Manila Prince Hotel v.

GSIS Digested
Manila Prince Hotel v. GSIS GR 122156, 3 February 1997
WHETHER OR NOT THE COSNTITUTIONAL PROVISIONS ARE SELF-EXECUTING
FACTS:
The Government Service Insurance System (GSIS), pursuant to the privatization program of the Philippine Government under Proclamation 50
dated 8 December 1986, decided to sell through public bidding 30% to 51% of the issued and outstanding shares of the Manila Hotel (MHC). In a close
bidding held on 18 September 1995 only two bidders participated: Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of
the MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator, which bid for the
same number of shares at P44.00 per share, or P2.42 more than the bid of petitioner. Pending the declaration of Renong Berhard as the winning
bidder/strategic partner and the execution of the necessary contracts, the Manila Prince Hotel matched the bid price of P44.00 per share tendered by
Renong Berhad in a letter to GSIS dated 28 September 1995. Manila Prince Hotel sent a managers check to the GSIS in a subsequent letter, but which
GSIS refused to accept. On 17 October 1995, perhaps apprehensive that GSIS has disregarded the tender of the matching bid and that the sale of 51%
of the MHC may be hastened by GSIS and consummated with Renong Berhad, Manila Prince Hotel came to the Court on prohibition and mandamus.

ISSUE: Whether or not the provisions of the Constitution, particularly Article XII Section 10, are self-executing.

RULING:
A provision which lays down a general principle, such as those found in Article II of the 1987 Constitution, is usually not self-executing. But a
provision which is complete in itself and becomes operative without the aid of supplementary or enabling legislation, or that which supplies sufficient
rule by means of which the right it grants may be enjoyed or protected, is self-executing. Thus a constitutional provision is self-executing if the nature
and extent of the right conferred and the liability imposed are fixed by the constitution itself, so that they can be determined by an examination and
construction of its terms, and there is no language indicating that the subject is referred to the legislature for action. In self-executing constitutional
provisions, the legislature may still enact legislation to facilitate the exercise of powers directly granted by the constitution, further the operation of such
a provision, prescribe a practice to be used for its enforcement, provide a convenient remedy for the protection of the rights secured or the
determination thereof, or place reasonable safeguards around the exercise of the right. The mere fact that legislation may supplement and add to or
prescribe a penalty for the violation of a self-executing constitutional provision does not render such a provision ineffective in the absence of such
legislation. The omission from a constitution of any express provision for a remedy for enforcing a right or liability is not necessarily an indication that it
was not intended to be self-executing. The rule is that a self-executing provision of the constitution does not necessarily exhaust legislative power on
the subject, but any legislation must be in harmony with the constitution, further the exercise of constitutional right and make it more available.
Subsequent legislation however does not necessarily mean that the subject constitutional provision is not, by itself, fully enforceable. As against
constitutions of the past, modern constitutions have been generally drafted upon a different principle and have often become in effect extensive codes
of laws intended to operate directly upon the people in a manner similar to that of statutory enactments, and the function of constitutional conventions
has evolved into one more like that of a legislative body. Hence, unless it is expressly provided that a legislative act is necessary to enforce a
constitutional mandate, the presumption now is that all provisions of the constitution are self-executing. If the constitutional provisions are treated as
requiring legislation instead of self-executing, the legislature would have the power to ignore and practically nullify the mandate of the fundamental law.
In fine, Section 10, second paragraph, Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in itself and which needs
no further guidelines or implementing laws or rules for its enforcement. From its very words the provision does not require any legislation to put it in
operation.








EN BANC
[G.R. No. 122156. February 3, 1997]
MANILA PRINCE HOTEL, petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON
PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL, respondents.
D E C I S I O N
BELLOSILLO, J.:
The Filipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and concessions covering the national economy
and patrimony, the State shall give preference to qualified Filipinos,
[1]
is invoked by petitioner in its bid to acquire 51% of the shares of the Manila Hotel
Corporation (MHC) which owns the historic Manila Hotel. Opposing, respondents maintain that the provision is not self-executing but requires an
implementing legislation for its enforcement. Corollarily, they ask whether the 51% shares form part of the national economy and patrimony covered by
the protective mantle of the Constitution.
The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization program of the Philippine
Government under Proclamation No. 50 dated 8 December 1986, decided to sell through public bidding 30% to 51% of the issued and outstanding
shares of respondent MHC. The winning bidder, or the eventual strategic partner, is to provide management expertise and/or an international
marketing/reservation system, and financial support to strengthen the profitability and performance of the Manila Hotel.
[2]
In a close bidding held on 18
September 1995 only two (2) bidders participated: petitioner Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the
MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator, which bid for the same
number of shares at P44.00 per share, or P2.42 more than the bid of petitioner.
Pertinent provisions of the bidding rules prepared by respondent GSIS state -
I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC -
1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November 3, 1995) or the Highest Bidder will lose
the right to purchase the Block of Shares and GSIS will instead offer the Block of Shares to the other Qualified Bidders:
a. The Highest Bidder must negotiate and execute with the GSIS/MHC the Management Contract, International Marketing/Reservation System Contract
or other type of contract specified by the Highest Bidder in its strategic plan for the Manila Hotel x x x x
b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS x x x x
K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER -
The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met:
a. Execution of the necessary contracts with GSIS/MHC not later than October 23, 1995 (reset to November 3, 1995); and
b. Requisite approvals from the GSIS/MHC and COP (Committee on Privatization)/ OGCC (Office of the Government Corporate Counsel) are obtained.
[3]

Pending the declaration of Renong Berhard as the winning bidder/strategic partner and the execution of the necessary contracts, petitioner in a
letter to respondent GSIS dated 28 September 1995 matched the bid price of P44.00 per share tendered by Renong Berhad.
[4]
In a subsequent letter
dated 10 October 1995 petitioner sent a managers check issued by Philtrust Bank for Thirty-three Million Pesos (P33,000,000.00) as Bid Security to
match the bid of the Malaysian Group, Messrs. Renong Berhad x x x x
[5]
which respondent GSIS refused to accept.
On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid and that the sale of 51% of the
MHC may be hastened by respondent GSIS and consummated with Renong Berhad, petitioner came to this Court on prohibition and mandamus. On 18
October 1995 the Court issued a temporary restraining order enjoining respondents from perfecting and consummating the sale to the Malaysian firm.
On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by the First Division. The case was then set
for oral arguments with former Chief Justice Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has been identified with
the Filipino nation and has practically become a historical monument which reflects the vibrancy of Philippine heritage and culture. It is a proud legacy
of an earlier generation of Filipinos who believed in the nobility and sacredness of independence and its power and capacity to release the full potential
of the Filipino people. To all intents and purposes, it has become a part of the national patrimony.
[6]
Petitioner also argues that since 51% of the shares
of the MHC carries with it the ownership of the business of the hotel which is owned by respondent GSIS, a government-owned and controlled
corporation, the hotel business of respondent GSIS being a part of the tourism industry is unquestionably a part of the national economy. Thus, any
transaction involving 51% of the shares of stock of the MHC is clearly covered by the term national economy, to which Sec. 10, second par., Art. XII,
1987 Constitution, applies.
[7]

It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also unquestionably part of the national
economy petitioner should be preferred after it has matched the bid offer of the Malaysian firm. For the bidding rules mandate that if for any reason,
the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided
that these Qualified Bidders are willing to match the highest bid in terms of price per share.
[8]

Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of principle and
policy since it is not a self-executing provision and requires implementing legislation(s) x x x x Thus, for the said provision to operate, there must be
existing laws to lay down conditions under which business may be done.
[9]

Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national patrimony which only refers to lands of
the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna and all marine wealth in its territorial sea, and exclusive marine zone as cited in the first and second paragraphs of Sec. 2, Art. XII, 1987
Constitution. According to respondents, while petitioner speaks of the guests who have slept in the hotel and the events that have transpired therein
which make the hotel historic, these alone do not make the hotel fall under the patrimony of the nation. What is more, the mandate of the Constitution
is addressed to the State, not to respondent GSIS which possesses a personality of its own separate and distinct from the Philippines as a State.
Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision invoked is still inapplicable since what is
being sold is only 51% of the outstanding shares of the corporation, not the hotel building nor the land upon which the building stands. Certainly, 51%
of the equity of the MHC cannot be considered part of the national patrimony. Moreover, if the disposition of the shares of the MHC is really contrary to
the Constitution, petitioner should have questioned it right from the beginning and not after it had lost in the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for any reason, the Highest Bidder cannot be
awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders
are willing to match the highest bid in terms of price per share, is misplaced. Respondents postulate that the privilege of submitting a matching bid has
not yet arisen since it only takes place if for any reason, the Highest Bidder cannot be awarded the Block of Shares. Thus the submission by petitioner
of a matching bid is premature since Renong Berhad could still very well be awarded the block of shares and the condition giving rise to the exercise of
the privilege to submit a matching bid had not yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of discretion should fail since respondent GSIS did not exercise its discretion in a
capricious, whimsical manner, and if ever it did abuse its discretion it was not so patent and gross as to amount to an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by law. Similarly, the petition for mandamus should fail as petitioner has no clear legal right to what it
demands and respondents do not have an imperative duty to perform the act required of them by petitioner.
We now resolve. A constitution is a system of fundamental laws for the governance and administration of a nation. It is supreme, imperious,
absolute and unalterable except by the authority from which it emanates. It has been defined as the fundamental and paramount law of the
nation.
[10]
It prescribes the permanent framework of a system of government, assigns to the different departments their respective powers and duties,
and establishes certain fixed principles on which government is founded. The fundamental conception in other words is that it is a supreme law to
which all other laws must conform and in accordance with which all private rights must be determined and all public authority administered.
[11]
Under
the doctrine of constitutional supremacy, if a law or contract violates any norm of the constitution that law or contract whether promulgated by the
legislative or by the executive branch or entered into by private persons for private purposes is null and void and without any force and
effect. Thus, since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract.
Admittedly, some constitutions are merely declarations of policies and principles. Their provisions command the legislature to enact laws and
carry out the purposes of the framers who merely establish an outline of government providing for the different departments of the governmental
machinery and securing certain fundamental and inalienable rights of citizens.
[12]
A provision which lays down a general principle, such as those found in
Art. II of the 1987 Constitution, is usually not self-executing. But a provision which is complete in itself and becomes operative without the aid of
supplementary or enabling legislation, or that which supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is self-
executing. Thus a constitutional provision is self-executing if the nature and extent of the right conferred and the liability imposed are fixed by the
constitution itself, so that they can be determined by an examination and construction of its terms, and there is no language indicating that the subject
is referred to the legislature for action.
[13]

As against constitutions of the past, modern constitutions have been generally drafted upon a different principle and have often become in effect
extensive codes of laws intended to operate directly upon the people in a manner similar to that of statutory enactments, and the function of
constitutional conventions has evolved into one more like that of a legislative body. Hence, unless it is expressly provided that a legislative act is
necessary to enforce a constitutional mandate, the presumption now is that all provisions of the constitution are self-executing. If the constitutional
provisions are treated as requiring legislation instead of self-executing, the legislature would have the power to ignore and practically nullify the
mandate of the fundamental law.
[14]
This can be cataclysmic. That is why the prevailing view is, as it has always been, that -
x x x x in case of doubt, the Constitution should be considered self-executing rather than non-self-executing x x x x Unless the contrary is clearly
intended, the provisions of the Constitution should be considered self-executing, as a contrary rule would give the legislature discretion to determine
when, or whether, they shall be effective. These provisions would be subordinated to the will of the lawmaking body, which could make them entirely
meaningless by simply refusing to pass the needed implementing statute.
[15]

Respondents argue that Sec. 10, second par., Art. XII, of the 1987 Constitution is clearly not self-executing, as they quote from discussions on the
floor of the 1986 Constitutional Commission -
MR. RODRIGO. Madam President, I am asking this question as the Chairman of the Committee on Style. If the wording of PREFERENCE
is given to QUALIFIED FILIPINOS, can it be understood as a preference to qualified Filipinos vis-a-vis Filipinos who are not
qualified. So, why do we not make it clear? To qualified Filipinos as against aliens?
THE PRESIDENT. What is the question of Commissioner Rodrigo? Is it to remove the word QUALIFIED?
MR. RODRIGO. No, no, but say definitely TO QUALIFIED FILIPINOS as against whom? As against aliens or over aliens ?
MR. NOLLEDO. Madam President, I think that is understood. We use the word QUALIFIED because the existing laws or prospective laws
will always lay down conditions under which business may be done. For example, qualifications on capital, qualifications on the
setting up of other financial structures, et cetera (underscoring supplied by respondents).
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO. Yes.
[16]

Quite apparently, Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it is non-self-executing but simply for
purposes of style. But, certainly, the legislature is not precluded from enacting further laws to enforce the constitutional provision so long as the
contemplated statute squares with the Constitution. Minor details may be left to the legislature without impairing the self-executing nature of
constitutional provisions.
In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers directly granted by the
constitution, further the operation of such a provision, prescribe a practice to be used for its enforcement, provide a convenient remedy for the
protection of the rights secured or the determination thereof, or place reasonable safeguards around the exercise of the right. The mere fact that
legislation may supplement and add to or prescribe a penalty for the violation of a self-executing constitutional provision does not render such a
provision ineffective in the absence of such legislation. The omission from a constitution of any express provision for a remedy for enforcing a right or
liability is not necessarily an indication that it was not intended to be self-executing. The rule is that a self-executing provision of the constitution does
not necessarily exhaust legislative power on the subject, but any legislation must be in harmony with the constitution, further the exercise of
constitutional right and make it more available.
[17]
Subsequent legislation however does not necessarily mean that the subject constitutional provision is
not, by itself, fully enforceable.
Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is implied from the tenor of the first and third
paragraphs of the same section which undoubtedly are not self-executing.
[18]
The argument is flawed. If the first and third paragraphs are not self-
executing because Congress is still to enact measures to encourage the formation and operation of enterprises fully owned by Filipinos, as in the first
paragraph, and the State still needs legislation to regulate and exercise authority over foreign investments within its national jurisdiction, as in the third
paragraph, then a fortiori, by the same logic, the second paragraph can only be self-executing as it does not by its language require any legislation in
order to give preference to qualified Filipinos in the grant of rights, privileges and concessions covering the national economy and patrimony. A
constitutional provision may be self-executing in one part and non-self-executing in another.
[19]

Even the cases cited by respondents holding that certain constitutional provisions are merely statements of principles and policies, which are
basically not self-executing and only placed in the Constitution as moral incentives to legislation, not as judicially enforceable rights - are simply not in
point. Basco v. Philippine Amusements and Gaming Corporation
[20]
speaks of constitutional provisions on personal dignity,
[21]
the sanctity of family
life,
[22]
the vital role of the youth in nation-building,
[23]
the promotion of social justice,
[24]
and the values of education.
[25]
Tolentino v. Secretary of
Finance
[26]
refers to constitutional provisions on social justice and human rights
[27]
and on education.
[28]
Lastly, Kilosbayan, Inc. v. Morato
[29]
cites
provisions on the promotion of general welfare,
[30]
the sanctity of family life,
[31]
the vital role of the youth in nation-building
[32]
and the promotion of total
human liberation and development.
[33]
A reading of these provisions indeed clearly shows that they are not judicially enforceable constitutional rights but
merely guidelines for legislation. The very terms of the provisions manifest that they are only principles upon which legislations must be based. Res
ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in itself and which
needs no further guidelines or implementing laws or rules for its enforcement. From its very words the provision does not require any legislation to put
it in operation. It is per se judicially enforceable. When our Constitution mandates that[i]n the grant of rights, privileges, and concessions covering
national economy and patrimony, the State shall give preference to qualified Filipinos, it means just that - qualified Filipinos shall be preferred. And
when our Constitution declares that a right exists in certain specified circumstances an action may be maintained to enforce such right notwithstanding
the absence of any legislation on the subject; consequently, if there is no statute especially enacted to enforce such constitutional right, such right
enforces itself by its own inherent potency and puissance, and from which all legislations must take their bearings. Where there is a right there is a
remedy. Ubi jus ibi remedium.
As regards our national patrimony, a member of the 1986 Constitutional Commission
[34]
explains -
The patrimony of the Nation that should be conserved and developed refers not only to our rich natural resources but also to the cultural
heritage of our race. It also refers to our intelligence in arts, sciences and letters. Therefore, we should develop not only our lands, forests,
mines and other natural resources but also the mental ability or faculty of our people.
We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage.
[35]
When the Constitution speaks of national patrimony, it
refers not only to the natural resources of the Philippines, as the Constitution could have very well used the term natural resources, but also to
the cultural heritage of the Filipinos.
Manila Hotel has become a landmark - a living testimonial of Philippine heritage. While it was restrictively an American hotel when it first opened
in 1912, it immediately evolved to be truly Filipino. Formerly a concourse for the elite, it has since then become the venue of various significant events
which have shaped Philippine history. It was called the Cultural Center of the 1930s. It was the site of the festivities during the inauguration of the
Philippine Commonwealth. Dubbed as the Official Guest House of the Philippine Government it plays host to dignitaries and official visitors who are
accorded the traditional Philippine hospitality.
[36]

