.

SEC. 4. This Act shall take effect upon its approval and the rules and regulations. promulgated hereunder
shall be in force and effect until the Congress of the Philippines shall otherwise provide.

Approved December 16, 1941.

The above Acts cannot validly be invoked, Executive Order No. 68 was issued on July 29, 1947. Said Acts had
elapsed upon the liberation of the Philippines form the Japanese forces or, at the latest, when the surrender of
Japan was signed in Tokyo on September 2, 1945.

When both Acts were enacted by the Second National Assembly, we happened to have taken direct part in their
consideration and passage, not only as one of the members of said legislative body as chairman of the Committee
on Third Reading population Known as the "Little Senate." We are, therefore in a position to state that said
measures were enacted by the second national Assembly for the purpose of facing the emergency of impending
war and of the Pacific War that finally broke out with the attack of Pearl Harbor on December 7, 1941. We approved
said extraordinary measures, by which under the exceptional circumstances then prevailing legislative power were
delegated to the President of the Philippines, by virtue of the following provisions of the Constitution:

In time of war or other national emergency, the Congress may by law authorize the President, for a limited
period and subject to such restrictions as it may prescribe to promulgate rules and regulations to carry out
declared national policy. (Article VI, section 26.)

It has never been the purpose of the National Assembly to extend the delegation beyond the emergency created by
the war as to extend it farther would be violative of the express provision of the Constitution. We are of the opinion
that there is no doubt on this question.; but if there could still be any the same should be resolved in favor of the
presumption that the National Assembly did not intend to violate the fundamental law.

The absurdity of the contention that the emergency Acts continued in effect even after the surrender of Japan can
not be gainsaid. Only a few months after liberation and even before the surrender of Japan, or since the middle of
1945, the Congress started to function normally. In the hypothesis that the contention can prevail, then, since 1945,
that is, four years ago, even after the Commonwealth was already replaced by the Republic of the Philippines with
the proclamation of our Independence, two district, separate and independence legislative organs, — Congress and
the President of the Philippines — would have been and would continue enacting laws, the former to enact laws of
every nature including those of emergency character, and the latter to enact laws, in the form of executive orders,
under the so-called emergency powers. The situation would be pregnant with dangers to peace and order to the
rights and liberties of the people and to Philippines democracy.

Should there be any disagreement between Congress and the President of the Philippines, a possibility that no one
can dispute the President of the Philippines may take advantage of he long recess of Congress (two-thirds of every
year ) to repeal and overrule legislative enactments of Congress, and may set up a veritable system of dictatorship,
absolutely repugnant to the letter and spirit of the Constitution.

Executive Order No. 68 is equally offensive to the Constitution because it violates the fundamental guarantees of
the due process and equal protection of the law. It is especially so, because it permit the admission of many kinds
evidence by which no innocent person can afford to get acquittal and by which it is impossible to determine whether
an accused is guilty or not beyond all reasonable doubt.

The rules of evidence adopted in Executive Order No. 68 are a reproduction of the regulation governing the trial of
twelve criminal, issued by General Douglas Mac Arthur, Commander in Chief of the United State Armed Forces in
Western Pacific, for the purpose of trying among other, General Yamashita and Homma. What we said in our
concurring and dissenting opinion to the decision promulgated on December 19, 1945, in the Yamashita case, L-
129, and in our concurring and dissenting opinion to the resolution of January 23, 1946 in disposing the Homma
case, L-244, are perfectly applicable to the offensive rules of evidence in Executive Order No. 68. Said rules of
evidence are repugnant to conscience as under them no justice can expected.
For all the foregoing, conformably with our position in the Yamashita and Homma cases, we vote to declare
Executive Order No. 68 null and void and to grant petition.

G.R. No. L-7995             May 31, 1957

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and partnerships
adversely affected. by Republic Act No. 1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer of
Manila, respondents.

Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates for petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for respondent Secretary of
Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for respondent City Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.

LABRADOR, J.:

I. The case and issue, in general

This Court has before it the delicate task of passing upon the validity and constitutionality of a legislative enactment,
fundamental and far-reaching in significance. The enactment poses questions of due process, police power and
equal protection of the laws. It also poses an important issue of fact, that is whether the conditions which the
disputed law purports to remedy really or actually exist. Admittedly springing from a deep, militant, and positive
nationalistic impulse, the law purports to protect citizen and country from the alien retailer. Through it, and within the
field of economy it regulates, Congress attempts to translate national aspirations for economic independence and
national security, rooted in the drive and urge for national survival and welfare, into a concrete and tangible
measures designed to free the national retailer from the competing dominance of the alien, so that the country and
the nation may be free from a supposed economic dependence and bondage. Do the facts and circumstances
justify the enactment?

II. Pertinent provisions of Republic Act No. 1180

Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes the retail trade
business. The main provisions of the Act are: (1) a prohibition against persons, not citizens of the Philippines, and
against associations, partnerships, or corporations the capital of which are not wholly owned by citizens of the
Philippines, from engaging directly or indirectly in the retail trade; (2) an exception from the above prohibition in
favor of aliens actually engaged in said business on May 15, 1954, who are allowed to continue to engaged therein,
unless their licenses are forfeited in accordance with the law, until their death or voluntary retirement in case of
natural persons, and for ten years after the approval of the Act or until the expiration of term in case of juridical
persons; (3) an exception therefrom in favor of citizens and juridical entities of the United States; (4) a provision for
the forfeiture of licenses (to engage in the retail business) for violation of the laws on nationalization, control weights
and measures and labor and other laws relating to trade, commerce and industry; (5) a prohibition against the
establishment or opening by aliens actually engaged in the retail business of additional stores or branches of retail
business, (6) a provision requiring aliens actually engaged in the retail business to present for registration with the
proper authorities a verified statement concerning their businesses, giving, among other matters, the nature of the
business, their assets and liabilities and their offices and principal offices of judicial entities; and (7) a provision
allowing the heirs of aliens now engaged in the retail business who die, to continue such business for a period of six
months for purposes of liquidation.

III. Grounds upon which petition is based-Answer thereto

Petitioner, for and in his own behalf and on behalf of other alien residents corporations and partnerships adversely
affected by the provisions of Republic Act. No. 1180, brought this action to obtain a judicial declaration that said Act
is unconstitutional, and to enjoin the Secretary of Finance and all other persons acting under him, particularly city
and municipal treasurers, from enforcing its provisions. Petitioner attacks the constitutionality of the Act, contending
that: (1) it denies to alien residents the equal protection of the laws and deprives of their liberty and property without
due process of law ; (2) the subject of the Act is not expressed or comprehended in the title thereof; (3) the Act
violates international and treaty obligations of the Republic of the Philippines; (4) the provisions of the Act against
the transmission by aliens of their retail business thru hereditary succession, and those requiring 100% Filipino
capitalization for a corporation or entity to entitle it to engage in the retail business, violate the spirit of Sections 1
and 5, Article XIII and Section 8 of Article XIV of the Constitution.

In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) the Act was passed in the valid
exercise of the police power of the State, which exercise is authorized in the Constitution in the interest of national
economic survival; (2) the Act has only one subject embraced in the title; (3) no treaty or international obligations are
infringed; (4) as regards hereditary succession, only the form is affected but the value of the property is not
impaired, and the institution of inheritance is only of statutory origin.

IV. Preliminary consideration of legal principles involved

a. The police power. —

There is no question that the Act was approved in the exercise of the police power, but petitioner claims that its
exercise in this instance is attended by a violation of the constitutional requirements of due process and equal
protection of the laws. But before proceeding to the consideration and resolution of the ultimate issue involved, it
would be well to bear in mind certain basic and fundamental, albeit preliminary, considerations in the determination
of the ever recurrent conflict between police power and the guarantees of due process and equal protection of the
laws. What is the scope of police power, and how are the due process and equal protection clauses related to it?
What is the province and power of the legislature, and what is the function and duty of the courts? These
consideration must be clearly and correctly understood that their application to the facts of the case may be brought
forth with clarity and the issue accordingly resolved.

It has been said the police power is so far - reaching in scope, that it has become almost impossible to limit its
sweep. As it derives its existence from the very existence of the State itself, it does not need to be expressed or
defined in its scope; it is said to be co-extensive with self-protection and survival, and as such it is the most positive
and active of all governmental processes, the most essential, insistent and illimitable. Especially is it so under a
modern democratic framework where the demands of society and of nations have multiplied to almost unimaginable
proportions; the field and scope of police power has become almost boundless, just as the fields of public interest
and public welfare have become almost all-embracing and have transcended human foresight. Otherwise stated, as
we cannot foresee the needs and demands of public interest and welfare in this constantly changing and
progressive world, so we cannot delimit beforehand the extent or scope of police power by which and through which
the State seeks to attain or achieve interest or welfare. So it is that Constitutions do not define the scope or extent of
the police power of the State; what they do is to set forth the limitations thereof. The most important of these are the
due process clause and the equal protection clause.

b. Limitations on police power. —

The basic limitations of due process and equal protection are found in the following provisions of our Constitution:

SECTION 1.(1) No person shall be deprived of life, liberty or property without due process of law, nor any
person be denied the equal protection of the laws. (Article III, Phil. Constitution)

These constitutional guarantees which embody the essence of individual liberty and freedom in democracies, are
not limited to citizens alone but are admittedly universal in their application, without regard to any differences of
race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)

c. The, equal protection clause. —

The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is limited either in the
object to which it is directed or by territory within which is to operate. It does not demand absolute equality among
residents; it merely requires that all persons shall be treated alike, under like circumstances and conditions both as
to privileges conferred and liabilities enforced. The equal protection clause is not infringed by legislation which
applies only to those persons falling within a specified class, if it applies alike to all persons within such class, and
reasonable grounds exists for making a distinction between those who fall within such class and those who do not.
(2 Cooley, Constitutional Limitations, 824-825.)

d. The due process clause. —

The due process clause has to do with the reasonableness of legislation enacted in pursuance of the police power.
Is there public interest, a public purpose; is public welfare involved? Is the Act reasonably necessary for the
accomplishment of the legislature's purpose; is it not unreasonable, arbitrary or oppressive? Is there sufficient
foundation or reason in connection with the matter involved; or has there not been a capricious use of the legislative
power? Can the aims conceived be achieved by the means used, or is it not merely an unjustified interference with
private interest? These are the questions that we ask when the due process test is applied.

The conflict, therefore, between police power and the guarantees of due process and equal protection of the laws is
more apparent than real. Properly related, the power and the guarantees are supposed to coexist. The balancing is
the essence or, shall it be said, the indispensable means for the attainment of legitimate aspirations of any
democratic society. There can be no absolute power, whoever exercise it, for that would be tyranny. Yet there can
neither be absolute liberty, for that would mean license and anarchy. So the State can deprive persons of life, liberty
and property, provided there is due process of law; and persons may be classified into classes and groups, provided
everyone is given the equal protection of the law. The test or standard, as always, is reason. The police power
legislation must be firmly grounded on public interest and welfare, and a reasonable relation must exist between
purposes and means. And if distinction and classification has been made, there must be a reasonable basis for said
distinction.

e. Legislative discretion not subject to judicial review. —

Now, in this matter of equitable balancing, what is the proper place and role of the courts? It must not be
overlooked, in the first place, that the legislature, which is the constitutional repository of police power and exercises
the prerogative of determining the policy of the State, is by force of circumstances primarily the judge of necessity,
adequacy or reasonableness and wisdom, of any law promulgated in the exercise of the police power, or of the
measures adopted to implement the public policy or to achieve public interest. On the other hand, courts, although
zealous guardians of individual liberty and right, have nevertheless evinced a reluctance to interfere with the
exercise of the legislative prerogative. They have done so early where there has been a clear, patent or palpable
arbitrary and unreasonable abuse of the legislative prerogative. Moreover, courts are not supposed to override
legitimate policy, and courts never inquire into the wisdom of the law.

V. Economic problems sought to be remedied

With the above considerations in mind, we will now proceed to delve directly into the issue involved. If the disputed
legislation were merely a regulation, as its title indicates, there would be no question that it falls within the legitimate
scope of legislative power. But it goes further and prohibits a group of residents, the aliens, from engaging therein.
The problem becomes more complex because its subject is a common, trade or occupation, as old as society itself,
which from the immemorial has always been open to residents, irrespective of race, color or citizenship.

a. Importance of retail trade in the economy of the nation. —

In a primitive economy where families produce all that they consume and consume all that they produce, the dealer,
of course, is unknown. But as group life develops and families begin to live in communities producing more than
what they consume and needing an infinite number of things they do not produce, the dealer comes into existence.
As villages develop into big communities and specialization in production begins, the dealer's importance is
enhanced. Under modern conditions and standards of living, in which man's needs have multiplied and diversified to
unlimited extents and proportions, the retailer comes as essential as the producer, because thru him the infinite
variety of articles, goods and needed for daily life are placed within the easy reach of consumers. Retail dealers
perform the functions of capillaries in the human body, thru which all the needed food and supplies are ministered to
members of the communities comprising the nation.

There cannot be any question about the importance of the retailer in the life of the community. He ministers to the
resident's daily needs, food in all its increasing forms, and the various little gadgets and things needed for home and
daily life. He provides his customers around his store with the rice or corn, the fish, the salt, the vinegar, the spices
needed for the daily cooking. He has cloths to sell, even the needle and the thread to sew them or darn the clothes
that wear out. The retailer, therefore, from the lowly peddler, the owner of a small sari-sari store, to the operator of a
department store or, a supermarket is so much a part of day-to-day existence.

b. The alien retailer's trait. —

The alien retailer must have started plying his trades in this country in the bigger centers of population (Time there
was when he was unknown in provincial towns and villages). Slowly but gradually be invaded towns and villages;
now he predominates in the cities and big centers of population. He even pioneers, in far away nooks where the
beginnings of community life appear, ministering to the daily needs of the residents and purchasing their agricultural
produce for sale in the towns. It is an undeniable fact that in many communities the alien has replaced the native
retailer. He has shown in this trade, industry without limit, and the patience and forbearance of a slave.

Derogatory epithets are hurled at him, but he laughs these off without murmur; insults of ill-bred and insolent
neighbors and customers are made in his face, but he heeds them not, and he forgets and forgives. The community
takes note of him, as he appears to be harmless and extremely useful.

c. Alleged alien control and dominance. —

There is a general feeling on the part of the public, which appears to be true to fact, about the controlling and
dominant position that the alien retailer holds in the nation's economy. Food and other essentials, clothing, almost
all articles of daily life reach the residents mostly through him. In big cities and centers of population he has acquired
not only predominance, but apparent control over distribution of almost all kinds of goods, such as lumber,
hardware, textiles, groceries, drugs, sugar, flour, garlic, and scores of other goods and articles. And were it not for
some national corporations like the Naric, the Namarco, the Facomas and the Acefa, his control over principal foods
and products would easily become full and complete.

Petitioner denies that there is alien predominance and control in the retail trade. In one breath it is said that the fear
is unfounded and the threat is imagined; in another, it is charged that the law is merely the result of radicalism and
pure and unabashed nationalism. Alienage, it is said, is not an element of control; also so many unmanageable
factors in the retail business make control virtually impossible. The first argument which brings up an issue of fact
merits serious consideration. The others are matters of opinion within the exclusive competence of the legislature
and beyond our prerogative to pass upon and decide.

The best evidence are the statistics on the retail trade, which put down the figures in black and white. Between the
constitutional convention year (1935), when the fear of alien domination and control of the retail trade already filled
the minds of our leaders with fears and misgivings, and the year of the enactment of the nationalization of the retail
trade act (1954), official statistics unmistakably point out to the ever-increasing dominance and control by the alien
of the retail trade, as witness the following tables:

Assets Gross Sales

Year and No.- Per cent Per cent
Retailers Establishment Pesos Distributio Pesos Distributio
Nationality s n n
1941
:
Filipino .. 106,671 200,323,13 55.82 174,181,92 51.74
........ 8 4
Chinese 15,356 118,348,69 32.98 148,813,23 44.21
........... 2 9
 Others .. 1,646 40,187,090 11.20 13,630,239 4.05
..........
1947
:
Filipino .. 111,107 208,658,94 65.05 279,583,33 57.03
........ 6 3
Chinese 13,774 106,156,21 33.56 205,701,13 41.96
........... 8 4
Others .. 354 8,761,260 .49 4,927,168 1.01
.........
1948 (Census
: )
Filipino .. 113,631 213,342,26 67.30 467,161,66 60.51
........ 4 7
Chinese 12,087 93,155,459 29.38 294,894,22 38.20
.......... 7
Others .. 422 10,514,675 3.32 9,995,402 1.29
........
1949
:
Filipino .. 113,659 213,451,60 60.89 462,532,90 53.47
........ 2 1
Chinese 16,248 125,223,33 35.72 392,414,87 45.36
.......... 6 5
Others .. 486 12,056,365 3.39 10,078,364 1.17
........
1951
:
Filipino .. 119,352 224,053,62 61.09 466,058,05 53.07
....... 0 2
Chinese 17,429 134,325,30 36.60 404,481,38 46.06
.......... 3 4
Others .. 347 8,614,025 2.31 7,645,327 87
........

AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT

Item Gross
Year and Retailer's
Assets Sales
Nationality
(Pesos) (Pesos)

1941:

Filipino ............................................. 1,878 1,633

Chinese ............................................ 7,707 9,691

..

Others .............................................. 24,415 8,281

 .

1947:

Filipino ............................................. 1,878 2,516

Chinese ........................................... 7,707 14,934

Others .............................................. 24,749 13,919

1948: (Census)

Filipino ............................................. 1,878 4,111

Chinese ............................................ 7,707 24,398

.

Others .............................................. 24,916 23,686

1949:

Filipino ............................................. 1,878 4,069

Chinese ............................................ 7,707 24,152

..

Others .............................................. 24,807 20,737

1951:

Filipino ............................................. 1,877 3,905

Chinese ............................................ 7,707 33,207

.

Others .............................................. 24,824 22,033

.

(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality of Owners,
Benchmark: 1948 Census, issued by the Bureau of Census and Statistics, Department of Commerce and
Industry; pp. 18-19 of Answer.)

The above statistics do not include corporations and partnerships, while the figures on Filipino establishments
already include mere market vendors, whose capital is necessarily small..

The above figures reveal that in percentage distribution of assests and gross sales, alien participation has steadily
increased during the years. It is true, of course, that Filipinos have the edge in the number of retailers, but aliens
more than make up for the numerical gap through their assests and gross sales which average between six and
seven times those of the very many Filipino retailers. Numbers in retailers, here, do not imply superiority; the alien
invests more capital, buys and sells six to seven times more, and gains much more. The same official report,
pointing out to the known predominance of foreign elements in the retail trade, remarks that the Filipino retailers
were largely engaged in minor retailer enterprises. As observed by respondents, the native investment is thinly
spread, and the Filipino retailer is practically helpless in matters of capital, credit, price and supply.

d. Alien control and threat, subject of apprehension in Constitutional convention. —

It is this domination and control, which we believe has been sufficiently shown to exist, that is the legislature's target
in the enactment of the disputed nationalization would never have been adopted. The framers of our Constitution
also believed in the existence of this alien dominance and control when they approved a resolution categorically
declaring among other things, that "it is the sense of the Convention that the public interest requires the
nationalization of the retail trade; . . . ." (II Aruego, The Framing of the Philippine Constitution, 662-663, quoted on
page 67 of Petitioner.) That was twenty-two years ago; and the events since then have not been either pleasant or
comforting. Dean Sinco of the University of the Philippines College of Law, commenting on the patrimony clause of
the Preamble opines that the fathers of our Constitution were merely translating the general preoccupation of
Filipinos "of the dangers from alien interests that had already brought under their control the commercial and other
economic activities of the country" (Sinco, Phil. Political Law, 10th ed., p. 114); and analyzing the concern of the
members of the constitutional convention for the economic life of the citizens, in connection with the nationalistic
provisions of the Constitution, he says:

But there has been a general feeling that alien dominance over the economic life of the country is not
desirable and that if such a situation should remain, political independence alone is no guarantee to national
stability and strength. Filipino private capital is not big enough to wrest from alien hands the control of the
national economy. Moreover, it is but of recent formation and hence, largely inexperienced, timid and
hesitant. Under such conditions, the government as the instrumentality of the national will, has to step in and
assume the initiative, if not the leadership, in the struggle for the economic freedom of the nation in
somewhat the same way that it did in the crusade for political freedom. Thus . . . it (the Constitution)
envisages an organized movement for the protection of the nation not only against the possibilities of armed
invasion but also against its economic subjugation by alien interests in the economic field. (Phil. Political
Law by Sinco, 10th ed., p. 476.)

Belief in the existence of alien control and predominance is felt in other quarters. Filipino businessmen,
manufacturers and producers believe so; they fear the dangers coming from alien control, and they express
sentiments of economic independence. Witness thereto is Resolution No. 1, approved on July 18, 1953, of the Fifth
National convention of Filipino Businessmen, and a similar resolution, approved on March 20, 1954, of the Second
National Convention of Manufacturers and Producers. The man in the street also believes, and fears, alien
predominance and control; so our newspapers, which have editorially pointed out not only to control but to alien
stranglehold. We, therefore, find alien domination and control to be a fact, a reality proved by official statistics, and
felt by all the sections and groups that compose the Filipino community.

e. Dangers of alien control and dominance in retail. —

But the dangers arising from alien participation in the retail trade does not seem to lie in the predominance alone;
there is a prevailing feeling that such predominance may truly endanger the national interest. With ample capital,
unity of purpose and action and thorough organization, alien retailers and merchants can act in such complete
unison and concert on such vital matters as the fixing of prices, the determination of the amount of goods or articles
to be made available in the market, and even the choice of the goods or articles they would or would not patronize
or distribute, that fears of dislocation of the national economy and of the complete subservience of national
economy and of the consuming public are not entirely unfounded. Nationals, producers and consumers alike can be
placed completely at their mercy. This is easily illustrated. Suppose an article of daily use is desired to be prescribed
by the aliens, because the producer or importer does not offer them sufficient profits, or because a new competing
article offers bigger profits for its introduction. All that aliens would do is to agree to refuse to sell the first article,
eliminating it from their stocks, offering the new one as a substitute. Hence, the producers or importers of the
prescribed article, or its consumers, find the article suddenly out of the prescribed article, or its consumers, find the
article suddenly out of circulation. Freedom of trade is thus curtailed and free enterprise correspondingly
suppressed.

We can even go farther than theoretical illustrations to show the pernicious influences of alien domination. Grave
abuses have characterized the exercise of the retail trade by aliens. It is a fact within judicial notice, which courts of
justice may not properly overlook or ignore in the interests of truth and justice, that there exists a general feeling on
the part of the public that alien participation in the retail trade has been attended by a pernicious and intolerable
practices, the mention of a few of which would suffice for our purposes; that at some time or other they have
cornered the market of essential commodities, like corn and rice, creating artificial scarcities to justify and enhance
profits to unreasonable proportions; that they have hoarded essential foods to the inconvenience and prejudice of
the consuming public, so much so that the Government has had to establish the National Rice and Corn
Corporation to save the public from their continuous hoarding practices and tendencies; that they have violated
price control laws, especially on foods and essential commodities, such that the legislature had to enact a law (Sec.
9, Republic Act No. 1168), authorizing their immediate and automatic deportation for price control convictions; that
they have secret combinations among themselves to control prices, cheating the operation of the law of supply and
demand; that they have connived to boycott honest merchants and traders who would not cater or yield to their
demands, in unlawful restraint of freedom of trade and enterprise. They are believed by the public to have evaded
tax laws, smuggled goods and money into and out of the land, violated import and export prohibitions, control laws
and the like, in derision and contempt of lawful authority. It is also believed that they have engaged in corrupting
public officials with fabulous bribes, indirectly causing the prevalence of graft and corruption in the Government. As
a matter of fact appeals to unscrupulous aliens have been made both by the Government and by their own lawful
diplomatic representatives, action which impliedly admits a prevailing feeling about the existence of many of the
above practices.

The circumstances above set forth create well founded fears that worse things may come in the future. The present
dominance of the alien retailer, especially in the big centers of population, therefore, becomes a potential source of
danger on occasions of war or other calamity. We do not have here in this country isolated groups of harmless
aliens retailing goods among nationals; what we have are well organized and powerful groups that dominate the
distribution of goods and commodities in the communities and big centers of population. They owe no allegiance or
loyalty to the State, and the State cannot rely upon them in times of crisis or emergency. While the national holds his
life, his person and his property subject to the needs of his country, the alien may even become the potential enemy
of the State.

f. Law enacted in interest of national economic survival and security. —

We are fully satisfied upon a consideration of all the facts and circumstances that the disputed law is not the product
of racial hostility, prejudice or discrimination, but the expression of the legitimate desire and determination of the
people, thru their authorized representatives, to free the nation from the economic situation that has unfortunately
been saddled upon it rightly or wrongly, to its disadvantage. The law is clearly in the interest of the public, nay of the
national security itself, and indisputably falls within the scope of police power, thru which and by which the State
insures its existence and security and the supreme welfare of its citizens.

VI. The Equal Protection Limitation

a. Objections to alien participation in retail trade. — The next question that now poses solution is, Does the law deny
the equal protection of the laws? As pointed out above, the mere fact of alienage is the root and cause of the
distinction between the alien and the national as a trader. The alien resident owes allegiance to the country of his
birth or his adopted country; his stay here is for personal convenience; he is attracted by the lure of gain and profit.
His aim or purpose of stay, we admit, is neither illegitimate nor immoral, but he is naturally lacking in that spirit of
loyalty and enthusiasm for this country where he temporarily stays and makes his living, or of that spirit of regard,
sympathy and consideration for his Filipino customers as would prevent him from taking advantage of their
weakness and exploiting them. The faster he makes his pile, the earlier can the alien go back to his beloved country
and his beloved kin and countrymen. The experience of the country is that the alien retailer has shown such utter
disregard for his customers and the people on whom he makes his profit, that it has been found necessary to adopt
the legislation, radical as it may seem.

Another objection to the alien retailer in this country is that he never really makes a genuine contribution to national
income and wealth. He undoubtedly contributes to general distribution, but the gains and profits he makes are not
invested in industries that would help the country's economy and increase national wealth. The alien's interest in this
country being merely transient and temporary, it would indeed be ill-advised to continue entrusting the very
important function of retail distribution to his hands.

The practices resorted to by aliens in the control of distribution, as already pointed out above, their secret
manipulations of stocks of commodities and prices, their utter disregard of the welfare of their customers and of the
ultimate happiness of the people of the nation of which they are mere guests, which practices, manipulations and
disregard do not attend the exercise of the trade by the nationals, show the existence of real and actual, positive
and fundamental differences between an alien and a national which fully justify the legislative classification adopted
in the retail trade measure. These differences are certainly a valid reason for the State to prefer the national over
the alien in the retail trade. We would be doing violence to fact and reality were we to hold that no reason or ground
for a legitimate distinction can be found between one and the other.

b. Difference in alien aims and purposes sufficient basis for distinction. —

The above objectionable characteristics of the exercise of the retail trade by the aliens, which are actual and real,
furnish sufficient grounds for legislative classification of retail traders into nationals and aliens. Some may disagree
with the wisdom of the legislature's classification. To this we answer, that this is the prerogative of the law-making
power. Since the Court finds that the classification is actual, real and reasonable, and all persons of one class are
treated alike, and as it cannot be said that the classification is patently unreasonable and unfounded, it is in duty
bound to declare that the legislature acted within its legitimate prerogative and it can not declare that the act
transcends the limit of equal protection established by the Constitution.

Broadly speaking, the power of the legislature to make distinctions and classifications among persons is not
curtailed or denied by the equal protection of the laws clause. The legislative power admits of a wide scope of
discretion, and a law can be violative of the constitutional limitation only when the classification is without
reasonable basis. In addition to the authorities we have earlier cited, we can also refer to the case of Linsey vs.
Natural Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and succinctly defined the application of equal
protection clause to a law sought to be voided as contrary thereto:

. . . . "1. The equal protection clause of the Fourteenth Amendment does not take from the state the power
to classify in the adoption of police laws, but admits of the exercise of the wide scope of discretion in that
regard, and avoids what is done only when it is without any reasonable basis, and therefore is purely
arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely
because it is not made with mathematical nicety, or because in practice it results in some inequality. 3.
When the classification in such a law is called in question, if any state of facts reasonably can be conceived
that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed.
4. One who assails the classification in such a law must carry the burden of showing that it does not rest
upon any reasonable basis but is essentially arbitrary."

c. Authorities recognizing citizenship as basis for classification. —

The question as to whether or not citizenship is a legal and valid ground for classification has already been
affirmatively decided in this jurisdiction as well as in various courts in the United States. In the case of Smith Bell &
Co. vs. Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the Philippine Legislature was in issue,
because of a condition therein limiting the ownership of vessels engaged in coastwise trade to corporations formed
by citizens of the Philippine Islands or the United States, thus denying the right to aliens, it was held that the
Philippine Legislature did not violate the equal protection clause of the Philippine Bill of Rights. The legislature in
enacting the law had as ultimate purpose the encouragement of Philippine shipbuilding and the safety for these
Islands from foreign interlopers. We held that this was a valid exercise of the police power, and all presumptions are
in favor of its constitutionality. In substance, we held that the limitation of domestic ownership of vessels engaged in
coastwise trade to citizens of the Philippines does not violate the equal protection of the law and due process or law
clauses of the Philippine Bill of Rights. In rendering said decision we quoted with approval the concurring opinion of
Justice Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as follows:

"Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts licensing gaming
houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly of that character, and forms
part of an extensive system, the object of which is to encourage American shipping, and place them on an
equal footing with the shipping of other nations. Almost every commercial nation reserves to its own subjects
a monopoly of its coasting trade; and a countervailing privilege in favor of American shipping is
contemplated, in the whole legislation of the United States on this subject. It is not to give the vessel an
American character, that the license is granted; that effect has been correctly attributed to the act of her
enrollment. But it is to confer on her American privileges, as contra distinguished from foreign; and to
preserve the Government from fraud by foreigners; in surreptitiously intruding themselves into the American
commercial marine, as well as frauds upon the revenue in the trade coastwise, that this whole system is
projected."

The rule in general is as follows:

Aliens are under no special constitutional protection which forbids a classification otherwise justified simply
because the limitation of the class falls along the lines of nationality. That would be requiring a higher degree
of protection for aliens as a class than for similar classes than for similar classes of American citizens.
 Broadly speaking, the difference in status between citizens and aliens constitutes a basis for reasonable
classification in the exercise of police power. (2 Am., Jur. 468-469.)

In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of hawkers and
peddlers, which provided that no one can obtain a license unless he is, or has declared his intention, to become a
citizen of the United States, was held valid, for the following reason: It may seem wise to the legislature to limit the
business of those who are supposed to have regard for the welfare, good order and happiness of the community,
and the court cannot question this judgment and conclusion. In Bloomfield vs. State, 99 N. E. 309 (Ohio, 1912), a
statute which prevented certain persons, among them aliens, from engaging in the traffic of liquors, was found not to
be the result of race hatred, or in hospitality, or a deliberate purpose to discriminate, but was based on the belief
that an alien cannot be sufficiently acquainted with "our institutions and our life as to enable him to appreciate the
relation of this particular business to our entire social fabric", and was not, therefore, invalid. In Ohio ex rel. Clarke
vs. Deckebach, 274 U. S. 392, 71 L. ed. 115 (1926), the U.S. Supreme Court had under consideration an ordinance
of the city of Cincinnati prohibiting the issuance of licenses (pools and billiard rooms) to aliens. It held that plainly
irrational discrimination against aliens is prohibited, but it does not follow that alien race and allegiance may not bear
in some instances such a relation to a legitimate object of legislation as to be made the basis of permitted
classification, and that it could not state that the legislation is clearly wrong; and that latitude must be allowed for the
legislative appraisement of local conditions and for the legislative choice of methods for controlling an apprehended
evil. The case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City
of Seattle, 210 P. 30 (Washington, 1922), the business of pawn brooking was considered as having tendencies
injuring public interest, and limiting it to citizens is within the scope of police power. A similar statute denying aliens
the right to engage in auctioneering was also sustained in Wright vs. May, L.R.A., 1915 P. 151 (Minnesota, 1914).
So also in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court said that aliens are judicially known to have
different interests, knowledge, attitude, psychology and loyalty, hence the prohibitions of issuance of licenses to
them for the business of pawnbroker, pool, billiard, card room, dance hall, is not an infringement of constitutional
rights. In Templar vs. Michigan State Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting the
licensing of aliens as barbers was held void, but the reason for the decision was the court's findings that the
exercise of the business by the aliens does not in any way affect the morals, the health, or even the convenience of
the community. In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a California statute banning
the issuance of commercial fishing licenses to person ineligible to citizenship was held void, because the law
conflicts with Federal power over immigration, and because there is no public interest in the mere claim of
ownership of the waters and the fish in them, so there was no adequate justification for the discrimination. It further
added that the law was the outgrowth of antagonism toward the persons of Japanese ancestry. However, two
Justices dissented on the theory that fishing rights have been treated traditionally as natural resources. In Fraser vs.
McConway & Tarley Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which imposed a tax on every employer of
foreign-born unnaturalized male persons over 21 years of age, was declared void because the court found that
there was no reason for the classification and the tax was an arbitrary deduction from the daily wage of an
employee.

d. Authorities contra explained. —

It is true that some decisions of the Federal court and of the State courts in the United States hold that the
distinction between aliens and citizens is not a valid ground for classification. But in this decision the laws declared
invalid were found to be either arbitrary, unreasonable or capricious, or were the result or product of racial
antagonism and hostility, and there was no question of public interest involved or pursued. In Yu Cong Eng vs.
Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared invalid a Philippine law making unlawful
the keeping of books of account in any language other than English, Spanish or any other local dialect, but the main
reasons for the decisions are: (1) that if Chinese were driven out of business there would be no other system of
distribution, and (2) that the Chinese would fall prey to all kinds of fraud, because they would be deprived of their
right to be advised of their business and to direct its conduct. The real reason for the decision, therefore, is the
court's belief that no public benefit would be derived from the operations of the law and on the other hand it would
deprive Chinese of something indispensable for carrying on their business. In Yick Wo vs. Hopkins, 30 L. ed 220
(1885) an ordinance conferring powers on officials to withhold consent in the operation of laundries both as to
persons and place, was declared invalid, but the court said that the power granted was arbitrary, that there was no
reason for the discrimination which attended the administration and implementation of the law, and that the motive
thereof was mere racial hostility. In State vs. Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to
engage as hawkers and peddlers was declared void, because the discrimination bore no reasonable and just
relation to the act in respect to which the classification was proposed.
The case at bar is radically different, and the facts make them so. As we already have said, aliens do not naturally
possess the sympathetic consideration and regard for the customers with whom they come in daily contact, nor the
patriotic desire to help bolster the nation's economy, except in so far as it enhances their profit, nor the loyalty and
allegiance which the national owes to the land. These limitations on the qualifications of the aliens have been shown
on many occasions and instances, especially in times of crisis and emergency. We can do no better than borrow the
language of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the reality and significance of the distinction
between the alien and the national, thus:

. . . . It may be judicially known, however, that alien coming into this country are without the intimate
knowledge of our laws, customs, and usages that our own people have. So it is likewise known that certain
classes of aliens are of different psychology from our fellow countrymen. Furthermore, it is natural and
reasonable to suppose that the foreign born, whose allegiance is first to their own country, and whose ideals
of governmental environment and control have been engendered and formed under entirely different
regimes and political systems, have not the same inspiration for the public weal, nor are they as well
disposed toward the United States, as those who by citizenship, are a part of the government itself. Further
enlargement, is unnecessary. I have said enough so that obviously it cannot be affirmed with absolute
confidence that the Legislature was without plausible reason for making the classification, and therefore
appropriate discriminations against aliens as it relates to the subject of legislation. . . . .

VII. The Due Process of Law Limitation.

a. Reasonability, the test of the limitation; determination by legislature decisive. —

We now come to due process as a limitation on the exercise of the police power. It has been stated by the highest
authority in the United States that:

. . . . And the guaranty of due process, as has often been held, demands only that the law shall not be
unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial relation
to the subject sought to be attained. . . . .

xxx     xxx     xxx

So far as the requirement of due process is concerned and in the absence of other constitutional restriction
a state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and
to enforce that policy by legislation adapted to its purpose. The courts are without authority either to declare
such policy, or, when it is declared by the legislature, to override it. If the laws passed are seen to have a
reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the
requirements of due process are satisfied, and judicial determination to that effect renders a court functus
officio. . . . (Nebbia vs. New York, 78 L. ed. 940, 950, 957.)

Another authority states the principle thus:

. . . . Too much significance cannot be given to the word "reasonable" in considering the scope of the police
power in a constitutional sense, for the test used to determine the constitutionality of the means employed
by the legislature is to inquire whether the restriction it imposes on rights secured to individuals by the Bill of
Rights are unreasonable, and not whether it imposes any restrictions on such rights. . . .

xxx     xxx     xxx

. . . . A statute to be within this power must also be reasonable in its operation upon the persons whom it
affects, must not be for the annoyance of a particular class, and must not be unduly oppressive. (11 Am. Jur.
Sec. 302., 1:1)- 1074-1075.)

In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:

. . . . To justify the state in thus interposing its authority in behalf of the public, it must appear, first, that the
interests of the public generally, as distinguished from those of a particular class, require such interference;
 and second, that the means are reasonably necessary for the accomplishment of the purpose, and not
unduly oppressive upon individuals. . . .

Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of constitutionality:

In determining whether a given act of the Legislature, passed in the exercise of the police power to regulate
the operation of a business, is or is not constitutional, one of the first questions to be considered by the court
is whether the power as exercised has a sufficient foundation in reason in connection with the matter
involved, or is an arbitrary, oppressive, and capricious use of that power, without substantial relation to the
health, safety, morals, comfort, and general welfare of the public.

b. Petitioner's argument considered. —

Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges long ago
recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful and honest occupation
and therefore beyond the power of the legislature to prohibit and penalized. This arguments overlooks fact and
reality and rests on an incorrect assumption and premise, i.e., that in this country where the occupation is engaged
in by petitioner, it has been so engaged by him, by the alien in an honest creditable and unimpeachable manner,
without harm or injury to the citizens and without ultimate danger to their economic peace, tranquility and welfare.
But the Legislature has found, as we have also found and indicated, that the privilege has been so grossly abused
by the alien, thru the illegitimate use of pernicious designs and practices, that he now enjoys a monopolistic control
of the occupation and threatens a deadly stranglehold on the nation's economy endangering the national security in
times of crisis and emergency.

The real question at issue, therefore, is not that posed by petitioner, which overlooks and ignores the facts and
circumstances, but this, Is the exclusion in the future of aliens from the retail trade unreasonable. Arbitrary
capricious, taking into account the illegitimate and pernicious form and manner in which the aliens have heretofore
engaged therein? As thus correctly stated the answer is clear. The law in question is deemed absolutely necessary
to bring about the desired legislative objective, i.e., to free national economy from alien control and dominance. It is
not necessarily unreasonable because it affects private rights and privileges (11 Am. Jur. pp. 1080-1081.) The test
of reasonableness of a law is the appropriateness or adequacy under all circumstances of the means adopted to
carry out its purpose into effect (Id.) Judged by this test, disputed legislation, which is not merely reasonable but
actually necessary, must be considered not to have infringed the constitutional limitation of reasonableness.

The necessity of the law in question is explained in the explanatory note that accompanied the bill, which later was
enacted into law:

This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not citizens of
the Philippines from having a strangle hold upon our economic life. If the persons who control this vital artery
of our economic life are the ones who owe no allegiance to this Republic, who have no profound devotion to
our free institutions, and who have no permanent stake in our people's welfare, we are not really the
masters of our destiny. All aspects of our life, even our national security, will be at the mercy of other people.

In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are not citizens
of the Philippines of their means of livelihood. While this bill seeks to take away from the hands of persons
who are not citizens of the Philippines a power that can be wielded to paralyze all aspects of our national life
and endanger our national security it respects existing rights.

The approval of this bill is necessary for our national survival.

If political independence is a legitimate aspiration of a people, then economic independence is none the less
legitimate. Freedom and liberty are not real and positive if the people are subject to the economic control and
domination of others, especially if not of their own race or country. The removal and eradication of the shackles of
foreign economic control and domination, is one of the noblest motives that a national legislature may pursue. It is
impossible to conceive that legislation that seeks to bring it about can infringe the constitutional limitation of due
process. The attainment of a legitimate aspiration of a people can never be beyond the limits of legislative authority.
c. Law expressly held by Constitutional Convention to be within the sphere of legislative action. —

The framers of the Constitution could not have intended to impose the constitutional restrictions of due process on
the attainment of such a noble motive as freedom from economic control and domination, thru the exercise of the
police power. The fathers of the Constitution must have given to the legislature full authority and power to enact
legislation that would promote the supreme happiness of the people, their freedom and liberty. On the precise issue
now before us, they expressly made their voice clear; they adopted a resolution expressing their belief that the
legislation in question is within the scope of the legislative power. Thus they declared the their Resolution:

That it is the sense of the Convention that the public interest requires the nationalization of retail trade; but it
abstain from approving the amendment introduced by the Delegate for Manila, Mr. Araneta, and others on
this matter because it is convinced that the National Assembly is authorized to promulgate a law which limits
to Filipino and American citizens the privilege to engage in the retail trade. (11 Aruego, The Framing of the
Philippine Constitution, quoted on pages 66 and 67 of the Memorandum for the Petitioner.)

It would do well to refer to the nationalistic tendency manifested in various provisions of the Constitution. Thus in the
preamble, a principle objective is the conservation of the patrimony of the nation and as corollary the provision
limiting to citizens of the Philippines the exploitation, development and utilization of its natural resources. And in
Section 8 of Article XIV, it is provided that "no franchise, certificate, or any other form of authorization for the
operation of the public utility shall be granted except to citizens of the Philippines." The nationalization of the retail
trade is only a continuance of the nationalistic protective policy laid down as a primary objective of the Constitution.
Can it be said that a law imbued with the same purpose and spirit underlying many of the provisions of the
Constitution is unreasonable, invalid and unconstitutional?

The seriousness of the Legislature's concern for the plight of the nationals as manifested in the approval of the
radical measures is, therefore, fully justified. It would have been recreant to its duties towards the country and its
people would it view the sorry plight of the nationals with the complacency and refuse or neglect to adopt a remedy
commensurate with the demands of public interest and national survival. As the repository of the sovereign power of
legislation, the Legislature was in duty bound to face the problem and meet, through adequate measures, the
danger and threat that alien domination of retail trade poses to national economy.

d. Provisions of law not unreasonable. —

A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the Legislature has
been. The law is made prospective and recognizes the right and privilege of those already engaged in the
occupation to continue therein during the rest of their lives; and similar recognition of the right to continue is
accorded associations of aliens. The right or privilege is denied to those only upon conviction of certain offenses. In
the deliberations of the Court on this case, attention was called to the fact that the privilege should not have been
denied to children and heirs of aliens now engaged in the retail trade. Such provision would defeat the law itself, its
aims and purposes. Beside, the exercise of legislative discretion is not subject to judicial review. It is well settled that
the Court will not inquire into the motives of the Legislature, nor pass upon general matters of legislative judgment.
The Legislature is primarily the judge of the necessity of an enactment or of any of its provisions, and every
presumption is in favor of its validity, and though the Court may hold views inconsistent with the wisdom of the law, it
may not annul the legislation if not palpably in excess of the legislative power. Furthermore, the test of the validity of
a law attacked as a violation of due process, is not its reasonableness, but its unreasonableness, and we find the
provisions are not unreasonable. These principles also answer various other arguments raised against the law,
some of which are: that the law does not promote general welfare; that thousands of aliens would be thrown out of
employment; that prices will increase because of the elimination of competition; that there is no need for the
legislation; that adequate replacement is problematical; that there may be general breakdown; that there would be
repercussions from foreigners; etc. Many of these arguments are directed against the supposed wisdom of the law
which lies solely within the legislative prerogative; they do not import invalidity.

VIII. Alleged defect in the title of the law

A subordinate ground or reason for the alleged invalidity of the law is the claim that the title thereof is misleading or
deceptive, as it conceals the real purpose of the bill which is to nationalize the retail business and prohibit aliens
from engaging therein. The constitutional provision which is claimed to be violated in Section 21 (1) of Article VI,
which reads:
 No bill which may be enacted in the law shall embrace more than one subject which shall be expressed in
the title of the bill.

What the above provision prohibits is duplicity, that is, if its title completely fails to appraise the legislators or the
public of the nature, scope and consequences of the law or its operation (I Sutherland, Statutory Construction, Sec.
1707, p. 297.) A cursory consideration of the title and the provisions of the bill fails to show the presence of duplicity.
It is true that the term "regulate" does not and may not readily and at first glance convey the idea of "nationalization"
and "prohibition", which terms express the two main purposes and objectives of the law. But "regulate" is a broader
term than either prohibition or nationalization. Both of these have always been included within the term regulation.

Under the title of an act to "regulate", the sale of intoxicating liquors, the Legislature may prohibit the sale of
intoxicating liquors. (Sweet vs. City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.)

Within the meaning of the Constitution requiring that the subject of every act of the Legislature shall be
stated in the tale, the title to regulate the sale of intoxicating liquors, etc." sufficiently expresses the subject
of an act prohibiting the sale of such liquors to minors and to persons in the habit of getting intoxicated; such
matters being properly included within the subject of regulating the sale. (Williams vs. State, 48 Ind. 306,
308, quoted in p. 42 of Answer.)

The word "regulate" is of broad import, and necessarily implies some degree of restraint and prohibition of
acts usually done in connection with the thing to be regulated. While word regulate does not ordinarily
convey meaning of prohibit, there is no absolute reason why it should not have such meaning when used in
delegating police power in connection with a thing the best or only efficacious regulation of which involves
suppression. (State vs. Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)

The general rule is for the use of general terms in the title of a bill; it has also been said that the title need not be an
index to the entire contents of the law (I Sutherland, Statutory Construction, See. 4803, p. 345.) The above rule was
followed the title of the Act in question adopted the more general term "regulate" instead of "nationalize" or
"prohibit". Furthermore, the law also contains other rules for the regulation of the retail trade which may not be
included in the terms "nationalization" or "prohibition"; so were the title changed from "regulate" to "nationalize" or
"prohibit", there would have been many provisions not falling within the scope of the title which would have made the
Act invalid. The use of the term "regulate", therefore, is in accord with the principle governing the drafting of statutes,
under which a simple or general term should be adopted in the title, which would include all other provisions found
in the body of the Act.

