1

Republic of the Philippines The expenses of government, having for their object the interest of all, should be borne by everyone, and
SUPREME COURT the more man enjoys the advantages of society, the more he ought to hold himself honored in
EN BANC contributing to those expenses.
G.R. No. 168056 September 1, 2005
ABAKADA GURO PARTY LIST (Formerly AASJAS) OFFICERS SAMSON S. ALCANTARA and ED VINCENT S. ALBANO, Petitioners,
vs. -Anne Robert Jacques Turgot (1727-1781)
THE HONORABLE EXECUTIVE SECRETARY EDUARDO ERMITA; HONORABLE SECRETARY OF THE DEPARTMENT OF FINANCE CESAR PURISIMA; and
HONORABLE COMMISSIONER OF INTERNAL REVENUE GUILLERMO PARAYNO, JR., Respondent.
x-------------------------x French statesman and economist
G.R. No. 168207
AQUILINO Q. PIMENTEL, JR., LUISA P. EJERCITO-ESTRADA, JINGGOY E. ESTRADA, PANFILO M. LACSON, ALFREDO S. LIM, JAMBY A.S. MADRIGAL, AND
SERGIO R. OSMEÑA III, Petitioners, Mounting budget deficit, revenue generation, inadequate fiscal allocation for education, increased
vs.
EXECUTIVE SECRETARY EDUARDO R. ERMITA, CESAR V. PURISIMA, SECRETARY OF FINANCE, GUILLERMO L. PARAYNO, JR., COMMISSIONER OF THE
emoluments for health workers, and wider coverage for full value-added tax benefits … these are the
BUREAU OF INTERNAL REVENUE, Respondent. reasons why Republic Act No. 9337 (R.A. No. 9337)1 was enacted. Reasons, the wisdom of which, the Court
x-------------------------x
even with its extensive constitutional power of review, cannot probe. The petitioners in these cases,
G.R. No. 168461
ASSOCIATION OF PILIPINAS SHELL DEALERS, INC. represented by its President, ROSARIO ANTONIO; PETRON DEALERS’ ASSOCIATION represented by its however, question not only the wisdom of the law, but also perceived constitutional infirmities in its
President, RUTH E. BARBIBI; ASSOCIATION OF CALTEX DEALERS’ OF THE PHILIPPINES represented by its President, MERCEDITAS A. GARCIA; ROSARIO passage.
ANTONIO doing business under the name and style of "ANB NORTH SHELL SERVICE STATION"; LOURDES MARTINEZ doing business under the name and
style of "SHELL GATE – N. DOMINGO"; BETHZAIDA TAN doing business under the name and style of "ADVANCE SHELL STATION"; REYNALDO P.
MONTOYA doing business under the name and style of "NEW LAMUAN SHELL SERVICE STATION"; EFREN SOTTO doing business under the name and Every law enjoys in its favor the presumption of constitutionality. Their arguments notwithstanding,
style of "RED FIELD SHELL SERVICE STATION"; DONICA CORPORATION represented by its President, DESI TOMACRUZ; RUTH E. MARBIBI doing business
under the name and style of "R&R PETRON STATION"; PETER M. UNGSON doing business under the name and style of "CLASSIC STAR GASOLINE SERVICE petitioners failed to justify their call for the invalidity of the law. Hence, R.A. No. 9337 is not
STATION"; MARIAN SHEILA A. LEE doing business under the name and style of "NTE GASOLINE & SERVICE STATION"; JULIAN CESAR P. POSADAS doing unconstitutional.
business under the name and style of "STARCARGA ENTERPRISES"; ADORACION MAÑEBO doing business under the name and style of "CMA MOTORISTS
CENTER"; SUSAN M. ENTRATA doing business under the name and style of "LEONA’S GASOLINE STATION and SERVICE CENTER"; CARMELITA
BALDONADO doing business under the name and style of "FIRST CHOICE SERVICE CENTER"; MERCEDITAS A. GARCIA doing business under the name and LEGISLATIVE HISTORY
style of "LORPED SERVICE CENTER"; RHEAMAR A. RAMOS doing business under the name and style of "RJRAM PTT GAS STATION"; MA. ISABEL VIOLAGO
doing business under the name and style of "VIOLAGO-PTT SERVICE CENTER"; MOTORISTS’ HEART CORPORATION represented by its Vice-President for
Operations, JOSELITO F. FLORDELIZA; MOTORISTS’ HARVARD CORPORATION represented by its Vice-President for Operations, JOSELITO F. FLORDELIZA; R.A. No. 9337 is a consolidation of three legislative bills namely, House Bill Nos. 3555 and 3705, and Senate
MOTORISTS’ HERITAGE CORPORATION represented by its Vice-President for Operations, JOSELITO F. FLORDELIZA; PHILIPPINE STANDARD OIL
CORPORATION represented by its Vice-President for Operations, JOSELITO F. FLORDELIZA; ROMEO MANUEL doing business under the name and style of Bill No. 1950.
"ROMMAN GASOLINE STATION"; ANTHONY ALBERT CRUZ III doing business under the name and style of "TRUE SERVICE STATION", Petitioners,
vs.
CESAR V. PURISIMA, in his capacity as Secretary of the Department of Finance and GUILLERMO L. PARAYNO, JR., in his capacity as Commissioner of House Bill No. 35552 was introduced on first reading on January 7, 2005. The House Committee on Ways
Internal Revenue, Respondent. and Means approved the bill, in substitution of House Bill No. 1468, which Representative (Rep.) Eric D.
x-------------------------x
G.R. No. 168463 Singson introduced on August 8, 2004. The President certified the bill on January 7, 2005 for immediate
FRANCIS JOSEPH G. ESCUDERO, VINCENT CRISOLOGO, EMMANUEL JOEL J. VILLANUEVA, RODOLFO G. PLAZA, DARLENE ANTONINO-CUSTODIO, OSCAR G. enactment. On January 27, 2005, the House of Representatives approved the bill on second and third
MALAPITAN, BENJAMIN C. AGARAO, JR. JUAN EDGARDO M. ANGARA, JUSTIN MARC SB. CHIPECO, FLORENCIO G. NOEL, MUJIV S. HATAMAN, RENATO B.
MAGTUBO, JOSEPH A. SANTIAGO, TEOFISTO DL. GUINGONA III, RUY ELIAS C. LOPEZ, RODOLFO Q. AGBAYANI and TEODORO A. CASIÑO, Petitioners,
reading.
vs.
CESAR V. PURISIMA, in his capacity as Secretary of Finance, GUILLERMO L. PARAYNO, JR., in his capacity as Commissioner of Internal Revenue, and
EDUARDO R. ERMITA, in his capacity as Executive Secretary,Respondent.
House Bill No. 37053 on the other hand, substituted House Bill No. 3105 introduced by Rep. Salacnib F.
x-------------------------x Baterina, and House Bill No. 3381 introduced by Rep. Jacinto V. Paras. Its "mother bill" is House Bill No.
G.R. No. 168730
BATAAN GOVERNOR ENRIQUE T. GARCIA, JR. Petitioner,
3555. The House Committee on Ways and Means approved the bill on February 2, 2005. The President also
vs. certified it as urgent on February 8, 2005. The House of Representatives approved the bill on second and
HON. EDUARDO R. ERMITA, in his capacity as the Executive Secretary; HON. MARGARITO TEVES, in his capacity as Secretary of Finance; HON. JOSE third reading on February 28, 2005.
MARIO BUNAG, in his capacity as the OIC Commissioner of the Bureau of Internal Revenue; and HON. ALEXANDER AREVALO, in his capacity as the OIC
Commissioner of the Bureau of Customs, Respondent.
Meanwhile, the Senate Committee on Ways and Means approved Senate Bill No. 19504 on March 7, 2005,
DECISION "in substitution of Senate Bill Nos. 1337, 1838 and 1873, taking into consideration House Bill Nos. 3555
and 3705." Senator Ralph G. Recto sponsored Senate Bill No. 1337, while Senate Bill Nos. 1838 and 1873
AUSTRIA-MARTINEZ, J.: were both sponsored by Sens. Franklin M. Drilon, Juan M. Flavier and Francis N. Pangilinan. The President
certified the bill on March 11, 2005, and was approved by the Senate on second and third reading on April
13, 2005.

On the same date, April 13, 2005, the Senate agreed to the request of the House of Representatives for a
committee conference on the disagreeing provisions of the proposed bills.
Before long, the Conference Committee on the Disagreeing Provisions of House Bill No. 3555, House Bill
No. 3705, and Senate Bill No. 1950, "after having met and discussed in full free and conference,"
recommended the approval of its report, which the Senate did on May 10, 2005, and with the House of
Representatives agreeing thereto the next day, May 11, 2005.
On May 23, 2005, the enrolled copy of the consolidated House and Senate version was transmitted to the
President, who signed the same into law on May 24, 2005. Thus, came R.A. No. 9337.
July 1, 2005 is the effectivity date of R.A. No. 9337. 5 When said date came, the Court issued a temporary
restraining order, effective immediately and continuing until further orders, enjoining respondents from
enforcing and implementing the law.
Oral arguments were held on July 14, 2005. Significantly, during the hearing, the Court speaking through
Mr. Justice Artemio V. Panganiban, voiced the rationale for its issuance of the temporary restraining order
on July 1, 2005, to wit:
J. PANGANIBAN : . . . But before I go into the details of your presentation, let me just tell you a little
background. You know when the law took effect on July 1, 2005, the Court issued a TRO at about 5 o’clock
in the afternoon. But before that, there was a lot of complaints aired on television and on radio. Some
people in a gas station were complaining that the gas prices went up by 10%. Some people were
complaining that their electric bill will go up by 10%. Other times people riding in domestic air carrier were
complaining that the prices that they’ll have to pay would have to go up by 10%. While all that was being
aired, per your presentation and per our own understanding of the law, that’s not true. It’s not true that
the e-vat law necessarily increased prices by 10% uniformly isn’t it?
ATTY. BANIQUED : No, Your Honor.
J. PANGANIBAN : It is not?
ATTY. BANIQUED : It’s not, because, Your Honor, there is an Executive Order that granted the Petroleum
companies some subsidy . . . interrupted
J. PANGANIBAN : That’s correct . . .
ATTY. BANIQUED : . . . and therefore that was meant to temper the impact . . . interrupted
J. PANGANIBAN : . . . mitigating measures . . .
ATTY. BANIQUED : Yes, Your Honor.
J. PANGANIBAN : As a matter of fact a part of the mitigating measures would be the elimination of the
Excise Tax and the import duties. That is why, it is not correct to say that the VAT as to petroleum dealers
increased prices by 10%.
ATTY. BANIQUED : Yes, Your Honor.
J. PANGANIBAN : And therefore, there is no justification for increasing the retail price by 10% to cover the
E-Vat tax. If you consider the excise tax and the import duties, the Net Tax would probably be in the
neighborhood of 7%? We are not going into exact figures I am just trying to deliver a point that different
2
industries, different products, different services are hit differently. So it’s not correct to say that all prices
must go up by 10%.
ATTY. BANIQUED : You’re right, Your Honor.
J. PANGANIBAN : Now. For instance, Domestic Airline companies, Mr. Counsel, are at present imposed a
Sales Tax of 3%. When this E-Vat law took effect the Sales Tax was also removed as a mitigating measure.
So, therefore, there is no justification to increase the fares by 10% at best 7%, correct?
ATTY. BANIQUED : I guess so, Your Honor, yes.
J. PANGANIBAN : There are other products that the people were complaining on that first day, were being
increased arbitrarily by 10%. And that’s one reason among many others this Court had to issue TRO
because of the confusion in the implementation. That’s why we added as an issue in this case, even if it’s
tangentially taken up by the pleadings of the parties, the confusion in the implementation of the E-vat. Our
people were subjected to the mercy of that confusion of an across the board increase of 10%, which you
yourself now admit and I think even the Government will admit is incorrect. In some cases, it should be 3%
only, in some cases it should be 6% depending on these mitigating measures and the location and situation
of each product, of each service, of each company, isn’t it?
ATTY. BANIQUED : Yes, Your Honor.
J. PANGANIBAN : Alright. So that’s one reason why we had to issue a TRO pending the clarification of all
these and we wish the government will take time to clarify all these by means of a more detailed
implementing rules, in case the law is upheld by this Court. . . . 6
The Court also directed the parties to file their respective Memoranda.
G.R. No. 168056
Before R.A. No. 9337 took effect, petitioners ABAKADA GURO Party List, et al., filed a petition for
prohibition on May 27, 2005. They question the constitutionality of Sections 4, 5 and 6 of R.A. No. 9337,
amending Sections 106, 107 and 108, respectively, of the National Internal Revenue Code (NIRC). Section 4
imposes a 10% VAT on sale of goods and properties, Section 5 imposes a 10% VAT on importation of
goods, and Section 6 imposes a 10% VAT on sale of services and use or lease of properties. These
questioned provisions contain a uniform proviso authorizing the President, upon recommendation of the
Secretary of Finance, to raise the VAT rate to 12%, effective January 1, 2006, after any of the following
conditions have been satisfied, to wit:
. . . That the President, upon the recommendation of the Secretary of Finance, shall, effective January 1,
2006, raise the rate of value-added tax to twelve percent (12%), after any of the following conditions has
been satisfied:
(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year
exceeds two and four-fifth percent (2 4/5%); or
(ii) National government deficit as a percentage of GDP of the previous year exceeds one and one-half
percent (1 ½%).

Petitioners argue that the law is unconstitutional, as it constitutes abandonment by Congress of its
exclusive authority to fix the rate of taxes under Article VI, Section 28(2) of the 1987 Philippine
Constitution.
G.R. No. 168207
On June 9, 2005, Sen. Aquilino Q. Pimentel, Jr., et al., filed a petition for certiorari likewise assailing the
constitutionality of Sections 4, 5 and 6 of R.A. No. 9337.
Aside from questioning the so-called stand-by authority of the President to increase the VAT rate to 12%,
on the ground that it amounts to an undue delegation of legislative power, petitioners also contend that
the increase in the VAT rate to 12% contingent on any of the two conditions being satisfied violates the
due process clause embodied in Article III, Section 1 of the Constitution, as it imposes an unfair and
additional tax burden on the people, in that: (1) the 12% increase is ambiguous because it does not state if
the rate would be returned to the original 10% if the conditions are no longer satisfied; (2) the rate is
unfair and unreasonable, as the people are unsure of the applicable VAT rate from year to year; and (3)
the increase in the VAT rate, which is supposed to be an incentive to the President to raise the VAT
collection to at least 2 4/5 of the GDP of the previous year, should only be based on fiscal adequacy.
Petitioners further claim that the inclusion of a stand-by authority granted to the President by the
Bicameral Conference Committee is a violation of the "no-amendment rule" upon last reading of a bill laid
down in Article VI, Section 26(2) of the Constitution.
G.R. No. 168461
Thereafter, a petition for prohibition was filed on June 29, 2005, by the Association of Pilipinas Shell
Dealers, Inc., et al., assailing the following provisions of R.A. No. 9337:
1) Section 8, amending Section 110 (A)(2) of the NIRC, requiring that the input tax on depreciable goods
shall be amortized over a 60-month period, if the acquisition, excluding the VAT components, exceeds One
Million Pesos (₱1, 000,000.00);
2) Section 8, amending Section 110 (B) of the NIRC, imposing a 70% limit on the amount of input tax to be
credited against the output tax; and
3) Section 12, amending Section 114 (c) of the NIRC, authorizing the Government or any of its political
subdivisions, instrumentalities or agencies, including GOCCs, to deduct a 5% final withholding tax on gross
payments of goods and services, which are subject to 10% VAT under Sections 106 (sale of goods and
properties) and 108 (sale of services and use or lease of properties) of the NIRC.
Petitioners contend that these provisions are unconstitutional for being arbitrary, oppressive, excessive,
and confiscatory.
3
Petitioners’ argument is premised on the constitutional right of non-deprivation of life, liberty or property
without due process of law under Article III, Section 1 of the Constitution. According to petitioners, the
contested sections impose limitations on the amount of input tax that may be claimed. Petitioners also
argue that the input tax partakes the nature of a property that may not be confiscated, appropriated, or
limited without due process of law. Petitioners further contend that like any other property or property
right, the input tax credit may be transferred or disposed of, and that by limiting the same, the
government gets to tax a profit or value-added even if there is no profit or value-added.
Petitioners also believe that these provisions violate the constitutional guarantee of equal protection of
the law under Article III, Section 1 of the Constitution, as the limitation on the creditable input tax if: (1)
the entity has a high ratio of input tax; or (2) invests in capital equipment; or (3) has several transactions
with the government, is not based on real and substantial differences to meet a valid classification.
Lastly, petitioners contend that the 70% limit is anything but progressive, violative of Article VI, Section
28(1) of the Constitution, and that it is the smaller businesses with higher input tax to output tax ratio that
will suffer the consequences thereof for it wipes out whatever meager margins the petitioners make.
G.R. No. 168463
Several members of the House of Representatives led by Rep. Francis Joseph G. Escudero filed this petition
for certiorari on June 30, 2005. They question the constitutionality of R.A. No. 9337 on the following
grounds:
1) Sections 4, 5, and 6 of R.A. No. 9337 constitute an undue delegation of legislative power, in violation of
Article VI, Section 28(2) of the Constitution;
2) The Bicameral Conference Committee acted without jurisdiction in deleting the no pass on provisions
present in Senate Bill No. 1950 and House Bill No. 3705; and
3) Insertion by the Bicameral Conference Committee of Sections 27, 28, 34, 116, 117, 119, 121, 125,7 148,
151, 236, 237 and 288, which were present in Senate Bill No. 1950, violates Article VI, Section 24(1) of the
Constitution, which provides that all appropriation, revenue or tariff bills shall originate exclusively in the
House of Representatives
G.R. No. 168730
On the eleventh hour, Governor Enrique T. Garcia filed a petition for certiorari and prohibition on July 20,
2005, alleging unconstitutionality of the law on the ground that the limitation on the creditable input tax in
effect allows VAT-registered establishments to retain a portion of the taxes they collect, thus violating the
principle that tax collection and revenue should be solely allocated for public purposes and expenditures.
Petitioner Garcia further claims that allowing these establishments to pass on the tax to the consumers is
inequitable, in violation of Article VI, Section 28(1) of the Constitution.

RESPONDENTS’ COMMENT
The Office of the Solicitor General (OSG) filed a Comment in behalf of respondents. Preliminarily,
respondents contend that R.A. No. 9337 enjoys the presumption of constitutionality and petitioners failed
to cast doubt on its validity.
Relying on the case of Tolentino vs. Secretary of Finance, 235 SCRA
630 (1994), respondents argue that the procedural issues raised by petitioners, i.e., legality of the
bicameral proceedings, exclusive origination of revenue measures and the power of the Senate
concomitant thereto, have already been settled. With regard to the issue of undue delegation of legislative
power to the President, respondents contend that the law is complete and leaves no discretion to the
President but to increase the rate to 12% once any of the two conditions provided therein arise.
Respondents also refute petitioners’ argument that the increase to 12%, as well as the 70% limitation on
the creditable input tax, the 60-month amortization on the purchase or importation of capital goods
exceeding ₱1,000,000.00, and the 5% final withholding tax by government agencies, is arbitrary,
oppressive, and confiscatory, and that it violates the constitutional principle on progressive taxation,
among others.
Finally, respondents manifest that R.A. No. 9337 is the anchor of the government’s fiscal reform agenda. A
reform in the value-added system of taxation is the core revenue measure that will tilt the balance
towards a sustainable macroeconomic environment necessary for economic growth.
ISSUES
The Court defined the issues, as follows:
PROCEDURAL ISSUE
Whether R.A. No. 9337 violates the following provisions of the Constitution:
a. Article VI, Section 24, and
b. Article VI, Section 26(2)
SUBSTANTIVE ISSUES
1. Whether Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108 of the NIRC, violate
the following provisions of the Constitution:
a. Article VI, Section 28(1), and
b. Article VI, Section 28(2)
2. Whether Section 8 of R.A. No. 9337, amending Sections 110(A)(2) and 110(B) of the NIRC; and Section
12 of R.A. No. 9337, amending Section 114(C) of the NIRC, violate the following provisions of the
Constitution:
a. Article VI, Section 28(1), and
b. Article III, Section 1
4
RULING OF THE COURT
As a prelude, the Court deems it apt to restate the general principles and concepts of value-added tax
(VAT), as the confusion and inevitably, litigation, breeds from a fallacious notion of its nature.
The VAT is a tax on spending or consumption. It is levied on the sale, barter, exchange or lease of goods or
properties and services.8 Being an indirect tax on expenditure, the seller of goods or services may pass on
the amount of tax paid to the buyer,9 with the seller acting merely as a tax collector. 10 The burden of VAT
is intended to fall on the immediate buyers and ultimately, the end-consumers.
In contrast, a direct tax is a tax for which a taxpayer is directly liable on the transaction or business it
engages in, without transferring the burden to someone else.11 Examples are individual and corporate
income taxes, transfer taxes, and residence taxes. 12
In the Philippines, the value-added system of sales taxation has long been in existence, albeit in a different
mode. Prior to 1978, the system was a single-stage tax computed under the "cost deduction method" and
was payable only by the original sellers. The single-stage system was subsequently modified, and a mixture
of the "cost deduction method" and "tax credit method" was used to determine the value-added tax
payable.13 Under the "tax credit method," an entity can credit against or subtract from the VAT charged on
its sales or outputs the VAT paid on its purchases, inputs and imports.14
It was only in 1987, when President Corazon C. Aquino issued Executive Order No. 273, that the VAT
system was rationalized by imposing a multi-stage tax rate of 0% or 10% on all sales using the "tax credit
method."15
E.O. No. 273 was followed by R.A. No. 7716 or the Expanded VAT Law,16 R.A. No. 8241 or the Improved
VAT Law,17 R.A. No. 8424 or the Tax Reform Act of 1997,18 and finally, the presently beleaguered R.A. No.
9337, also referred to by respondents as the VAT Reform Act.
The Court will now discuss the issues in logical sequence.
PROCEDURAL ISSUE
I.
Whether R.A. No. 9337 violates the following provisions of the Constitution:
a. Article VI, Section 24, and
b. Article VI, Section 26(2)
A. The Bicameral Conference Committee
Petitioners Escudero, et al., and Pimentel, et al., allege that the Bicameral Conference Committee
exceeded its authority by:
1) Inserting the stand-by authority in favor of the President in Sections 4, 5, and 6 of R.A. No. 9337;
2) Deleting entirely the no pass-on provisions found in both the House and Senate bills;
3) Inserting the provision imposing a 70% limit on the amount of input tax to be credited against the
output tax; and

4) Including the amendments introduced only by Senate Bill No. 1950 regarding other kinds of taxes in
addition to the value-added tax.
Petitioners now beseech the Court to define the powers of the Bicameral Conference Committee.
It should be borne in mind that the power of internal regulation and discipline are intrinsic in any
legislative body for, as unerringly elucidated by Justice Story, "[i]f the power did not exist, it would be
utterly impracticable to transact the business of the nation, either at all, or at least with decency,
deliberation, and order."19 Thus, Article VI, Section 16 (3) of the Constitution provides that "each House
may determine the rules of its proceedings." Pursuant to this inherent constitutional power to promulgate
and implement its own rules of procedure, the respective rules of each house of Congress provided for the
creation of a Bicameral Conference Committee.
Thus, Rule XIV, Sections 88 and 89 of the Rules of House of Representatives provides as follows:
Sec. 88. Conference Committee. – In the event that the House does not agree with the Senate on the
amendment to any bill or joint resolution, the differences may be settled by the conference committees of
both chambers.
In resolving the differences with the Senate, the House panel shall, as much as possible, adhere to and
support the House Bill. If the differences with the Senate are so substantial that they materially impair the
House Bill, the panel shall report such fact to the House for the latter’s appropriate action.
Sec. 89. Conference Committee Reports. – . . . Each report shall contain a detailed, sufficiently explicit
statement of the changes in or amendments to the subject measure. . . .
The Chairman of the House panel may be interpellated on the Conference Committee Report prior to the
voting thereon. The House shall vote on the Conference Committee Report in the same manner and
procedure as it votes on a bill on third and final reading.
Rule XII, Section 35 of the Rules of the Senate states:
Sec. 35. In the event that the Senate does not agree with the House of Representatives on the provision of
any bill or joint resolution, the differences shall be settled by a conference committee of both Houses
which shall meet within ten (10) days after their composition. The President shall designate the members
of the Senate Panel in the conference committee with the approval of the Senate.
Each Conference Committee Report shall contain a detailed and sufficiently explicit statement of the
changes in, or amendments to the subject measure, and shall be signed by a majority of the members of
each House panel, voting separately.
A comparative presentation of the conflicting House and Senate provisions and a reconciled version
thereof with the explanatory statement of the conference committee shall be attached to the report. . . .
5
The creation of such conference committee was apparently in response to a problem, not addressed by
any constitutional provision, where the two houses of Congress find themselves in disagreement over
changes or amendments introduced by the other house in a legislative bill. Given that one of the most
basic powers of the legislative branch is to formulate and implement its own rules of proceedings and to
discipline its members, may the Court then delve into the details of how Congress complies with its
internal rules or how it conducts its business of passing legislation? Note that in the present petitions, the
issue is not whether provisions of the rules of both houses creating the bicameral conference committee
are unconstitutional, but whether the bicameral conference committee has strictly complied with the
rules of both houses, thereby remaining within the jurisdiction conferred upon it by Congress.
In the recent case of Fariñas vs. The Executive Secretary,20 the Court En Banc, unanimously reiterated and
emphasized its adherence to the "enrolled bill doctrine," thus, declining therein petitioners’ plea for the
Court to go behind the enrolled copy of the bill. Assailed in said case was Congress’s creation of two sets of
bicameral conference committees, the lack of records of said committees’ proceedings, the alleged
violation of said committees of the rules of both houses, and the disappearance or deletion of one of the
provisions in the compromise bill submitted by the bicameral conference committee. It was argued that
such irregularities in the passage of the law nullified R.A. No. 9006, or the Fair Election Act.
Striking down such argument, the Court held thus:
Under the "enrolled bill doctrine," the signing of a bill by the Speaker of the House and the Senate
President and the certification of the Secretaries of both Houses of Congress that it was passed are
conclusive of its due enactment. A review of cases reveals the Court’s consistent adherence to the
rule. The Court finds no reason to deviate from the salutary rule in this case where the irregularities
alleged by the petitioners mostly involved the internal rules of Congress, e.g., creation of the 2nd or
3rd Bicameral Conference Committee by the House. This Court is not the proper forum for the
enforcement of these internal rules of Congress, whether House or Senate. Parliamentary rules are
merely procedural and with their observance the courts have no concern. Whatever doubts there may
be as to the formal validity of Rep. Act No. 9006 must be resolved in its favor.The Court reiterates its
ruling in Arroyo vs. De Venecia, viz.:
But the cases, both here and abroad, in varying forms of expression, all deny to the courts the power to
inquire into allegations that, in enacting a law, a House of Congress failed to comply with its own rules,
in the absence of showing that there was a violation of a constitutional provision or the rights of private
individuals. In Osmeña v. Pendatun, it was held: "At any rate, courts have declared that ‘the rules adopted
by deliberative bodies are subject to revocation, modification or waiver at the pleasure of the body
adopting them.’ And it has been said that "Parliamentary rules are merely procedural, and with their
observance, the courts have no concern. They may be waived or disregarded by the legislative body."
Consequently, "mere failure to conform to parliamentary usage will not invalidate the action (taken by a
deliberative body) when the requisite number of members have agreed to a particular
measure."21 (Emphasis supplied)
The foregoing declaration is exactly in point with the present cases, where petitioners allege irregularities
committed by the conference committee in introducing changes or deleting provisions in the House and
 6