The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City.
[37]
During World War II the hotel was
converted by the Japanese Military Administration into a military headquarters. When the American forces returned to recapture Manila the hotel was
selected by the Japanese together with Intramuros as the two (2) places for their final stand. Thereafter, in the 1950s and 1960s, the hotel became
the center of political activities, playing host to almost every political convention. In 1970 the hotel reopened after a renovation and reaped numerous
international recognitions, an acknowledgment of the Filipino talent and ingenuity. In 1986 the hotel was the site of a failed coup d etat where an
aspirant for vice-president was proclaimed President of the Philippine Republic.
For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of the Filipinos; its
existence is impressed with public interest; its own historicity associated with our struggle for sovereignty, independence and nationhood. Verily, Manila
Hotel has become part of our national economy and patrimony. For sure, 51% of the equity of the MHC comes within the purview of the constitutional
shelter for it comprises the majority and controlling stock, so that anyone who acquires or owns the 51% will have actual control and management of
the hotel. In this instance, 51% of the MHC cannot be disassociated from the hotel and the land on which the hotel edifice stands. Consequently, we
cannot sustain respondents claim that the Filipino First Policy provision is not applicable since what is being sold is only 51% of the outstanding shares
of the corporation, not the Hotel building nor the land upon which the building stands.
[38]

The argument is pure sophistry. The term qualified Filipinos as used in our Constitution also includes corporations at least 60% of which is owned
by Filipinos. This is very clear from the proceedings of the 1986 Constitutional Commission -
THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. I would like to introduce an amendment to the Nolledo amendment. And the amendment would consist in substituting the
words QUALIFIED FILIPINOS with the following: CITIZENS OF THE PHILIPPINES OR CORPORATIONS OR ASSOCIATIONS WHOSE
CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY SUCH CITIZENS.
x x x x
MR. MONSOD. Madam President, apparently the proponent is agreeable, but we have to raise a question. Suppose it is a corporation that
is 80-percent Filipino, do we not give it preference?
MR. DAVIDE. The Nolledo amendment would refer to an individual Filipino. What about a corporation wholly owned by Filipino citizens?
MR. MONSOD. At least 60 percent, Madam President.
MR. DAVIDE. Is that the intention?
MR. MONSOD. Yes, because, in fact, we would be limiting it if we say that the preference should only be 100-percent Filipino.
MR. DAVIDE. I want to get that meaning clear because QUALIFIED FILIPINOS may refer only to individuals and not to juridical
personalities or entities.
MR. MONSOD. We agree, Madam President.
[39]

x x x x
MR. RODRIGO. Before we vote, may I request that the amendment be read again.
MR. NOLLEDO. The amendment will read: IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL
ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS. And the word Filipinos here, as
intended by the proponents, will include not only individual Filipinos but also Filipino-controlled entities or entities fully-controlled by
Filipinos.
[40]

The phrase preference to qualified Filipinos was explained thus -
MR. FOZ. Madam President, I would like to request Commissioner Nolledo to please restate his amendment so that I can ask a question.
MR. NOLLEDO. IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY,
THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS.
MR. FOZ. In connection with that amendment, if a foreign enterprise is qualified and a Filipino enterprise is also qualified, will the Filipino
enterprise still be given a preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred?
MR. NOLLEDO. The answer is yes.
MR. FOZ. Thank you.
[41]

Expounding further on the Filipino First Policy provision Commissioner Nolledo continues
MR. NOLLEDO. Yes, Madam President. Instead of MUST, it will be SHALL - THE STATE SHALL GIVE PREFERENCE TO QUALIFIED
FILIPINOS. This embodies the so-called Filipino First policy. That means that Filipinos should be given preference in the grant of
concessions, privileges and rights covering the national patrimony.
[42]

The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was still further clarified by Commissioner
Nolledo
[43]
-
Paragraph 2 of Section 10 explicitly mandates the Pro-Filipino bias in all economic concerns. It is better known as the FILIPINO FIRST Policy x x x
x This provision was never found in previous Constitutions x x x x
The term qualified Filipinos simply means that preference shall be given to those citizens who can make a viable contribution to the common good,
because of credible competence and efficiency. It certainly does NOT mandate the pampering and preferential treatment to Filipino citizens or
organizations that are incompetent or inefficient, since such an indiscriminate preference would be counterproductive and inimical to the common good.
In the granting of economic rights, privileges, and concessions, when a choice has to be made between a qualified foreigner and a qualified Filipino,
the latter shall be chosen over the former.
Lastly, the word qualified is also determinable. Petitioner was so considered by respondent GSIS and selected as one of the qualified bidders. It
was pre-qualified by respondent GSIS in accordance with its own guidelines so that the sole inference here is that petitioner has been found to be
possessed of proven management expertise in the hotel industry, or it has significant equity ownership in another hotel company, or it has an overall
management and marketing proficiency to successfully operate the Manila Hotel.
[44]

The penchant to try to whittle away the mandate of the Constitution by arguing that the subject provision is not self-executory and requires
implementing legislation is quite disturbing. The attempt to violate a clear constitutional provision - by the government itself - is only too
distressing. To adopt such a line of reasoning is to renounce the duty to ensure faithfulness to the Constitution. For, even some of the provisions of
the Constitution which evidently need implementing legislation have juridical life of their own and can be the source of a judicial remedy. We cannot
simply afford the government a defense that arises out of the failure to enact further enabling, implementing or guiding legislation. In fine, the
discourse of Fr. Joaquin G. Bernas, S.J., on constitutional government is apt -
The executive department has a constitutional duty to implement laws, including the Constitution, even before Congress acts - provided that there are
discoverable legal standards for executive action. When the executive acts, it must be guided by its own understanding of the constitutional command
and of applicable laws. The responsibility for reading and understanding the Constitution and the laws is not the sole prerogative of Congress. If it
were, the executive would have to ask Congress, or perhaps the Court, for an interpretation every time the executive is confronted by a constitutional
command. That is not how constitutional government operates.
[45]

Respondents further argue that the constitutional provision is addressed to the State, not to respondent GSIS which by itself possesses a separate
and distinct personality. This argument again is at best specious. It is undisputed that the sale of 51% of the MHC could only be carried out with the
prior approval of the State acting through respondent Committee on Privatization. As correctly pointed out by Fr. Joaquin G. Bernas, S.J., this fact alone
makes the sale of the assets of respondents GSIS and MHC a state action. In constitutional jurisprudence, the acts of persons distinct from the
government are considered state action covered by the Constitution (1) when the activity it engages in is a public function; (2) when the
government is so significantly involved with the private actor as to make the government responsible for his action; and, (3) when the government has
approved or authorized the action. It is evident that the act of respondent GSIS in selling 51% of its share in respondent MHC comes under the second
and third categories of state action. Without doubt therefore the transaction, although entered into by respondent GSIS, is in fact a transaction of the
State and therefore subject to the constitutional command.
[46]