One purpose of the constitutional directive that the subject of a bill should be embraced in its title is to apprise the
legislators of the purposes, the nature and scope of its provisions, and prevent the enactment into law of matters
which have received the notice, action and study of the legislators or of the public. In the case at bar it cannot be
claimed that the legislators have been appraised of the nature of the law, especially the nationalization and the
prohibition provisions. The legislators took active interest in the discussion of the law, and a great many of the
persons affected by the prohibitions in the law conducted a campaign against its approval. It cannot be claimed,
therefore, that the reasons for declaring the law invalid ever existed. The objection must therefore, be overruled.

IX. Alleged violation of international treaties and obligations

Another subordinate argument against the validity of the law is the supposed violation thereby of the Charter of the
United Nations and of the Declaration of the Human Rights adopted by the United Nations General Assembly. We
find no merit in the Nations Charter imposes no strict or legal obligations regarding the rights and freedom of their
subjects (Hans Kelsen, The Law of the United Nations, 1951 ed. pp. 29-32), and the Declaration of Human Rights
contains nothing more than a mere recommendation or a common standard of achievement for all peoples and all
nations (Id. p. 39.) That such is the import of the United Nations Charter aid of the Declaration of Human Rights can
be inferred the fact that members of the United Nations Organizations, such as Norway and Denmark, prohibit
foreigners from engaging in retail trade, and in most nations of the world laws against foreigners engaged in
domestic trade are adopted.

The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18, 1947 is also
claimed to be violated by the law in question. All that the treaty guarantees is equality of treatment to the Chinese
nationals "upon the same terms as the nationals of any other country." But the nationals of China are not
discriminating against because nationals of all other countries, except those of the United States, who are granted
special rights by the Constitution, are all prohibited from engaging in the retail trade. But even supposing that the
law infringes upon the said treaty, the treaty is always subject to qualification or amendment by a subsequent law
(U. S. vs. Thompson, 258, Fed. 257, 260), and the same may never curtail or restrict the scope of the police power
of the State (plaston vs. Pennsylvania, 58 L. ed. 539.)

X. Conclusion

Resuming what we have set forth above we hold that the disputed law was enacted to remedy a real actual threat
and danger to national economy posed by alien dominance and control of the retail business and free citizens and
country from dominance and control; that the enactment clearly falls within the scope of the police power of the
State, thru which and by which it protects its own personality and insures its security and future; that the law does
not violate the equal protection clause of the Constitution because sufficient grounds exist for the distinction
between alien and citizen in the exercise of the occupation regulated, nor the due process of law clause, because
the law is prospective in operation and recognizes the privilege of aliens already engaged in the occupation and
reasonably protects their privilege; that the wisdom and efficacy of the law to carry out its objectives appear to us to
be plainly evident — as a matter of fact it seems not only appropriate but actually necessary — and that in any case
such matter falls within the prerogative of the Legislature, with whose power and discretion the Judicial department
of the Government may not interfere; that the provisions of the law are clearly embraced in the title, and this suffers
from no duplicity and has not misled the legislators or the segment of the population affected; and that it cannot be
said to be void for supposed conflict with treaty obligations because no treaty has actually been entered into on the
subject and the police power may not be curtailed or surrendered by any treaty or any other conventional
agreement.

Some members of the Court are of the opinion that the radical effects of the law could have been made less harsh
in its impact on the aliens. Thus it is stated that the more time should have been given in the law for the liquidation
of existing businesses when the time comes for them to close. Our legal duty, however, is merely to determine if the
law falls within the scope of legislative authority and does not transcend the limitations of due process and equal
protection guaranteed in the Constitution. Remedies against the harshness of the law should be addressed to the
Legislature; they are beyond our power and jurisdiction.

The petition is hereby denied, with costs against petitioner.

Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur.

Separate Opinions

PADILLA, J., concurring and dissenting:

I agree to the proposition, principle or rule that courts may not inquire into the wisdom of an the Act passed by the
Congress and duly approved by the President of the Republic. But the rule does not preclude courts from inquiring
and determining whether the Act offends against a provision or provisions of the Constitution. I am satisfied that the
Act assailed as violative of the due process of law and the equal protection of the laws clauses of the Constitution
does not infringe upon them, insofar as it affects associations, partnership or corporations, the capital of which is not
wholly owned by the citizens of the Philippines, and aliens, who are not and have not been engaged in the retail
business. I am, however, unable to persuade myself that it does not violate said clauses insofar as the Act applies to
associations and partnerships referred to in the Act and to aliens, who are and have heretofore been engaged in
said business. When they did engage in the retail business there was no prohibition on or against them to engage in
it. They assumed and believed in good faith they were entitled to engaged in the business. The Act allows aliens to
continue in business until their death or voluntary retirement from the business or forfeiture of their license; and
corporations, associations or partnership, the capital of which is not wholly owned by the citizens of the Philippines
to continue in the business for a period of ten years from the date of the approval of the Act (19 June 1954) or until
the expiry of term of the existence of the association or partnership or corporation, whichever event comes first. The
prohibition on corporations, the capital of which is not wholly owned by citizens of the Philippines, to engage in the
retail business for a period of more than ten years from the date of the approval of the Act or beyond the term of
their corporate existence, whichever event comes first, is valid and lawful, because the continuance of the existence
of such corporations is subject to whatever the Congress may impose reasonably upon them by subsequent
legislation.1 But the prohibition to engage in the retail business by associations and partnerships, the capital of which
is not wholly owned by citizen of the Philippines, after ten years from the date of the approval of the Act, even before
the end of the term of their existence as agreed upon by the associates and partners, and by alien heirs to whom
the retail business is transmitted by the death of an alien engaged in the business, or by his executor or
administrator, amounts to a deprivation of their property without due process of law. To my mind, the ten-year period
from the date of the approval of the Act or until the expiration of the term of the existence of the association and
partnership, whichever event comes first, and the six-month period granted to alien heirs of a deceased alien, his
executor or administrator, to liquidate the business, do not cure the defect of the law, because the effect of the
prohibition is to compel them to sell or dispose of their business. The price obtainable at such forced sale of the
business would be inadequate to reimburse and compensate the associates or partners of the associations or
partnership, and the alien heirs of a deceased alien, engaged in the retail business for the capital invested in it. The
stock of merchandise bought and sold at retail does not alone constitute the business. The goodwill that the
association, partnership and the alien had built up during a long period of effort, patience and perseverance forms
part of such business. The constitutional provisions that no person shall be deprived of his property without due
process of law2 and that no person shall be denied the equal protection of the laws3 would have no meaning as
applied to associations or partnership and alien heirs of an alien engaged in the retail business if they were to be
compelled to sell or dispose of their business within ten years from the date of the approval of the Act and before
the end of the term of the existence of the associations and partnership as agreed upon by the associations and
partners and within six months after the death of their predecessor-in-interest.

The authors of the Constitution were vigilant, careful and zealous in the safeguard of the ownership of private
agricultural lands which together with the lands of the public domain constitute the priceless patrimony and mainstay
of the nation; yet, they did not deem it wise and prudent to deprive aliens and their heirs of such lands.4

For these reasons, I am of the opinion that section 1 of the Act, insofar as it compels associations and partnership
referred to therein to wind up their retail business within ten years from the date of the approval of the Act even
before the expiry of the term of their existence as agreed upon by the associates and partners and section 3 of the
Act, insofar as it compels the aliens engaged in the retail business in his lifetime his executor or administrator, to
liquidate the business, are invalid, for they violate the due process of law and the equal protection of the laws
clauses of the Constitution.

Footnotes

1
 Section 76, Act No. 1459..

2
 Section 1 (1), Article III, of the Constitution..

3
 Ibid.

4
 Section 5, Article XIII, of the Constitution.

August 15, 1961

IN RE: PETITION OF ARTURO EFREN GARCIA for admission to the Philippine Bar without taking the
examination. ARTURO EFREN GARCIA, petitioner.

RESOLUTION
BARRERA, J.:

Arturo E. Garcia has applied for admission to the practice of law in the Philippines without submitting to the required
bar examinations. In his verified petition, he avers, among others, that he is a Filipino citizen born in Bacolor City,
Province of Negros Occidental, of Filipino parentage; that he had taken and finished in Spain, the course of
"Bachillerato Superior"; that he was approved, selected and qualified by the "Instituto de Cervantes" for admission to
the Central University of Madrid where he studied and finished the law course graduating there as "Licenciado En
Derecho"; that thereafter he was allowed to practice the law profession in Spain; and that under the provision of the
Treaty of Academic Degrees and the Exercise of Professions between the Republic of the Philippines and the
Spanish state, he is entitled to practice the law profession in the Philippines without submitting to the required bar
examinations.

After due consideration, the Court resolved to deny the petition on the following grounds:

(1) the provisions of the Treaty on Academic Degrees and the Exercise of Professions between the Republic of the
Philippines and the Spanish State can not be invoked by applicant. Under Article 11 thereof;

The Nationals of each of the two countries who shall have obtained recognition of the validity of their
academic degrees by virtue of the stipulations of this Treaty, can practice their professions within the
territory of the Other, . . .. (Emphasis supplied).

from which it could clearly be discerned that said Treaty was intended to govern Filipino citizens desiring to practice
their profession in Spain, and the citizens of Spain desiring to practice their professions in the Philippines. Applicant
is a Filipino citizen desiring to practice the legal profession in the Philippines. He is therefore subject to the laws of
his own country and is not entitled to the privileges extended to Spanish nationals desiring to practice in the
Philippines.

(2) Article I of the Treaty, in its pertinent part, provides .

The nationals of both countries who shall have obtained degree or diplomas to practice the liberal
professions in either of the Contracting States, issued by competent national authorities, shall be deemed
competent to exercise said professions in the territory of the Other, subject to the laws and regulations of
the latter. . . ..

It is clear, therefore, that the privileges provided in the Treaty invoked by the applicant are made expressly subject
to the laws and regulations of the contracting State in whose territory it is desired to exercise the legal profession;
and Section 1 of Rule 127, in connection with Sections 2,9, and 16 thereof, which have the force of law, require that
before anyone can practice the legal profession in the Philippine he must first successfully pass the required bar
examinations; and

(3) The aforementioned Treaty, concluded between the Republic of the Philippines and the Spanish State could not
have been intended to modify the laws and regulations governing admission to the practice of law in the Philippines,
for the reason that the Executive Department may not encroach upon the constitutional prerogative of the Supreme
Court to promulgate rules for admission to the practice of law in the Philippines, the lower to repeal, alter or
supplement such rules being reserved only to the Congress of the Philippines. (See Sec. 13, Art VIII, Phil.
Constitution).

Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Paredes, Dizon, De Leon and Natividad, JJ., concur.
Bautista Angelo, J., on leave, took no part.
Concepcion, J., took no part.
G.R. No. 173034             October 9, 2007

PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF THE PHILIPPINES, petitioner,

vs.
HEALTH SECRETARY FRANCISCO T. DUQUE III; HEALTH UNDER SECRETARIES DR. ETHELYN P. NIETO,
DR. MARGARITA M. GALON, ATTY. ALEXANDER A. PADILLA, & DR. JADE F. DEL MUNDO; and ASSISTANT
SECRETARIES DR. MARIO C. VILLAVERDE, DR. DAVID J. LOZADA, AND DR. NEMESIO T.
GAKO, respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

The Court and all parties involved are in agreement that the best nourishment for an infant is mother's milk. There is
nothing greater than for a mother to nurture her beloved child straight from her bosom. The ideal is, of course, for
each and every Filipino child to enjoy the unequaled benefits of breastmilk. But how should this end be attained?

Before the Court is a petition for certiorari under Rule 65 of the Rules of Court, seeking to nullify Administrative
Order (A.O.) No. 2006-0012 entitled, Revised Implementing Rules and Regulations of Executive Order No. 51,
Otherwise Known as The "Milk Code," Relevant International Agreements, Penalizing Violations Thereof,
and for Other Purposes (RIRR). Petitioner posits that the RIRR is not valid as it contains provisions that are not
constitutional and go beyond the law it is supposed to implement.

Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of the Department of
Health (DOH). For purposes of herein petition, the DOH is deemed impleaded as a co-respondent since
respondents issued the questioned RIRR in their capacity as officials of said executive agency.1

Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October 28, 1986 by virtue of the
legislative powers granted to the president under the Freedom Constitution. One of the preambular clauses of the
Milk Code states that the law seeks to give effect to Article 112 of the International Code of Marketing of Breastmilk
Substitutes (ICMBS), a code adopted by the World Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA
adopted several Resolutions to the effect that breastfeeding should be supported, promoted and protected, hence, it
should be ensured that nutrition and health claims are not permitted for breastmilk substitutes.

In 1990, the Philippines ratified the International Convention on the Rights of the Child. Article 24 of said instrument
provides that State Parties should take appropriate measures to diminish infant and child mortality, and ensure that
all segments of society, specially parents and children, are informed of the advantages of breastfeeding.

On May 15, 2006, the DOH issued herein assailed RIRR which was to take effect on July 7, 2006.

However, on June 28, 2006, petitioner, representing its members that are manufacturers of breastmilk substitutes,
filed the present Petition for Certiorari and Prohibition with Prayer for the Issuance of a Temporary Restraining Order
(TRO) or Writ of Preliminary Injunction.

The main issue raised in the petition is whether respondents officers of the DOH acted without or in excess of
jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and in violation of the
provisions of the Constitution in promulgating the RIRR.3

On August 15, 2006, the Court issued a Resolution granting a TRO enjoining respondents from implementing the
questioned RIRR.

After the Comment and Reply had been filed, the Court set the case for oral arguments on June 19, 2007. The
Court issued an Advisory (Guidance for Oral Arguments) dated June 5, 2007, to wit:

The Court hereby sets the following issues:

1. Whether or not petitioner is a real party-in-interest;

 2. Whether Administrative Order No. 2006-0012 or the Revised Implementing Rules and Regulations (RIRR)
issued by the Department of Health (DOH) is not constitutional;

2.1 Whether the RIRR is in accord with the provisions of Executive Order No. 51 (Milk Code);

2.2 Whether pertinent international agreements1 entered into by the Philippines are part of the law of the
land and may be implemented by the DOH through the RIRR; If in the affirmative, whether the RIRR is in
accord with the international agreements;

2.3 Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the due process clause and are in
restraint of trade; and

2.4 Whether Section 13 of the RIRR on Total Effect provides sufficient standards.

_____________

1 (1) United Nations Convention on the Rights of the Child; (2) the WHO and Unicef "2002 Global Strategy
on Infant and Young Child Feeding;" and (3) various World Health Assembly (WHA) Resolutions.

The parties filed their respective memoranda.

The petition is partly imbued with merit.

On the issue of petitioner's standing

With regard to the issue of whether petitioner may prosecute this case as the real party-in-interest, the Court adopts
the view enunciated in Executive Secretary v. Court of Appeals,4 to wit:

The modern view is that an association has standing to complain of injuries to its members. This view fuses
the legal identity of an association with that of its members. An association has standing to file suit for
its workers despite its lack of direct interest if its members are affected by the action. An
organization has standing to assert the concerns of its constituents.

xxxx

x x x We note that, under its Articles of Incorporation, the respondent was organized x x x to act as the
representative of any individual, company, entity or association on matters related to the manpower
recruitment industry, and to perform other acts and activities necessary to accomplish the purposes
embodied therein. The respondent is, thus, the appropriate party to assert the rights of its members,
because it and its members are in every practical sense identical. x x x The respondent [association]
is but the medium through which its individual members seek to make more effective the expression
of their voices and the redress of their grievances. 5 (Emphasis supplied)

which was reasserted in Purok Bagong Silang Association, Inc. v. Yuipco,6 where the Court ruled that an association
has the legal personality to represent its members because the results of the case will affect their vital interests.7

Herein petitioner's Amended Articles of Incorporation contains a similar provision just like in Executive Secretary,
that the association is formed "to represent directly or through approved representatives the pharmaceutical and
health care industry before the Philippine Government and any of its agencies, the medical professions and the
general public."8 Thus, as an organization, petitioner definitely has an interest in fulfilling its avowed purpose of
representing members who are part of the pharmaceutical and health care industry. Petitioner is duly authorized9 to
take the appropriate course of action to bring to the attention of government agencies and the courts any grievance
suffered by its members which are directly affected by the RIRR. Petitioner, which is mandated by its Amended
Articles of Incorporation to represent the entire industry, would be remiss in its duties if it fails to act on
governmental action that would affect any of its industry members, no matter how few or numerous they are. Hence,
petitioner, whose legal identity is deemed fused with its members, should be considered as a real party-in-interest
which stands to be benefited or injured by any judgment in the present action.
On the constitutionality of the provisions of the RIRR

First, the Court will determine if pertinent international instruments adverted to by respondents are part of the law of
the land.

Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code, thereby amending and
expanding the coverage of said law. The defense of the DOH is that the RIRR implements not only the Milk Code
but also various international instruments10 regarding infant and young child nutrition. It is respondents' position that
said international instruments are deemed part of the law of the land and therefore the DOH may implement them
through the RIRR.

The Court notes that the following international instruments invoked by respondents, namely: (1) The United Nations
Convention on the Rights of the Child; (2) The International Covenant on Economic, Social and Cultural Rights; and
(3) the Convention on the Elimination of All Forms of Discrimination Against Women, only provide in general terms
that steps must be taken by State Parties to diminish infant and child mortality and inform society of the advantages
of breastfeeding, ensure the health and well-being of families, and ensure that women are provided with services
and nutrition in connection with pregnancy and lactation. Said instruments do not contain specific provisions
regarding the use or marketing of breastmilk substitutes.

The international instruments that do have specific provisions regarding breastmilk substitutes are the ICMBS and
various WHA Resolutions.

Under the 1987 Constitution, international law can become part of the sphere of domestic law either
by transformation or incorporation.11 The transformation method requires that an international law be transformed
into a domestic law through a constitutional mechanism such as local legislation. The incorporation method applies
when, by mere constitutional declaration, international law is deemed to have the force of domestic law.12

Treaties become part of the law of the land through transformation pursuant to Article VII, Section 21 of the
Constitution which provides that "[n]o treaty or international agreement shall be valid and effective unless concurred
in by at least two-thirds of all the members of the Senate." Thus, treaties or conventional international law must go
through a process prescribed by the Constitution for it to be transformed into municipal law that can be applied to
domestic conflicts.13

The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at least two-thirds of all
members of the Senate as required under Section 21, Article VII of the 1987 Constitution.

However, the ICMBS which was adopted by the WHA in 1981 had been transformed into domestic law through local
legislation, the Milk Code. Consequently, it is the Milk Code that has the force and effect of law in this jurisdiction
and not the ICMBS per se.

The Milk Code is almost a verbatim reproduction of the ICMBS, but it is well to emphasize at this point that the Code
did not adopt the provision in the ICMBS absolutely prohibiting advertising or other forms of promotion to the
general public of products within the scope of the ICMBS. Instead, the Milk Code expressly provides that
advertising, promotion, or other marketing materials may be allowed if such materials are duly authorized
and approved by the Inter-Agency Committee (IAC).

On the other hand, Section 2, Article II of the 1987 Constitution, to wit:

SECTION 2. The Philippines renounces war as an instrument of national policy, adopts the generally
accepted principles of international law as part of the law of the land and adheres to the policy of
peace, equality, justice, freedom, cooperation and amity with all nations. (Emphasis supplied)

embodies the incorporation method.14

In Mijares v. Ranada,15 the Court held thus:

 [G]enerally accepted principles of international law, by virtue of the incorporation clause of the Constitution,
form part of the laws of the land even if they do not derive from treaty obligations. The classical formulation
in international law sees those customary rules accepted as binding result from the combination [of] two
elements: the established, widespread, and consistent practice on the part of States; and a psychological
element known as the opinion juris sive necessitates (opinion as to law or necessity). Implicit in the latter
element is a belief that the practice in question is rendered obligatory by the existence of a rule of law
requiring it.16 (Emphasis supplied)

"Generally accepted principles of international law" refers to norms of general or customary international law which
are binding on all states,17 i.e., renunciation of war as an instrument of national policy, the principle of sovereign
immunity,18 a person's right to life, liberty and due process,19 and pacta sunt servanda,20 among others. The concept
of "generally accepted principles of law" has also been depicted in this wise:

Some legal scholars and judges look upon certain "general principles of law" as a primary source of international
law because they have the "character of jus rationale" and are "valid through all kinds of human
societies." (Judge Tanaka in his dissenting opinion in the 1966 South West Africa Case, 1966 I.C.J. 296).
O'Connell holds that certain priniciples are part of international law because they are "basic to legal systems
generally" and hence part of the jus gentium. These principles, he believes, are established by a process of
reasoning based on the common identity of all legal systems. If there should be doubt or disagreement, one must
look to state practice and determine whether the municipal law principle provides a just and acceptable solution. x x
x 21 (Emphasis supplied)

Fr. Joaquin G. Bernas defines customary international law as follows:

Custom or customary international law means "a general and consistent practice of states followed by them
from a sense of legal obligation [opinio juris]." (Restatement) This statement contains the two basic
elements of custom: the material factor, that is, how states behave, and the psychological
or subjective factor, that is, why they behave the way they do.

xxxx

The initial factor for determining the existence of custom is the actual behavior of states. This includes
several elements: duration, consistency, and generality of the practice of states.

The required duration can be either short or long. x x x

xxxx

Duration therefore is not the most important element. More important is the consistency and the generality of
the practice. x x x

xxxx

Once the existence of state practice has been established, it becomes necessary to determine why states
behave the way they do. Do states behave the way they do because they consider it obligatory to behave
thus or do they do it only as a matter of courtesy? Opinio juris, or the belief that a certain form of
behavior is obligatory, is what makes practice an international rule. Without it, practice is not
law.22 (Underscoring and Emphasis supplied)

Clearly, customary international law is deemed incorporated into our domestic system.23

WHA Resolutions have not been embodied in any local legislation. Have they attained the status of customary law
and should they then be deemed incorporated as part of the law of the land?

The World Health Organization (WHO) is one of the international specialized agencies allied with the United Nations
(UN) by virtue of Article 57,24 in relation to Article 6325 of the UN Charter. Under the 1946 WHO Constitution, it is the
WHA which determines the policies of the WHO,26 and has the power to adopt regulations concerning "advertising
and labeling of biological, pharmaceutical and similar products moving in international commerce,"27 and to "make
recommendations to members with respect to any matter within the competence of the Organization."28 The legal
effect of its regulations, as opposed to recommendations, is quite different.

Regulations, along with conventions and agreements, duly adopted by the WHA bind member states thus:

Article 19. The Health Assembly shall have authority to adopt conventions or agreements with respect to any
matter within the competence of the Organization. A two-thirds vote of the Health Assembly shall be
required for the adoption of such conventions or agreements, which shall come into force for each
Member when accepted by it in accordance with its constitutional processes.

Article 20. Each Member undertakes that it will, within eighteen months after the adoption by the Health
Assembly of a convention or agreement, take action relative to the acceptance of such convention or
agreement. Each Member shall notify the Director-General of the action taken, and if it does not accept
such convention or agreement within the time limit, it will furnish a statement of the reasons for non-
acceptance. In case of acceptance, each Member agrees to make an annual report to the Director-General
in accordance with Chapter XIV.

Article 21. The Health Assembly shall have authority to adopt regulations concerning: (a) sanitary and
quarantine requirements and other procedures designed to prevent the international spread of disease; (b)
nomenclatures with respect to diseases, causes of death and public health practices; (c) standards with
respect to diagnostic procedures for international use; (d) standards with respect to the safety, purity and
potency of biological, pharmaceutical and similar products moving in international commerce; (e) advertising
and labeling of biological, pharmaceutical and similar products moving in international commerce.

Article 22. Regulations adopted pursuant to Article 21 shall come into force for all Members after due notice
has been given of their adoption by the Health Assembly except for such Members as may notify the
Director-General of rejection or reservations within the period stated in the notice. (Emphasis supplied)

On the other hand, under Article 23, recommendations of the WHA do not come into force for members, in the
same way that conventions or agreements under Article 19 and regulations under Article 21 come into force.
Article 23 of the WHO Constitution reads:

Article 23. The Health Assembly shall have authority to make recommendations to Members with respect
to any matter within the competence of the Organization. (Emphasis supplied)

The absence of a provision in Article 23 of any mechanism by which the recommendation would come into force for
member states is conspicuous.

The former Senior Legal Officer of WHO, Sami Shubber, stated that WHA recommendations are generally not
binding, but they "carry moral and political weight, as they constitute the judgment on a health issue of the collective
membership of the highest international body in the field of health."29 Even the ICMBS itself was adopted as a mere
recommendation, as WHA Resolution No. 34.22 states:

"The Thirty-Fourth World Health Assembly x x x adopts, in the sense of Article 23 of the Constitution, the
International Code of Marketing of Breastmilk Substitutes annexed to the present resolution." (Emphasis
supplied)

The Introduction to the ICMBS also reads as follows:

In January 1981, the Executive Board of the World Health Organization at its sixty-seventh session,
considered the fourth draft of the code, endorsed it, and unanimously recommended to the Thirty-fourth
World Health Assembly the text of a resolution by which it would adopt the code in the form of a
recommendation rather than a regulation. x x x (Emphasis supplied)

The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the WHO Constitution, to
wit:
 Art. 62. Each member shall report annually on the action taken with respect to recommendations made to it
by the Organization, and with respect to conventions, agreements and regulations.

Apparently, the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions urging member states to
implement the ICMBS are merely recommendatory and legally non-binding. Thus, unlike what has been done
with the ICMBS whereby the legislature enacted most of the provisions into law which is the Milk Code, the
subsequent WHA Resolutions,30 specifically providing for exclusive breastfeeding from 0-6 months,
continued breastfeeding up to 24 months, and absolutely prohibiting advertisements and promotions of
breastmilk substitutes, have not been adopted as a domestic law.

It is propounded that WHA Resolutions may constitute "soft law" or non-binding norms, principles and practices that
influence state behavior.31

"Soft law" does not fall into any of the categories of international law set forth in Article 38, Chapter III of the 1946
Statute of the International Court of Justice.32 It is, however, an expression of non-binding norms, principles, and
practices that influence state behavior.33 Certain declarations and resolutions of the UN General Assembly fall under
this category.34 The most notable is the UN Declaration of Human Rights, which this Court has enforced in various
cases, specifically, Government of Hongkong Special Administrative Region v. Olalia,35 Mejoff v. Director of
Prisons,36 Mijares v. Rañada37 and Shangri-la International Hotel Management, Ltd. v. Developers Group of
Companies, Inc..38

The World Intellectual Property Organization (WIPO), a specialized agency attached to the UN with the mandate to
promote and protect intellectual property worldwide, has resorted to soft law as a rapid means of norm creation, in
order "to reflect and respond to the changing needs and demands of its constituents."39 Other international
organizations which have resorted to soft law include the International Labor Organization and the Food and
Agriculture Organization (in the form of the Codex Alimentarius).40

WHO has resorted to soft law. This was most evident at the time of the Severe Acute Respiratory Syndrome (SARS)
and Avian flu outbreaks.

Although the IHR Resolution does not create new international law binding on WHO member states,
it provides an excellent example of the power of "soft law" in international relations. International
lawyers typically distinguish binding rules of international law-"hard law"-from non-binding norms,
principles, and practices that influence state behavior-"soft law." WHO has during its existence
generated many soft law norms, creating a "soft law regime" in international governance for public
health.

The "soft law" SARS and IHR Resolutions represent significant steps in laying the political groundwork for
improved international cooperation on infectious diseases. These resolutions clearly define WHO member
states' normative duty to cooperate fully with other countries and with WHO in connection with infectious
disease surveillance and response to outbreaks.

This duty is neither binding nor enforceable, but, in the wake of the SARS epidemic, the duty is
powerful politically for two reasons. First, the SARS outbreak has taught the lesson that participating in,
and enhancing, international cooperation on infectious disease controls is in a country's self-interest x x x if
this warning is heeded, the "soft law" in the SARS and IHR Resolution could inform the development of
general and consistent state practice on infectious disease surveillance and outbreak response, perhaps
crystallizing eventually into customary international law on infectious disease prevention and control.41

In the Philippines, the executive department implemented certain measures recommended by WHO to address the
outbreaks of SARS and Avian flu by issuing Executive Order (E.O.) No. 201 on April 26, 2003 and E.O. No. 280 on
February 2, 2004, delegating to various departments broad powers to close down schools/establishments, conduct
health surveillance and monitoring, and ban importation of poultry and agricultural products.

It must be emphasized that even under such an international emergency, the duty of a state to implement the IHR
Resolution was still considered not binding or enforceable, although said resolutions had great political influence.
As previously discussed, for an international rule to be considered as customary law, it must be established that
such rule is being followed by states because they consider it obligatory to comply with such rules (opinio juris).
Respondents have not presented any evidence to prove that the WHA Resolutions, although signed by most of the
member states, were in fact enforced or practiced by at least a majority of the member states; neither have
respondents proven that any compliance by member states with said WHA Resolutions was obligatory in nature.

Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary international law
that may be deemed part of the law of the land.

Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into domestic law. The
provisions of the WHA Resolutions cannot be considered as part of the law of the land that can be
implemented by executive agencies without the need of a law enacted by the legislature.

Second, the Court will determine whether the DOH may implement the provisions of the WHA Resolutions by virtue
of its powers and functions under the Revised Administrative Code even in the absence of a domestic law.

Section 3, Chapter 1, Title IX of the Revised Administrative Code of 1987 provides that the DOH shall define the
national health policy and implement a national health plan within the framework of the government's general
policies and plans, and issue orders and regulations concerning the implementation of established health
policies.

It is crucial to ascertain whether the absolute prohibition on advertising and other forms of promotion of breastmilk
substitutes provided in some WHA Resolutions has been adopted as part of the national health policy.

Respondents submit that the national policy on infant and young child feeding is embodied in A.O. No. 2005-0014,
dated May 23, 2005. Basically, the Administrative Order declared the following policy guidelines: (1) ideal
breastfeeding practices, such as early initiation of breastfeeding, exclusive breastfeeding for the first six months,
extended breastfeeding up to two years and beyond; (2) appropriate complementary feeding, which is to start at age
six months; (3) micronutrient supplementation; (4) universal salt iodization; (5) the exercise of other feeding options;
and (6) feeding in exceptionally difficult circumstances. Indeed, the primacy of breastfeeding for children is
emphasized as a national health policy. However, nowhere in A.O. No. 2005-0014 is it declared that as part of
such health policy, the advertisement or promotion of breastmilk substitutes should be absolutely
prohibited.

The national policy of protection, promotion and support of breastfeeding cannot automatically be equated with a
total ban on advertising for breastmilk substitutes.

In view of the enactment of the Milk Code which does not contain a total ban on the advertising and promotion of
breastmilk substitutes, but instead, specifically creates an IAC which will regulate said advertising and promotion, it
follows that a total ban policy could be implemented only pursuant to a law amending the Milk Code passed by the
constitutionally authorized branch of government, the legislature.

Thus, only the provisions of the Milk Code, but not those of subsequent WHA Resolutions, can be validly
implemented by the DOH through the subject RIRR.

Third, the Court will now determine whether the provisions of the RIRR are in accordance with those of the Milk
Code.

In support of its claim that the RIRR is inconsistent with the Milk Code, petitioner alleges the following:

1. The Milk Code limits its coverage to children 0-12 months old, but the RIRR extended its coverage to
"young children" or those from ages two years old and beyond:

MILK CODE RIRR

WHEREAS, in order to ensure that safe and Section 2. Purpose – These Revised Rules
adequate nutrition for infants is provided, there and Regulations are hereby promulgated to
is a need to protect and promote breastfeeding ensure the provision of safe and adequate
 and to inform the public about the proper use of nutrition for infants and young children by the
breastmilk substitutes and supplements and promotion, protection and support of
related products through adequate, consistent breastfeeding and by ensuring the proper use
and objective information and appropriate of breastmilk substitutes, breastmilk
regulation of the marketing and distribution of supplements and related products when these
the said substitutes, supplements and related are medically indicated and only when
products; necessary, on the basis of adequate
information and through appropriate marketing
SECTION 4(e). "Infant" means a person falling and distribution.
within the age bracket of 0-12 months.
Section 5(ff). "Young Child" means a person
from the age of more than twelve (12) months
up to the age of three (3) years (36 months).

2. The Milk Code recognizes that infant formula may be a proper and possible substitute for breastmilk in
certain instances; but the RIRR provides "exclusive breastfeeding for infants from 0-6 months" and declares
that "there is no substitute nor replacement for breastmilk":

MILK CODE RIRR

WHEREAS, in order to ensure that safe and Section 4. Declaration of Principles – The
adequate nutrition for infants is provided, there following are the underlying principles from
is a need to protect and promote breastfeeding which the revised rules and regulations are
and to inform the public about the proper use of premised upon:
breastmilk substitutes and supplements and
related products through adequate, consistent a. Exclusive breastfeeding is for infants from 0
and objective information and appropriate to six (6) months.
regulation of the marketing and distribution of
the said substitutes, supplements and related b. There is no substitute or replacement for
products; breastmilk.

3. The Milk Code only regulates and does not impose unreasonable requirements for advertising and
promotion; RIRR imposes an absolute ban on such activities for breastmilk substitutes intended for infants
from 0-24 months old or beyond, and forbids the use of health and nutritional claims. Section 13 of the
RIRR, which provides for a "total effect" in the promotion of products within the scope of the Code, is vague:

MILK CODE RIRR

SECTION 6. The General Public and Section 4. Declaration of Principles – The
Mothers. – following are the underlying principles from
which the revised rules and regulations are
(a) No advertising, promotion or other premised upon:
marketing materials, whether written, audio or
visual, for products within the scope of this xxxx
Code shall be printed, published, distributed,
exhibited and broadcast unless such materials f. Advertising, promotions, or sponsor-ships of
are duly authorized and approved by an inter- infant formula, breastmilk substitutes and other
agency committee created herein pursuant to related products are prohibited.
the applicable standards provided for in this
Code. Section 11. Prohibition – No advertising,
promotions, sponsorships, or marketing
materials and activities for breastmilk
substitutes intended for infants and young
children up to twenty-four (24) months, shall be
allowed, because they tend to convey or give
subliminal messages or impressions that
undermine breastmilk and breastfeeding or
otherwise exaggerate breastmilk substitutes
and/or replacements, as well as related
 products covered within the scope of this Code.

Section 13. "Total Effect" - Promotion of

products within the scope of this Code must be
objective and should not equate or make the
product appear to be as good or equal to
breastmilk or breastfeeding in the advertising
concept. It must not in any case undermine
breastmilk or breastfeeding. The "total effect"
should not directly or indirectly suggest that
buying their product would produce better
individuals, or resulting in greater love,
intelligence, ability, harmony or in any manner
bring better health to the baby or other such
exaggerated and unsubstantiated claim.

Section 15. Content of Materials. - The

following shall not be included in advertising,
promotional and marketing materials:

a. Texts, pictures, illustrations or information

which discourage or tend to undermine the
benefits or superiority of breastfeeding or which
idealize the use of breastmilk substitutes and
milk supplements. In this connection, no
pictures of babies and children together with
their mothers, fathers, siblings, grandparents,
other relatives or caregivers (or yayas) shall be
used in any advertisements for infant formula
and breastmilk supplements;

b. The term "humanized," "maternalized,"

"close to mother's milk" or similar words in
describing breastmilk substitutes or milk
supplements;

c. Pictures or texts that idealize the use of

infant and milk formula.

Section 16. All health and nutrition claims for

products within the scope of the Code are
absolutely prohibited. For this purpose, any
phrase or words that connotes to increase
emotional, intellectual abilities of the infant and
young child and other like phrases shall not be
allowed.

4. The RIRR imposes additional labeling requirements not found in the Milk Code:

MILK CODE RIRR

SECTION 10. Containers/Label. – Section 26. Content – Each container/label
shall contain such message, in both Filipino
(a) Containers and/or labels shall be designed and English languages, and which message
to provide the necessary information about the cannot be readily separated therefrom, relative
appropriate use of the products, and in such a the following points:
way as not to discourage breastfeeding.
 (b) Each container shall have a clear, (a) The words or phrase "Important Notice" or
conspicuous and easily readable and "Government Warning" or their equivalent;
understandable message in Pilipino or English
printed on it, or on a label, which message can (b) A statement of the superiority of
not readily become separated from it, and breastfeeding;
which shall include the following points:
(c) A statement that there is no substitute for
(i) the words "Important Notice" or their breastmilk;
equivalent;
(d) A statement that the product shall be used
(ii) a statement of the superiority of only on the advice of a health worker as to the
breastfeeding; need for its use and the proper methods of use;

(iii) a statement that the product shall be used (e) Instructions for appropriate prepara-tion,
only on the advice of a health worker as to the and a warning against the health hazards of
need for its use and the proper methods of use; inappropriate preparation; and
and
(f) The health hazards of unnecessary or
(iv) instructions for appropriate preparation, improper use of infant formula and other
and a warning against the health hazards of related products including information that
inappropriate preparation. powdered infant formula may contain
pathogenic microorganisms and must be
prepared and used appropriately.

5. The Milk Code allows dissemination of information on infant formula to health professionals; the RIRR
totally prohibits such activity:

MILK CODE RIRR

SECTION 7. Health Care System. – Section 22. No manufacturer, distributor, or
representatives of products covered by the
(b) No facility of the health care system shall Code shall be allowed to conduct or be
be used for the purpose of promoting infant involved in any activity on breastfeeding
formula or other products within the scope of promotion, education and production of
this Code. This Code does not, however, Information, Education and Communication
preclude the dissemination of information to (IEC) materials on breastfeeding, holding of or
health professionals as provided in Section participating as speakers in classes or
8(b). seminars for women and children activities and
to avoid the use of these venues to market
SECTION 8. Health Workers. - their brands or company names.

(b) Information provided by manufacturers and SECTION 16. All health and nutrition claims for
distributors to health professionals regarding products within the scope of the Code are
products within the scope of this Code shall be absolutely prohibited. For this purpose, any
restricted to scientific and factual matters and phrase or words that connotes to increase
such information shall not imply or create a emotional, intellectual abilities of the infant and
belief that bottle-feeding is equivalent or young child and other like phrases shall not be
superior to breastfeeding. It shall also include allowed.
the information specified in Section 5(b).

6. The Milk Code permits milk manufacturers and distributors to extend assistance in research and
continuing education of health professionals; RIRR absolutely forbids the same.

MILK CODE RIRR

SECTION 8. Health Workers – Section 4. Declaration of Principles –
 (e) Manufacturers and distributors of products The following are the underlying principles from
within the scope of this Code may assist in the which the revised rules and regulations are
research, scholarships and continuing premised upon:
education, of health professionals, in
accordance with the rules and regulations i. Milk companies, and their
promulgated by the Ministry of Health. representatives, should not form part of any
policymaking body or entity in relation to the
advancement of breasfeeding.

SECTION 22. No manufacturer, distributor, or

representatives of products covered by the
Code shall be allowed to conduct or be
involved in any activity on breastfeeding
promotion, education and production of
Information, Education and Communication
(IEC) materials on breastfeeding, holding of or
participating as speakers in classes or
seminars for women and children activities and
to avoid the use of these venues to market
their brands or company names.

SECTION 32. Primary Responsibility of

Health Workers - It is the primary
responsibility of the health workers to promote,
protect and support breastfeeding and
appropriate infant and young child feeding.
Part of this responsibility is to continuously
update their knowledge and skills on
breastfeeding. No assistance, support, logistics
or training from milk companies shall be
permitted.

7. The Milk Code regulates the giving of donations; RIRR absolutely prohibits it.

MILK CODE RIRR

SECTION 6. The General Public and Section 51. Donations Within the Scope of
Mothers. – This Code - Donations of products, materials,
defined and covered under the Milk Code and
(f) Nothing herein contained shall prevent these implementing rules and regulations, shall
donations from manufacturers and distributors be strictly prohibited.
of products within the scope of this Code upon
request by or with the approval of the Ministry Section 52. Other Donations By Milk
of Health. Companies Not Covered by this Code. -
Donations of products, equipments, and the
like, not otherwise falling within the scope of
this Code or these Rules, given by milk
companies and their agents, representatives,
whether in kind or in cash, may only be
coursed through the Inter Agency Committee
(IAC), which shall determine whether such
donation be accepted or otherwise.

8. The RIRR provides for administrative sanctions not imposed by the Milk Code.

MILK CODE RIRR

  Section 46. Administrative Sanctions. – The
 following administrative sanctions shall be
imposed upon any person, juridical or natural,
found to have violated the provisions of the
Code and its implementing Rules and
Regulations:

a) 1st violation – Warning;

b) 2nd violation – Administrative fine of a

minimum of Ten Thousand (P10,000.00) to
Fifty Thousand (P50,000.00) Pesos, depending
on the gravity and extent of the violation,
including the recall of the offending product;

c) 3rd violation – Administrative Fine of a

minimum of Sixty Thousand (P60,000.00) to
One Hundred Fifty Thousand (P150,000.00)
Pesos, depending on the gravity and extent of
the violation, and in addition thereto, the recall
of the offending product, and suspension of the
Certificate of Product Registration (CPR);

d) 4th violation –Administrative Fine of a

minimum of Two Hundred Thousand
(P200,000.00) to Five Hundred (P500,000.00)
Thousand Pesos, depending on the gravity and
extent of the violation; and in addition thereto,
the recall of the product, revocation of the
CPR, suspension of the License to Operate
(LTO) for one year;

e) 5th and succeeding repeated violations –

Administrative Fine of One Million
(P1,000,000.00) Pesos, the recall of the
offending product, cancellation of the CPR,
revocation of the License to Operate (LTO) of
the company concerned, including the
blacklisting of the company to be furnished the
Department of Budget and Management
(DBM) and the Department of Trade and
Industry (DTI);

f) An additional penalty of Two Thou-sand Five

Hundred (P2,500.00) Pesos per day shall be
made for every day the violation continues
after having received the order from the IAC or
other such appropriate body, notifying and
penalizing the company for the infraction.

For purposes of determining whether or not

there is "repeated" violation, each product
violation belonging or owned by a company,
including those of their subsidiaries, are
deemed to be violations of the concerned milk
company and shall not be based on the
specific violating product alone.

9. The RIRR provides for repeal of existing laws to the contrary.

The Court shall resolve the merits of the allegations of petitioner seriatim.

1. Petitioner is mistaken in its claim that the Milk Code's coverage is limited only to children 0-12 months old.
Section 3 of the Milk Code states:

SECTION 3. Scope of the Code – The Code applies to the marketing, and practices related thereto, of the
following products: breastmilk substitutes, including infant formula; other milk products, foods and
beverages, including bottle-fed complementary foods, when marketed or otherwise represented to be
suitable, with or without modification, for use as a partial or total replacement of breastmilk; feeding bottles
and teats. It also applies to their quality and availability, and to information concerning their use.

Clearly, the coverage of the Milk Code is not dependent on the age of the child but on the kind of product being
marketed to the public. The law treats infant formula, bottle-fed complementary food, and breastmilk substitute as
separate and distinct product categories.

Section 4(h) of the Milk Code defines infant formula as "a breastmilk substitute x x x to satisfy the normal nutritional
requirements of infants up to between four to six months of age, and adapted to their physiological characteristics";
while under Section 4(b), bottle-fed complementary food refers to "any food, whether manufactured or locally
prepared, suitable as a complement to breastmilk or infant formula, when either becomes insufficient to satisfy the
nutritional requirements of the infant." An infant under Section 4(e) is a person falling within the age bracket 0-12
months. It is the nourishment of this group of infants or children aged 0-12 months that is sought to be promoted
and protected by the Milk Code.

But there is another target group. Breastmilk substitute is defined under Section 4(a) as "any food being marketed or
otherwise presented as a partial or total replacement for breastmilk, whether or not suitable for that purpose." This
section conspicuously lacks reference to any particular age-group of children. Hence, the provision of the
Milk Code cannot be considered exclusive for children aged 0-12 months. In other words, breastmilk
substitutes may also be intended for young children more than 12 months of age. Therefore, by regulating
breastmilk substitutes, the Milk Code also intends to protect and promote the nourishment of children more than 12
months old.

Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided in Section 3, then it
can be subject to regulation pursuant to said law, even if the product is to be used by children aged over 12 months.

There is, therefore, nothing objectionable with Sections 242 and 5(ff)43 of the RIRR.

2. It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code, does not recognize that breastmilk
substitutes may be a proper and possible substitute for breastmilk.

The entirety of the RIRR, not merely truncated portions thereof, must be considered and construed together. As held
in De Luna v. Pascual,44 "[t]he particular words, clauses and phrases in the Rule should not be studied as detached
and isolated expressions, but the whole and every part thereof must be considered in fixing the meaning of any of
its parts and in order to produce a harmonious whole."

Section 7 of the RIRR provides that "when medically indicated and only when necessary, the use of breastmilk
substitutes is proper if based on complete and updated information." Section 8 of the RIRR also states that
information and educational materials should include information on the proper use of infant formula when the use
thereof is needed.

Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of breastmilk
substitutes may be proper.

3. The Court shall ascertain the merits of allegations 345 and 446 together as they are interlinked with each other.

To resolve the question of whether the labeling requirements and advertising regulations under the RIRR are valid,
it is important to deal first with the nature, purpose, and depth of the regulatory powers of the DOH, as defined in
general under the 1987 Administrative Code,47 and as delegated in particular under the Milk Code.
Health is a legitimate subject matter for regulation by the DOH (and certain other administrative agencies) in
exercise of police powers delegated to it. The sheer span of jurisprudence on that matter precludes the need to
further discuss it..48 However, health information, particularly advertising materials on apparently non-toxic products
like breastmilk substitutes and supplements, is a relatively new area for regulation by the DOH.49

As early as the 1917 Revised Administrative Code of the Philippine Islands,50 health information was already within
the ambit of the regulatory powers of the predecessor of DOH.51 Section 938 thereof charged it with the duty to
protect the health of the people, and vested it with such powers as "(g) the dissemination of hygienic information
among the people and especially the inculcation of knowledge as to the proper care of infants and the
methods of preventing and combating dangerous communicable diseases."

Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state policy pronounced
under Section 15, Article II of the 1987 Constitution, which is "to protect and promote the right to health of the
people and instill health consciousness among them."52 To that end, it was granted under Section 3 of the
Administrative Code the power to "(6) propagate health information and educate the population on important
health, medical and environmental matters which have health implications."53

When it comes to information regarding nutrition of infants and young children, however, the Milk Code specifically
delegated to the Ministry of Health (hereinafter referred to as DOH) the power to ensure that there is adequate,
consistent and objective information on breastfeeding and use of breastmilk substitutes, supplements and related
products; and the power to control such information. These are expressly provided for in Sections 12 and 5(a), to
wit:

SECTION 12. Implementation and Monitoring –

xxxx

(b) The Ministry of Health shall be principally responsible for the implementation and enforcement of the
provisions of this Code. For this purpose, the Ministry of Health shall have the following powers and
functions:

(1) To promulgate such rules and regulations as are necessary or proper for the implementation of
this Code and the accomplishment of its purposes and objectives.

xxxx

(4) To exercise such other powers and functions as may be necessary for or incidental to the
attainment of the purposes and objectives of this Code.