Senate bills. Akin to the Fariñas case,22 the present petitions also raise an issue regarding the actions taken NIRC)
by the conference committee on matters regarding Congress’ compliance with its own internal rules. As With regard to the "no pass-on" provision
stated earlier, one of the most basic and inherent power of the legislature is the power to formulate rules No similar provision Provides that the VAT imposed on Provides that the VAT imposed
for its proceedings and the discipline of its members. Congress is the best judge of how it should conduct power generation and on the sale on sales of electricity by
its own business expeditiously and in the most orderly manner. It is also the sole of petroleum products shall be generation companies and
absorbed by generation services of transmission
concern of Congress to instill discipline among the members of its conference committee if it believes that companies or sellers, respectively, companies and distribution
said members violated any of its rules of proceedings. Even the expanded jurisdiction of this Court cannot and shall not be passed on to companies, as well as those of
apply to questions regarding only the internal operation of Congress, thus, the Court is wont to deny a consumers franchise grantees of electric
review of the internal proceedings of a co-equal branch of government. utilities shall not apply to
residential
Moreover, as far back as 1994 or more than ten years ago, in the case of Tolentino vs. Secretary of
Finance,23 the Court already made the pronouncement that "[i]f a change is desired in the practice [of the end-users. VAT shall be
Bicameral Conference Committee] it must be sought in Congress since this question is not covered by absorbed by generation,
any constitutional provision but is only an internal rule of each house." 24 To date, Congress has not seen transmission, and distribution
it fit to make such changes adverted to by the Court. It seems, therefore, that Congress finds the practices companies.
of the bicameral conference committee to be very useful for purposes of prompt and efficient legislative With regard to 70% limit on input tax credit
action. Provides that the input tax No similar provision Provides that the input tax
credit for capital goods on credit for capital goods on
Nevertheless, just to put minds at ease that no blatant irregularities tainted the proceedings of the which a VAT has been paid which a VAT has been paid shall
bicameral conference committees, the Court deems it necessary to dwell on the issue. The Court observes shall be equally distributed be equally distributed over 5
that there was a necessity for a conference committee because a comparison of the provisions of House over 5 years or the years or the depreciable life of
Bill Nos. 3555 and 3705 on one hand, and Senate Bill No. 1950 on the other, reveals that there were depreciable life of such capital such capital goods; the input
indeed disagreements. As pointed out in the petitions, said disagreements were as follows: goods; the input tax credit for tax credit for goods and
goods and services other than services other than capital
House Bill No. 3555 House Bill No.3705 Senate Bill No. 1950 capital goods shall not exceed goods shall not exceed 90% of
With regard to "Stand-By Authority" in favor of President 5% of the total amount of the output VAT.
Provides for 12% VAT on every Provides for 12% VAT in general on Provides for a single rate of such goods and services; and
sale of goods or properties sales of goods or properties and 10% VAT on sale of goods or for persons engaged in retail
(amending Sec. 106 of NIRC); reduced rates for sale of certain properties (amending Sec. 106 trading of goods, the
12% VAT on importation of locally manufactured goods and of NIRC), 10% VAT on sale of allowable input tax credit shall
goods (amending Sec. 107 of petroleum products and raw services including sale of not exceed 11% of the total
NIRC); and 12% VAT on sale of materials to be used in the electricity by generation amount of goods purchased.
services and use or lease of manufacture thereof (amending companies, transmission and With regard to amendments to be made to NIRC provisions regarding income and excise taxes
properties (amending Sec. 108 Sec. 106 of NIRC); 12% VAT on distribution companies, and No similar provision No similar provision Provided for amendments to
of NIRC) importation of goods and reduced use or lease of properties several NIRC provisions regarding
rates for certain imported (amending Sec. 108 of NIRC) corporate income, percentage,
products including petroleum franchise and excise taxes
products (amending Sec. 107 of
NIRC); and 12% VAT on sale of The disagreements between the provisions in the House bills and the Senate bill were with regard to (1)
services and use or lease of what rate of VAT is to be imposed; (2) whether only the VAT imposed on electricity generation,
properties and a reduced rate for transmission and distribution companies should not be passed on to consumers, as proposed in the Senate
certain services including power bill, or both the VAT imposed on electricity generation, transmission and distribution companies and the
generation (amending Sec. 108 of VAT imposed on sale of petroleum products should not be passed on to consumers, as proposed in the

House bill; (3) in what manner input tax credits should be limited; (4) and whether the NIRC provisions on
corporate income taxes, percentage, franchise and excise taxes should be amended.
There being differences and/or disagreements on the foregoing provisions of the House and Senate bills,
the Bicameral Conference Committee was mandated by the rules of both houses of Congress to act on the
same by settling said differences and/or disagreements. The Bicameral Conference Committee acted on
the disagreeing provisions by making the following changes:
1. With regard to the disagreement on the rate of VAT to be imposed, it would appear from the
Conference Committee Report that the Bicameral Conference Committee tried to bridge the gap in the
difference between the 10% VAT rate proposed by the Senate, and the various rates with 12% as the
highest VAT rate proposed by the House, by striking a compromise whereby the present 10% VAT rate
would be retained until certain conditions arise, i.e., the value-added tax collection as a percentage of
gross domestic product (GDP) of the previous year exceeds 2 4/5%, or National Government deficit as a
percentage of GDP of the previous year exceeds 1½%, when the President, upon recommendation of the
Secretary of Finance shall raise the rate of VAT to 12% effective January 1, 2006.
2. With regard to the disagreement on whether only the VAT imposed on electricity generation,
transmission and distribution companies should not be passed on to consumers or whether both the VAT
imposed on electricity generation, transmission and distribution companies and the VAT imposed on sale
of petroleum products may be passed on to consumers, the Bicameral Conference Committee chose to
settle such disagreement by altogether deleting from its Report any no pass-on provision.
3. With regard to the disagreement on whether input tax credits should be limited or not, the Bicameral
Conference Committee decided to adopt the position of the House by putting a limitation on the amount
of input tax that may be credited against the output tax, although it crafted its own language as to the
amount of the limitation on input tax credits and the manner of computing the same by providing thus:
(A) Creditable Input Tax. – . . .
...
Provided, The input tax on goods purchased or imported in a calendar month for use in trade or business
for which deduction for depreciation is allowed under this Code, shall be spread evenly over the month of
acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such goods,
excluding the VAT component thereof, exceeds one million Pesos (₱1,000,000.00): PROVIDED, however,
that if the estimated useful life of the capital good is less than five (5) years, as used for depreciation
purposes, then the input VAT shall be spread over such shorter period: . . .
(B) Excess Output or Input Tax. – If at the end of any taxable quarter the output tax exceeds the input tax,
the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess
shall be carried over to the succeeding quarter or quarters: PROVIDED that the input tax inclusive of input
VAT carried over from the previous quarter that may be credited in every quarter shall not exceed seventy
percent (70%) of the output VAT: PROVIDED, HOWEVER, THAT any input tax attributable to zero-rated
7
sales by a VAT-registered person may at his option be refunded or credited against other internal revenue
taxes, . . .
4. With regard to the amendments to other provisions of the NIRC on corporate income tax, franchise,
percentage and excise taxes, the conference committee decided to include such amendments and
basically adopted the provisions found in Senate Bill No. 1950, with some changes as to the rate of the tax
to be imposed.
Under the provisions of both the Rules of the House of Representatives and Senate Rules, the Bicameral
Conference Committee is mandated to settle the differences between the disagreeing provisions in the
House bill and the Senate bill. The term "settle" is synonymous to "reconcile" and "harmonize."25 To
reconcile or harmonize disagreeing provisions, the Bicameral Conference Committee may then (a) adopt
the specific provisions of either the House bill or Senate bill, (b) decide that neither provisions in the House
bill or the provisions in the Senate bill would
be carried into the final form of the bill, and/or (c) try to arrive at a compromise between the disagreeing
provisions.
In the present case, the changes introduced by the Bicameral Conference Committee on disagreeing
provisions were meant only to reconcile and harmonize the disagreeing provisions for it did not inject any
idea or intent that is wholly foreign to the subject embraced by the original provisions.
The so-called stand-by authority in favor of the President, whereby the rate of 10% VAT wanted by the
Senate is retained until such time that certain conditions arise when the 12% VAT wanted by the House
shall be imposed, appears to be a compromise to try to bridge the difference in the rate of VAT proposed
by the two houses of Congress. Nevertheless, such compromise is still totally within the subject of what
rate of VAT should be imposed on taxpayers.
The no pass-on provision was deleted altogether. In the transcripts of the proceedings of the Bicameral
Conference Committee held on May 10, 2005, Sen. Ralph Recto, Chairman of the Senate Panel, explained
the reason for deleting the no pass-on provision in this wise:
. . . the thinking was just to keep the VAT law or the VAT bill simple. And we were thinking that no sector
should be a beneficiary of legislative grace, neither should any sector be discriminated on. The VAT is an
indirect tax. It is a pass on-tax. And let’s keep it plain and simple. Let’s not confuse the bill and put a no
pass-on provision. Two-thirds of the world have a VAT system and in this two-thirds of the globe, I have yet
to see a VAT with a no pass-though provision. So, the thinking of the Senate is basically simple, let’s keep
the VAT simple.26 (Emphasis supplied)
Rep. Teodoro Locsin further made the manifestation that the no pass-on provision "never really enjoyed
the support of either House."27
With regard to the amount of input tax to be credited against output tax, the Bicameral Conference
Committee came to a compromise on the percentage rate of the limitation or cap on such input tax credit,
 8

but again, the change introduced by the Bicameral Conference Committee was totally within the intent of circumvention of the "no amendment rule" (Sec. 26 (2), Art. VI of the 1987 Constitution), fails to convince
both houses to put a cap on input tax that may be the Court to deviate from its ruling in the Tolentino case that:

credited against the output tax. From the inception of the subject revenue bill in the House of
Representatives, one of the major objectives was to "plug a glaring loophole in the tax policy and
administration by creating vital restrictions on the claiming of input VAT tax credits . . ." and "[b]y
introducing limitations on the claiming of tax credit, we are capping a major leakage that has placed our
collection efforts at an apparent disadvantage." 28
As to the amendments to NIRC provisions on taxes other than the value-added tax proposed in Senate Bill
No. 1950, since said provisions were among those referred to it, the conference committee had to act on
the same and it basically adopted the version of the Senate.
Thus, all the changes or modifications made by the Bicameral Conference Committee were germane to
subjects of the provisions referred
to it for reconciliation. Such being the case, the Court does not see any grave abuse of discretion
amounting to lack or excess of jurisdiction committed by the Bicameral Conference Committee. In the
earlier cases of Philippine Judges Association vs. Prado29 and Tolentino vs. Secretary of Finance,30 the Court
recognized the long-standing legislative practice of giving said conference committee ample latitude for
compromising differences between the Senate and the House. Thus, in the Tolentino case, it was held that:
Nor is there any reason for requiring that the Committee’s Report in these cases must have undergone
three readings in each of the two houses. If that be the case, there would be no end to negotiation since
each house may seek modification of the compromise bill. . . .
Art. VI. § 26 (2) must, therefore, be construed as referring only to bills introduced for the first time in
either house of Congress, not to the conference committee report. 32 (Emphasis supplied)
The Court reiterates here that the "no-amendment rule" refers only to the procedure to be followed by
each house of Congress with regard to bills initiated in each of said respective houses, before said bill is
transmitted to the other house for its concurrence or amendment. Verily, to construe said provision in a
way as to proscribe any further changes to a bill after one house has voted on it would lead to absurdity as
this would mean that the other house of Congress would be deprived of its constitutional power to amend
or introduce changes to said bill. Thus, Art. VI, Sec. 26 (2) of the Constitution cannot be taken to mean that
the introduction by the Bicameral Conference Committee of amendments and modifications to
disagreeing provisions in bills that have been acted upon by both houses of Congress is prohibited.
C. R.A. No. 9337 Does Not Violate Article VI, Section 24 of the Constitution on Exclusive Origination of
Revenue Bills

. . . it is within the power of a conference committee to include in its report an entirely new provision that Coming to the issue of the validity of the amendments made regarding the NIRC provisions on corporate
is not found either in the House bill or in the Senate bill. If the committee can propose an amendment income taxes and percentage, excise taxes. Petitioners refer to the following provisions, to wit:
consisting of one or two provisions, there is no reason why it cannot propose several provisions,
collectively considered as an "amendment in the nature of a substitute," so long as such amendment is Section 27 Rates of Income Tax on Domestic Corporation
germane to the subject of the bills before the committee. After all, its report was not final but needed the 28(A)(1) Tax on Resident Foreign Corporation
approval of both houses of Congress to become valid as an act of the legislative department. The charge
28(B)(1) Inter-corporate Dividends
that in this case the Conference Committee acted as a third legislative chamber is thus without any
34(B)(1) Inter-corporate Dividends
basis.31 (Emphasis supplied)
116 Tax on Persons Exempt from VAT
B. R.A. No. 9337 Does Not Violate Article VI, Section 26(2) of the Constitution on the "No-Amendment Rule" 117 Percentage Tax on domestic carriers and keepers of Garage
119 Tax on franchises
Article VI, Sec. 26 (2) of the Constitution, states: 121 Tax on banks and Non-Bank Financial Intermediaries
148 Excise Tax on manufactured oils and other fuels
No bill passed by either House shall become a law unless it has passed three readings on separate days, 151 Excise Tax on mineral products
and printed copies thereof in its final form have been distributed to its Members three days before its 236 Registration requirements
passage, except when the President certifies to the necessity of its immediate enactment to meet a public 237 Issuance of receipts or sales or commercial invoices
calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the 288 Disposition of Incremental Revenue
vote thereon shall be taken immediately thereafter, and the yeas and nays entered in the Journal.
Petitioners claim that the amendments to these provisions of the NIRC did not at all originate from the
Petitioners’ argument that the practice where a bicameral conference committee is allowed to add or House. They aver that House Bill No. 3555 proposed amendments only regarding Sections 106, 107, 108,
delete provisions in the House bill and the Senate bill after these had passed three readings is in effect a 110 and 114 of the NIRC, while House Bill No. 3705 proposed amendments only to Sections 106, 107,108,

109, 110 and 111 of the NIRC; thus, the other sections of the NIRC which the Senate amended but which
amendments were not found in the House bills are not intended to be amended by the House of
Representatives. Hence, they argue that since the proposed amendments did not originate from the
House, such amendments are a violation of Article VI, Section 24 of the Constitution.
The argument does not hold water.
Article VI, Section 24 of the Constitution reads:
Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the House of Representatives but the Senate may
propose or concur with amendments.
In the present cases, petitioners admit that it was indeed House Bill Nos. 3555 and 3705 that initiated the
move for amending provisions of the NIRC dealing mainly with the value-added tax. Upon transmittal of
said House bills to the Senate, the Senate came out with Senate Bill No. 1950 proposing amendments not
only to NIRC provisions on the value-added tax but also amendments to NIRC provisions on other kinds of
taxes. Is the introduction by the Senate of provisions not dealing directly with the value- added tax, which
is the only kind of tax being amended in the House bills, still within the purview of the constitutional
provision authorizing the Senate to propose or concur with amendments to a revenue bill that originated
from the House?
The foregoing question had been squarely answered in the Tolentino case, wherein the Court held, thus:
. . . To begin with, it is not the law – but the revenue bill – which is required by the Constitution to
"originate exclusively" in the House of Representatives. It is important to emphasize this, because a bill
originating in the House may undergo such extensive changes in the Senate that the result may be a
rewriting of the whole. . . . At this point, what is important to note is that, as a result of the Senate action,
a distinct bill may be produced. To insist that a revenue statute – and not only the bill which initiated the
legislative process culminating in the enactment of the law – must substantially be the same as the
House bill would be to deny the Senate’s power not only to "concur with amendments" but also to
"propose amendments." It would be to violate the coequality of legislative power of the two houses of
Congress and in fact make the House superior to the Senate.
… beginning, but in the long run prove effective and beneficial to the overall status of our economy. One
…Given, then, the power of the Senate to propose amendments, the Senate can propose its own version
even with respect to bills which are required by the Constitution to originate in the House.
...
Indeed, what the Constitution simply means is that the initiative for filing revenue, tariff or tax bills, bills
authorizing an increase of the public debt, private bills and bills of local application must come from the
9
House of Representatives on the theory that, elected as they are from the districts, the members of the
House can be expected to be more sensitive to the local needs and problems. On the other hand, the
senators, who are elected at large, are expected to approach the same problems from the national
perspective. Both views are thereby made to bear on the enactment of such laws.33 (Emphasis supplied)
Since there is no question that the revenue bill exclusively originated in the House of Representatives, the
Senate was acting within its
constitutional power to introduce amendments to the House bill when it included provisions in Senate Bill
No. 1950 amending corporate income taxes, percentage, excise and franchise taxes. Verily, Article VI,
Section 24 of the Constitution does not contain any prohibition or limitation on the extent of the
amendments that may be introduced by the Senate to the House revenue bill.
Furthermore, the amendments introduced by the Senate to the NIRC provisions that had not been
touched in the House bills are still in furtherance of the intent of the House in initiating the subject
revenue bills. The Explanatory Note of House Bill No. 1468, the very first House bill introduced on the
floor, which was later substituted by House Bill No. 3555, stated:
One of the challenges faced by the present administration is the urgent and daunting task of solving the
country’s serious financial problems. To do this, government expenditures must be strictly monitored and
controlled and revenues must be significantly increased. This may be easier said than done, but our fiscal
authorities are still optimistic the government will be operating on a balanced budget by the year 2009. In
fact, several measures that will result to significant expenditure savings have been identified by the
administration. It is supported with a credible package of revenue measures that include measures to
improve tax administration and control the leakages in revenues from income taxes and the value-
added tax (VAT). (Emphasis supplied)
Rep. Eric D. Singson, in his sponsorship speech for House Bill No. 3555, declared that:
In the budget message of our President in the year 2005, she reiterated that we all acknowledged that on
top of our agenda must be the restoration of the health of our fiscal system.
In order to considerably lower the consolidated public sector deficit and eventually achieve a balanced
budget by the year 2009, we need to seize windows of opportunities which might seem poignant in the
such opportunity is a review of existing tax rates, evaluating the relevance given our present
conditions.34 (Emphasis supplied)
Notably therefore, the main purpose of the bills emanating from the House of Representatives is to bring
in sizeable revenues for the government
to supplement our country’s serious financial problems, and improve tax administration and control of the
leakages in revenues from income taxes and value-added taxes. As these house bills were transmitted to
the Senate, the latter, approaching the measures from the point of national perspective, can introduce

amendments within the purposes of those bills. It can provide for ways that would soften the impact of
the VAT measure on the consumer, i.e., by distributing the burden across all sectors instead of putting it
entirely on the shoulders of the consumers. The sponsorship speech of Sen. Ralph Recto on why the
provisions on income tax on corporation were included is worth quoting:
All in all, the proposal of the Senate Committee on Ways and Means will raise ₱64.3 billion in additional
revenues annually even while by mitigating prices of power, services and petroleum products.
However, not all of this will be wrung out of VAT. In fact, only ₱48.7 billion amount is from the VAT on
twelve goods and services. The rest of the tab – ₱10.5 billion- will be picked by corporations.
What we therefore prescribe is a burden sharing between corporate Philippines and the consumer. Why
should the latter bear all the pain? Why should the fiscal salvation be only on the burden of the consumer?
The corporate world’s equity is in form of the increase in the corporate income tax from 32 to 35 percent,
but up to 2008 only. This will raise ₱10.5 billion a year. After that, the rate will slide back, not to its old rate
of 32 percent, but two notches lower, to 30 percent.
Clearly, we are telling those with the capacity to pay, corporations, to bear with this emergency provision
that will be in effect for 1,200 days, while we put our fiscal house in order. This fiscal medicine will have an
expiry date.
For their assistance, a reward of tax reduction awaits them. We intend to keep the length of their sacrifice
brief. We would like to assure them that not because there is a light at the end of the tunnel, this
government will keep on making the tunnel long.
The responsibility will not rest solely on the weary shoulders of the small man. Big business will be there to
share the burden.35
As the Court has said, the Senate can propose amendments and in fact, the amendments made on
provisions in the tax on income of corporations are germane to the purpose of the house bills which is to
raise revenues for the government.
Likewise, the Court finds the sections referring to other percentage and excise taxes germane to the
reforms to the VAT system, as these sections would cushion the effects of VAT on consumers. Considering
that certain goods and services which were subject to percentage tax and excise tax would no longer be
VAT-exempt, the consumer would be burdened more as they would be paying the VAT in addition to these
taxes. Thus, there is a need to amend these sections to soften the impact of VAT. Again, in his sponsorship
speech, Sen. Recto said:
However, for power plants that run on oil, we will reduce to zero the present excise tax on bunker fuel, to
lessen the effect of a VAT on this product.
10
For electric utilities like Meralco, we will wipe out the franchise tax in exchange for a VAT.
And in the case of petroleum, while we will levy the VAT on oil products, so as not to destroy the VAT
chain, we will however bring down the excise tax on socially sensitive products such as diesel, bunker, fuel
and kerosene.
...
What do all these exercises point to? These are not contortions of giving to the left hand what was taken
from the right. Rather, these sprang from our concern of softening the impact of VAT, so that the people
can cushion the blow of higher prices they will have to pay as a result of VAT. 36
The other sections amended by the Senate pertained to matters of tax administration which are necessary
for the implementation of the changes in the VAT system.
To reiterate, the sections introduced by the Senate are germane to the subject matter and purposes of the
house bills, which is to supplement our country’s fiscal deficit, among others. Thus, the Senate acted
within its power to propose those amendments.
SUBSTANTIVE ISSUES
I.
Whether Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108 of the NIRC, violate the
following provisions of the Constitution:
a. Article VI, Section 28(1), and
b. Article VI, Section 28(2)
A. No Undue Delegation of Legislative Power
Petitioners ABAKADA GURO Party List, et al., Pimentel, Jr., et al., and Escudero, et al. contend in common
that Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108, respectively, of the NIRC
giving the President the stand-by authority to raise the VAT rate from 10% to 12% when a certain
condition is met, constitutes undue delegation of the legislative power to tax.
The assailed provisions read as follows:
SEC. 4. Sec. 106 of the same Code, as amended, is hereby further amended to read as follows:
SEC. 106. Value-Added Tax on Sale of Goods or Properties. –
(A) Rate and Base of Tax. – There shall be levied, assessed and collected on every sale, barter or exchange
of goods or properties, a value-added tax equivalent to ten percent (10%) of the gross selling price or gross
value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or
transferor: provided, that the President, upon the recommendation of the Secretary of Finance, shall,

effective January 1, 2006, raise the rate of value-added tax to twelve percent (12%), after any of the
following conditions has been satisfied.
(i) value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year
exceeds two and four-fifth percent (2 4/5%) or
(ii) national government deficit as a percentage of GDP of the previous year exceeds one and one-half
percent (1 ½%).
SEC. 5. Section 107 of the same Code, as amended, is hereby further amended to read as follows:
SEC. 107. Value-Added Tax on Importation of Goods. –
(A) In General. – There shall be levied, assessed and collected on every importation of goods a value-added
tax equivalent to ten percent (10%) based on the total value used by the Bureau of Customs in
determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, such tax
to be paid by the importer prior to the release of such goods from customs custody: Provided, That where
the customs duties are determined on the basis of the quantity or volume of the goods, the value-added
tax shall be based on the landed cost plus excise taxes, if any: provided, further, that the President, upon
the recommendation of the Secretary of Finance, shall, effective January 1, 2006, raise the rate of value-
added tax to twelve percent (12%) after any of the following conditions has been satisfied.
(i) value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year
exceeds two and four-fifth percent (2 4/5%) or
(ii) national government deficit as a percentage of GDP of the previous year exceeds one and one-half
percent (1 ½%).
SEC. 6. Section 108 of the same Code, as amended, is hereby further amended to read as follows:
SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties –
(A) Rate and Base of Tax. – There shall be levied, assessed and collected, a value-added tax equivalent to
ten percent (10%) of gross receipts derived from the sale or exchange of services: provided, that the
President, upon the recommendation of the Secretary of Finance, shall, effective January 1, 2006, raise
the rate of value-added tax to twelve percent (12%), after any of the following conditions has been
satisfied.
(i) value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year
exceeds two and four-fifth percent (2 4/5%) or
(ii) national government deficit as a percentage of GDP of the previous year exceeds one and one-half
percent (1 ½%). (Emphasis supplied)
11
Petitioners allege that the grant of the stand-by authority to the President to increase the VAT rate is a
virtual abdication by Congress of its exclusive power to tax because such delegation is not within the
purview of Section 28 (2), Article VI of the Constitution, which provides:
The Congress may, by law, authorize the President to fix within specified limits, and may impose, tariff
rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within the
framework of the national development program of the government.
They argue that the VAT is a tax levied on the sale, barter or exchange of goods and properties as well as
on the sale or exchange of services, which cannot be included within the purview of tariffs under the
exempted delegation as the latter refers to customs duties, tolls or tribute payable upon merchandise to
the government and usually imposed on goods or merchandise imported or exported.
Petitioners ABAKADA GURO Party List, et al., further contend that delegating to the President the
legislative power to tax is contrary to republicanism. They insist that accountability, responsibility and
transparency should dictate the actions of Congress and they should not pass to the President the decision
to impose taxes. They also argue that the law also effectively nullified the President’s power of control,
which includes the authority to set aside and nullify the acts of her subordinates like the Secretary of
Finance, by mandating the fixing of the tax rate by the President upon the recommendation of the
Secretary of Finance.
Petitioners Pimentel, et al. aver that the President has ample powers to cause, influence or create the
conditions provided by the law to bring about either or both the conditions precedent.
On the other hand, petitioners Escudero, et al. find bizarre and revolting the situation that the imposition
of the 12% rate would be subject to the whim of the Secretary of Finance, an unelected bureaucrat,
contrary to the principle of no taxation without representation. They submit that the Secretary of Finance
is not mandated to give a favorable recommendation and he may not even give his recommendation.
Moreover, they allege that no guiding standards are provided in the law on what basis and as to how he
will make his recommendation. They claim, nonetheless, that any recommendation of the Secretary of
Finance can easily be brushed aside by the President since the former is a mere alter ego of the latter, such
that, ultimately, it is the President who decides whether to impose the increased tax rate or not.
A brief discourse on the principle of non-delegation of powers is instructive.
The principle of separation of powers ordains that each of the three great branches of government has
exclusive cognizance of and is supreme in matters falling within its own constitutionally allocated
sphere.37 A logical
corollary to the doctrine of separation of powers is the principle of non-delegation of powers, as expressed
in the Latin maxim: potestas delegata non delegari potest which means "what has been delegated, cannot
be delegated."38 This doctrine is based on the ethical principle that such as delegated power constitutes
not only a right but a duty to be performed by the delegate through the instrumentality of his own
judgment and not through the intervening mind of another.39

With respect to the Legislature, Section 1 of Article VI of the Constitution provides that "the Legislative
power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of
Representatives." The powers which Congress is prohibited from delegating are those which are strictly, or
inherently and exclusively, legislative. Purely legislative power, which can never be delegated, has been
described as the authority to make a complete law – complete as to the time when it shall take effect
and as to whom it shall be applicable – and to determine the expediency of its enactment.40 Thus, the
rule is that in order that a court may be justified in holding a statute unconstitutional as a delegation of
legislative power, it must appear that the power involved is purely legislative in nature – that is, one
appertaining exclusively to the legislative department. It is the nature of the power, and not the liability of
its use or the manner of its exercise, which determines the validity of its delegation.
Nonetheless, the general rule barring delegation of legislative powers is subject to the following
recognized limitations or exceptions:
(1) Delegation of tariff powers to the President under Section 28 (2) of Article VI of the Constitution;
(2) Delegation of emergency powers to the President under Section 23 (2) of Article VI of the Constitution;
(3) Delegation to the people at large;
(4) Delegation to local governments; and
(5) Delegation to administrative bodies.
In every case of permissible delegation, there must be a showing that the delegation itself is valid. It is
valid only if the law (a) is complete in itself, setting forth therein the policy to be executed, carried out, or
implemented by the delegate;41 and (b) fixes a standard — the limits of which are sufficiently determinate
and determinable — to which the delegate must conform in the performance of his functions. 42 A
sufficient standard is one which defines legislative policy, marks its limits, maps out its boundaries and
specifies the public agency to apply it. It indicates the circumstances under which the legislative command
is to be effected.43 Both tests are intended to prevent a total transference of legislative authority to the
delegate, who is not allowed to step into the shoes of the legislature and exercise a power essentially
legislative.44
In People vs. Vera,45 the Court, through eminent Justice Jose P. Laurel, expounded on the concept and
extent of delegation of power in this wise:
In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to
inquire whether the statute was complete in all its terms and provisions when it left the hands of the
legislature so that nothing was left to the judgment of any other appointee or delegate of the legislature. .
..
‘The true distinction’, says Judge Ranney, ‘is between the delegation of power to make the law, which
necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its
execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no
valid objection can be made.’ . . .
12
It is contended, however, that a legislative act may be made to the effect as law after it leaves the hands of
the legislature. It is true that laws may be made effective on certain contingencies, as by proclamation of
the executive or the adoption by the people of a particular community. In Wayman vs. Southard, the
Supreme Court of the United States ruled that the legislature may delegate a power not legislative which it
may itself rightfully exercise. The power to ascertain facts is such a power which may be delegated. There
is nothing essentially legislative in ascertaining the existence of facts or conditions as the basis of the
taking into effect of a law. That is a mental process common to all branches of the
government. Notwithstanding the apparent tendency, however, to relax the rule prohibiting delegation of
legislative authority on account of the complexity arising from social and economic forces at work in this
modern industrial age, the orthodox pronouncement of Judge Cooley in his work on Constitutional
Limitations finds restatement in Prof. Willoughby's treatise on the Constitution of the United States in the
following language — speaking of declaration of legislative power to administrative agencies: The principle
which permits the legislature to provide that the administrative agent may determine when the
circumstances are such as require the application of a law is defended upon the ground that at the time
this authority is granted, the rule of public policy, which is the essence of the legislative act, is
determined by the legislature. In other words, the legislature, as it is its duty to do, determines that,
under given circumstances, certain executive or administrative action is to be taken, and that, under
other circumstances, different or no action at all is to be taken. What is thus left to the administrative
official is not the legislative determination of what public policy demands, but simply the ascertainment
of what the facts of the case require to be done according to the terms of the law by which he is
governed. The efficiency of an Act as a declaration of legislative will must, of course, come from
Congress, but the ascertainment of the contingency upon which the Act shall take effect may be left to
such agencies as it may designate. The legislature, then, may provide that a law shall take effect upon
the happening of future specified contingencies leaving to some other person or body the power to
determine when the specified contingency has arisen. (Emphasis supplied).46
In Edu vs. Ericta,47 the Court reiterated:
What cannot be delegated is the authority under the Constitution to make laws and to alter and repeal
them; the test is the completeness of the statute in all its terms and provisions when it leaves the hands of
the legislature. To determine whether or not there is an undue delegation of legislative power, the inquiry
must be directed to the scope and definiteness of the measure enacted. The legislative does not abdicate
its functions when it describes what job must be done, who is to do it, and what is the scope of his
authority. For a complex economy, that may be the only way in which the legislative process can go
forward. A distinction has rightfully been made between delegation of power to make the laws which
necessarily involves a discretion as to what it shall be, which constitutionally may not be done, and
delegation of authority or discretion as to its execution to be exercised under and in pursuance of the
law, to which no valid objection can be made. The Constitution is thus not to be regarded as denying the
legislature the necessary resources of flexibility and practicability. (Emphasis supplied). 48
Clearly, the legislature may delegate to executive officers or bodies the power to determine certain facts
or conditions, or the happening of contingencies, on which the operation of a statute is, by its terms, made
to depend, but the legislature must prescribe sufficient standards, policies or limitations on their
authority.49 While the power to tax cannot be delegated to executive agencies, details as to the