When the Constitution addresses the State it refers not only to the people but also to the government as elements of the State. After all,
government is composed of three (3) divisions of power - legislative, executive and judicial. Accordingly, a constitutional mandate directed to the State
is correspondingly directed to the three (3) branches of government. It is undeniable that in this case the subject constitutional injunction is addressed
among others to the Executive Department and respondent GSIS, a government instrumentality deriving its authority from the State.
It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning bidder. The bidding rules expressly provide that
the highest bidder shall only be declared the winning bidder after it has negotiated and executed the necessary contracts, and secured the requisite
approvals. Since the Filipino First Policy provision of the Constitution bestows preference on qualified Filipinos the mere tending of the highest bid is
not an assurance that the highest bidder will be declared the winning bidder. Resultantly, respondents are not bound to make the award yet, nor are
they under obligation to enter into one with the highest bidder. For in choosing the awardee respondents are mandated to abide by the dictates of the
1987 Constitution the provisions of which are presumed to be known to all the bidders and other interested parties.
Adhering to the doctrine of constitutional supremacy, the subject constitutional provision is, as it should be, impliedly written in the bidding rules
issued by respondent GSIS, lest the bidding rules be nullified for being violative of the Constitution. It is a basic principle in constitutional law that all
laws and contracts must conform with the fundamental law of the land. Those which violate the Constitution lose their reason for being.
Paragraph V. J. 1 of the bidding rules provides that [i]f for any reason the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer
this to other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of
price per share.
[47]
Certainly, the constitutional mandate itself is reason enough not to award the block of shares immediately to the foreign bidder
notwithstanding its submission of a higher, or even the highest, bid. In fact, we cannot conceive of a stronger reason than the constitutional injunction
itself.
In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the grant of rights, privileges and concessions
covering the national economy and patrimony, thereby exceeding the bid of a Filipino, there is no question that the Filipino will have to be allowed to
match the bid of the foreign entity. And if the Filipino matches the bid of a foreign firm the award should go to the Filipino. It must be so if we are to
give life and meaning to the Filipino First Policy provision of the 1987 Constitution. For, while this may neither be expressly stated nor contemplated in
the bidding rules, the constitutional fiat is omnipresent to be simply disregarded. To ignore it would be to sanction a perilous skirting of the basic law.
This Court does not discount the apprehension that this policy may discourage foreign investors. But the Constitution and laws of the Philippines
are understood to be always open to public scrutiny. These are given factors which investors must consider when venturing into business in a foreign
jurisdiction. Any person therefore desiring to do business in the Philippines or with any of its agencies or instrumentalities is presumed to know his
rights and obligations under the Constitution and the laws of the forum.
The argument of respondents that petitioner is now estopped from questioning the sale to Renong Berhad since petitioner was well aware from
the beginning that a foreigner could participate in the bidding is meritless. Undoubtedly, Filipinos and foreigners alike were invited to the bidding. But
foreigners may be awarded the sale only if no Filipino qualifies, or if the qualified Filipino fails to match the highest bid tendered by the foreign
entity. In the case before us, while petitioner was already preferred at the inception of the bidding because of the constitutional mandate, petitioner
had not yet matched the bid offered by Renong Berhad. Thus it did not have the right or personality then to compel respondent GSIS to accept its
earlier bid. Rightly, only after it had matched the bid of the foreign firm and the apparent disregard by respondent GSIS of petitioners matching bid did
the latter have a cause of action.
Besides, there is no time frame for invoking the constitutional safeguard unless perhaps the award has been finally made. To insist on selling the
Manila Hotel to foreigners when there is a Filipino group willing to match the bid of the foreign group is to insist that government be treated as any
other ordinary market player, and bound by its mistakes or gross errors of judgment, regardless of the consequences to the Filipino people. The
miscomprehension of the Constitution is regrettable. Thus we would rather remedy the indiscretion while there is still an opportunity to do so than let
the government develop the habit of forgetting that the Constitution lays down the basic conditions and parameters for its actions.
Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the bidding rules, respondent GSIS is left with no
alternative but to award to petitioner the block of shares of MHC and to execute the necessary agreements and documents to effect the sale in
accordance not only with the bidding guidelines and procedures but with the Constitution as well. The refusal of respondent GSIS to execute the
corresponding documents with petitioner as provided in the bidding rules after the latter has matched the bid of the Malaysian firm clearly constitutes
grave abuse of discretion.
The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987 Constitution not merely to be used as a guideline for
future legislation but primarily to be enforced; so must it be enforced. This Court as the ultimate guardian of the Constitution will never shun, under
any reasonable circumstance, the duty of upholding the majesty of the Constitution which it is tasked to defend. It is worth emphasizing that it is not
the intention of this Court to impede and diminish, much less undermine, the influx of foreign investments. Far from it, the Court encourages and
welcomes more business opportunities but avowedly sanctions the preference for Filipinos whenever such preference is ordained by the
Constitution. The position of the Court on this matter could have not been more appropriately articulated by Chief Justice Narvasa -
As scrupulously as it has tried to observe that it is not its function to substitute its judgment for that of the legislature or the executive about the
wisdom and feasibility of legislation economic in nature, the Supreme Court has not been spared criticism for decisions perceived as obstacles to
economic progress and development x x x x in connection with a temporary injunction issued by the Courts First Division against the sale of the Manila
Hotel to a Malaysian Firm and its partner, certain statements were published in a major daily to the effect that that injunction again demonstrates that
the Philippine legal system can be a major obstacle to doing business here.
Let it be stated for the record once again that while it is no business of the Court to intervene in contracts of the kind referred to or set itself up as the
judge of whether they are viable or attainable, it is its bounden duty to make sure that they do not violate the Constitution or the laws, or are not
adopted or implemented with grave abuse of discretion amounting to lack or excess of jurisdiction. It will never shirk that duty, no matter how buffeted
by winds of unfair and ill-informed criticism.
[48]

Privatization of a business asset for purposes of enhancing its business viability and preventing further losses, regardless of the character of the
asset, should not take precedence over non-material values. A commercial, nay even a budgetary, objective should not be pursued at the expense of
national pride and dignity. For the Constitution enshrines higher and nobler non-material values. Indeed, the Court will always defer to the Constitution
in the proper governance of a free society; after all, there is nothing so sacrosanct in any economic policy as to draw itself beyond judicial review when
the Constitution is involved.
[49]

Nationalism is inherent in the very concept of the Philippines being a democratic and republican state, with sovereignty residing in the Filipino
people and from whom all government authority emanates. In nationalism, the happiness and welfare of the people must be the goal. The nation-
state can have no higher purpose. Any interpretation of any constitutional provision must adhere to such basic concept. Protection of foreign
investments, while laudible, is merely a policy. It cannot override the demands of nationalism.
[50]

The Manila Hotel or, for that matter, 51% of the MHC, is not just any commodity to be sold to the highest bidder solely for the sake of
privatization. We are not talking about an ordinary piece of property in a commercial district. We are talking about a historic relic that has hosted many
of the most important events in the short history of the Philippines as a nation. We are talking about a hotel where heads of states would prefer to be
housed as a strong manifestation of their desire to cloak the dignity of the highest state function to their official visits to the Philippines. Thus the
Manila Hotel has played and continues to play a significant role as an authentic repository of twentieth century Philippine history and culture. In this
sense, it has become truly a reflection of the Filipino soul - a place with a history of grandeur; a most historical setting that has played a part in the
shaping of a country.
[51]

This Court cannot extract rhyme nor reason from the determined efforts of respondents to sell the historical landmark - this Grand Old Dame of
hotels in Asia - to a total stranger. For, indeed, the conveyance of this epic exponent of the Filipino psyche to alien hands cannot be less than
mephistophelian for it is, in whatever manner viewed, a veritable alienation of a nations soul for some pieces of foreign silver. And so we ask: What
advantage, which cannot be equally drawn from a qualified Filipino, can be gained by the Filipinos if Manila Hotel - and all that it stands for - is sold to a
non-Filipino? How much of national pride will vanish if the nations cultural heritage is entrusted to a foreign entity? On the other hand, how much
dignity will be preserved and realized if the national patrimony is safekept in the hands of a qualified, zealous and well-meaning Filipino? This is the
plain and simple meaning of the Filipino First Policy provision of the Philippine Constitution. And this Court, heeding the clarion call of the Constitution
and accepting the duty of being the elderly watchman of the nation, will continue to respect and protect the sanctity of the Constitution.
WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and
OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are directed to CEASE and DESIST from selling 51% of the shares of the Manila Hotel
Corporation to RENONG BERHAD, and to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL CORPORATION to purchase the subject 51% of
the shares of the Manila Hotel Corporation at P44.00 per share and thereafter to execute the necessary agreements and documents to effect the sale,
to issue the necessary clearances and to do such other acts and deeds as may be necessary for the purpose.
SO ORDERED.





FACTS :
Beginning 2002, personnel from the armed forces of the United States started arriving in Mindanao, to take part, in conjunction with the Philippine
military, in Balikatan 02-1. In theory, they are a simulation of joint military maneuvers pursuant to the Mutual Defense Treaty, a bilateral defense
agreement entered into by the Philippines and the United States in 1951.
On Feb. 2002, Lim filed this petition for certiorari and prohibition, praying that respondents be restrained from proceeding with the so-called Balikatan
02-1, and that after due notice and hearing, judgment be rendered issuing a permanent writ of injuction and/or prohibition against the deployment of
US troops in Basilan and Mindanao for being illegal and in violation of the Constitution.
Petitioners contend that the RP and the US signed the Mutual Defense Treaty to provide mutual military assistance in accordance with the
constitutional processes of each country only in the case of a armed attack by an external aggressor, meaning a third country, against one of them.
They further argued that it cannot be said that the Abu Sayyaf in Basilan constitutes an external aggressor to warrant US military assistance in
accordance with MDT of 1951. Another contention was that the VFA of 1999 does not authorize American soldiers to engage in combat operations in
Philippine territory.
ISSUE :
Whether or not the Balikatan 02-1 activities are covered by the VFA.
RULING :
Petition is dismissed. The VFA itself permits US personnel to engage on an impermanent basis, in activities, the exact meaning of which is left
undefined. The sole encumbrance placed on its definition is couched in the negative, in that the US personnel must abstain from any activity
inconsistent with the spirit of this agreement, and in particular, from any political activity.
Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only logical to assume that Balikatan 02-1 a mutual anti
terrorism advising assisting and training exercise falls under the umbrella of sanctioned or allowable activities in the context of the agreement. Both the
history and intent of the Mutual Defense Treaty and the VFA support the conclusion that combat-related activities as opposed to combat itself such
as the one subject of the instant petition, are indeed authorized.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 151445 April 11, 2002

ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners,
vs.
HONORABLE EXECUTIVE SECRETARY as alter ego of HER EXCELLENCEY GLORIA MACAPAGAL-ARROYO, and HONORABLE ANGELO
REYES in his capacity as Secretary of National Defense, respondents.
----------------------------------------
SANLAKAS and PARTIDO NG MANGGAGAWA, petitioners-intervenors,
vs.
GLORIA MACAPAGA-ARROYO, ALBERTO ROMULO, ANGELO REYES, respondents.
DISSENTING OPINION
SEPARATE OPINION
DE LEON, JR., J.:
This case involves a petition for certiorari and prohibition as well as a petition-in-intervention, praying that respondents be restrained from proceeding
with the so-called "Balikatan 02-1" and that after due notice and hearing, that judgment be rendered issuing a permanent writ of injunction and/or
prohibition against the deployment of U.S. troops in Basilan and Mindanao for being illegal and in violation of the Constitution.
The facts are as follows:
Beginning January of this year 2002, personnel from the armed forces of the United States of America started arriving in Mindanao to take part, in
conjunction with the Philippine military, in "Balikatan 02-1." These so-called "Balikatan" exercises are the largest combined training operations involving
Filipino and American troops. In theory, they are a simulation of joint military maneuvers pursuant to the Mutual Defense Treaty,
1
a bilateral defense
agreement entered into by the Philippines and the United States in 1951.
Prior to the year 2002, the last "Balikatan" was held in 1995. This was due to the paucity of any formal agreement relative to the treatment of United
States personnel visiting the Philippines. In the meantime, the respective governments of the two countries agreed to hold joint exercises on a reduced
scale. The lack of consensus was eventually cured when the two nations concluded the Visiting Forces Agreement (V FA) in 1999.
The entry of American troops into Philippine soil is proximately rooted in the international anti-terrorism campaign declared by President George W.
Bush in reaction to the tragic events that occurred on September 11, 2001. On that day, three (3) commercial aircrafts were hijacked, flown and
smashed into the twin towers of the World Trade Center in New York City and the Pentagon building in Washington, D.C. by terrorists with alleged links
to the al-Qaeda ("the Base"), a Muslim extremist organization headed by the infamous Osama bin Laden. Of no comparable historical parallels, these
acts caused billions of dollars worth of destruction of property and incalculable loss of hundreds of lives.
On February 1, 2002, petitioners Arthur D. Lim and Paulino P. Ersando filed this petition for certiorari and prohibition, attacking the constitutionality of
the joint exercise.
2
They were joined subsequently by SANLAKAS and PARTIDO NG MANGGAGAWA, both party-Iist organizations, who filed a petition-in-
intervention on February 11, 2002.
Lim and Ersando filed suit in their capacities as citizens, lawyers and taxpayers. SANLAKAS and PARTIDO, on the other hand, aver that certain members
of their organization are residents of Zamboanga and Sulu, and hence will be directly affected by the operations being conducted in Mindanao. They
likewise pray for a relaxation on the rules relative to locus standi citing the unprecedented importance of the issue involved.
On February 71 2002 the Senate conducted a hearing on the "Balikatan" exercise wherein Vice-President Teofisto T. Guingona, Jr., who is concurrently
Secretary of Foreign. Affairs, presented the Draft Terms of Reference (TOR).
3
Five days later, he approved the TOR, which we quote hereunder:
I. POLICY LEVEL
1. The Exercise shall be consistent with the Philippine Constitution and all its activities shall be in consonance with the laws of the land and
the provisions of the RP-US Visiting Forces Agreement (VFA).
2. The conduct of this training Exercise is in accordance with pertinent United Nations resolutions against global terrorism as understood by
the respective parties.
3. No permanent US basing and support facilities shall be established. Temporary structures such as those for troop billeting, classroom
instruction and messing may be set up for use by RP and US Forces during the Exercise.
4. The Exercise shall be implemented jointly by RP and US Exercise Co-Directors under the authority of the Chief of Staff, AFP. In no instance
will US Forces operate independently during field training exercises (FTX). AFP and US Unit Commanders will retain command over their
respective forces under the overall authority of the Exercise Co-Directors. RP and US participants shall comply with operational instructions of
the AFP during the FTX.
5. The exercise shall be conducted and completed within a period of not more than six months, with the projected participation of 660 US
personnel and 3,800 RP Forces. The Chief of Staff, AFP shall direct the Exercise Co-Directors to wind up and terminate the Exercise and other
activities within the six month Exercise period.
6. The Exercise is a mutual counter-terrorism advising, assisting and training Exercise relative to Philippine efforts against the ASG, and will be
conducted on the Island of Basilan. Further advising, assisting and training exercises shall be conducted in Malagutay and the Zamboanga
area. Related activities in Cebu will be for support of the Exercise.
7. Only 160 US Forces organized in 12-man Special Forces Teams shall be deployed with AFP field, commanders. The US teams shall remain
at the Battalion Headquarters and, when approved, Company Tactical headquarters where they can observe and assess the performance of
the AFP Forces.
8. US exercise participants shall not engage in combat, without prejudice to their right of self-defense.
9. These terms of Reference are for purposes of this Exercise only and do not create additional legal obligations between the US Government
and the Republic of the Philippines.
II. EXERCISE LEVEL
1. TRAINING
a. The Exercise shall involve the conduct of mutual military assisting, advising and training of RP and US Forces with the primary
objective of enhancing the operational capabilities of both forces to combat terrorism.
b. At no time shall US Forces operate independently within RP territory.
c. Flight plans of all aircraft involved in the exercise will comply with the local air traffic regulations.
2. ADMINISTRATION & LOGISTICS
a. RP and US participants shall be given a country and area briefing at the start of the Exercise. This briefing shall acquaint US
Forces on the culture and sensitivities of the Filipinos and the provisions of the VF A. The briefing shall also promote the full
cooperation on the part of the RP and US participants for the successful conduct of the Exercise.
b. RP and US participating forces may share, in accordance with their respective laws and regulations, in the use of their resources,
equipment and other assets. They will use their respective logistics channels.
c. Medical evaluation shall be jointly planned and executed utilizing RP and US assets and resources.
d. Legal liaison officers from each respective party shall be appointed by the Exercise Directors.
3. PUBLIC AFFAIRS
a. Combined RP-US Information Bureaus shall be established at the Exercise Directorate in Zamboanga City and at GHQ, AFP in
Camp Aguinaldo, Quezon City.
b. Local media relations will be the concern of the AFP and all public affairs guidelines shall be jointly developed by RP and US
Forces.
c. Socio-Economic Assistance Projects shall be planned and executed jointly by RP and US Forces in accordance with their
respective laws and regulations, and in consultation with community and local government officials.
Contemporaneously, Assistant Secretary for American Affairs Minerva Jean A. Falcon and United States Charge d' Affaires Robert Fitts signed the Agreed
Minutes of the discussion between the Vice-President and Assistant Secretary Kelly.
4