SECTION 5. Information and Education –

(a) The government shall ensure that objective and consistent information is provided on infant feeding,
for use by families and those involved in the field of infant nutrition. This responsibility shall cover the
planning, provision, design and dissemination of information, and the control thereof, on infant nutrition.
(Emphasis supplied)

Further, DOH is authorized by the Milk Code to control the content of any information on breastmilk vis-à-
vis breastmilk substitutes, supplement and related products, in the following manner:

SECTION 5. x x x

(b) Informational and educational materials, whether written, audio, or visual, dealing with the feeding of
infants and intended to reach pregnant women and mothers of infants, shall include clear information on all
the following points: (1) the benefits and superiority of breastfeeding; (2) maternal nutrition, and the
preparation for and maintenance of breastfeeding; (3) the negative effect on breastfeeding of introducing
partial bottlefeeding; (4) the difficulty of reversing the decision not to breastfeed; and (5) where needed, the
proper use of infant formula, whether manufactured industrially or home-prepared. When such materials
 contain information about the use of infant formula, they shall include the social and financial
implications of its use; the health hazards of inappropriate foods or feeding methods; and, in
particular, the health hazards of unnecessary or improper use of infant formula and other breastmilk
substitutes. Such materials shall not use any picture or text which may idealize the use of
breastmilk substitutes.

SECTION 8. Health Workers –

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding products within
the scope of this Code shall be restricted to scientific and factual matters, and such information shall
not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding. It shall also
include the information specified in Section 5(b).

SECTION 10. Containers/Label –

(a) Containers and/or labels shall be designed to provide the necessary information about the appropriate
use of the products, and in such a way as not to discourage breastfeeding.

xxxx

(d) The term "humanized," "maternalized" or similar terms shall not be used. (Emphasis supplied)

The DOH is also authorized to control the purpose of the information and to whom such information may be
disseminated under Sections 6 through 9 of the Milk Code54 to ensure that the information that would reach pregnant
women, mothers of infants, and health professionals and workers in the health care system is restricted to scientific
and factual matters and shall not imply or create a belief that bottlefeeding is equivalent or superior to
breastfeeding.

It bears emphasis, however, that the DOH's power under the Milk Code to control information regarding
breastmilk vis-a-vis breastmilk substitutes is not absolute as the power to control does not encompass the power to
absolutely prohibit the advertising, marketing, and promotion of breastmilk substitutes.

The following are the provisions of the Milk Code that unequivocally indicate that the control over information given
to the DOH is not absolute and that absolute prohibition is not contemplated by the Code:

a) Section 2 which requires adequate information and appropriate marketing and distribution of breastmilk
substitutes, to wit:

SECTION 2. Aim of the Code – The aim of the Code is to contribute to the provision of safe and
adequate nutrition for infants by the protection and promotion of breastfeeding and by ensuring the
proper use of breastmilk substitutes and breastmilk supplements when these are necessary, on the
basis of adequate information and through appropriate marketing and distribution.

b) Section 3 which specifically states that the Code applies to the marketing of and practices related to
breastmilk substitutes, including infant formula, and to information concerning their use;

c) Section 5(a) which provides that the government shall ensure that objective and consistent information is
provided on infant feeding;

d) Section 5(b) which provides that written, audio or visual informational and educational materials shall not
use any picture or text which may idealize the use of breastmilk substitutes and should include information
on the health hazards of unnecessary or improper use of said product;
 e) Section 6(a) in relation to Section 12(a) which creates and empowers the IAC to review and examine
advertising, promotion, and other marketing materials;

f) Section 8(b) which states that milk companies may provide information to health professionals but such
information should be restricted to factual and scientific matters and shall not imply or create a belief that
bottlefeeding is equivalent or superior to breastfeeding; and

g) Section 10 which provides that containers or labels should not contain information that would discourage
breastfeeding and idealize the use of infant formula.

It is in this context that the Court now examines the assailed provisions of the RIRR regarding labeling and
advertising.

Sections 1355 on "total effect" and 2656 of Rule VII of the RIRR contain some labeling requirements, specifically: a)
that there be a statement that there is no substitute to breastmilk; and b) that there be a statement that powdered
infant formula may contain pathogenic microorganisms and must be prepared and used appropriately. Section
1657 of the RIRR prohibits all health and nutrition claims for products within the scope of the Milk Code, such as
claims of increased emotional and intellectual abilities of the infant and young child.

These requirements and limitations are consistent with the provisions of Section 8 of the Milk Code, to wit:

SECTION 8. Health workers -

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding products within
the scope of this Code shall be restricted to scientific and factual matters, and such information shall
not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding. It shall also include
the information specified in Section 5.58 (Emphasis supplied)

and Section 10(d)59 which bars the use on containers and labels of the terms "humanized," "maternalized," or similar
terms.

These provisions of the Milk Code expressly forbid information that would imply or create a belief that there is any
milk product equivalent to breastmilk or which is humanized or maternalized, as such information would be
inconsistent with the superiority of breastfeeding.

It may be argued that Section 8 of the Milk Code refers only to information given to health workers regarding
breastmilk substitutes, not to containers and labels thereof. However, such restrictive application of Section 8(b) will
result in the absurd situation in which milk companies and distributors are forbidden to claim to health workers that
their products are substitutes or equivalents of breastmilk, and yet be allowed to display on the containers and
labels of their products the exact opposite message. That askewed interpretation of the Milk Code is precisely what
Section 5(a) thereof seeks to avoid by mandating that all information regarding breastmilk vis-a-vis breastmilk
substitutes be consistent, at the same time giving the government control over planning, provision, design, and
dissemination of information on infant feeding.

Thus, Section 26(c) of the RIRR which requires containers and labels to state that the product offered is not a
substitute for breastmilk, is a reasonable means of enforcing Section 8(b) of the Milk Code and deterring
circumvention of the protection and promotion of breastfeeding as embodied in Section 260 of the Milk Code.

Section 26(f)61 of the RIRR is an equally reasonable labeling requirement. It implements Section 5(b) of the Milk
Code which reads:

SECTION 5. x x x

xxxx
 (b) Informational and educational materials, whether written, audio, or visual, dealing with the feeding of
infants and intended to reach pregnant women and mothers of infants, shall include clear information on all
the following points: x x x (5) where needed, the proper use of infant formula, whether manufactured
industrially or home-prepared. When such materials contain information about the use of infant formula, they
shall include the social and financial implications of its use; the health hazards of inappropriate foods or
feeding methods; and, in particular, the health hazards of unnecessary or improper use of infant
formula and other breastmilk substitutes. Such materials shall not use any picture or text which may
idealize the use of breastmilk substitutes. (Emphasis supplied)

The label of a product contains information about said product intended for the buyers thereof. The buyers of
breastmilk substitutes are mothers of infants, and Section 26 of the RIRR merely adds a fair warning about the
likelihood of pathogenic microorganisms being present in infant formula and other related products when these are
prepared and used inappropriately.

Petitioner’s counsel has admitted during the hearing on June 19, 2007 that formula milk is prone to contaminations
and there is as yet no technology that allows production of powdered infant formula that eliminates all forms of
contamination.62

Ineluctably, the requirement under Section 26(f) of the RIRR for the label to contain the message regarding health
hazards including the possibility of contamination with pathogenic microorganisms is in accordance with Section
5(b) of the Milk Code.

The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk substitutes and supplements
and related products cannot be questioned. It is its intervention into the area of advertising, promotion, and
marketing that is being assailed by petitioner.

In furtherance of Section 6(a) of the Milk Code, to wit:

SECTION 6. The General Public and Mothers. –

(a) No advertising, promotion or other marketing materials, whether written, audio or visual, for products
within the scope of this Code shall be printed, published, distributed, exhibited and broadcast unless such
materials are duly authorized and approved by an inter-agency committee created herein pursuant to the
applicable standards provided for in this Code.

the Milk Code invested regulatory authority over advertising, promotional and marketing materials to an IAC, thus:

SECTION 12. Implementation and Monitoring -

(a) For purposes of Section 6(a) of this Code, an inter-agency committee composed of the following
members is hereby created:

Minister of Health ------------------- Chairman

Minister of Trade and Industry ------------------- Member

Minister of Justice ------------------- Member

Minister of Social Services and Development ------------------- Member

The members may designate their duly authorized representative to every meeting of the Committee.

The Committee shall have the following powers and functions:

(1) To review and examine all advertising. promotion or other marketing materials, whether written,
audio or visual, on products within the scope of this Code;
 (2) To approve or disapprove, delete objectionable portions from and prohibit the printing,
publication, distribution, exhibition and broadcast of, all advertising promotion or other marketing
materials, whether written, audio or visual, on products within the scope of this Code;

(3) To prescribe the internal and operational procedure for the exercise of its powers and functions
as well as the performance of its duties and responsibilities; and

(4) To promulgate such rules and regulations as are necessary or proper for the
implementation of Section 6(a) of this Code. x x x (Emphasis supplied)

However, Section 11 of the RIRR, to wit:

SECTION 11. Prohibition – No advertising, promotions, sponsorships, or marketing materials and activities

for breastmilk substitutes intended for infants and young children up to twenty-four (24) months, shall be
allowed, because they tend to convey or give subliminal messages or impressions that undermine
breastmilk and breastfeeding or otherwise exaggerate breastmilk substitutes and/or replacements, as well
as related products covered within the scope of this Code.

prohibits advertising, promotions, sponsorships or marketing materials and activities for breastmilk substitutes in line
with the RIRR’s declaration of principle under Section 4(f), to wit:

SECTION 4. Declaration of Principles –

xxxx

(f) Advertising, promotions, or sponsorships of infant formula, breastmilk substitutes and other related
products are prohibited.

The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory authority given to the IAC
but also imposed absolute prohibition on advertising, promotion, and marketing.

Yet, oddly enough, Section 12 of the RIRR reiterated the requirement of the Milk Code in Section 6 thereof for prior
approval by IAC of all advertising, marketing and promotional materials prior to dissemination.

Even respondents, through the OSG, acknowledged the authority of IAC, and repeatedly insisted, during the oral
arguments on June 19, 2007, that the prohibition under Section 11 is not actually operational, viz:

SOLICITOR GENERAL DEVANADERA:

xxxx

x x x Now, the crux of the matter that is being questioned by Petitioner is whether or not there is an absolute
prohibition on advertising making AO 2006-12 unconstitutional. We maintained that what AO 2006-12
provides is not an absolute prohibition because Section 11 while it states and it is entitled prohibition it states
that no advertising, promotion, sponsorship or marketing materials and activities for breast milk substitutes
intended for infants and young children up to 24 months shall be allowed because this is the standard they
tend to convey or give subliminal messages or impression undermine that breastmilk or breastfeeding x x x.

We have to read Section 11 together with the other Sections because the other Section, Section 12,
provides for the inter agency committee that is empowered to process and evaluate all the advertising and
promotion materials.

xxxx

What AO 2006-12, what it does, it does not prohibit the sale and manufacture, it simply regulates the
advertisement and the promotions of breastfeeding milk substitutes.
xxxx

Now, the prohibition on advertising, Your Honor, must be taken together with the provision on the Inter-
Agency Committee that processes and evaluates because there may be some information dissemination
that are straight forward information dissemination. What the AO 2006 is trying to prevent is any material
that will undermine the practice of breastfeeding, Your Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

Madam Solicitor General, under the Milk Code, which body has authority or power to promulgate Rules and
Regulations regarding the Advertising, Promotion and Marketing of Breastmilk Substitutes?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, it is provided that the Inter-Agency Committee, Your Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

x x x Don't you think that the Department of Health overstepped its rule making authority when it totally
banned advertising and promotion under Section 11 prescribed the total effect rule as well as the content of
materials under Section 13 and 15 of the rules and regulations?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, first we would like to stress that there is no total absolute ban. Second, the Inter-Agency
Committee is under the Department of Health, Your Honor.

xxxx

ASSOCIATE JUSTICE NAZARIO:

x x x Did I hear you correctly, Madam Solicitor, that there is no absolute ban on advertising of breastmilk
substitutes in the Revised Rules?

SOLICITOR GENERAL DEVANADERA:

Yes, your Honor.

ASSOCIATE JUSTICE NAZARIO:

But, would you nevertheless agree that there is an absolute ban on advertising of breastmilk substitutes
intended for children two (2) years old and younger?

SOLICITOR GENERAL DEVANADERA:

It's not an absolute ban, Your Honor, because we have the Inter-Agency Committee that can evaluate some
advertising and promotional materials, subject to the standards that we have stated earlier, which are- they
should not undermine breastfeeding, Your Honor.

xxxx
 x x x Section 11, while it is titled Prohibition, it must be taken in relation with the other Sections, particularly
12 and 13 and 15, Your Honor, because it is recognized that the Inter-Agency Committee has that power to
evaluate promotional materials, Your Honor.

ASSOCIATE JUSTICE NAZARIO:

So in short, will you please clarify there's no absolute ban on advertisement regarding milk substitute
regarding infants two (2) years below?

SOLICITOR GENERAL DEVANADERA:

We can proudly say that the general rule is that there is a prohibition, however, we take exceptions and
standards have been set. One of which is that, the Inter-Agency Committee can allow if the advertising and
promotions will not undermine breastmilk and breastfeeding, Your Honor.63

Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code.

However, although it is the IAC which is authorized to promulgate rules and regulations for the approval or rejection
of advertising, promotional, or other marketing materials under Section 12(a) of the Milk Code, said provision must
be related to Section 6 thereof which in turn provides that the rules and regulations must be "pursuant to the
applicable standards provided for in this Code." Said standards are set forth in Sections 5(b), 8(b), and 10 of the
Code, which, at the risk of being repetitious, and for easy reference, are quoted hereunder:

SECTION 5. Information and Education –

xxxx

(b) Informational and educational materials, whether written, audio, or visual, dealing with the feeding of
infants and intended to reach pregnant women and mothers of infants, shall include clear information on all
the following points: (1) the benefits and superiority of breastfeeding; (2) maternal nutrition, and the
preparation for and maintenance of breastfeeding; (3) the negative effect on breastfeeding of introducing
partial bottlefeeding; (4) the difficulty of reversing the decision not to breastfeed; and (5) where needed, the
proper use of infant formula, whether manufactured industrially or home-prepared. When such materials
contain information about the use of infant formula, they shall include the social and financial implications of
its use; the health hazards of inappropriate foods of feeding methods; and, in particular, the health hazards
of unnecessary or improper use of infant formula and other breastmilk substitutes. Such materials shall not
use any picture or text which may idealize the use of breastmilk substitutes.

xxxx

SECTION 8. Health Workers. –

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding products within
the scope of this Code shall be restricted to scientific and factual matters and such information shall not
imply or create a belief that bottle feeding is equivalent or superior to breastfeeding. It shall also include the
information specified in Section 5(b).

xxxx

SECTION 10. Containers/Label –

(a) Containers and/or labels shall be designed to provide the necessary information about the appropriate
use of the products, and in such a way as not to discourage breastfeeding.
 (b) Each container shall have a clear, conspicuous and easily readable and understandable message in
Pilipino or English printed on it, or on a label, which message can not readily become separated from it, and
which shall include the following points:

(i) the words "Important Notice" or their equivalent;

(ii) a statement of the superiority of breastfeeding;

(iii) a statement that the product shall be used only on the advice of a health worker as to the need
for its use and the proper methods of use; and

(iv) instructions for appropriate preparation, and a warning against the health hazards of
inappropriate preparation.

Section 12(b) of the Milk Code designates the DOH as the principal implementing agency for the enforcement of the
provisions of the Code. In relation to such responsibility of the DOH, Section 5(a) of the Milk Code states that:

SECTION 5. Information and Education –

(a) The government shall ensure that objective and consistent information is provided on infant feeding,
for use by families and those involved in the field of infant nutrition. This responsibility shall cover the
planning, provision, design and dissemination of information, and the control thereof, on infant nutrition.
(Emphasis supplied)

Thus, the DOH has the significant responsibility to translate into operational terms the standards set forth in
Sections 5, 8, and 10 of the Milk Code, by which the IAC shall screen advertising, promotional, or other
marketing materials.

It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR which reads as
follows:

SECTION 13. "Total Effect" - Promotion of products within the scope of this Code must be objective and
should not equate or make the product appear to be as good or equal to breastmilk or breastfeeding in the
advertising concept. It must not in any case undermine breastmilk or breastfeeding. The "total effect" should
not directly or indirectly suggest that buying their product would produce better individuals, or resulting in
greater love, intelligence, ability, harmony or in any manner bring better health to the baby or other such
exaggerated and unsubstantiated claim.

Such standards bind the IAC in formulating its rules and regulations on advertising, promotion, and marketing.
Through that single provision, the DOH exercises control over the information content of advertising, promotional
and marketing materials on breastmilk vis-a-vis breastmilk substitutes, supplements and other related products. It
also sets a viable standard against which the IAC may screen such materials before they are made public.

In Equi-Asia Placement, Inc. vs. Department of Foreign Affairs,64 the Court held:

x x x [T]his Court had, in the past, accepted as sufficient standards the following: "public interest," "justice
and equity," "public convenience and welfare," and "simplicity, economy and welfare."65

In this case, correct information as to infant feeding and nutrition is infused with public interest and welfare.

4. With regard to activities for dissemination of information to health professionals, the Court also finds that there is
no inconsistency between the provisions of the Milk Code and the RIRR. Section 7(b)66 of the Milk Code, in relation
to Section 8(b)67 of the same Code, allows dissemination of information to health professionals but such information
is restricted to scientific and factual matters.
Contrary to petitioner's claim, Section 22 of the RIRR does not prohibit the giving of information to health
professionals on scientific and factual matters. What it prohibits is the involvement of the manufacturer and
distributor of the products covered by the Code in activities for the promotion, education and production of
Information, Education and Communication (IEC) materials regarding breastfeeding that are intended for women
and children. Said provision cannot be construed to encompass even the dissemination of information to health
professionals, as restricted by the Milk Code.

5. Next, petitioner alleges that Section 8(e)68 of the Milk Code permits milk manufacturers and distributors to extend
assistance in research and in the continuing education of health professionals, while Sections 22 and 32 of the
RIRR absolutely forbid the same. Petitioner also assails Section 4(i)69 of the RIRR prohibiting milk manufacturers'
and distributors' participation in any policymaking body in relation to the advancement of breastfeeding.

Section 4(i) of the RIRR provides that milk companies and their representatives should not form part of any
policymaking body or entity in relation to the advancement of breastfeeding. The Court finds nothing in said
provisions which contravenes the Milk Code. Note that under Section 12(b) of the Milk Code, it is the DOH which
shall be principally responsible for the implementation and enforcement of the provisions of said Code. It is
entirely up to the DOH to decide which entities to call upon or allow to be part of policymaking bodies on
breastfeeding. Therefore, the RIRR's prohibition on milk companies’ participation in any policymaking body in
relation to the advancement of breastfeeding is in accord with the Milk Code.

Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from giving reasearch
assistance and continuing education to health professionals. Section 2270 of the RIRR does not pertain to
research assistance to or the continuing education of health professionals; rather, it deals with breastfeeding
promotion and education for women and children. Nothing in Section 22 of the RIRR prohibits milk companies
from giving assistance for research or continuing education to health professionals; hence, petitioner's argument
against this particular provision must be struck down.

It is Sections 971 and 1072 of the RIRR which govern research assistance. Said sections of the RIRR provide
that research assistance for health workers and researchers may be allowed upon approval of an ethics
committee, and with certain disclosure requirements imposed on the milk company and on the recipient of
the research award.

The Milk Code endows the DOH with the power to determine how such research or educational assistance may be
given by milk companies or under what conditions health workers may accept the assistance. Thus, Sections 9 and
10 of the RIRR imposing limitations on the kind of research done or extent of assistance given by milk companies
are completely in accord with the Milk Code.

Petitioner complains that Section 3273 of the RIRR prohibits milk companies from giving assistance, support, logistics
or training to health workers. This provision is within the prerogative given to the DOH under Section 8(e)74 of the
Milk Code, which provides that manufacturers and distributors of breastmilk substitutes may assist in researches,
scholarships and the continuing education, of health professionals in accordance with the rules and regulations
promulgated by the Ministry of Health, now DOH.

6. As to the RIRR's prohibition on donations, said provisions are also consistent with the Milk Code. Section 6(f) of
the Milk Code provides that donations may be made by manufacturers and distributors of breastmilk
substitutes upon the request or with the approval of the DOH. The law does not proscribe the refusal of
donations. The Milk Code leaves it purely to the discretion of the DOH whether to request or accept such donations.
The DOH then appropriately exercised its discretion through Section 5175 of the RIRR which sets forth its policy not
to request or approve donations from manufacturers and distributors of breastmilk substitutes.

It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any donation from milk
companies not covered by the Code should be coursed through the IAC which shall determine whether such
donation should be accepted or refused. As reasoned out by respondents, the DOH is not mandated by the Milk
Code to accept donations. For that matter, no person or entity can be forced to accept a donation. There is,
therefore, no real inconsistency between the RIRR and the law because the Milk Code does not prohibit the DOH
from refusing donations.
7. With regard to Section 46 of the RIRR providing for administrative sanctions that are not found in the Milk Code,
the Court upholds petitioner's objection thereto.

Respondent's reliance on Civil Aeronautics Board v. Philippine Air Lines, Inc. 76 is misplaced. The glaring difference
in said case and the present case before the Court is that, in the Civil Aeronautics Board, the Civil Aeronautics
Administration (CAA) was expressly granted by the law (R.A. No. 776) the power to impose fines and civil
penalties, while the Civil Aeronautics Board (CAB) was granted by the same law the power to review on appeal the
order or decision of the CAA and to determine whether to impose, remit, mitigate, increase or compromise such fine
and civil penalties. Thus, the Court upheld the CAB's Resolution imposing administrative fines.

In a more recent case, Perez v. LPG Refillers Association of the Philippines, Inc.,77 the Court upheld the Department
of Energy (DOE) Circular No. 2000-06-10 implementing Batas Pambansa (B.P.) Blg. 33. The circular provided for
fines for the commission of prohibited acts. The Court found that nothing in the circular contravened the law
because the DOE was expressly authorized by B.P. Blg. 33 and R.A. No. 7638 to impose fines or penalties.

In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH the authority to fix
or impose administrative fines. Thus, without any express grant of power to fix or impose such fines, the DOH
cannot provide for those fines in the RIRR. In this regard, the DOH again exceeded its authority by providing for
such fines or sanctions in Section 46 of the RIRR. Said provision is, therefore, null and void.

The DOH is not left without any means to enforce its rules and regulations. Section 12(b) (3) of the Milk Code
authorizes the DOH to "cause the prosecution of the violators of this Code and other pertinent laws on products
covered by this Code." Section 13 of the Milk Code provides for the penalties to be imposed on violators of the
provision of the Milk Code or the rules and regulations issued pursuant to it, to wit:

SECTION 13. Sanctions –

(a) Any person who violates the provisions of this Code or the rules and regulations issued pursuant to
this Code shall, upon conviction, be punished by a penalty of two (2) months to one (1) year imprisonment
or a fine of not less than One Thousand Pesos (P1,000.00) nor more than Thirty Thousand Pesos
(P30,000.00) or both. Should the offense be committed by a juridical person, the chairman of the Board of
Directors, the president, general manager, or the partners and/or the persons directly responsible therefor,
shall be penalized.

(b) Any license, permit or authority issued by any government agency to any health worker, distributor,
manufacturer, or marketing firm or personnel for the practice of their profession or occupation, or for the
pursuit of their business, may, upon recommendation of the Ministry of Health, be suspended or revoked in
the event of repeated violations of this Code, or of the rules and regulations issued pursuant to this Code.
(Emphasis supplied)

8. Petitioner’s claim that Section 57 of the RIRR repeals existing laws that are contrary to the RIRR is frivolous.

Section 57 reads:

SECTION 57. Repealing Clause - All orders, issuances, and rules and regulations or parts thereof
inconsistent with these revised rules and implementing regulations are hereby repealed or modified
accordingly.

Section 57 of the RIRR does not provide for the repeal of laws but only orders, issuances and rules and regulations.
Thus, said provision is valid as it is within the DOH's rule-making power.

An administrative agency like respondent possesses quasi-legislative or rule-making power or the power to make
rules and regulations which results in delegated legislation that is within the confines of the granting statute and the
Constitution, and subject to the doctrine of non-delegability and separability of powers.78 Such express grant of rule-
making power necessarily includes the power to amend, revise, alter, or repeal the same.79 This is to allow
administrative agencies flexibility in formulating and adjusting the details and manner by which they are to
implement the provisions of a law,80 in order to make it more responsive to the times. Hence, it is a standard
provision in administrative rules that prior issuances of administrative agencies that are inconsistent therewith are
declared repealed or modified.

In fine, only Sections 4(f), 11 and 46 are ultra vires, beyond the authority of the DOH to promulgate and in
contravention of the Milk Code and, therefore, null and void. The rest of the provisions of the RIRR are in
consonance with the Milk Code.

Lastly, petitioner makes a "catch-all" allegation that:

x x x [T]he questioned RIRR sought to be implemented by the Respondents is unnecessary and

oppressive, and is offensive to the due process clause of the Constitution, insofar as the same is in
restraint of trade and because a provision therein is inadequate to provide the public with a
comprehensible basis to determine whether or not they have committed a violation.81 (Emphasis supplied)

Petitioner refers to Sections 4(f),82 4(i),83 5(w),84 11,85 22,86 32,87 46,88 and 5289 as the provisions that suppress the
trade of milk and, thus, violate the due process clause of the Constitution.

The framers of the constitution were well aware that trade must be subjected to some form of regulation for the
public good. Public interest must be upheld over business interests.90 In Pest Management Association of the
Philippines v. Fertilizer and Pesticide Authority,91 it was held thus:

x x x Furthermore, as held in Association of Philippine Coconut Desiccators v. Philippine Coconut

Authority, despite the fact that "our present Constitution enshrines free enterprise as a policy, it
nonetheless reserves to the government the power to intervene whenever necessary to promote the
general welfare." There can be no question that the unregulated use or proliferation of pesticides would be
hazardous to our environment. Thus, in the aforecited case, the Court declared that "free enterprise does
not call for removal of ‘protective regulations’." x x x It must be clearly explained and proven by
competent evidence just exactly how such protective regulation would result in the restraint of
trade. [Emphasis and underscoring supplied]

In this case, petitioner failed to show that the proscription of milk manufacturers’ participation in any policymaking
body (Section 4(i)), classes and seminars for women and children (Section 22); the giving of assistance, support
and logistics or training (Section 32); and the giving of donations (Section 52) would unreasonably hamper the trade
of breastmilk substitutes. Petitioner has not established that the proscribed activities are indispensable to the trade
of breastmilk substitutes. Petitioner failed to demonstrate that the aforementioned provisions of the RIRR are
unreasonable and oppressive for being in restraint of trade.

Petitioner also failed to convince the Court that Section 5(w) of the RIRR is unreasonable and oppressive. Said
section provides for the definition of the term "milk company," to wit:

SECTION 5 x x x. (w) "Milk Company" shall refer to the owner, manufacturer, distributor of infant formula,
follow-up milk, milk formula, milk supplement, breastmilk substitute or replacement, or by any other
description of such nature, including their representatives who promote or otherwise advance their
commercial interests in marketing those products;

On the other hand, Section 4 of the Milk Code provides:

(d) "Distributor" means a person, corporation or any other entity in the public or private sector engaged in
the business (whether directly or indirectly) of marketing at the wholesale or retail level a product within the
scope of this Code. A "primary distributor" is a manufacturer's sales agent, representative, national
distributor or broker.

xxxx

(j) "Manufacturer" means a corporation or other entity in the public or private sector engaged in the business
or function (whether directly or indirectly or through an agent or and entity controlled by or under contract
with it) of manufacturing a products within the scope of this Code.
Notably, the definition in the RIRR merely merged together under the term "milk company" the entities defined
separately under the Milk Code as "distributor" and "manufacturer." The RIRR also enumerated in Section 5(w) the
products manufactured or distributed by an entity that would qualify it as a "milk company," whereas in the Milk
Code, what is used is the phrase "products within the scope of this Code." Those are the only differences between
the definitions given in the Milk Code and the definition as re-stated in the RIRR.

Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and distributors, the
Court sees no harm in the RIRR providing for just one term to encompass both entities. The definition of "milk
company" in the RIRR and the definitions of "distributor" and "manufacturer" provided for under the Milk Code are
practically the same.

The Court is not convinced that the definition of "milk company" provided in the RIRR would bring about any change
in the treatment or regulation of "distributors" and "manufacturers" of breastmilk substitutes, as defined under the
Milk Code.

Except Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with the objective,
purpose and intent of the Milk Code, constituting reasonable regulation of an industry which affects public health
and welfare and, as such, the rest of the RIRR do not constitute illegal restraint of trade nor are they violative of the
due process clause of the Constitution.

WHEREFORE, the petition is PARTIALLY GRANTED. Sections 4(f), 11 and 46 of Administrative Order No. 2006-
0012 dated May 12, 2006 are declared NULL and VOID for being ultra vires. The Department of Health and
respondents are PROHIBITED from implementing said provisions.

The Temporary Restraining Order issued on August 15, 2006 is LIFTED insofar as the rest of the provisions of
Administrative Order No. 2006-0012 is concerned.

SO ORDERED.

Puno, (Chief Justice), Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Corona, Carpio-Morales, Azcuna,
Tinga, Chico-Nazario, Garcia, Velasco, Jr., Nachura, Reyes, JJ., concur.

Footnotes

1
 Section 11, Rule 3, 1997 Rules of Civil Procedure which provides:

Section 11. Misjoinder and non-joinder of parties. - Neither misjoinder nor non-joinder of parties is
ground for dismissal of an action. Parties may be dropped or added by order of the court on
motion of any party or on its own initiative at any stage of the action and on such terms as are
just. x x x (Emphasis supplied)

2
 Article 11. Implementation and monitoring

11.1 Governments should take action to give effect to the principles and aim of this Code, as
appropriate to their social and legislative framework, including the adoption of national legislation,
regulations or other suitable measures. For this purpose, governments should seek, when
necessary, the cooperation of WHO, UNICEF and other agencies of the United Nations system.
National policies and measures, including laws and regulations, which are adopted to give effect to
the principles and aim of this Code should be publicly stated, and should apply on the same basis to
all those involved in the manufacture and marketing of products within the scope of this Code.

xxxx

3
 Petition, rollo, p. 12.
4
 G.R. No. 131719, May 25, 2004, 429 SCRA 81.

5
 Id. at 96-97.

6
 G.R. No. 135092, May 4, 2006, 489 SCRA 382.

7
 Id. at 396.

8
 Annex "G", Petitioner's Memorandum dated July 19, 2007.

 Annexes "H", "I", and "J" of Petitioner's Memorandum executed by Wyeth Philippines, Inc., Bristol Myers
9

Squibb (Phil.), Inc., and Abbott Laboratories, Inc., respectively.

 a) The UN Convention on the Rights of the Child (CRC); b) the International Code of Marketing Breastmilk
10

Substitutes (ICMBS); c) the International Covenant on Economic, Social and Cultural Rights (CSCR); d) the
Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW); e) the Global
Strategy for Infant and Young Child Nutrition (Global Strategy); and f) various resolutions adopted by the
World Health Assembly.

11
 Joaquin G. Bernas, S.J., Constitutional Structure and Powers of Government (Notes and Cases) Part
I ( 2005).

12
 Id.

13
 Joaquin G. Bernas, S.J., An Introduction to Public International Law, 2002 Ed., p. 57.

 According to Fr. Bernas, the Austrian Constitution (Art. 9) and the Constitution of the Federal Republic of
14

Germany (Art. 25) also use the incorporation method.

15
 G.R. No. 139325, April 12, 2005, 455 SCRA 397.

16
 Id. at 421.

17
 Merlin M. Magallona, Fundamentals of Public International Law, 2005 Ed., p. 526.

18
 Id. at 525.

19
 Government of Hong Kong Special Administrative Region v. Olalia, G.R. No. 153675, April 19, 2007.

20
 Tañada v. Angara, 338 Phil. 546, 592 (1997).

 Louis Henkin, Richard C. Pugh, Oscar Schachter, Hans Smit, International Law, Cases and Materials,
21

2nd Ed., p. 96.

22
 Supra note 13, at 10-13.

23
 Minucher v. Court of Appeals, 445 Phil. 250, 269 (2003).

 Article 57. The various specialized agencies, established by intergovernmental agreement and having
24

wide international responsibilities, as defined in their basic instruments, in economic, social, cultural,
educational, health, and related fields, shall be brought into relationship with the United Nations in
accordance with the provisions of Article 63.

Such agencies thus brought into relationship with the United Nations are hereinafter referred to as
specialized agencies.
  Article 63. The Economic and Social Council may enter into agreements with any of the agencies referred
25

to in Article 57, defining the terms on which the agency concerned shall be brought into relationship with the
United Nations. Such agreements shall be subject to approval by the General Assembly.

It may coordinate the activities of the specialized agencies through consultation with and recommendations
to such agencies and through recommendations to the General Assembly and to the Members of the United
Nations.

 Article 18. The functions of the Health Assembly shall be: (a) to determine the policies of the
26

Organization x x x. (Emphasis supplied)

 Article 21. The Health Assembly shall have authority to adopt regulations concerning: x x x (e) advertising
27

and labeling of biological, pharmaceutical and similar products moving in international commerce.
(Emphasis supplied)

 Article 23. The Health Assembly shall have authority to make recommendations to Members with
28

respect to any matter within the competence of the Organization. (Emphasis supplied)

 See David Fidler, Developments Involving SARS, International Law, and Infectious Disease Control at the
29

Fifty-Sixth Meeting of the World Health Assembly, June 2003, ASIL.

 In Resolution No. 34.22 (May 21, 1981), the WHA, acting under Article 23 of the WHO Constitution,
30

adopted the ICBMS.

(a) In Resolution No. 35.26 (May 1982), the WHA urged member states to implement the ICBMS as
a "minimum requirement".

(b) In Resolution No. 39.28 (May 16, 1986), the WHA requested the WHO Director General to
direct the attention of member states to the fact that any food or drink given before complementary
feeding is nutritionally required may interfere with the initiation or maintenance of breastfeeding and
therefore should neither be promoted nor encouraged for us by infants during this period.

(c) In Resolution No. 43.3 (May 14, 1990), the WHA urged member states to protect and promote
breastfeeding as an essential component of nutrition policies so as to enable infants to be
exclusively breastfed during the first four to six months of life.

(d) In Resolution No. 45.34 (May 14, 1992), the WHA urged member states to implement the
targets of the Innocenti Declaration specifically, to give effect to the ICMBS.

(e) In Resolution No. 46.7 (May 10, 1993), the WHA urged member states to strive to eliminate
under-nutrition, malnutrition and nutritional deficiency among children.

(f) In Resolution No. 47.5 (May 9, 1994), the WHA urged member states to ensure that there are no
donations of supplies of breastmilk substitutes and other products covered by the ICMBS in any part
of the health care system.

(g) In Resolution No. 49.15 (May 25, 1996), the WHA urged member states to ensure that
complementary foods are not marketed for or used in ways that undermine exclusive and sustained
breastfeeding.

(h) In Resolution No. 54.2 (May 2002), the WHA, noting that "despite the fact that the International
Code of Marketing of Breastmilk Substitutes and relevant subsequent World Health Assembly
resolutions state that there should be no advertising or other forms of promotion of products within
its scope, new modern communication methods including electronic means, are currently
increasingly being used to promote such products; and conscious of the need for the Codex
Alimentarius Commission to take the International Code and subsequent relevant Health Assembly
resolutions into consideration in dealing with health claims in the development of food standards and
 guidelines x x x," urged member states to develop new approaches to protect, promote and support
exclusive breastfeeding for six months as a global public health recommendation.

(i) In Resolution No. 55.25 (May 15, 2002), the WHA requested the Codex Alimentarius
Commission to ensure that labelling of processed foods for infants and young children be consistent
with the WHO policy under the ICBMS.

(j) In Resolution No. 58.32 (May 25, 2005), the WHA urged member states to continue to protect
and promote exclusive breastfeeding for six months.

(k) In Resolution No. 59.21 (May 27, 2006), the WHA reiterated its support for the Gobal strategy
for Infant and Young Child Feeding.

31
 David Fidler, supra note 29.

 Article 38. 1. The Court, whose function is to decide in accordance with international law such disputes as
32

are submitted to it, shall apply: a) international conventions, whether general or particular, establishing rules
expressly recognized by the contesting states; b) international custom, as evidence of a general practice
accepted as law; c) the general principles of law recognized by civilized nations; d) subject to the provisions
of Article 59, judicial decisions and the teachings of the most highly qualified publicists of the various
nations, as subsidiary means for the determination of rules of law.

33
 Supra note 29.

34
 Louis Henkin, et al., International Law, Cases and Materials, 2nd Ed., supra note 21, at 114-136.

35
 Supra note 19.

36
 90 Phil. 70 (1951).

37
 Supra note 15.

38
 G.R. No. 159938, March 31, 2006, 486 SCRA 405.

 Edward Kwakwa, Some Comments on Rulemaking at the World Intellectual Property

39

Organization, www.law.duke.edu/shell/cite; September 13, 2007, 12:33, citing the 1999 WIPO Resolution
Concerning Provisions on the Protection of Well-Known Marks, 2000 WIPO Recommendation Concerning
Trademark Licenses, and 2001 WIPO Recommendation Concerning Provisions on the Protection of Marks
and other Industrial Property Rights in Signs on the Internet.

40
 Id.

41
 Supra note 29.

 Section 2. Purpose – These Revised Rules and Regulations are hereby promulgated to ensure the
42

provision of safe and adequate nutrition for infants and young children by the promotion, protection and
support of breastfeeding and by ensuring the proper use of breastmilk substitutes, breastmilk supplements
and related products when these are medically indicated and only when necessary, on the basis of
adequate information and through appropriate marketing and distribution. (Underscoring supplied)

 Section 5(ff). "Young Child" means a person from the age of more than twelve (12) months up to the age
43

of three (3) years (36 months). (Underscoring supplied)

44
 G.R. No. 144218, July 14, 2006, 495 SCRA 42, 55.

45
 See pp. 19-21.
46
 See p. 21.

47
 Executive Order No. 292, made effective on November 23, 1989 by Proclamation No. 495.

 Jacobson v. Massachusetts, 197 US 11 (1905); Beltran v. Secretary of Health G.R. No. 133640,

48

November 25, 2005, 476 SCRA 168, 196; St. Lukes’s Medical Center Employees Association- AFW
v. National Labor Relations Commission, G.R. No. 162053, March 7, 2007; Tablarin v. Gutierrez, G.R.
No. L-78164, July 31, 1987, 152 SCRA 730, 741; Pollution Adjudication Board v. Court of Appeals, G.R. No.
93891, March 11, 1991, 195 SCRA 112, 123-124; Rivera v. Campbell, 34 Phil. 348, 353-354 (1916);
Lorenzo v. Director of Health, 50 Phil. 595, 597 (1927).

 As early as People v. Pomar, 46 Phil. 440, 445 (1924), we already noted that "advancing civilization is
49

bringing within the scope of police power of the state today things which were not thought of as
being with in such power yesterday. The development of civilization, the rapidly increasing population, the
growth of public opinion, with [an increasing] desire on the part of the masses and of the government to look
after and care for the interests of the individuals of the state, have brought within the police power of the
state many questions for regulation which formerly were not so considered."

50
 Act No. 2711, approved on March 10, 1917.

51
 Known then as Public Health Service

52
 Section 1, Chapter I, Title IX, Executive Order No. 292.

53
 Id. at Section 3.

54
 SECTION 6. The General Public and Mothers –

(a) No advertising, promotion or other marketing materials, whether written, audio or visual, for
products within the scope of this Code shall be printed, published, distributed, exhibited and
broadcast unless such materials are duly authorized and approved by an inter-agency committee
created herein pursuant to the applicable standards provided for in this Code.

(b) Manufacturers and distributors shall not be permitted to give, directly or indirectly, samples and
supplies of products within the scope of this Code or gifts of any sort to any member of the general
public, including members of their families, to hospitals and other health institutions, as well as to
personnel within the health care system, save as otherwise provided in this Code.

(c) There shall be no point-of-sale advertising, giving of samples or any other promotion devices to
induce sales directly to the consumers at the retail level, such as special displays, discount coupons,
premiums, special sales, bonus and tie-in sales for the products within the scope of this Code. This
provision shall not restrict the establishment of pricing policies and practices intended to provide
products at lower prices on a long-term basis.

(d) Manufactures and distributors shall not distribute to pregnant women or mothers of infants any
gifts or articles or utensils which may promote the use of breastmilk substitutes or bottlefeeding, nor
shall any other groups, institutions or individuals distribute such gifts, utensils or products to the
general public and mothers.

(e) Marketing personnel shall be prohibited from advertising or promoting in any other manner the
products covered by this Code, either directly or indirectly, to pregnant women or with mother of
infants, except as otherwise provided by this Code.

(f) Nothing herein contained shall prevent donations from manufacturers and distributors or products
within the scope of this Code upon request by or with the approval of the Ministry of Health.

SECTION 7. Health Care System –

 (a) The Ministry of Health shall take appropriate measures to encourage and promote breastfeeding.
It shall provide objective and consistent information, training and advice to health workers on infant
nutrition, and on their obligations under this Code.

(b) No facility of the health care system shall be used for the purpose of promoting infant formula or
other products within the scope of this Code. This Code does not, however, preclude the
dissemination of information to health professionals as provided in Section 8(b).

(c) Facilities of the health care system shall not be used for the display of products within the scope
of this Code, or for placards or posters concerning such products.

(d) The use by the health care system of "professional service" representatives, "mothercraft nurses"
or similar personnel, provided or paid for by manufacturers or distributors, shall not be permitted.

(e) In health education classes for mothers and the general public, health workers and community
workers shall emphasize the hazards and risks of the improper use of breastmilk substitutes
particularly infant formula. Feeding with infant formula shall be demonstrated only to mothers who
may not be able to breastfeed for medical or other legitimate reasons.

SECTION 8. Health Workers –

(a) Health workers shall encourage and promote breastfeeding and shall make themselves familiar
with objectives and consistent information on maternal and infant nutrition, and with their
responsibilities under this Code.

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters and such
information shall not imply or create a belief that bottlefeeding is equivalent or superior to
breastfeeding. It shall also include the information specified in Section 5(b).

(c) No financial or material inducements to promote products within the scope of this Code shall be
offered by manufacturers or distributors to health workers or members of their families, nor shall
these be accepted by the health workers or members of their families, except as otherwise provided
in Section 8(e).

(d) Samples of infant formula or other products within the scope of this Code, or of equipment or
utensils for their preparation or use, shall not be provided to health workers except when necessary
for the purpose of professional evaluation or research in accordance with the rules and regulations
promulgated by the Ministry of Health. No health workers shall give samples of infant formula to
pregnant women and mothers of infants or members of their families.

(e) Manufacturers and distributors of products within the scope of this Code may assist in the
research, scholarships and continuing education, of health professionals, in accordance with the
rules and regulations promulgated by the Ministry of Health.

SECTION 9. Persons employed by Manufacturers and Distributors – Personnel employed in marketing

products within the scope of this Code shall not, as part of their job responsibilities, perform educational
functions in relation to pregnant women or mothers of infants.

55
 See p. 20.

56
 See p. 21.

57
 SECTION 16. All health and nutrition claims for products within the scope of the Code are absolutely
prohibited. For this purpose, any phrase or words that connotes to increase emotional, intellectual abilities of
the infant and young child and other like phrases shall not be allowed.
58
 See p. 30.

59
 SECTION 10. Containers/Label –

xxxx

(d) The term "humanized", "maternalized" or similar terms shall not be used.

60
 SECTION 2. Aim of the Code – The aim of the Code is to contribute to the provision of safe and adequate
nutrition for infants by the protection and promotion of breastfeeding and by ensuring the proper use of
breastmilk substitutes and breastmilk supplements when these are necessary, on the basis of adequate
information and through appropriate marketing and distribution.

61
 SECTION 26. Content – Each container/label shall contain such message, in both Filipino and English
languages, and which message cannot be readily separated therefrom, relative the following points:

xxxx

(f) The health hazards of unnecessary or improper use of infant formula and other related products
including information that powdered infant formula may contain pathogenic microorganisms and
must be prepared and used appropriately.

62
 TSN of the hearing of June 19, 2007, pp. 114-120.

63
 TSN of June 19, 2007 hearing, pp. 193-194, 198, 231, 237-240, 295-300.

64
 G.R. No. 152214, September 19, 2006, 502 SCRA 295.

65
 Id. at 314.

66
 SECTION 7. Health Care System –

xxxx

(b) No facility of the health care system shall be used for the purpose of promoting infant formula or
other products within the scope of this Code. This Code does not, however, preclude the
dissemination of information to health professionals as provided in Section 8(b).

67
 SECTION 8. Health Workers. -

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters and such
information shall not imply or create a belief that bottlefeeding is equivalent or superior to
breastfeeding. It shall also include the information specified in Section 5(b).

68
 SECTION 8. Health Workers -

xxxx

(e) Manufacturers and distributors of products within the scope of this Code may assist in the
research, scholarships and continuing education, of health professionals, in accordance with the
rules and regulations promulgated by the Ministry of Health.
  SECTION 4. Declaration of Principles – The following are the underlying principles from which the revised
69

rules and regulations are premised upon:

xxxx

(i) Milk companies, and their representatives, should not form part of any policymaking body or entity
in relation to the advancement of breastfeeding.

70
 SECTION 22. No manufacturer, distributor, or representatives of products covered by the Code shall be
allowed to conduct or be involved in any activity on breastfeeding promotion, education and production of
Information, Education and Communication (IEC) materials on breastfeeding, holding of or participating as
speakers in classes or seminars for women and children activities and to avoid the use of these venues to
market their brands or company names.

 SECTION 9. Research, Ethics Committee, Purpose - The DOH shall ensure that research conducted for
71

public policy purposes, relating to infant and young child feeding should, at all times, be free form any
commercial influence/bias; accordingly, the health worker or researcher involved in such must disclose any
actual or potential conflict of interest with the company/person funding the research. In any event, such
research and its findings shall be subjected to independent peer review. x x x.