enforcement and administration of an exercise of such power may be left to them, including the power to
determine the existence of facts on which its operation depends.50
The rationale for this is that the preliminary ascertainment of facts as basis for the enactment of legislation
is not of itself a legislative function, but is simply ancillary to legislation. Thus, the duty of correlating
information and making recommendations is the kind of subsidiary activity which the legislature may
perform through its members, or which it may delegate to others to perform. Intelligent legislation on the
complicated problems of modern society is impossible in the absence of accurate information on the part
of the legislators, and any reasonable method of securing such information is proper. 51 The Constitution as
a continuously operative charter of government does not require that Congress find for itself
every fact upon which it desires to base legislative action or that it make for itself detailed determinations
which it has declared to be prerequisite to application of legislative policy to particular facts and
circumstances impossible for Congress itself properly to investigate.52
In the present case, the challenged section of R.A. No. 9337 is the common proviso in Sections 4, 5 and 6
which reads as follows:
That the President, upon the recommendation of the Secretary of Finance, shall, effective January 1, 2006,
raise the rate of value-added tax to twelve percent (12%), after any of the following conditions has been
satisfied:
(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year
exceeds two and four-fifth percent (2 4/5%); or
(ii) National government deficit as a percentage of GDP of the previous year exceeds one and one-half
percent (1 ½%).
The case before the Court is not a delegation of legislative power. It is simply a delegation of
ascertainment of facts upon which enforcement and administration of the increase rate under the law is
contingent. The legislature has made the operation of the 12% rate effective January 1, 2006, contingent
upon a specified fact or condition. It leaves the entire operation or non-operation of the 12% rate upon
factual matters outside of the control of the executive.
No discretion would be exercised by the President. Highlighting the absence of discretion is the fact that
the word shall is used in the common proviso. The use of the word shall connotes a mandatory order. Its
use in a statute denotes an imperative obligation and is inconsistent with the idea of discretion.53 Where
the law is clear and unambiguous, it must be taken to mean exactly what it says, and courts have no choice
but to see to it that the mandate is obeyed.54
Thus, it is the ministerial duty of the President to immediately impose the 12% rate upon the existence of
any of the conditions specified by Congress. This is a duty which cannot be evaded by the President.
Inasmuch as the law specifically uses the word shall, the exercise of discretion by the President does not
come into play. It is a clear directive to impose the 12% VAT rate when the specified conditions are
13
present. The time of taking into effect of the 12% VAT rate is based on the happening of a certain specified
contingency, or upon the ascertainment of certain facts or conditions by a person or body other than the
legislature itself.
The Court finds no merit to the contention of petitioners ABAKADA GURO Party List, et al. that the law
effectively nullified the President’s power of control over the Secretary of Finance by mandating the fixing
of the tax rate by the President upon the recommendation of the Secretary of Finance. The Court cannot
also subscribe to the position of petitioners
Pimentel, et al. that the word shall should be interpreted to mean may in view of the phrase "upon the
recommendation of the Secretary of Finance." Neither does the Court find persuasive the submission of
petitioners Escudero, et al. that any recommendation by the Secretary of Finance can easily be brushed
aside by the President since the former is a mere alter ego of the latter.
When one speaks of the Secretary of Finance as the alter ego of the President, it simply means that as
head of the Department of Finance he is the assistant and agent of the Chief Executive. The multifarious
executive and administrative functions of the Chief Executive are performed by and through the executive
departments, and the acts of the secretaries of such departments, such as the Department of Finance,
performed and promulgated in the regular course of business, are, unless disapproved or reprobated by
the Chief Executive, presumptively the acts of the Chief Executive. The Secretary of Finance, as such,
occupies a political position and holds office in an advisory capacity, and, in the language of Thomas
Jefferson, "should be of the President's bosom confidence" and, in the language of Attorney-General
Cushing, is "subject to the direction of the President." 55
In the present case, in making his recommendation to the President on the existence of either of the two
conditions, the Secretary of Finance is not acting as the alter ego of the President or even her subordinate.
In such instance, he is not subject to the power of control and direction of the President. He is acting as
the agent of the legislative department, to determine and declare the event upon which its expressed will
is to take effect.56 The Secretary of Finance becomes the means or tool by which legislative policy is
determined and implemented, considering that he possesses all the facilities to gather data and
information and has a much broader perspective to properly evaluate them. His function is to gather and
collate statistical data and other pertinent information and verify if any of the two conditions laid out by
Congress is present. His personality in such instance is in reality but a projection of that of Congress. Thus,
being the agent of Congress and not of the President, the President cannot alter or modify or nullify, or set
aside the findings of the Secretary of Finance and to substitute the judgment of the former for that of the
latter.
Congress simply granted the Secretary of Finance the authority to ascertain the existence of a fact, namely,
whether by December 31, 2005, the value-added tax collection as a percentage of Gross Domestic Product
(GDP) of the previous year exceeds two and four-fifth percent (24/5%) or the national government deficit
as a percentage of GDP of the previous year exceeds one and one-half percent (1½%). If either of these
two instances has occurred, the Secretary of Finance, by legislative mandate, must submit such
information to the President. Then the 12% VAT rate must be imposed by the President effective January
1, 2006. There is no undue delegation of legislative power but only of the discretion as to the execution

of a law. This is constitutionally permissible.57 Congress does not abdicate its functions or unduly delegate
power when it describes what job must be done, who must do it, and what is the scope of his authority; in
our complex economy that is frequently the only way in which the legislative process can go forward.58
As to the argument of petitioners ABAKADA GURO Party List, et al. that delegating to the President the
legislative power to tax is contrary to the principle of republicanism, the same deserves scant
consideration. Congress did not delegate the power to tax but the mere implementation of the law. The
intent and will to increase the VAT rate to 12% came from Congress and the task of the President is to
simply execute the legislative policy. That Congress chose to do so in such a manner is not within the
province of the Court to inquire into, its task being to interpret the law. 59
The insinuation by petitioners Pimentel, et al. that the President has ample powers to cause, influence or
create the conditions to bring about either or both the conditions precedent does not deserve any merit as
this argument is highly speculative. The Court does not rule on allegations which are manifestly
conjectural, as these may not exist at all. The Court deals with facts, not fancies; on realities, not
appearances. When the Court acts on appearances instead of realities, justice and law will be short-lived.
B. The 12% Increase VAT Rate Does Not Impose an Unfair and Unnecessary Additional Tax Burden
Petitioners Pimentel, et al. argue that the 12% increase in the VAT rate imposes an unfair and additional
tax burden on the people. Petitioners also argue that the 12% increase, dependent on any of the 2
conditions set forth in the contested provisions, is ambiguous because it does not state if the VAT rate
would be returned to the original 10% if the rates are no longer satisfied. Petitioners also argue that such
rate is unfair and unreasonable, as the people are unsure of the applicable VAT rate from year to year.
Under the common provisos of Sections 4, 5 and 6 of R.A. No. 9337, if any of the two conditions set forth
therein are satisfied, the President shall increase the VAT rate to 12%. The provisions of the law are clear.
It does not provide for a return to the 10% rate nor does it empower the President to so revert if, after the
rate is increased to 12%, the VAT collection goes below the 24/5 of the GDP of the previous year or that the
national government deficit as a percentage of GDP of the previous year does not exceed 1½%.
Therefore, no statutory construction or interpretation is needed. Neither can conditions or limitations be
introduced where none is provided for. Rewriting the law is a forbidden ground that only Congress may
tread upon.60
Thus, in the absence of any provision providing for a return to the 10% rate, which in this case the Court
finds none, petitioners’ argument is, at best, purely speculative. There is no basis for petitioners’ fear of a
fluctuating VAT rate because the law itself does not provide that the rate should go back to 10% if the
conditions provided in Sections 4, 5 and 6 are no longer present. The rule is that where the provision of the
law is clear and unambiguous, so that there is no occasion for the court's seeking the legislative intent, the
law must be taken as it is, devoid of judicial addition or subtraction. 61
14
Petitioners also contend that the increase in the VAT rate, which was allegedly an incentive to the
President to raise the VAT collection to at least 2 4/5 of the GDP of the previous year, should be based on
fiscal adequacy.
Petitioners obviously overlooked that increase in VAT collection is not the only condition. There is another
condition, i.e., the national government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 ½%).
Respondents explained the philosophy behind these alternative conditions:
1. VAT/GDP Ratio > 2.8%
The condition set for increasing VAT rate to 12% have economic or fiscal meaning. If VAT/GDP is less than
2.8%, it means that government has weak or no capability of implementing the VAT or that VAT is not
effective in the function of the tax collection. Therefore, there is no value to increase it to 12% because
such action will also be ineffectual.
2. Nat’l Gov’t Deficit/GDP >1.5%
The condition set for increasing VAT when deficit/GDP is 1.5% or less means the fiscal condition of
government has reached a relatively sound position or is towards the direction of a balanced budget
position. Therefore, there is no need to increase the VAT rate since the fiscal house is in a relatively
healthy position. Otherwise stated, if the ratio is more than 1.5%, there is indeed a need to increase the
VAT rate.62
That the first condition amounts to an incentive to the President to increase the VAT collection does not
render it unconstitutional so long as there is a public purpose for which the law was passed, which in this
case, is mainly to raise revenue. In fact, fiscal adequacy dictated the need for a raise in revenue.
The principle of fiscal adequacy as a characteristic of a sound tax system was originally stated by Adam
Smith in his Canons of Taxation (1776), as:
IV. Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as
little as possible over and above what it brings into the public treasury of the state.63
It simply means that sources of revenues must be adequate to meet government expenditures and their
variations.64
The dire need for revenue cannot be ignored. Our country is in a quagmire of financial woe. During the
Bicameral Conference Committee hearing, then Finance Secretary Purisima bluntly depicted the country’s
gloomy state of economic affairs, thus:
 15

First, let me explain the position that the Philippines finds itself in right now. We are in a position where 90 legislative discretion within its prescribed limits should be exercised in a particular manner are matters for
percent of our revenue is used for debt service. So, for every peso of revenue that we currently raise, 90 the judgment of the legislature, and the serious conflict of opinions does not suffice to bring them within
goes to debt service. That’s interest plus amortization of our debt. So clearly, this is not a sustainable the range of judicial cognizance.66
situation. That’s the first fact.
In the same vein, the Court in this case will not dawdle on the purpose of Congress or the executive policy,
The second fact is that our debt to GDP level is way out of line compared to other peer countries that given that it is not for the judiciary to "pass upon questions of wisdom, justice or expediency of
borrow money from that international financial markets. Our debt to GDP is approximately equal to our legislation."67
GDP. Again, that shows you that this is not a sustainable situation.
II.
The third thing that I’d like to point out is the environment that we are presently operating in is not as
benign as what it used to be the past five years. Whether Section 8 of R.A. No. 9337, amending Sections 110(A)(2) and 110(B) of the NIRC; and Section 12
of R.A. No. 9337, amending Section 114(C) of the NIRC, violate the following provisions of the Constitution:
What do I mean by that?
a. Article VI, Section 28(1), and
In the past five years, we’ve been lucky because we were operating in a period of basically global growth
and low interest rates. The past few months, we have seen an inching up, in fact, a rapid increase in the b. Article III, Section 1
interest rates in the leading economies of the world. And, therefore, our ability to borrow at reasonable
prices is going to be challenged. In fact, ultimately, the question is our ability to access the financial A. Due Process and Equal Protection Clauses
markets.
Petitioners Association of Pilipinas Shell Dealers, Inc., et al. argue that Section 8 of R.A. No. 9337,
When the President made her speech in July last year, the environment was not as bad as it is now, at amending Sections 110 (A)(2), 110 (B), and Section 12 of R.A. No. 9337, amending Section 114 (C) of the
least based on the forecast of most financial institutions. So, we were assuming that raising 80 billion NIRC are arbitrary, oppressive, excessive and confiscatory. Their argument is premised on the
would put us in a position where we can then convince them to improve our ability to borrow at lower constitutional right against deprivation of life, liberty of property without due process of law, as embodied
rates. But conditions have changed on us because the interest rates have gone up. In fact, just within this in Article III, Section 1 of the Constitution.
room, we tried to access the market for a billion dollars because for this year alone, the Philippines will
have to borrow 4 billion dollars. Of that amount, we have borrowed 1.5 billion. We issued last January a
Petitioners also contend that these provisions violate the constitutional guarantee of equal protection of
25-year bond at 9.7 percent cost. We were trying to access last week and the market was not as favorable
the law.
and up to now we have not accessed and we might pull back because the conditions are not very good.
The doctrine is that where the due process and equal protection clauses are invoked, considering that they
So given this situation, we at the Department of Finance believe that we really need to front-end our
are not fixed rules but rather broad standards, there is a need for proof of such persuasive character as
deficit reduction. Because it is deficit that is causing the increase of the debt and we are in what we call a
would lead to such a conclusion. Absent such a showing, the presumption of validity must prevail. 68
debt spiral. The more debt you have, the more deficit you have because interest and debt service eats and
eats more of your revenue. We need to get out of this debt spiral. And the only way, I think, we can get
Section 8 of R.A. No. 9337, amending Section 110(B) of the NIRC imposes a limitation on the amount of
out of this debt spiral is really have a front-end adjustment in our revenue base.65
input tax that may be credited against the output tax. It states, in part: "[P]rovided, that the input tax
inclusive of the input VAT carried over from the previous quarter that may be credited in every quarter
The image portrayed is chilling. Congress passed the law hoping for rescue from an inevitable catastrophe.
shall not exceed seventy percent (70%) of the output VAT: …"
Whether the law is indeed sufficient to answer the state’s economic dilemma is not for the Court to judge.
In the Fariñas case, the Court refused to consider the various arguments raised therein that dwelt on the
Input Tax is defined under Section 110(A) of the NIRC, as amended, as the value-added tax
wisdom of Section 14 of R.A. No. 9006 (The Fair Election Act), pronouncing that:
due from or paid by a VAT-registered person on the importation of goods or local purchase of good and
services, including lease or use of property, in the course of trade or business, from a VAT-registered
. . . policy matters are not the concern of the Court. Government policy is within the exclusive dominion of
person, and Output Tax is the value-added tax due on the sale or lease of taxable goods or properties or
the political branches of the government. It is not for this Court to look into the wisdom or propriety of
services by any person registered or required to register under the law.
legislative determination. Indeed, whether an enactment is wise or unwise, whether it is based on sound
economic theory, whether it is the best means to achieve the desired results, whether, in short, the

Petitioners claim that the contested sections impose limitations on the amount of input tax that may be
claimed. In effect, a portion of the input tax that has already been paid cannot now be credited against the
output tax.
Petitioners’ argument is not absolute. It assumes that the input tax exceeds 70% of the output tax, and
therefore, the input tax in excess of 70% remains uncredited. However, to the extent that the input tax is
less than 70% of the output tax, then 100% of such input tax is still creditable.
More importantly, the excess input tax, if any, is retained in a business’s books of accounts and remains
creditable in the succeeding quarter/s. This is explicitly allowed by Section 110(B), which provides that "if
the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or
quarters." In addition, Section 112(B) allows a VAT-registered person to apply for the issuance of a tax
credit certificate or refund for any unused input taxes, to the extent that such input taxes have not been
applied against the output taxes. Such unused input tax may be used in payment of his other internal
revenue taxes.
The non-application of the unutilized input tax in a given quarter is not ad infinitum, as petitioners
exaggeratedly contend. Their analysis of the effect of the 70% limitation is incomplete and one-sided. It
ends at the net effect that there will be unapplied/unutilized inputs VAT for a given quarter. It does not
proceed further to the fact that such unapplied/unutilized input tax may be credited in the subsequent
periods as allowed by the carry-over provision of Section 110(B) or that it may later on be refunded
through a tax credit certificate under Section 112(B).
Therefore, petitioners’ argument must be rejected.
On the other hand, it appears that petitioner Garcia failed to comprehend the operation of the 70%
limitation on the input tax. According to petitioner, the limitation on the creditable input tax in effect
allows VAT-registered establishments to retain a portion of the taxes they collect, which violates the
principle that tax collection and revenue should be for public purposes and expenditures
As earlier stated, the input tax is the tax paid by a person, passed on to him by the seller, when he buys
goods. Output tax meanwhile is the tax due to the person when he sells goods. In computing the VAT
payable, three possible scenarios may arise:
First, if at the end of a taxable quarter the output taxes charged by the seller are equal to the input taxes
that he paid and passed on by the suppliers, then no payment is required;
Second, when the output taxes exceed the input taxes, the person shall be liable for the excess, which has
to be paid to the Bureau of Internal Revenue (BIR);69 and
Third, if the input taxes exceed the output taxes, the excess shall be carried over to the succeeding quarter
or quarters. Should the input taxes result from zero-rated or effectively zero-rated transactions, any excess
over the output taxes shall instead be refunded to the taxpayer or credited against other internal revenue
taxes, at the taxpayer’s option.70
16
Section 8 of R.A. No. 9337 however, imposed a 70% limitation on the input tax. Thus, a person can credit
his input tax only up to the extent of 70% of the output tax. In layman’s term, the value-added taxes that a
person/taxpayer paid and passed on to him by a seller can only be credited up to 70% of the value-added
taxes that is due to him on a taxable transaction. There is no retention of any tax collection because the
person/taxpayer has already previously paid the input tax to a seller, and the seller will subsequently remit
such input tax to the BIR. The party directly liable for the payment of the tax is the seller. 71 What only
needs to be done is for the person/taxpayer to apply or credit these input taxes, as evidenced by receipts,
against his output taxes.
Petitioners Association of Pilipinas Shell Dealers, Inc., et al. also argue that the input tax partakes the
nature of a property that may not be confiscated, appropriated, or limited without due process of law.
The input tax is not a property or a property right within the constitutional purview of the due process
clause. A VAT-registered person’s entitlement to the creditable input tax is a mere statutory privilege.
The distinction between statutory privileges and vested rights must be borne in mind for persons have no
vested rights in statutory privileges. The state may change or take away rights, which were created by the
law of the state, although it may not take away property, which was vested by virtue of such rights. 72
Under the previous system of single-stage taxation, taxes paid at every level of distribution are not
recoverable from the taxes payable, although it becomes part of the cost, which is deductible from the
gross revenue. When Pres. Aquino issued E.O. No. 273 imposing a 10% multi-stage tax on all sales, it was
then that the crediting of the input tax paid on purchase or importation of goods and services by VAT-
registered persons against the output tax was introduced.73 This was adopted by the Expanded VAT Law
(R.A. No. 7716),74 and The Tax Reform Act of 1997 (R.A. No. 8424).75 The right to credit input tax as against
the output tax is clearly a privilege created by law, a privilege that also the law can remove, or in this case,
limit.
Petitioners also contest as arbitrary, oppressive, excessive and confiscatory, Section 8 of R.A. No. 9337,
amending Section 110(A) of the NIRC, which provides:
SEC. 110. Tax Credits. –
(A) Creditable Input Tax. – …
Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or
business for which deduction for depreciation is allowed under this Code, shall be spread evenly over the
month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such
goods, excluding the VAT component thereof, exceeds One million pesos (₱1,000,000.00): Provided,
however, That if the estimated useful life of the capital goods is less than five (5) years, as used for
depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, finally,
That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the
purchaser, lessee or license upon payment of the compensation, rental, royalty or fee.

The foregoing section imposes a 60-month period within which to amortize the creditable input tax on
purchase or importation of capital goods with acquisition cost of ₱1 Million pesos, exclusive of the VAT
component. Such spread out only poses a delay in the crediting of the input tax. Petitioners’ argument is
without basis because the taxpayer is not permanently deprived of his privilege to credit the input tax.
It is worth mentioning that Congress admitted that the spread-out of the creditable input tax in this case
amounts to a 4-year interest-free loan to the government.76 In the same breath, Congress also justified its
move by saying that the provision was designed to raise an annual revenue of 22.6 billion. 77 The legislature
also dispelled the fear that the provision will fend off foreign investments, saying that foreign investors
have other tax incentives provided by law, and citing the case of China, where despite a 17.5% non-
creditable VAT, foreign investments were not deterred. 78 Again, for whatever is the purpose of the 60-
month amortization, this involves executive economic policy and legislative wisdom in which the Court
cannot intervene.
With regard to the 5% creditable withholding tax imposed on payments made by the government for
taxable transactions, Section 12 of R.A. No. 9337, which amended Section 114 of the NIRC, reads:
SEC. 114. Return and Payment of Value-added Tax. –
(C) Withholding of Value-added Tax. – The Government or any of its political subdivisions,
instrumentalities or agencies, including government-owned or controlled corporations (GOCCs) shall,
before making payment on account of each purchase of goods and services which are subject to the value-
added tax imposed in Sections 106 and 108 of this Code, deduct and withhold a final value-added tax at
the rate of five percent (5%) of the gross payment thereof: Provided, That the payment for lease or use of
properties or property rights to nonresident owners shall be subject to ten percent (10%) withholding tax
at the time of payment. For purposes of this Section, the payor or person in control of the payment shall
be considered as the withholding agent.
The value-added tax withheld under this Section shall be remitted within ten (10) days following the end of
the month the withholding was made.
Section 114(C) merely provides a method of collection, or as stated by respondents, a more simplified VAT
withholding system. The government in this case is constituted as a withholding agent with respect to their
payments for goods and services.
Prior to its amendment, Section 114(C) provided for different rates of value-added taxes to be withheld --
3% on gross payments for purchases of goods; 6% on gross payments for services supplied by contractors
other than by public works contractors; 8.5% on gross payments for services supplied by public work
contractors; or 10% on payment for the lease or use of properties or property rights to nonresident
owners. Under the present Section 114(C), these different rates, except for the 10% on lease or property
rights payment to nonresidents, were deleted, and a uniform rate of 5% is applied.
17
The Court observes, however, that the law the used the word final. In tax usage, final, as opposed to
creditable, means full. Thus, it is provided in Section 114(C): "final value-added tax at the rate of five
percent (5%)."
In Revenue Regulations No. 02-98, implementing R.A. No. 8424 (The Tax Reform Act of 1997), the concept
of final withholding tax on income was explained, to wit:
SECTION 2.57. Withholding of Tax at Source
(A) Final Withholding Tax. – Under the final withholding tax system the amount of income tax withheld by
the withholding agent is constituted as full and final payment of the income tax due from the payee on
the said income. The liability for payment of the tax rests primarily on the payor as a withholding agent.
Thus, in case of his failure to withhold the tax or in case of underwithholding, the deficiency tax shall be
collected from the payor/withholding agent. …
(B) Creditable Withholding Tax. – Under the creditable withholding tax system, taxes withheld on certain
income payments are intended to equal or at least approximate the tax due of the payee on said income.
… Taxes withheld on income payments covered by the expanded withholding tax (referred to in Sec. 2.57.2
of these regulations) and compensation income (referred to in Sec. 2.78 also of these regulations) are
creditable in nature.
As applied to value-added tax, this means that taxable transactions with the government are subject to a
5% rate, which constitutes as full payment of the tax payable on the transaction. This represents the net
VAT payable of the seller. The other 5% effectively accounts for the standard input VAT (deemed input
VAT), in lieu of the actual input VAT directly or attributable to the taxable transaction.79
The Court need not explore the rationale behind the provision. It is clear that Congress intended to treat
differently taxable transactions with the government.80 This is supported by the fact that under the old
provision, the 5% tax withheld by the government remains creditable against the tax liability of the seller
or contractor, to wit:
SEC. 114. Return and Payment of Value-added Tax. –
(C) Withholding of Creditable Value-added Tax. – The Government or any of its political subdivisions,
instrumentalities or agencies, including government-owned or controlled corporations (GOCCs) shall,
before making payment on account of each purchase of goods from sellers and services rendered by
contractors which are subject to the value-added tax imposed in Sections 106 and 108 of this Code, deduct
and withhold the value-added tax due at the rate of three percent (3%) of the gross payment for the
purchase of goods and six percent (6%) on gross receipts for services rendered by contractors on every
sale or installment payment which shall be creditable against the value-added tax liability of the seller or
contractor: Provided, however, That in the case of government public works contractors, the withholding
rate shall be eight and one-half percent (8.5%): Provided, further, That the payment for lease or use of
properties or property rights to nonresident owners shall be subject to ten percent (10%) withholding tax

at the time of payment. For this purpose, the payor or person in control of the payment shall be
considered as the withholding agent.
The valued-added tax withheld under this Section shall be remitted within ten (10) days following the end
of the month the withholding was made. (Emphasis supplied)
As amended, the use of the word final and the deletion of the word creditable exhibits Congress’s
intention to treat transactions with the government differently. Since it has not been shown that the class
subject to the 5% final withholding tax has been unreasonably narrowed, there is no reason to invalidate
the provision. Petitioners, as petroleum dealers, are not the only ones subjected to the 5% final
withholding tax. It applies to all those who deal with the government.
Moreover, the actual input tax is not totally lost or uncreditable, as petitioners believe. Revenue
Regulations No. 14-2005 or the Consolidated Value-Added Tax Regulations 2005 issued by the BIR,
provides that should the actual input tax exceed 5% of gross payments, the excess may form part of the
cost. Equally, should the actual input tax be less than 5%, the difference is treated as income. 81
Petitioners also argue that by imposing a limitation on the creditable input tax, the government gets to tax
a profit or value-added even if there is no profit or value-added.
Petitioners’ stance is purely hypothetical, argumentative, and again, one-sided. The Court will not engage
in a legal joust where premises are what ifs, arguments, theoretical and facts, uncertain. Any disquisition
by the Court on this point will only be, as Shakespeare describes life in Macbeth,82 "full of sound and fury,
signifying nothing."
What’s more, petitioners’ contention assumes the proposition that there is no profit or value-added. It
need not take an astute businessman to know that it is a matter of exception that a business will sell goods
or services without profit or value-added. It cannot be overstressed that a business is created precisely for
profit.
The equal protection clause under the Constitution means that "no person or class of persons shall be
deprived of the same protection of laws which is enjoyed by other persons or other classes in the same
place and in like circumstances."83
The power of the State to make reasonable and natural classifications for the purposes of taxation has long
been established. Whether it relates to the subject of taxation, the kind of property, the rates to be levied,
or the amounts to be raised, the methods of assessment, valuation and collection, the State’s power is
entitled to presumption of validity. As a rule, the judiciary will not interfere with such power absent a clear
showing of unreasonableness, discrimination, or arbitrariness. 84
Petitioners point out that the limitation on the creditable input tax if the entity has a high ratio of input
tax, or invests in capital equipment, or has several transactions with the government, is not based on real
and substantial differences to meet a valid classification.
18
The argument is pedantic, if not outright baseless. The law does not make any classification in the subject
of taxation, the kind of property, the rates to be levied or the amounts to be raised, the methods of
assessment, valuation and collection. Petitioners’ alleged distinctions are based on variables that bear
different consequences. While the implementation of the law may yield varying end results depending on
one’s profit margin and value-added, the Court cannot go beyond what the legislature has laid down and
interfere with the affairs of business.
The equal protection clause does not require the universal application of the laws on all persons or things
without distinction. This might in fact sometimes result in unequal protection. What the clause requires is
equality among equals as determined according to a valid classification. By classification is meant the
grouping of persons or things similar to each other in certain particulars and different from all others in
these same particulars.85
Petitioners brought to the Court’s attention the introduction of Senate Bill No. 2038 by Sens. S.R. Osmeña
III and Ma. Ana Consuelo A.S. – Madrigal on June 6, 2005, and House Bill No. 4493 by Rep. Eric D. Singson.
The proposed legislation seeks to amend the 70% limitation by increasing the same to 90%. This, according
to petitioners, supports their stance that the 70% limitation is arbitrary and confiscatory. On this score,
suffice it to say that these are still proposed legislations. Until Congress amends the law, and absent any
unequivocal basis for its unconstitutionality, the 70% limitation stays.
B. Uniformity and Equitability of Taxation
Article VI, Section 28(1) of the Constitution reads:
The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of
taxation.
Uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed
at the same rate. Different articles may be taxed at different amounts provided that the rate is uniform on
the same class everywhere with all people at all times. 86
In this case, the tax law is uniform as it provides a standard rate of 0% or 10% (or 12%) on all goods and
services. Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108, respectively, of the
NIRC, provide for a rate of 10% (or 12%) on sale of goods and properties, importation of goods, and sale of
services and use or lease of properties. These same sections also provide for a 0% rate on certain sales and
transaction.
Neither does the law make any distinction as to the type of industry or trade that will bear the 70%
limitation on the creditable input tax, 5-year amortization of input tax paid on purchase of capital goods or
the 5% final withholding tax by the government. It must be stressed that the rule of uniform taxation does
not deprive Congress of the power to classify subjects of taxation, and only demands uniformity within the
particular class.87