Petitioners Lim and Ersando present the following arguments:
I
THE PHILIPPINES AND THE UNITED STATES SIGNED THE MUTUAL DEFENSE TREATY (MDT) in 1951 TO PROVIDE MUTUAL MILITARY
ASSIST ANCE IN ACCORDANCE WITH THE 'CONSTITUTIONAL PROCESSE-S' OF EACH COUNTRY ONLY IN THE CASE OF AN ARMED ATTACK
BY AN EXTERNAL AGGRESSOR, MEANING A THIRD COUNTRY AGAINST ONE OF THEM.
BY NO STRETCH OF THE IMAGINA TION CAN IT BE SAID THAT THE ABU SAYYAF BANDITS IN BASILAN CONSTITUTE AN EXTERNAL ARMED
FORCE THAT HAS SUBJECT THE PHILIPPINES TO AN ARMED EXTERNAL ATTACK TO WARRANT U.S. MILITARY ASSISTANCE UNDER THE
MDT OF 1951.
II
NEITHER DOES THE VFA OF 1999 AUTHORIZE AMERICAN SOLDIERS TO ENGAGE IN COMBAT OPERATIONS IN PHILIPPINE TERRITORY,
NOT EVEN TO FIRE BACK "IF FIRED UPON".
Substantially the same points are advanced by petitioners SANLAKAS and PARTIDO.
In his Comment, the Solicitor General points to infirmities in the petitions regarding, inter alia, Lim and Ersando's standing to file suit, the prematurity of
the action, as well as the impropriety of availing of certiorari to ascertain a question of fact. Anent their locus standi, the Solicitor General argues
that first, they may not file suit in their capacities as, taxpayers inasmuch as it has not been shown that "Balikatan 02-1 " involves the exercise of
Congress' taxing or spending powers. Second, their being lawyers does not invest them with sufficient personality to initiate the case, citing our ruling
in Integrated Bar of the Philippines v. Zamora.
5
Third, Lim and Ersando have failed to demonstrate the requisite showing of direct personal injury.
We agree.
It is also contended that the petitioners are indulging in speculation. The Solicitor General is of the view that since the Terms of Reference are clear as
to the extent and duration of "Balikatan 02-1," the issues raised by petitioners are premature, as they are based only on a fear of future violation of the
Terms of Reference. Even petitioners' resort to a special civil action for certiorari is assailed on the ground that the writ may only issue on the basis of
established facts.
Apart from these threshold issues, the Solicitor General claims that there is actually no question of constitutionality involved. The true object of the
instant suit, it is said, is to obtain an interpretation of the V FA. The Solicitor General asks that we accord due deference to the executive determination
that "Balikatan 02-1" is covered by the VFA, considering the President's monopoly in the field of foreign relations and her role as commander-in-chief of
the Philippine armed forces.
Given the primordial importance of the issue involved, it will suffice to reiterate our view on this point in a related case:
Notwithstanding, in view of the paramount importance and the constitutional significance of the issues raised in the petitions, this
Court, in the exercise of its sound discretion, brushes aside the procedural barrier and takes cognizance of the petitions, as we have
done in the early Emergency Powers Cases, where we had occasion to rule:
'x x x ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President
Quirino although they were involving only an indirect and general interest shared in common with the public. The Court dismissed
the objection that they were not proper parties and ruled that 'transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure.' We
have since then applied the exception in many other cases. [citation omitted]
This principle was reiterated in the subsequent cases of Gonzales vs. COMELEC, Daza vs. Singson, and Basco vs. Phil, Amusement
and Gaming Corporation, where we emphatically held:
Considering however the importance to the public of the case at bar, and in keeping with the Court's duty, under the 1987
Constitution, to determine whether or not the other branches of the government have kept themselves within the limits of the
Constitution and the laws that they have not abused the discretion given to them, the Court has brushed aside technicalities of
procedure and has taken cognizance of this petition. xxx'
Again, in the more recent case of Kilosbayan vs. Guingona, Jr., this Court ruled that in cases of transcendental importance, the Court
may relax the standing requirements and allow a suit to prosper even where there is no direct injury to the party claiming
the right of judicial review.
Although courts generally avoid having to decide a constitutional question based on the doctrine of separation of powers, which enjoins upon
the department of the government a becoming respect for each other's act, this Court nevertheless resolves to take cognizance of the instant
petition.
6

Hence, we treat with similar dispatch the general objection to the supposed prematurity of the action. At any rate, petitioners' concerns on the lack of
any specific regulation on the latitude of activity US personnel may undertake and the duration of their stay has been addressed in the Terms of
Reference.
The holding of "Balikatan 02-1" must be studied in the framework of the treaty antecedents to which the Philippines bound itself. The first of these is
the Mutual Defense Treaty (MDT, for brevity). The MDT has been described as the "core" of the defense relationship between the Philippines and its
traditional ally, the United States. Its aim is to enhance the strategic and technological capabilities of our armed forces through joint training with its
American counterparts; the "Balikatan" is the largest such training exercise directly supporting the MDT's objectives. It is this treaty to which the V FA
adverts and the obligations thereunder which it seeks to reaffirm.
The lapse of the US-Philippine Bases Agreement in 1992 and the decision not to renew it created a vacuum in US-Philippine defense relations, that is,
until it was replaced by the Visiting Forces Agreement. It should be recalled that on October 10, 2000, by a vote of eleven to three, this Court upheld
the validity of the VFA.
7
The V FA provides the "regulatory mechanism" by which "United States military and civilian personnel [may visit] temporarily in
the Philippines in connection with activities approved by the Philippine Government." It contains provisions relative to entry and departure of American
personnel, driving and vehicle registration, criminal jurisdiction, claims, importation and exportation, movement of vessels and aircraft, as well as the
duration of the agreement and its termination. It is the VFA which gives continued relevance to the MDT despite the passage of years. Its primary goal
is to facilitate the promotion of optimal cooperation between American and Philippine military forces in the event of an attack by a common foe.
The first question that should be addressed is whether "Balikatan 02-1" is covered by the Visiting Forces Agreement. To resolve this, it is necessary to
refer to the V FA itself: Not much help can be had therefrom, unfortunately, since the terminology employed is itself the source of the problem. The VFA
permits United States personnel to engage, on an impermanent basis, in "activities," the exact meaning of which was left undefined. The expression is
ambiguous, permitting a wide scope of undertakings subject only to the approval of the Philippine government.
8
The sole encumbrance placed on its
definition is couched in the negative, in that United States personnel must "abstain from any activity inconsistent with the spirit of this agreement, and
in particular, from any political activity."
9
All other activities, in other words, are fair game.
We are not left completely unaided, however. The Vienna Convention on the Law of Treaties, which contains provisos governing interpretations of
international agreements, state:
SECTION 3. INTERPRETATION OF TREATIES
Article 31
General rule of interpretation
1. A treaty shall be interpreted in good faith ill accordance with the ordinary meaning to be given to the tenus of the treaty in their context
and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the
other parties as an instrument related to the party .
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its
interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
Article 32
Supplementary means of interpretation
Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its
conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation
according to article 31 :
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd unreasonable.
It is clear from the foregoing that the cardinal rule of interpretation must involve an examination of the text, which is presumed to verbalize the parties'
intentions. The Convention likewise dictates what may be used as aids to deduce the meaning of terms, which it refers to as the context of the treaty,
as well as other elements may be taken into account alongside the aforesaid context. As explained by a writer on the Convention ,
[t]he Commission's proposals (which were adopted virtually without change by the conference and are now reflected in Articles 31 and 32 of
the Convention) were clearly based on the view that the text of a treaty must be presumed to be the authentic expression of the intentions of
the parties; the Commission accordingly came down firmly in favour of the view that 'the starting point of interpretation is the elucidation of
the meaning of the text, not an investigation ab initio into the intentions of the parties'. This is not to say that the travauxpreparatoires of a
treaty , or the circumstances of its conclusion, are relegated to a subordinate, and wholly ineffective, role. As Professor Briggs points out, no
rigid temporal prohibition on resort to travaux preparatoires of a treaty was intended by the use of the phrase 'supplementary means of
interpretation' in what is now Article 32 of the Vienna Convention. The distinction between the general rule of interpretation and the
supplementary means of interpretation is intended rather to ensure that the supplementary means do not constitute an alternative,
autonomous method of interpretation divorced from the general rule.
10