 SECTION 10. Public Disclosure – For transparency purposes, a disclosure and/or disclaimer of the
72

sponsoring company should be done by the company itself, health worker, researcher involved through
verbal declaration during the public presentation of the research and in print upon publication.

 SECTION 32. Primary Responsibility of Health Workers – It is the primary responsibility of the health
73

workers to promote, protect and support breastfeeding and appropriate infant and young child feeding. Part
of this responsibility is to continuously update their knowledge and skills on breastfeeding. No assistance,
support, logistics or training from milk companies shall be permitted.

74
 Supra note 68.

 SECTION 51. Donations Within the Scope of This Code - Donations of products, materials, defined and
75

covered under the Milk Code and these implementing rules and regulations, shall be strictly prohibited.

76
 159-A Phil. 142 (1975).

77
 G.R. No. 159149, June 26, 2006, 492 SCRA 638.

78
 Smart Communications, Inc. v. National Telecommunications Commission, 456 Phil. 145, 155-156 (2003).

 Yazaki Torres Manufacturing, Inc. v. Court of Appeals, G.R. No. 130584, June 27, 2006, 493 SCRA 86,
79

97.

80
 Supra note 78, at 156.

81
 Petitioner's Memorandum.

 SECTION 4. Declaration of Principles – The following are the underlying principles from which the revised
82

rules and regulations are premised upon:

xxxx

(f) Advertising, promotions, or sponsorships of infant formula, breastmilk substitutes and other
related products are prohibited.

83
 SECTION 4. Declaration of Principles – x x x
 (i) Milk companies, and their representatives, should not form part of any policymaking body or entity
in relation to the advancement of breastfeeding.

84
 SECTION 5. x x x x (w) "Milk Company" shall refer to the owner, manufacturer, distributor, of infant
formula, follow-up milk, milk formula, milk supplement, breastmilk substitute or replacement, or by any other
description of such nature, including their representatives who promote or otherwise advance their
commercial interests in marketing those products; x x x.

85
 SECTION 11. Prohibition – No advertising, promotions, sponsorships, or marketing materials and activities
for breastmilk substitutes intended for infants and young children up to twenty-four (24) months, shall be
allowed, because they tend to convey or give subliminal messages or impressions that undermine
breastmilk and breastfeeding or otherwise exaggerate breastmilk substitutes and/or replacements, as well
as related products covered within the scope of this Code.

86
 Supra note 70.

87
 Supra note 73.

 SECTION 46. Administrative Sanctions. – The following administrative sanctions shall be imposed upon
88

any person, juridical or natural, found to have violated the provisions of the Code and its implementing Rules
and Regulations:

(a) 1st violation – Warning;

(b) 2nd violation – Administrative fine of a minimum of Ten Thousand (P10,000.00) to Fifty Thousand
(P50,000.00) Pesos, depending on the gravity and extent of the violation, including the recall of the
offending product;

(c) 3rd violation – Administrative Fine of a minimum of Sixty Thousand (P60,000.00) to One Hundred
Fifty Thousand (P150,000.00) Pesos, depending on the gravity and extent of the violation, and in
addition thereto, the recall of the offending product, and suspension of the Certificate of Product
Registration (CPR);

(d) 4th violation –Administrative Fine of a minimum of Two Hundred Thousand (P200,000.00) to Five
Hundred (P500,000.00) Thousand Pesos, depending on the gravity and extent of the violation; and
in addition thereto, the recall of the product, revocation of the CPR, suspension of the License to
Operate (LTO) for one year;

(e) 5th and succeeding repeated violations – Administrative Fine of One Million (P1,000,000.00)
Pesos, the recall of the offending product, cancellation of the CPR, revocation of the License to
Operate (LTO) of the company concerned, including the blacklisting of the company to be furnished
the Department of Budget and Management (DBM) and the Department of Trade and Industry (DTI);

(f) An additional penalty of Two Thou-sand Five Hundred (P2,500.00) Pesos per day shall be made
for every day the violation continues after having received the order from the IAC or other such
appropriate body, notifying and penalizing the company for the infraction.

For purposes of determining whether or not there is "repeated" violation, each product violation
belonging or owned by a company, including those of their subsidiaries, are deemed to be violations
of the concerned milk company and shall not be based on the specific violating product alone.

89
 SECTION 52. Other Donations By Milk Companies Not Covered by this Code - Donations of products,
equipments, and the like, not otherwise falling within the scope of this Code or these Rules, given by milk
companies and their agents, representatives, whether in kind or in cash, may only be coursed through the
Inter Agency Committee (IAC), which shall determine whether such donation be accepted or otherwise.
  Eastern Assurance & Surety Corporation v. Land Transportation Franchising and Regulatory Board, 459
90

Phil. 395, 399 (2003).

91
 G.R. No. 156041, February 21, 2007.

G.R. No. L-45892             July 13, 1938

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
TRANQUILINO LAGMAN, defendant-appellant.

-----------------------------

G.R. No. L-45893             July 13, 1938

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
PRIMITIVO DE SOSA, defendant-appellant.

Severino P. Izon for appellants.

Office of the Solicitor-General Tuason for appellee.

AVANCEÑA, J.:

In these two cases (G.R. Nos. L-45892 and 45893), the appellants Tranquilino and Primitivo de Sosa are charged
with a violation of section 60 of Commonwealth Act No. 1, known as the National Defense Law. It is alleged that
these two appellants, being Filipinos and having reached the age of twenty years in 1936, willfully and unlawfully
refused to register in the military service between the 1st and 7th of April of said year, notwithstanding the fact that
they had been required to do so. The evidence shows that these two appellants were duly notified by the
corresponding authorities to appear before the Acceptance Board in order to register for military service in
accordance with law, and that the said appellants, in spite of these notices, had not registered up to the date of the
filing of the information.

The appellants do not deny these facts, but they allege in defense that they have not registered in the military
service because Primitivo de Sosa is fatherless and has a mother and a brother eight years old to support, and
Tranquilino Lagman also has a father to support, has no military learnings, and does not wish to kill or be killed.

Each of these appellants was sentenced by the Court of First Instance to one month and one day of imprisonment,
with the costs.

In this instance, the validity of the National Defense Law, under which the accused were sentenced, is impugned on
the ground that it is unconstitutional. Section 2, Article II of the Constitution of the Philippines provides as follows:

SEC. 2. The defense of the state is a prime duty of government, and in the fulfillment of this duty all citizens
may be required by law to render personal military or civil service.

The National Defense Law, in so far as it establishes compulsory military service, does not go against this
constitutional provision but is, on the contrary, in faithful compliance therewith. The duty of the Government to
defend the State cannot be performed except through an army. To leave the organization of an army to the will of
the citizens would be to make this duty of the Government excusable should there be no sufficient men who
volunteer to enlist therein. 1ªvvphïl.nët
In the United States the courts have held in a series of decisions that the compulsory military service adopted by
reason of the civil war and the world war does not violate the Constitution, because the power to establish it is
derived from that granted to Congress to declare war and to organize and maintain an army. This is so because the
right of the Government to require compulsory military service is a consequence of its duty to defend the State and
is reciprocal with its duty to defend the life, liberty, and property of the citizen. In the case of Jacobson vs.
Massachusetts (197 U.S., 11; 25 Sup. Ct. Rep., 385), it was said that, without violating the Constitution, a person
may be compelled by force, if need be, against his will, against his pecuniary interests, and even against his
religious or political convictions, to take his place in the ranks of the army of his country, and risk the chance of
being shot down in its defense. In the case of United States vs. Olson (253 Fed., 233), it was also said that this is
not deprivation of property without due process of law, because, in its just sense, there is no right of property to an
office or employment.

The circumstance that these decisions refer to laws enacted by reason on the actual existence of war does not
make our case any different, inasmuch as, in the last analysis, what justifies compulsory military service is the
defense of the State, whether actual or whether in preparation to make it more effective, in case of need. The
circumstance that the appellants have dependent families to support does not excuse them from their duty to
present themselves before the Acceptance Board because, if such circumstance exists, they can ask for determent
in complying with their duty and, at all events, they can obtain the proper pecuniary allowance to attend to these
family responsibilities (secs. 65 and 69 of Commonwealth Act No. 1).

The appealed judgment rendered in these two cases is affirmed, with the costs to the appellants. So ordered.

Villa-Real, Imperial, Diaz, Laurel and Concepcion, JJ., concur.

G.R. No. 118978 May 23, 1997

PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY, * petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and GRACE DE GUZMAN, respondents.

REGALADO, J.:

Seeking relief through the extraordinary writ of certiorari, petitioner Philippine Telegraph and Telephone Company
(hereafter, PT & T) invokes the alleged concealment of civil status and defalcation of company funds as grounds to
terminate the services of an employee. That employee, herein private respondent Grace de Guzman, contrarily
argues that what really motivated PT & T to terminate her services was her having contracted marriage during her
employment, which is prohibited by petitioner in its company policies. She thus claims that she was discriminated
against in gross violation of law, such a proscription by an employer being outlawed by Article 136 of the Labor
Code.

Grace de Guzman was initially hired by petitioner as a reliever, specifically as a "Supernumerary Project Worker,"
for a fixed period from November 21, 1990 until April 20, 1991 vice one C.F. Tenorio who went on maternity
leave.  Under the Reliever Agreement which she signed with petitioner company, her employment was to be
1

immediately terminated upon expiration of the agreed period. Thereafter, from June 10, 1991 to July 1, 1991, and
from July 19, 1991 to August 8, 1991, private respondent's services as reliever were again engaged by petitioner,
this time in replacement of one Erlinda F. Dizon who went on leave during both periods.  After August 8, 1991, and
2

pursuant to their Reliever Agreement, her services were terminated.

On September 2, 1991, private respondent was once more asked to join petitioner company as a probationary
employee, the probationary period to cover 150 days. In the job application form that was furnished her to be filled
up for the purpose, she indicated in the portion for civil status therein that she was single although she had
contracted marriage a few months earlier, that is, on May 26, 1991. 3

It now appears that private respondent had made the same representation in the two successive reliever
agreements which she signed on June 10, 1991 and July 8, 1991. When petitioner supposedly learned about the
same later, its branch supervisor in Baguio City, Delia M. Oficial, sent to private respondent a memorandum dated
January 15, 1992 requiring her to explain the discrepancy. In that memorandum, she was reminded about the
company's policy of not accepting married women for employment. 4

In her reply letter dated January 17, 1992, private respondent stated that she was not aware of PT&T's policy
regarding married women at the time, and that all along she had not deliberately hidden her true civil
status.  Petitioner nonetheless remained unconvinced by her explanations. Private respondent was dismissed from
5

the company effective January 29, 1992,  which she readily contested by initiating a complaint for illegal dismissal,
6

coupled with a claim for non-payment of cost of living allowances (COLA), before the Regional Arbitration Branch of
the National Labor Relations Commission in Baguio City.

At the preliminary conference conducted in connection therewith, private respondent volunteered the information,
and this was incorporated in the stipulation of facts between the parties, that she had failed to remit the amount of
P2,380.75 of her collections. She then executed a promissory note for that amount in favor of petitioner . All of these
7

took place in a formal proceeding and with the agreement of the parties and/or their counsel.

On November 23, 1993, Labor Arbiter Irenarco R. Rimando handed down a decision declaring that private
respondent, who had already gained the status of a regular employee, was illegally dismissed by petitioner. Her
reinstatement, plus payment of the corresponding back wages and COLA, was correspondingly ordered, the labor
arbiter being of the firmly expressed view that the ground relied upon by petitioner in dismissing private respondent
was clearly insufficient, and that it was apparent that she had been discriminated against on account of her having
contracted marriage in violation of company rules.

On appeal to the National Labor Relations Commission (NLRC), said public respondent upheld the labor arbiter
and, in its decision dated April 29, 1994, it ruled that private respondent had indeed been the subject of an unjust
and unlawful discrimination by her employer, PT & T. However, the decision of the labor arbiter was modified with
the qualification that Grace de Guzman deserved to be suspended for three months in view of the dishonest nature
of her acts which should not be condoned. In all other respects, the NLRC affirmed the decision of the labor arbiter,
including the order for the reinstatement of private respondent in her employment with PT & T.

The subsequent motion for reconsideration filed by petitioner was rebuffed by respondent NLRC in its resolution of
November 9, 1994, hence this special civil action assailing the aforestated decisions of the labor arbiter and
respondent NLRC, as well as the denial resolution of the latter.

1. Decreed in the Bible itself is the universal norm that women should be regarded with love and respect but,
through the ages, men have responded to that injunction with indifference, on the hubristic conceit that women
constitute the inferior sex. Nowhere has that prejudice against womankind been so pervasive as in the field of labor,
especially on the matter of equal employment opportunities and standards. In the Philippine setting, women have
traditionally been considered as falling within the vulnerable groups or types of workers who must be safeguarded
with preventive and remedial social legislation against discriminatory and exploitative practices in hiring, training,
benefits, promotion and retention.

The Constitution, cognizant of the disparity in rights between men and women in almost all phases of social and
political life, provides a gamut of protective provisions. To cite a few of the primordial ones, Section 14, Article II  on
8

the Declaration of Principles and State Policies, expressly recognizes the role of women in nation-building and
commands the State to ensure, at all times, the fundamental equality before the law of women and men. Corollary
thereto, Section 3 of Article XIII  (the progenitor whereof dates back to both the 1935 and 1973 Constitution)
9

pointedly requires the State to afford full protection to labor and to promote full employment and equality of
employment opportunities for all, including an assurance of entitlement to tenurial security of all workers. Similarly,
Section 14 of Article XIII   mandates that the State shall protect working women through provisions for opportunities
10

that would enable them to reach their full potential.

2. Corrective labor and social laws on gender inequality have emerged with more frequency in the years since the
Labor Code was enacted on May 1, 1974 as Presidential Decree No. 442, largely due to our country's commitment
as a signatory to the United Nations Convention on the Elimination of All Forms of Discrimination Against Women
(CEDAW).  11

Principal among these laws are Republic Act No. 6727   which explicitly prohibits discrimination against women with
12

respect to terms and conditions of employment, promotion, and training opportunities; Republic Act No.
6955   which bans the "mail-order-bride" practice for a fee and the export of female labor to countries that cannot
13

guarantee protection to the rights of women workers; Republic Act No. 7192   also known as the "Women in
14

Development and Nation Building Act," which affords women equal opportunities with men to act and to enter into
contracts, and for appointment, admission, training, graduation, and commissioning in all military or similar schools
of the Armed Forces of the Philippines and the Philippine National Police; Republic Act No. 7322   increasing the
15

maternity benefits granted to women in the private sector; Republic Act No. 7877   which outlaws and punishes
16

sexual harassment in the workplace and in the education and training environment; and Republic Act No. 8042,   or 17

the "Migrant Workers and Overseas Filipinos Act of 1995," which prescribes as a matter of policy, inter alia, the
deployment of migrant workers, with emphasis on women, only in countries where their rights are secure. Likewise,
it would not be amiss to point out that in the Family Code,   women's rights in the field of civil law have been greatly
18

enhanced and expanded.

In the Labor Code, provisions governing the rights of women workers are found in Articles 130 to 138 thereof. Article
130 involves the right against particular kinds of night work while Article 132 ensures the right of women to be
provided with facilities and standards which the Secretary of Labor may establish to ensure their health and safety.
For purposes of labor and social legislation, a woman working in a nightclub, cocktail lounge, massage clinic, bar or
other similar establishments shall be considered as an employee under Article 138. Article 135, on the other hand,
recognizes a woman's right against discrimination with respect to terms and conditions of employment on account
simply of sex. Finally, and this brings us to the issue at hand, Article 136 explicitly prohibits discrimination merely by
reason of the marriage of a female employee.

3. Acknowledged as paramount in the due process scheme is the constitutional guarantee of protection to labor and
security of tenure. Thus, an employer is required, as a condition sine qua non prior to severance of the employment
ties of an individual under his employ, to convincingly establish, through substantial evidence, the existence of a
valid and just cause in dispensing with the services of such employee, one's labor being regarded as constitutionally
protected property.

On the other hand, it is recognized that regulation of manpower by the company falls within the so-called
management prerogatives, which prescriptions encompass the matter of hiring, supervision of workers, work
assignments, working methods and assignments, as well as regulations on the transfer of employees, lay-off of
workers, and the discipline, dismissal, and recall of employees.   As put in a case, an employer is free to regulate,
19

according to his discretion and best business judgment, all aspects of employment, "from hiring to firing," except in
cases of unlawful discrimination or those which may be provided by law.  20

In the case at bar, petitioner's policy of not accepting or considering as disqualified from work any woman worker
who contracts marriage runs afoul of the test of, and the right against, discrimination, afforded all women workers by
our labor laws and by no less than the Constitution. Contrary to petitioner's assertion that it dismissed private
respondent from employment on account of her dishonesty, the record discloses clearly that her ties with the
company were dissolved principally because of the company's policy that married women are not qualified for
employment in PT & T, and not merely because of her supposed acts of dishonesty.

That it was so can easily be seen from the memorandum sent to private respondent by Delia M. Oficial, the branch
supervisor of the company, with the reminder, in the words of the latter, that "you're fully aware that the company is
not accepting married women employee (sic), as it was verbally instructed to you."   Again, in the termination notice
21

sent to her by the same branch supervisor, private respondent was made to understand that her severance from the
service was not only by reason of her concealment of her married status but, over and on top of that, was her
violation of the company's policy against marriage ("and even told you that married women employees are not
applicable [sic] or accepted in our company.")   Parenthetically, this seems to be the curious reason why it was
22

made to appear in the initiatory pleadings that petitioner was represented in this case only by its said supervisor and
not by its highest ranking officers who would otherwise be solidarily liable with the corporation. 23
Verily, private respondent's act of concealing the true nature of her status from PT & T could not be properly
characterized as willful or in bad faith as she was moved to act the way she did mainly because she wanted to retain
a permanent job in a stable company. In other words, she was practically forced by that very same illegal company
policy into misrepresenting her civil status for fear of being disqualified from work. While loss of confidence is a just
cause for termination of employment, it should not be simulated.   It must rest on an actual breach of duty
24

committed by the employee and not on the employer's caprices.   Furthermore, it should never be used as a
25

subterfuge for causes which are improper, illegal, or unjustified. 26

In the present controversy, petitioner's expostulations that it dismissed private respondent, not because the latter
got married but because she concealed that fact, does have a hollow ring. Her concealment, so it is claimed,
bespeaks dishonesty hence the consequent loss of confidence in her which justified her dismissal.

Petitioner would asseverate, therefore, that while it has nothing against marriage, it nonetheless takes umbrage
over the concealment of that fact. This improbable reasoning, with interstitial distinctions, perturbs the Court since
private respondent may well be minded to claim that the imputation of dishonesty should be the other way around.

Petitioner would have the Court believe that although private respondent defied its policy against its female
employees contracting marriage, what could be an act of insubordination was inconsequential. What it submits as
unforgivable is her concealment of that marriage yet, at the same time, declaring that marriage as a trivial matter to
which it supposedly has no objection. In other words, PT & T says it gives its blessings to its female employees
contracting marriage, despite the maternity leaves and other benefits it would consequently respond for and which
obviously it would have wanted to avoid. If that employee confesses such fact of marriage, there will be no sanction;
but if such employee conceals the same instead of proceeding to the confessional, she will be dismissed. This line
of reasoning does not impress us as reflecting its true management policy or that we are being regaled with
responsible advocacy.

This Court should be spared the ennui of strained reasoning and the tedium of propositions which confuse through
less than candid arguments. Indeed, petitioner glosses over the fact that it was its unlawful policy against married
women, both on the aspects of qualification and retention, which compelled private respondent to conceal her
supervenient marriage. It was, however, that very policy alone which was the cause of private respondent's
secretive conduct now complained of. It is then apropos to recall the familiar saying that he who is the cause of the
cause is the cause of the evil caused.

Finally, petitioner's collateral insistence on the admission of private respondent that she supposedly misappropriated
company funds, as an additional ground to dismiss her from employment, is somewhat insincere and self-serving.
Concededly, private respondent admitted in the course of the proceedings that she failed to remit some of her
collections, but that is an altogether different story. The fact is that she was dismissed solely because of her
concealment of her marital status, and not on the basis of that supposed defalcation of company funds. That the
labor arbiter would thus consider petitioner's submissions on this supposed dishonesty as a mere afterthought, just
to bolster its case for dismissal, is a perceptive conclusion born of experience in labor cases. For, there was no
showing that private respondent deliberately misappropriated the amount or whether her failure to remit the same
was through negligence and, if so, whether the negligence was in nature simple or grave. In fact, it was merely
agreed that private respondent execute a promissory note to refund the same, which she did, and the matter was
deemed settled as a peripheral issue in the labor case.

Private respondent, it must be observed, had gained regular status at the time of her dismissal. When she was
served her walking papers on January 29, 1992, she was about to complete the probationary period of 150 days as
she was contracted as a probationary employee on September 2, 1991. That her dismissal would be effected just
when her probationary period was winding down clearly raises the plausible conclusion that it was done in order to
prevent her from earning security of tenure.   On the other hand, her earlier stints with the company as reliever were
27

undoubtedly those of a regular employee, even if the same were for fixed periods, as she performed activities which
were essential or necessary in the usual trade and business of PT & T.   The primary standard of determining
28

regular employment is the reasonable connection between the activity performed by the employee in relation to the
business or trade of the employer.  29

As an employee who had therefore gained regular status, and as she had been dismissed without just cause, she is
entitled to reinstatement without loss of seniority rights and other privileges and to full back wages, inclusive of
allowances and other benefits or their monetary equivalent.   However, as she had undeniably committed an act of
30
dishonesty in concealing her status, albeit under the compulsion of an unlawful imposition of petitioner, the three-
month suspension imposed by respondent NLRC must be upheld to obviate the impression or inference that such
act should be condoned. It would be unfair to the employer if she were to return to its fold without any sanction
whatsoever for her act which was not totally justified. Thus, her entitlement to back wages, which shall be computed
from the time her compensation was withheld up to the time of her actual reinstatement, shall be reduced by
deducting therefrom the amount corresponding to her three months suspension.

4. The government, to repeat, abhors any stipulation or policy in the nature of that adopted by petitioner PT & T. The
Labor Code state, in no uncertain terms, as follows:

Art. 136. Stipulation against marriage. — It shall be unlawful for an employer to require as a

condition of employment or continuation of employment that a woman shall not get married, or to
stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a
woman employee merely by reason of marriage.

This provision had a studied history for its origin can be traced to Section 8 of Presidential Decree No. 148,   better
31

known as the "Women and

Child Labor Law," which amended paragraph (c), Section 12 of Republic Act No. 679,   entitled "An Act to Regulate
32

the Employment of Women and Children, to Provide Penalties for Violations Thereof, and for Other Purposes." The
forerunner to Republic Act No. 679, on the other hand, was Act No. 3071 which became law on March 16, 1923 and
which regulated the employment of women and children in shops, factories, industrial, agricultural, and mercantile
establishments and other places of labor in the then Philippine Islands.

It would be worthwhile to reflect upon and adopt here the rationalization in Zialcita, et al. vs. Philippine Air Lines,   a
33

decision that emanated from the Office of the President. There, a policy of Philippine Air Lines requiring that
prospective flight attendants must be single and that they will be automatically separated from the service once they
marry was declared void, it being violative of the clear mandate in Article 136 of the Labor Code with regard to
discrimination against married women. Thus:

Of first impression is the incompatibility of the respondent's policy or regulation with the codal
provision of law. Respondent is resolute in its contention that Article 136 of the Labor Code applies
only to women employed in ordinary occupations and that the prohibition against marriage of women
engaged in extraordinary occupations, like flight attendants, is fair and reasonable, considering the
pecularities of their chosen profession.

We cannot subscribe to the line of reasoning pursued by respondent. All along, it knew that the
controverted policy has already met its doom as early as March 13, 1973 when Presidential Decree
No. 148, otherwise known as the Women and Child Labor Law, was promulgated. But for the timidity
of those affected or their labor unions in challenging the validity of the policy, the same was able to
obtain a momentary reprieve. A close look at Section 8 of said decree, which amended paragraph
(c) of Section 12 of Republic Act No. 679, reveals that it is exactly the same provision reproduced
verbatim in Article 136 of the Labor Code, which was promulgated on May 1, 1974 to take effect six
(6) months later, or on November 1, 1974.

It cannot be gainsaid that, with the reiteration of the same provision in the new Labor Code, all
policies and acts against it are deemed illegal and therefore abrogated. True, Article 132 enjoins the
Secretary of Labor to establish standards that will ensure the safety and health of women employees
and in appropriate cases shall by regulation require employers to determine appropriate minimum
standards for termination in special occupations, such as those of flight attendants, but that is
precisely the factor that militates against the policy of respondent. The standards have not yet been
established as set forth in the first paragraph, nor has the Secretary of Labor issued any regulation
affecting flight attendants.

It is logical to presume that, in the absence of said standards or regulations which are as yet to be
established, the policy of respondent against marriage is patently illegal. This finds support in
Section 9 of the New Constitution, which provides:
 Sec. 9. The State shall afford protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the
relations between workers and employees. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of work . . . .

Moreover, we cannot agree to the respondent's proposition that termination from employment of
flight attendants on account of marriage is a fair and reasonable standard designed for their own
health, safety, protection and welfare, as no basis has been laid therefor. Actually, respondent
claims that its concern is not so much against the continued employment of the flight attendant
merely by reason of marriage as observed by the Secretary of Labor, but rather on the consequence
of marriage-pregnancy. Respondent discussed at length in the instant appeal the supposed ill effects
of pregnancy on flight attendants in the course of their employment. We feel that this needs no
further discussion as it had been adequately explained by the Secretary of Labor in his decision of
May 2, 1976.

In a vain attempt to give meaning to its position, respondent went as far as invoking the provisions of
Articles 52 and 216 of the New Civil Code on the preservation of marriage as an inviolable social
institution and the family as a basic social institution, respectively, as bases for its policy of non-
marriage. In both instances, respondent predicates absence of a flight attendant from her home for
long periods of time as contributory to an unhappy married life. This is pure conjecture not based on
actual conditions, considering that, in this modern world, sophisticated technology has narrowed the
distance from one place to another. Moreover, respondent overlooked the fact that married flight
attendants can program their lives to adapt to prevailing circumstances and events.

Article 136 is not intended to apply only to women employed in ordinary occupations, or it should
have categorically expressed so. The sweeping intendment of the law, be it on special or ordinary
occupations, is reflected in the whole text and supported by Article 135 that speaks of non-
discrimination on the employment of women.

The judgment of the Court of Appeals in Gualberto, et al. vs. Marinduque Mining & Industrial
Corporation   considered as void a policy of the same nature. In said case, respondent, in dismissing from the
34

service the complainant, invoked a policy of the firm to consider female employees in the project it was undertaking
as separated the moment they get married due to lack of facilities for married women. Respondent further claimed
that complainant was employed in the project with an oral understanding that her services would be terminated
when she gets married. Branding the policy of the employer as an example of "discriminatory chauvinism"
tantamount to denying equal employment opportunities to women simply on account of their sex, the appellate court
struck down said employer policy as unlawful in view of its repugnance to the Civil Code, Presidential Decree No.
148 and the Constitution.

Under American jurisprudence, job requirements which establish employer preference or conditions relating to the
marital status of an employee are categorized as a "sex-plus" discrimination where it is imposed on one sex and not
on the other. Further, the same should be evenly applied and must not inflict adverse effects on a racial or sexual
group which is protected by federal job discrimination laws. Employment rules that forbid or restrict the employment
of married women, but do not apply to married men, have been held to violate Title VII of the United States Civil
Rights Act of 1964, the main federal statute prohibiting job discrimination against employees and applicants on the
basis of, among other things, sex.  35

Further, it is not relevant that the rule is not directed against all women but just against married women. And, where
the employer discriminates against married women, but not against married men, the variable is sex and the
discrimination is unlawful.   Upon the other hand, a requirement that a woman employee must remain unmarried
36

could be justified as a "bona fide occupational qualification," or BFOQ, where the particular requirements of the job
would justify the same, but not on the ground of a general principle, such as the desirability of spreading work in the
workplace. A requirement of that nature would be valid provided it reflects an inherent quality reasonably necessary
for satisfactory job performance. Thus, in one case, a no-marriage rule applicable to both male and female flight
attendants, was regarded as unlawful since the restriction was not related to the job performance of the flight
attendants. 37
5. Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a
woman to be free from any kind of stipulation against marriage in connection with her employment, but it likewise
assaults good morals and public policy, tending as it does to deprive a woman of the freedom to choose her status,
a privilege that by all accounts inheres in the individual as an intangible and inalienable right.   Hence, while it is true
38

that the parties to a contract may establish any agreements, terms, and conditions that they may deem convenient,
the same should not be contrary to law, morals, good customs, public order, or public policy.   Carried to its logical
39

consequences, it may even be said that petitioner's policy against legitimate marital bonds would encourage illicit or
common-law relations and subvert the sacrament of marriage.

Parenthetically, the Civil Code provisions on the contract of labor state that the relations between the parties, that is,
of capital and labor, are not merely contractual, impressed as they are with so much public interest that the same
should yield to the common good.   It goes on to intone that neither capital nor labor should visit acts of oppression
40

against the other, nor impair the interest or convenience of the public.   In the final reckoning, the danger of just
41

such a policy against marriage followed by petitioner PT & T is that it strikes at the very essence, ideals and purpose
of marriage as an inviolable social institution and, ultimately, of the family as the foundation of the nation.   That it
42

must be effectively interdicted here in all its indirect, disguised or dissembled forms as discriminatory conduct
derogatory of the laws of the land is not only in order but imperatively required.

ON THE FOREGOING PREMISES, the petition of Philippine Telegraph and Telephone Company is hereby
DISMISSED for lack of merit, with double costs against petitioner.

SO ORDERED.

Romero, Puno, Mendoza and Torres, Jr., JJ., concur.

Footnotes

* The phrase "herein represented by DELIA M. OFICIAL", added hereto in the title of this case as
stated in the petition, has been deleted for being unnecessary and violative of the rules on
pleadings, and is commented upon in the text of this opinion.

1 Rollo, 42; Annex D.

2 Ibid., 44-45, Annexes F and G

3 Ibid., 46-48; Annexes H and I.

4 Ibid., 49; Annex J.

5 Id., 50; Annex K.

6 Id., 51; Annex L.

7 Id., 53; Annex N.

8 The State recognizes the role of women in nation-building, and shall ensure the fundamental
equality before the law of women and men (Sec.14, Art. II).

9 The State shall afford full protection to labor, local and overseas, organized or unorganized, and
promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law. They shall be
entitled to security of tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes of settling disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor
to its just share in the fruits of production and the right of enterprises to reasonable returns on
investment, and to expansion and growth (Sec. 3, Art. XIII).

10 The State shall protect working women by providing safe and healthful working conditions, taking
into account their maternal functions, and such facilities and opportunities that will enhance their
welfare and enable them to realize their full potential in the service of the nation (Sec. 14, Art. XIII).

11 Adopted in 1979 by the UN General Assembly, it is regarded as the most comprehensive

international treaty governing the rights of women. The Philippines became a signatory thereto a
year after its adoption by the UN and in 1981, the country ratified it.

The Philippines had likewise been an active participant in all the four U.N. World Conferences on
Women, namely those held in Mexico in 1975, Copenhagen in 1980, Nairobi in 1985, and Beijing in
1995.

Other relevant international laws to which the Philippines adheres as a member of the international
community include the Universal Declaration of Human Rights, the International Covenant on Civil
and Political Rights, and the International Covenant on Economic, Social and Cultural Rights.

12 Approved, June 9, 1989.

13 Approved, June 13, 1990.

14 Approved, February 12, 1992.

15 Approved, March 30, 1992.

16 Approved, February 14, 1995.

17 Approved, June 7, 1995.

18 Effective August 3, 1988.

19 Caltex Refinery Employees Association (CREA) vs. National Labor Relations Commission, et al.,
G.R. No. 102993, July 14, 1995, 246 SCRA 271; Oriental Mindoro Electric Cooperative, Inc. vs.
National Labor Relations Commission, et al., G.R. No. 111905, July 31, 1995, 246 SCRA 794; Nuez
vs. National Labor Relations Commission, et al., G.R. No. 107574, December 28, 1994, 239 SCRA
518; San Miguel Corporation vs. Ubaldo, et al., G.R. No. 92859, February 1, 1993, 218 SCRA 293.

20 NAFLU vs. National Labor Relations Commission, et al., G.R. No. 90739, October 3, 1991, 202
SCRA 346.

21 Quoted in the Decision of the Third Division, NLRC, in NLRC Case No. RAB-CAR-02-0042-92,
Annex B of petition, Rollo, 35. See also Annex J, supra, Fn. 4.

22 Annex L, id., Rollo, 51.

23 Art. 289, Labor Code; see AC Ransom Labor Union-ACLU vs. National Labor Relations
Commission, et al., G.R. No. 69494, June 10, 1986, 142 SCRA 269; Chua vs. National Labor
Relations Commission, et al., G.R. No. 81450, February 15, 1990, 182 SCRA 353.
24 Mapalo vs. National Labor Relations Commission, et al., G.R. No. 107940, June 17, 1994, 233
SCRA 266; PNOC-Energy Development Corporation vs. National Labor Relations Commission, et
al., G.R. No. 79182, September 11, 1991, 201 SCRA 487.

25 San Antonio vs. National Labor Relations Commission, et al., G.R. No. 100829, November 21,
1995, 250 SCRA 359; Labor vs. National Labor Relations Commission, G.R. No. 110388,
September 14, 1995, 248 SCRA 183.

26 Hospicio de San Jose de Basili vs. National Labor Relations Commission, et al., G.R. No. 75997,
August 18, 1988, 164 SCRA 516.

27 Cielo vs. National Labor Relations Commission, et al G.R. No. 78693, January 28, 1991, 193
SCRA 410; Brent School, Inc. vs. Zamora, et al., G.R. No. 48494, February 5, 1990, 181 SCRA 702.

28 Art. 280, Labor Code; see PLDT vs. Montemayor, et al., G.R. No. 88626, October 12, 1990, 190
SCRA 427.

29 De Leon vs. National Labor Relations Commission, et al., G.R. No. 70705, August 21, 1989, 176
SCRA 615.

30 Molave Tours Corp. vs. National Labor Relations Commission, et al., G.R. No. 112909,
November 24, 1995, 250 SCRA 325; see Art. 279, Labor Code, as amended by Republic Act No.
6715.

31 Promulgated on March 13, 1973.

32 Approved on April 15, 1952. It was later amended by Republic Act No. 1131, which in turn was
approved on June 16, 1954.

33 Case No. RO4-3-3398-76; February 20, 1977.

34 CA-G.R. No. 52753-R, June 28, 1978.

35 45A Am. Jur. 2d, Job Discrimination, Sec. 506, p. 486.

36 Ibid., id., id.

37 Ibid., id., Sec. 507.

38 Tolentino, A., Civil Code of the Philippines, Vol. III, 1979 ed., 235; see Art. 874, Civil Code.

39 Art. 1306, Civil Code.

40 Art. 1700, Civil Code; see Macleod &. Co. of the Philippines vs. Progressive Federation of Labor,
97 Phil. 205 (1955).

41 Art. 1701, Civil Code.

42 The 1987 Constitution provides:

The State recognizes the sanctity of family life and shall protect and strengthen the family as a basic
autonomous social institution. . . . (Sec. 15, Art. II).

The State recognizes the Filipino family as the foundation of the nation. Accordingly, it shall
strengthen its solidarity and actively promote its total development (Sec. 1, Art. XV).
 Marriage, as an inviolable social institution, is the foundation of the family and shall be protected by
the State (Sec. 2, Art. XV).

G.R. No. 101083 July 30, 1993

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

Oposa Law Office for petitioners.

The Solicitor General for respondents.

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the
petitioners dramatically associate with the twin concepts of "inter-generational responsibility" and "inter-generational
justice." Specifically, it touches on the issue of whether the said petitioners have a cause of action to "prevent the
misappropriation or impairment" of Philippine rainforests and "arrest the unabated hemorrhage of the country's vital
life support systems and continued rape of Mother Earth."

The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro Manila) of
the Regional Trial Court (RTC), National Capital Judicial Region. The principal plaintiffs therein, now the principal
petitioners, are all minors duly represented and joined by their respective parents. Impleaded as an additional
plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit corporation organized
for the purpose of, inter alia, engaging in concerted action geared for the protection of our environment and natural
resources. The original defendant was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department
of Environment and Natural Resources (DENR). His substitution in this petition by the new Secretary, the Honorable
Angel C. Alcala, was subsequently ordered upon proper motion by the petitioners.  The complaint  was instituted as
1 2

a taxpayers' class suit  and alleges that the plaintiffs "are all citizens of the Republic of the Philippines, taxpayers,
3

and entitled to the full benefit, use and enjoyment of the natural resource treasure that is the country's virgin tropical
forests." The same was filed for themselves and others who are equally concerned about the preservation of said
resource but are "so numerous that it is impracticable to bring them all before the Court." The minors further
asseverate that they "represent their generation as well as generations yet unborn."  Consequently, it is prayed for
4

that judgment be rendered:

. . . ordering defendant, his agents, representatives and other persons acting in his behalf to —

(1) Cancel all existing timber license agreements in the country;

(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber
license agreements.

and granting the plaintiffs ". . . such other reliefs just and equitable under the premises." 5

The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area
of thirty million (30,000,000) hectares and is endowed with rich, lush and verdant rainforests in which varied, rare
and unique species of flora and fauna may be found; these rainforests contain a genetic, biological and chemical
pool which is irreplaceable; they are also the habitat of indigenous Philippine cultures which have existed, endured
and flourished since time immemorial; scientific evidence reveals that in order to maintain a balanced and healthful
ecology, the country's land area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest cover
and forty-six per cent (46%) for agricultural, residential, industrial, commercial and other uses; the distortion and
disturbance of this balance as a consequence of deforestation have resulted in a host of environmental tragedies,
such as (a) water shortages resulting from drying up of the water table, otherwise known as the "aquifer," as well as
of rivers, brooks and streams, (b) salinization of the water table as a result of the intrusion therein of salt water,
incontrovertible examples of which may be found in the island of Cebu and the Municipality of Bacoor, Cavite, (c)
massive erosion and the consequential loss of soil fertility and agricultural productivity, with the volume of soil
eroded estimated at one billion (1,000,000,000) cubic meters per annum — approximately the size of the entire
island of Catanduanes, (d) the endangering and extinction of the country's unique, rare and varied flora and fauna,
(e) the disturbance and dislocation of cultural communities, including the disappearance of the Filipino's indigenous
cultures, (f) the siltation of rivers and seabeds and consequential destruction of corals and other aquatic life leading
to a critical reduction in marine resource productivity, (g) recurrent spells of drought as is presently experienced by
the entire country, (h) increasing velocity of typhoon winds which result from the absence of windbreakers, (i) the
floodings of lowlands and agricultural plains arising from the absence of the absorbent mechanism of forests, (j) the
siltation and shortening of the lifespan of multi-billion peso dams constructed and operated for the purpose of
supplying water for domestic uses, irrigation and the generation of electric power, and (k) the reduction of the earth's
capacity to process carbon dioxide gases which has led to perplexing and catastrophic climatic changes such as the
phenomenon of global warming, otherwise known as the "greenhouse effect."

Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation are so
capable of unquestionable demonstration that the same may be submitted as a matter of judicial notice. This
notwithstanding, they expressed their intention to present expert witnesses as well as documentary, photographic
and film evidence in the course of the trial.

As their cause of action, they specifically allege that:

CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests
constituting roughly 53% of the country's land mass.

9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of
said rainforests or four per cent (4.0%) of the country's land area.

10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left,
barely 2.8% of the entire land mass of the Philippine archipelago and about 3.0 million hectares of
immature and uneconomical secondary growth forests.

11. Public records reveal that the defendant's, predecessors have granted timber license
agreements ('TLA's') to various corporations to cut the aggregate area of 3.89 million hectares for
commercial logging purposes.

A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A".

12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per
hour — nighttime, Saturdays, Sundays and holidays included — the Philippines will be bereft of
forest resources after the end of this ensuing decade, if not earlier.

13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this
continued trend of deforestation to the plaintiff minor's generation and to generations yet unborn are
evident and incontrovertible. As a matter of fact, the environmental damages enumerated in
paragraph 6 hereof are already being felt, experienced and suffered by the generation of plaintiff
adults.

14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest
stands will work great damage and irreparable injury to plaintiffs — especially plaintiff minors and
their successors — who may never see, use, benefit from and enjoy this rare and unique natural
resource treasure.

This act of defendant constitutes a misappropriation and/or impairment of the natural resource
property he holds in trust for the benefit of plaintiff minors and succeeding generations.

15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are
entitled to protection by the State in its capacity as the parens patriae.

16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2,
1990, plaintiffs served upon defendant a final demand to cancel all logging permits in the country.

A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".

17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious
damage and extreme prejudice of plaintiffs.

18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights
of plaintiffs, especially plaintiff minors who may be left with a country that is desertified (sic), bare,
barren and devoid of the wonderful flora, fauna and indigenous cultures which the Philippines had
been abundantly blessed with.

19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy
enunciated in the Philippine Environmental Policy which, in pertinent part, states that it is the policy
of the State —

(a) to create, develop, maintain and improve conditions under which man and nature can thrive in
productive and enjoyable harmony with each other;
 (b) to fulfill the social, economic and other requirements of present and future generations of
Filipinos and;

(c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and well-
being. (P.D. 1151, 6 June 1977)

20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory
to the Constitutional policy of the State to —

a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and
efficient use of natural resources (sic)." (Section 1, Article XII of the Constitution);

b. "protect the nation's marine wealth." (Section 2, ibid);

c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article
XIV, id.);

d. "protect and advance the right of the people to a balanced and healthful ecology in accord with the
rhythm and harmony of nature." (Section 16, Article II, id.)

21. Finally, defendant's act is contrary to the highest law of humankind — the natural law — and
violative of plaintiffs' right to self-preservation and perpetuation.

22. There is no other plain, speedy and adequate remedy in law other than the instant action to
arrest the unabated hemorrhage of the country's vital life support systems and continued rape of
Mother Earth.  6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint based on
two (2) grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue raised by the
plaintiffs is a political question which properly pertains to the legislative or executive branches of Government. In
their 12 July 1990 Opposition to the Motion, the petitioners maintain that (1) the complaint shows a clear and
unmistakable cause of action, (2) the motion is dilatory and (3) the action presents a justiciable question as it
involves the defendant's abuse of discretion.

On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss.  In the said
7

order, not only was the defendant's claim — that the complaint states no cause of action against him and that it
raises a political question — sustained, the respondent Judge further ruled that the granting of the relief prayed for
would result in the impairment of contracts which is prohibited by the fundamental law of the land.

Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and ask
this Court to rescind and set aside the dismissal order on the ground that the respondent Judge gravely abused his
discretion in dismissing the action. Again, the parents of the plaintiffs-minors not only represent their children, but
have also joined the latter in this case.
8

On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their respective
Memoranda after the Office of the Solicitor General (OSG) filed a Comment in behalf of the respondents and the
petitioners filed a reply thereto.

Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient
allegations concerning their right to a sound environment based on Articles 19, 20 and 21 of the Civil Code (Human
Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree (P.D.)
No. 1151 (Philippine Environmental Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the
people to a balanced and healthful ecology, the concept of generational genocide in Criminal Law and the concept
of man's inalienable right to self-preservation and self-perpetuation embodied in natural law. Petitioners likewise rely
on the respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard the people's right to a
healthful environment.
It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting Timber
License Agreements (TLAs) to cover more areas for logging than what is available involves a judicial question.

Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain that
the same does not apply in this case because TLAs are not contracts. They likewise submit that even if TLAs may
be considered protected by the said clause, it is well settled that they may still be revoked by the State when the
public interest so requires.

On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific legal right
violated by the respondent Secretary for which any relief is provided by law. They see nothing in the complaint but
vague and nebulous allegations concerning an "environmental right" which supposedly entitles the petitioners to the
"protection by the state in its capacity as parens patriae." Such allegations, according to them, do not reveal a valid
cause of action. They then reiterate the theory that the question of whether logging should be permitted in the
country is a political question which should be properly addressed to the executive or legislative branches of
Government. They therefore assert that the petitioners' resources is not to file an action to court, but to lobby before
Congress for the passage of a bill that would ban logging totally.

As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the State
without due process of law. Once issued, a TLA remains effective for a certain period of time — usually for twenty-
five (25) years. During its effectivity, the same can neither be revised nor cancelled unless the holder has been
found, after due notice and hearing, to have violated the terms of the agreement or other forestry laws and
regulations. Petitioners' proposition to have all the TLAs indiscriminately cancelled without the requisite hearing
would be violative of the requirements of due process.

Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No. 90-
777 as a class suit. The original defendant and the present respondents did not take issue with this matter.
Nevertheless, We hereby rule that the said civil case is indeed a class suit. The subject matter of the complaint is of
common and general interest not just to several, but to all citizens of the Philippines. Consequently, since the parties
are so numerous, it, becomes impracticable, if not totally impossible, to bring all of them before the court. We
likewise declare that the plaintiffs therein are numerous and representative enough to ensure the full protection of all
concerned interests. Hence, all the requisites for the filing of a valid class suit under Section 12, Rule 3 of the
Revised Rules of Court are present both in the said civil case and in the instant petition, the latter being but an
incident to the former.

This case, however, has a special and novel element. Petitioners minors assert that they represent their generation
as well as generations yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their
generation and for the succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding
generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced
and healthful ecology is concerned. Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety.  Such rhythm and harmony
9

indispensably include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the
country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources to the end that
their exploration, development and utilization be equitably accessible to the present as well as future
generations.   Needless to say, every generation has a responsibility to the next to preserve that rhythm and
10

harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the minors' assertion of
their right to a sound environment constitutes, at the same time, the performance of their obligation to ensure the
protection of that right for the generations to come.

The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the petition.

After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the issues
raised and arguments adduced by the parties, We do not hesitate to find for the petitioners and rule against the
respondent Judge's challenged order for having been issued with grave abuse of discretion amounting to lack of
jurisdiction. The pertinent portions of the said order reads as follows:

xxx xxx xxx

 After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with the
defendant. For although we believe that plaintiffs have but the noblest of all intentions, it (sic) fell
short of alleging, with sufficient definiteness, a specific legal right they are seeking to enforce and
protect, or a specific legal wrong they are seeking to prevent and redress (Sec. 1, Rule 2, RRC).
Furthermore, the Court notes that the Complaint is replete with vague assumptions and vague
conclusions based on unverified data. In fine, plaintiffs fail to state a cause of action in its Complaint
against the herein defendant.