R.A. No. 9337 is also equitable. The law is equipped with a threshold margin. The VAT rate of 0% or 10%
(or 12%) does not apply to sales of goods or services with gross annual sales or receipts not exceeding
₱1,500,000.00.88Also, basic marine and agricultural food products in their original state are still not subject
to the tax,89 thus ensuring that prices at the grassroots level will remain accessible. As was stated
in Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan:90
The disputed sales tax is also equitable. It is imposed only on sales of goods or services by persons engaged
in business with an aggregate gross annual sales exceeding ₱200,000.00. Small corner sari-sari stores are
consequently exempt from its application. Likewise exempt from the tax are sales of farm and marine
products, so that the costs of basic food and other necessities, spared as they are from the incidence of
the VAT, are expected to be relatively lower and within the reach of the general public.
It is admitted that R.A. No. 9337 puts a premium on businesses with low profit margins, and unduly favors
those with high profit margins. Congress was not oblivious to this. Thus, to equalize the weighty burden
the law entails, the law, under Section 116, imposed a 3% percentage tax on VAT-exempt persons under
Section 109(v), i.e., transactions with gross annual sales and/or receipts not exceeding ₱1.5 Million. This
acts as a equalizer because in effect, bigger businesses that qualify for VAT coverage and VAT-exempt
taxpayers stand on equal-footing.
Moreover, Congress provided mitigating measures to cushion the impact of the imposition of the tax on
those previously exempt. Excise taxes on petroleum products91 and natural gas92 were reduced.
Percentage tax on domestic carriers was removed.93 Power producers are now exempt from paying
franchise tax.94
Aside from these, Congress also increased the income tax rates of corporations, in order to distribute the
burden of taxation. Domestic, foreign, and non-resident corporations are now subject to a 35% income tax
rate, from a previous 32%.95 Intercorporate dividends of non-resident foreign corporations are still subject
to 15% final withholding tax but the tax credit allowed on the corporation’s domicile was increased to
20%.96 The Philippine Amusement and Gaming Corporation (PAGCOR) is not exempt from income taxes
anymore.97 Even the sale by an artist of his works or services performed for the production of such works
was not spared.
All these were designed to ease, as well as spread out, the burden of taxation, which would otherwise rest
largely on the consumers. It cannot therefore be gainsaid that R.A. No. 9337 is equitable.
C. Progressivity of Taxation
Lastly, petitioners contend that the limitation on the creditable input tax is anything but regressive. It is
the smaller business with higher input tax-output tax ratio that will suffer the consequences.
Progressive taxation is built on the principle of the taxpayer’s ability to pay. This principle was also lifted
from Adam Smith’s Canons of Taxation, and it states:
19
I. The subjects of every state ought to contribute towards the support of the government, as nearly as
possible, in proportion to their respective abilities; that is, in proportion to the revenue which they
respectively enjoy under the protection of the state.
Taxation is progressive when its rate goes up depending on the resources of the person affected. 98
The VAT is an antithesis of progressive taxation. By its very nature, it is regressive. The principle of
progressive taxation has no relation with the VAT system inasmuch as the VAT paid by the consumer or
business for every goods bought or services enjoyed is the same regardless of income. In
other words, the VAT paid eats the same portion of an income, whether big or small. The disparity lies in
the income earned by a person or profit margin marked by a business, such that the higher the income or
profit margin, the smaller the portion of the income or profit that is eaten by VAT. A converso, the lower
the income or profit margin, the bigger the part that the VAT eats away. At the end of the day, it is really
the lower income group or businesses with low-profit margins that is always hardest hit.
Nevertheless, the Constitution does not really prohibit the imposition of indirect taxes, like the VAT. What
it simply provides is that Congress shall "evolve a progressive system of taxation." The Court stated in
the Tolentino case, thus:
The Constitution does not really prohibit the imposition of indirect taxes which, like the VAT, are
regressive. What it simply provides is that Congress shall ‘evolve a progressive system of taxation.’ The
constitutional provision has been interpreted to mean simply that ‘direct taxes are . . . to be preferred
[and] as much as possible, indirect taxes should be minimized.’ (E. FERNANDO, THE CONSTITUTION OF THE
PHILIPPINES 221 (Second ed. 1977)) Indeed, the mandate to Congress is not to prescribe, but to evolve, a
progressive tax system. Otherwise, sales taxes, which perhaps are the oldest form of indirect taxes, would
have been prohibited with the proclamation of Art. VIII, §17 (1) of the 1973 Constitution from which the
present Art. VI, §28 (1) was taken. Sales taxes are also regressive.
Resort to indirect taxes should be minimized but not avoided entirely because it is difficult, if not
impossible, to avoid them by imposing such taxes according to the taxpayers' ability to pay. In the case of
the VAT, the law minimizes the regressive effects of this imposition by providing for zero rating of certain
transactions (R.A. No. 7716, §3, amending §102 (b) of the NIRC), while granting exemptions to other
transactions. (R.A. No. 7716, §4 amending §103 of the NIRC) 99
CONCLUSION
It has been said that taxes are the lifeblood of the government. In this case, it is just an enema, a first-aid
measure to resuscitate an economy in distress. The Court is neither blind nor is it turning a deaf ear on the
plight of the masses. But it does not have the panacea for the malady that the law seeks to remedy. As in
other cases, the Court cannot strike down a law as unconstitutional simply because of its yokes.
 20

Let us not be overly influenced by the plea that for every wrong there is a remedy, and that the judiciary HER EXCELLENCY, PRESIDENT GLORIA MACAPAGAL-ARROYO, THE HONORABLE EXECUTIVE SECRETARY, EDUARDO ERMITA, THE CHIEF OF STAFF,
ARMED FORCES OF THE PHILIPPINES, GENEROSO SENGA, AND THE PNP DIRECTOR GENERAL, ARTURO LOMIBAO, Respondents.
should stand ready to afford relief. There are undoubtedly many wrongs the judicature may not correct, x-------------------------------------x
for instance, those involving political questions. . . . G.R. No. 171400 May 3, 2006
ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner,
vs.
Let us likewise disabuse our minds from the notion that the judiciary is the repository of remedies for all EXECUTIVE SECRETARY EDUARDO R. ERMITA, LT. GEN. GENEROSO SENGA, AND DIRECTOR GENERAL ARTURO LOMIBAO, Respondents.
G.R. No. 171489 May 3, 2006
political or social ills; We should not forget that the Constitution has judiciously allocated the powers of JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA, JOSE AMOR M. AMORADO, ALICIA A. RISOS-VIDAL, FELIMON C. ABELITA III,
government to three distinct and separate compartments; and that judicial interpretation has tended to MANUEL P. LEGASPI, J.B. JOVY C. BERNABE, BERNARD L. DAGCUTA, ROGELIO V. GARCIA AND INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioners,
vs.
the preservation of the independence of the three, and a zealous regard of the prerogatives of each, HON. EXECUTIVE SECRETARY EDUARDO ERMITA, GENERAL GENEROSO SENGA, IN HIS CAPACITY AS AFP CHIEF OF STAFF, AND DIRECTOR GENERAL
knowing full well that one is not the guardian of the others and that, for official wrong-doing, each may be ARTURO LOMIBAO, IN HIS CAPACITY AS PNP CHIEF, Respondents.
brought to account, either by impeachment, trial or by the ballot box. 100 x-------------------------------------x
G.R. No. 171424 May 3, 2006
LOREN B. LEGARDA, Petitioner,
vs.
The words of the Court in Vera vs. Avelino101 holds true then, as it still holds true now. All things GLORIA MACAPAGAL-ARROYO, IN HER CAPACITY AS PRESIDENT AND COMMANDER-IN-CHIEF; ARTURO LOMIBAO, IN HIS CAPACITY AS DIRECTOR-
considered, there is no raison d'être for the unconstitutionality of R.A. No. 9337. GENERAL OF THE PHILIPPINE NATIONAL POLICE (PNP); GENEROSO SENGA, IN HIS CAPACITY AS CHIEF OF STAFF OF THE ARMED FORCES OF THE
PHILIPPINES (AFP); AND EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, Respondents.

WHEREFORE, Republic Act No. 9337 not being unconstitutional, the petitions in G.R. Nos. 168056, 168207,
168461, 168463, and 168730, are hereby DISMISSED. DECISION

There being no constitutional impediment to the full enforcement and implementation of R.A. No. 9337, SANDOVAL-GUTIERREZ, J.:
the temporary restraining order issued by the Court on July 1, 2005 is LIFTED upon finality of herein
decision. All powers need some restraint; practical adjustments rather than rigid formula are necessary. 1 Superior
strength – the use of force – cannot make wrongs into rights. In this regard, the courts should be vigilant in
SO ORDERED. safeguarding the constitutional rights of the citizens, specifically their liberty.

G.R. No. 171396 May 3, 2006 Chief Justice Artemio V. Panganiban’s philosophy of liberty is thus most relevant. He said: "In cases
involving liberty, the scales of justice should weigh heavily against government and in favor of the poor,
PROF. RANDOLF S. DAVID, LORENZO TAÑADA III, RONALD LLAMAS, H. HARRY L. ROQUE, JR., JOEL RUIZ BUTUYAN, ROGER R. RAYEL, GARY S. the oppressed, the marginalized, the dispossessed and the weak." Laws and actions that restrict
MALLARI, ROMEL REGALADO BAGARES, CHRISTOPHER F.C. BOLASTIG, Petitioners, fundamental rights come to the courts "with a heavy presumption against their constitutional validity."2
vs.
GLORIA MACAPAGAL-ARROYO, AS PRESIDENT AND COMMANDER-IN-CHIEF, EXECUTIVE SECRETARY EDUARDO ERMITA, HON. AVELINO CRUZ II,
SECRETARY OF NATIONAL DEFENSE, GENERAL GENEROSO SENGA, CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, DIRECTOR GENERAL ARTURO These seven (7) consolidated petitions for certiorari and prohibition allege that in issuing Presidential
LOMIBAO, CHIEF, PHILIPPINE NATIONAL POLICE, Respondents.
x-------------------------------------x Proclamation No. 1017 (PP 1017) and General Order No. 5 (G.O. No. 5), President Gloria Macapagal-Arroyo
G.R. No. 171409 May 3, 2006 committed grave abuse of discretion. Petitioners contend that respondent officials of the Government, in
NIÑEZ CACHO-OLIVARES AND TRIBUNE PUBLISHING CO., INC., Petitioners,
vs.
their professed efforts to defend and preserve democratic institutions, are actually trampling upon the
HONORABLE SECRETARY EDUARDO ERMITA AND HONORABLE DIRECTOR GENERAL ARTURO C. LOMIBAO, Respondents. very freedom guaranteed and protected by the Constitution. Hence, such issuances are void for being
x-------------------------------------x unconstitutional.
G.R. No. 171485 May 3, 2006
FRANCIS JOSEPH G. ESCUDERO, JOSEPH A. SANTIAGO, TEODORO A. CASINO, AGAPITO A. AQUINO, MARIO J. AGUJA, SATUR C. OCAMPO, MUJIV S.
HATAMAN, JUAN EDGARDO ANGARA, TEOFISTO DL. GUINGONA III, EMMANUEL JOSEL J. VILLANUEVA, LIZA L. MAZA, IMEE R. MARCOS, RENATO B.
Once again, the Court is faced with an age-old but persistently modern problem. How does the
MAGTUBO, JUSTIN MARC SB. CHIPECO, ROILO GOLEZ, DARLENE ANTONINO-CUSTODIO, LORETTA ANN P. ROSALES, JOSEL G. VIRADOR, RAFAEL V.
MARIANO, GILBERT C. REMULLA, FLORENCIO G. NOEL, ANA THERESIA HONTIVEROS-BARAQUEL, IMELDA C. NICOLAS, MARVIC M.V.F. LEONEN, NERI Constitution of a free people combine the degree of liberty, without which, law becomes tyranny, with the
JAVIER COLMENARES, MOVEMENT OF CONCERNED CITIZENS FOR CIVIL LIBERTIES REPRESENTED BY AMADO GAT INCIONG, Petitioners, degree of law, without which, liberty becomes license?3
vs.
EDUARDO R. ERMITA, EXECUTIVE SECRETARY, AVELINO J. CRUZ, JR., SECRETARY, DND RONALDO V. PUNO, SECRETARY, DILG, GENEROSO SENGA, AFP
CHIEF OF STAFF, ARTURO LOMIBAO, CHIEF PNP, Respondents. On February 24, 2006, as the nation celebrated the 20th Anniversary of the Edsa People Power I, President
x-------------------------------------x
G.R. No. 171483 May 3, 2006 Arroyo issued PP 1017 declaring a state of national emergency, thus:
KILUSANG MAYO UNO, REPRESENTED BY ITS CHAIRPERSON ELMER C. LABOG AND SECRETARY GENERAL JOEL MAGLUNSOD, NATIONAL FEDERATION
OF LABOR UNIONS – KILUSANG MAYO UNO (NAFLU-KMU), REPRESENTED BY ITS NATIONAL PRESIDENT, JOSELITO V. USTAREZ, ANTONIO C. PASCUAL,
SALVADOR T. CARRANZA, EMILIA P. DAPULANG, MARTIN CUSTODIO, JR., AND ROQUE M. TAN, Petitioners, NOW, THEREFORE, I, Gloria Macapagal-Arroyo, President of the Republic of the Philippines and
vs. Commander-in-Chief of the Armed Forces of the Philippines, by virtue of the powers vested upon me by

Section 18, Article 7 of the Philippine Constitution which states that: "The President. . . whenever it
becomes necessary, . . . may call out (the) armed forces to prevent or suppress. . .rebellion. . .," and in my
capacity as their Commander-in-Chief, do hereby command the Armed Forces of the Philippines, to
maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as
well as any act of insurrection or rebellion and to enforce obedience to all the laws and to all decrees,
orders and regulations promulgated by me personally or upon my direction; and as provided in Section
17, Article 12 of the Constitution do hereby declare a State of National Emergency.
She cited the following facts as bases:
WHEREAS, over these past months, elements in the political opposition have conspired with
authoritarians of the extreme Left represented by the NDF-CPP-NPA and the extreme Right, represented
by military adventurists – the historical enemies of the democratic Philippine State – who are now in a
tactical alliance and engaged in a concerted and systematic conspiracy, over a broad front, to bring down
the duly constituted Government elected in May 2004;
WHEREAS, these conspirators have repeatedly tried to bring down the President;
WHEREAS, the claims of these elements have been recklessly magnified by certain segments of the
national media;
WHEREAS, this series of actions is hurting the Philippine State – by obstructing governance
including hindering the growth of the economy and sabotaging the people’s confidence in government
and their faith in the future of this country;
WHEREAS, these actions are adversely affecting the economy;
WHEREAS, these activities give totalitarian forces of both the extreme Left and extreme Right the
opening to intensify their avowed aims to bring down the democratic Philippine State;
WHEREAS, Article 2, Section 4 of the our Constitution makes the defense and preservation of the
democratic institutions and the State the primary duty of Government;
WHEREAS, the activities above-described, their consequences, ramifications and collateral effects
constitute a clear and present danger to the safety and the integrity of the Philippine State and of the
Filipino people;
On the same day, the President issued G. O. No. 5 implementing PP 1017, thus:
WHEREAS, over these past months, elements in the political opposition have conspired with authoritarians
of the extreme Left, represented by the NDF-CPP-NPA and the extreme Right, represented by military
adventurists - the historical enemies of the democratic Philippine State – and who are now in a tactical
21
alliance and engaged in a concerted and systematic conspiracy, over a broad front, to bring down the duly-
constituted Government elected in May 2004;
WHEREAS, these conspirators have repeatedly tried to bring down our republican government;
WHEREAS, the claims of these elements have been recklessly magnified by certain segments of the
national media;
WHEREAS, these series of actions is hurting the Philippine State by obstructing governance, including
hindering the growth of the economy and sabotaging the people’s confidence in the government and their
faith in the future of this country;
WHEREAS, these actions are adversely affecting the economy;
WHEREAS, these activities give totalitarian forces; of both the extreme Left and extreme Right the opening
to intensify their avowed aims to bring down the democratic Philippine State;
WHEREAS, Article 2, Section 4 of our Constitution makes the defense and preservation of the democratic
institutions and the State the primary duty of Government;
WHEREAS, the activities above-described, their consequences, ramifications and collateral effects
constitute a clear and present danger to the safety and the integrity of the Philippine State and of the
Filipino people;
WHEREAS, Proclamation 1017 date February 24, 2006 has been issued declaring a State of National
Emergency;
NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested in me under the
Constitution as President of the Republic of the Philippines, and Commander-in-Chief of the Republic of
the Philippines, and pursuant to Proclamation No. 1017 dated February 24, 2006, do hereby call upon the
Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), to prevent and suppress
acts of terrorism and lawless violence in the country;
I hereby direct the Chief of Staff of the AFP and the Chief of the PNP, as well as the officers and men of the
AFP and PNP, to immediately carry out the necessary and appropriate actions and measures to suppress
and prevent acts of terrorism and lawless violence.
On March 3, 2006, exactly one week after the declaration of a state of national emergency and after all
these petitions had been filed, the President lifted PP 1017. She issued Proclamation No. 1021 which
reads:
WHEREAS, pursuant to Section 18, Article VII and Section 17, Article XII of the Constitution, Proclamation
No. 1017 dated February 24, 2006, was issued declaring a state of national emergency;

WHEREAS, by virtue of General Order No.5 and No.6 dated February 24, 2006, which were issued on the
basis of Proclamation No. 1017, the Armed Forces of the Philippines (AFP) and the Philippine National
Police (PNP), were directed to maintain law and order throughout the Philippines, prevent and suppress all
form of lawless violence as well as any act of rebellion and to undertake such action as may be necessary;
WHEREAS, the AFP and PNP have effectively prevented, suppressed and quelled the acts lawless violence
and rebellion;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by
virtue of the powers vested in me by law, hereby declare that the state of national emergency has ceased
to exist.
In their presentation of the factual bases of PP 1017 and G.O. No. 5, respondents stated that the
proximate cause behind the executive issuances was the conspiracy among some military officers, leftist
insurgents of the New People’s Army (NPA), and some members of the political opposition in a plot to
unseat or assassinate President Arroyo.4 They considered the aim to oust or assassinate the President and
take-over the reigns of government as a clear and present danger.
During the oral arguments held on March 7, 2006, the Solicitor General specified the facts leading to the
issuance of PP 1017 and G.O. No. 5. Significantly, there was no refutation from petitioners’ counsels.
The Solicitor General argued that the intent of the Constitution is to give full discretionary powers to the
President in determining the necessity of calling out the armed forces. He emphasized that none of the
petitioners has shown that PP 1017 was without factual bases. While he explained that it is not
respondents’ task to state the facts behind the questioned Proclamation, however, they are presenting the
same, narrated hereunder, for the elucidation of the issues.
On January 17, 2006, Captain Nathaniel Rabonza and First Lieutenants Sonny Sarmiento, Lawrence San
Juan and Patricio Bumidang, members of the Magdalo Group indicted in the Oakwood mutiny, escaped
their detention cell in Fort Bonifacio, Taguig City. In a public statement, they vowed to remain defiant and
to elude arrest at all costs. They called upon the people to "show and proclaim our displeasure at the sham
regime. Let us demonstrate our disgust, not only by going to the streets in protest, but also by wearing red
bands on our left arms." 5
On February 17, 2006, the authorities got hold of a document entitled "Oplan Hackle I " which detailed
plans for bombings and attacks during the Philippine Military Academy Alumni Homecoming in Baguio City.
The plot was to assassinate selected targets including some cabinet members and President Arroyo
herself.6 Upon the advice of her security, President Arroyo decided not to attend the Alumni Homecoming.
The next day, at the height of the celebration, a bomb was found and detonated at the PMA parade
ground.
On February 21, 2006, Lt. San Juan was recaptured in a communist safehouse in Batangas province. Found
in his possession were two (2) flash disks containing minutes of the meetings between members of the
Magdalo Group and the National People’s Army (NPA), a tape recorder, audio cassette cartridges,
22
diskettes, and copies of subversive documents.7 Prior to his arrest, Lt. San Juan announced through DZRH
that the "Magdalo’s D-Day would be on February 24, 2006, the 20th Anniversary of Edsa I."
On February 23, 2006, PNP Chief Arturo Lomibao intercepted information that members of the PNP-
Special Action Force were planning to defect. Thus, he immediately ordered SAF Commanding General
Marcelino Franco, Jr. to "disavow" any defection. The latter promptly obeyed and issued a public
statement: "All SAF units are under the effective control of responsible and trustworthy officers with proven
integrity and unquestionable loyalty."
On the same day, at the house of former Congressman Peping Cojuangco, President Cory Aquino’s
brother, businessmen and mid-level government officials plotted moves to bring down the Arroyo
administration. Nelly Sindayen of TIME Magazine reported that Pastor Saycon, longtime Arroyo critic,
called a U.S. government official about his group’s plans if President Arroyo is ousted. Saycon also phoned
a man code-named Delta. Saycon identified him as B/Gen. Danilo Lim, Commander of the Army’s elite
Scout Ranger. Lim said "it was all systems go for the planned movement against Arroyo."8
B/Gen. Danilo Lim and Brigade Commander Col. Ariel Querubin confided to Gen. Generoso Senga, Chief of
Staff of the Armed Forces of the Philippines (AFP), that a huge number of soldiers would join the rallies to
provide a critical mass and armed component to the Anti-Arroyo protests to be held on February 24, 2005.
According to these two (2) officers, there was no way they could possibly stop the soldiers because they
too, were breaking the chain of command to join the forces foist to unseat the President. However, Gen.
Senga has remained faithful to his Commander-in-Chief and to the chain of command. He immediately
took custody of B/Gen. Lim and directed Col. Querubin to return to the Philippine Marines Headquarters in
Fort Bonifacio.
Earlier, the CPP-NPA called for intensification of political and revolutionary work within the military and
the police establishments in order to forge alliances with its members and key officials. NPA spokesman
Gregorio "Ka Roger" Rosal declared: "The Communist Party and revolutionary movement and the entire
people look forward to the possibility in the coming year of accomplishing its immediate task of bringing
down the Arroyo regime; of rendering it to weaken and unable to rule that it will not take much longer to
end it."9
On the other hand, Cesar Renerio, spokesman for the National Democratic Front (NDF) at North Central
Mindanao, publicly announced: "Anti-Arroyo groups within the military and police are growing rapidly,
hastened by the economic difficulties suffered by the families of AFP officers and enlisted personnel who
undertake counter-insurgency operations in the field." He claimed that with the forces of the national
democratic movement, the anti-Arroyo conservative political parties, coalitions, plus the groups that have
been reinforcing since June 2005, it is probable that the President’s ouster is nearing its concluding stage
in the first half of 2006.
Respondents further claimed that the bombing of telecommunication towers and cell sites in Bulacan and
Bataan was also considered as additional factual basis for the issuance of PP 1017 and G.O. No. 5. So is the
raid of an army outpost in Benguet resulting in the death of three (3) soldiers. And also the directive of the

Communist Party of the Philippines ordering its front organizations to join 5,000 Metro Manila radicals and
25,000 more from the provinces in mass protests.10
By midnight of February 23, 2006, the President convened her security advisers and several cabinet
members to assess the gravity of the fermenting peace and order situation. She directed both the AFP and
the PNP to account for all their men and ensure that the chain of command remains solid and undivided.
To protect the young students from any possible trouble that might break loose on the streets, the
President suspended classes in all levels in the entire National Capital Region.
For their part, petitioners cited the events that followed after the issuance of PP 1017 and G.O. No. 5.
Immediately, the Office of the President announced the cancellation of all programs and activities related
to the 20th anniversary celebration of Edsa People Power I; and revoked the permits to hold rallies issued
earlier by the local governments. Justice Secretary Raul Gonzales stated that political rallies, which to the
President’s mind were organized for purposes of destabilization, are cancelled.Presidential Chief of Staff
Michael Defensor announced that "warrantless arrests and take-over of facilities, including media, can
already be implemented."11
Undeterred by the announcements that rallies and public assemblies would not be allowed, groups of
protesters (members of Kilusang Mayo Uno [KMU] and National Federation of Labor Unions-Kilusang
Mayo Uno [NAFLU-KMU]), marched from various parts of Metro Manila with the intention of converging at
the EDSA shrine. Those who were already near the EDSA site were violently dispersed by huge clusters of
anti-riot police. The well-trained policemen used truncheons, big fiber glass shields, water cannons, and
tear gas to stop and break up the marching groups, and scatter the massed participants. The same police
action was used against the protesters marching forward to Cubao, Quezon City and to the corner of
Santolan Street and EDSA. That same evening, hundreds of riot policemen broke up an EDSA celebration
rally held along Ayala Avenue and Paseo de Roxas Street in Makati City. 12
According to petitioner Kilusang Mayo Uno, the police cited PP 1017 as the ground for the dispersal of
their assemblies.
During the dispersal of the rallyists along EDSA, police arrested (without warrant) petitioner Randolf S.
David, a professor at the University of the Philippines and newspaper columnist. Also arrested was his
companion, Ronald Llamas, president of party-list Akbayan.
At around 12:20 in the early morning of February 25, 2006, operatives of the Criminal Investigation and
Detection Group (CIDG) of the PNP, on the basis of PP 1017 and G.O. No. 5, raided the Daily Tribune offices
in Manila. The raiding team confiscated news stories by reporters, documents, pictures, and mock-ups of
the Saturday issue. Policemen from Camp Crame in Quezon City were stationed inside the editorial and
business offices of the newspaper; while policemen from the Manila Police District were stationed outside
the building.13
A few minutes after the search and seizure at the Daily Tribune offices, the police surrounded the premises
of another pro-opposition paper, Malaya, and its sister publication, the tabloid Abante.
23
The raid, according to Presidential Chief of Staff Michael Defensor, is "meant to show a ‘strong presence,’
to tell media outlets not to connive or do anything that would help the rebels in bringing down this
government." The PNP warned that it would take over any media organization that would not
follow "standards set by the government during the state of national emergency." Director General
Lomibao stated that "if they do not follow the standards – and the standards are - if they would contribute
to instability in the government, or if they do not subscribe to what is in General Order No. 5 and Proc. No.
1017 – we will recommend a ‘takeover.’" National Telecommunications’ Commissioner Ronald Solis urged
television and radio networks to "cooperate" with the government for the duration of the state of national
emergency. He asked for "balanced reporting" from broadcasters when covering the events surrounding
the coup attempt foiled by the government. He warned that his agency will not hesitate to recommend
the closure of any broadcast outfit that violates rules set out for media coverage when the national
security is threatened.14
Also, on February 25, 2006, the police arrested Congressman Crispin Beltran, representing
the Anakpawis Party and Chairman of Kilusang Mayo Uno (KMU), while leaving his farmhouse in Bulacan.
The police showed a warrant for his arrest dated 1985. Beltran’s lawyer explained that the warrant, which
stemmed from a case of inciting to rebellion filed during the Marcos regime, had long been quashed.
Beltran, however, is not a party in any of these petitions.
When members of petitioner KMU went to Camp Crame to visit Beltran, they were told they could not be
admitted because of PP 1017 and G.O. No. 5. Two members were arrested and detained, while the rest
were dispersed by the police.
Bayan Muna Representative Satur Ocampo eluded arrest when the police went after him during a public
forum at the Sulo Hotel in Quezon City. But his two drivers, identified as Roel and Art, were taken into
custody.
Retired Major General Ramon Montaño, former head of the Philippine Constabulary, was arrested while
with his wife and golfmates at the Orchard Golf and Country Club in Dasmariñas, Cavite.
Attempts were made to arrest Anakpawis Representative Satur Ocampo, Representative Rafael
Mariano, Bayan Muna Representative Teodoro Casiño and Gabriela Representative Liza Maza. Bayan
Muna Representative Josel Virador was arrested at the PAL Ticket Office in Davao City. Later, he was
turned over to the custody of the House of Representatives where the "Batasan 5" decided to stay
indefinitely.
Let it be stressed at this point that the alleged violations of the rights of Representatives Beltran, Satur
Ocampo, et al., are not being raised in these petitions.
On March 3, 2006, President Arroyo issued PP 1021 declaring that the state of national emergency has
ceased to exist.