The Terms of Reference rightly fall within the context of the VFA.
After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the word .'activities" arose from accident. In our view, it
was deliberately made that way to give both parties a certain leeway in negotiation. In this manner, visiting US forces may sojourn in Philippine territory
for purposes other than military. As conceived, the joint exercises may include training on new techniques of patrol and surveillance to protect the
nation's marine resources, sea search-and-rescue operations to assist vessels in distress, disaster relief operations, civic action projects such as the
building of school houses, medical and humanitarian missions, and the like.
Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only logical to assume that .'Balikatan 02-1," a "mutual anti-
terrorism advising, assisting and training exercise," falls under the umbrella of sanctioned or allowable activities in the context of the agreement. Both
the history and intent of the Mutual Defense Treaty and the V FA support the conclusion that combat-related activities -as opposed to combat itself -
such as the one subject of the instant petition, are indeed authorized.
That is not the end of the matter, though. Granted that "Balikatan 02-1" is permitted under the terms of the VFA, what may US forces legitimately do in
furtherance of their aim to provide advice, assistance and training in the global effort against terrorism? Differently phrased, may American troops
actually engage in combat in Philippine territory? The Terms of Reference are explicit enough. Paragraph 8 of section I stipulates that US exercise
participants may not engage in combat "except in self-defense." We wryly note that this sentiment is admirable in the abstract but difficult in
implementation. The target of "Balikatan 02-1 I" the Abu Sayyaf, cannot reasonably be expected to sit idly while the battle is brought to their very
doorstep. They cannot be expected to pick and choose their targets for they will not have the luxury of doing so. We state this point if only to signify
our awareness that the parties straddle a fine line, observing the honored legal maxim "Nemo potest facere per alium quod non potest facere per
directum."
11
The indirect violation is actually petitioners' worry, that in reality, "Balikatan 02-1 " is actually a war principally conducted by the United
States government, and that the provision on self-defense serves only as camouflage to conceal the true nature of the exercise. A clear pronouncement
on this matter thereby becomes crucial.
In our considered opinion, neither the MDT nor the V FA allow foreign troops to engage in an offensive war on Philippine territory. We bear in mind the
salutary proscription stated in the Charter of the United Nations, to wit:
Article 2
The Organization and its Members, in pursuit of the Purposes stated in Article 1, shall act in accordance with the following Principles.
xxx xxx xxx xxx
4. All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political
independence of any state, or in any other manner inconsistent with the Purposes of the United Nations.
xxx xxx xxx xxx
In the same manner, both the Mutual Defense Treaty and the Visiting Forces Agreement, as in all other treaties and international agreements to which
the Philippines is a party, must be read in the context of the 1987 Constitution. In particular, the Mutual Defense Treaty was concluded way before the
present Charter, though it nevertheless remains in effect as a valid source of international obligation. The present Constitution contains key provisions
useful in determining the extent to which foreign military troops are allowed in Philippine territory. Thus, in the Declaration of Principles and State
Policies, it is provided that:
xxx xxx xxx xxx
SEC. 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.
xxx xxx xxx xxx
SEC. 7. The State shall pursue an independent foreign policy. In its relations with other states the paramount consideration shall be national
sovereignty, territorial integrity, national interest, and the right to self- determination.
SEC. 8. The Philippines, consistent with the national interest, adopts and pursues a policy of freedom from nuclear weapons in the country.
xxx xxx xxx xxx
The Constitution also regulates the foreign relations powers of the Chief Executive when it 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."
12
Even more pointedly, the Transitory Provisions state:
Sec. 25. After the expiration in 1991 of the Agreement between the Republic of the Philippines and the United States of America concerning
Military Bases, foreign military bases, troops or facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the
Senate and, when the Congress so requires, ratified by a majority of the votes cast by the people in a national referendum held for that
purpose, and recognized as a treaty by the other contracting state.
The aforequoted provisions betray a marked antipathy towards foreign military presence in the country, or of foreign influence in general. Hence,
foreign troops are allowed entry into the Philippines only by way of direct exception. Conflict arises then between the fundamental law and our
obligations arising from international agreements.
A rather recent formulation of the relation of international law vis-a-vis municipal law was expressed in Philip Morris, Inc. v. Court of Appeals,
13
to
wit:
xxx Withal, the fact that international law has been made part of the law of the land does not by any means imply the primacy of international
law over national law in the municipal sphere. Under the doctrine of incorporation as applied in most countries, rules of international law are
given a standing equal, not superior, to national legislation.
This is not exactly helpful in solving the problem at hand since in trying to find a middle ground, it favors neither one law nor the other, which only
leaves the hapless seeker with an unsolved dilemma. Other more traditional approaches may offer valuable insights.
From the perspective of public international law, a treaty is favored over municipal law pursuant to the principle ofpacta sunt servanda. Hence, "[e]very
treaty in force is binding upon the parties to it and must be performed by them in good faith."
14
Further, a party to a treaty is not allowed to "invoke the
provisions of its internal law as justification for its failure to perform a treaty."
15

Our Constitution espouses the opposing view. Witness our jurisdiction as I stated in section 5 of Article VIII:
The Supreme Court shall have the following powers:
xxx xxx xxx xxx
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may provide, final judgments and order
of lower courts in:
(A) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation is in question.
xxx xxx xxx xxx
In Ichong v. Hernandez,
16
we ruled that the provisions of a treaty are always subject to qualification or amendment by a subsequent law, or that it is
subject to the police power of the State. In Gonzales v. Hechanova,
17

xxx As regards the question whether an international agreement may be invalidated by our courts, suffice it to say that the Constitution of the
Philippines has clearly settled it in the affirmative, by providing, in Section 2 of Article VIII thereof, that the Supreme Court may not be
deprived "of its jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari, or writ of error as the law or the rules of court
may provide, final judgments and decrees of inferior courts in -( I) All cases in which the constitutionality or validity of anytreaty, law,
ordinance, or executive order or regulation is in question." In other words, our Constitution authorizes the nullification of a treaty, not only
when it conflicts with the fundamental law, but, also, when it runs counter to an act of Congress.
The foregoing premises leave us no doubt that US forces are prohibited / from engaging in an offensive war on Philippine territory.
Yet a nagging question remains: are American troops actively engaged in combat alongside Filipino soldiers under the guise of an alleged training and
assistance exercise? Contrary to what petitioners would have us do, we cannot take judicial notice of the events transpiring down south,18 as reported
from the saturation coverage of the media. As a rule, we do not take cognizance of newspaper or electronic reports per se, not because of any issue as
to their truth, accuracy, or impartiality, but for the simple reason that facts must be established in accordance with the rules of evidence. As a result, we
cannot accept, in the absence of concrete proof, petitioners' allegation that the Arroyo government is engaged in "doublespeak" in trying to pass off as
a mere training exercise an offensive effort by foreign troops on native soil. The petitions invite us to speculate on what is really happening in Mindanao,
to issue I make factual findings on matters well beyond our immediate perception, and this we are understandably loath to do.
It is all too apparent that the determination thereof involves basically a question of fact. On this point, we must concur with the Solicitor General that
the present subject matter is not a fit topic for a special civil action forcertiorari. We have held in too many instances that questions of fact are not
entertained in such a remedy. The sole object of the writ is to correct errors of jurisdiction or grave abuse of discretion: The phrase "grave abuse of
discretion" has a precise meaning in law, denoting abuse of discretion "too patent and gross as to amount to an evasion of a positive duty, or a virtual
refusal to perform the duty enjoined or act in contemplation of law, or where the power is exercised in an arbitrary and despotic manner by reason of
passion and personal hostility."
19

In this connection, it will not be amiss to add that the Supreme Court is not a trier of facts.
20

Under the expanded concept of judicial power under the Constitution, courts are charged with the duty "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."
21
From the facts
obtaining, we find that the holding of "Balikatan 02-1" joint military exercise has not intruded into that penumbra of error that would otherwise call for
correction on our part. In other words, respondents in the case at bar have not committed grave abuse of discretion amounting to lack or excess of
jurisdiction.
WHEREFORE, the petition and the petition-in-intervention are hereby DISMISSED without prejudice to the filing of a new petition sufficient in form
and substance in the proper Regional Trial Court.
SO ORDERED.












Pharmaceutical and Health Care Association of the Philippines vs. Duque III
(Austria-Martinez, October 9, 2007)
Nature: Special Civil Action in the Supreme Court. Certiorari
Petitioner: Pharmaceutical and Healthcare Association of the Philippines
Respondents: DOH Sec. Francisco Duque III, DOH Undersecretaries Dr. Ethelyn Nieto, Dr. Margarita Galon, Atty. Alexander Padilla and Dr. Jade Del
Mundo; and Asst. Secretaries Dr. Mario Villaverde, Dr. David Lozada and Dr. Nemesio Gako
Facts:
- Executive Order No. 51 (The Milk Code - TMC) was issued by Pres. Aquino on Oct. 28, 1986 by virtue of the legislative powers granted to her
under the Freedom Constitution.
(1) One of the preambular clauses of TMC the law seeks to give effect to Article 11 of the International Code of Marketing of Breastmilk
Substituttes (ICMBS), a code adopted by the WHA (World Health Assembly) in 1981.
- In 1990, the Philippine ratified the International Convention on the Rights of the Child. Art. 24 of the instrument mandates that States should
take measure to diminish infant mortality and should ensure that all segments of society are informed of the advantages of breastfeeding.
- From 1982 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.
- May 15, 2006 DOH issues the assailed RIRR (Revised Implementing Rules and Regulations of E.O. 51 or A.O. No. 2006-0012) which was to
take effect on July 7, 2006. The RIRR imposes a ban on all advertisements of breastmilk substitutes
- June 28, 2006 Petitioner filed the present Petition for Certiorari and Prohibition with Prayer for the Issuance of a TRO or Writ of Preliminary
injunction.
- August 15, 2006 the Court issued a Resolution granting the TRO, enjoining the respondents from implementing the assailed RIRR.
- Petitioner assails the RIRR for going beyond the provisions of TMC thereby amending and expanding the coverage of the said law.
- DOH meanwhile contends that the RIRR implements not only TMC but also various international instruments regarding infant and young child
nutrition. They posit that the said international instruments are deemed part of the law of the land and therefore may be implemented by the
DOH in the RIRR.
Issue: W/n the RIRR is unconstitutional?
Sub-issue(s): W/n the RIRR is in accord with TMC? W/n pertinent international agreements entered into by the Philippines are part of the law of the
land and may thus be implemented through an RIRR, if so, is the RIRR in accord with such international agreements?
Note: I focused on the parts on international law. The other matters (in case maam asks) are at the bottom of the digest.
Held: No. However what may be implemented is the RIRR based on the Milk Code which in turn is based on the ICMBS as this is deemed part of the
law of the land. The other WHA Resolutions however cannot be imposed as they are not deemed part of the law of the land.
Ratio:
1. Are the international instruments referred to by the respondents part of the law of the land?
- The various international instruments invoked by respondents are:
(1) The UN Conventions on the Rights of the Child
(2) The International Convenant on Economic, Social, and Cultural Rights
(3) Convention on the Elimination of All Forms of Discrimination Against Women
- These instruments only provide general terms of the steps that States must take to prevent child mortality. Hence, they do not have anything
about the use and marketing of breastmilk substitutes