Furthermore, the Court firmly believes that the matter before it, being impressed with political color
and involving a matter of public policy, may not be taken cognizance of by this Court without doing
violence to the sacred principle of "Separation of Powers" of the three (3) co-equal branches of the
Government.

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant
the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the
country and to cease and desist from receiving, accepting, processing, renewing or approving new
timber license agreements. For to do otherwise would amount to "impairment of contracts" abhored
(sic) by the fundamental law.  11

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient definiteness a
specific legal right involved or a specific legal wrong committed, and that the complaint is replete with vague
assumptions and conclusions based on unverified data. A reading of the complaint itself belies these conclusions.

The complaint focuses on one specific fundamental legal right — the right to a balanced and healthful ecology
which, for the first time in our nation's constitutional history, is solemnly incorporated in the fundamental law. Section
16, Article II of the 1987 Constitution explicitly provides:

Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful
ecology in accord with the rhythm and harmony of nature.

This right unites with the right to health which is provided for in the preceding section of the same
article:

Sec. 15. The State shall protect and promote the right to health of the people and instill health
consciousness among them.

While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State
Policies and not under the Bill of Rights, it does not follow that it is less important than any of the civil and political
rights enumerated in the latter. Such a right belongs to a different category of rights altogether for it concerns
nothing less than self-preservation and self-perpetuation — aptly and fittingly stressed by the petitioners — the
advancement of which may even be said to predate all governments and constitutions. As a matter of fact, these
basic rights need not even be written in the Constitution for they are assumed to exist from the inception of
humankind. If they are now explicitly mentioned in the fundamental charter, it is because of the well-founded fear of
its framers that unless the rights to a balanced and healthful ecology and to health are mandated as state policies
by the Constitution itself, thereby highlighting their continuing importance and imposing upon the state a solemn
obligation to preserve the first and protect and advance the second, the day would not be too far when all else
would be lost not only for the present generation, but also for those to come — generations which stand to inherit
nothing but parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the
environment. During the debates on this right in one of the plenary sessions of the 1986 Constitutional Commission,
the following exchange transpired between Commissioner Wilfrido Villacorta and Commissioner Adolfo Azcuna who
sponsored the section in question:

MR. VILLACORTA:
 Does this section mandate the State to provide sanctions against all forms of
pollution — air, water and noise pollution?

MR. AZCUNA:

Yes, Madam President. The right to healthful (sic) environment necessarily carries
with it the correlative duty of not impairing the same and, therefore, sanctions may be
provided for impairment of environmental balance.  12

The said right implies, among many other things, the judicious management and conservation of the country's
forests.

Without such forests, the ecological or environmental balance would be irreversiby disrupted.

Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the
other related provisions of the Constitution concerning the conservation, development and utilization of the country's
natural resources,   then President Corazon C. Aquino promulgated on 10 June 1987 E.O. No. 192,   Section 4 of
13 14

which expressly mandates that the Department of Environment and Natural Resources "shall be the primary
government agency responsible for the conservation, management, development and proper use of the country's
environment and natural resources, specifically forest and grazing lands, mineral, resources, including those in
reservation and watershed areas, and lands of the public domain, as well as the licensing and regulation of all
natural resources as may be provided for by law in order to ensure equitable sharing of the benefits derived
therefrom for the welfare of the present and future generations of Filipinos." Section 3 thereof makes the following
statement of policy:

Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure the
sustainable use, development, management, renewal, and conservation of the country's forest,
mineral, land, off-shore areas and other natural resources, including the protection and
enhancement of the quality of the environment, and equitable access of the different segments of
the population to the development and the use of the country's natural resources, not only for the
present generation but for future generations as well. It is also the policy of the state to recognize
and apply a true value system including social and environmental cost implications relative to their
utilization, development and conservation of our natural resources.

This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987,  specifically
15

in Section 1 thereof which reads:

Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the Filipino people, the
full exploration and development as well as the judicious disposition, utilization, management,
renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore
areas and other natural resources, consistent with the necessity of maintaining a sound ecological
balance and protecting and enhancing the quality of the environment and the objective of making the
exploration, development and utilization of such natural resources equitably accessible to the
different segments of the present as well as future generations.

(2) The State shall likewise recognize and apply a true value system that takes into account social
and environmental cost implications relative to the utilization, development and conservation of our
natural resources.

The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and
enhancing the quality of the environment." Section 2 of the same Title, on the other hand, specifically speaks of the
mandate of the DENR; however, it makes particular reference to the fact of the agency's being subject to law and
higher authority. Said section provides:

Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall be primarily
responsible for the implementation of the foregoing policy.
 (2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional
mandate to control and supervise the exploration, development, utilization, and conservation of the
country's natural resources.

Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases for
policy formulation, and have defined the powers and functions of the DENR.

It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid
special attention to the "environmental right" of the present and future generations. On 6 June 1977, P.D. No. 1151
(Philippine Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued. The former
"declared a continuing policy of the State (a) to create, develop, maintain and improve conditions under which man
and nature can thrive in productive and enjoyable harmony with each other, (b) to fulfill the social, economic and
other requirements of present and future generations of Filipinos, and (c) to insure the attainment of an
environmental quality that is conducive to a life of dignity and well-being."   As its goal, it speaks of the
16

"responsibilities of each generation as trustee and guardian of the environment for succeeding generations."   The 17

latter statute, on the other hand, gave flesh to the said policy.

Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear as the
DENR's duty — under its mandate and by virtue of its powers and functions under E.O. No. 192 and the
Administrative Code of 1987 — to protect and advance the said right.

A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the same
gives rise to a cause of action. Petitioners maintain that the granting of the TLAs, which they claim was done with
grave abuse of discretion, violated their right to a balanced and healthful ecology; hence, the full protection thereof
requires that no further TLAs should be renewed or granted.

A cause of action is defined as:

. . . an act or omission of one party in violation of the legal right or rights of the other; and its
essential elements are legal right of the plaintiff, correlative obligation of the defendant, and act or
omission of the defendant in violation of said legal right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a
cause of action,   the question submitted to the court for resolution involves the sufficiency of the facts alleged in the
19

complaint itself. No other matter should be considered; furthermore, the truth of falsity of the said allegations is
beside the point for the truth thereof is deemed hypothetically admitted. The only issue to be resolved in such a
case is: admitting such alleged facts to be true, may the court render a valid judgment in accordance with the prayer
in the complaint?   In Militante vs. Edrosolano,   this Court laid down the rule that the judiciary should "exercise the
20 21

utmost care and circumspection in passing upon a motion to dismiss on the ground of the absence thereof [cause of
action] lest, by its failure to manifest a correct appreciation of the facts alleged and deemed hypothetically admitted,
what the law grants or recognizes is effectively nullified. If that happens, there is a blot on the legal order. The law
itself stands in disrepute."

After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative
allegations, as well as the specific averments under the sub-heading CAUSE OF ACTION, to be adequate enough
to show, prima facie, the claimed violation of their rights. On the basis thereof, they may thus be granted, wholly or
partly, the reliefs prayed for. It bears stressing, however, that insofar as the cancellation of the TLAs is concerned,
there is the need to implead, as party defendants, the grantees thereof for they are indispensable parties.

The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or
determination by the executive or legislative branches of Government is not squarely put in issue. What is principally
involved is the enforcement of a right vis-a-vis policies already formulated and expressed in legislation. It must,
nonetheless, be emphasized that the political question doctrine is no longer, the insurmountable obstacle to the
exercise of judicial power or the impenetrable shield that protects executive and legislative actions from judicial
inquiry or review. The second paragraph of section 1, Article VIII of the Constitution states that:
 Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.

Commenting on this provision in his book, Philippine Political Law,   Mr. Justice Isagani A. Cruz, a distinguished
22

member of this Court, says:

The first part of the authority represents the traditional concept of judicial power, involving the
settlement of conflicting rights as conferred as law. The second part of the authority represents a
broadening of judicial power to enable the courts of justice to review what was before forbidden
territory, to wit, the discretion of the political departments of the government.

As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to
rule upon even the wisdom of the decisions of the executive and the legislature and to declare their
acts invalid for lack or excess of jurisdiction because tainted with grave abuse of discretion. The
catch, of course, is the meaning of "grave abuse of discretion," which is a very elastic phrase that
can expand or contract according to the disposition of the judiciary.

In Daza vs. Singson,   Mr. Justice Cruz, now speaking for this Court, noted:
23

In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The
reason is that, even if we were to assume that the issue presented before us was political in nature,
we would still not be precluded from revolving it under the expanded jurisdiction conferred upon us
that now covers, in proper cases, even the political question. Article VII, Section 1, of the
Constitution clearly provides: . . .

The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause
found in the Constitution. The court a quo declared that:

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant
the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the
country and to cease and desist from receiving, accepting, processing, renewing or approving new
timber license agreements. For to do otherwise would amount to "impairment of contracts" abhored
(sic) by the fundamental law.  24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement.
In the first place, the respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the
non-impairment clause. If he had done so, he would have acted with utmost infidelity to the Government by
providing undue and unwarranted benefits and advantages to the timber license holders because he would have
forever bound the Government to strictly respect the said licenses according to their terms and conditions
regardless of changes in policy and the demands of public interest and welfare. He was aware that as correctly
pointed out by the petitioners, into every timber license must be read Section 20 of the Forestry Reform Code (P.D.
No. 705) which provides:

. . . Provided, That when the national interest so requires, the President may amend, modify, replace
or rescind any contract, concession, permit, licenses or any other form of privilege granted
herein . . .

Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract,
property or a property right protested by the due process clause of the Constitution. In Tan vs. Director of
Forestry,   this Court held:
25

. . . A timber license is an instrument by which the State regulates the utilization and disposition of
forest resources to the end that public welfare is promoted. A timber license is not a contract within
the purview of the due process clause; it is only a license or privilege, which can be validly
withdrawn whenever dictated by public interest or public welfare as in this case.
 A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a
contract between the authority, federal, state, or municipal, granting it and the person to whom it is
granted; neither is it property or a property right, nor does it create a vested right; nor is it taxation
(37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights,
neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576).

We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary:  26

. . . Timber licenses, permits and license agreements are the principal instruments by which the
State regulates the utilization and disposition of forest resources to the end that public welfare is
promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to
qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular
concession area and the forest products therein. They may be validly amended, modified, replaced
or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed
contracts within the purview of the due process of law clause [See Sections 3(ee) and 20 of Pres.
Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27,
1983, 125 SCRA 302].

Since timber licenses are not contracts, the non-impairment clause, which reads:

Sec. 10. No law impairing, the obligation of contracts shall be passed.  27

cannot be invoked.

In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law
or even an executive issuance declaring the cancellation or modification of existing timber licenses. Hence, the non-
impairment clause cannot as yet be invoked. Nevertheless, granting further that a law has actually been passed
mandating cancellations or modifications, the same cannot still be stigmatized as a violation of the non-impairment
clause. This is because by its very nature and purpose, such as law could have only been passed in the exercise of
the police power of the state for the purpose of advancing the right of the people to a balanced and healthful
ecology, promoting their health and enhancing the general welfare. In Abe vs. Foster Wheeler
Corp.   this Court stated:
28

The freedom of contract, under our system of government, is not meant to be absolute. The same is
understood to be subject to reasonable legislative regulation aimed at the promotion of public health,
moral, safety and welfare. In other words, the constitutional guaranty of non-impairment of
obligations of contract is limited by the exercise of the police power of the State, in the interest of
public health, safety, moral and general welfare.

The reason for this is emphatically set forth in Nebia vs. New York,   quoted in Philippine American Life Insurance
29

Co. vs. Auditor General,  to wit:

30

Under our form of government the use of property and the making of contracts are normally matters
of private and not of public concern. The general rule is that both shall be free of governmental
interference. But neither property rights nor contract rights are absolute; for government cannot exist
if the citizen may at will use his property to the detriment of his fellows, or exercise his freedom of
contract to work them harm. Equally fundamental with the private right is that of the public to
regulate it in the common interest.

In short, the non-impairment clause must yield to the police power of the state.  31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the
prayer to enjoin the respondent Secretary from receiving, accepting, processing, renewing or approving new timber
licenses for, save in cases of renewal, no contract would have as of yet existed in the other instances. Moreover,
with respect to renewal, the holder is not entitled to it as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of
respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may
therefore amend their complaint to implead as defendants the holders or grantees of the questioned timber license
agreements.

No pronouncement as to costs.

SO ORDERED.

Cruz, Padilla, Bidin, Griño-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ., concur.

Narvasa, C.J., Puno and Vitug, JJ., took no part.

Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is
one of the most important cases decided by this Court in the last few years. The seminal principles laid down in this
decision are likely to influence profoundly the direction and course of the protection and management of the
environment, which of course embraces the utilization of all the natural resources in the territorial base of our polity.
I have therefore sought to clarify, basically to myself, what the Court appears to be saying.

The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance
of this suit (Decision, pp. 11-12). Locus standi is not a function of petitioners' claim that their suit is properly
regarded as a class suit. I understand locus standi to refer to the legal interest which a plaintiff must have in the
subject matter of the suit. Because of the very broadness of the concept of "class" here involved — membership in
this "class" appears to embrace everyone living in the country whether now or in the
future — it appears to me that everyone who may be expected to benefit from the course of action petitioners seek
to require public respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to
be recognizing a beneficiaries' right of action in the field of environmental protection, as against both the public
administrative agency directly concerned and the private persons or entities operating in the field or sector of activity
involved. Whether such beneficiaries' right of action may be found under any and all circumstances, or whether
some failure to act, in the first instance, on the part of the governmental agency concerned must be shown ("prior
exhaustion of administrative remedies"), is not discussed in the decision and presumably is left for future
determination in an appropriate case.

The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right
— the right to a balanced and healthful ecology" (Decision, p. 14). There is no question that "the right to a balanced
and healthful ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But although it is
fundamental in character, I suggest, with very great respect, that it cannot be characterized as "specific," without
doing excessive violence to language. It is in fact very difficult to fashion language more comprehensive in scope
and generalized in character than a right to "a balanced and healthful ecology." The list of particular claims which
can be subsumed under this rubic appears to be entirely open-ended: prevention and control of emission of toxic
fumes and smoke from factories and motor vehicles; of discharge of oil, chemical effluents, garbage and raw
sewage into rivers, inland and coastal waters by vessels, oil rigs, factories, mines and whole communities; of
dumping of organic and inorganic wastes on open land, streets and thoroughfares; failure to rehabilitate land after
strip-mining or open-pit mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other
living sea resources through the use of dynamite or cyanide and other chemicals; contamination of ground water
resources; loss of certain species of fauna and flora; and so on. The other statements pointed out by the Court:
Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book IV of the 1987 Administrative
Code; and P.D. No. 1151, dated 6 June 1977 — all appear to be formulations of policy, as general and abstract as
the constitutional statements of basic policy in Article II, Section 16 ("the right — to a balanced and healthful
ecology") and 15 ("the right to health").

P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a
compendious collection of more "specific environment management policies" and "environment quality standards"
(fourth "Whereas" clause, Preamble) relating to an extremely wide range of topics:

(a) air quality management;

(b) water quality management;

(c) land use management;

(d) natural resources management and conservation embracing:

(i) fisheries and aquatic resources;

(ii) wild life;

(iii) forestry and soil conservation;

(iv) flood control and natural calamities;

(v) energy development;

(vi) conservation and utilization of surface and ground water

(vii) mineral resources

Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the
particular provision or provisions (if any) of the Philippine Environment Code which give rise to a specific legal right
which petitioners are seeking to enforce. Secondly, the Philippine Environment Code identifies with notable care the
particular government agency charged with the formulation and implementation of guidelines and programs dealing
with each of the headings and sub-headings mentioned above. The Philippine Environment Code does not, in other
words, appear to contemplate action on the part of private persons who are beneficiaries of implementation of that
Code.

As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the
constitutional statements above noted, the Court is in effect saying that Section 15 (and Section 16) of Article II of
the Constitution are self-executing and judicially enforceable even in their present form. The implications of this
doctrine will have to be explored in future cases; those implications are too large and far-reaching in nature even to
be hinted at here.

My suggestion is simply that petitioners must, before the trial court, show a more specific legal right — a right cast in
language of a significantly lower order of generality than Article II (15) of the Constitution — that is or may be
violated by the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can
validly render judgment granting all or part of the relief prayed for. To my mind, the Court should be understood as
simply saying that such a more specific legal right or rights may well exist in our corpus of law, considering the
general policy principles found in the Constitution and the existence of the Philippine Environment Code, and that
the trial court should have given petitioners an effective opportunity so to demonstrate, instead of aborting the
proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a cause of action be a specific,
operable legal right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless
the legal right claimed to have been violated or disregarded is given specification in operational terms, defendants
may well be unable to defend themselves intelligently and effectively; in other words, there are due process
dimensions to this matter.

The second is a broader-gauge consideration — where a specific violation of law or applicable regulation is not
alleged or proved, petitioners can be expected to fall back on the expanded conception of judicial power in the
second paragraph of Section 1 of Article VIII of the Constitution which reads:

Section 1. . . .

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. (Emphasis supplied)

When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to
health" are combined with remedial standards as broad ranging as "a grave abuse of discretion amounting
to lack or excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the
uncharted ocean of social and economic policy making. At least in respect of the vast area of environmental
protection and management, our courts have no claim to special technical competence and experience and
professional qualification. Where no specific, operable norms and standards are shown to exist, then the
policy making departments — the legislative and executive departments — must be given a real and
effective opportunity to fashion and promulgate those norms and standards, and to implement them before
the courts should intervene.

My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's
petitioners demand public respondents should cancel, must be impleaded in the proceedings below. It might be
asked that, if petitioners' entitlement to the relief demanded is not dependent upon proof of breach by the timber
companies of one or more of the specific terms and conditions of their concession agreements (and this, petitioners
implicitly assume), what will those companies litigate about? The answer I suggest is that they may seek to dispute
the existence of the specific legal right petitioners should allege, as well as the reality of the claimed factual nexus
between petitioners' specific legal rights and the claimed wrongful acts or failures to act of public respondent
administrative agency. They may also controvert the appropriateness of the remedy or remedies demanded by
petitioners, under all the circumstances which exist.

I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our
territory, is of extreme importance for the country. The doctrines set out in the Court's decision issued today should,
however, be subjected to closer examination.

# Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is
one of the most important cases decided by this Court in the last few years. The seminal principles laid down in this
decision are likely to influence profoundly the direction and course of the protection and management of the
environment, which of course embraces the utilization of all the natural resources in the territorial base of our polity.
I have therefore sought to clarify, basically to myself, what the Court appears to be saying.

The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance
of this suit (Decision, pp. 11-12). Locus standi is not a function of petitioners' claim that their suit is properly
regarded as a class suit. I understand locus standi to refer to the legal interest which a plaintiff must have in the
subject matter of the suit. Because of the very broadness of the concept of "class" here involved — membership in
this "class" appears to embrace everyone living in the country whether now or in the
future — it appears to me that everyone who may be expected to benefit from the course of action petitioners seek
to require public respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to
be recognizing a beneficiaries' right of action in the field of environmental protection, as against both the public
administrative agency directly concerned and the private persons or entities operating in the field or sector of activity
involved. Whether such beneficiaries' right of action may be found under any and all circumstances, or whether
some failure to act, in the first instance, on the part of the governmental agency concerned must be shown ("prior
exhaustion of administrative remedies"), is not discussed in the decision and presumably is left for future
determination in an appropriate case.

The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right
— the right to a balanced and healthful ecology" (Decision, p. 14). There is no question that "the right to a balanced
and healthful ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But although it is
fundamental in character, I suggest, with very great respect, that it cannot be characterized as "specific," without
doing excessive violence to language. It is in fact very difficult to fashion language more comprehensive in scope
and generalized in character than a right to "a balanced and healthful ecology." The list of particular claims which
can be subsumed under this rubic appears to be entirely open-ended: prevention and control of emission of toxic
fumes and smoke from factories and motor vehicles; of discharge of oil, chemical effluents, garbage and raw
sewage into rivers, inland and coastal waters by vessels, oil rigs, factories, mines and whole communities; of
dumping of organic and inorganic wastes on open land, streets and thoroughfares; failure to rehabilitate land after
strip-mining or open-pit mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other
living sea resources through the use of dynamite or cyanide and other chemicals; contamination of ground water
resources; loss of certain species of fauna and flora; and so on. The other statements pointed out by the Court:
Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book IV of the 1987 Administrative
Code; and P.D. No. 1151, dated 6 June 1977 — all appear to be formulations of policy, as general and abstract as
the constitutional statements of basic policy in Article II, Section 16 ("the right — to a balanced and healthful
ecology") and 15 ("the right to health").

P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a
compendious collection of more "specific environment management policies" and "environment quality standards"
(fourth "Whereas" clause, Preamble) relating to an extremely wide range of topics:

(a) air quality management;

(b) water quality management;

(c) land use management;

(d) natural resources management and conservation embracing:

(i) fisheries and aquatic resources;

(ii) wild life;

(iii) forestry and soil conservation;

(iv) flood control and natural calamities;

(v) energy development;

(vi) conservation and utilization of surface and ground water

(vii) mineral resources

Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the
particular provision or provisions (if any) of the Philippine Environment Code which give rise to a specific legal right
which petitioners are seeking to enforce. Secondly, the Philippine Environment Code identifies with notable care the
particular government agency charged with the formulation and implementation of guidelines and programs dealing
with each of the headings and sub-headings mentioned above. The Philippine Environment Code does not, in other
words, appear to contemplate action on the part of private persons who are beneficiaries of implementation of that
Code.

As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the
constitutional statements above noted, the Court is in effect saying that Section 15 (and Section 16) of Article II of
the Constitution are self-executing and judicially enforceable even in their present form. The implications of this
doctrine will have to be explored in future cases; those implications are too large and far-reaching in nature even to
be hinted at here.

My suggestion is simply that petitioners must, before the trial court, show a more specific legal right — a right cast in
language of a significantly lower order of generality than Article II (15) of the Constitution — that is or may be
violated by the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can
validly render judgment granting all or part of the relief prayed for. To my mind, the Court should be understood as
simply saying that such a more specific legal right or rights may well exist in our corpus of law, considering the
general policy principles found in the Constitution and the existence of the Philippine Environment Code, and that
the trial court should have given petitioners an effective opportunity so to demonstrate, instead of aborting the
proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component of a cause of action be a specific,
operable legal right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless
the legal right claimed to have been violated or disregarded is given specification in operational terms, defendants
may well be unable to defend themselves intelligently and effectively; in other words, there are due process
dimensions to this matter.

The second is a broader-gauge consideration — where a specific violation of law or applicable regulation is not
alleged or proved, petitioners can be expected to fall back on the expanded conception of judicial power in the
second paragraph of Section 1 of Article VIII of the Constitution which reads:

Section 1. . . .

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. (Emphasis supplied)

When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to
health" are combined with remedial standards as broad ranging as "a grave abuse of discretion amounting
to lack or excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the
uncharted ocean of social and economic policy making. At least in respect of the vast area of environmental
protection and management, our courts have no claim to special technical competence and experience and
professional qualification. Where no specific, operable norms and standards are shown to exist, then the
policy making departments — the legislative and executive departments — must be given a real and
effective opportunity to fashion and promulgate those norms and standards, and to implement them before
the courts should intervene.

My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's
petitioners demand public respondents should cancel, must be impleaded in the proceedings below. It might be
asked that, if petitioners' entitlement to the relief demanded is not dependent upon proof of breach by the timber
companies of one or more of the specific terms and conditions of their concession agreements (and this, petitioners
implicitly assume), what will those companies litigate about? The answer I suggest is that they may seek to dispute
the existence of the specific legal right petitioners should allege, as well as the reality of the claimed factual nexus
between petitioners' specific legal rights and the claimed wrongful acts or failures to act of public respondent
administrative agency. They may also controvert the appropriateness of the remedy or remedies demanded by
petitioners, under all the circumstances which exist.

I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our
territory, is of extreme importance for the country. The doctrines set out in the Court's decision issued today should,
however, be subjected to closer examination.

# Footnotes

1 Rollo, 164; 186.

2 Id., 62-65, exclusive of annexes.

3 Under Section 12, Rule 3, Revised Rules of Court.

4 Rollo, 67.

5 Id., 74.

6 Rollo, 70-73.

7 Annex "B" of Petitions; Id., 43-44.

8 Paragraph 7, Petition, 6; Rollo, 20.

9 Webster's Third New International Dictionary, unabridged, 1986, 1508.

10 Title XIV (Environment and Natural Resources), Book IV of the Administrative Code of 1987, E.O.
No. 292.

11 Annex "B" of Petition; Rollo, 43-44.

12 Record of the Constitutional Commission, vol. 4, 913.

13 For instance, the Preamble and Article XII on the National Economy and Patrimony.

14 The Reorganization Act of the Department of Environment and Natural Resources.

15 E.O. No. 292.

16 Section 1.

17 Section 2.

18 Ma-ao Sugar Central Co. vs. Barrios, 79 Phil. 666 [1947]; Community Investment and Finance
Corp. vs. Garcia, 88 Phil. 215 [1951]; Remitere vs. Vda. de Yulo, 16 SCRA 251 [1966]; Caseñas vs.
Rosales, 19 SCRA 462 [1967]; Virata vs. Sandiganbayan, 202 SCRA 680 [1991]; Madrona vs.
Rosal, 204 SCRA 1 [1991].

19 Section 1(q), Rule 16, Revised Rules of Court.

20 Adamos vs. J.M. Tuason and Co., Inc. 25 SCRA 529 [1968]; Virata vs. Sandiganbayn, supra;
Madrona vs. Rosal, supra.

21 39 SCRA 473, 479 [1971].

 22 1991 ed., 226-227.

23 180 SCRA 496, 501-502 [1989]. See also, Coseteng vs. Mitra, 187 SCRA 377 [1990]; Gonzales
vs. Macaraig, 191 SCRA 452 [1990]; Llamas vs. Orbos, 202 SCRA 844 [1991]; Bengzon vs. Senate
Blue Ribbon Committee, 203 SCRA 767 [1991].

24 Rollo, 44.

25 125 SCRA 302, 325 [1983].

26 190 SCRA 673, 684 [1990].

27 Article III, 1987 Constitution.

28 110 Phil. 198, 203 [1960]; footnotes omitted.

29 291 U.S. 502, 523, 78 L. ed. 940, 947-949.

30 22 SCRA 135, 146-147 [1968].

31 Ongsiako vs. Gamboa, 86 Phil. 50 [1950]; Abe vs. Foster Wheeler Corp. supra.; Phil. American
Life Insurance Co. vs. Auditor General, supra.; Alalayan vs. NPC, 24 SCRA 172[1968]; Victoriano
vs. Elizalde Rope Workers' Union, 59 SCRA 54 [1974]; Kabiling vs. National Housing Authority, 156
SCRA 623 [1987].

G.R. No. 167614               March 24, 2009

ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

For decades, the toil of solitary migrants has helped lift entire families and communities out of poverty. Their
earnings have built houses, provided health care, equipped schools and planted the seeds of businesses. They
have woven together the world by transmitting ideas and knowledge from country to country. They have provided
the dynamic human link between cultures, societies and economies. Yet, only recently have we begun to
understand not only how much international migration impacts development, but how smart public policies can
magnify this effect.

United Nations Secretary-General Ban Ki-Moon

Global Forum on Migration and Development
Brussels, July 10, 20071

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section 10, Republic Act
(R.A.) No. 8042,2 to wit:
Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with
interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.

x x x x (Emphasis and underscoring supplied)

does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but exacerbates
the hardships borne by them by unduly limiting their entitlement in case of illegal dismissal to their lump-sum salary
either for the unexpired portion of their employment contract "or for three months for every year of the unexpired
term, whichever is less" (subject clause). Petitioner claims that the last clause violates the OFWs' constitutional
rights in that it impairs the terms of their contract, deprives them of equal protection and denies them due process.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December 8, 2004
Decision3 and April 1, 2005 Resolution4 of the Court of Appeals (CA), which applied the subject clause, entreating
this Court to declare the subject clause unconstitutional.

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents) under a
Philippine Overseas Employment Administration (POEA)-approved Contract of Employment with the following terms
and conditions:

Duration of contract 12 months

Position Chief Officer
Basic monthly salary US$1,400.00
Hours of work 48.0 hours per week
Overtime US$700.00 per month
Vacation leave with pay 7.00 days per month5

On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded employment
contract for the position of Second Officer with a monthly salary of US$1,000.00, upon the assurance and
representation of respondents that he would be made Chief Officer by the end of April 1998.6

Respondents did not deliver on their promise to make petitioner Chief Officer.7 Hence, petitioner refused to stay on
as Second Officer and was repatriated to the Philippines on May 26, 1998.8

Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March 19, 1999, but at
the time of his repatriation on May 26, 1998, he had served only two (2) months and seven (7) days of his contract,
leaving an unexpired portion of nine (9) months and twenty-three (23) days.

Petitioner filed with the Labor Arbiter (LA) a Complaint9 against respondents for constructive dismissal and for
payment of his money claims in the total amount of US$26,442.73, broken down as follows:

May 27/31, 1998 (5 days) incl. Leave pay US$ 413.90

June 01/30, 1998 2,590.00
July 01/31, 1998 2,590.00
August 01/31, 1998 2,590.00
Sept. 01/30, 1998 2,590.00
Oct. 01/31, 1998 2,590.00
Nov. 01/30, 1998 2,590.00
Dec. 01/31, 1998 2,590.00
Jan. 01/31, 1999 2,590.00
Feb. 01/28, 1999 2,590.00
Mar. 1/19, 1999 (19 days) incl. leave pay 1,640.00
  --------------------------
--------------------------
--------------------------
--
  25,382.23
Amount adjusted to chief mate's salary  
(March 19/31, 1998 to April 1/30, 1998) + 1,060.5010
  --------------------------
--------------------------
--------------------------
----------------
TOTAL CLAIM US$ 26,442.7311

as well as moral and exemplary damages and attorney's fees.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal and awarding
him monetary benefits, to wit:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the
complainant (petitioner) by the respondents in the above-entitled case was illegal and the respondents are
hereby ordered to pay the complainant [petitioner], jointly and severally, in Philippine Currency, based on the
rate of exchange prevailing at the time of payment, the amount of EIGHT THOUSAND SEVEN HUNDRED
SEVENTY U.S. DOLLARS (US $8,770.00), representing the complainant’s salary for three (3) months
of the unexpired portion of the aforesaid contract of employment. 1avvphi1

The respondents are likewise ordered to pay the complainant [petitioner], jointly and severally, in Philippine
Currency, based on the rate of exchange prevailing at the time of payment, the amount of FORTY FIVE U.S.
DOLLARS (US$ 45.00),12 representing the complainant’s claim for a salary differential. In addition, the
respondents are hereby ordered to pay the complainant, jointly and severally, in Philippine Currency, at the
exchange rate prevailing at the time of payment, the complainant’s (petitioner's) claim for attorney’s fees
equivalent to ten percent (10%) of the total amount awarded to the aforesaid employee under this Decision.

The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of merit.

All other claims are hereby DISMISSED.

SO ORDERED.13 (Emphasis supplied)

In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the salary
period of three months only -- rather than the entire unexpired portion of nine months and 23 days of
petitioner's employment contract - applying the subject clause. However, the LA applied the salary rate of
US$2,590.00, consisting of petitioner's "[b]asic salary, US$1,400.00/month + US$700.00/month, fixed
overtime pay, + US$490.00/month, vacation leave pay = US$2,590.00/compensation per month."14

Respondents appealed15 to the National Labor Relations Commission (NLRC) to question the finding of the
LA that petitioner was illegally dismissed.
 Petitioner also appealed16 to the NLRC on the sole issue that the LA erred in not applying the ruling of the
Court in Triple Integrated Services, Inc. v. National Labor Relations Commission 17 that in case of illegal
dismissal, OFWs are entitled to their salaries for the unexpired portion of their contracts.18

In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit:

WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are hereby ordered to pay
complainant, jointly and severally, in Philippine currency, at the prevailing rate of exchange at the time of
payment the following:

1. Three (3) months salary

$1,400 x 3 US$4,200.00
2. Salary differential 45.00
US$4,245.00
3. 10% Attorney’s fees 424.50
TOTAL US$4,669.50

The other findings are affirmed.

SO ORDERED.19

The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing the applicable
salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042 "does not provide for the award of overtime
pay, which should be proven to have been actually performed, and for vacation leave pay."20

Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the subject
clause.21 The NLRC denied the motion.22

Petitioner filed a Petition for Certiorari23 with the CA, reiterating the constitutional challenge against the subject
clause.24 After initially dismissing the petition on a technicality, the CA eventually gave due course to it, as directed
by this Court in its Resolution dated August 7, 2003 which granted the petition for certiorari, docketed as G.R. No.
151833, filed by petitioner.

In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the reduction of the applicable salary
rate; however, the CA skirted the constitutional issue raised by petitioner.25

His Motion for Reconsideration26 having been denied by the CA,27 petitioner brings his cause to this Court on the
following grounds:

The Court of Appeals and the labor tribunals have decided the case in a way not in accord with applicable decision
of the Supreme Court involving similar issue of granting unto the migrant worker back wages equal to the unexpired
portion of his contract of employment instead of limiting it to three (3) months

II

In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their interpretation of
Section 10 of Republic Act No. 8042, it is submitted that the Court of Appeals gravely erred in law when it failed to
discharge its judicial duty to decide questions of substance not theretofore determined by the Honorable Supreme
Court, particularly, the constitutional issues raised by the petitioner on the constitutionality of said law, which
unreasonably, unfairly and arbitrarily limits payment of the award for back wages of overseas workers to three (3)
months.
 III

Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the Court of Appeals
gravely erred in law in excluding from petitioner’s award the overtime pay and vacation pay provided in his contract
since under the contract they form part of his salary.28

On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is already old and sickly, and he
intends to make use of the monetary award for his medical treatment and medication.29 Required to comment,
counsel for petitioner filed a motion, urging the court to allow partial execution of the undisputed monetary award
and, at the same time, praying that the constitutional question be resolved.30

Considering that the parties have filed their respective memoranda, the Court now takes up the full merit of the
petition mindful of the extreme importance of the constitutional question raised therein.

On the first and second issues

The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not disputed. Likewise
not disputed is the salary differential of US$45.00 awarded to petitioner in all three fora. What remains disputed is
only the computation of the lump-sum salary to be awarded to petitioner by reason of his illegal dismissal.

Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at the monthly rate
of US$1,400.00 covering the period of three months out of the unexpired portion of nine months and 23 days of his
employment contract or a total of US$4,200.00.

Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the US$4,200.00
awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of US$25,382.23, equivalent to his
salaries for the entire nine months and 23 days left of his employment contract, computed at the monthly rate of
US$2,590.00.31

The Arguments of Petitioner

Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom of OFWs to
negotiate for and stipulate in their overseas employment contracts a determinate employment period and a fixed
salary package.32 It also impinges on the equal protection clause, for it treats OFWs differently from local Filipino
workers (local workers) by putting a cap on the amount of lump-sum salary to which OFWs are entitled in case of
illegal dismissal, while setting no limit to the same monetary award for local workers when their dismissal is declared
illegal; that the disparate treatment is not reasonable as there is no substantial distinction between the two
groups;33 and that it defeats Section 18,34 Article II of the Constitution which guarantees the protection of the rights
and welfare of all Filipino workers, whether deployed locally or overseas.35

Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with existing
jurisprudence on the issue of money claims of illegally dismissed OFWs. Though there are conflicting rulings on this,
petitioner urges the Court to sort them out for the guidance of affected OFWs.36

Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 serves no other purpose
but to benefit local placement agencies. He marks the statement made by the Solicitor General in his
Memorandum, viz.:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that
jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation.
Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for
the acts of the foreign employer. To protect them and to promote their continued helpful contribution in deploying
Filipino migrant workers, liability for money claims was reduced under Section 10 of R.A. No. 8042. 37 (Emphasis
supplied)

Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause sacrifices the well-
being of OFWs. Not only that, the provision makes foreign employers better off than local employers because in
cases involving the illegal dismissal of employees, foreign employers are liable for salaries covering a maximum of
only three months of the unexpired employment contract while local employers are liable for the full lump-sum
salaries of their employees. As petitioner puts it:

In terms of practical application, the local employers are not limited to the amount of backwages they have to give
their employees they have illegally dismissed, following well-entrenched and unequivocal jurisprudence on the
matter. On the other hand, foreign employers will only be limited to giving the illegally dismissed migrant workers the
maximum of three (3) months unpaid salaries notwithstanding the unexpired term of the contract that can be more
than three (3) months.38

Lastly, petitioner claims that the subject clause violates the due process clause, for it deprives him of the salaries
and other emoluments he is entitled to under his fixed-period employment contract.39

The Arguments of Respondents

In their Comment and Memorandum, respondents contend that the constitutional issue should not be entertained,
for this was belatedly interposed by petitioner in his appeal before the CA, and not at the earliest opportunity, which
was when he filed an appeal before the NLRC.40

The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its provisions could not
have impaired petitioner's 1998 employment contract. Rather, R.A. No. 8042 having preceded petitioner's contract,
the provisions thereof are deemed part of the minimum terms of petitioner's employment, especially on the matter of
money claims, as this was not stipulated upon by the parties.42

Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of their employment, such
that their rights to monetary benefits must necessarily be treated differently. The OSG enumerates the essential
elements that distinguish OFWs from local workers: first, while local workers perform their jobs within Philippine
territory, OFWs perform their jobs for foreign employers, over whom it is difficult for our courts to acquire jurisdiction,
or against whom it is almost impossible to enforce judgment; and second, as held in Coyoca v. National Labor
Relations Commission43 and Millares v. National Labor Relations Commission,44 OFWs are contractual employees
who can never acquire regular employment status, unlike local workers who are or can become regular employees.
Hence, the OSG posits that there are rights and privileges exclusive to local workers, but not available to OFWs;
that these peculiarities make for a reasonable and valid basis for the differentiated treatment under the subject
clause of the money claims of OFWs who are illegally dismissed. Thus, the provision does not violate the equal
protection clause nor Section 18, Article II of the Constitution.45

Lastly, the OSG defends the rationale behind the subject clause as a police power measure adopted to mitigate the
solidary liability of placement agencies for this "redounds to the benefit of the migrant workers whose welfare the
government seeks to promote. The survival of legitimate placement agencies helps [assure] the government that
migrant workers are properly deployed and are employed under decent and humane conditions."46

The Court's Ruling

The Court sustains petitioner on the first and second issues.

When the Court is called upon to exercise its power of judicial review of the acts of its co-equals, such as the
Congress, it does so only when these conditions obtain: (1) that there is an actual case or controversy involving a
conflict of rights susceptible of judicial determination;47 (2) that the constitutional question is raised by a proper
party48 and at the earliest opportunity;49 and (3) that the constitutional question is the very lis mota of the
case,50 otherwise the Court will dismiss the case or decide the same on some other ground.51

Without a doubt, there exists in this case an actual controversy directly involving petitioner who is personally
aggrieved that the labor tribunals and the CA computed his monetary award based on the salary period of three
months only as provided under the subject clause.
The constitutional challenge is also timely. It should be borne in mind that the requirement that a constitutional issue
be raised at the earliest opportunity entails the interposition of the issue in the pleadings before a competent court,
such that, if the issue is not raised in the pleadings before that competent court, it cannot be considered at the trial
and, if not considered in the trial, it cannot be considered on appeal.52 Records disclose that the issue on the
constitutionality of the subject clause was first raised, not in petitioner's appeal with the NLRC, but in his Motion for
Partial Reconsideration with said labor tribunal,53 and reiterated in his Petition for Certiorari before the
CA.54 Nonetheless, the issue is deemed seasonably raised because it is not the NLRC but the CA which has the
competence to resolve the constitutional issue. The NLRC is a labor tribunal that merely performs a quasi-judicial
function – its function in the present case is limited to determining questions of fact to which the legislative policy of
R.A. No. 8042 is to be applied and to resolving such questions in accordance with the standards laid down by the
law itself;55 thus, its foremost function is to administer and enforce R.A. No. 8042, and not to inquire into the validity
of its provisions. The CA, on the other hand, is vested with the power of judicial review or the power to declare
unconstitutional a law or a provision thereof, such as the subject clause.56 Petitioner's interposition of the
constitutional issue before the CA was undoubtedly seasonable. The CA was therefore remiss in failing to take up
the issue in its decision.

The third condition that the constitutional issue be critical to the resolution of the case likewise obtains because the
monetary claim of petitioner to his lump-sum salary for the entire unexpired portion of his 12-month employment
contract, and not just for a period of three months, strikes at the very core of the subject clause.

Thus, the stage is all set for the determination of the constitutionality of the subject clause.

Does the subject clause violate Section 10,

Article III of the Constitution on non-impairment
of contracts?

The answer is in the negative.

Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract on the term of his
employment and the fixed salary package he will receive57 is not tenable.

Section 10, Article III of the Constitution provides:

No law impairing the obligation of contracts shall be passed.

The prohibition is aligned with the general principle that laws newly enacted have only a prospective operation,58 and
cannot affect acts or contracts already perfected;59 however, as to laws already in existence, their provisions are
read into contracts and deemed a part thereof.60 Thus, the non-impairment clause under Section 10, Article II is
limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by
enlarging, abridging or in any manner changing the intention of the parties thereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the employment
contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A. No. 8042, particularly
the subject clause, impaired the employment contract of the parties. Rather, when the parties executed their 1998
employment contract, they were deemed to have incorporated into it all the provisions of R.A. No. 8042.

But even if the Court were to disregard the timeline, the subject clause may not be declared unconstitutional on the
ground that it impinges on the impairment clause, for the law was enacted in the exercise of the police power of the
State to regulate a business, profession or calling, particularly the recruitment and deployment of OFWs, with the
noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be
employed.61 Police power legislations adopted by the State to promote the health, morals, peace, education, good
order, safety, and general welfare of the people are generally applicable not only to future contracts but even to
those already in existence, for all private contracts must yield to the superior and legitimate measures taken by the
State to promote public welfare.62

Does the subject clause violate Section 1,

Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor
as a protected sector?

The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees:

No person shall be deprived of life, liberty, or property without due process of law nor shall any person be denied
the equal protection of the law.

Section 18,63 Article II and Section 3,64 Article XIII accord all members of the labor sector, without distinction as to
place of deployment, full protection of their rights and welfare.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to economic
security and parity: all monetary benefits should be equally enjoyed by workers of similar category, while all
monetary obligations should be borne by them in equal degree; none should be denied the protection of the laws
which is enjoyed by, or spared the burden imposed on, others in like circumstances.65

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees fit, a system
of classification into its legislation; however, to be valid, the classification must comply with these requirements: 1) it
is based on substantial distinctions; 2) it is germane to the purposes of the law; 3) it is not limited to existing
conditions only; and 4) it applies equally to all members of the class.66

There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a
law: a) the deferential or rational basis scrutiny in which the challenged classification needs only be shown to be
rationally related to serving a legitimate state interest;67 b) the middle-tier or intermediate scrutiny in which the
government must show that the challenged classification serves an important state interest and that the
classification is at least substantially related to serving that interest;68 and c) strict judicial scrutiny69 in which a
legislative classification which impermissibly interferes with the exercise of a fundamental right70 or operates to the
peculiar disadvantage of a suspect class71 is presumed unconstitutional, and the burden is upon the government to
prove that the classification is necessary to achieve a compelling state interest and that it is the least restrictive
means to protect such interest.72

Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications73 based on race74 or
gender75 but not when the classification is drawn along income categories.76

It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee Association, Inc.
v. Bangko Sentral ng Pilipinas,77 the constitutionality of a provision in the charter of the Bangko Sentral ng
Pilipinas (BSP), a government financial institution (GFI), was challenged for maintaining its rank-and-file employees
under the Salary Standardization Law (SSL), even when the rank-and-file employees of other GFIs had been
exempted from the SSL by their respective charters. Finding that the disputed provision contained a suspect
classification based on salary grade, the Court deliberately employed the standard of strict judicial scrutiny in its
review of the constitutionality of said provision. More significantly, it was in this case that the Court revealed the
broad outlines of its judicial philosophy, to wit:

Congress retains its wide discretion in providing for a valid classification, and its policies should be accorded
recognition and respect by the courts of justice except when they run afoul of the Constitution. The deference stops
where the classification violates a fundamental right, or prejudices persons accorded special protection by the
Constitution. When these violations arise, this Court must discharge its primary role as the vanguard of
constitutional guaranties, and require a stricter and more exacting adherence to constitutional limitations. Rational
basis should not suffice.

Admittedly, the view that prejudice to persons accorded special protection by the Constitution requires a stricter
judicial scrutiny finds no support in American or English jurisprudence. Nevertheless, these foreign decisions and
authorities are not per se controlling in this jurisdiction. At best, they are persuasive and have been used to support
many of our decisions. We should not place undue and fawning reliance upon them and regard them as
indispensable mental crutches without which we cannot come to our own decisions through the employment of our
own endowments. We live in a different ambience and must decide our own problems in the light of our own
interests and needs, and of our qualities and even idiosyncrasies as a people, and always with our own concept of
law and justice. Our laws must be construed in accordance with the intention of our own lawmakers and such intent
may be deduced from the language of each law and the context of other local legislation related thereto. More
importantly, they must be construed to serve our own public interest which is the be-all and the end-all of all our
laws. And it need not be stressed that our public interest is distinct and different from others.

xxxx

Further, the quest for a better and more "equal" world calls for the use of equal protection as a tool of effective
judicial intervention.

Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble proclaims
"equality" as an ideal precisely in protest against crushing inequities in Philippine society. The command to promote
social justice in Article II, Section 10, in "all phases of national development," further explicitated in Article XIII, are
clear commands to the State to take affirmative action in the direction of greater equality. x x x [T]here is thus in the
Philippine Constitution no lack of doctrinal support for a more vigorous state effort towards achieving a reasonable
measure of equality.

Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized groups of
society, including labor. Under the policy of social justice, the law bends over backward to accommodate the
interests of the working class on the humane justification that those with less privilege in life should have more in
law. And the obligation to afford protection to labor is incumbent not only on the legislative and executive branches
but also on the judiciary to translate this pledge into a living reality. Social justice calls for the humanization of laws
and the equalization of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated.

xxxx

Under most circumstances, the Court will exercise judicial restraint in deciding questions of constitutionality,
recognizing the broad discretion given to Congress in exercising its legislative power. Judicial scrutiny would be
based on the "rational basis" test, and the legislative discretion would be given deferential treatment.