In the interim, these seven (7) petitions challenging the constitutionality of PP 1017 and G.O. No. 5 were
filed with this Court against the above-named respondents. Three (3) of these petitions impleaded
President Arroyo as respondent.
In G.R. No. 171396, petitioners Randolf S. David, et al. assailed PP 1017 on the grounds that (1) it
encroaches on the emergency powers of Congress; (2) itis a subterfuge to avoid the constitutional
requirements for the imposition of martial law; and (3) it violates the constitutional guarantees of freedom
of the press, of speech and of assembly.
In G.R. No. 171409, petitioners Ninez Cacho-Olivares and Tribune Publishing Co., Inc. challenged the CIDG’s
act of raiding the Daily Tribune offices as a clear case of "censorship" or "prior restraint." They also claimed
that the term "emergency" refers only to tsunami, typhoon, hurricane and similar occurrences, hence,
there is "absolutely no emergency" that warrants the issuance of PP 1017.
In G.R. No. 171485, petitioners herein are Representative Francis Joseph G. Escudero, and twenty one (21)
other members of the House of Representatives, including Representatives Satur Ocampo, Rafael Mariano,
Teodoro Casiño, Liza Maza, and Josel Virador. They asserted that PP 1017 and G.O. No. 5 constitute
"usurpation of legislative powers"; "violation of freedom of expression" and "a declaration of martial law."
They alleged that President Arroyo "gravely abused her discretion in calling out the armed forces without
clear and verifiable factual basis of the possibility of lawless violence and a showing that there is necessity
to do so."
In G.R. No. 171483,petitioners KMU, NAFLU-KMU, and their members averred that PP 1017 and G.O. No. 5
are unconstitutional because (1) they arrogate unto President Arroyo the power to enact laws and
decrees; (2) their issuance was without factual basis; and (3) they violate freedom of expression and the
right of the people to peaceably assemble to redress their grievances.
In G.R. No. 171400, petitioner Alternative Law Groups, Inc. (ALGI) alleged that PP 1017 and G.O. No. 5 are
unconstitutional because they violate (a) Section 415 of Article II, (b) Sections 1,16 2,17 and 418 of Article
III, (c)Section 2319 of Article VI, and (d) Section 1720 of Article XII of the Constitution.
In G.R. No. 171489, petitioners Jose Anselmo I. Cadiz et al., alleged that PP 1017 is an "arbitrary and
unlawful exercise by the President of her Martial Law powers." And assuming that PP 1017 is not really a
declaration of Martial Law, petitioners argued that "it amounts to an exercise by the President of
emergency powers without congressional approval." In addition, petitioners asserted that PP 1017 "goes
beyond the nature and function of a proclamation as defined under the Revised Administrative Code."
And lastly, in G.R. No. 171424,petitionerLoren B. Legarda maintained that PP 1017 and G.O. No. 5 are
"unconstitutional for being violative of the freedom of expression, including its cognate rights such as
freedom of the press and the right to access to information on matters of public concern, all guaranteed
under Article III, Section 4 of the 1987 Constitution." In this regard, she stated that these issuances
prevented her from fully prosecuting her election protest pending before the Presidential Electoral
Tribunal.
24
In respondents’ Consolidated Comment, the Solicitor General countered that: first, the petitions should be
dismissed for being moot; second,petitioners in G.R. Nos. 171400 (ALGI), 171424 (Legarda), 171483
(KMU et al.), 171485 (Escudero et al.) and 171489 (Cadiz et al.) have no legal standing; third, it is not
necessary for petitioners to implead President Arroyo as respondent; fourth, PP 1017 has constitutional
and legal basis; and fifth, PP 1017 does not violate the people’s right to free expression and redress of
grievances.
On March 7, 2006, the Court conducted oral arguments and heard the parties on the above interlocking
issues which may be summarized as follows:
A. PROCEDURAL:
1) Whether the issuance of PP 1021 renders the petitions moot and academic.
2) Whether petitioners in 171485 (Escudero et al.), G.R. Nos. 171400 (ALGI), 171483 (KMU et
al.), 171489(Cadiz et al.), and 171424 (Legarda) have legal standing.
B. SUBSTANTIVE:
1) Whetherthe Supreme Court can review the factual bases of PP 1017.
2) Whether PP 1017 and G.O. No. 5 are unconstitutional.
a. Facial Challenge
b. Constitutional Basis
c. As Applied Challenge
A. PROCEDURAL
First, we must resolve the procedural roadblocks.
I- Moot and Academic Principle
One of the greatest contributions of the American system to this country is the concept of judicial review
enunciated in Marbury v. Madison.21 This concept rests on the extraordinary simple foundation --
The Constitution is the supreme law. It was ordained by the people, the ultimate source of all political
authority. It confers limited powers on the national government. x x x If the government consciously or
unconsciously oversteps these limitations there must be some authority competent to hold it in control,
to thwart its unconstitutional attempt, and thus to vindicate and preserve inviolate the will of the
people as expressed in the Constitution. This power the courts exercise. This is the beginning and the
end of the theory of judicial review.22
But the power of judicial review does not repose upon the courts a "self-starting capacity."23 Courts may
exercise such power only when the following requisites are present: first, there must be an actual case or
controversy; second, petitioners have to raise a question of constitutionality; third, the constitutional
question must be raised at the earliest opportunity; and fourth, the decision of the constitutional question
must be necessary to the determination of the case itself.24
Respondents maintain that the first and second requisites are absent, hence, we shall limit our discussion
thereon.

An actual case or controversy involves a conflict of legal right, an opposite legal claims susceptible of
judicial resolution. It is "definite and concrete, touching the legal relations of parties having adverse legal
interest;" a real and substantial controversy admitting of specific relief. 25 The Solicitor General refutes the
existence of such actual case or controversy, contending that the present petitions were rendered "moot
and academic" by President Arroyo’s issuance of PP 1021.
Such contention lacks merit.
A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening
events,26 so that a declaration thereon would be of no practical use or value. 27 Generally, courts decline
jurisdiction over such case28 or dismiss it on ground of mootness. 29
The Court holds that President Arroyo’s issuance of PP 1021 did not render the present petitions moot and
academic. During the eight (8) days that PP 1017 was operative, the police officers, according to
petitioners, committed illegal acts in implementing it. Are PP 1017 and G.O. No. 5 constitutional or valid?
Do they justify these alleged illegal acts? These are the vital issues that must be resolved in the present
petitions. It must be stressed that "an unconstitutional act is not a law, it confers no rights, it imposes no
duties, it affords no protection; it is in legal contemplation, inoperative."30
The "moot and academic" principle is not a magical formula that can automatically dissuade the courts in
resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there is a grave violation
of the Constitution;31 second, the exceptional character of the situation and the paramount public interest
is involved;32third, when constitutional issue raised requires formulation of controlling principles to guide
the bench, the bar, and the public;33 and fourth, the case is capable of repetition yet evading review. 34
All the foregoing exceptions are present here and justify this Court’s assumption of jurisdiction over the
instant petitions. Petitioners alleged that the issuance of PP 1017 and G.O. No. 5 violates the Constitution.
There is no question that the issues being raised affect the public’s interest, involving as they do the
people’s basic rights to freedom of expression, of assembly and of the press. Moreover, the Court has the
duty to formulate guiding and controlling constitutional precepts, doctrines or rules. It has the symbolic
function of educating the bench and the bar, and in the present petitions, the military and the police, on
the extent of the protection given by constitutional guarantees.35 And lastly, respondents’ contested
actions are capable of repetition. Certainly, the petitions are subject to judicial review.
In their attempt to prove the alleged mootness of this case, respondents cited Chief Justice Artemio V.
Panganiban’s Separate Opinion in Sanlakas v. Executive Secretary.36 However, they failed to take into
account the Chief Justice’s very statement that an otherwise "moot" case may still be decided "provided
the party raising it in a proper case has been and/or continues to be prejudiced or damaged as a direct
result of its issuance." The present case falls right within this exception to the mootness rule pointed out
by the Chief Justice.
II- Legal Standing
25
In view of the number of petitioners suing in various personalities, the Court deems it imperative to have a
more than passing discussion on legal standing or locus standi.
Locus standi is defined as "a right of appearance in a court of justice on a given question."37 In private suits,
standing is governed by the "real-parties-in interest" rule as contained in Section 2, Rule 3 of the 1997
Rules of Civil Procedure, as amended. It provides that "every action must be prosecuted or defended in
the name of the real party in interest." Accordingly, the "real-party-in interest" is "the party who stands
to be benefited or injured by the judgment in the suit or the party entitled to the avails of the
suit."38 Succinctly put, the plaintiff’s standing is based on his own right to the relief sought.
The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a "public
right" in assailing an allegedly illegal official action, does so as a representative of the general public. He
may be a person who is affected no differently from any other person. He could be suing as a "stranger,"
or in the category of a "citizen," or ‘taxpayer." In either case, he has to adequately show that he is entitled
to seek judicial protection. In other words, he has to make out a sufficient interest in the vindication of the
public order and the securing of relief as a "citizen" or "taxpayer.
Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in public actions. The
distinction was first laid down in Beauchamp v. Silk,39 where it was held that the plaintiff in a taxpayer’s
suit is in a different category from the plaintiff in a citizen’s suit. In the former, the plaintiff is affected by
the expenditure of public funds, while in the latter, he is but the mere instrument of the public
concern. As held by the New York Supreme Court in People ex rel Case v. Collins:40 "In matter of mere
public right, however…the people are the real parties…It is at least the right, if not the duty, of every
citizen to interfere and see that a public offence be properly pursued and punished, and that a public
grievance be remedied." With respect to taxpayer’s suits, Terr v. Jordan41 held that "the right of a citizen
and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds to his injury
cannot be denied."
However, to prevent just about any person from seeking judicial interference in any official policy or act
with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public
service, the United State Supreme Court laid down the more stringent "direct injury" test in Ex Parte
Levitt,42 later reaffirmed in Tileston v. Ullman.43 The same Court ruled that for a private individual to invoke
the judicial power to determine the validity of an executive or legislative action, he must show that he has
sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest
common to all members of the public.
This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera,44 it held that the person
who impugns the validity of a statute must have "a personal and substantial interest in the case such that
he has sustained, or will sustain direct injury as a result." The Vera doctrine was upheld in a litany of
cases, such as, Custodio v. President of the Senate,45 Manila Race Horse Trainers’ Association v. De la
Fuente,46 Pascual v. Secretary of Public Works47 and Anti-Chinese League of the Philippines v. Felix.48
However, being a mere procedural technicality, the requirement of locus standi may be waived by the
Court in the exercise of its discretion. This was done in the 1949 Emergency Powers Cases, Araneta v.

Dinglasan,49 where the "transcendental importance" of the cases prompted the Court to act liberally. Such
liberality was neither a rarity nor accidental. In Aquino v. Comelec,50 this Court resolved to pass upon the
issues raised due to the "far-reaching implications" of the petition notwithstanding its categorical
statement that petitioner therein had no personality to file the suit. Indeed, there is a chain of cases where
this liberal policy has been observed, allowing ordinary citizens, members of Congress, and civic
organizations to prosecute actions involving the constitutionality or validity of laws, regulations and
rulings.51
Thus, the Court has adopted a rule that even where the petitioners have failed to show direct injury, they
have been allowed to sue under the principle of "transcendental importance." Pertinent are the following
cases:
(1) Chavez v. Public Estates Authority,52 where the Court ruled that the enforcement of the
constitutional right to information and the equitable diffusion of natural resources are matters
of transcendental importance which clothe the petitioner with locus standi;
(2) Bagong Alyansang Makabayan v. Zamora,53 wherein the Court held that "given the
transcendental importance of the issues involved, the Court may relax the standing
requirements and allow the suit to prosper despite the lack of direct injury to the parties
seeking judicial review" of the Visiting Forces Agreement;
(3) Lim v. Executive Secretary,54 while the Court noted that the petitioners may not file suit in
their capacity as taxpayers absent a showing that "Balikatan 02-01" involves the exercise of
Congress’ taxing or spending powers, it reiterated its ruling in Bagong Alyansang Makabayan v.
Zamora,55that in cases of transcendental importance, the cases must be settled promptly and
definitely and standing requirements may be relaxed.
By way of summary, the following rules may be culled from the cases decided by this Court. Taxpayers,
voters, concerned citizens, and legislators may be accorded standing to sue, provided that the following
requirements are met:
(1) the cases involve constitutional issues;
(2) for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax
measure is unconstitutional;
(3) for voters, there must be a showing of obvious interest in the validity of the election law in
question;
(4) for concerned citizens, there must be a showing that the issues raised are of transcendental
importance which must be settled early; and
26
(5) for legislators, there must be a claim that the official action complained of infringes upon their
prerogatives as legislators.
Significantly, recent decisions show a certain toughening in the Court’s attitude toward legal standing.
In Kilosbayan, Inc. v. Morato,56 the Court ruled that the status of Kilosbayan as a people’s organization
does not give it the requisite personality to question the validity of the on-line lottery contract, more so
where it does not raise any issue of constitutionality. Moreover, it cannot sue as a taxpayer absent any
allegation that public funds are being misused. Nor can it sue as a concerned citizen as it does not allege
any specific injury it has suffered.
In Telecommunications and Broadcast Attorneys of the Philippines, Inc. v. Comelec,57 the Court reiterated
the "direct injury" test with respect to concerned citizens’ cases involving constitutional issues. It held that
"there must be a showing that the citizen personally suffered some actual or threatened injury arising
from the alleged illegal official act."
In Lacson v. Perez,58 the Court ruled that one of the petitioners, Laban ng Demokratikong Pilipino (LDP), is
not a real party-in-interest as it had not demonstrated any injury to itself or to its leaders, members or
supporters.
In Sanlakas v. Executive Secretary,59 the Court ruled that only the petitioners who are members of
Congress have standing to sue, as they claim that the President’s declaration of a state of rebellion is a
usurpation of the emergency powers of Congress, thus impairing their legislative powers. As to
petitioners Sanlakas, Partido Manggagawa, and Social Justice Society, the Court declared them to be
devoid of standing, equating them with the LDP in Lacson.
Now, the application of the above principles to the present petitions.
The locus standi of petitioners in G.R. No. 171396, particularly David and Llamas, is beyond doubt. The
same holds true with petitioners in G.R. No. 171409, Cacho-Olivares and Tribune Publishing Co. Inc. They
alleged "direct injury" resulting from "illegal arrest" and "unlawful search" committed by police operatives
pursuant to PP 1017. Rightly so, the Solicitor General does not question their legal standing.
In G.R. No. 171485, the opposition Congressmen alleged there was usurpation of legislative powers. They
also raised the issue of whether or not the concurrence of Congress is necessary whenever the alarming
powers incident to Martial Law are used. Moreover, it is in the interest of justice that those affected by PP
1017 can be represented by their Congressmen in bringing to the attention of the Court the alleged
violations of their basic rights.
In G.R. No. 171400, (ALGI), this Court applied the liberality rule in Philconsa v. Enriquez,60 Kapatiran Ng
Mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan,61 Association of Small Landowners in the
Philippines, Inc. v. Secretary of Agrarian Reform,62 Basco v. Philippine Amusement and Gaming
Corporation,63 and Tañada v. Tuvera,64 that when the issue concerns a public right, it is sufficient that the
petitioner is a citizen and has an interest in the execution of the laws.

In G.R. No. 171483, KMU’s assertion that PP 1017 and G.O. No. 5 violated its right to peaceful assembly
may be deemed sufficient to give it legal standing. Organizations may be granted standing to assert the
rights of their members.65 We take judicial notice of the announcement by the Office of the President
banning all rallies and canceling all permits for public assemblies following the issuance of PP 1017 and
G.O. No. 5.
In G.R. No. 171489, petitioners, Cadiz et al., who are national officers of the Integrated Bar of the
Philippines (IBP) have no legal standing, having failed to allege any direct or potential injury which the IBP
as an institution or its members may suffer as a consequence of the issuance of PP No. 1017 and G.O. No.
5. In Integrated Bar of the Philippines v. Zamora,66 the Court held that the mere invocation by the IBP of its
duty to preserve the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it
with standing in this case. This is too general an interest which is shared by other groups and the whole
citizenry. However, in view of the transcendental importance of the issue, this Court declares that
petitioner have locus standi.
In G.R. No. 171424, Loren Legarda has no personality as a taxpayer to file the instant petition as there are
no allegations of illegal disbursement of public funds. The fact that she is a former Senator is of no
consequence. She can no longer sue as a legislator on the allegation that her prerogatives as a lawmaker
have been impaired by PP 1017 and G.O. No. 5. Her claim that she is a media personality will not likewise
aid her because there was no showing that the enforcement of these issuances prevented her from
pursuing her occupation. Her submission that she has pending electoral protest before the Presidential
Electoral Tribunal is likewise of no relevance. She has not sufficiently shown that PP 1017 will affect the
proceedings or result of her case. But considering once more the transcendental importance of the issue
involved, this Court may relax the standing rules.
It must always be borne in mind that the question of locus standi is but corollary to the bigger question of
proper exercise of judicial power. This is the underlying legal tenet of the "liberality doctrine" on legal
standing. It cannot be doubted that the validity of PP No. 1017 and G.O. No. 5 is a judicial question which is
of paramount importance to the Filipino people. To paraphrase Justice Laurel, the whole of Philippine
society now waits with bated breath the ruling of this Court on this very critical matter. The petitions thus
call for the application of the "transcendental importance" doctrine, a relaxation of the standing
requirements for the petitioners in the "PP 1017 cases."1avvphil.net
This Court holds that all the petitioners herein have locus standi.
Incidentally, it is not proper to implead President Arroyo as respondent. Settled is the doctrine that the
President, during his tenure of office or actual incumbency,67 may not be sued in any civil or criminal case,
and there is no need to provide for it in the Constitution or law. It will degrade the dignity of the high
office of the President, the Head of State, if he can be dragged into court litigations while serving as such.
Furthermore, it is important that he be freed from any form of harassment, hindrance or distraction to
enable him to fully attend to the performance of his official duties and functions. Unlike the legislative and
judicial branch, only one constitutes the executive branch and anything which impairs his usefulness in the
discharge of the many great and important duties imposed upon him by the Constitution necessarily
impairs the operation of the Government. However, this does not mean that the President is not
27
accountable to anyone. Like any other official, he remains accountable to the people 68 but he may be
removed from office only in the mode provided by law and that is by impeachment. 69
B. SUBSTANTIVE
I. Review of Factual Bases
Petitioners maintain that PP 1017 has no factual basis. Hence, it was not "necessary" for President Arroyo
to issue such Proclamation.
The issue of whether the Court may review the factual bases of the President’s exercise of his
Commander-in-Chief power has reached its distilled point - from the indulgent days of Barcelon v.
Baker70 and Montenegro v. Castaneda71 to the volatile era of Lansang v. Garcia,72 Aquino, Jr. v.
Enrile,73 and Garcia-Padilla v. Enrile.74 The tug-of-war always cuts across the line defining "political
questions," particularly those questions "in regard to which full discretionary authority has been delegated
to the legislative or executive branch of the government."75 Barcelon and Montenegro were in unison in
declaring that the authority to decide whether an exigency has arisen belongs to the President and his
decision is final and conclusive on the courts. Lansang took the opposite view. There, the members of the
Court were unanimous in the conviction that the Court has the authority to inquire into the existence of
factual bases in order to determine their constitutional sufficiency. From the principle of separation of
powers, it shifted the focus to the system of checks and balances, "under which the President is
supreme, x x x only if and when he acts within the sphere allotted to him by the Basic Law, and the
authority to determine whether or not he has so acted is vested in the Judicial Department, which in this
respect, is, in turn, constitutionally supreme."76 In 1973, the unanimous Court of Lansang was divided
in Aquino v. Enrile.77 There, the Court was almost evenly divided on the issue of whether the validity of the
imposition of Martial Law is a political or justiciable question.78 Then came Garcia-Padilla v. Enrile which
greatly diluted Lansang. It declared that there is a need to re-examine the latter case, ratiocinating that "in
times of war or national emergency, the President must be given absolute control for the very life of the
nation and the government is in great peril. The President, it intoned, is answerable only to his
conscience, the People, and God."79
The Integrated Bar of the Philippines v. Zamora80 -- a recent case most pertinent to these cases at bar --
echoed a principle similar to Lansang. While the Court considered the President’s "calling-out" power as a
discretionary power solely vested in his wisdom, it stressed that "this does not prevent an examination of
whether such power was exercised within permissible constitutional limits or whether it was exercised
in a manner constituting grave abuse of discretion."This ruling is mainly a result of the Court’s reliance on
Section 1, Article VIII of 1987 Constitution which fortifies the authority of the courts to determine in an
appropriate action the validity of the acts of the political departments. Under the new definition of judicial
power, the courts are authorized not only "to settle actual controversies involving rights which are legally
demandable and enforceable," but also "to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
government." The latter part of the authority represents a broadening of judicial power to enable the
courts of justice to review what was before a forbidden territory, to wit, the discretion of the political

departments of the government.81 It speaks of judicial prerogative not only in terms of power but also
of duty.82
As to how the Court may inquire into the President’s exercise of power, Lansang adopted the test that
"judicial inquiry can go no further than to satisfy the Court not that the President’s decision is correct," but
that "the President did not act arbitrarily." Thus, the standard laid down is not correctness, but
arbitrariness.83 In Integrated Bar of the Philippines, this Court further ruled that "it is incumbent upon the
petitioner to show that the President’s decision is totally bereft of factual basis" and that if he fails, by
way of proof, to support his assertion, then "this Court cannot undertake an independent investigation
beyond the pleadings."
Petitioners failed to show that President Arroyo’s exercise of the calling-out power, by issuing PP 1017, is
totally bereft of factual basis. A reading of the Solicitor General’s Consolidated Comment and
Memorandum shows a detailed narration of the events leading to the issuance of PP 1017, with
supporting reports forming part of the records. Mentioned are the escape of the Magdalo Group, their
audacious threat of the Magdalo D-Day, the defections in the military, particularly in the Philippine
Marines, and the reproving statements from the communist leaders. There was also the Minutes of the
Intelligence Report and Security Group of the Philippine Army showing the growing alliance between the
NPA and the military. Petitioners presented nothing to refute such events. Thus, absent any contrary
allegations, the Court is convinced that the President was justified in issuing PP 1017 calling for military
aid.
Indeed, judging the seriousness of the incidents, President Arroyo was not expected to simply fold her
arms and do nothing to prevent or suppress what she believed was lawless violence, invasion or rebellion.
However, the exercise of such power or duty must not stifle liberty.
II. Constitutionality of PP 1017 and G.O. No. 5 Doctrines of Several Political Theorists on the Power of
the President in Times of Emergency
This case brings to fore a contentious subject -- the power of the President in times of emergency. A
glimpse at the various political theories relating to this subject provides an adequate backdrop for our
ensuing discussion.
John Locke, describing the architecture of civil government, called upon the English doctrine of prerogative
to cope with the problem of emergency. In times of danger to the nation, positive law enacted by the
legislature might be inadequate or even a fatal obstacle to the promptness of action necessary to avert
catastrophe. In these situations, the Crown retained a prerogative "power to act according to discretion
for the public good, without the proscription of the law and sometimes even against it."84 But Locke
recognized that this moral restraint might not suffice to avoid abuse of prerogative powers. Who shall
judge the need for resorting to the prerogative and how may its abuse be avoided? Here, Locke readily
admitted defeat, suggesting that "the people have no other remedy in this, as in all other cases where
they have no judge on earth, but to appeal to Heaven."85
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Jean-Jacques Rousseau also assumed the need for temporary suspension of democratic processes of
government in time of emergency. According to him:
The inflexibility of the laws, which prevents them from adopting themselves to circumstances, may, in
certain cases, render them disastrous and make them bring about, at a time of crisis, the ruin of the State…
It is wrong therefore to wish to make political institutions as strong as to render it impossible to suspend
their operation. Even Sparta allowed its law to lapse...
If the peril is of such a kind that the paraphernalia of the laws are an obstacle to their preservation, the
method is to nominate a supreme lawyer, who shall silence all the laws and suspend for a moment the
sovereign authority. In such a case, there is no doubt about the general will, and it clear that the people’s
first intention is that the State shall not perish.86
Rosseau did not fear the abuse of the emergency dictatorship or "supreme magistracy" as he termed it.
For him, it would more likely be cheapened by "indiscreet use." He was unwilling to rely upon an "appeal
to heaven." Instead, he relied upon a tenure of office of prescribed duration to avoid perpetuation of the
dictatorship.87
John Stuart Mill concluded his ardent defense of representative government: "I am far from condemning,
in cases of extreme necessity, the assumption of absolute power in the form of a temporary
dictatorship."88
Nicollo Machiavelli’s view of emergency powers, as one element in the whole scheme of limited
government, furnished an ironic contrast to the Lockean theory of prerogative. He recognized and
attempted to bridge this chasm in democratic political theory, thus:
Now, in a well-ordered society, it should never be necessary to resort to extra –constitutional measures;
for although they may for a time be beneficial, yet the precedent is pernicious, for if the practice is once
established for good objects, they will in a little while be disregarded under that pretext but for evil
purposes. Thus, no republic will ever be perfect if she has not by law provided for everything, having a
remedy for every emergency and fixed rules for applying it. 89
Machiavelli – in contrast to Locke, Rosseau and Mill – sought to incorporate into the constitution a
regularized system of standby emergency powers to be invoked with suitable checks and controls in time
of national danger. He attempted forthrightly to meet the problem of combining a capacious reserve of
power and speed and vigor in its application in time of emergency, with effective constitutional
restraints.90
Contemporary political theorists, addressing themselves to the problem of response to emergency by
constitutional democracies, have employed the doctrine of constitutional dictatorship. 91 Frederick M.
Watkins saw "no reason why absolutism should not be used as a means for the defense of liberal
institutions," provided it "serves to protect established institutions from the danger of permanent injury
in a period of temporary emergency and is followed by a prompt return to the previous forms of

political life."92 He recognized the two (2) key elements of the problem of emergency governance, as well
as all constitutional governance: increasing administrative powers of the executive, while at the same
time "imposing limitation upon that power."93Watkins placed his real faith in a scheme of constitutional
dictatorship. These are the conditions of success of such a dictatorship: "The period of dictatorship must
be relatively short…Dictatorship should always be strictly legitimate in character…Final authority to
determine the need for dictatorship in any given case must never rest with the dictator himself…"94 and
the objective of such an emergency dictatorship should be "strict political conservatism."
Carl J. Friedrich cast his analysis in terms similar to those of Watkins.95 "It is a problem of concentrating
power – in a government where power has consciously been divided – to cope with… situations of
unprecedented magnitude and gravity. There must be a broad grant of powers, subject to equally strong
limitations as to who shall exercise such powers, when, for how long, and to what end." 96 Friedrich, too,
offered criteria for judging the adequacy of any of scheme of emergency powers, to wit: "The emergency
executive must be appointed by constitutional means – i.e., he must be legitimate; he should not enjoy
power to determine the existence of an emergency; emergency powers should be exercised under a
strict time limitation; and last, the objective of emergency action must be the defense of the
constitutional order."97
Clinton L. Rossiter, after surveying the history of the employment of emergency powers in Great Britain,
France, Weimar, Germany and the United States, reverted to a description of a scheme of "constitutional
dictatorship" as solution to the vexing problems presented by emergency. 98 Like Watkins and Friedrich, he
stated a priori the conditions of success of the "constitutional dictatorship," thus:
1) No general regime or particular institution of constitutional dictatorship should be initiated
unless it is necessary or even indispensable to the preservation of the State and its constitutional
order…
2) …the decision to institute a constitutional dictatorship should never be in the hands of the man
or men who will constitute the dictator…
3) No government should initiate a constitutional dictatorship without making specific provisions
for its termination…
4) …all uses of emergency powers and all readjustments in the organization of the government
should be effected in pursuit of constitutional or legal requirements…
5) … no dictatorial institution should be adopted, no right invaded, no regular procedure altered
any more than is absolutely necessary for the conquest of the particular crisis . . .
6) The measures adopted in the prosecution of the a constitutional dictatorship should never be
permanent in character or effect…
7) The dictatorship should be carried on by persons representative of every part of the citizenry
interested in the defense of the existing constitutional order. . .
8) Ultimate responsibility should be maintained for every action taken under a constitutional
dictatorship. . .
9) The decision to terminate a constitutional dictatorship, like the decision to institute one should
never be in the hands of the man or men who constitute the dictator. . .
10) No constitutional dictatorship should extend beyond the termination of the crisis for which it
was instituted…
29
11) …the termination of the crisis must be followed by a complete return as possible to the
political and governmental conditions existing prior to the initiation of the constitutional
dictatorship…99
Rossiter accorded to legislature a far greater role in the oversight exercise of emergency powers than did
Watkins. He would secure to Congress final responsibility for declaring the existence or termination of an
emergency, and he places great faith in the effectiveness of congressional investigating committees. 100
Scott and Cotter, in analyzing the above contemporary theories in light of recent experience, were one in
saying that, "the suggestion that democracies surrender the control of government to an authoritarian
ruler in time of grave danger to the nation is not based upon sound constitutional theory." To appraise
emergency power in terms of constitutional dictatorship serves merely to distort the problem and hinder
realistic analysis. It matters not whether the term "dictator" is used in its normal sense (as applied to
authoritarian rulers) or is employed to embrace all chief executives administering emergency powers.
However used, "constitutional dictatorship" cannot be divorced from the implication of suspension of the
processes of constitutionalism. Thus, they favored instead the "concept of constitutionalism" articulated
by Charles H. McIlwain:
A concept of constitutionalism which is less misleading in the analysis of problems of emergency powers,
and which is consistent with the findings of this study, is that formulated by Charles H. McIlwain. While it
does not by any means necessarily exclude some indeterminate limitations upon the substantive powers
of government, full emphasis is placed upon procedural limitations, and political responsibility. McIlwain
clearly recognized the need to repose adequate power in government. And in discussing the meaning of
constitutionalism, he insisted that the historical and proper test of constitutionalism was the existence of
adequate processes for keeping government responsible. He refused to equate constitutionalism with the
enfeebling of government by an exaggerated emphasis upon separation of powers and substantive
limitations on governmental power. He found that the really effective checks on despotism have consisted
not in the weakening of government but, but rather in the limiting of it; between which there is a great
and very significant difference. In associating constitutionalism with "limited" as distinguished from
"weak" government, McIlwain meant government limited to the orderly procedure of law as opposed to
the processes of force. The two fundamental correlative elements of constitutionalism for which all
lovers of liberty must yet fight are the legal limits to arbitrary power and a complete political
responsibility of government to the governed.101
In the final analysis, the various approaches to emergency of the above political theorists –- from Lock’s
"theory of prerogative," to Watkins’ doctrine of "constitutional dictatorship" and, eventually, to McIlwain’s
"principle of constitutionalism" --- ultimately aim to solve one real problem in emergency governance,
i.e., that of allotting increasing areas of discretionary power to the Chief Executive, while insuring that
such powers will be exercised with a sense of political responsibility and under effective limitations and
checks.
Our Constitution has fairly coped with this problem. Fresh from the fetters of a repressive regime, the
1986 Constitutional Commission, in drafting the 1987 Constitution, endeavored to create a government in
the concept of Justice Jackson’s "balanced power structure."102 Executive, legislative, and judicial powers