- The ICMBS and other WHA Resolutions however, are the international instruments which have specific provisions on breastmilk substitutes
- Under the 1987 Constitution, international law can become part of domestic law in 2 ways:
(1) Transformation an international law is transformed into a domestic law through a constitutional mechanism such as local legislation
Treaties become part of law of the land through this method, pursuant to Art 7, Sec 21 wherein no treaty or international agreement
shall be valid.. unless concurred by at least 2/3 of Senate
The ICMBS and WHA Resolutions are NOT treaties as they havent been concurred in by the required 2/3 vote.
HOWEVER, the ICMBS has been transformed into domestic law through local legislation that is TMC.
Therefore, it is not the ICMBS per se that has the force of law but its TMC.
o While TMC is almost a verbatim reproduction of the ICMBS, it did not adopt the latters provision on the absolute prohibition
on advertising of products within the scope of the ICMBS. Instead the MC provides that advertising promotion or other
marketing materials may be allowed if such materials are approved by a committee.
(2) Incorporation by mere constitutional declaration, international law is deemed to have the force of domestic law
This is found under Art 2, Sec 2 The Philippines adopts generally accepted principles of international law as part of the law of the
land
In Mihares v. Ranada: International law becomes customary rules accepted as binding as a result of two elements:
1.) Established, widespread, and consistent practice on part of the state
2.) Opinion juris sive necessitates (opinion as to law or necessity.
Generally accepted principles of international law refer to norms of general or customary international law which are binding on all
states, valid through all kinds of human societies, and basic to legal systems generally
Fr. Bernas has a definition similar to the one above. Customary international law has two factors:
1.) Material factor how states behave
The consistency and the generality of the practice
2.) Psychological or subjective factor why they behave the way they do
Once state practice has been established, now determine why they behave they do. Is it ouor of courtesy or opinio juris (the
belief that a certain type of behavior is obligatory)
When a law satisfies the two factors it becomes part of customary international law which is then incorporated into our domestic
system

2. Since the WHA Resolutions have not been embodied in any local legislation, have they attained the status of customary law and hence part of our
law of the land?
- The World Health Organization (WHO) is one of the international specialized agencies of the UN.
- According to the WHO Constitution, its the WHA which determines the policies of the WHO, the former also has the power to adopt regulations
concerning advertising and labeling of pharmaceutical and similar products and to make recommendations to members on any matter within
the Organizations competence
- Note that the legal effect of a regulation as opposed to recommendation is quite different
(1) Regulations which are duly adopted by the WHA are binding on member states
(2) On the other hand, recommendations of the WHA do not come into force for its members unlike regulations. Rather, they carry moral and
political weight as they constitute the judgment on a health issue of the collective membership of the highest body in the field of health.
- The WHA resolution adopting the ICMBS and the subsequent WHA resolutions urging states to implement the ICMBS are merely recommendatory
and legally non-binding.
- Hence, unlike the ICMBS which has become TMC through legislative enactment, the subsequent WHA Resolutions, which provide for exclusive
breastfeeding and prohibition on advertisements and promotions of breastmilk have not been adopted as domestic law.
- WHA Resolutions have been viewed to constitute soft law or non-binding norms, which influence state behavior. Soft law has been noted to be
a rapid means of norm creation, in order to reflect and respond to the changing needs and demands of constituents (of the UN.)
- As previously discussed, for an international rule to be considered customary law, it must be established that such rule is followed by states
because it is considered obligatory (opinio juris).
- In the case at bar, respondents have not presented any evidence to prove that the WHA Resolutions are in fact enforced or practice by member
states. Further, they failed to establish that provisions of pertinent WHA Resolutions are customary international law that may be deemed part of
law of the land.
- Hence, legislation is necessary to transform the WHA resolutions into domestic law. They cannot thus be implemented by executive agencies
without the need of a law to be enacted by legislature.

On other issues:
W/n the petitioner is the real party in interest? Yes.
- An association has standing to file suit for its workers despite its lack of direct interest of its members are affected by the action. An organization
has standing to assert the concerns of its constituents. (Exec Sec vs CA)
- The Court has rules that an association has the legal personality to represent its members because the results of the case will affect their vital
interests. (Purok Bagong Silang Association Inc. vs. Yuipco)
- In the petitioners Amended Articles of Incorporation, it states 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.
- Therefore, the petitioner, as an organization, has an interest in fulfilling its avowed purpose of representing members who are part of the
pharmaceutical and health care industry. Petitioner is duly authorized to bring to the attention of the government agencies and courts any
grievance suffered by its members which are directly affected by the assailed RIRR.
- The petitioner, whose legal identity is deemed fused with its members, should be considered as a legal party-in-interest which stands to be
benefited or injured by any judgment in the case.

W/n the DOH has the power to implement the WHA Resolutions under the Revised Administrative Code even in the absence of a domestic law? Only
the provisions of the Milk Code. (as per the discussion above)
- Section 3, Chapter 1, Title IX of the RAC of 1987 provides that the DOH shall define the national health policy and can issue orders and
regulations concerning the implementation of established health policies.
- A.O. No 2005 -0014 which provides the national policy on infant and young child feeding, does not declare that as part of its policy, the
advertisement or promotion of breastmilk substitutes should be absolutely prohibited.
- Only the provisions of the Milk Code, but not those of the subsequent WHA Resolutions, can be validly implemented by the DOH through the
subject RIRR.

W/n the provisions of the RIRR being in accordance with the Milk Code? Not all of them
- Assailed provisions: [1] extending the coverage to young children; [2] imposing exclusive breastfeeding for infants from 0-6 months; [3] imposes
an absolute ban on advertising and promotion for breastmilk substitutes; [4] requiring additional labeling requirements; [5] prohibits the
dissemination of information on infant formula; [6] forbids milk manufacturers and distributors to extend assistance in research and continuing
education Although the DOH has the power under the Milk Code to control information regarding breastmilk vis--vis breastmilk substitutes, this
power is not absolute because it has no power to impose an absolute prohibition in the marketing, promotion and advertising of breastmilk
substitutes. Several provisions of the Milk Code attest to the fact that such power to control information is not absolute.
- Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code because such provisions impose an absolute prohibition on advertising,
promotion and marketing of breastmilk substitutes, which is not provided for in the Milk Code. Section 46 is violative of the Milk Code because
the DOH has exceeded its authority in imposing such fines or sanctions when the Milk Code does not do so. Other assailed provisions are in
accordance with the Milk Code.

W/n Section 13 of the RIRR providing a sufficient standard? Yes.
- Questioned provision, in addition to Section 26 of Rule VII provide labeling requirements for breastmilk substitutes found to be in consonance
with the Milk Code
- The provisions in question provide reasonable means of enforcing related provisions in the Milk Code.

W/n Section 57 of the RIRR repeals existing laws?
- Section in question only repeals orders, issuances and rules and regulations, not laws. The provision is valid as it is within the DOHs rule-making
power.
- An administrative agency has quasi-legislative or rule-making power. However, such power is limited to making rules and regulation subjected to
the boundaries set by the granting statute and the Constitution. The power is also subject to the doctrine of non-delegability and separability of
powers. The power, which includes amending, revising, altering or repealing, is granted to allow for flexibility in the implementation of the laws.

W/n On Section 4, 5(w), 11, 22, 32, 47 and 52 violates the due process clause of the Constitution (Article III Section 1)?
- Despite the fact that the 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 free enterprise does not call for the removal of protective regulations. It must be
clearly explained and proven by competent evidence just exactly how such protective regulation would result in the restraint of trade.
- Section 4 proscription of milk manufacturers participation in any policymaking body; Section 22 classes and seminars for women and
children; Section 32 giving of assistance, support and logistics or training; Section 52 giving of donations
- In the instant case, petitioner failed to show how the aforementioned sections hamper the trade of breastmilk substitutes. They also failed to
establish that these activities are essential and indispensable to their trade.

Disposition: The Petition is Partially Granted. Only sections 4(f), 11 and 46 of A.O. 2006-0014 are declared null and void for being
ultra vires. The TRO is lifted insofar as the rest of the provisions of A.O. 2006-0012 is concerned.