But if the challenge to the statute is premised on the denial of a fundamental right, or the perpetuation of prejudice
against persons favored by the Constitution with special protection, judicial scrutiny ought to be more
strict. A weak and watered down view would call for the abdication of this Court’s solemn duty to strike down any
law repugnant to the Constitution and the rights it enshrines. This is true whether the actor committing the
unconstitutional act is a private person or the government itself or one of its instrumentalities. Oppressive acts will
be struck down regardless of the character or nature of the actor.

xxxx

In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-employee status. It is
akin to a distinction based on economic class and status, with the higher grades as recipients of a benefit
specifically withheld from the lower grades. Officers of the BSP now receive higher compensation packages that are
competitive with the industry, while the poorer, low-salaried employees are limited to the rates prescribed by the
SSL. The implications are quite disturbing: BSP rank-and-file employees are paid the strictly regimented rates of the
SSL while employees higher in rank - possessing higher and better education and opportunities for career
advancement - are given higher compensation packages to entice them to stay. Considering that majority, if not all,
the rank-and-file employees consist of people whose status and rank in life are less and limited, especially in terms
of job marketability, it is they - and not the officers - who have the real economic and financial need for the
adjustment . This is in accord with the policy of the Constitution "to free the people from poverty, provide adequate
social services, extend to them a decent standard of living, and improve the quality of life for all." Any act of
Congress that runs counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass
muster. (Emphasis supplied)
Imbued with the same sense of "obligation to afford protection to labor," the Court in the present case also employs
the standard of strict judicial scrutiny, for it perceives in the subject clause a suspect classification prejudicial to
OFWs.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a closer
examination reveals that the subject clause has a discriminatory intent against, and an invidious impact on, OFWs at
two levels:

First, OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts
of one year or more;

Second, among OFWs with employment contracts of more than one year; and

Third, OFWs vis-à-vis local workers with fixed-period employment;

OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts of one
year or more

As pointed out by petitioner,78 it was in Marsaman Manning Agency, Inc. v. National Labor Relations
Commission79 (Second Division, 1999) that the Court laid down the following rules on the application of the periods
prescribed under Section 10(5) of R.A. No. 804, to wit:

A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed
overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or
three (3) months’ salary for every year of the unexpired term, whichever is less, comes into play only when
the employment contract concerned has a term of at least one (1) year or more. This is evident from the
words "for every year of the unexpired term" which follows the words "salaries x x x for three months." To
follow petitioners’ thinking that private respondent is entitled to three (3) months salary only simply because it is the
lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some.
This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken
that every part or word thereof be given effect since the law-making body is presumed to know the meaning of the
words employed in the statue and to have used them advisedly. Ut res magis valeat quam pereat.80 (Emphasis
supplied)

In Marsaman, the OFW involved was illegally dismissed two months into his 10-month contract, but was awarded
his salaries for the remaining 8 months and 6 days of his contract.

Prior to Marsaman, however, there were two cases in which the Court made conflicting rulings on Section 10(5).
One was Asian Center for Career and Employment System and Services v. National Labor Relations
Commission (Second Division, October 1998),81 which involved an OFW who was awarded a two-year employment
contract, but was dismissed after working for one year and two months. The LA declared his dismissal illegal and
awarded him SR13,600.00 as lump-sum salary covering eight months, the unexpired portion of his contract. On
appeal, the Court reduced the award to SR3,600.00 equivalent to his three months’ salary, this being the lesser
value, to wit:

Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just, valid or authorized
cause is entitled to his salary for the unexpired portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less.

In the case at bar, the unexpired portion of private respondent’s employment contract is eight (8) months. Private
respondent should therefore be paid his basic salary corresponding to three (3) months or a total of SR3,600.82

Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations Commission (Third Division,
December 1998),83 which involved an OFW (therein respondent Erlinda Osdana) who was originally granted a 12-
month contract, which was deemed renewed for another 12 months. After serving for one year and seven-and-a-half
months, respondent Osdana was illegally dismissed, and the Court awarded her salaries for the entire unexpired
portion of four and one-half months of her contract.
The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:

Case Title Contract Period of Unexpired Period Applied in

Period Service Period the Computation
of the Monetary
Award

Skippers v. 6 months 2 months 4 months 4 months

Maguad84

Bahia Shipping 9 months 8 months 4 months 4 months

v. Reynaldo
Chua 85

Centennial 9 months 4 months 5 months 5 months

Transmarine v.
dela Cruz l86

Talidano v. 12 months 3 months 9 months 3 months

Falcon87

Univan v. CA 88 12 months 3 months 9 months 3 months

Oriental v. CA 89 12 months more than 2 10 months 3 months

months

PCL v. NLRC90 12 months more than 2 more or less 9 3 months

months months

Olarte v. 12 months 21 days 11 months and 9 3 months

Nayona91 days

JSS v.Ferrer92 12 months 16 days 11 months and 3 months

24 days

Pentagon v. 12 months 9 months and 2 months and 23 2 months and 23

Adelantar93 7 days days days

Phil. Employ v. 12 months 10 months 2 months Unexpired portion

Paramio, et al.94

Flourish 2 years 26 days 23 months and 4 6 months or 3

Maritime v. days months for each
Almanzor 95 year of contract

Athenna 1 year, 10 1 month 1 year, 9 months 6 months or 3

Manpower v. months and and 28 days months for each
Villanos 96 28 days year of contract

As the foregoing matrix readily shows, the subject clause classifies OFWs into two categories. The first category
includes OFWs with fixed-period employment contracts of less than one year; in case of illegal dismissal, they are
entitled to their salaries for the entire unexpired portion of their contract. The second category consists of OFWs with
fixed-period employment contracts of one year or more; in case of illegal dismissal, they are entitled to monetary
award equivalent to only 3 months of the unexpired portion of their contracts.

The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent OFW worked
for only 2 months out of his 6-month contract, but was awarded his salaries for the remaining 4 months. In contrast,
the respondent OFWs in Oriental and PCL who had also worked for about 2 months out of their 12-month contracts
were awarded their salaries for only 3 months of the unexpired portion of their contracts. Even the OFWs involved
in Talidano and Univan who had worked for a longer period of 3 months out of their 12-month contracts before
being illegally dismissed were awarded their salaries for only 3 months.
To illustrate the disparity even more vividly, the Court assumes a hypothetical OFW-A with an employment contract
of 10 months at a monthly salary rate of US$1,000.00 and a hypothetical OFW-B with an employment contract of 15
months with the same monthly salary rate of US$1,000.00. Both commenced work on the same day and under the
same employer, and were illegally dismissed after one month of work. Under the subject clause, OFW-A will be
entitled to US$9,000.00, equivalent to his salaries for the remaining 9 months of his contract, whereas OFW-B will
be entitled to only US$3,000.00, equivalent to his salaries for 3 months of the unexpired portion of his contract,
instead of US$14,000.00 for the unexpired portion of 14 months of his contract, as the US$3,000.00 is the lesser
amount.

The disparity becomes more aggravating when the Court takes into account jurisprudence that, prior to the
effectivity of R.A. No. 8042 on July 14, 1995,97 illegally dismissed OFWs, no matter how long the period of their
employment contracts, were entitled to their salaries for the entire unexpired portions of their contracts. The matrix
below speaks for itself:

Case Title Contract Period of Unexpired Period Applied in the

Period Service Period Computation of the
Monetary Award

ATCI v. CA, et 2 years 2 months 22 months 22 months

al.98

Phil. Integrated 2 years 7 days 23 months 23 months and 23

v. NLRC99 and 23 days days

JGB v. NLC100 2 years 9 months 15 months 15 months

Agoy v. 2 years 2 months 22 months 22 months

NLRC101

EDI v. NLRC, et 2 years 5 months 19 months 19 months

al.102

Barros v. 12 months 4 months 8 months 8 months

NLRC, et al.103

Philippine 12 months 6 months 5 months and 5 months and 18 days

Transmarine v. and 22 days 18 days
Carilla104

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof,
were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. Their claims
were subjected to a uniform rule of computation: their basic salaries multiplied by the entire unexpired portion of
their employment contracts.

The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation of the money
claims of illegally dismissed OFWs based on their employment periods, in the process singling out one category
whose contracts have an unexpired portion of one year or more and subjecting them to the peculiar disadvantage of
having their monetary awards limited to their salaries for 3 months or for the unexpired portion thereof, whichever is
less, but all the while sparing the other category from such prejudice, simply because the latter's unexpired
contracts fall short of one year.

Among OFWs With Employment Contracts of More Than One Year

Upon closer examination of the terminology employed in the subject clause, the Court now has misgivings on the
accuracy of the Marsaman interpretation.

The Court notes that the subject clause "or for three (3) months for every year of the unexpired term, whichever is
less" contains the qualifying phrases "every year" and "unexpired term." By its ordinary meaning, the word "term"
means a limited or definite extent of time.105 Corollarily, that "every year" is but part of an "unexpired term" is
significant in many ways: first, the unexpired term must be at least one year, for if it were any shorter, there would
be no occasion for such unexpired term to be measured by every year; and second, the original term must be more
than one year, for otherwise, whatever would be the unexpired term thereof will not reach even a year.
Consequently, the more decisive factor in the determination of when the subject clause "for three (3) months
for every year of the unexpired term, whichever is less" shall apply is not the length of the original contract period as
held in Marsaman,106 but the length of the unexpired portion of the contract period -- the subject clause applies in
cases when the unexpired portion of the contract period is at least one year, which arithmetically requires that the
original contract period be more than one year.

Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs whose contract periods
are for more than one year: those who are illegally dismissed with less than one year left in their contracts shall be
entitled to their salaries for the entire unexpired portion thereof, while those who are illegally dismissed with one
year or more remaining in their contracts shall be covered by the subject clause, and their monetary benefits limited
to their salaries for three months only.

To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court assumes
hypothetical OFW-C and OFW-D, who each have a 24-month contract at a salary rate of US$1,000.00 per month.
OFW-C is illegally dismissed on the 12th month, and OFW-D, on the 13th month. Considering that there is at least
12 months remaining in the contract period of OFW-C, the subject clause applies to the computation of the latter's
monetary benefits. Thus, OFW-C will be entitled, not to US$12,000,00 or the latter's total salaries for the 12 months
unexpired portion of the contract, but to the lesser amount of US$3,000.00 or the latter's salaries for 3 months out of
the 12-month unexpired term of the contract. On the other hand, OFW-D is spared from the effects of the subject
clause, for there are only 11 months left in the latter's contract period. Thus, OFW-D will be entitled to
US$11,000.00, which is equivalent to his/her total salaries for the entire 11-month unexpired portion.

OFWs vis-à-vis Local Workers
With Fixed-Period Employment

As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary awards of illegally
dismissed OFWs was in place. This uniform system was applicable even to local workers with fixed-term
employment.107

The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of Commerce
(1888),108 to wit:

Article 299. If the contracts between the merchants and their shop clerks and employees should have been made of
a fixed period, none of the contracting parties, without the consent of the other, may withdraw from the fulfillment of
said contract until the termination of the period agreed upon.

Persons violating this clause shall be subject to indemnify the loss and damage suffered, with the exception of the
provisions contained in the following articles.

In Reyes v. The Compañia Maritima,109 the Court applied the foregoing provision to determine the liability of a
shipping company for the illegal discharge of its managers prior to the expiration of their fixed-term employment.
The Court therein held the shipping company liable for the salaries of its managers for the remainder of their fixed-
term employment.

There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of Commerce which
provides:

Article 605. If the contracts of the captain and members of the crew with the agent should be for a definite period or
voyage, they cannot be discharged until the fulfillment of their contracts, except for reasons of insubordination in
serious matters, robbery, theft, habitual drunkenness, and damage caused to the vessel or to its cargo by malice or
manifest or proven negligence.

Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie,110 in

which the Court held the shipping company liable for the salaries and subsistence allowance of its illegally
dismissed employees for the entire unexpired portion of their employment contracts.

While Article 605 has remained good law up to the present,111 Article 299 of the Code of Commerce was replaced by
Art. 1586 of the Civil Code of 1889, to wit:

Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a certain work
cannot leave or be dismissed without sufficient cause, before the fulfillment of the contract. (Emphasis supplied.)

Citing Manresa, the Court in Lemoine v. Alkan112 read the disjunctive "or" in Article 1586 as a conjunctive "and" so as
to apply the provision to local workers who are employed for a time certain although for no particular skill. This
interpretation of Article 1586 was reiterated in Garcia Palomar v. Hotel de France Company.113 And in both Lemoine
and Palomar, the Court adopted the general principle that in actions for wrongful discharge founded on Article 1586,
local workers are entitled to recover damages to the extent of the amount stipulated to be paid to them by the terms
of their contract. On the computation of the amount of such damages, the Court in Aldaz v. Gay114 held:

The doctrine is well-established in American jurisprudence, and nothing has been brought to our attention to the
contrary under Spanish jurisprudence, that when an employee is wrongfully discharged it is his duty to seek other
employment of the same kind in the same community, for the purpose of reducing the damages resulting from such
wrongful discharge. However, while this is the general rule, the burden of showing that he failed to make an effort to
secure other employment of a like nature, and that other employment of a like nature was obtainable, is upon the
defendant. When an employee is wrongfully discharged under a contract of employment his prima facie damage is
the amount which he would be entitled to had he continued in such employment until the termination of the period.
(Howard vs. Daly, 61 N. Y., 362; Allen vs. Whitlark, 99 Mich., 492; Farrell vs. School District No. 2, 98 Mich.,
43.)115 (Emphasis supplied)

On August 30, 1950, the New Civil Code took effect with new provisions on fixed-term employment: Section 2
(Obligations with a Period), Chapter 3, Title I, and Sections 2 (Contract of Labor) and 3 (Contract for a Piece of
Work), Chapter 3, Title VIII, Book IV.116 Much like Article 1586 of the Civil Code of 1889, the new provisions of the
Civil Code do not expressly provide for the remedies available to a fixed-term worker who is illegally discharged.
However, it is noted that in Mackay Radio & Telegraph Co., Inc. v. Rich,117 the Court carried over the principles on
the payment of damages underlying Article 1586 of the Civil Code of 1889 and applied the same to a case involving
the illegal discharge of a local worker whose fixed-period employment contract was entered into in 1952, when the
new Civil Code was already in effect.118

More significantly, the same principles were applied to cases involving overseas Filipino workers whose fixed-term
employment contracts were illegally terminated, such as in First Asian Trans & Shipping Agency, Inc. v.
Ople,119 involving seafarers who were illegally discharged. In Teknika Skills and Trade Services, Inc. v. National
Labor Relations Commission,120 an OFW who was illegally dismissed prior to the expiration of her fixed-period
employment contract as a baby sitter, was awarded salaries corresponding to the unexpired portion of her contract.
The Court arrived at the same ruling in Anderson v. National Labor Relations Commission,121 which involved a
foreman hired in 1988 in Saudi Arabia for a fixed term of two years, but who was illegally dismissed after only nine
months on the job -- the Court awarded him salaries corresponding to 15 months, the unexpired portion of his
contract. In Asia World Recruitment, Inc. v. National Labor Relations Commission,122 a Filipino working as a security
officer in 1989 in Angola was awarded his salaries for the remaining period of his 12-month contract after he was
wrongfully discharged. Finally, in Vinta Maritime Co., Inc. v. National Labor Relations Commission, 123 an OFW
whose 12-month contract was illegally cut short in the second month was declared entitled to his salaries for the
remaining 10 months of his contract.

In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were illegally discharged
were treated alike in terms of the computation of their money claims: they were uniformly entitled to their salaries for
the entire unexpired portions of their contracts. But with the enactment of R.A. No. 8042, specifically the adoption of
the subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in their employment
contract have since been differently treated in that their money claims are subject to a 3-month cap, whereas no
such limitation is imposed on local workers with fixed-term employment.

The Court concludes that the subject clause contains a suspect classification in that, in the computation of
the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month cap on
the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims
of other OFWs or local workers with fixed-term employment. The subject clause singles out one
classification of OFWs and burdens it with a peculiar disadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution, the Court now
subjects the classification to a strict judicial scrutiny, and determines whether it serves a compelling state interest
through the least restrictive means.

What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the Constitution
and calibrated by history.124 It is akin to the paramount interest of the state125 for which some individual liberties must
give way, such as the public interest in safeguarding health or maintaining medical standards,126 or in maintaining
access to information on matters of public concern.127

In the present case, the Court dug deep into the records but found no compelling state interest that the subject
clause may possibly serve.

The OSG defends the subject clause as a police power measure "designed to protect the employment of Filipino
seafarers overseas x x x. By limiting the liability to three months [sic], Filipino seafarers have better chance of
getting hired by foreign employers." The limitation also protects the interest of local placement agencies, which
otherwise may be made to shoulder millions of pesos in "termination pay."128

The OSG explained further:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that
jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation.
Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for
the acts of the foreign employer. To protect them and to promote their continued helpful contribution in deploying
Filipino migrant workers, liability for money are reduced under Section 10 of RA 8042.

This measure redounds to the benefit of the migrant workers whose welfare the government seeks to promote. The
survival of legitimate placement agencies helps [assure] the government that migrant workers are properly deployed
and are employed under decent and humane conditions.129 (Emphasis supplied)

However, nowhere in the Comment or Memorandum does the OSG cite the source of its perception of the state
interest sought to be served by the subject clause.

The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio Gallego in sponsorship of House Bill
No. 14314 (HB 14314), from which the law originated;130 but the speech makes no reference to the underlying
reason for the adoption of the subject clause. That is only natural for none of the 29 provisions in HB 14314
resembles the subject clause.

On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to wit:

Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within
ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of the complaint, the claim arising out of an employer-employee relationship or by virtue of
any law or contract involving Filipino workers for overseas employment including claims for actual, moral, exemplary
and other forms of damages.

The liability of the principal and the recruitment/placement agency or any and all claims under this Section shall be
joint and several.

Any compromise/amicable settlement or voluntary agreement on any money claims exclusive of damages under this
Section shall not be less than fifty percent (50%) of such money claims: Provided, That any installment payments, if
applicable, to satisfy any such compromise or voluntary settlement shall not be more than two (2) months. Any
compromise/voluntary agreement in violation of this paragraph shall be null and void.
Non-compliance with the mandatory period for resolutions of cases provided under this Section shall subject the
responsible officials to any or all of the following penalties:

(1) The salary of any such official who fails to render his decision or resolution within the prescribed period
shall be, or caused to be, withheld until the said official complies therewith;

(2) Suspension for not more than ninety (90) days; or

(3) Dismissal from the service with disqualification to hold any appointive public office for five (5) years.

Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such
official may have incurred under other existing laws or rules and regulations as a consequence of violating the
provisions of this paragraph.

But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of money claims.

A rule on the computation of money claims containing the subject clause was inserted and eventually adopted as
the 5th paragraph of Section 10 of R.A. No. 8042. The Court examined the rationale of the subject clause in the
transcripts of the "Bicameral Conference Committee (Conference Committee) Meetings on the Magna Carta on
OCWs (Disagreeing Provisions of Senate Bill No. 2077 and House Bill No. 14314)." However, the Court finds no
discernible state interest, let alone a compelling one, that is sought to be protected or advanced by the adoption of
the subject clause.

In fine, the Government has failed to discharge its burden of proving the existence of a compelling state interest that
would justify the perpetuation of the discrimination against OFWs under the subject clause.

Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the employment of OFWs
by mitigating the solidary liability of placement agencies, such callous and cavalier rationale will have to be rejected.
There can never be a justification for any form of government action that alleviates the burden of one sector, but
imposes the same burden on another sector, especially when the favored sector is composed of private businesses
such as placement agencies, while the disadvantaged sector is composed of OFWs whose protection no less than
the Constitution commands. The idea that private business interest can be elevated to the level of a compelling
state interest is odious.

Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement agencies vis-a-
vis their foreign principals, there are mechanisms already in place that can be employed to achieve that purpose
without infringing on the constitutional rights of OFWs.

The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers,
dated February 4, 2002, imposes administrative disciplinary measures on erring foreign employers who default on
their contractual obligations to migrant workers and/or their Philippine agents. These disciplinary measures range
from temporary disqualification to preventive suspension. The POEA Rules and Regulations Governing the
Recruitment and Employment of Seafarers, dated May 23, 2003, contains similar administrative disciplinary
measures against erring foreign employers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement
agencies in enforcing the solidary liability of their foreign principals.

Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and
other OFWs to equal protection. 1avvphi1

Further, there would be certain misgivings if one is to approach the declaration of the unconstitutionality of the
subject clause from the lone perspective that the clause directly violates state policy on labor under Section
3,131 Article XIII of the Constitution.
While all the provisions of the 1987 Constitution are presumed self-executing,132 there are some which this Court has
declared not judicially enforceable, Article XIII being one,133 particularly Section 3 thereof, the nature of which, this
Court, in Agabon v. National Labor Relations Commission, 134 has described to be not self-actuating:

Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as self-executing in
the sense that these are automatically acknowledged and observed without need for any enabling legislation.
However, to declare that the constitutional provisions are enough to guarantee the full exercise of the rights
embodied therein, and the realization of ideals therein expressed, would be impractical, if not unrealistic. The
espousal of such view presents the dangerous tendency of being overbroad and exaggerated. The guarantees of
"full protection to labor" and "security of tenure", when examined in isolation, are facially unqualified, and the
broadest interpretation possible suggests a blanket shield in favor of labor against any form of removal regardless of
circumstance. This interpretation implies an unimpeachable right to continued employment-a utopian notion,
doubtless-but still hardly within the contemplation of the framers. Subsequent legislation is still needed to define the
parameters of these guaranteed rights to ensure the protection and promotion, not only the rights of the labor
sector, but of the employers' as well. Without specific and pertinent legislation, judicial bodies will be at a loss,
formulating their own conclusion to approximate at least the aims of the Constitution.

Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive enforceable
right to stave off the dismissal of an employee for just cause owing to the failure to serve proper notice or hearing.
As manifested by several framers of the 1987 Constitution, the provisions on social justice require legislative
enactments for their enforceability.135 (Emphasis added)

Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for the violation of
which the questioned clause may be declared unconstitutional. It may unwittingly risk opening the floodgates of
litigation to every worker or union over every conceivable violation of so broad a concept as social justice for labor.

It must be stressed that Section 3, Article XIII does not directly bestow on the working class any actual enforceable
right, but merely clothes it with the status of a sector for whom the Constitution urges protection through executive or
legislative action and judicial recognition. Its utility is best limited to being an impetus not just for the executive and
legislative departments, but for the judiciary as well, to protect the welfare of the working class. And it was in fact
consistent with that constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas)
Employee Association, Inc. v. Bangko Sentral ng Pilipinas, penned by then Associate Justice now Chief Justice
Reynato S. Puno, formulated the judicial precept that when the challenge to a statute is premised on the
perpetuation of prejudice against persons favored by the Constitution with special protection -- such as the working
class or a section thereof -- the Court may recognize the existence of a suspect classification and subject the same
to strict judicial scrutiny.

The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central Bank Employee
Association exaggerate the significance of Section 3, Article XIII is a groundless apprehension. Central Bank applied
Article XIII in conjunction with the equal protection clause. Article XIII, by itself, without the application of the equal
protection clause, has no life or force of its own as elucidated in Agabon.

Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's right to
substantive due process, for it deprives him of property, consisting of monetary benefits, without any existing valid
governmental purpose.136

The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the entitlement of
OFWs to their three-month salary in case of illegal dismissal, is to give them a better chance of getting hired by
foreign employers. This is plain speculation. As earlier discussed, there is nothing in the text of the law or the
records of the deliberations leading to its enactment or the pleadings of respondent that would indicate that there is
an existing governmental purpose for the subject clause, or even just a pretext of one.

The subject clause does not state or imply any definitive governmental purpose; and it is for that precise reason that
the clause violates not just petitioner's right to equal protection, but also her right to substantive due process under
Section 1,137 Article III of the Constitution.
The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired period of nine
months and 23 days of his employment contract, pursuant to law and jurisprudence prior to the enactment of R.A.
No. 8042.

On the Third Issue

Petitioner contends that his overtime and leave pay should form part of the salary basis in the computation of his
monetary award, because these are fixed benefits that have been stipulated into his contract.

Petitioner is mistaken.

The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like petitioner, DOLE
Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in which salary is
understood as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas overtime pay is
compensation for all work "performed" in excess of the regular eight hours, and holiday pay is compensation for any
work "performed" on designated rest days and holidays.

By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and holiday pay in the
computation of petitioner's monetary award, unless there is evidence that he performed work during those periods.
As the Court held in Centennial Transmarine, Inc. v. Dela Cruz,138

However, the payment of overtime pay and leave pay should be disallowed in light of our ruling in Cagampan v.
National Labor Relations Commission, to wit:

The rendition of overtime work and the submission of sufficient proof that said was actually performed are conditions
to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of 30% of
the basic monthly salary. In short, the contract provision guarantees the right to overtime pay but the entitlement to
such benefit must first be established.

In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is unwarranted since the
same is given during the actual service of the seamen.

WHEREFORE, the Court GRANTS the Petition. The subject clause "or for three months for every year of the
unexpired term, whichever is less" in the 5th paragraph of Section 10 of Republic Act No. 8042
is DECLARED UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005 Resolution of the
Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his salaries for the entire unexpired
portion of his employment contract consisting of nine months and 23 days computed at the rate of US$1,400.00 per
month.

No costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO

Associate Justice Associate Justice

ANTONIO T. CARPIO RENATO C. CORONA

 Associate Justice Associate Justice

CONCHITA CARPIO MORALES DANTE O. TINGA

Associate Justice Associate Justice

(On leave)
PRESBITERO J. VELASCO, JR.
MINITA V. CHICO-NAZARIO
Associate Justice
Associate Justice

ANTONIO EDUARDO B. NACHURA TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

(see concurring opinion)

DIOSDADO M. PERALTA
ARTURO D. BRION
Associate Justice
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO
Chief Justice

Footnotes

1
 http://www.un.org/News/Press/docs/2007/sgsm11084.doc.htm.

2
 Migrant Workers and Overseas Filipinos Act of 1995, effective July 15, 1995.

 Penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Associate Justices Lucas P.
3

Bersamin and Celia C. Librea-Leagogo; rollo, p. 231.

4
 Id. at 248.

5
 Rollo, p. 57.

6
 Id. at 58.

7
 Id. at 59.

8
 Id. at 48.

9
 Id. at 55.

 According to petitioner, this amount represents the pro-rated difference between the salary of
10

US$2,590.00 per month which he was supposed to receive as Chief Officer from March 19, 1998 to April 30,
1998 and the salary of US$1,850.00 per month which he was actually paid as Second Officer for the same
period. See LA Decision, rollo, pp. 107 and 112.

11
 Position Paper, id. at 53-54.
  The LA awarded petitioner US$45.00 out of the US$1,480.00 salary differential to which petitioner is
12

entitled in view of his having received from respondents US$1,435.00 as evidenced by receipts marked as
Annexes "F", "G" and "H", id. at 319-321.

13
 Id. at 114.

14
 Rollo, pp. 111-112.

15
 Id. at 124.

16
 Id. at 115.

17
 G.R. No. 129584, December 3, 1998, 299 SCRA 608.

18
 Appeal Memorandum, rollo, p. 121.

19
 Id. at 134.

20
 NLRC Decision, rollo, p. 140.

21
 Id. at 146-150.

22
 Id. at 153.

23
 Id. at 155.

24
 Id. at 166-177.

25
 CA Decision, id. at 239-241.

26
 Id. at 242.

27
 Id. at 248.

28
 Petition, rollo, p. 28.

29
 Id. at 787.

30
 Id. at 799.

31
 Rollo, p. 282

32
 Memorandum for Petitioner, id. at 741-742.

33
 Id. at 746-753.

 Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers
34

and promote their welfare.

35
 Rollo, pp. 763-766.

36
 Petition, id. at 735.

37
 Memorandum of the Solicitor General, rollo, p. 680.
38
 Memorandum for Petitioner, id. at 755.

39
 Id. at 761-763.

40
 Rollo, pp. 645-646 and 512-513.

 Alfredo L. Benipayo was Solicitor General at the time the Comment was filed. Antonio Eduardo B. Nachura
41

(now an Associate Justice of the Supreme Court) was Solicitor General when the Memorandum was filed.

42
 Memorandum of the Solicitor General, id. at 662-665.

43
 G.R. No. 113658, March 31, 1995, 243 SCRA 190.

44
 G.R. No. 110524, July 29, 2002, 385 SCRA 306.

45
 Memorandum of the Solicitor General, rollo, pp. 668-678.

46
 Id. at 682.

 The Province of North Cotabato v. The Government of the Republic of the Philippines Peace Panel on
47

Ancestral Domain, G.R. No. 183591 October 14, 2008.

48
 Automotive Industry Workers Alliance v. Romulo, G.R. No. 157509, January 18, 2005, 449 SCRA 1.

49
 David v. Macapagal-Arroyo, G.R. No. 171396, May 3, 2006, 489 SCRA 160.

50
 Arceta v. Mangrobang, G.R. No. 152895, June 15, 2004, 432 SCRA 136.

 Moldex Realty, Inc. v. Housing and Land Use Regulatory Board, G.R. No. 149719, June 21, 2007, 525
51

SCRA 198; Marasigan v. Marasigan, G.R. No. 156078, March 14, 2008, 548 SCRA 409.

52
 Matibag v. Benipayo, G.R. No. 149036, April 2, 2002, 380 SCRA 49.

53
 Rollo, p. 145.

54
 Id. at 166.

 Smart Communications, Inc. v. National Telecommunications Commission, G.R. No. 151908, August 12,
55

2003, 408 SCRA 678.

 Equi-Asia Placement, Inc. v. Department of Foreign Affairs, G.R. No. 152214, September 19, 2006, 502
56

SCRA 295.

57
 Memorandum for Petitioner, rollo, pp. 741-742.

58
 Ortigas & Co., Ltd. v. Court of Appeals, G.R. No. 126102, December 4, 2000, 346 SCRA 748.

 Picop Resources, Inc. v. Base Metals Mineral Resources Corporation, G.R. No. 163509, December 6,
59

2006, 510 SCRA 400.

 Walker v. Whitehead, 83 U.S. 314 (1873); Wood v. Lovett, 313 U.S. 362, 370 (1941); Intrata-Assurance
60

Corporation v. Republic of the Philippines, G.R. No. 156571, July 9, 2008; Smart Communications, Inc. v.
City of Davao, G.R. No. 155491, September 16, 2008.
  Executive Secretary v. Court of Appeals, G.R. No. 131719, May 25, 2004, 429 SCRA 81, citing JMM
61

Promotion and Management, Inc. v. Court of Appeals, G.R. No. 120095, August 5, 1996, 260 SCRA 319.

62
 Ortigas & Co., Ltd. v. Court of Appeals, supra note 58.

 Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers
63

and promote their welfare.

 Section 3, The State shall afford full protection to labor, local and overseas, organized and unorganized,
64

and promote full employment and equality of employment opportunities for all.

 See City of Manila v. Laguio, G.R. No. 118127, April 12, 2005, 455 SCRA 308; Pimentel III v. Commission
65

on Elections, G.R. No. 178413, March 13, 2008, 548 SCRA 169.

 League of Cities of the Philippines v. Commission on Elections G.R. No. 176951, November 18,
66

2008; Beltran v. Secretary of Health, G.R. No. 139147,November 25, 2005, 476 SCRA 168.

 Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, G.R. No. 78742, July
67

14, 1989, 175 SCRA 343.

68
 Los Angeles v. Almeda Books, Inc., 535 U.S. 425 (2002); Craig v. Boren, 429 US 190 (1976).

69
 There is also the "heightened scrutiny" standard of review which is less demanding than "strict scrutiny"
but more demanding than the standard rational relation test. Heightened scrutiny has generally been applied
to cases that involve discriminatory classifications based on sex or illegitimacy, such as in Plyler v. Doe, 457
U.S. 202, where a heightened scrutiny standard was used to invalidate a State's denial to the children of
illegal aliens of the free public education that it made available to other residents.

 America v. Dale, 530 U.S. 640 (2000); Parents Involved in Community Schools v. Seattle School District
70

No. 1, 551 U.S. (2007); http://www.supremecourtus.gov/opinions/06pdf/05-908.pdf.

71
 Adarand Constructors, Inc. v. Peña, 515 US 230 (1995).

72
 Grutter v. Bollinger, 539 US 306 (2003); Bernal v. Fainter, 467 US 216 (1984).

 The concept of suspect classification first emerged in the famous footnote in the opinion of Justice Harlan
73

Stone in U.S. v. Carolene Products Co., 304 U.S. 144 (1938), the full text of which footnote is reproduced
below:

There may be narrower scope for operation of the presumption of constitutionality when legislation
appears on its face to be within a specific prohibition of the Constitution, such as those of the first ten
amendments, which are deemed equally specific when held to be embraced within the Fourteenth.
See Stromberg v. California, 283 U.S. 359, 369-370; Lovell v. Griffin, 303 U.S. 444, 452.

It is unnecessary to consider now whether legislation which restricts those political processes which
can ordinarily be expected to bring about repeal of undesirable legislation is to be subjected to more
exacting judicial scrutiny under the general prohibitions of the Fourteenth Amendment than are most
other types of legislation. On restrictions upon the right to vote, see Nixon v. Herndon, 273 U.S. 536;
Nixon v. Condon, 286 U.S. 73; on restraints upon the dissemination of information, see Near v.
Minnesota ex rel. Olson, 283 U.S. 697, 713-714, 718-720, 722; Grosjean v. American Press Co.,
297 U.S. 233; Lovell v. Griffin, supra; on interferences with political organizations, see Stromberg v.
California, supra, 369; Fiske v. Kansas, 274 U.S. 380; Whitney v. California, 274 U.S. 357, 373-378;
Herndon v. Lowry, 301 U.S. 242, and see Holmes, J., in Gitlow v. New York, 268 U.S. 652, 673; as
to prohibition of peaceable assembly, see De Jonge v. Oregon, 299 U.S. 353, 365.

Nor need we enquire whether similar considerations enter into the review of statutes directed at
particular religious, Pierce v. Society of Sisters, 268 U.S. 510, or national, Meyer v. Nebraska, 262
 U.S. 390; Bartels v. Iowa, 262 U.S. 404; Farrington v. Tokushige, 273 U.S. 284, or racial minorities,
Nixon v. Herndon, supra; Nixon v. Condon, supra: whether prejudice against discrete and insular
minorities may be a special condition, which tends seriously to curtail the operation of those political
processes ordinarily to be relied upon to protect minorities, and which may call for a correspondingly
more searching judicial inquiry. Compare McCulloch v. Maryland, 4 Wheat. 316, 428; South Carolina
v. Barnwell Bros., 303 U.S. 177, 184, n 2, and cases cited.

 Korematsu v. United States, 323 U.S. 214 (1944); Regents of the University of California v. Bakke, 438
74

U.S. 265 (1978).

75
 Frontiero v. Richardson, 411 U.S. 677 (1973); U.S. v. Virginia, 518 U.S. 515 (1996).

76
 San Antonio Independent School District v. Rodriguez, 411 U.S. 1 (1973).

77
 G.R. No. 148208, December 15, 2004, 446 SCRA 299.

78
 Rollo, pp. 727 and 735.

79
 371 Phil. 827 (1999).

80
 Id. at 840-841.

81
 G.R. No. 131656, October 20, 1998, 297 SCRA 727.

82
 Id.

83
 Supra note 17.

84
 G.R. No. 166363, August 15, 2006, 498 SCRA 639.

85
 G.R. No. 162195, April 8, 2008, 550 SCRA 600.

86
 G.R. No. 180719, August 22, 2008.

87
 G.R. No. 172031, July 14, 2008, 558 SCRA 279.

88
 G.R. No. 157534, June 18, 2003 (Resolution).

89
 G.R. No. 153750, January 25, 2006, 480 SCRA 100.

90
 G.R. No. 148418, July 28, 2005, 464 SCRA 314.

91
 G.R. No. 148407, November 12, 2003, 415 SCRA 720.

92
 G.R. No. 156381, October 14, 2005, 473 SCRA 120.

93
 G.R. No. 157373, July 27, 2004, 435 SCRA 342.

94
 G.R. No. 144786, April 15, 2004, 427 SCRA 732.

95
 G.R. No. 177948, March 14, 2008, 548 SCRA 712.

96
 G.R. No. 151303, April 15, 2005, 456 SCRA 313.

97
 Asian Center v. National Labor Relations Commission, supra note 81.
98
 G.R. No. 143949, August 9, 2001, 362 SCRA 571.

99
 G.R. No. 123354, November 19, 1996, 264 SCRA 418.

100
 G.R. No. 109390, March 7, 1996, 254 SCRA 457.

101
 G.R. No. 112096, January 30, 1996, 252 SCRA 588.

102
 G.R. No. 145587, October 26, 2007, 537 SCRA 409.

103
 G.R. No. 123901, September 22, 1999, 315 SCRA 23.

104
 G.R. No. 157975, June 26, 2007, 525 SCRA 586.

105
 www.merriam-webster.com/dictionary visited on November 22, 2008 at 3:09.

106
 See also Flourish, supra note 95; and Athena, supra note 96.

107
 It is noted that both petitioner and the OSG drew comparisons between OFWs in general and local
workers in general. However, the Court finds that the more relevant comparison is between OFWs whose
employment is necessarily subject to a fixed term and local workers whose employment is also subject to a
fixed term.

 Promulgated on August 6, 1888 by Queen Maria Cristina of Spain and extended to the Philippines by
108

Royal Decree of August 8, 1888. It took effect on December 1, 1888.

109
 No. 1133, March 29, 1904, 3 SCRA 519.

110
 No. L-8431, October 30, 1958, 104 SCRA 748.

 See also Wallem Philippines Shipping, Inc. v. Hon. Minister of Labor, No. L-50734-37, February 20, 1981,
111

102 scra 835, where Madrigal Shipping Company, Inc. v. Ogilvie is cited.

112
 No. L-10422, January 11, 1916, 33 SCRA 162.

113
 No. L-15878, January 11, 1922, 42 SCRA 660.

114
 7 Phil. 268 (1907).

115
 See also Knust v. Morse, 41 Phil 184 (1920).

116
 Brent School, Inc. v. Zamora, No. L-48494, February 5, 1990, 181 SCRA 702.

117
 No. L-22608, June 30, 1969, 28 SCRA 699.

 The Labor Code itself does not contain a specific provision for local workers with fixed-term employment
118

contracts. As the Court observed in Brent School, Inc., the concept of fixed-term employment has slowly
faded away from our labor laws, such that reference to our labor laws is of limited use in determining the
monetary benefits to be awarded to fixed-term workers who are illegally dismissed.

119
 No. L-65545, July 9, 1986., 142 SCRA 542.

120
 G.R. No. 100399, August 4, 1992, 212 SCRA 132.

121
 G.R. No. 111212, January 22, 1996, 252 SCRA 116.
122
 G.R. No. 113363, August 24, 1999, 313 SCRA 1.

123
 G.R. No. 113911, January 23, 1998, 284 SCRA 656.

124
 See Estrada v. Escritor, A.M. No. P-02-1651, August 4, 2003, 408 SCRA 1.

125
 Id.

 Roe v. Wade, 410 U.S. 113 (1971); see also Carey v. Population Service International, 431 U.S. 678
126

(1977).

127
 Sabio v. Gordon, G.R. Nos. 174340, 174318, 174177, October 16, 2006, 504 SCRA 704.

128
 Comment, rollo, p. 555.

129
 Memorandum of the Solicitor General, id. at 682-683

130
 Id. at p. 693.

 Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,
131

and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor to its
just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to
expansion and growth.

 Manila Prince Hotel v. Government Service Insurance System, G.R. No. 122156, February 3, 1997, 267
132

SCRA 408.

133
 Basco v. Philippine Amusement and Gaming Corporation, G.R. No. 91649, May 14, 1991, 197 SCRA 52.

134
 G.R. No. 158693, November 17, 2004, 442 SCRA 573.

135
 Agabon v. National Labor Relations Commission, supra note 134, at 686.

 Associated Communications and Wireless Services, Ltd. v. Dumlao, G. R. No. 136762, November 21,
136

2002, 392 SCRA 269.

 Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any
137

person be denied the equal protection of the laws.

 G.R. No. 180719, August 22, 2008. See also PCL Shipping Philippines, Inc. v. National Labor Relations
138

Commission. G.R. No. 153031, December 14, 2006, 511 SCRA 44.
G.R. No. 118295 May 2, 1997

WIGBERTO E. TAÑADA and ANNA DOMINIQUE COSETENG, as members of the Philippine Senate and as
taxpayers; GREGORIO ANDOLANA and JOKER ARROYO as members of the House of Representatives and
as taxpayers; NICANOR P. PERLAS and HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES
UNION, NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION, CENTER FOR ALTERNATIVE
DEVELOPMENT INITIATIVES, LIKAS-KAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL
RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS, INC., and
PHILIPPINE PEASANT INSTITUTE, in representation of various taxpayers and as non-governmental
organizations, petitioners,
vs.
EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ, AGAPITO
AQUINO, RODOLFO BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA.
MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS OPLE, JOHN OSMEÑA, SANTANINA RASUL, RAMON
REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their respective capacities as
members of the Philippine Senate who concurred in the ratification by the President of the Philippines of
the Agreement Establishing the World Trade Organization; SALVADOR ENRIQUEZ, in his capacity as
Secretary of Budget and Management; CARIDAD VALDEHUESA, in her capacity as National Treasurer;
RIZALINO NAVARRO, in his capacity as Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his
capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as Secretary of Finance;
ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs; and TEOFISTO T. GUINGONA, in his
capacity as Executive Secretary, respondents.

PANGANIBAN, J.:

The emergence on January 1, 1995 of the World Trade Organization, abetted by the membership thereto of the vast
majority of countries has revolutionized international business and economic relations amongst states. It has
irreversibly propelled the world towards trade liberalization and economic globalization. Liberalization, globalization,
deregulation and privatization, the third-millennium buzz words, are ushering in a new borderless world of business
by sweeping away as mere historical relics the heretofore traditional modes of promoting and protecting national
economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax exemptions and currency
controls. Finding market niches and becoming the best in specific industries in a market-driven and export-oriented
global scenario are replacing age-old "beggar-thy-neighbor" policies that unilaterally protect weak and inefficient
domestic producers of goods and services. In the words of Peter Drucker, the well-known management guru,
"Increased participation in the world economy has become the key to domestic economic growth and prosperity."

Brief Historical Background

To hasten worldwide recovery from the devastation wrought by the Second World War, plans for the establishment
of three multilateral institutions — inspired by that grand political body, the United Nations — were discussed at
Dumbarton Oaks and Bretton Woods. The first was the World Bank (WB) which was to address the rehabilitation
and reconstruction of war-ravaged and later developing countries; the second, the International Monetary Fund
(IMF) which was to deal with currency problems; and the third, the International Trade Organization (ITO), which
was to foster order and predictability in world trade and to minimize unilateral protectionist policies that invite
challenge, even retaliation, from other states. However, for a variety of reasons, including its non-ratification by the
United States, the ITO, unlike the IMF and WB, never took off. What remained was only GATT — the General
Agreement on Tariffs and Trade. GATT was a collection of treaties governing access to the economies of treaty
adherents with no institutionalized body administering the agreements or dependable system of dispute settlement.

After half a century and several dizzying rounds of negotiations, principally the Kennedy Round, the Tokyo Round
and the Uruguay Round, the world finally gave birth to that administering body — the World Trade Organization —
with the signing of the "Final Act" in Marrakesh, Morocco and the ratification of the WTO Agreement by its
members. 1
Like many other developing countries, the Philippines joined WTO as a founding member with the goal, as
articulated by President Fidel V. Ramos in two letters to the Senate (infra), of improving "Philippine access to foreign
markets, especially its major trading partners, through the reduction of tariffs on its exports, particularly agricultural
and industrial products." The President also saw in the WTO the opening of "new opportunities for the services
sector . . . , (the reduction of) costs and uncertainty associated with exporting . . . , and (the attraction of) more
investments into the country." Although the Chief Executive did not expressly mention it in his letter, the Philippines
— and this is of special interest to the legal profession — will benefit from the WTO system of dispute settlement by
judicial adjudication through the independent WTO settlement bodies called (1) Dispute Settlement Panels and (2)
Appellate Tribunal. Heretofore, trade disputes were settled mainly through negotiations where solutions were arrived
at frequently on the basis of relative bargaining strengths, and where naturally, weak and underdeveloped countries
were at a disadvantage.

The Petition in Brief

Arguing mainly (1) that the WTO requires the Philippines "to place nationals and products of member-countries on
the same footing as Filipinos and local products" and (2) that the WTO "intrudes, limits and/or impairs" the
constitutional powers of both Congress and the Supreme Court, the instant petition before this Court assails the
WTO Agreement for violating the mandate of the 1987 Constitution to "develop a self-reliant and independent
national economy effectively controlled by Filipinos . . . (to) give preference to qualified Filipinos (and to) promote
the preferential use of Filipino labor, domestic materials and locally produced goods."

Simply stated, does the Philippine Constitution prohibit Philippine participation in worldwide trade liberalization and
economic globalization? Does it proscribe Philippine integration into a global economy that is liberalized,
deregulated and privatized? These are the main questions raised in this petition for certiorari, prohibition
and mandamus under Rule 65 of the Rules of Court praying (1) for the nullification, on constitutional grounds, of the
concurrence of the Philippine Senate in the ratification by the President of the Philippines of the Agreement
Establishing the World Trade Organization (WTO Agreement, for brevity) and (2) for the prohibition of its
implementation and enforcement through the release and utilization of public funds, the assignment of public
officials and employees, as well as the use of government properties and resources by respondent-heads of various
executive offices concerned therewith. This concurrence is embodied in Senate Resolution No. 97, dated December
14, 1994.

The Facts

On April 15, 1994, Respondent Rizalino Navarro, then Secretary of The Department of Trade and Industry
(Secretary Navarro, for brevity), representing the Government of the Republic of the Philippines, signed in
Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations (Final
Act, for brevity).

By signing the Final Act,  Secretary Navarro on behalf of the Republic of the Philippines, agreed:
2

(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective
competent authorities, with a view to seeking approval of the Agreement in accordance with their
procedures; and

(b) to adopt the Ministerial Declarations and Decisions.

On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994 from the
President of the Philippines,  stating among others that "the Uruguay Round Final Act is hereby submitted to the
3

Senate for its concurrence pursuant to Section 21, Article VII of the Constitution."