are dispersed to the President, the Congress, and the Supreme Court, respectively. Each is supreme within
its own sphere. But none has the monopoly of power in times of emergency. Each branch is given a role
to serve as limitation or check upon the other. This system does not weaken the President, it
just limits his power, using the language of McIlwain. In other words, in times of emergency, our
Constitution reasonably demands that we repose a certain amount of faith in the basic integrity and
wisdom of the Chief Executive but, at the same time, it obliges him to operate within carefully prescribed
procedural limitations.
a. "Facial Challenge"
Petitioners contend that PP 1017 is void on its face because of its "overbreadth." They claim that its
enforcement encroached on both unprotected and protected rights under Section 4, Article III of the
Constitution and sent a "chilling effect" to the citizens.
A facial review of PP 1017, using the overbreadth doctrine, is uncalled for.
First and foremost, the overbreadth doctrine is an analytical tool developed for testing "on their faces"
statutes in free speech cases, also known under the American Law as First Amendment cases.103
A plain reading of PP 1017 shows that it is not primarily directed to speech or even speech-related
conduct. It is actually a call upon the AFP to prevent or suppress all forms of lawless violence. In United
States v. Salerno,104the US Supreme Court held that "we have not recognized an ‘overbreadth’ doctrine
outside the limited context of the First Amendment" (freedom of speech).
Moreover, the overbreadth doctrine is not intended for testing the validity of a law that "reflects
legitimate state interest in maintaining comprehensive control over harmful, constitutionally unprotected
conduct." Undoubtedly, lawless violence, insurrection and rebellion are considered "harmful" and
"constitutionally unprotected conduct." In Broadrick v. Oklahoma,105 it was held:
It remains a ‘matter of no little difficulty’ to determine when a law may properly be held void on its face
and when ‘such summary action’ is inappropriate. But the plain import of our cases is, at the very least,
that facial overbreadth adjudication is an exception to our traditional rules of practice and that its
function, a limited one at the outset, attenuates as the otherwise unprotected behavior that it forbids
the State to sanction moves from ‘pure speech’ toward conduct and that conduct –even if expressive –
falls within the scope of otherwise valid criminal laws that reflect legitimate state interests in
maintaining comprehensive controls over harmful, constitutionally unprotected conduct.
Thus, claims of facial overbreadth are entertained in cases involving statutes which, by their terms, seek to
regulate only "spoken words" and again, that "overbreadth claims, if entertained at all, have been
curtailed when invoked against ordinary criminal laws that are sought to be applied to protected
conduct."106 Here, the incontrovertible fact remains that PP 1017 pertains to a spectrum of conduct, not
free speech, which is manifestly subject to state regulation.
30
Second, facial invalidation of laws is considered as "manifestly strong medicine," to be used "sparingly
and only as a last resort," and is "generally disfavored;"107 The reason for this is obvious. Embedded in the
traditional rules governing constitutional adjudication is the principle that a person to whom a law may be
applied will not be heard to challenge a law on the ground that it may conceivably be applied
unconstitutionally to others, i.e., in other situations not before the Court.108 A writer and scholar in
Constitutional Law explains further:
The most distinctive feature of the overbreadth technique is that it marks an exception to some of the
usual rules of constitutional litigation. Ordinarily, a particular litigant claims that a statute is
unconstitutional as applied to him or her; if the litigant prevails, the courts carve away the
unconstitutional aspects of the law by invalidating its improper applications on a case to case basis.
Moreover, challengers to a law are not permitted to raise the rights of third parties and can only assert
their own interests. In overbreadth analysis, those rules give way; challenges are permitted to raise the
rights of third parties; and the court invalidates the entire statute "on its face," not merely "as applied for"
so that the overbroad law becomes unenforceable until a properly authorized court construes it more
narrowly. The factor that motivates courts to depart from the normal adjudicatory rules is the concern
with the "chilling;" deterrent effect of the overbroad statute on third parties not courageous enough to
bring suit. The Court assumes that an overbroad law’s "very existence may cause others not before the
court to refrain from constitutionally protected speech or expression." An overbreadth ruling is designed
to remove that deterrent effect on the speech of those third parties.
In other words, a facial challenge using the overbreadth doctrine will require the Court to examine PP 1017
and pinpoint its flaws and defects, not on the basis of its actual operation to petitioners, but on the
assumption or prediction that its very existence may cause others not before the Court to refrain from
constitutionally protected speech or expression. In Younger v. Harris,109 it was held that:
[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these
deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The
combination of the relative remoteness of the controversy, the impact on the legislative process of the
relief sought, and above all the speculative and amorphous nature of the required line-by-line analysis of
detailed statutes,...ordinarily results in a kind of case that is wholly unsatisfactory for deciding
constitutional questions, whichever way they might be decided.
And third, a facial challenge on the ground of overbreadth is the most difficult challenge to mount
successfully, since the challenger must establish that there can be no instance when the assailed law may
be valid. Here, petitioners did not even attempt to show whether this situation exists.
Petitioners likewise seek a facial review of PP 1017 on the ground of vagueness. This, too, is unwarranted.
Related to the "overbreadth" doctrine is the "void for vagueness doctrine" which holds that "a law is
facially invalid if men of common intelligence must necessarily guess at its meaning and differ as to its
application."110 It is subject to the same principles governing overbreadth doctrine. For one, it is also an
analytical tool for testing "on their faces" statutes in free speech cases. And like overbreadth, it is said that
a litigant may challenge a statute on its face only if it is vague in all its possible applications. Again,

petitioners did not even attempt to show that PP 1017 is vague in all its application. They also failed to
establish that men of common intelligence cannot understand the meaning and application of PP 1017.
b. Constitutional Basis of PP 1017
Now on the constitutional foundation of PP 1017.
The operative portion of PP 1017 may be divided into three important provisions, thus:
First provision:
"by virtue of the power vested upon me by Section 18, Artilce VII … do hereby command the Armed Forces
of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of
lawless violence as well any act of insurrection or rebellion"
Second provision:
"and to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me
personally or upon my direction;"
Third provision:
"as provided in Section 17, Article XII of the Constitution do hereby declare a State of National
Emergency."
First Provision: Calling-out Power
The first provision pertains to the President’s calling-out power. In Sanlakas v. Executive Secretary,111 this
Court, through Mr. Justice Dante O. Tinga, held that Section 18, Article VII of the Constitution reproduced
as follows:
Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines
and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless
violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may,
for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the
Philippines or any part thereof under martial law. Within forty-eight hours from the proclamation of
martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a
report in person or in writing to the Congress. The Congress, voting jointly, by a vote of at least a majority
of all its Members in regular or special session, may revoke such proclamation or suspension, which
revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may,
in the same manner, extend such proclamation or suspension for a period to be determined by the
Congress, if the invasion or rebellion shall persist and public safety requires it.
31
The Congress, if not in session, shall within twenty-four hours following such proclamation or suspension,
convene in accordance with its rules without need of a call.
The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the
factual bases of the proclamation of martial law or the suspension of the privilege of the writ or the
extension thereof, and must promulgate its decision thereon within thirty days from its filing.
A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of
the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and
agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of
the writ.
The suspension of the privilege of the writ shall apply only to persons judicially charged for rebellion or
offenses inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any person thus arrested or detained shall be judicially
charged within three days, otherwise he shall be released.
grants the President, as Commander-in-Chief, a "sequence" of graduated powers. From the most to the
least benign, these are: the calling-out power, the power to suspend the privilege of the writ of habeas
corpus, and the power to declare Martial Law. Citing Integrated Bar of the Philippines v. Zamora,112 the
Court ruled that the only criterion for the exercise of the calling-out power is that "whenever it becomes
necessary," the President may call the armed forces "to prevent or suppress lawless violence, invasion or
rebellion." Are these conditions present in the instant cases? As stated earlier, considering the
circumstances then prevailing, President Arroyo found it necessary to issue PP 1017. Owing to her Office’s
vast intelligence network, she is in the best position to determine the actual condition of the country.
Under the calling-out power, the President may summon the armed forces to aid him in
suppressing lawless violence, invasion and rebellion. This involves ordinary police action. But every act
that goes beyond the President’s calling-out power is considered illegal or ultra vires. For this reason, a
President must be careful in the exercise of his powers. He cannot invoke a greater power when he wishes
to act under a lesser power. There lies the wisdom of our Constitution, the greater the power, the greater
are the limitations.
It is pertinent to state, however, that there is a distinction between the President’s authority to declare a
"state of rebellion" (in Sanlakas) and the authority to proclaim a state of national emergency. While
President Arroyo’s authority to declare a "state of rebellion" emanates from her powers as Chief
Executive, the statutory authority cited in Sanlakas was Section 4, Chapter 2, Book II of the Revised
Administrative Code of 1987, which provides:
SEC. 4. – Proclamations. – Acts of the President fixing a date or declaring a status or condition of public
moment or interest, upon the existence of which the operation of a specific law or regulation is made to
depend, shall be promulgated in proclamations which shall have the force of an executive order.

President Arroyo’s declaration of a "state of rebellion" was merely an act declaring a status or condition of
public moment or interest, a declaration allowed under Section 4 cited above. Such declaration, in the
words of Sanlakas, is harmless, without legal significance, and deemed not written. In these cases, PP 1017
is more than that. In declaring a state of national emergency, President Arroyo did not only rely on Section
18, Article VII of the Constitution, a provision calling on the AFP to prevent or suppress lawless violence,
invasion or rebellion. She also relied on Section 17, Article XII, a provision on the State’s extraordinary
power to take over privately-owned public utility and business affected with public interest. Indeed, PP
1017 calls for the exercise of an awesome power. Obviously, such Proclamation cannot be deemed
harmless, without legal significance, or not written, as in the case of Sanlakas.
Some of the petitioners vehemently maintain that PP 1017 is actually a declaration of Martial Law. It is no
so. What defines the character of PP 1017 are its wordings. It is plain therein that what the President
invoked was her calling-out power.
The declaration of Martial Law is a "warn[ing] to citizens that the military power has been called upon by
the executive to assist in the maintenance of law and order, and that, while the emergency lasts, they
must, upon pain of arrest and punishment, not commit any acts which will in any way render more difficult
the restoration of order and the enforcement of law." 113
In his "Statement before the Senate Committee on Justice" on March 13, 2006, Mr. Justice Vicente V.
Mendoza,114an authority in constitutional law, said that of the three powers of the President as
Commander-in-Chief, the power to declare Martial Law poses the most severe threat to civil liberties. It is
a strong medicine which should not be resorted to lightly. It cannot be used to stifle or persecute critics of
the government. It is placed in the keeping of the President for the purpose of enabling him to secure the
people from harm and to restore order so that they can enjoy their individual freedoms. In fact, Section
18, Art. VII, provides:
A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of
the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and
agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of
the writ.
Justice Mendoza also stated that PP 1017 is not a declaration of Martial Law. It is no more than a call by
the President to the armed forces to prevent or suppress lawless violence. As such, it cannot be used to
justify acts that only under a valid declaration of Martial Law can be done. Its use for any other purpose is
a perversion of its nature and scope, and any act done contrary to its command is ultra vires.
Justice Mendoza further stated that specifically, (a) arrests and seizures without judicial warrants; (b) ban
on public assemblies; (c) take-over of news media and agencies and press censorship; and (d) issuance of
Presidential Decrees, are powers which can be exercised by the President as Commander-in-
Chief only where there is a valid declaration of Martial Law or suspension of the writ of habeas corpus.
32
Based on the above disquisition, it is clear that PP 1017 is not a declaration of Martial Law. It is merely an
exercise of President Arroyo’s calling-out power for the armed forces to assist her in preventing or
suppressing lawless violence.
Second Provision: "Take Care" Power
The second provision pertains to the power of the President to ensure that the laws be faithfully executed.
This is based on Section 17, Article VII which reads:
SEC. 17. The President shall have control of all the executive departments, bureaus, and offices. He shall
ensure that the laws be faithfully executed.
As the Executive in whom the executive power is vested,115 the primary function of the President is to
enforce the laws as well as to formulate policies to be embodied in existing laws. He sees to it that all laws
are enforced by the officials and employees of his department. Before assuming office, he is required to
take an oath or affirmation to the effect that as President of the Philippines, he will, among others,
"execute its laws."116 In the exercise of such function, the President, if needed, may employ the powers
attached to his office as the Commander-in-Chief of all the armed forces of the country,117 including the
Philippine National Police118 under the Department of Interior and Local Government. 119
Petitioners, especially Representatives Francis Joseph G. Escudero, Satur Ocampo, Rafael Mariano,
Teodoro Casiño, Liza Maza, and Josel Virador argue that PP 1017 is unconstitutional as it arrogated upon
President Arroyo the power to enact laws and decrees in violation of Section 1, Article VI of the
Constitution, which vests the power to enact laws in Congress. They assail the clause "to enforce
obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or
upon my direction."
Petitioners’ contention is understandable. A reading of PP 1017 operative clause shows that it was
lifted120 from Former President Marcos’ Proclamation No. 1081, which partly reads:
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines by virtue of the powers vested
upon me by Article VII, Section 10, Paragraph (2) of the Constitution, do hereby place the entire Philippines
as defined in Article 1, Section 1 of the Constitution under martial law and, in my capacity as their
Commander-in-Chief, do hereby command the Armed Forces of the Philippines, to maintain law and
order throughout the Philippines, prevent or suppress all forms of lawless violence as well as any act of
insurrection or rebellion and to enforce obedience to all the laws and decrees, orders and regulations
promulgated by me personally or upon my direction.
We all know that it was PP 1081 which granted President Marcos legislative power. Its enabling clause
states: "to enforce obedience to all the laws and decrees, orders and regulations promulgated by me
personally or upon my direction." Upon the other hand, the enabling clause of PP 1017 issued by
President Arroyo is: to enforce obedience to all the laws and to all decrees, orders and regulations
promulgated by me personally or upon my direction."

Is it within the domain of President Arroyo to promulgate "decrees"?
PP 1017 states in part: "to enforce obedience to all the laws and decrees x x x promulgated by me
personally or upon my direction."
The President is granted an Ordinance Power under Chapter 2, Book III of Executive Order No. 292
(Administrative Code of 1987). She may issue any of the following:
Sec. 2. Executive Orders. — Acts of the President providing for rules of a general or permanent character in
implementation or execution of constitutional or statutory powers shall be promulgated in executive
orders.
Sec. 3. Administrative Orders. — Acts of the President which relate to particular aspect of governmental
operations in pursuance of his duties as administrative head shall be promulgated in administrative orders.
Sec. 4. Proclamations. — Acts of the President fixing a date or declaring a status or condition of public
moment or interest, upon the existence of which the operation of a specific law or regulation is made to
depend, shall be promulgated in proclamations which shall have the force of an executive order.
Sec. 5. Memorandum Orders. — Acts of the President on matters of administrative detail or of subordinate
or temporary interest which only concern a particular officer or office of the Government shall be
embodied in memorandum orders.
Sec. 6. Memorandum Circulars. — Acts of the President on matters relating to internal administration,
which the President desires to bring to the attention of all or some of the departments, agencies, bureaus
or offices of the Government, for information or compliance, shall be embodied in memorandum circulars.
Sec. 7. General or Special Orders. — Acts and commands of the President in his capacity as Commander-in-
Chief of the Armed Forces of the Philippines shall be issued as general or special orders.
President Arroyo’s ordinance power is limited to the foregoing issuances. She cannot issue decrees similar
to those issued by Former President Marcos under PP 1081. Presidential Decrees are laws which are of the
same category and binding force as statutes because they were issued by the President in the exercise of
his legislative power during the period of Martial Law under the 1973 Constitution. 121
This Court rules that the assailed PP 1017 is unconstitutional insofar as it grants President Arroyo the
authority to promulgate "decrees." Legislative power is peculiarly within the province of the Legislature.
Section 1, Article VI categorically states that "[t]he legislative power shall be vested in the Congress of the
Philippines which shall consist of a Senate and a House of Representatives." To be sure, neither Martial
Law nor a state of rebellion nor a state of emergency can justify President Arroyo’s exercise of legislative
power by issuing decrees.
Can President Arroyo enforce obedience to all decrees and laws through the military?
33
As this Court stated earlier, President Arroyo has no authority to enact decrees. It follows that these
decrees are void and, therefore, cannot be enforced. With respect to "laws," she cannot call the military to
enforce or implement certain laws, such as customs laws, laws governing family and property relations,
laws on obligations and contracts and the like. She can only order the military, under PP 1017, to enforce
laws pertinent to its duty to suppress lawless violence.
Third Provision: Power to Take Over
The pertinent provision of PP 1017 states:
x x x and to enforce obedience to all the laws and to all decrees, orders, and regulations promulgated by
me personally or upon my direction; and as provided in Section 17, Article XII of the Constitution do
hereby declare a state of national emergency.
The import of this provision is that President Arroyo, during the state of national emergency under PP
1017, can call the military not only to enforce obedience "to all the laws and to all decrees x x x" but also
to act pursuant to the provision of Section 17, Article XII which reads:
Sec. 17. In times of national emergency, when the public interest so requires, the State may, during the
emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of
any privately-owned public utility or business affected with public interest.
What could be the reason of President Arroyo in invoking the above provision when she issued PP 1017?
The answer is simple. During the existence of the state of national emergency, PP 1017 purports to grant
the President, without any authority or delegation from Congress, to take over or direct the operation of
any privately-owned public utility or business affected with public interest.
This provision was first introduced in the 1973 Constitution, as a product of the "martial law" thinking of
the 1971 Constitutional Convention.122 In effect at the time of its approval was President Marcos’ Letter of
Instruction No. 2 dated September 22, 1972 instructing the Secretary of National Defense to take over "the
management, control and operation of the Manila Electric Company, the Philippine Long Distance
Telephone Company, the National Waterworks and Sewerage Authority, the Philippine National Railways,
the Philippine Air Lines, Air Manila (and) Filipinas Orient Airways . . . for the successful prosecution by the
Government of its effort to contain, solve and end the present national emergency."
Petitioners, particularly the members of the House of Representatives, claim that President Arroyo’s
inclusion of Section 17, Article XII in PP 1017 is an encroachment on the legislature’s emergency powers.
This is an area that needs delineation.
A distinction must be drawn between the President’s authority to declare "a state of national emergency"
and to exercise emergency powers. To the first, as elucidated by the Court, Section 18, Article VII grants

the President such power, hence, no legitimate constitutional objection can be raised. But to the second,
manifold constitutional issues arise.
Section 23, Article VI of the Constitution reads:
SEC. 23. (1) The Congress, by a vote of two-thirds of both Houses in joint session assembled, voting
separately, shall have the sole power to declare the existence of a state of war.
(2) In times of war or other national emergency, the Congress may, by law, authorize the President, for a
limited period and subject to such restrictions as it may prescribe, to exercise powers necessary and
proper to carry out a declared national policy. Unless sooner withdrawn by resolution of the Congress,
such powers shall cease upon the next adjournment thereof.
It may be pointed out that the second paragraph of the above provision refers not only to war but also to
"other national emergency." If the intention of the Framers of our Constitution was to withhold from the
President the authority to declare a "state of national emergency" pursuant to Section 18, Article VII
(calling-out power) and grant it to Congress (like the declaration of the existence of a state of war), then
the Framers could have provided so. Clearly, they did not intend that Congress should first authorize the
President before he can declare a "state of national emergency." The logical conclusion then is that
President Arroyo could validly declare the existence of a state of national emergency even in the absence
of a Congressional enactment.
But the exercise of emergency powers, such as the taking over of privately owned public utility or business
affected with public interest, is a different matter. This requires a delegation from Congress.
Courts have often said that constitutional provisions in pari materia are to be construed together.
Otherwise stated, different clauses, sections, and provisions of a constitution which relate to the same
subject matter will be construed together and considered in the light of each other. 123 Considering
that Section 17 of Article XII and Section 23 of Article VI, previously quoted, relate to national emergencies,
they must be read together to determine the limitation of the exercise of emergency powers.
Generally, Congress is the repository of emergency powers. This is evident in the tenor of Section 23 (2),
Article VI authorizing it to delegate such powers to the President. Certainly, a body cannot delegate a
power not reposed upon it. However, knowing that during grave emergencies, it may not be possible or
practicable for Congress to meet and exercise its powers, the Framers of our Constitution deemed it wise
to allow Congress to grant emergency powers to the President, subject to certain conditions, thus:
(1) There must be a war or other emergency.
(2) The delegation must be for a limited period only.
(3) The delegation must be subject to such restrictions as the Congress may prescribe.
34
(4) The emergency powers must be exercised to carry out a national policy declared by
Congress.124
Section 17, Article XII must be understood as an aspect of the emergency powers clause. The taking over of
private business affected with public interest is just another facet of the emergency powers generally
reposed upon Congress. Thus, when Section 17 states that the "the State may, during the emergency and
under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately
owned public utility or business affected with public interest," it refers to Congress, not the President.
Now, whether or not the President may exercise such power is dependent on whether Congress may
delegate it to him pursuant to a law prescribing the reasonable terms thereof. Youngstown Sheet & Tube
Co. et al. v. Sawyer,125 held:
It is clear that if the President had authority to issue the order he did, it must be found in some provision
of the Constitution. And it is not claimed that express constitutional language grants this power to the
President. The contention is that presidential power should be implied from the aggregate of his powers
under the Constitution. Particular reliance is placed on provisions in Article II which say that "The executive
Power shall be vested in a President . . . .;" that "he shall take Care that the Laws be faithfully executed;"
and that he "shall be Commander-in-Chief of the Army and Navy of the United States.
The order cannot properly be sustained as an exercise of the President’s military power as Commander-in-
Chief of the Armed Forces. The Government attempts to do so by citing a number of cases upholding
broad powers in military commanders engaged in day-to-day fighting in a theater of war. Such cases need
not concern us here. Even though "theater of war" be an expanding concept, we cannot with
faithfulness to our constitutional system hold that the Commander-in-Chief of the Armed Forces has the
ultimate power as such to take possession of private property in order to keep labor disputes from
stopping production. This is a job for the nation’s lawmakers, not for its military authorities.
Nor can the seizure order be sustained because of the several constitutional provisions that grant
executive power to the President. In the framework of our Constitution, the President’s power to see
that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits
his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of
laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws
which the President is to execute. The first section of the first article says that "All legislative Powers
herein granted shall be vested in a Congress of the United States. . ."126
Petitioner Cacho-Olivares, et al. contends that the term "emergency" under Section 17, Article XII refers to
"tsunami," "typhoon," "hurricane"and"similar occurrences." This is a limited view of "emergency."
Emergency, as a generic term, connotes the existence of conditions suddenly intensifying the degree of
existing danger to life or well-being beyond that which is accepted as normal. Implicit in this definitions are
the elements of intensity, variety, and perception.127 Emergencies, as perceived by legislature or executive
in the United Sates since 1933, have been occasioned by a wide range of situations, classifiable under
three (3) principal heads: a)economic,128 b) natural disaster,129 and c) national security.130

"Emergency," as contemplated in our Constitution, is of the same breadth. It may include rebellion,
economic crisis, pestilence or epidemic, typhoon, flood, or other similar catastrophe of nationwide
proportions or effect.131 This is evident in the Records of the Constitutional Commission, thus:
MR. GASCON. Yes. What is the Committee’s definition of "national emergency" which appears in Section
13, page 5? It reads:
When the common good so requires, the State may temporarily take over or direct the operation of any
privately owned public utility or business affected with public interest.
MR. VILLEGAS. What I mean is threat from external aggression, for example, calamities or natural
disasters.
MR. GASCON. There is a question by Commissioner de los Reyes. What about strikes and riots?
MR. VILLEGAS. Strikes, no; those would not be covered by the term "national emergency."
MR. BENGZON. Unless they are of such proportions such that they would paralyze government service. 132
xxxxxx
MR. TINGSON. May I ask the committee if "national emergency" refers to military national emergency or
could this be economic emergency?"
MR. VILLEGAS. Yes, it could refer to both military or economic dislocations.
MR. TINGSON. Thank you very much.133
It may be argued that when there is national emergency, Congress may not be able to convene and,
therefore, unable to delegate to the President the power to take over privately-owned public utility or
business affected with public interest.
In Araneta v. Dinglasan,134 this Court emphasized that legislative power, through which extraordinary
measures are exercised, remains in Congress even in times of crisis.
"x x x
After all the criticisms that have been made against the efficiency of the system of the separation of
powers, the fact remains that the Constitution has set up this form of government, with all its defects and
shortcomings, in preference to the commingling of powers in one man or group of men. The Filipino
people by adopting parliamentary government have given notice that they share the faith of other
democracy-loving peoples in this system, with all its faults, as the ideal. The point is, under this framework
of government, legislation is preserved for Congress all the time, not excepting periods of crisis no matter
how serious. Never in the history of the United States, the basic features of whose Constitution have been
copied in ours, have specific functions of the legislative branch of enacting laws been surrendered to
another department – unless we regard as legislating the carrying out of a legislative policy according to
prescribed standards; no, not even when that Republic was fighting a total war, or when it was engaged in
a life-and-death struggle to preserve the Union. The truth is that under our concept of constitutional
government, in times of extreme perils more than in normal circumstances ‘the various branches,
executive, legislative, and judicial,’ given the ability to act, are called upon ‘to perform the duties and
discharge the responsibilities committed to them respectively."
35
Following our interpretation of Section 17, Article XII, invoked by President Arroyo in issuing PP 1017, this
Court rules that such Proclamation does not authorize her during the emergency to temporarily take over
or direct the operation of any privately owned public utility or business affected with public interest
without authority from Congress.
Let it be emphasized that while the President alone can declare a state of national emergency, however,
without legislation, he has no power to take over privately-owned public utility or business affected with
public interest. The President cannot decide whether exceptional circumstances exist warranting the take
over of privately-owned public utility or business affected with public interest. Nor can he determine when
such exceptional circumstances have ceased. Likewise, without legislation, the President has no power to
point out the types of businesses affected with public interest that should be taken over. In short, the
President has no absolute authority to exercise all the powers of the State under Section 17, Article VII in
the absence of an emergency powers act passed by Congress.
c. "AS APPLIED CHALLENGE"
One of the misfortunes of an emergency, particularly, that which pertains to security, is that military
necessity and the guaranteed rights of the individual are often not compatible. Our history reveals that in
the crucible of conflict, many rights are curtailed and trampled upon. Here, the right against unreasonable
search and seizure; the right against warrantless arrest; and the freedom of speech, of expression, of the
press, and of assembly under the Bill of Rights suffered the greatest blow.
Of the seven (7) petitions, three (3) indicate "direct injury."
In G.R. No. 171396, petitioners David and Llamas alleged that, on February 24, 2006, they were arrested
without warrants on their way to EDSA to celebrate the 20th Anniversary of People Power I. The arresting
officers cited PP 1017 as basis of the arrest.
In G.R. No. 171409, petitioners Cacho-Olivares and Tribune Publishing Co., Inc. claimed that on February
25, 2006, the CIDG operatives "raided and ransacked without warrant" their office. Three policemen were
assigned to guard their office as a possible "source of destabilization." Again, the basis was PP 1017.
And in G.R. No. 171483, petitioners KMU and NAFLU-KMU et al. alleged that their members were "turned
away and dispersed" when they went to EDSA and later, to Ayala Avenue, to celebrate the 20th
Anniversary of People Power I.
A perusal of the "direct injuries" allegedly suffered by the said petitioners shows that they resulted from
the implementation, pursuant to G.O. No. 5, of PP 1017.
Can this Court adjudge as unconstitutional PP 1017 and G.O. No 5 on the basis of these illegal acts? In
general, does the illegal implementation of a law render it unconstitutional?

Settled is the rule that courts are not at liberty to declare statutes invalid although they may be abused
and misabused135 and may afford an opportunity for abuse in the manner of application.136 The validity
of a statute or ordinance is to be determined from its general purpose and its efficiency to accomplish the
end desired, not from its effects in a particular case.137 PP 1017 is merely an invocation of the President’s
calling-out power. Its general purpose is to command the AFP to suppress all forms of lawless violence,
invasion or rebellion. It had accomplished the end desired which prompted President Arroyo to issue PP
1021. But there is nothing in PP 1017 allowing the police, expressly or impliedly, to conduct illegal arrest,
search or violate the citizens’ constitutional rights.
Now, may this Court adjudge a law or ordinance unconstitutional on the ground that its implementor
committed illegal acts? The answer is no. The criterion by which the validity of the statute or ordinance is
to be measured is the essential basis for the exercise of power, and not a mere incidental result arising
from its exertion.138 This is logical. Just imagine the absurdity of situations when laws maybe declared
unconstitutional just because the officers implementing them have acted arbitrarily. If this were so,
judging from the blunders committed by policemen in the cases passed upon by the Court, majority of the
provisions of the Revised Penal Code would have been declared unconstitutional a long time ago.
President Arroyo issued G.O. No. 5 to carry into effect the provisions of PP 1017. General orders are "acts
and commands of the President in his capacity as Commander-in-Chief of the Armed Forces of the
Philippines." They are internal rules issued by the executive officer to his subordinates precisely for
the proper and efficientadministration of law. Such rules and regulations create no relation except
between the official who issues them and the official who receives them. 139 They are based on and are the
product of, a relationship in which power is their source, and obedience, their object.140 For these reasons,
one requirement for these rules to be valid is that they must be reasonable, not arbitrary or capricious.
G.O. No. 5 mandates the AFP and the PNP to immediately carry out the "necessary and appropriate
actions and measures to suppress and prevent acts of terrorism and lawless violence."
Unlike the term "lawless violence" which is unarguably extant in our statutes and the Constitution, and
which is invariably associated with "invasion, insurrection or rebellion," the phrase "acts of terrorism" is
still an amorphous and vague concept. Congress has yet to enact a law defining and punishing acts of
terrorism.
In fact, this "definitional predicament" or the "absence of an agreed definition of terrorism" confronts not
only our country, but the international community as well. The following observations are quite apropos:
In the actual unipolar context of international relations, the "fight against terrorism" has become one of
the basic slogans when it comes to the justification of the use of force against certain states and against
groups operating internationally. Lists of states "sponsoring terrorism" and of terrorist organizations are
set up and constantly being updated according to criteria that are not always known to the public, but are
clearly determined by strategic interests.
The basic problem underlying all these military actions – or threats of the use of force as the most recent
by the United States against Iraq – consists in the absence of an agreed definition of terrorism.
36
Remarkable confusion persists in regard to the legal categorization of acts of violence either by states, by
armed groups such as liberation movements, or by individuals.
The dilemma can by summarized in the saying "One country’s terrorist is another country’s freedom
fighter." The apparent contradiction or lack of consistency in the use of the term "terrorism" may further
be demonstrated by the historical fact that leaders of national liberation movements such as Nelson
Mandela in South Africa, Habib Bourgouiba in Tunisia, or Ahmed Ben Bella in Algeria, to mention only a
few, were originally labeled as terrorists by those who controlled the territory at the time, but later
became internationally respected statesmen.
What, then, is the defining criterion for terrorist acts – the differentia specifica distinguishing those acts
from eventually legitimate acts of national resistance or self-defense?
Since the times of the Cold War the United Nations Organization has been trying in vain to reach a
consensus on the basic issue of definition. The organization has intensified its efforts recently, but has
been unable to bridge the gap between those who associate "terrorism" with any violent act by non-state
groups against civilians, state functionaries or infrastructure or military installations, and those who
believe in the concept of the legitimate use of force when resistance against foreign occupation or against
systematic oppression of ethnic and/or religious groups within a state is concerned.
The dilemma facing the international community can best be illustrated by reference to the contradicting
categorization of organizations and movements such as Palestine Liberation Organization (PLO) – which is
a terrorist group for Israel and a liberation movement for Arabs and Muslims – the Kashmiri resistance
groups – who are terrorists in the perception of India, liberation fighters in that of Pakistan – the earlier
Contras in Nicaragua – freedom fighters for the United States, terrorists for the Socialist camp – or, most
drastically, the Afghani Mujahedeen (later to become the Taliban movement): during the Cold War period
they were a group of freedom fighters for the West, nurtured by the United States, and a terrorist gang for
the Soviet Union. One could go on and on in enumerating examples of conflicting categorizations that
cannot be reconciled in any way – because of opposing political interests that are at the roots of those
perceptions.
How, then, can those contradicting definitions and conflicting perceptions and evaluations of one and the
same group and its actions be explained? In our analysis, the basic reason for these striking inconsistencies
lies in the divergent interest of states. Depending on whether a state is in the position of an occupying
power or in that of a rival, or adversary, of an occupying power in a given territory, the definition of
terrorism will "fluctuate" accordingly. A state may eventually see itself as protector of the rights of a
certain ethnic group outside its territory and will therefore speak of a "liberation struggle," not of
"terrorism" when acts of violence by this group are concerned, and vice-versa.
The United Nations Organization has been unable to reach a decision on the definition of terrorism exactly
because of these conflicting interests of sovereign states that determine in each and every instance how a
particular armed movement (i.e. a non-state actor) is labeled in regard to the terrorists-freedom fighter
dichotomy. A "policy of double standards" on this vital issue of international affairs has been the
unavoidable consequence.

This "definitional predicament" of an organization consisting of sovereign states – and not of peoples, in
spite of the emphasis in the Preamble to the United Nations Charter! – has become even more serious in
the present global power constellation: one superpower exercises the decisive role in the Security Council,
former great powers of the Cold War era as well as medium powers are increasingly being marginalized;
and the problem has become even more acute since the terrorist attacks of 11 September 2001 I the
United States.141
The absence of a law defining "acts of terrorism" may result in abuse and oppression on the part of the
police or military. An illustration is when a group of persons are merely engaged in a drinking spree. Yet
the military or the police may consider the act as an act of terrorism and immediately arrest them
pursuant to G.O. No. 5. Obviously, this is abuse and oppression on their part. It must be remembered that
an act can only be considered a crime if there is a law defining the same as such and imposing the
corresponding penalty thereon.
So far, the word "terrorism" appears only once in our criminal laws, i.e., in P.D. No. 1835 dated January 16,
1981 enacted by President Marcos during the Martial Law regime. This decree is entitled "Codifying The
Various Laws on Anti-Subversion and Increasing The Penalties for Membership in Subversive
Organizations." The word "terrorism" is mentioned in the following provision: "That one who conspires
with any other person for the purpose of overthrowing the Government of the Philippines x x x by force,
violence, terrorism, x x x shall be punished by reclusion temporal x x x."
P.D. No. 1835 was repealed by E.O. No. 167 (which outlaws the Communist Party of the Philippines)
enacted by President Corazon Aquino on May 5, 1985. These two (2) laws, however, do not define "acts of
terrorism." Since there is no law defining "acts of terrorism," it is President Arroyo alone, under G.O. No. 5,
who has the discretion to determine what acts constitute terrorism. Her judgment on this aspect is
absolute, without restrictions. Consequently, there can be indiscriminate arrest without warrants,
breaking into offices and residences, taking over the media enterprises, prohibition and dispersal of all
assemblies and gatherings unfriendly to the administration. All these can be effected in the name of G.O.
No. 5. These acts go far beyond the calling-out power of the President. Certainly, they violate the due
process clause of the Constitution. Thus, this Court declares that the "acts of terrorism" portion of G.O. No.
5 is unconstitutional.
Significantly, there is nothing in G.O. No. 5 authorizing the military or police to commit acts beyond what
are necessary and appropriate to suppress and prevent lawless violence, the limitation of their authority
in pursuing the Order. Otherwise, such acts are considered illegal.
We first examine G.R. No. 171396 (David et al.)
The Constitution provides that "the right of the people to be secured in their persons, houses, papers and
effects against unreasonable search and seizure of whatever nature and for any purpose shall
be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be
determined personally by the judge after examination under oath or affirmation of the complainant and
the witnesses he may produce, and particularly describing the place to be searched and the persons or
things to be seized."142 The plain import of the language of the Constitution is that searches, seizures and
37
arrests are normally unreasonable unless authorized by a validly issued search warrant or warrant of
arrest. Thus, the fundamental protection given by this provision is that between person and police must
stand the protective authority of a magistrate clothed with power to issue or refuse to issue search
warrants or warrants of arrest.143
In the Brief Account144 submitted by petitioner David, certain facts are established: first, he was arrested
without warrant; second, the PNP operatives arrested him on the basis of PP 1017; third, he was brought
at Camp Karingal, Quezon City where he was fingerprinted, photographed and booked like a criminal
suspect; fourth,he was treated brusquely by policemen who "held his head and tried to push him" inside
an unmarked car; fifth, he was charged with Violation of Batas Pambansa Bilang No. 880145 and Inciting to
Sedition; sixth, he was detained for seven (7) hours; and seventh,he was eventually released for
insufficiency of evidence.
Section 5, Rule 113 of the Revised Rules on Criminal Procedure provides:
Sec. 5. Arrest without warrant; when lawful. - A peace officer or a private person may, without a warrant,
arrest a person:
(a) When, in his presence, the person to be arrested has committed, is actually committing, or is
attempting to commit an offense.
(b) When an offense has just been committed and he has probable cause to believe based on
personal knowledge of facts or circumstances that the person to be arrested has committed it;
and x x x.
Neither of the two (2) exceptions mentioned above justifies petitioner David’s warrantless arrest. During
the inquest for the charges of inciting to sedition and violation of BP 880, all that the arresting officers
could invoke was their observation that some rallyists were wearing t-shirts with the invective "Oust Gloria
Now" and their erroneous assumption that petitioner David was the leader of the rally.146 Consequently,
the Inquest Prosecutor ordered his immediate release on the ground of insufficiency of evidence. He noted
that petitioner David was not wearing the subject t-shirt and even if he was wearing it, such fact is
insufficient to charge him with inciting to sedition. Further, he also stated that there is insufficient
evidence for the charge of violation of BP 880 as it was not even known whether petitioner David was the
leader of the rally.147
But what made it doubly worse for petitioners David et al. is that not only was their right against
warrantless arrest violated, but also their right to peaceably assemble.
Section 4 of Article III guarantees:
No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the
people peaceably to assemble and petition the government for redress of grievances.

"Assembly" means a right on the part of the citizens to meet peaceably for consultation in respect to
public affairs. It is a necessary consequence of our republican institution and complements the right of
speech. As in the case of freedom of expression, this right is not to be limited, much less denied, except on
a showing of a clear and present danger of a substantive evil that Congress has a right to prevent. In other
words, like other rights embraced in the freedom of expression, the right to assemble is not subject to
previous restraint or censorship. It may not be conditioned upon the prior issuance of a permit or
authorization from the government authorities except, of course, if the assembly is intended to be held in
a public place, a permit for the use of such place, and not for the assembly itself, may be validly required.
The ringing truth here is that petitioner David, et al. were arrested while they were exercising their right to
peaceful assembly. They were not committing any crime, neither was there a showing of a clear and
present danger that warranted the limitation of that right. As can be gleaned from circumstances, the
charges of inciting to seditionand violation of BP 880 were mere afterthought. Even the Solicitor General,
during the oral argument, failed to justify the arresting officers’ conduct. In De Jonge v. Oregon,148 it was
held that peaceable assembly cannot be made a crime, thus:
Peaceable assembly for lawful discussion cannot be made a crime. The holding of meetings for peaceable
political action cannot be proscribed. Those who assist in the conduct of such meetings cannot be branded
as criminals on that score. The question, if the rights of free speech and peaceful assembly are not to be
preserved, is not as to the auspices under which the meeting was held but as to its purpose; not as to the
relations of the speakers, but whether their utterances transcend the bounds of the freedom of speech
which the Constitution protects. If the persons assembling have committed crimes elsewhere, if they have
formed or are engaged in a conspiracy against the public peace and order, they may be prosecuted for
their conspiracy or other violations of valid laws. But it is a different matter when the State, instead of
prosecuting them for such offenses, seizes upon mere participation in a peaceable assembly and a lawful
public discussion as the basis for a criminal charge.
On the basis of the above principles, the Court likewise considers the dispersal and arrest of the members
of KMU et al. (G.R. No. 171483) unwarranted. Apparently, their dispersal was done merely on the basis of
Malacañang’s directive canceling all permits previously issued by local government units. This is arbitrary.
The wholesale cancellation of all permits to rally is a blatant disregard of the principle that "freedom of
assembly is not to be limited, much less denied, except on a showing of a clear and present danger of a
substantive evil that the State has a right to prevent."149 Tolerance is the rule and limitation is the
exception. Only upon a showing that an assembly presents a clear and present danger that the State may
deny the citizens’ right to exercise it. Indeed, respondents failed to show or convince the Court that the
rallyists committed acts amounting to lawless violence, invasion or rebellion. With the blanket revocation
of permits, the distinction between protected and unprotected assemblies was eliminated.
Moreover, under BP 880, the authority to regulate assemblies and rallies is lodged with the local
government units. They have the power to issue permits and to revoke such permits after due notice and
hearing on the determination of the presence of clear and present danger. Here, petitioners were not
even notified and heard on the revocation of their permits. 150 The first time they learned of it was at the
time of the dispersal. Such absence of notice is a fatal defect. When a person’s right is restricted by
38
government action, it behooves a democratic government to see to it that the restriction is fair,
reasonable, and according to procedure.
G.R. No. 171409, (Cacho-Olivares, et al.) presents another facet of freedom of speech i.e., the freedom of
the press. Petitioners’ narration of facts, which the Solicitor General failed to refute, established the
following: first, the Daily Tribune’s offices were searched without warrant;second, the police operatives
seized several materials for publication; third, the search was conducted at about 1:00 o’ clock in the
morning of February 25, 2006; fourth, the search was conducted in the absence of any official of the Daily
Tribune except the security guard of the building; and fifth, policemen stationed themselves at the vicinity
of the Daily Tribune offices.
Thereafter, a wave of warning came from government officials. Presidential Chief of Staff Michael
Defensor was quoted as saying that such raid was "meant to show a ‘strong presence,’ to tell media
outlets not to connive or do anything that would help the rebels in bringing down this
government." Director General Lomibao further stated that "if they do not follow the standards –and the
standards are if they would contribute to instability in the government, or if they do not subscribe to
what is in General Order No. 5 and Proc. No. 1017 – we will recommend a ‘takeover.’" National
Telecommunications Commissioner Ronald Solis urged television and radio networks to "cooperate" with
the government for the duration of the state of national emergency. He warned that his agency will not
hesitate to recommend the closure of any broadcast outfit that violates rules set out for media coverage
during times when the national security is threatened.151
The search is illegal. Rule 126 of The Revised Rules on Criminal Procedure lays down the steps in the
conduct of search and seizure. Section 4 requires that a search warrant be issued upon probable cause in
connection with one specific offence to be determined personally by the judge after examination under
oath or affirmation of the complainant and the witnesses he may produce. Section 8 mandates that the
search of a house, room, or any other premise be made in the presence of the lawful occupant thereof or
any member of his family or in the absence of the latter, in the presence of two (2) witnesses of sufficient
age and discretion residing in the same locality. And Section 9 states that the warrant must direct that it
be served in the daytime, unless the property is on the person or in the place ordered to be searched, in
which case a direction may be inserted that it be served at any time of the day or night. All these rules
were violated by the CIDG operatives.
Not only that, the search violated petitioners’ freedom of the press. The best gauge of a free and
democratic society rests in the degree of freedom enjoyed by its media. In the Burgos v. Chief of
Staff152 this Court held that --
As heretofore stated, the premises searched were the business and printing offices of the "Metropolitan
Mail" and the "We Forum" newspapers. As a consequence of the search and seizure, these premises were
padlocked and sealed, with the further result that the printing and publication of said newspapers were
discontinued.
Such closure is in the nature of previous restraint or censorship abhorrent to the freedom of the press
guaranteed under the fundamental law, and constitutes a virtual denial of petitioners' freedom to

express themselves in print. This state of being is patently anathematic to a democratic framework
where a free, alert and even militant press is essential for the political enlightenment and growth of the
citizenry.
While admittedly, the Daily Tribune was not padlocked and sealed like the "Metropolitan Mail" and "We
Forum" newspapers in the above case, yet it cannot be denied that the CIDG operatives exceeded their
enforcement duties. The search and seizure of materials for publication, the stationing of policemen in the
vicinity of the The Daily Tribune offices, and the arrogant warning of government officials to media, are
plain censorship. It is that officious functionary of the repressive government who tells the citizen that he
may speak only if allowed to do so, and no more and no less than what he is permitted to say on pain of
punishment should he be so rash as to disobey.153Undoubtedly, the The Daily Tribune was subjected to
these arbitrary intrusions because of its anti-government sentiments. This Court cannot tolerate the
blatant disregard of a constitutional right even if it involves the most defiant of our citizens. Freedom to
comment on public affairs is essential to the vitality of a representative democracy. It is the duty of the
courts to be watchful for the constitutional rights of the citizen, and against any stealthy encroachments
thereon. The motto should always be obsta principiis.154
Incidentally, during the oral arguments, the Solicitor General admitted that the search of
the Tribune’s offices and the seizure of its materials for publication and other papers are illegal; and that
the same are inadmissible "for any purpose," thus:
JUSTICE CALLEJO:
You made quite a mouthful of admission when you said that the policemen, when inspected the Tribune
for the purpose of gathering evidence and you admitted that the policemen were able to get the clippings.
Is that not in admission of the admissibility of these clippings that were taken from the Tribune?
SOLICITOR GENERAL BENIPAYO:
Under the law they would seem to be, if they were illegally seized, I think and I know, Your Honor, and
these are inadmissible for any purpose.155 x x x x x x x x x
SR. ASSO. JUSTICE PUNO:
These have been published in the past issues of the Daily Tribune; all you have to do is to get those past
issues. So why do you have to go there at 1 o’clock in the morning and without any search warrant? Did
they become suddenly part of the evidence of rebellion or inciting to sedition or what?
SOLGEN BENIPAYO:
Well, it was the police that did that, Your Honor. Not upon my instructions.
SR. ASSO. JUSTICE PUNO:
Are you saying that the act of the policeman is illegal, it is not based on any law, and it is not based on
Proclamation 1017.
SOLGEN BENIPAYO:
It is not based on Proclamation 1017, Your Honor, because there is nothing in 1017 which says that the
police could go and inspect and gather clippings from Daily Tribune or any other newspaper.
39
SR. ASSO. JUSTICE PUNO:
Is it based on any law?
SOLGEN BENIPAYO:
As far as I know, no, Your Honor, from the facts, no.
SR. ASSO. JUSTICE PUNO:
So, it has no basis, no legal basis whatsoever?
SOLGEN BENIPAYO:
Maybe so, Your Honor. Maybe so, that is why I said, I don’t know if it is premature to say this, we do not
condone this. If the people who have been injured by this would want to sue them, they can sue and
there are remedies for this.156
Likewise, the warrantless arrests and seizures executed by the police were, according to the Solicitor
General, illegal and cannot be condoned, thus:
CHIEF JUSTICE PANGANIBAN:
There seems to be some confusions if not contradiction in your theory.
SOLICITOR GENERAL BENIPAYO:
I don’t know whether this will clarify. The acts, the supposed illegal or unlawful acts committed on the
occasion of 1017, as I said, it cannot be condoned. You cannot blame the President for, as you said, a
misapplication of the law. These are acts of the police officers, that is their responsibility. 157
The Dissenting Opinion states that PP 1017 and G.O. No. 5 are constitutional in every aspect and "should
result in no constitutional or statutory breaches if applied according to their letter."
The Court has passed upon the constitutionality of these issuances. Its ratiocination has been exhaustively
presented. At this point, suffice it to reiterate that PP 1017 is limited to the calling out by the President of
the military to prevent or suppress lawless violence, invasion or rebellion. When in implementing its
provisions, pursuant to G.O. No. 5, the military and the police committed acts which violate the citizens’
rights under the Constitution, this Court has to declare such acts unconstitutional and illegal.
In this connection, Chief Justice Artemio V. Panganiban’s concurring opinion, attached hereto, is
considered an integral part of this ponencia.
SUMMATION
In sum, the lifting of PP 1017 through the issuance of PP 1021 – a supervening event – would have
normally rendered this case moot and academic. However, while PP 1017 was still operative, illegal acts
were committed allegedly in pursuance thereof. Besides, there is no guarantee that PP 1017, or one
similar to it, may not again be issued. Already, there have been media reports on April 30, 2006 that
allegedly PP 1017 would be reimposed "if the May 1 rallies" become "unruly and violent." Consequently,
the transcendental issues raised by the parties should not be "evaded;" they must now be resolved to
prevent future constitutional aberration.
The Court finds and so holds that PP 1017 is constitutional insofar as it constitutes a call by the President
for the AFP to prevent or suppress lawless violence. The proclamation is sustained by Section 18, Article
VII of the Constitution and the relevant jurisprudence discussed earlier. However, PP 1017’s extraneous

provisions giving the President express or implied power (1) to issue decrees; (2) to direct the AFP to
enforce obedience to all laws even those not related to lawless violence as well as decrees promulgated
by the President; and (3) to impose standards on media or any form of prior restraint on the press,
are ultra vires and unconstitutional. The Court also rules that under Section 17, Article XII of the
Constitution, the President, in the absence of a legislation, cannot take over privately-owned public utility
and private business affected with public interest.
In the same vein, the Court finds G.O. No. 5 valid. It is an Order issued by the President – acting as
Commander-in-Chief – addressed to subalterns in the AFP to carry out the provisions of PP 1017.
Significantly, it also provides a valid standard – that the military and the police should take only the
"necessary and appropriate actions and measures to suppress and prevent acts of lawless violence."But
the words "acts of terrorism" found in G.O. No. 5 have not been legally defined and made punishable by
Congress and should thus be deemed deleted from the said G.O. While "terrorism" has been denounced
generally in media, no law has been enacted to guide the military, and eventually the courts, to determine
the limits of the AFP’s authority in carrying out this portion of G.O. No. 5.
On the basis of the relevant and uncontested facts narrated earlier, it is also pristine clear that (1) the
warrantless arrest of petitioners Randolf S. David and Ronald Llamas; (2) the dispersal of the rallies and
warrantless arrest of the KMU and NAFLU-KMU members; (3) the imposition of standards on media or any
prior restraint on the press; and (4) the warrantless search of the Tribune offices and the whimsical
seizures of some articles for publication and other materials, are not authorized by the Constitution, the
law and jurisprudence. Not even by the valid provisions of PP 1017 and G.O. No. 5.
Other than this declaration of invalidity, this Court cannot impose any civil, criminal or administrative
sanctions on the individual police officers concerned. They have not been individually identified and given
their day in court. The civil complaints or causes of action and/or relevant criminal Informations have not
been presented before this Court. Elementary due process bars this Court from making any specific
pronouncement of civil, criminal or administrative liabilities.
It is well to remember that military power is a means to an end and substantive civil rights are ends in
themselves. How to give the military the power it needs to protect the Republic without unnecessarily
trampling individual rights is one of the eternal balancing tasks of a democratic state.During emergency,
governmental action may vary in breadth and intensity from normal times, yet they should not be arbitrary
as to unduly restrain our people’s liberty.
Perhaps, the vital lesson that we must learn from the theorists who studied the various competing political
philosophies is that, it is possible to grant government the authority to cope with crises without
surrendering the two vital principles of constitutionalism: the maintenance of legal limits to arbitrary
power, and political responsibility of the government to the governed.158
WHEREFORE, the Petitions are partly granted. The Court rules that PP 1017 is CONSTITUTIONAL insofar as
it constitutes a call by President Gloria Macapagal-Arroyo on the AFP to prevent or suppress lawless
violence. However, the provisions of PP 1017 commanding the AFP to enforce laws not related to lawless
violence, as well as decrees promulgated by the President, are declared UNCONSTITUTIONAL. In addition,
40
the provision in PP 1017 declaring national emergency under Section 17, Article VII of the Constitution
is CONSTITUTIONAL, but such declaration does not authorize the President to take over privately-owned
public utility or business affected with public interest without prior legislation.
G.O. No. 5 is CONSTITUTIONAL since it provides a standard by which the AFP and the PNP should
implement PP 1017, i.e. whatever is "necessary and appropriate actions and measures to suppress and
prevent acts of lawless violence." Considering that "acts of terrorism" have not yet been defined and
made punishable by the Legislature, such portion of G.O. No. 5 is declared UNCONSTITUTIONAL.
The warrantless arrest of Randolf S. David and Ronald Llamas; the dispersal and warrantless arrest of the
KMU and NAFLU-KMU members during their rallies, in the absence of proof that these petitioners were
committing acts constituting lawless violence, invasion or rebellion and violating BP 880; the imposition of
standards on media or any form of prior restraint on the press, as well as the warrantless search of
the Tribune offices and whimsical seizure of its articles for publication and other materials, are
declared UNCONSTITUTIONAL.
No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 103702 December 6, 1994
MUNICIPALITY OF SAN NARCISO, QUEZON; MAYOR JUAN K. UY; COUNCILORS: DEOGRACIAS R. ARGOSINO III, BENITO T. CAPIO,
EMMANUEL R. CORTEZ, NORMANDO MONTILLA, LEONARDO C. UY, FIDEL C. AURELLANA, PEDRO C. CARABIT, LEONARDO D.
AURELLANA, FABIAN M. MEDENILLA, TRINIDAD F. CORTEZ, SALVADOR M. MEDENILLA, CERELITO B. AUREADA and FRANCISCA A.
BAMBA, petitioners,
vs.
HON. ANTONIO V. MENDEZ, SR., Presiding Judge, Regional Trial Court, Branch 62, 4th Judicial Region, Gumaca, Quezon;
MUNICIPALITY OF SAN ANDRES, QUEZON; MAYOR FRANCISCO DE LEON; COUNCILORS: FE LUPINAC, TOMAS AVERIA, MANUEL O.
OSAS, WILFREDO O. FONTANIL, ENRICO U. NADRES, RODELITO LUZOIR, LENAC, JOSE L. CARABOT, DOMING AUSA, VIDAL
BANQUELES and CORAZON M. MAXIMO, respondents.
Manuel Laserna, Jr. for petitioners.
Florante Pamfilo for private respondents.
VITUG, J.:
On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and 2630 of the
Revised Administrative Code, as amended, Executive Order No. 353 creating the municipal district of San
Andres, Quezon, by segregating from the municipality of San Narciso of the same province, the barrios of
San Andres, Mangero, Alibijaban, Pansoy, Camflora and Tala along with their respective sitios.

Executive Order No. 353 was issued upon the request, addressed to the President and coursed through the
Provincial Board of Quezon, of the municipal council of San Narciso, Quezon, in its Resolution No. 8 of 24
May 1959.1
By virtue of Executive Order No. 174, dated 05 October 1965, issued by President Diosdado Macapagal,
the municipal district of San Andres was later officially recognized to have gained the status of a fifth class
municipality beginning 01 July 1963 by operation of Section 2 of Republic Act No. 1515. 2 The executive
order added that "(t)he conversion of this municipal district into (a) municipality as proposed in House Bill
No. 4864 was approved by the House of Representatives."
On 05 June 1989, the Municipality of San Narciso filed a petition for quo warranto with the Regional Trial
Court, Branch 62, in Gumaca, Quezon, against the officials of the Municipality of San Andres. Docketed
Special Civil Action No. 2014-G, the petition sought the declaration of nullity of Executive Order No. 353
and prayed that the respondent local officials of the Municipality of San Andres be permanently ordered to
refrain from performing the duties and functions of their respective offices. 3 Invoking the ruling of this
Court in Pelaez v. Auditor General,4 the petitioning municipality contended that Executive Order No. 353, a
presidential act, was a clear usurpation of the inherent powers of the legislature and in violation of the
constitutional principle of separation of powers. Hence, petitioner municipality argued, the officials of the
Municipality or Municipal District of San Andres had no right to exercise the duties and functions of their
respective offices that righfully belonged to the corresponding officials of the Municipality of San Narciso.
In their answer, respondents asked for the dismissal of the petition, averring, by way of affirmative and
special defenses, that since it was at the instance of petitioner municipality that the Municipality of San
Andres was given life with the issuance of Executive Order No. 353, it (petitioner municipality) should be
deemed estopped from questioning the creation of the new municipality;5 that because the Municipality
of San Andred had been in existence since 1959, its corporate personality could no longer be assailed; and
that, considering the petition to be one for quo warranto, petitioner municipality was not the proper party
to bring the action, that prerogative being reserved to the State acting through the Solicitor General. 6
On 18 July 1991, after the parties had submitted their respective pre-trial briefs, the trial court resolved to
defer action on the motion to dismiss and to deny a judgment on the pleadings.
On 27 November 1991, the Municipality of San Andres filed anew a motion to dismiss alleging that the
case had become moot and academic with the enactment of Republic Act No. 7160, otherwise known as
the Local Government Code of 1991, which took effect on 01 January 1991. The movant municipality cited
Section 442(d) of the law, reading thusly:
Sec. 442. Requisites for Creation. — . . .
(d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and
operate as such. Existing municipal districts organized pursuant to presidential issuances or
executive orders and which have their respective set of elective municipal officials holding office
at the time of the effectivity of this Code shall henceforth be considered as regular municipalities.
41
The motion was opposed by petitioner municipality, contending that the above provision of law
was inapplicable to the Municipality of San Andres since the enactment referred to legally existing
municipalities and not to those whose mode of creation had been void ab initio.7
In its Order of 02 December 1991, the lower court8 finally dismissed the petition9 for lack of cause of action
on what it felt was a matter that belonged to the State, adding that "whatever defects (were) present in
the creation of municipal districts by the President pursuant to presidential issuances and executive
orders, (were) cured by the enactment of R.A. 7160, otherwise known as Local Government Code of 1991."
In an order, dated 17 January 1992, the same court denied petitioner municipality's motion for
reconsideration.
Hence, this petition "for review on certiorari." Petitioners 10 argue that in issuing the orders of 02
December 1991 and 17 January 1992, the lower court has "acted with grave abuse of discretion amounting
to lack of or in excess of jurisdiction." Petitioners assert that the existence of a municipality created by a
null and void presidential order may be attacked either directly or even collaterally by anyone whose
interests or rights are affected, and that an unconstitutional act is not a law, creates no office and is
inoperative such as though its has never been passed. 11
Petitioners consider the instant petition to be one for "review on certiorari" under Rules 42 and 45 of the
Rules of Court; at the same time, however, they question the orders of the lower court for having been
issued with "grave abuse of discretion amounting to lack of or in excess of jurisdiction, and that there is no
other plain, speedy and adequate remedy in the ordinary course of law available to petitioners to correct
said Orders, to protect their rights and to secure a final and definitive interpretation of the legal issues
involved." 12 Evidently, then, the petitioners intend to submit their case in this instance under Rule 65. We
shall disregard the procedural incongruence.
The special civil action of quo warranto is a "prerogative writ by which the Government can call upon any
person to show by what warrant he holds a public office or exercises a public franchise." 13 When the
inquiry is focused on the legal existence of a body politic, the action is reserved to the State in a
proceeding for quo warranto or any other credit proceeding. 14 It must be brought "in the name of the
Republic of the Philippines" 15 and commenced by the Solicitor General or the fiscal "when directed by the
President of the Philippines . . . ." 16 Such officers may, under certain circumstances, bring such an action
"at the request and upon the relation of another person" with the permission of the court. 17 The Rules of
Court also allows an individual to commence an action for quo warranto in his own name but this initiative
can be done when he claims to be "entitled to a public office or position usurped or unlawfully held or
exercised by another." 18 While the quo warranto proceedings filed below by petitioner municipality has so
named only the officials of the Municipality of San Andres as respondents, it is virtually, however, a
denunciation of the authority of the Municipality or Municipal District of San Andres to exist and to act in
that capacity.
At any rate, in the interest of resolving any further doubt on the legal status of the Municipality of San
Andres, the Court shall delve into the merits of the petition.