On August 13, 1994, the members of the Philippine Senate received another letter from the President of the
Philippines  likewise dated August 11, 1994, which stated among others that "the Uruguay Round Final Act, the
4

Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions, and the
Understanding on Commitments in Financial Services are hereby submitted to the Senate for its concurrence
pursuant to Section 21, Article VII of the Constitution."
On December 9, 1994, the President of the Philippines certified the necessity of the immediate adoption of P.S.
1083, a resolution entitled "Concurring in the Ratification of the Agreement Establishing the World Trade
Organization."5

On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which "Resolved, as it is hereby resolved,
that the Senate concur, as it hereby concurs, in the ratification by the President of the Philippines of the Agreement
Establishing the World Trade Organization."  The text of the WTO Agreement is written on pages 137 et seq. of
6

Volume I of the 36-volume Uruguay Round of Multilateral Trade Negotiations and includes various agreements and
associated legal instruments (identified in the said Agreement as Annexes 1, 2 and 3 thereto and collectively
referred to as Multilateral Trade Agreements, for brevity) as follows:

ANNEX 1

Annex 1A: Multilateral Agreement on Trade in Goods

General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of he
General Agreement on Tariffs and Trade
1994
Agreement on Implementation of Article VII of the
General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating
Measures
Agreement on Safeguards

Annex 1B: General Agreement on Trade in Services and Annexes

Annex 1C: Agreement on Trade-Related Aspects of Intellectual

Property Rights

ANNEX 2

Understanding on Rules and Procedures Governing

the Settlement of Disputes

ANNEX 3

Trade Policy Review Mechanism

On December 16, 1994, the President of the Philippines signed  the Instrument of Ratification, declaring:
7

NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic of the
Philippines, after having seen and considered the aforementioned Agreement Establishing the World
Trade Organization and the agreements and associated legal instruments included in Annexes one
(1), two (2) and three (3) of that Agreement which are integral parts thereof, signed at Marrakesh,
Morocco on 15 April 1994, do hereby ratify and confirm the same and every Article and Clause
thereof.
To emphasize, the WTO Agreement ratified by the President of the Philippines is composed of the Agreement
Proper and "the associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement
which are integral parts thereof."

On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO Agreement (and its
integral annexes aforementioned) but also (1) the Ministerial Declarations and Decisions and (2) the Understanding
on Commitments in Financial Services. In his Memorandum dated May 13, 1996,  the Solicitor General describes
8

these two latter documents as follows:

The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a wide
range of matters, such as measures in favor of least developed countries, notification procedures,
relationship of WTO with the International Monetary Fund (IMF), and agreements on technical
barriers to trade and on dispute settlement.

The Understanding on Commitments in Financial Services dwell on, among other things, standstill or
limitations and qualifications of commitments to existing non-conforming measures, market access,
national treatment, and definitions of non-resident supplier of financial services, commercial
presence and new financial service.

On December 29, 1994, the present petition was filed. After careful deliberation on respondents' comment and
petitioners' reply thereto, the Court resolved on December 12, 1995, to give due course to the petition, and the
parties thereafter filed their respective memoranda. The court also requested the Honorable Lilia R. Bautista, the
Philippine Ambassador to the United Nations stationed in Geneva, Switzerland, to submit a paper, hereafter referred
to as "Bautista Paper,"  for brevity, (1) providing a historical background of and (2) summarizing the said
9

agreements.

During the Oral Argument held on August 27, 1996, the Court directed:

(a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy and (2)
the transcript of proceedings/hearings in the Senate; and

(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties signed
prior to the Philippine adherence to the WTO Agreement, which derogate from Philippine
sovereignty and (2) copies of the multi-volume WTO Agreement and other documents mentioned in
the Final Act, as soon as possible.

After receipt of the foregoing documents, the Court said it would consider the case submitted for resolution. In a
Compliance dated September 16, 1996, the Solicitor General submitted a printed copy of the 36-volume Uruguay
Round of Multilateral Trade Negotiations, and in another Compliance dated October 24, 1996, he listed the various
"bilateral or multilateral treaties or international instruments involving derogation of Philippine sovereignty."
Petitioners, on the other hand, submitted their Compliance dated January 28, 1997, on January 30, 1997.

The Issues

In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows:

A. Whether the petition presents a political question or is otherwise not justiciable.

B. Whether the petitioner members of the Senate who participated in the deliberations and voting
leading to the concurrence are estopped from impugning the validity of the Agreement Establishing
the World Trade Organization or of the validity of the concurrence.

C. Whether the provisions of the Agreement Establishing the World Trade Organization contravene
the provisions of Sec. 19, Article II, and Secs. 10 and 12, Article XII, all of the 1987 Philippine
Constitution.
 D. Whether provisions of the Agreement Establishing the World Trade Organization unduly limit,
restrict and impair Philippine sovereignty specifically the legislative power which, under Sec. 2,
Article VI, 1987 Philippine Constitution is "vested in the Congress of the Philippines";

E. Whether provisions of the Agreement Establishing the World Trade Organization interfere with the
exercise of judicial power.

F. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to
lack or excess of jurisdiction when they voted for concurrence in the ratification of the
constitutionally-infirm Agreement Establishing the World Trade Organization.

G. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to
lack or excess of jurisdiction when they concurred only in the ratification of the Agreement
Establishing the World Trade Organization, and not with the Presidential submission which included
the Final Act, Ministerial Declaration and Decisions, and the Understanding on Commitments in
Financial Services.

On the other hand, the Solicitor General as counsel for respondents "synthesized the several issues raised by
petitioners into the following": 
10

1. Whether or not the provisions of the "Agreement Establishing the World Trade Organization and
the Agreements and Associated Legal Instruments included in Annexes one (1), two (2) and three
(3) of that agreement" cited by petitioners directly contravene or undermine the letter, spirit and
intent of Section 19, Article II and Sections 10 and 12, Article XII of the 1987 Constitution.

2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the exercise of
legislative power by Congress.

3. Whether or not certain provisions of the Agreement impair the exercise of judicial power by this
Honorable Court in promulgating the rules of evidence.

4. Whether or not the concurrence of the Senate "in the ratification by the President of the
Philippines of the Agreement establishing the World Trade Organization" implied rejection of the
treaty embodied in the Final Act.

By raising and arguing only four issues against the seven presented by petitioners, the Solicitor General has
effectively ignored three, namely: (1) whether the petition presents a political question or is otherwise not justiciable;
(2) whether petitioner-members of the Senate (Wigberto E. Tañada and Anna Dominique Coseteng) are estopped
from joining this suit; and (3) whether the respondent-members of the Senate acted in grave abuse of discretion
when they voted for concurrence in the ratification of the WTO Agreement. The foregoing notwithstanding, this Court
resolved to deal with these three issues thus:

(1) The "political question" issue — being very fundamental and vital, and being a matter that probes into the very
jurisdiction of this Court to hear and decide this case — was deliberated upon by the Court and will thus be ruled
upon as the first issue;

(2) The matter of estoppel will not be taken up because this defense is waivable and the respondents have
effectively waived it by not pursuing it in any of their pleadings; in any event, this issue, even if ruled in respondents'
favor, will not cause the petition's dismissal as there are petitioners other than the two senators, who are not
vulnerable to the defense of estoppel; and

(3) The issue of alleged grave abuse of discretion on the part of the respondent senators will be taken up as an
integral part of the disposition of the four issues raised by the Solicitor General.

During its deliberations on the case, the Court noted that the respondents did not question the locus standi of
petitioners. Hence, they are also deemed to have waived the benefit of such issue. They probably realized that
grave constitutional issues, expenditures of public funds and serious international commitments of the nation are
involved here, and that transcendental public interest requires that the substantive issues be met head on and
decided on the merits, rather than skirted or deflected by procedural matters.  11

To recapitulate, the issues that will be ruled upon shortly are:

(1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED,

DOES THE PETITION INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HAS NO
JURISDICTION?

(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES
CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE PHILIPPINE
CONSTITUTION?

(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR
IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY CONGRESS?

(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF

JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES ON EVIDENCE?

(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS ANNEXES
SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT,
MINISTERIAL DECLARATIONS AND DECISIONS, AND THE UNDERSTANDING ON
COMMITMENTS IN FINANCIAL SERVICES?

The First Issue: Does the Court

Have Jurisdiction Over the Controversy?

In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no
doubt raises a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed
the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. "The question
thus posed is judicial rather than political. The duty (to adjudicate) remains to assure that the supremacy of the
Constitution is upheld."   Once a "controversy as to the application or interpretation of a constitutional provision is
12

raised before this Court (as in the instant case), it becomes a legal issue which the Court is bound by constitutional
mandate to decide."  13

The jurisdiction of this Court to adjudicate the matters   raised in the petition is clearly set out in the 1987
14

Constitution,   as follows:

15

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

The foregoing text emphasizes the judicial department's duty and power to strike down grave abuse of discretion on
the part of any branch or instrumentality of government including Congress. It is an innovation in our political
law.   As explained by former Chief Justice Roberto Concepcion,   "the judiciary is the final arbiter on the question
16 17

of whether or not a branch of government or any of its officials has acted without jurisdiction or in excess of
jurisdiction or so capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction. This is not
only a judicial power but a duty to pass judgment on matters of this nature."

As this Court has repeatedly and firmly emphasized in many cases,   it will not shirk, digress from or abandon its
18

sacred duty and authority to uphold the Constitution in matters that involve grave abuse of discretion brought before
it in appropriate cases, committed by any officer, agency, instrumentality or department of the government.

As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate remedy in the
ordinary course of law, we have no hesitation at all in holding that this petition should be given due course and the
vital questions raised therein ruled upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition
and mandamus are appropriate remedies to raise constitutional issues and to review and/or prohibit/nullify, when
proper, acts of legislative and executive officials. On this, we have no equivocation.

We should stress that, in deciding to take jurisdiction over this petition, this Court will not review the wisdom of the
decision of the President and the Senate in enlisting the country into the WTO, or pass upon the merits of trade
liberalization as a policy espoused by said international body. Neither will it rule on the propriety of the government's
economic policy of reducing/removing tariffs, taxes, subsidies, quantitative restrictions, and other import/trade
barriers. Rather, it will only exercise its constitutional duty "to determine whether or not there had been a grave
abuse of discretion amounting to lack or excess of jurisdiction" on the part of the Senate in ratifying the WTO
Agreement and its three annexes.

Second Issue: The WTO Agreement

and Economic Nationalism

This is the lis mota, the main issue, raised by the petition.

Petitioners vigorously argue that the "letter, spirit and intent" of the Constitution mandating "economic nationalism"
are violated by the so-called "parity provisions" and "national treatment" clauses scattered in various parts not only
of the WTO Agreement and its annexes but also in the Ministerial Decisions and Declarations and in the
Understanding on Commitments in Financial Services.

Specifically, the "flagship" constitutional provisions referred to are Sec 19, Article II, and Secs. 10 and 12, Article XII,
of the Constitution, which are worded as follows:

Article II

DECLARATION OF PRINCIPLES
AND STATE POLICIES

x x x           x x x          x x x

Sec. 19. The State shall develop a self-reliant and independent national economy effectively
controlled by Filipinos.

x x x           x x x          x x x

Article XII

NATIONAL ECONOMY AND PATRIMONY

x x x           x x x          x x x

Sec. 10. . . . The Congress shall enact measures that will encourage the formation and operation of
enterprises whose capital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions covering the national economy and patrimony, the
State shall give preference to qualified Filipinos.

x x x           x x x          x x x

Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally
produced goods, and adopt measures that help make them competitive.

Petitioners aver that these sacred constitutional principles are desecrated by the following WTO provisions quoted in
their memorandum:  19
 a) In the area of investment measures related to trade in goods (TRIMS, for brevity):

Article 2

National Treatment and Quantitative Restrictions.

1. Without prejudice to other rights and obligations under GATT 1994, no Member
shall apply any TRIM that is inconsistent with the provisions of Article II or Article XI
of GATT 1994.

2. An illustrative list of TRIMS that are inconsistent with the obligations of general
elimination of quantitative restrictions provided for in paragraph I of Article XI of
GATT 1994 is contained in the Annex to this Agreement." (Agreement on Trade-
Related Investment Measures, Vol. 27, Uruguay Round, Legal Instruments, p.
22121, emphasis supplied).

The Annex referred to reads as follows:

ANNEX

Illustrative List

1. TRIMS that are inconsistent with the obligation of national treatment provided for in paragraph 4 of
Article III of GATT 1994 include those which are mandatory or enforceable under domestic law or
under administrative rulings, or compliance with which is necessary to obtain an advantage, and
which require:

(a) the purchase or use by an enterprise of products of domestic origin or from any
domestic source, whether specified in terms of particular products, in terms of
volume or value of products, or in terms of proportion of volume or value of its local
production; or

(b) that an enterprise's purchases or use of imported products be limited to an

amount related to the volume or value of local products that it exports.

2. TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions
provided for in paragraph 1 of Article XI of GATT 1994 include those which are mandatory or
enforceable under domestic laws or under administrative rulings, or compliance with which is
necessary to obtain an advantage, and which restrict:

(a) the importation by an enterprise of products used in or related to the local

production that it exports;

(b) the importation by an enterprise of products used in or related to its local

production by restricting its access to foreign exchange inflows attributable to the
enterprise; or

(c) the exportation or sale for export specified in terms of particular products, in terms
of volume or value of products, or in terms of a preparation of volume or value of its
local production. (Annex to the Agreement on Trade-Related Investment Measures,
Vol. 27, Uruguay Round Legal Documents, p. 22125, emphasis supplied).

The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:

The products of the territory of any contracting party imported into the territory of any
other contracting party shall be accorded treatment no less favorable than that
 accorded to like products of national origin in respect of laws, regulations and
requirements affecting their internal sale, offering for sale, purchase, transportation,
distribution or use, the provisions of this paragraph shall not prevent the application
of differential internal transportation charges which are based exclusively on the
economic operation of the means of transport and not on the nationality of the
product." (Article III, GATT 1947, as amended by the Protocol Modifying Part II, and
Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to paragraph
1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round,
Legal Instruments p. 177, emphasis supplied).

(b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity):

Each Member shall accord to the nationals of other Members treatment no less
favourable than that it accords to its own nationals with regard to the protection of
intellectual property. . . (par. 1 Article 3, Agreement on Trade-Related Aspect of
Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments, p. 25432
(emphasis supplied)

(c) In the area of the General Agreement on Trade in Services:

National Treatment

1. In the sectors inscribed in its schedule, and subject to any conditions and
qualifications set out therein, each Member shall accord to services and service
suppliers of any other Member, in respect of all measures affecting the supply of
services, treatment no less favourable than it accords to its own like services and
service suppliers.

2. A Member may meet the requirement of paragraph I by according to services and

service suppliers of any other Member, either formally suppliers of any other
Member, either formally identical treatment or formally different treatment to that it
accords to its own like services and service suppliers.

3. Formally identical or formally different treatment shall be considered to be less

favourable if it modifies the conditions of completion in favour of services or service
suppliers of the Member compared to like services or service suppliers of any other
Member. (Article XVII, General Agreement on Trade in Services, Vol. 28, Uruguay
Round Legal Instruments, p. 22610 emphasis supplied).

It is petitioners' position that the foregoing "national treatment" and "parity provisions" of the WTO Agreement "place
nationals and products of member countries on the same footing as Filipinos and local products," in contravention of
the "Filipino First" policy of the Constitution. They allegedly render meaningless the phrase "effectively controlled by
Filipinos." The constitutional conflict becomes more manifest when viewed in the context of the clear duty imposed
on the Philippines as a WTO member to ensure the conformity of its laws, regulations and administrative procedures
with its obligations as provided in the annexed agreements.   Petitioners further argue that these provisions
20

contravene constitutional limitations on the role exports play in national development and negate the preferential
treatment accorded to Filipino labor, domestic materials and locally produced goods.

On the other hand, respondents through the Solicitor General counter (1) that such Charter provisions are not self-
executing and merely set out general policies; (2) that these nationalistic portions of the Constitution invoked by
petitioners should not be read in isolation but should be related to other relevant provisions of Art. XII, particularly
Secs. 1 and 13 thereof; (3) that read properly, the cited WTO clauses do not conflict with Constitution; and (4) that
the WTO Agreement contains sufficient provisions to protect developing countries like the Philippines from the
harshness of sudden trade liberalization.

We shall now discuss and rule on these arguments.

 Declaration of Principles
Not Self-Executing

By its very title, Article II of the Constitution is a "declaration of principles and state policies." The counterpart of this
article in the 1935 Constitution   is called the "basic political creed of the nation" by Dean Vicente Sinco.   These
21 22

principles in Article II are not intended to be self-executing principles ready for enforcement through the
courts.   They are used by the judiciary as aids or as guides in the exercise of its power of judicial review, and by
23

the legislature in its enactment of laws. As held in the leading case of Kilosbayan, Incorporated vs. Morato,   the 24

principles and state policies enumerated in Article II and some sections of Article XII are not "self-executing
provisions, the disregard of which can give rise to a cause of action in the courts. They do not embody judicially
enforceable constitutional rights but guidelines for legislation."

In the same light, we held in Basco vs. Pagcor   that broad constitutional principles need legislative enactments to
25

implement the, thus:

On petitioners' allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12 (Family) and 13
(Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational
Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are merely
statements of principles and policies. As such, they are basically not self-executing, meaning a law
should be passed by Congress to clearly define and effectuate such principles.

In general, therefore, the 1935 provisions were not intended to be self-executing

principles ready for enforcement through the courts. They were rather directives
addressed to the executive and to the legislature. If the executive and the legislature
failed to heed the directives of the article, the available remedy was not judicial but
political. The electorate could express their displeasure with the failure of the
executive and the legislature through the language of the ballot. (Bernas, Vol. II, p.
2).

The reasons for denying a cause of action to an alleged infringement of board constitutional principles are sourced
from basic considerations of due process and the lack of judicial authority to wade "into the uncharted ocean of
social and economic policy making." Mr. Justice Florentino P. Feliciano in his concurring opinion in Oposa
vs. Factoran, Jr.,   explained these reasons as follows:
26

My suggestion is simply that petitioners must, before the trial court, show a more specific legal right
— a right cast in language of a significantly lower order of generality than Article II (15) of the
Constitution — that is or may be violated by the actions, or failures to act, imputed to the public
respondent by petitioners so that the trial court can validly render judgment grating all or part of the
relief prayed for. To my mind, the court should be understood as simply saying that such a more
specific legal right or rights may well exist in our corpus of law, considering the general policy
principles found in the Constitution and the existence of the Philippine Environment Code, and that
the trial court should have given petitioners an effective opportunity so to demonstrate, instead of
aborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component of a cause of action be
a specific, operable legal right, rather than a constitutional or statutory policy, for at least two (2)
reasons. One is that unless the legal right claimed to have been violated or disregarded is given
specification in operational terms, defendants may well be unable to defend themselves intelligently
and effectively; in other words, there are due process dimensions to this matter.

The second is a broader-gauge consideration — where a specific violation of law or applicable

regulation is not alleged or proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution
which reads:

Sec. 1. . . .
 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.
(Emphasis supplied)

When substantive standards as general as "the right to a balanced and healthy ecology" and "the
right to health" are combined with remedial standards as broad ranging as "a grave abuse of
discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully submitted, to
propel courts into the uncharted ocean of social and economic policy making. At least in respect of
the vast area of environmental protection and management, our courts have no claim to special
technical competence and experience and professional qualification. Where no specific, operable
norms and standards are shown to exist, then the policy making departments — the legislative and
executive departments — must be given a real and effective opportunity to fashion and promulgate
those norms and standards, and to implement them before the courts should intervene.

Economic Nationalism Should Be Read with

Other Constitutional Mandates to Attain
Balanced Development of Economy

On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down general principles relating to the
national economy and patrimony, should be read and understood in relation to the other sections in said article,
especially Secs. 1 and 13 thereof which read:

Sec. 1. The goals of the national economy are a more equitable distribution of opportunities, income,
and wealth; a sustained increase in the amount of goods and services produced by the nation for the
benefit of the people; and an expanding productivity as the key to raising the quality of life for all
especially the underprivileged.

The State shall promote industrialization and full employment based on sound agricultural
development and agrarian reform, through industries that make full and efficient use of human and
natural resources, and which are competitive in both domestic and foreign markets. However, the
State shall protect Filipino enterprises against unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given
optimum opportunity to develop. . . .

xxx xxx xxx

Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms
and arrangements of exchange on the basis of equality and reciprocity.

As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic development, as
follows:

1. A more equitable distribution of opportunities, income and wealth;

2. A sustained increase in the amount of goods and services provided by the nation for the benefit of the people;
and

3. An expanding productivity as the key to raising the quality of life for all especially the underprivileged.

With these goals in context, the Constitution then ordains the ideals of economic nationalism (1) by expressing
preference in favor of qualified Filipinos "in the grant of rights, privileges and concessions covering the national
economy and patrimony"   and in the use of "Filipino labor, domestic materials and locally-produced goods"; (2) by
27

mandating the State to "adopt measures that help make them competitive;   and (3) by requiring the State to
28

"develop a self-reliant and independent national economy effectively controlled by Filipinos."   In similar language,
29
the Constitution takes into account the realities of the outside world as it requires the pursuit of "a trade policy that
serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality ad
reciprocity";   and speaks of industries "which are competitive in both domestic and foreign markets" as well as of
30

the protection of "Filipino enterprises against unfair foreign competition and trade practices."

It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System, et al.,   this Court
31

held that "Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is
complete in itself and which needs no further guidelines or implementing laws or rule for its enforcement. From its
very words the provision does not require any legislation to put it in operation. It is per se judicially enforceable."
However, as the constitutional provision itself states, it is enforceable only in regard to "the grants of rights,
privileges and concessions covering national economy and patrimony" and not to every aspect of trade and
commerce. It refers to exceptions rather than the rule. The issue here is not whether this paragraph of Sec. 10 of
Art. XII is self-executing or not. Rather, the issue is whether, as a rule, there are enough balancing provisions in the
Constitution to allow the Senate to ratify the Philippine concurrence in the WTO Agreement. And we hold that there
are.

All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at
the same time, it recognizes the need for business exchange with the rest of the world on the bases of equality and
reciprocity and limits protection of Filipino enterprises only against foreign competition and trade practices that are
unfair.   In other words, the Constitution did not intend to pursue an isolationist policy. It did not shut out foreign
32

investments, goods and services in the development of the Philippine economy. While the Constitution does not
encourage the unlimited entry of foreign goods, services and investments into the country, it does not prohibit them
either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition
that is unfair.

WTO Recognizes Need to

Protect Weak Economies

Upon the other hand, respondents maintain that the WTO itself has some built-in advantages to protect weak and
developing economies, which comprise the vast majority of its members. Unlike in the UN where major states have
permanent seats and veto powers in the Security Council, in the WTO, decisions are made on the basis of
sovereign equality, with each member's vote equal in weight to that of any other. There is no WTO equivalent of the
UN Security Council.

WTO decides by consensus whenever possible, otherwise, decisions of the Ministerial Conference
and the General Council shall be taken by the majority of the votes cast, except in cases of
interpretation of the Agreement or waiver of the obligation of a member which would require three
fourths vote. Amendments would require two thirds vote in general. Amendments to MFN provisions
and the Amendments provision will require assent of all members. Any member may withdraw from
the Agreement upon the expiration of six months from the date of notice of withdrawals.  33

Hence, poor countries can protect their common interests more effectively through the WTO than through one-on-
one negotiations with developed countries. Within the WTO, developing countries can form powerful blocs to push
their economic agenda more decisively than outside the Organization. This is not merely a matter of practical
alliances but a negotiating strategy rooted in law. Thus, the basic principles underlying the WTO Agreement
recognize the need of developing countries like the Philippines to "share in the growth in international
trade commensurate with the needs of their economic development." These basic principles are found in the
preamble   of the WTO Agreement as follows:
34

The Parties to this Agreement,

Recognizing that their relations in the field of trade and economic endeavour should be conducted
with a view to raising standards of living, ensuring full employment and a large and steadily growing
volume of real income and effective demand, and expanding the production of and trade in goods
and services, while allowing for the optimal use of the world's resources in accordance with the
objective of sustainable development, seeking both to protect and preserve the environment and to
enhance the means for doing so in a manner consistent with their respective needs and concerns at
different levels of economic development,
 Recognizing further that there is need for positive efforts designed to ensure that developing
countries, and especially the least developed among them, secure a share in the growth in
international trade commensurate with the needs of their economic development,

Being desirous of contributing to these objectives by entering into reciprocal and mutually
advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade
and to the elimination of discriminatory treatment in international trade relations,

Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system
encompassing the General Agreement on Tariffs and Trade, the results of past trade liberalization
efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations,

Determined to preserve the basic principles and to further the objectives underlying this multilateral
trading system, . . . (emphasis supplied.)

Specific WTO Provisos

Protect Developing Countries

So too, the Solicitor General points out that pursuant to and consistent with the foregoing basic principles, the WTO
Agreement grants developing countries a more lenient treatment, giving their domestic industries some protection
from the rush of foreign competition. Thus, with respect to tariffs in general, preferential treatment is given to
developing countries in terms of the amount of tariff reduction and the period within which the reduction is to be
spread out. Specifically, GATT requires an average tariff reduction rate of 36% for developed countries to be
effected within a period of six (6) years while developing countries — including the Philippines — are required to
effect an average tariff reduction of only 24% within ten (10) years.

In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to agricultural

products by 20% over six (6) years, as compared to only 13% for developing countries to be effected within ten (10)
years.

In regard to export subsidy for agricultural products, GATT requires developed countries to reduce their budgetary
outlays for export subsidy by 36% and export volumes receiving export subsidy by 21% within a period of six (6)
years. For developing countries, however, the reduction rate is only two-thirds of that prescribed for developed
countries and a longer period of ten (10) years within which to effect such reduction.

Moreover, GATT itself has provided built-in protection from unfair foreign competition and trade practices including
anti-dumping measures, countervailing measures and safeguards against import surges. Where local businesses
are jeopardized by unfair foreign competition, the Philippines can avail of these measures. There is hardly therefore
any basis for the statement that under the WTO, local industries and enterprises will all be wiped out and that
Filipinos will be deprived of control of the economy. Quite the contrary, the weaker situations of developing nations
like the Philippines have been taken into account; thus, there would be no basis to say that in joining the WTO, the
respondents have gravely abused their discretion. True, they have made a bold decision to steer the ship of state
into the yet uncharted sea of economic liberalization. But such decision cannot be set aside on the ground of grave
abuse of discretion, simply because we disagree with it or simply because we believe only in other economic
policies. As earlier stated, the Court in taking jurisdiction of this case will not pass upon the advantages and
disadvantages of trade liberalization as an economic policy. It will only perform its constitutional duty of determining
whether the Senate committed grave abuse of discretion.

Constitution Does Not

Rule Out Foreign Competition

Furthermore, the constitutional policy of a "self-reliant and independent national economy"   does not necessarily
35

rule out the entry of foreign investments, goods and services. It contemplates neither "economic seclusion" nor
"mendicancy in the international community." As explained by Constitutional Commissioner Bernardo Villegas,
sponsor of this constitutional policy:
 Economic self-reliance is a primary objective of a developing country that is keenly aware of
overdependence on external assistance for even its most basic needs. It does not mean autarky or
economic seclusion; rather, it means avoiding mendicancy in the international community.
Independence refers to the freedom from undue foreign control of the national economy, especially
in such strategic industries as in the development of natural resources and public utilities. 36

The WTO reliance on "most favored nation," "national treatment," and "trade without discrimination" cannot be
struck down as unconstitutional as in fact they are rules of equality and reciprocity that apply to all WTO members.
Aside from envisioning a trade policy based on "equality and reciprocity,"   the fundamental law encourages
37

industries that are "competitive in both domestic and foreign markets," thereby demonstrating a clear policy against
a sheltered domestic trade environment, but one in favor of the gradual development of robust industries that can
compete with the best in the foreign markets. Indeed, Filipino managers and Filipino enterprises have shown
capability and tenacity to compete internationally. And given a free trade environment, Filipino entrepreneurs and
managers in Hongkong have demonstrated the Filipino capacity to grow and to prosper against the best offered
under a policy of laissez faire.

Constitution Favors Consumers,

Not Industries or Enterprises

The Constitution has not really shown any unbalanced bias in favor of any business or enterprise, nor does it
contain any specific pronouncement that Filipino companies should be pampered with a total proscription of foreign
competition. On the other hand, respondents claim that WTO/GATT aims to make available to the Filipino consumer
the best goods and services obtainable anywhere in the world at the most reasonable prices. Consequently, the
question boils down to whether WTO/GATT will favor the general welfare of the public at large.

Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality?

Will WTO/GATT succeed in promoting the Filipinos' general welfare because it will — as promised by its promoters
— expand the country's exports and generate more employment?

Will it bring more prosperity, employment, purchasing power and quality products at the most reasonable rates to
the Filipino public?

The responses to these questions involve "judgment calls" by our policy makers, for which they are answerable to
our people during appropriate electoral exercises. Such questions and the answers thereto are not subject to judicial
pronouncements based on grave abuse of discretion.

Constitution Designed to Meet

Future Events and Contingencies

No doubt, the WTO Agreement was not yet in existence when the Constitution was drafted and ratified in 1987. That
does not mean however that the Charter is necessarily flawed in the sense that its framers might not have
anticipated the advent of a borderless world of business. By the same token, the United Nations was not yet in
existence when the 1935 Constitution became effective. Did that necessarily mean that the then Constitution might
not have contemplated a diminution of the absoluteness of sovereignty when the Philippines signed the UN Charter,
thereby effectively surrendering part of its control over its foreign relations to the decisions of various UN organs like
the Security Council?

It is not difficult to answer this question. Constitutions are designed to meet not only the vagaries of contemporary
events. They should be interpreted to cover even future and unknown circumstances. It is to the credit of its drafters
that a Constitution can withstand the assaults of bigots and infidels but at the same time bend with the refreshing
winds of change necessitated by unfolding events. As one eminent political law writer and respected
jurist   explains:
38

The Constitution must be quintessential rather than superficial, the root and not the blossom, the
base and frame-work only of the edifice that is yet to rise. It is but the core of the dream that must
take shape, not in a twinkling by mandate of our delegates, but slowly "in the crucible of Filipino
 minds and hearts," where it will in time develop its sinews and gradually gather its strength and
finally achieve its substance. In fine, the Constitution cannot, like the goddess Athena, rise full-grown
from the brow of the Constitutional Convention, nor can it conjure by mere fiat an instant Utopia. It
must grow with the society it seeks to re-structure and march apace with the progress of the race,
drawing from the vicissitudes of history the dynamism and vitality that will keep it, far from becoming
a petrified rule, a pulsing, living law attuned to the heartbeat of the nation.

Third Issue: The WTO Agreement and Legislative Power

The WTO Agreement provides that "(e)ach Member shall ensure the conformity of its laws, regulations and
administrative procedures with its obligations as provided in the annexed Agreements."   Petitioners maintain that
39

this undertaking "unduly limits, restricts and impairs Philippine sovereignty, specifically the legislative power which
under Sec. 2, Article VI of the 1987 Philippine Constitution is vested in the Congress of the Philippines. It is an
assault on the sovereign powers of the Philippines because this means that Congress could not pass legislation that
will be good for our national interest and general welfare if such legislation will not conform with the WTO
Agreement, which not only relates to the trade in goods . . . but also to the flow of investments and money . . . as
well as to a whole slew of agreements on socio-cultural matters . . .  40

More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in the
Congress.   And while the Constitution allows Congress to authorize the President to fix tariff rates, import and
41

export quotas, tonnage and wharfage dues, and other duties or imposts, such authority is subject to "specified limits
and . . . such limitations and restrictions" as Congress may provide,   as in fact it did under Sec. 401 of the Tariff
42

and Customs Code.

Sovereignty Limited by
International Law and Treaties

This Court notes and appreciates the ferocity and passion by which petitioners stressed their arguments on this
issue. However, while sovereignty has traditionally been deemed absolute and all-encompassing on the domestic
level, it is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or
impliedly, as a member of the family of nations. Unquestionably, the Constitution did not envision a hermit-type
isolation of the country from the rest of the world. In its Declaration of Principles and State Policies, the Constitution
"adopts the generally accepted principles of international law as part of the law of the land, and adheres to the policy
of peace, equality, justice, freedom, cooperation and amity, with all nations."   By the doctrine of incorporation, the
43

country is bound by generally accepted principles of international law, which are considered to be automatically part
of our own laws.   One of the oldest and most fundamental rules in international law is pacta sunt servanda —
44

international agreements must be performed in good faith. "A treaty engagement is not a mere moral obligation but
creates a legally binding obligation on the parties . . . A state which has contracted valid international obligations is
bound to make in its legislations such modifications as may be necessary to ensure the fulfillment of the obligations
undertaken."  45

By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations
may surrender some aspects of their state power in exchange for greater benefits granted by or derived from a
convention or pact. After all, states, like individuals, live with coequals, and in pursuit of mutually covenanted
objectives and benefits, they also commonly agree to limit the exercise of their otherwise absolute rights. Thus,
treaties have been used to record agreements between States concerning such widely diverse matters as, for
example, the lease of naval bases, the sale or cession of territory, the termination of war, the regulation of conduct
of hostilities, the formation of alliances, the regulation of commercial relations, the settling of claims, the laying down
of rules governing conduct in peace and the establishment of international organizations.   The sovereignty of a
46

state therefore cannot in fact and in reality be considered absolute. Certain restrictions enter into the picture: (1)
limitations imposed by the very nature of membership in the family of nations and (2) limitations imposed by treaty
stipulations. As aptly put by John F. Kennedy, "Today, no nation can build its destiny alone. The age of self-
sufficient nationalism is over. The age of interdependence is here."  47

UN Charter and Other Treaties

Limit Sovereignty
Thus, when the Philippines joined the United Nations as one of its 51 charter members, it consented to restrict its
sovereign rights under the "concept of sovereignty as auto-limitation." -A Under Article 2 of the UN Charter, "(a)ll
47

members shall give the United Nations every assistance in any action it takes in accordance with the present
Charter, and shall refrain from giving assistance to any state against which the United Nations is taking preventive
or enforcement action." Such assistance includes payment of its corresponding share not merely in administrative
expenses but also in expenditures for the peace-keeping operations of the organization. In its advisory opinion of
July 20, 1961, the International Court of Justice held that money used by the United Nations Emergency Force in
the Middle East and in the Congo were "expenses of the United Nations" under Article 17, paragraph 2, of the UN
Charter. Hence, all its members must bear their corresponding share in such expenses. In this sense, the Philippine
Congress is restricted in its power to appropriate. It is compelled to appropriate funds whether it agrees with such
peace-keeping expenses or not. So too, under Article 105 of the said Charter, the UN and its representatives enjoy
diplomatic privileges and immunities, thereby limiting again the exercise of sovereignty of members within their own
territory. Another example: although "sovereign equality" and "domestic jurisdiction" of all members are set forth as
underlying principles in the UN Charter, such provisos are however subject to enforcement measures decided by
the Security Council for the maintenance of international peace and security under Chapter VII of the Charter. A final
example: under Article 103, "(i)n the event of a conflict between the obligations of the Members of the United
Nations under the present Charter and their obligations under any other international agreement, their obligation
under the present charter shall prevail," thus unquestionably denying the Philippines — as a member — the
sovereign power to make a choice as to which of conflicting obligations, if any, to honor.

Apart from the UN Treaty, the Philippines has entered into many other international pacts — both bilateral and
multilateral — that involve limitations on Philippine sovereignty. These are enumerated by the Solicitor General in
his Compliance dated October 24, 1996, as follows:

(a) Bilateral convention with the United States regarding taxes on income, where the Philippines
agreed, among others, to exempt from tax, income received in the Philippines by, among others, the
Federal Reserve Bank of the United States, the Export/Import Bank of the United States, the
Overseas Private Investment Corporation of the United States. Likewise, in said convention, wages,
salaries and similar remunerations paid by the United States to its citizens for labor and personal
services performed by them as employees or officials of the United States are exempt from income
tax by the Philippines.

(b) Bilateral agreement with Belgium, providing, among others, for the avoidance of double taxation
with respect to taxes on income.

(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation.

(d) Bilateral convention with the French Republic for the avoidance of double taxation.

(e) Bilateral air transport agreement with Korea where the Philippines agreed to exempt from all
customs duties, inspection fees and other duties or taxes aircrafts of South Korea and the regular
equipment, spare parts and supplies arriving with said aircrafts.

(f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt from customs
duties, excise taxes, inspection fees and other similar duties, taxes or charges fuel, lubricating oils,
spare parts, regular equipment, stores on board Japanese aircrafts while on Philippine soil.

(g) Bilateral air service agreement with Belgium where the Philippines granted Belgian air carriers
the same privileges as those granted to Japanese and Korean air carriers under separate air service
agreements.

(h) Bilateral notes with Israel for the abolition of transit and visitor visas where the Philippines
exempted Israeli nationals from the requirement of obtaining transit or visitor visas for a sojourn in
the Philippines not exceeding 59 days.

(i) Bilateral agreement with France exempting French nationals from the requirement of obtaining
transit and visitor visa for a sojourn not exceeding 59 days.
 (j) Multilateral Convention on Special Missions, where the Philippines agreed that premises of
Special Missions in the Philippines are inviolable and its agents can not enter said premises without
consent of the Head of Mission concerned. Special Missions are also exempted from customs
duties, taxes and related charges.

(k) Multilateral convention on the Law of Treaties. In this convention, the Philippines agreed to be
governed by the Vienna Convention on the Law of Treaties.

(l) Declaration of the President of the Philippines accepting compulsory jurisdiction of the
International Court of Justice. The International Court of Justice has jurisdiction in all legal disputes
concerning the interpretation of a treaty, any question of international law, the existence of any fact
which, if established, would constitute a breach "of international obligation."

In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of its sovereign powers of
taxation, eminent domain and police power. The underlying consideration in this partial surrender of sovereignty is
the reciprocal commitment of the other contracting states in granting the same privilege and immunities to the
Philippines, its officials and its citizens. The same reciprocity characterizes the Philippine commitments under WTO-
GATT.

International treaties, whether relating to nuclear disarmament, human rights, the environment, the
law of the sea, or trade, constrain domestic political sovereignty through the assumption of external
obligations. But unless anarchy in international relations is preferred as an alternative, in most cases
we accept that the benefits of the reciprocal obligations involved outweigh the costs associated with
any loss of political sovereignty. (T)rade treaties that structure relations by reference to durable, well-
defined substantive norms and objective dispute resolution procedures reduce the risks of larger
countries exploiting raw economic power to bully smaller countries, by subjecting power relations to
some form of legal ordering. In addition, smaller countries typically stand to gain disproportionately
from trade liberalization. This is due to the simple fact that liberalization will provide access to a
larger set of potential new trading relationship than in case of the larger country gaining enhanced
success to the smaller country's market.  48

The point is that, as shown by the foregoing treaties, a portion of sovereignty may be waived without violating the
Constitution, based on the rationale that the Philippines "adopts the generally accepted principles of international
law as part of the law of the land and adheres to the policy of . . . cooperation and amity with all nations."

Fourth Issue: The WTO Agreement and Judicial Power

Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic Principles of the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS)   intrudes on the power of the Supreme Court to
49

promulgate rules concerning pleading, practice and procedures.  50

To understand the scope and meaning of Article 34, TRIPS,   it will be fruitful to restate its full text as follows:
51

Article 34

Process Patents: Burden of Proof

1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner
referred to in paragraph 1 (b) of Article 28, if the subject matter of a patent is a process for obtaining
a product, the judicial authorities shall have the authority to order the defendant to prove that the
process to obtain an identical product is different from the patented process. Therefore, Members
shall provide, in at least one of the following circumstances, that any identical product when
produced without the consent of the patent owner shall, in the absence of proof to the contrary, be
deemed to have been obtained by the patented process:

(a) if the product obtained by the patented process is new;

 (b) if there is a substantial likelihood that the identical product was made by the
process and the owner of the patent has been unable through reasonable efforts to
determine the process actually used.

2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be on
the alleged infringer only if the condition referred to in subparagraph (a) is fulfilled or only if the
condition referred to in subparagraph (b) is fulfilled.

3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their
manufacturing and business secrets shall be taken into account.

From the above, a WTO Member is required to provide a rule of disputable (not the words "in the absence of proof
to the contrary") presumption that a product shown to be identical to one produced with the use of a patented
process shall be deemed to have been obtained by the (illegal) use of the said patented process, (1) where such
product obtained by the patented product is new, or (2) where there is "substantial likelihood" that the identical
product was made with the use of the said patented process but the owner of the patent could not determine the
exact process used in obtaining such identical product. Hence, the "burden of proof" contemplated by Article 34
should actually be understood as the duty of the alleged patent infringer to overthrow such presumption. Such
burden, properly understood, actually refers to the "burden of evidence" (burden of going forward) placed on the
producer of the identical (or fake) product to show that his product was produced without the use of the patented
process.

The foregoing notwithstanding, the patent owner still has the "burden of proof" since, regardless of the presumption
provided under paragraph 1 of Article 34, such owner still has to introduce evidence of the existence of the alleged
identical product, the fact that it is "identical" to the genuine one produced by the patented process and the fact of
"newness" of the genuine product or the fact of "substantial likelihood" that the identical product was made by the
patented process.

The foregoing should really present no problem in changing the rules of evidence as the present law on the subject,
Republic Act No. 165, as amended, otherwise known as the Patent Law, provides a similar presumption in cases of
infringement of patented design or utility model, thus:

Sec. 60. Infringement. — Infringement of a design patent or of a patent for utility model shall consist
in unauthorized copying of the patented design or utility model for the purpose of trade or industry in
the article or product and in the making, using or selling of the article or product copying the
patented design or utility model. Identity or substantial identity with the patented design or utility
model shall constitute evidence of copying. (emphasis supplied)

Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption applies only if
(1) the product obtained by the patented process in NEW or (2) there is a substantial likelihood that the identical
product was made by the process and the process owner has not been able through reasonable effort to determine
the process used. Where either of these two provisos does not obtain, members shall be free to determine the
appropriate method of implementing the provisions of TRIPS within their own internal systems and processes.

By and large, the arguments adduced in connection with our disposition of the third issue — derogation of legislative
power — will apply to this fourth issue also. Suffice it to say that the reciprocity clause more than justifies such
intrusion, if any actually exists. Besides, Article 34 does not contain an unreasonable burden, consistent as it is with
due process and the concept of adversarial dispute settlement inherent in our judicial system.

So too, since the Philippine is a signatory to most international conventions on patents, trademarks and copyrights,
the adjustment in legislation and rules of procedure will not be substantial. 52

Fifth Issue: Concurrence Only in the WTO Agreement and

Not in Other Documents Contained in the Final Act

Petitioners allege that the Senate concurrence in the WTO Agreement and its annexes — but not in the other
documents referred to in the Final Act, namely the Ministerial Declaration and Decisions and the Understanding on
Commitments in Financial Services — is defective and insufficient and thus constitutes abuse of discretion. They
submit that such concurrence in the WTO Agreement alone is flawed because it is in effect a rejection of the Final
Act, which in turn was the document signed by Secretary Navarro, in representation of the Republic upon authority
of the President. They contend that the second letter of the President to the Senate   which enumerated what
53

constitutes the Final Act should have been the subject of concurrence of the Senate.

"A final act, sometimes called protocol de cloture, is an instrument which records the winding up of the proceedings
of a diplomatic conference and usually includes a reproduction of the texts of treaties, conventions,
recommendations and other acts agreed upon and signed by the plenipotentiaries attending the conference."   It is 54

not the treaty itself. It is rather a summary of the proceedings of a protracted conference which may have taken
place over several years. The text of the "Final Act Embodying the Results of the Uruguay Round of Multilateral
Trade Negotiations" is contained in just one page   in Vol. I of the 36-volume Uruguay Round of Multilateral Trade
55

Negotiations. By signing said Final Act, Secretary Navarro as representative of the Republic of the Philippines
undertook:

(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective
competent authorities with a view to seeking approval of the Agreement in accordance with their
procedures; and

(b) to adopt the Ministerial Declarations and Decisions.

The assailed Senate Resolution No. 97 expressed concurrence in exactly what the Final Act required from its
signatories, namely, concurrence of the Senate in the WTO Agreement.

The Ministerial Declarations and Decisions were deemed adopted without need for ratification. They were approved
by the ministers by virtue of Article XXV: 1 of GATT which provides that representatives of the members can meet
"to give effect to those provisions of this Agreement which invoke joint action, and generally with a view to facilitating
the operation and furthering the objectives of this Agreement."  56

The Understanding on Commitments in Financial Services also approved in Marrakesh does not apply to the
Philippines. It applies only to those 27 Members which "have indicated in their respective schedules of commitments
on standstill, elimination of monopoly, expansion of operation of existing financial service suppliers, temporary entry
of personnel, free transfer and processing of information, and national treatment with respect to access to payment,
clearing systems and refinancing available in the normal course of business." 57

On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed included as its
integral parts,   as follows:
58

Article II

Scope of the WTO

1. The WTO shall provide the common institutional frame-work for the conduct of trade relations
among its Members in matters to the agreements and associated legal instruments included in the
Annexes to this Agreement.

2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3, (hereinafter
referred to as "Multilateral Agreements") are integral parts of this Agreement, binding on all
Members.

3. The Agreements and associated legal instruments included in Annex 4 (hereinafter referred to as
"Plurilateral Trade Agreements") are also part of this Agreement for those Members that have
accepted them, and are binding on those Members. The Plurilateral Trade Agreements do not create
either obligation or rights for Members that have not accepted them.

4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter referred
to as "GATT 1994") is legally distinct from the General Agreement on Tariffs and Trade, dated 30
 October 1947, annexed to the Final Act adopted at the conclusion of the Second Session of the
Preparatory Committee of the United Nations Conference on Trade and Employment, as
subsequently rectified, amended or modified (hereinafter referred to as "GATT 1947").

It should be added that the Senate was well-aware of what it was concurring in as shown by the members'
deliberation on August 25, 1994. After reading the letter of President Ramos dated August 11, 1994,   the senators
59

of the Republic minutely dissected what the Senate was concurring in, as follows:  60

THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in the first day
hearing of this Committee yesterday. Was the observation made by Senator Tañada that what was
submitted to the Senate was not the agreement on establishing the World Trade Organization by the
final act of the Uruguay Round which is not the same as the agreement establishing the World Trade
Organization? And on that basis, Senator Tolentino raised a point of order which, however, he
agreed to withdraw upon understanding that his suggestion for an alternative solution at that time
was acceptable. That suggestion was to treat the proceedings of the Committee as being in the
nature of briefings for Senators until the question of the submission could be clarified.

And so, Secretary Romulo, in effect, is the President submitting a new . . . is he making a new
submission which improves on the clarity of the first submission?

MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no
misunderstanding, it was his intention to clarify all matters by giving this letter.

THE CHAIRMAN: Thank you.

Can this Committee hear from Senator Tañada and later on Senator Tolentino since they were the
ones that raised this question yesterday?

Senator Tañada, please.

SEN. TAÑADA: Thank you, Mr. Chairman.

Based on what Secretary Romulo has read, it would now clearly appear that what is being submitted
to the Senate for ratification is not the Final Act of the Uruguay Round, but rather the Agreement on
the World Trade Organization as well as the Ministerial Declarations and Decisions, and the
Understanding and Commitments in Financial Services.

I am now satisfied with the wording of the new submission of President Ramos.

SEN. TAÑADA. . . . of President Ramos, Mr. Chairman.

THE CHAIRMAN. Thank you, Senator Tañada. Can we hear from Senator Tolentino? And after him
Senator Neptali Gonzales and Senator Lina.

SEN. TOLENTINO, Mr. Chairman, I have not seen the new submission actually transmitted to us
but I saw the draft of his earlier, and I think it now complies with the provisions of the Constitution,
and with the Final Act itself . The Constitution does not require us to ratify the Final Act. It requires
us to ratify the Agreement which is now being submitted. The Final Act itself specifies what is going
to be submitted to with the governments of the participants.

In paragraph 2 of the Final Act, we read and I quote:

By signing the present Final Act, the representatives agree: (a) to submit as appropriate the WTO
Agreement for the consideration of the respective competent authorities with a view to seeking
approval of the Agreement in accordance with their procedures.
 In other words, it is not the Final Act that was agreed to be submitted to the governments for
ratification or acceptance as whatever their constitutional procedures may provide but it is the World
Trade Organization Agreement. And if that is the one that is being submitted now, I think it satisfies
both the Constitution and the Final Act itself .

Thank you, Mr. Chairman.

THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.

SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record. And they

had been adequately reflected in the journal of yesterday's session and I don't see any need for
repeating the same.

Now, I would consider the new submission as an act ex abudante cautela.

THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any comment
on this?

SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of the
abundance of question. Then the new submission is, I believe, stating the obvious and therefore I
have no further comment to make.

Epilogue

In praying for the nullification of the Philippine ratification of the WTO Agreement, petitioners are invoking this
Court's constitutionally imposed duty "to determine whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction" on the part of the Senate in giving its concurrence therein via Senate
Resolution No. 97. Procedurally, a writ of certiorari grounded on grave abuse of discretion may be issued by the
Court under Rule 65 of the Rules of Court when it is amply shown that petitioners have no other plain, speedy and
adequate remedy in the ordinary course of law.

By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction.   Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is
61

exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and
so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at
all in contemplation of law.   Failure on the part of the petitioner to show grave abuse of discretion will result in the
62

dismissal of the petition.  63

In rendering this Decision, this Court never forgets that the Senate, whose act is under review, is one of two
sovereign houses of Congress and is thus entitled to great respect in its actions. It is itself a constitutional body
independent and coordinate, and thus its actions are presumed regular and done in good faith. Unless convincing
proof and persuasive arguments are presented to overthrow such presumptions, this Court will resolve every doubt
in its favor. Using the foregoing well-accepted definition of grave abuse of discretion and the presumption of
regularity in the Senate's processes, this Court cannot find any cogent reason to impute grave abuse of discretion to
the Senate's exercise of its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article VII of the
Constitution.  64

It is true, as alleged by petitioners, that broad constitutional principles require the State to develop an independent
national economy effectively controlled by Filipinos; and to protect and/or prefer Filipino labor, products, domestic
materials and locally produced goods. But it is equally true that such principles — while serving as judicial and
legislative guides — are not in themselves sources of causes of action. Moreover, there are other equally
fundamental constitutional principles relied upon by the Senate which mandate the pursuit of a "trade policy that
serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity" and the promotion of industries "which are competitive in both domestic and foreign markets," thereby
justifying its acceptance of said treaty. So too, the alleged impairment of sovereignty in the exercise of legislative
and judicial powers is balanced by the adoption of the generally accepted principles of international law as part of
the law of the land and the adherence of the Constitution to the policy of cooperation and amity with all nations.
That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent to the WTO
Agreement thereby making it "a part of the law of the land" is a legitimate exercise of its sovereign duty and power.
We find no "patent and gross" arbitrariness or despotism "by reason of passion or personal hostility" in such
exercise. It is not impossible to surmise that this Court, or at least some of its members, may even agree with
petitioners that it is more advantageous to the national interest to strike down Senate Resolution No. 97. But that
is not a legal reason to attribute grave abuse of discretion to the Senate and to nullify its decision. To do so would
constitute grave abuse in the exercise of our own judicial power and duty. Ineludably, what the Senate did was a
valid exercise of its authority. As to whether such exercise was wise, beneficial or viable is outside the realm of
judicial inquiry and review. That is a matter between the elected policy makers and the people. As to whether the
nation should join the worldwide march toward trade liberalization and economic globalization is a matter that our
people should determine in electing their policy makers. After all, the WTO Agreement allows withdrawal of
membership, should this be the political desire of a member.

The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian Renaissance   where
65

"the East will become the dominant region of the world economically, politically and culturally in the next century."
He refers to the "free market" espoused by WTO as the "catalyst" in this coming Asian ascendancy. There are at
present about 31 countries including China, Russia and Saudi Arabia negotiating for membership in the WTO.
Notwithstanding objections against possible limitations on national sovereignty, the WTO remains as the only viable
structure for multilateral trading and the veritable forum for the development of international trade law. The
alternative to WTO is isolation, stagnation, if not economic self-destruction. Duly enriched with original membership,
keenly aware of the advantages and disadvantages of globalization with its on-line experience, and endowed with a
vision of the future, the Philippines now straddles the crossroads of an international strategy for economic prosperity
and stability in the new millennium. Let the people, through their duly authorized elected officers, make their free
choice.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco, Hermosisima,
Jr. and Torres, Jr., JJ., concur.

Padilla and Vitug, JJ., concur in the result.

Footnotes

1 In Annex "A" of her Memorandum, dated August 8, 1996, received by this Court on August 12,
1996, Philippine Ambassador to the United Nations, World Trade Organization and other
international organizations Lilia R. Bautista (hereafter referred to as "Bautista Paper") submitted a
"46-year Chronology" of GATT as follows:

1947 The birth of GATT. On 30 October 1947, the General Agreement on Tariffs and
Trade (GATT) was signed by 23 nations at the Palais des Nations in Geneva. The
Agreement contained tariff concessions agreed to in the first multilateral trade
negotiations and a set of rules designed to prevent these concessions from being
frustrated by restrictive trade measures.

The 23 founding contracting parties were members of the Preparatory Committee

established by the United Nations Economic and Social Council in 1946 to draft the
charter of the International Trade Organization (ITO). The ITO was envisaged as the
final leg of a triad of post-War economic agencies (the other two were the
International Monetary Fund and the International Bank for Reconstruction — later
the World Bank).

In parallel with this task, the Committee members decided to negotiate tariff
concessions among themselves. From April to October 1947, the participants
completed some 123 negotiations and established 20 schedules containing the tariff
reductions and bindings which became an integral part of GATT. These schedules
resulting from the first Round covered some 45,000 tariff concessions and about $10
billion in trade.

GATT was conceived as an interim measure that put into effect the commercial-
policy provisions of the ITO. In November, delegations from 56 countries met in
Havana, Cuba, to consider the to ITO draft as a whole. After long and difficult
negotiations, some 53 countries signed the Final Act authenticating the text of the
Havana Charter in March 1948. There was no commitment, however, from
governments to ratification and, in the end, the ITO was stillborn, leaving GATT as
the only international instrument governing the conduct of world trade.

1948 Entry into force. On 1 January 1948, GATT entered into force. The 23 founding
members were: Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China,
Cuba, Czechoslovakia, France, India, Lebanon, Luxembourg, Netherlands, New
Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom
and the United States. The first Session of the Contracting Parties was held from
February to March in Havana, Cuba. The secretariat of the Interim Commission for
the ITO, which served as the ad hoc secretariat of GATT, moved from Lake Placid,
New York, to Geneva. The Contracting Parties held their second session in Geneva
from August to September.

1949 Second Round at Annecy. During the second Round of trade negotiations, held
from April to August at Annecy, France, the contracting parties exchanged some
5,000 tariff concessions. At their third Session, they also dealt with the accession of
ten more countries.

1950 Third Round at Torquay. From September 1950 to April 1951, the contracting
parties exchanged some 8,700 tariff concessions in the English town, yielding tariff
reduction of about 25 per cent in relation to the 1948 level. Four more countries
acceded to GATT. During the fifth Session of the Contracting Parties, the United
States indicated that the ITO Charter would not be re-submitted to the US Congress;
this, in effect, meant that ITO would not come into operation.

1956 Fourth Round at Geneva. The fourth Round was completed in May and
produced some $2.5 billion worth of tariff reductions. At the beginning of the year, the
GATT commercial policy course for officials of developing countries was inaugurated.

1958 The Haberler Report. GATT published Trends in International Trade in October.

Known as the "Haberler Report" in honour of Professor Gottfried Haberler, the
chairman of the panel of eminent economists, it provided initial guidelines for the
work of GATT. The Contracting Parties at their 13th Sessions, attended by Ministers,
subsequently established three committees in GATT: Committee I to convene a
further tariff negotiating conference; Committee II to review the agricultural policies of
member governments and Committee III to tackle the problem facing developing
countries in their trade. The establishment of the European Economic Community
during the previous year also demanded large-scale tariff negotiations under Article
XXIV: 6 of the General Agreement.

1960 The Dillon Round. The fifth Round opened in September and was divided into
two phases: the first was concerned with negotiations with EEC member states for
the creation of a single schedule of concessions for the Community based on its
Common External Tariff; and the second was a further general round of tariff
negotiations. Named in honour of US Under-Secretary of State Douglas Dillon who
proposed the negotiations, the Round was concluded in July 1962 and resulted in
about 4,400 tariff concessions covering $4.9 billion of trade.
1961 The Short-Term Arrangement covering cotton textiles was agreed as an
exception to the GATT rules. The arrangement permitted the negotiation of quota
restrictions affecting the exports of cotton-producing countries. In 1962 the "Short
Term" Arrangement became the "Long term" Arrangement, lasting until 1974 when
the Multifibre Arrangement entered into force.

1964 The Kennedy Round. Meeting at Ministerial level, a Trade Negotiations

Committee formally opened the Kennedy Round in May. In June 1967, the Round's
Final Act was signed by some 50 participating countries which together accounted
for 75 per cent of world trade. For the first time, negotiations departed from the
product-by-product approach used in the previous Rounds to an across-the-board or
linear method of cutting tariffs for industrial goods. The working hypothesis of a 50
per cent target cut in tariff levels was achieved in many areas. Concessions covered
an estimated total value of trade of about $410 billion. Separate agreements were
reached on grains, chemical products and a Code on Anti-Dumping.

1965 A New Chapter. The early 1960s marked the accession to the general
Agreement of many newly-independent developing countries. In February, the
Contracting Parties, meeting in a special session, adopted the text of Part IV on
Trade and Development. The additional chapter to the GATT required developed
countries to accord high priority to the reduction of trade barriers to products of
developing countries. A Committee on Trade and Development was established to
oversee the functioning of the new GATT provisions. In the preceding year, GATT
had established the International Trade Centre (ITC) to help developing countries in
trade promotion and identification of potential markets. Since 1968, the ITC had been
jointly operated by GATT and the UN Conference on Trade and Development
(UNCTAD).

1973 The Tokyo Round. The seventh Round was launched by Ministers in
September at the Japanese capital. Some 99 countries participated in negotiating a
comprehensive body of agreements covering both tariff and non-tariff matters. At the
end of the Round in November 1979, participants exchanged tariff reductions and
bindings which covered more than $300 billion of trade. As a result of these cuts, the
weighted average tariff on manufactured goods in the world's nine major industrial
markets declined from 7.0 to 4.7 per cent. Agreements were reached in the following
areas: subsidies and countervailing measures, technical barriers to trade, import
licensing procedures, government procurement, customs valuation, a revised anti-
dumping code, trade in bovine meat, trade in dairy products and trade in civil aircraft.
The first concrete result of the Round was the reduction of import duties and other
trade barriers by industrial countries on tropical products exported by developing
countries.

1974 On 1 January 1974, the Arrangement Regarding International Trade in Textiles,

otherwise known as the Multifibre Arrangement (MFA), entered into force. It
superseded the arrangements that had been governing trade in cotton textiles since
1961. The MFA seeks to promote the expansion and progressive liberalization of
trade in textile products while at the same time avoiding disruptive effects in
individual markets and lines of production. The MFA was extended in 1978, 1982,
1986, 1991 and 1992. MFA members account for most of the world exports of
textiles and clothing which in 1986 amounted to US$128 billion.

1982 Ministerial Meeting. Meeting for the first time in nearly ten years, the GATT
Ministers in November at Geneva reaffirmed the validity of GATT rules for the
conduct of international trade and committed themselves to combating protectionist
pressures. They also established a wide-ranging work programme for the GATT
which was to lay down the groundwork for a new Round 1986. The Uruguay Round.
The GATT Trade Ministers meeting at Punta del Este, Uruguay, launched the eighth
Round of trade negotiations on 20 September. The Punta del Este Declaration, while
 representing a single political undertaking, was divided into two sections. The first
covered negotiations on trade in goods and the second initiated negotiation on trade
in services. In the area of trade in goods, the Ministers committed themselves to a
"standstill" on new trade measures inconsistent with their GATT obligations and to a
"rollback" programme aimed at phasing out existing inconsistent measures.
Envisaged to last four years, negotiations started in early February 1987 in the
following areas tariffs, non-tariff measures, tropical products, natural resource-based
products, textiles and clothing, agriculture, subsidies, safe-guards, trade-related
aspects of intellectual property rights including trade in counterfeit goods, and trade-
related investment measures. The work of other groups included a review of GATT
articles, the GATT dispute settlement procedure, the Tokyo Round agreements, as
well as the functioning of the GATT system as a whole.

1994 "GATT 1994" is the updated version of GATT 1947 and takes into account the
substantive and institutional changes negotiated in the Uruguay Round GATT 1994
is an integral part of the World Trade Organization established on 1 January 1995. It
is agreed that there be a one year transition period during which certain GATT 1947
bodies and commitments would co-exist with those of the World Trade Organization.

2 The Final Act was signed by representatives of 125 entities, namely Algeria, Angola, Antigua and
Barbuda, Argentine Republic, Australia, Republic of Austria, State of Bahrain, People's Republic of
Bangladesh, Barbados, The Kingdom of Belgium Belize, Republic of Benin, Bolivia, Botswana,
Brazil, Brunei Darussalam, Burkina Faso, Burundi, Cameroon, Canada, Central African Republic,
Chad, Chile, People's Republic of China, Colombia, Congo, Costa Rica, Republic of Cote d'Ivoire,
Cuba, Cyprus, Czech Republic, Kingdom of Denmark, Commonwealth of Dominica, Dominican
Republic, Arab Republic of Egypt, El Salvador, European Communities, Republic of Fiji, Finland,
French Republic, Gabonese Republic, Gambia, Federal Republic of Germany, Ghana, Hellenic
Republic, Grenada, Guatemala, Republic of Guinea-Bissau, Republic of Guyana, Haiti, Honduras,
Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, State of Israel, Italian Republic, Jamaica,
Japan, Kenya, Korea, State of Kuwait, Kingdom of Lesotho, Principality of Liechtenstein, Grand
Duchy of Luxembourg, Macau, Republic of Madagascar, Republic of Malawi, Malaysia, Republic of
Maldives, Republic of Mali, Republic of Malta, Islamic Republic of Mauritania, Republic of Mauritius,
United Mexican States, Kingdom of Morocco, Republic of Mozambique, Union of Myanmar, Republic
of Namibia, Kingdom of the Netherlands, New Zealand, Nicaragua, Republic of Niger, Federal
Republic of Nigeria, Kingdom of Norway, Islamic Republic of Pakistan, Paraguay, Peru, Philippines,
Poland, Potuguese Republic, State of Qatar, Romania, Rwandese Republic, Saint Kitts and Nevis,
Saint Lucia, Saint Vincent and the Grenadines, Senegal, Sierra Leone, Singapore, Slovak Republic,
South Africa, Kingdom of Spain, Democratic Socialist Republic of Sri Lanka, Republic of Surinam,
Kingdom of Swaziland, Kingdom of Sweden, Swiss Confederation, United Republic of Tanzania,
Kingdom of Thailand, Togolese Republic, Republic of Trinidad and Tobago, Tunisia, Turkey,
Uganda, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, United States
of America, Eastern Republic of Uruguay, Venezuela, Republic of Zaire, Republic of Zambia,
Republic of Zimbabwe; see pp. 6-25, Vol. 1, Uruguay Round of Multilateral Trade Negotiations.

3 11 August 1994

The Honorable Members

Senate

Through Senate President Edgardo Angara

Manila

Ladies and Gentlemen:

I have the honor to forward herewith an authenticated copy of the Uruguay Round Final Act signed
by Department of Trade and Industry Secretary Rizalino S. Navarro for the Philippines on 15 April
1994 in Marrakesh, Morocco.

The Uruguay Round Final Act aims to liberalize and expand world trade and strengthen the
interrelationship between trade and economic policies affecting growth and development.

The Final Act will improve Philippine access to foreign markets, especially its major trading partners
through the reduction of tariffs on its exports particularly agricultural and industrial products. These
concessions may be availed of by the Philippines, only if it is a member of the World Trade
Organization. By GATT estimates, the Philippines can acquire additional export from $2.2 to $2.7
Billion annually under Uruguay Round. This will be on top of the normal increase in exports that the
Philippines may experience.

The Final Act will also open up new opportunities for the services sector in such areas as the
movement of personnel, (e.g. professional services and construction services), cross-border supply
(e.g. computer-related services), consumption abroad (e.g. tourism, convention services, etc.) and
commercial presence.

The clarified and improved rules and disciplines on anti-dumping and countervailing measures will
also benefit Philippine exporters by reducing the costs ad uncertainty associated with exporting while
at the same time providing means for domestic industries to safeguard themselves against unfair
imports.

Likewise, the provision of adequate protection for intellectual property rights is expected to attract
more investments into the country and to make it less vulnerable to unilateral actions by its trading
partners (e.g. Sec. 301 of the United States' Omnibus Trade Law).

In view of the foregoing, the Uruguay Round Final Act is hereby submitted to the Senate for its
concurrence pursuant to Section 21, Article VII of the Constitution.

A draft of a proposed Resolution giving its concurrence to the aforesaid Agreement is enclosed.

Very truly yours,

(SGD.) FIDEL V.
RAMOS

4 11 August 1994

The Honorable Members

Senate

Through Senate President Edgardo Angara

Manila

Ladies and Gentlemen:

I have the honor to forward herewith an authenticated copy of the Uruguay Round Final Act signed
by Department of Trade and Industry Secretary Rizalino S. Navarro for the Philippines on 13 April
1994 in Marrakech (sic), Morocco.

Members of the trade negotiations committee, which included the Philippines, agreed that the
Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions,
and the Understanding on Commitments in Financial Services embody the results of their
negotiations and form an integral part of the Uruguay Round Final Act.

By signing the Uruguay Round Final Act, the Philippines, through Secretary Navarro, agreed:

(a) To submit the Agreement Establishing the World Trade Organization to the Senate for its
concurrence pursuant to Section 21, Article VII of the Constitution; and

(b) To adopt the Ministerial Declarations and Decisions.

The Uruguay Round Final Act aims to liberalize and expand world trade and strengthen the
interrelationship between trade and economic policies affecting growth and development.

The Final Act will improve Philippine access to foreign markets, especially its major trading partners
through the reduction of tariffs on its exports particularly agricultural and industrial products. These
concessions may be availed of by the Philippines, only if it is a member of the World Trade
Organization. By GATT estimates, the Philippines can acquire additional export revenues from $2.2
to $2.7 Billion annually under Uruguay Round. This will be on top of the normal increase in the
exports that the Philippines may experience.

The Final Act will also open up new opportunities for the services sector in such areas as the
movement of personnel, (e.g., professional services and construction services), cross-border supply
(e.g., computer-related services), consumption abroad (e.g., tourism, convention services, etc.) and
commercial presence.

The clarified and improved rules ad disciplines on anti-dumping and countervailing measures will
also benefit Philippine exporters by reducing the costs and uncertainty associated with exporting
while at the same time providing a means for domestic industries to safeguard themselves against
unfair imports.

Likewise, the provision of adequate protection for intellectual property rights is expected to attract
more investments into the country and to make it a less vulnerable to unilateral actions by its trading
partners (e.g., Sec. 301 of the United States Omnibus Trade Law).

In view of the foregoing, the Uruguay Round Final Act, the Agreement Establishing the World Trade
Organization, the Ministerial Declarations and Decisions, and the Understanding on Commitments in
Financial Services, as embodied in the Uruguay Round Final Act and forming and integral part
thereof are hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of
the Constitution.

A draft of a proposed Resolution giving its concurrence to the aforesaid Agreement is enclosed.

Very truly yours,

(SGD.) FIDEL V.
RAMOS

5 December 9, 1994

HON. EDGARDO J. ANGARA

Senate President
Senate Manila

Dear Senate President Angara:

Pursuant to the provisions of Sec. 26 (2) Article VI of the Constitution, I hereby certify to the
necessity of the immediate adoption of P.S. 1083 entitled:

CONCURRING IN THE RATIFICATION OF THE AGREEMENT ESTABLISHING

THE WORLD TRADE ORGANIZATION

to meet a public emergency consisting of the need for immediate membership in the WTO in order to
assure the benefits to the Philippine economy arising from such membership.

Very truly yours,

(SGD.) FIDEL V.
RAMOS

6 Attached as Annex A, Petition; rollo, p. 52. P.S. 1083 is the forerunner of assailed Senate
Resolution No. 97. It was prepared by the Committee of the Whole on the General Agreement on
Tariffs and Trade chaired by Sen. Blas F. Ople and co-chaired by Sen. Gloria Macapagal-
Arroyo; see Annex C, Compliance of petitioners dated January 28, 1997.

7 The Philippines is thus considered an original or founding member of WTO, which as of July 26,
1996 had 123 members as follows: Antigua and Barbuda, Argentina, Australia, Austria, Bahrain,
Bangladesh, Barbados, Belguim, Belize, Benin, Bolivia, Botswana, Brazil, Brunei Darussalam,
Burkina Faso, Burundi, Cameroon, Canada, Central African Republic, Chili, Colombia, Costa Rica,
Cote d'Ivoire, Cuba, Cyprus, Czech Republic, Denmark, Djibouti, Dominica, Dominican Republic,
Ecuador, Egypt, El Salvador, European Community, Fiji, Finland, France, Gabon, Germany, Ghana,
Greece, Grenada, Guatemala, Guinea, Guinea Bissau, Guyana, Haiti, Honduras, Honkong,
Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kenya, Korea, Kuwait,
Lesotho, Liechtenstein, Luxembourg, Macau, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta,
Mauritania, Mauritius, Mexico, Morocco, Mozambique, Myanmar, Namibia, Netherlands — for the
Kingdom in Europe and for the Netherlands Antilles, New Zealand, Nicaragua, Nigeria, Norway,
Pakistan, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Portugal, Qatar, Romania,
Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent & the Grenadines, Senegal, Sierra Leone,
Singapore, Slovak Republic, Slovenia, Solomon Islands, South Africa, Spain, Sri Lanka, Surinam,
Swaziland, Sweden, Switzerland, Tanzania, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey,
Uganda, United Arab Emirates, United Kingdom, United States, Uruguay, Venezuela, Zambia, and
Zimbabwe. See Annex A, Bautista Paper, infra.

8 Page 6; rollo p. 261.

9 In compliance, Ambassador Bautista submitted to the Court on August 12, 1996, a Memorandum
(the "Bautista Paper") consisting of 56 pages excluding annexes. This is the same document
mentioned in footnote no. 1.

10 Memorandum for Respondents, p. 13; rollo, p. 268.

11 Cf . Kilosbayan Incorporated vs. Morato, 246 SCRA 540, July 17, 1995 for a discussion on locus
standi. See also the Concurring Opinion of Mr. Justice Vicente V. Mendoza in Tatad vs. Garcia, Jr.,
243 SCRA 473, April 6, 1995, as well as Kilusang Mayo Uno Labor Center vs. Garcia, Jr., 239
SCRA 386, 414, December 23, 1994.

12 Aquino, Jr. vs. Ponce Enrile, 59 SCRA 183, 196, September 17, 1974, cited in Bondoc vs.
Pineda, 201 SCRA 792, 795, September 26, 1991.
13 Guingona, Jr. vs. Gonzales, 219 SCRA 326, 337, March 1, 1993.

14 See Tañada and Macapagal vs. Cuenco, et al., 103 Phil. 1051 for a discussion on the scope of
"political question."

15 Section 1, Article VIII, (par. 2).

16 In a privilege speech on May 17, 1993, entitled "Supreme Court — Potential Tyrant?" Senator
Arturo Tolentino concedes that this new provision gives the Supreme Court a duty "to intrude into the
jurisdiction of the Congress or the President."

17 I Record of the Constitutional Commission 436.

18 Cf . Daza vs. Singson, 180 SCRA 496, December 21, 1989.

19 Memorandum for Petitioners, pp. 14-16; rollo, pp. 204-206.

20 Par. 4, Article XVI, WTO Agreement, Uruguay Round of Multilateral Trade Negotiations, Vol. 1. p.
146.

21 Also entitled "Declaration of Principles." The nomenclature in the 1973 Charter is identical with
that in the 1987's.

22 Philippine Political Law, 1962 Ed., p. 116.

23 Bernas, The Constitution of the Philippines: A Commentary, Vol. II, 1988 Ed., p. 2. In the very
recent case of Manila Prince Hotel v. GSIS, G.R. No. 122156, February 3, 1997, p. 8, it was held
that "A provision which lays down a general principle, such as those found in Art. II of the 1987
Constitution, is usually not self-executing."

24 246 SCRA 540, 564, July 17, 1995. See also Tolentino vs. Secretary of Finance, G.R. No.
115455 and consolidated cases, August 25, 1995.

25 197 SCRA 52, 68, May 14, 1991.

26 224 SCRA 792, 817, July 30, 1993.

27 Sec. 10, Article XII.

28 Sec. 12, Article XII.

29 Sec. 19, Art. II.

30 Sec. 13, Art. XII.

31 G.R. No. 122156, February 3, 1997, pp. 13-14.

32 Sec. 1, Art. XII.

33 Bautista Paper, p. 19.

34 Preamble, WTO Agreement p. 137, Vol. 1, Uruguay Round of Multilateral Trade Negotiations.
Emphasis supplied.

35 Sec. 19, Article II, Constitution.

36 III Records of the Constitutional Commission 252.

37 Sec. 13, Article XII, Constitution.

38 Justice Isagani A. Cruz, Philippine Political Law, 1995 Ed., p. 13, quoting his own article entitled,
"A Quintessential Constitution" earlier published in the San Beda Law Journal, April 1972; emphasis
supplied.

39 Par. 4, Article XVI (Miscellaneous Provisions), WTO Agreement, p. 146, Vol. 1, Uruguay Round
of Multilateral Trade Negotiations.

40 Memorandum for the Petitioners, p. 29; rollo, p. 219.

41 Sec. 24, Article VI, Constitution.

42 Subsection (2), Sec. 28, Article VI, Constitution.

43 Sec. 2, Article II, Constitution.

44 Cruz, Philippine Political Law, 1995 Ed., p. 55.

45 Salonga and Yap, op cit 305.

46 Salonga, op. cit., p. 287.

47 Quoted in Paras and Paras, Jr., International Law and World Politics, 1994 Ed., p. 178.

47-A Reagan vs. Commission of Internal Revenue, 30 SCRA 968, 973, December 27, 1969.

48 Trebilcock and Howse. The Regulation of International Trade, p. 14, London, 1995, cited on p.
55-56, Bautista Paper.

49 Uruguay Round of Multilateral Trade Negotiations, Vol. 31, p. 25445.

50 Item 5, Sec. 5, Article VIII, Constitution.

51 Uruguay Round of Multilateral Trade Negotiations, Vol. 31, p. 25445.

52 Bautista Paper, p. 13.

53 See footnote 3 of the text of this letter.

54 Salonga and Yap, op cit., pp. 289-290.

55 The full text, without the signatures, of the Final Act is as follows:

Final Act Embodying the Results of the

Uruguay Round of Multilateral Trade Negotiations

1. Having met in order to conclude the Uruguay Round of Multilateral Trade Negotiations,
representatives of the governments and of the European Communities, members of the Trade
Negotiations Committee, agree that the Agreement Establishing the World Trade Organization
(referred to in the Final Act as the "WTO Agreement"), the Ministerial Declarations and Decisions,
and the Understanding on Commitments in Financial Services, as annexed hereto, embody the
results of their negotiations and form an integral part of this Final Act.

2. By signing to the present Final Act, the representatives agree.

(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities with a view to seeking approval of the Agreement in
accordance with their procedures; and

(b) to adopt the Ministerial Declarations and Decisions.

3. The representatives agree on the desirability of acceptance of the WTO Agreement by all
participants in the Uruguay Round of Multilateral Trade Negotiations (hereinafter referred to as
"participants") with a view to its entry into force by 1 January 1995, or as early as possible thereafter.
Not later than late 1994, Ministers will meet, in accordance with the final paragraph of the Punta del
Este Ministerial Declarations, to decide on the international implementation of the results, including
the timing of their entry into force.

4. the representatives agree that the WTO Agreement shall be open for acceptance as a whole, by
signature or otherwise, by all participants pursuant to Article XIV thereof. The acceptance and entry
into force of a Plurilateral Trade Agreement included in Annex 4 of the WTO Agreement shall be
governed by the provisions of that Plurilateral Trade Agreement.

5. Before accepting the WTO Agreement, participants which are not contracting parties to the
General Agreement on Tariffs and Trade must first have concluded negotiations for their accession
to the General Agreement and become contracting parties thereto. For participants which are not
contracting parties to the general Agreement as of the date of the Final Act, the Schedules are not
definitive and shall be subsequently completed for the purpose of their accession to the General
Agreement and acceptance of the WTO Agreement.

6. This Final Act and the texts annexed hereto shall be deposited with the Director-General to the
CONTRACTING PARTIES to the General Agreement on Tariffs and Trade who shall promptly
furnish to each participant a certified copy thereof.

DONE at Marrakesh this fifteenth day of April one thousand nine hundred and ninety-four, in a single
copy, in the English, French and Spanish languages, each text being authentic.

56 Bautista Paper, p. 16.

57 Baustista Paper, p. 16.

58 Uruguay Round of Multilateral Trade Negotiations, Vol. I, pp. 137-138.

59 See footnote 3 for complete text.

60 Taken from pp. 63-85, "Respondent" Memorandum.

61 Zarate vs. Olegario, G.R. No. 90655, October 7, 1996.

62 San Sebastian College vs. Court of Appeals, 197 SCRA 138, 144, May 15, 1991; Commissioner
of Internal Revenue vs. Court of Tax Appeals, 195 SCRA 444, 458 March 20, 1991; Simon vs. Civil
Service Commission, 215 SCRA 410, November 5, 1992; Bustamante vs. Commissioner on Audit,
216 SCRA 134, 136, November 27, 1992.

63 Paredes vs. Civil Service Commission, 192 SCRA 84, 94, December 4, 1990.
 64 Sec. 21. 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."

65 Reader's Digest, December 1996 issue, p. 28.

G.R. No. 161872             April 13, 2004

REV. ELLY CHAVEZ PAMATONG, ESQUIRE, petitioner,

vs.
COMMISSION ON ELECTIONS, respondent.

RESOLUTION

TINGA, J.:

Petitioner Rev. Elly Velez Pamatong filed his Certificate of Candidacy for President on December 17, 2003.
Respondent Commission on Elections (COMELEC) refused to give due course to petitioner’s Certificate of
Candidacy in its Resolution No. 6558 dated January 17, 2004. The decision, however, was not unanimous since
Commissioners Luzviminda G. Tancangco and Mehol K. Sadain voted to include petitioner as they believed he had
parties or movements to back up his candidacy.

On January 15, 2004, petitioner moved for reconsideration of Resolution No. 6558. Petitioner’s Motion for
Reconsideration was docketed as SPP (MP) No. 04-001. The COMELEC, acting on petitioner’s Motion for
Reconsideration and on similar motions filed by other aspirants for national elective positions, denied the same
under the aegis of Omnibus Resolution No. 6604 dated February 11, 2004. The COMELEC declared petitioner and
thirty-five (35) others nuisance candidates who could not wage a nationwide campaign and/or are not nominated by
a political party or are not supported by a registered political party with a national constituency. Commissioner
Sadain maintained his vote for petitioner. By then, Commissioner Tancangco had retired.

In this Petition For Writ of Certiorari, petitioner seeks to reverse the resolutions which were allegedly rendered in
violation of his right to "equal access to opportunities for public service" under Section 26, Article II of the 1987

Constitution,1 by limiting the number of qualified candidates only to those who can afford to wage a nationwide
campaign and/or are nominated by political parties. In so doing, petitioner argues that the COMELEC indirectly
amended the constitutional provisions on the electoral process and limited the power of the sovereign people to
choose their leaders. The COMELEC supposedly erred in disqualifying him since he is the most qualified among all
the presidential candidates, i.e., he possesses all the constitutional and legal qualifications for the office of the
president, he is capable of waging a national campaign since he has numerous national organizations under his
leadership, he also has the capacity to wage an international campaign since he has practiced law in other
countries, and he has a platform of government. Petitioner likewise attacks the validity of the form for the Certificate
of Candidacy prepared by the COMELEC. Petitioner claims that the form does not provide clear and reasonable
guidelines for determining the qualifications of candidates since it does not ask for the candidate’s bio-data and his
program of government.

First, the constitutional and legal dimensions involved.

Implicit in the petitioner’s invocation of the constitutional provision ensuring "equal access to opportunities for public
office" is the claim that there is a constitutional right to run for or hold public office and, particularly in his case, to
seek the presidency. There is none. What is recognized is merely a privilege subject to limitations imposed by law.
Section 26, Article II of the Constitution neither bestows such a right nor elevates the privilege to the level of an
enforceable right. There is nothing in the plain language of the provision which suggests such a thrust or justifies an
interpretation of the sort.

The "equal access" provision is a subsumed part of Article II of the Constitution, entitled "Declaration of Principles
and State Policies." The provisions under the Article are generally considered not self-executing,2 and there is no
plausible reason for according a different treatment to the "equal access" provision. Like the rest of the policies
enumerated in Article II, the provision does not contain any judicially enforceable constitutional right but merely
specifies a guideline for legislative or executive action.3 The disregard of the provision does not give rise to any
cause of action before the courts.4

An inquiry into the intent of the framers5 produces the same determination that the provision is not self-executory.
The original wording of the present Section 26, Article II had read, "The State shall broaden opportunities to public
office and prohibit public dynasties."6 Commissioner (now Chief Justice) Hilario Davide, Jr. successfully brought
forth an amendment that changed the word "broaden" to the phrase "ensure equal access," and the substitution of
the word "office" to "service." He explained his proposal in this wise:

I changed the word "broaden" to "ENSURE EQUAL ACCESS TO" because what is important would be
equal access to the opportunity. If you broaden, it would necessarily mean that the government would
be mandated to create as many offices as are possible to accommodate as many people as are also
possible. That is the meaning of broadening opportunities to public service. So, in order that we should
not mandate the State to make the government the number one employer and to limit offices only to
what may be necessary and expedient yet offering equal opportunities to access to it, I change the
word "broaden."7 (emphasis supplied)

Obviously, the provision is not intended to compel the State to enact positive measures that would accommodate as
many people as possible into public office. The approval of the "Davide amendment" indicates the design of the
framers to cast the provision as simply enunciatory of a desired policy objective and not reflective of the imposition
of a clear State burden.

Moreover, the provision as written leaves much to be desired if it is to be regarded as the source of positive rights. It
is difficult to interpret the clause as operative in the absence of legislation since its effective means and reach are
not properly defined. Broadly written, the myriad of claims that can be subsumed under this rubric appear to be
entirely open-ended.8 Words and phrases such as "equal access," "opportunities," and "public service" are
susceptible to countless interpretations owing to their inherent impreciseness. Certainly, it was not the intention of
the framers to inflict on the people an operative but amorphous foundation from which innately unenforceable rights
may be sourced.

As earlier noted, the privilege of equal access to opportunities to public office may be subjected to limitations. Some
valid limitations specifically on the privilege to seek elective office are found in the provisions9 of the Omnibus
Election Code on "Nuisance Candidates" and COMELEC Resolution No. 645210 dated December 10, 2002 outlining
the instances wherein the COMELEC may motu proprio refuse to give due course to or cancel a Certificate of
Candidacy.

As long as the limitations apply to everybody equally without discrimination, however, the equal access clause is not
violated. Equality is not sacrificed as long as the burdens engendered by the limitations are meant to be borne by
any one who is minded to file a certificate of candidacy. In the case at bar, there is no showing that any person is
exempt from the limitations or the burdens which they create.

Significantly, petitioner does not challenge the constitutionality or validity of Section 69 of the Omnibus Election
Code and COMELEC Resolution No. 6452 dated 10 December 2003. Thus, their presumed validity stands and has
to be accorded due weight.

Clearly, therefore, petitioner’s reliance on the equal access clause in Section 26, Article II of the Constitution is
misplaced.

The rationale behind the prohibition against nuisance candidates and the disqualification of candidates who have
not evinced a bona fide intention to run for office is easy to divine. The State has a compelling interest to ensure
that its electoral exercises are rational, objective, and orderly. Towards this end, the State takes into account the
practical considerations in conducting elections. Inevitably, the greater the number of candidates, the greater the
opportunities for logistical confusion, not to mention the increased allocation of time and resources in preparation for
the election. These practical difficulties should, of course, never exempt the State from the conduct of a mandated
electoral exercise. At the same time, remedial actions should be available to alleviate these logistical hardships,
whenever necessary and proper. Ultimately, a disorderly election is not merely a textbook example of inefficiency,
but a rot that erodes faith in our democratic institutions. As the United States Supreme Court held:

[T]here is surely an important state interest in requiring some preliminary showing of a significant modicum
of support before printing the name of a political organization and its candidates on the ballot – the interest,
if no other, in avoiding confusion, deception and even frustration of the democratic [process].11

The COMELEC itself recognized these practical considerations when it promulgated Resolution No. 6558 on 17
January 2004, adopting the study Memorandum of its Law Department dated 11 January 2004. As observed in the
COMELEC’s Comment:

There is a need to limit the number of candidates especially in the case of candidates for national positions
because the election process becomes a mockery even if those who cannot clearly wage a national
campaign are allowed to run. Their names would have to be printed in the Certified List of Candidates,
Voters Information Sheet and the Official Ballots. These would entail additional costs to the government. For
the official ballots in automated counting and canvassing of votes, an additional page would amount to more
or less FOUR HUNDRED FIFTY MILLION PESOS (₱450,000,000.00).

xxx[I]t serves no practical purpose to allow those candidates to continue if they cannot wage a decent
campaign enough to project the prospect of winning, no matter how slim.12

The preparation of ballots is but one aspect that would be affected by allowance of "nuisance candidates" to run in
the elections. Our election laws provide various entitlements for candidates for public office, such as watchers in
every polling place,13 watchers in the board of canvassers,14 or even the receipt of electoral
contributions.15 Moreover, there are election rules and regulations the formulations of which are dependent on the
number of candidates in a given election.

Given these considerations, the ignominious nature of a nuisance candidacy becomes even more galling. The
organization of an election with bona fide candidates standing is onerous enough. To add into the mix candidates
with no serious intentions or capabilities to run a viable campaign would actually impair the electoral process. This is
not to mention the candidacies which are palpably ridiculous so as to constitute a one-note joke. The poll body
would be bogged by irrelevant minutiae covering every step of the electoral process, most probably posed at the
instance of these nuisance candidates. It would be a senseless sacrifice on the part of the State.

Owing to the superior interest in ensuring a credible and orderly election, the State could exclude nuisance
candidates and need not indulge in, as the song goes, "their trips to the moon on gossamer wings."

The Omnibus Election Code and COMELEC Resolution No. 6452 are cognizant of the compelling State interest to
ensure orderly and credible elections by excising impediments thereto, such as nuisance candidacies that distract
and detract from the larger purpose. The COMELEC is mandated by the Constitution with the administration of
elections16 and endowed with considerable latitude in adopting means and methods that will ensure the promotion of
free, orderly and honest elections.17 Moreover, the Constitution guarantees that only bona fide candidates for public
office shall be free from any form of harassment and discrimination.18 The determination of bona fide candidates is
governed by the statutes, and the concept, to our mind is, satisfactorily defined in the Omnibus Election Code.

Now, the needed factual premises.

However valid the law and the COMELEC issuance involved are, their proper application in the case of the
petitioner cannot be tested and reviewed by this Court on the basis of what is now before it. The assailed
resolutions of the COMELEC do not direct the Court to the evidence which it considered in determining that
petitioner was a nuisance candidate. This precludes the Court from reviewing at this instance whether the
COMELEC committed grave abuse of discretion in disqualifying petitioner, since such a review would necessarily
take into account the matters which the COMELEC considered in arriving at its decisions.

Petitioner has submitted to this Court mere photocopies of various documents purportedly evincing his credentials
as an eligible candidate for the presidency. Yet this Court, not being a trier of facts, can not properly pass upon the
reproductions as evidence at this level. Neither the COMELEC nor the Solicitor General appended any document to
their respective Comments.

The question of whether a candidate is a nuisance candidate or not is both legal and factual. The basis of the
factual determination is not before this Court. Thus, the remand of this case for the reception of further evidence is
in order.

A word of caution is in order. What is at stake is petitioner’s aspiration and offer to serve in the government. It
deserves not a cursory treatment but a hearing which conforms to the requirements of due process.

As to petitioner’s attacks on the validity of the form for the certificate of candidacy, suffice it to say that the form
strictly complies with Section 74 of the Omnibus Election Code. This provision specifically enumerates what a
certificate of candidacy should contain, with the required information tending to show that the candidate possesses
the minimum qualifications for the position aspired for as established by the Constitution and other election laws.

IN VIEW OF THE FOREGOING, COMELEC Case No. SPP (MP) No. 04-001 is hereby remanded to the COMELEC
for the reception of further evidence, to determine the question on whether petitioner Elly Velez Lao Pamatong is a
nuisance candidate as contemplated in Section 69 of the Omnibus Election Code.

The COMELEC is directed to hold and complete the reception of evidence and report its findings to this Court with
deliberate dispatch.

SO ORDERED.

Davide, Jr., Puno, Vitug*, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-
Martinez, Corona, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur.

Footnotes

* On Official Leave.

1
 Sec. 26. The State shall guarantee equal access to opportunities for public service, and prohibit political
dynasties as may be defined by law.

2
 See Basco v. PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 52, 68; Kilosbayan, Inc. v. Morato,
G.R. No. 118910, 246 SCRA 540, 564. "A provision which lays down a general principle, such as those
found in Art. II of the 1987 Constitution, is usually not self-executing." Manila Prince Hotel v. GSIS, G.R. No.
122156, 3 February 1997, 267 SCRA 408, 431. "Accordingly, [the Court has] held that the provisions in
Article II of our Constitution entitled "Declaration of Principles and State Policies" should generally be
construed as mere statements of principles of the State." Justice Puno, dissenting, Manila Prince Hotel v.
GSIS, Id. at 474.

 See Kilosbayan Inc. v. Morato, G.R. No. 118910, 16 November 1995, 250 SCRA 130, 138. Manila Prince
3

Hotel v. GSIS, supra note 2 at 436.

4
 Kilosbayan, Inc. v. Morato, supra note 2.
5
 "A searching inquiry should be made to find out if the provision is intended as a present enactment,
complete in itself as a definitive law, or if it needs future legislation for completion and enforcement. The
inquiry demands a micro-analysis and the context of the provision in question." J. Puno, dissenting, Manila
Prince Hotel v. GSIS, supra note 2.

6
 J. Bernas, The Intent of the 1986 Constitution Writers (1995), p. 148.

7
 IV Records of Proceedings and Debates, 1986 Constitutional Commission 945.

8
 See J. Feliciano, concurring, Oposa v. Factoran, Jr., G.R. No. 101083, 30 July 1993, 224 SCRA 792, 815.

9
 Section 69. Nuisance Candidates. — The Commission may, motu proprio or upon a verified petition of an
interested party, refuse to give due course or cancel a certificate of candidacy if it is shown that said
certificate has been filed to put the election process in mockery or disrepute or to cause confusion among
the voters by the similarity of the names of the registered candidates or by other circumstances or acts
which clearly demonstrate that the candidate has no bona fide intention to run for the office for which the
certificate of candidacy has been filed and thus prevent a faithful determination of the true will of the
electorate.

 SEC. 6. Motu Proprio Cases. — The Commission may, at any time before the election, motu proprio
10

refuse to give due course to or cancel a certificate of candidacy of any candidate for the positions of
President, Vice-President, Senator and Party-list:

I. The grounds:

a. Candidates who, on the face of their certificate of candidacy, do not possess the
constitutional and legal qualifications of the office to which they aspire to be elected;

b. Candidate who, on the face of said certificate, filed their certificate of candidacy to put the
election process in mockery or disrepute;

c. Candidates whose certificate of candidacy could cause confusion among the voters by the
similarity of names and surnames with other candidates; and

d. Candidates who have no bona fide intention to run for the office for which the certificate of
candidacy had been filed or acts that clearly demonstrate the lack of such bona fide
intention, such as:

d.1 Candidates who do not belong to or are not nominated by any registered political
party of national constituency;

d.2 Presidential, Vice-Presidential [candi-dates] who do not present running mates

for vice-president, respectively, nor senatorial candidates;

d.3 Candidates who do not have a platform of government and are not capable of
waging a nationwide campaign.

11
 Jenness v. Fortson, 403 U.S. 431 (1971).

12
 Rollo, pp. 469.

13
 See Section 178, Omnibus Election Code, as amended.

14
 See Section 239, Omnibus Election Code, as amended.

15
 See Article XI, Omnibus Election Code, as amended.
16
 See Section 2(1), Article IX, Constitution.

 Sanchez v. COMELEC, 199 Phil. 617 (1987), citing Cauton v. COMELEC, L-25467, 27 April 1967, 19
17

SCRA 911.

18
 See Section 9, Article IX, Constitution.