While petitioners would grant that the enactment of Republic Act
No. 7160 may have converted the Municipality of San Andres into a de facto municipality, they, however,
contend that since the petition for quo warranto had been filed prior to the passage of said law, petitioner
municipality had acquired a vested right to seek the nullification of Executive Order No. 353, and any
attempt to apply Section 442 of Republic Act 7160 to the petition would perforce be violative of due
process and the equal protection clause of the Constitution.
Petitioners' theory might perhaps be a point to consider had the case been seasonably brought. Executive
Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959 but it was
only after almost thirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally decided
to challenge the legality of the executive order. In the meantime, the Municipal District, and later the
Municipality, of San Andres, began and continued to exercise the powers and authority of a duly created
local government unit. In the same manner that the failure of a public officer to question his ouster or the
right of another to hold a position within a one-year period can abrogate an action belatedly filed, 19 so
also, if not indeed with greatest imperativeness, must a quo warranto proceeding assailing the lawful
authority of a political subdivision be timely raised. 20 Public interest
demands it.
Granting the Executive Order No. 353 was a complete nullity for being the result of an unconstitutional
delegation of legislative power, the peculiar circumstances obtaining in this case hardly could offer a
choice other than to consider the Municipality of San Andres to have at least attained a status uniquely of
its own closely approximating, if not in fact attaining, that of a de facto municipal corporation.
Conventional wisdom cannot allow it to be otherwise. Created in 1959 by virtue of Executive Order No.
353, the Municipality of San Andres had been in existence for more than six years when, on 24 December
1965, Pelaez v. Auditor General was promulgated. The ruling could have sounded the call for a similar
declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case. On the
contrary, certain governmental acts all pointed to the State's recognition of the continued existence of the
Municipality of San Andres. Thus, after more than five years as a municipal district, Executive Order No.
174 classified the Municipality of San Andres as a fifth class municipality after having surpassed the income
requirement laid out in Republic Act No. 1515. Section 31 of Batas Pambansa Blg. 129, otherwise known as
the Judiciary Reorganization Act of 1980, constituted as municipal circuits, in the establishment of
Municipal Circuit Trial Courts in the country, certain municipalities that comprised the municipal circuits
organized under Administrative Order No. 33, dated 13 June 1978, issued by this Court pursuant to
Presidential Decree No. 537. Under this administrative order, the Municipality of San Andres had been
covered by the 10th Municipal Circuit Court of San Francisco-San Andres for the province of Quezon.
At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the
Ordinance (adopted on 15 October 1986) apportioning the seats of the House of Representatives,
appended to the 1987 Constitution, the Municipality of San Andres has been considered to be one of the
twelve (12) municipalities composing the Third District of the province of Quezon. Equally significant is
Section 442(d) of the Local Government Code to the effect that municipal districts "organized pursuant to
presidential issuances or executive orders and which have their respective sets of elective municipal
officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular
municipalities." No pretension of unconstitutionality per se of Section 442(d) of the Local Government
42
Code is proferred. It is doubtful whether such a pretext, even if made, would succeed. The power to create
political subdivisions is a function of the legislature. Congress did just that when it has incorporated
Section 442(d) in the Code. Curative laws, which in essence are retrospective, 21 and aimed at giving
"validity to acts done that would have been invalid under existing laws, as if existing laws have been
complied with," are validly accepted in this jurisdiction, subject to the usual qualification against
impairment of vested rights. 22
All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now be
conceded.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Costs against petitioners.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 159796 July 17, 2007
ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST CONSUMERS NETWORK, INC.
(ECN), Petitioners,
vs.
DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC), NATIONAL POWER
CORPORATION (NPC), POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT GROUP (PSALM Corp.),
STRATEGIC POWER UTILITIES GROUP (SPUG), and PANAY ELECTRIC COMPANY INC. (PECO),Respondents.
DECISION
NACHURA, J.:
Petitioners Romeo P. Gerochi, Katulong Ng Bayan (KB), and Environmentalist Consumers Network, Inc.
(ECN) (petitioners), come before this Court in this original action praying that Section 34 of Republic Act
(RA) 9136, otherwise known as the "Electric Power Industry Reform Act of 2001" (EPIRA), imposing the
Universal Charge,1and Rule 18 of the Rules and Regulations (IRR)2 which seeks to implement the said
imposition, be declared unconstitutional. Petitioners also pray that the Universal Charge imposed upon the
consumers be refunded and that a preliminary injunction and/or temporary restraining order (TRO) be
issued directing the respondents to refrain from implementing, charging, and collecting the said
charge.3 The assailed provision of law reads:

SECTION 34. Universal Charge. — Within one (1) year from the effectivity of this Act, a universal charge to
be determined, fixed and approved by the ERC, shall be imposed on all electricity end-users for the
following purposes:
(a) Payment for the stranded debts4 in excess of the amount assumed by the National
Government and stranded contract costs of NPC5 and as well as qualified stranded contract costs
of distribution utilities resulting from the restructuring of the industry;
6
(b) Missionary electrification;
(c) The equalization of the taxes and royalties applied to indigenous or renewable sources of
energy vis-à-vis imported energy fuels;
(d) An environmental charge equivalent to one-fourth of one centavo per kilowatt-hour
(₱0.0025/kWh), which shall accrue to an environmental fund to be used solely for watershed
rehabilitation and management. Said fund shall be managed by NPC under existing arrangements;
and
(e) A charge to account for all forms of cross-subsidies for a period not exceeding three (3) years.
The universal charge shall be a non-bypassable charge which shall be passed on and collected from all end-
users on a monthly basis by the distribution utilities. Collections by the distribution utilities and the
TRANSCO in any given month shall be remitted to the PSALM Corp. on or before the fifteenth (15th) of the
succeeding month, net of any amount due to the distribution utility. Any end-user or self-generating entity
not connected to a distribution utility shall remit its corresponding universal charge directly to the
TRANSCO. The PSALM Corp., as administrator of the fund, shall create a Special Trust Fund which shall be
disbursed only for the purposes specified herein in an open and transparent manner. All amount collected
for the universal charge shall be distributed to the respective beneficiaries within a reasonable period to
be provided by the ERC.
The Facts
Congress enacted the EPIRA on June 8, 2001; on June 26, 2001, it took effect. 7
On April 5, 2002, respondent National Power Corporation-Strategic Power Utilities Group8 (NPC-SPUG)
filed with respondent Energy Regulatory Commission (ERC) a petition for the availment from the Universal
Charge of its share for Missionary Electrification, docketed as ERC Case No. 2002-165.9
On May 7, 2002, NPC filed another petition with ERC, docketed as ERC Case No. 2002-194, praying that the
proposed share from the Universal Charge for the Environmental charge of ₱0.0025 per kilowatt-hour
(/kWh), or a total of ₱119,488,847.59, be approved for withdrawal from the Special Trust Fund (STF)
managed by respondent Power Sector Assets and
43
Liabilities Management Group (PSALM)10 for the rehabilitation and management of watershed areas.11
On December 20, 2002, the ERC issued an Order12 in ERC Case No. 2002-165 provisionally approving the
computed amount of ₱0.0168/kWh as the share of the NPC-SPUG from the Universal Charge for
Missionary Electrification and authorizing the National Transmission Corporation (TRANSCO) and
Distribution Utilities to collect the same from its end-users on a monthly basis.
On June 26, 2003, the ERC rendered its Decision13 (for ERC Case No. 2002-165) modifying its Order of
December 20, 2002, thus:
WHEREFORE, the foregoing premises considered, the provisional authority granted to petitioner National
Power Corporation-Strategic Power Utilities Group (NPC-SPUG) in the Order dated December 20, 2002 is
hereby modified to the effect that an additional amount of ₱0.0205 per kilowatt-hour should be added to
the ₱0.0168 per kilowatt-hour provisionally authorized by the Commission in the said Order. Accordingly, a
total amount of ₱0.0373 per kilowatt-hour is hereby APPROVED for withdrawal from the Special Trust
Fund managed by PSALM as its share from the Universal Charge for Missionary Electrification (UC-ME)
effective on the following billing cycles:
(a) June 26-July 25, 2003 for National Transmission Corporation (TRANSCO); and
(b) July 2003 for Distribution Utilities (Dus).
Relative thereto, TRANSCO and Dus are directed to collect the UC-ME in the amount of ₱0.0373 per
kilowatt-hour and remit the same to PSALM on or before the 15th day of the succeeding month.
In the meantime, NPC-SPUG is directed to submit, not later than April 30, 2004, a detailed report to
include Audited Financial Statements and physical status (percentage of completion) of the projects using
the prescribed format.1avvphi1
Let copies of this Order be furnished petitioner NPC-SPUG and all distribution utilities (Dus).
SO ORDERED.
On August 13, 2003, NPC-SPUG filed a Motion for Reconsideration asking the ERC, among others, 14 to set
aside the above-mentioned Decision, which the ERC granted in its Order dated October 7, 2003, disposing:
WHEREFORE, the foregoing premises considered, the "Motion for Reconsideration" filed by petitioner
National Power Corporation-Small Power Utilities Group (NPC-SPUG) is hereby GRANTED. Accordingly, the
Decision dated June 26, 2003 is hereby modified accordingly.
Relative thereto, NPC-SPUG is directed to submit a quarterly report on the following:
1. Projects for CY 2002 undertaken;

2. Location
3. Actual amount utilized to complete the project;
4. Period of completion;
5. Start of Operation; and
6. Explanation of the reallocation of UC-ME funds, if any.
SO ORDERED.15
Meanwhile, on April 2, 2003, ERC decided ERC Case No. 2002-194, authorizing the NPC to draw up to
₱70,000,000.00 from PSALM for its 2003 Watershed Rehabilitation Budget subject to the availability of
funds for the Environmental Fund component of the Universal Charge. 16
On the basis of the said ERC decisions, respondent Panay Electric Company, Inc. (PECO) charged petitioner
Romeo P. Gerochi and all other end-users with the Universal Charge as reflected in their respective electric
bills starting from the month of July 2003.17
Hence, this original action.
Petitioners submit that the assailed provision of law and its IRR which sought to implement the same are
unconstitutional on the following grounds:
1) The universal charge provided for under Sec. 34 of the EPIRA and sought to be implemented
under Sec. 2, Rule 18 of the IRR of the said law is a tax which is to be collected from all electric
end-users and self-generating entities. The power to tax is strictly a legislative function and as
such, the delegation of said power to any executive or administrative agency like the ERC is
unconstitutional, giving the same unlimited authority. The assailed provision clearly provides that
the Universal Charge is to be determined, fixed and approved by the ERC, hence leaving to the
latter complete discretionary legislative authority.
2) The ERC is also empowered to approve and determine where the funds collected should be
used.
3) The imposition of the Universal Charge on all end-users is oppressive and confiscatory and
amounts to taxation without representation as the consumers were not given a chance to be
heard and represented.18
Petitioners contend that the Universal Charge has the characteristics of a tax and is collected to fund the
operations of the NPC. They argue that the cases19 invoked by the respondents clearly show the regulatory
purpose of the charges imposed therein, which is not so in the case at bench. In said cases, the respective
funds20 were created in order to balance and stabilize the prices of oil and sugar, and to act as buffer to
counteract the changes and adjustments in prices, peso devaluation, and other variables which cannot be
adequately and timely monitored by the legislature. Thus, there was a need to delegate powers to
administrative bodies.21 Petitioners posit that the Universal Charge is imposed not for a similar purpose.
44
On the other hand, respondent PSALM through the Office of the Government Corporate Counsel (OGCC)
contends that unlike a tax which is imposed to provide income for public purposes, such as support of the
government, administration of the law, or payment of public expenses, the assailed Universal Charge is
levied for a specific regulatory purpose, which is to ensure the viability of the country's electric power
industry. Thus, it is exacted by the State in the exercise of its inherent police power. On this premise,
PSALM submits that there is no undue delegation of legislative power to the ERC since the latter merely
exercises a limited authority or discretion as to the execution and implementation of the provisions of the
EPIRA.22
Respondents Department of Energy (DOE), ERC, and NPC, through the Office of the Solicitor General
(OSG), share the same view that the Universal Charge is not a tax because it is levied for a specific
regulatory purpose, which is to ensure the viability of the country's electric power industry, and is,
therefore, an exaction in the exercise of the State's police power. Respondents further contend that said
Universal Charge does not possess the essential characteristics of a tax, that its imposition would redound
to the benefit of the electric power industry and not to the public, and that its rate is uniformly levied on
electricity end-users, unlike a tax which is imposed based on the individual taxpayer's ability to pay.
Moreover, respondents deny that there is undue delegation of legislative power to the ERC since the
EPIRA sets forth sufficient determinable standards which would guide the ERC in the exercise of the
powers granted to it. Lastly, respondents argue that the imposition of the Universal Charge is not
oppressive and confiscatory since it is an exercise of the police power of the State and it complies with the
requirements of due process.23
On its part, respondent PECO argues that it is duty-bound to collect and remit the amount pertaining to
the Missionary Electrification and Environmental Fund components of the Universal Charge, pursuant to
Sec. 34 of the EPIRA and the Decisions in ERC Case Nos. 2002-194 and 2002-165. Otherwise, PECO could be
held liable under Sec. 4624 of the EPIRA, which imposes fines and penalties for any violation of its
provisions or its IRR.25
The Issues
The ultimate issues in the case at bar are:
1) Whether or not, the Universal Charge imposed under Sec. 34 of the EPIRA is a tax; and
2) Whether or not there is undue delegation of legislative power to tax on the part of the ERC. 26
Before we discuss the issues, the Court shall first deal with an obvious procedural lapse.
Petitioners filed before us an original action particularly denominated as a Complaint assailing the
constitutionality of Sec. 34 of the EPIRA imposing the Universal Charge and Rule 18 of the EPIRA's IRR. No
doubt, petitioners havelocus standi. They impugn the constitutionality of Sec. 34 of the EPIRA because
they sustained a direct injury as a result of the imposition of the Universal Charge as reflected in their
electric bills.

However, petitioners violated the doctrine of hierarchy of courts when they filed this "Complaint" directly
with us. Furthermore, the Complaint is bereft of any allegation of grave abuse of discretion on the part of
the ERC or any of the public respondents, in order for the Court to consider it as a petition for certiorari or
prohibition.
Article VIII, Section 5(1) and (2) of the 1987 Constitution27 categorically provides that:
SECTION 5. The Supreme Court shall have the following powers:
1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and
consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas
corpus.
2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of
court may provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in
question.
But this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, and habeas
corpus, while concurrent with that of the regional trial courts and the Court of Appeals, does not give
litigants unrestrained freedom of choice of forum from which to seek such relief. 28 It has long been
established that this Court will not entertain direct resort to it unless the redress desired cannot be
obtained in the appropriate courts, or where exceptional and compelling circumstances justify availment
of a remedy within and call for the exercise of our primary jurisdiction. 29 This circumstance alone warrants
the outright dismissal of the present action.
This procedural infirmity notwithstanding, we opt to resolve the constitutional issue raised herein. We are
aware that if the constitutionality of Sec. 34 of the EPIRA is not resolved now, the issue will certainly
resurface in the near future, resulting in a repeat of this litigation, and probably involving the same parties.
In the public interest and to avoid unnecessary delay, this Court renders its ruling now.
The instant complaint is bereft of merit.
The First Issue
To resolve the first issue, it is necessary to distinguish the State’s power of taxation from the police power.
The power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in its very
nature no limits, so that security against its abuse is to be found only in the responsibility of the legislature
which imposes the tax on the constituency that is to pay it.30 It is based on the principle that taxes are the
lifeblood of the government, and their prompt and certain availability is an imperious need. 31 Thus, the
45
theory behind the exercise of the power to tax emanates from necessity; without taxes, government
cannot fulfill its mandate of promoting the general welfare and well-being of the people.32
On the other hand, police power is the power of the state to promote public welfare by restraining and
regulating the use of liberty and property.33 It is the most pervasive, the least limitable, and the most
demanding of the three fundamental powers of the State. The justification is found in the Latin
maxims salus populi est suprema lex (the welfare of the people is the supreme law) and sic utere tuo ut
alienum non laedas (so use your property as not to injure the property of others). As an inherent attribute
of sovereignty which virtually extends to all public needs, police power grants a wide panoply of
instruments through which the State, as parens patriae, gives effect to a host of its regulatory
powers.34 We have held that the power to "regulate" means the power to protect, foster, promote,
preserve, and control, with due regard for the interests, first and foremost, of the public, then of the utility
and of its patrons.35
The conservative and pivotal distinction between these two powers rests in the purpose for which the
charge is made. If generation of revenue is the primary purpose and regulation is merely incidental, the
imposition is a tax; but if regulation is the primary purpose, the fact that revenue is incidentally raised does
not make the imposition a tax.36
In exacting the assailed Universal Charge through Sec. 34 of the EPIRA, the State's police power,
particularly its regulatory dimension, is invoked. Such can be deduced from Sec. 34 which enumerates the
purposes for which the Universal Charge is imposed37 and which can be amply discerned as regulatory in
character. The EPIRA resonates such regulatory purposes, thus:
SECTION 2. Declaration of Policy. — It is hereby declared the policy of the State:
(a) To ensure and accelerate the total electrification of the country;
(b) To ensure the quality, reliability, security and affordability of the supply of electric power;
(c) To ensure transparent and reasonable prices of electricity in a regime of free and fair
competition and full public accountability to achieve greater operational and economic efficiency
and enhance the competitiveness of Philippine products in the global market;
(d) To enhance the inflow of private capital and broaden the ownership base of the power
generation, transmission and distribution sectors;
(e) To ensure fair and non-discriminatory treatment of public and private sector entities in the
process of restructuring the electric power industry;
(f) To protect the public interest as it is affected by the rates and services of electric utilities and
other providers of electric power;

(g) To assure socially and environmentally compatible energy sources and infrastructure;
(h) To promote the utilization of indigenous and new and renewable energy resources in power
generation in order to reduce dependence on imported energy;
(i) To provide for an orderly and transparent privatization of the assets and liabilities of the
National Power Corporation (NPC);
(j) To establish a strong and purely independent regulatory body and system to ensure consumer
protection and enhance the competitive operation of the electricity market; and
(k) To encourage the efficient use of energy and other modalities of demand side management.
From the aforementioned purposes, it can be gleaned that the assailed Universal Charge is not a tax, but
an exaction in the exercise of the State's police power. Public welfare is surely promoted.
Moreover, it is a well-established doctrine that the taxing power may be used as an implement of police
power.38 In Valmonte v. Energy Regulatory Board, et al.39 and in Gaston v. Republic Planters Bank,40 this
Court held that the Oil Price Stabilization Fund (OPSF) and the Sugar Stabilization Fund (SSF) were
exactions made in the exercise of the police power. The doctrine was reiterated in Osmeña v. Orbos41 with
respect to the OPSF. Thus, we disagree with petitioners that the instant case is different from the
aforementioned cases. With the Universal Charge, a Special Trust Fund (STF) is also created under the
administration of PSALM.42 The STF has some notable characteristics similar to the OPSF and the SSF, viz.:
1) In the implementation of stranded cost recovery, the ERC shall conduct a review to determine
whether there is under-recovery or over recovery and adjust (true-up) the level of the stranded
cost recovery charge. In case of an over-recovery, the ERC shall ensure that any excess amount
shall be remitted to the STF. A separate account shall be created for these amounts which shall be
held in trust for any future claims of distribution utilities for stranded cost recovery. At the end of
the stranded cost recovery period, any remaining amount in this account shall be used to reduce
the electricity rates to the end-users.43
2) With respect to the assailed Universal Charge, if the total amount collected for the same is
greater than the actual availments against it, the PSALM shall retain the balance within the STF to
pay for periods where a shortfall occurs.44
3) Upon expiration of the term of PSALM, the administration of the STF shall be transferred to the
DOF or any of the DOF attached agencies as designated by the DOF Secretary. 45
The OSG is in point when it asseverates:
Evidently, the establishment and maintenance of the Special Trust Fund, under the last paragraph of
Section 34, R.A. No. 9136, is well within the pervasive and non-waivable power and responsibility of the
46
government to secure the physical and economic survival and well-being of the community, that
comprehensive sovereign authority we designate as the police power of the State. 46
This feature of the Universal Charge further boosts the position that the same is an exaction imposed
primarily in pursuit of the State's police objectives. The STF reasonably serves and assures the attainment
and perpetuity of the purposes for which the Universal Charge is imposed, i.e., to ensure the viability of
the country's electric power industry.
The Second Issue
The principle of separation of powers ordains that each of the three branches of government has exclusive
cognizance of and is supreme in matters falling within its own constitutionally allocated sphere. A logical
corollary to the doctrine of separation of powers is the principle of non-delegation of powers, as expressed
in the Latin maxim potestas delegata non delegari potest (what has been delegated cannot be delegated).
This is based on the ethical principle that such delegated power constitutes not only a right but a duty to
be performed by the delegate through the instrumentality of his own judgment and not through the
intervening mind of another. 47
In the face of the increasing complexity of modern life, delegation of legislative power to various
specialized administrative agencies is allowed as an exception to this principle. 48 Given the volume and
variety of interactions in today's society, it is doubtful if the legislature can promulgate laws that will deal
adequately with and respond promptly to the minutiae of everyday life. Hence, the need to delegate to
administrative bodies - the principal agencies tasked to execute laws in their specialized fields - the
authority to promulgate rules and regulations to implement a given statute and effectuate its policies. All
that is required for the valid exercise of this power of subordinate legislation is that the regulation be
germane to the objects and purposes of the law and that the regulation be not in contradiction to, but in
conformity with, the standards prescribed by the law. These requirements are denominated as the
completeness test and the sufficient standard test.
Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature
such that when it reaches the delegate, the only thing he will have to do is to enforce it. The second test
mandates adequate guidelines or limitations in the law to determine the boundaries of the delegate's
authority and prevent the delegation from running riot.49
The Court finds that the EPIRA, read and appreciated in its entirety, in relation to Sec. 34 thereof, is
complete in all its essential terms and conditions, and that it contains sufficient standards.
Although Sec. 34 of the EPIRA merely provides that "within one (1) year from the effectivity thereof, a
Universal Charge to be determined, fixed and approved by the ERC, shall be imposed on all electricity end-
users," and therefore, does not state the specific amount to be paid as Universal Charge, the amount
nevertheless is made certain by the legislative parameters provided in the law itself. For one, Sec. 43(b)(ii)
of the EPIRA provides:

SECTION 43. Functions of the ERC. — The ERC shall promote competition, encourage market development,
ensure customer choice and penalize abuse of market power in the restructured electricity industry. In
appropriate cases, the ERC is authorized to issue cease and desist order after due notice and hearing.
Towards this end, it shall be responsible for the following key functions in the restructured industry: x x x x
(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in accordance with law,
a National Grid Code and a Distribution Code which shall include, but not limited to the following: x x x x
(ii) Financial capability standards for the generating companies, the TRANSCO, distribution utilities and
suppliers: Provided, That in the formulation of the financial capability standards, the nature and function
of the entity shall be considered: Provided, further, That such standards are set to ensure that the electric
power industry participants meet the minimum financial standards to protect the public interest.
Determine, fix, and approve, after due notice and public hearings the universal charge, to be imposed on
all electricity end-users pursuant to Section 34 hereof;
Moreover, contrary to the petitioners’ contention, the ERC does not enjoy a wide latitude of discretion in
the determination of the Universal Charge. Sec. 51(d) and (e) of the EPIRA 50 clearly provides:
SECTION 51. Powers. — The PSALM Corp. shall, in the performance of its functions and for the attainment
of its objective, have the following powers:
xxxx
(d) To calculate the amount of the stranded debts and stranded contract costs of NPC which shall
form the basis for ERC in the determination of the universal charge;
(e) To liquidate the NPC stranded contract costs, utilizing the proceeds from sales and other
property contributed to it, including the proceeds from the universal charge.
Thus, the law is complete and passes the first test for valid delegation of legislative power.
As to the second test, this Court had, in the past, accepted as sufficient standards the following: "interest
of law and order;"51 "adequate and efficient instruction;"52 "public interest;"53 "justice and
equity;"54 "public convenience and welfare;"55 "simplicity, economy and efficiency;"56 "standardization and
regulation of medical education;"57 and "fair and equitable employment practices."58 Provisions of the
EPIRA such as, among others, "to ensure the total electrification of the country and the quality, reliability,
security and affordability of the supply of electric power"59 and "watershed rehabilitation and
management"60 meet the requirements for valid delegation, as they provide the limitations on the ERC’s
power to formulate the IRR. These are sufficient standards.
It may be noted that this is not the first time that the ERC's conferred powers were challenged. In Freedom
from Debt Coalition v. Energy Regulatory Commission,61 the Court had occasion to say:
47
In determining the extent of powers possessed by the ERC, the provisions of the EPIRA must not be read in
separate parts. Rather, the law must be read in its entirety, because a statute is passed as a whole, and is
animated by one general purpose and intent. Its meaning cannot to be extracted from any single part
thereof but from a general consideration of the statute as a whole. Considering the intent of Congress in
enacting the EPIRA and reading the statute in its entirety, it is plain to see that the law has expanded the
jurisdiction of the regulatory body, the ERC in this case, to enable the latter to implement the reforms
sought to be accomplished by the EPIRA. When the legislators decided to broaden the jurisdiction of the
ERC, they did not intend to abolish or reduce the powers already conferred upon ERC's predecessors. To
sustain the view that the ERC possesses only the powers and functions listed under Section 43 of the EPIRA
is to frustrate the objectives of the law.
In his Concurring and Dissenting Opinion62 in the same case, then Associate Justice, now Chief Justice,
Reynato S. Puno described the immensity of police power in relation to the delegation of powers to the
ERC and its regulatory functions over electric power as a vital public utility, to wit:
Over the years, however, the range of police power was no longer limited to the preservation of public
health, safety and morals, which used to be the primary social interests in earlier times. Police power now
requires the State to "assume an affirmative duty to eliminate the excesses and injustices that are the
concomitants of an unrestrained industrial economy." Police power is now exerted "to further the public
welfare — a concept as vast as the good of society itself." Hence, "police power is but another name for the
governmental authority to further the welfare of society that is the basic end of all government." When
police power is delegated to administrative bodies with regulatory functions, its exercise should be given a
wide latitude. Police power takes on an even broader dimension in developing countries such as ours,
where the State must take a more active role in balancing the many conflicting interests in society. The
Questioned Order was issued by the ERC, acting as an agent of the State in the exercise of police power.
We should have exceptionally good grounds to curtail its exercise. This approach is more compelling in the
field of rate-regulation of electric power rates. Electric power generation and distribution is a traditional
instrument of economic growth that affects not only a few but the entire nation. It is an important factor in
encouraging investment and promoting business. The engines of progress may come to a screeching halt if
the delivery of electric power is impaired. Billions of pesos would be lost as a result of power outages or
unreliable electric power services. The State thru the ERC should be able to exercise its police power with
great flexibility, when the need arises.
This was reiterated in National Association of Electricity Consumers for Reforms v. Energy Regulatory
Commission63 where the Court held that the ERC, as regulator, should have sufficient power to respond in
real time to changes wrought by multifarious factors affecting public utilities.
From the foregoing disquisitions, we therefore hold that there is no undue delegation of legislative power
to the ERC.
Petitioners failed to pursue in their Memorandum the contention in the Complaint that the imposition of
the Universal Charge on all end-users is oppressive and confiscatory, and amounts to taxation without
representation. Hence, such contention is deemed waived or abandoned per Resolution64 of August 3,
2004.65 Moreover, the determination of whether or not a tax is excessive, oppressive or confiscatory is an

issue which essentially involves questions of fact, and thus, this Court is precluded from reviewing the
same.66
As a penultimate statement, it may be well to recall what this Court said of EPIRA:
One of the landmark pieces of legislation enacted by Congress in recent years is the EPIRA. It established a
new policy, legal structure and regulatory framework for the electric power industry. The new thrust is to
tap private capital for the expansion and improvement of the industry as the large government debt and
the highly capital-intensive character of the industry itself have long been acknowledged as the critical
constraints to the program. To attract private investment, largely foreign, the jaded structure of the
industry had to be addressed. While the generation and transmission sectors were centralized and
monopolistic, the distribution side was fragmented with over 130 utilities, mostly small and uneconomic.
The pervasive flaws have caused a low utilization of existing generation capacity; extremely high and
uncompetitive power rates; poor quality of service to consumers; dismal to forgettable performance of the
government power sector; high system losses; and an inability to develop a clear strategy for overcoming
these shortcomings.
Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization of
the assets of the National Power Corporation (NPC), the transition to a competitive structure, and the
delineation of the roles of various government agencies and the private entities. The law ordains the
division of the industry into four (4) distinct sectors, namely: generation, transmission, distribution and
supply.
Corollarily, the NPC generating plants have to privatized and its transmission business spun off and
privatized thereafter.67
Finally, every law has in its favor the presumption of constitutionality, and to justify its nullification, there
must be a clear and unequivocal breach of the Constitution and not one that is doubtful, speculative, or
argumentative.68Indubitably, petitioners failed to overcome this presumption in favor of the EPIRA. We
find no clear violation of the Constitution which would warrant a pronouncement that Sec. 34 of the EPIRA
and Rule 18 of its IRR are unconstitutional and void.
WHEREFORE, the instant case is hereby DISMISSED for lack of merit.
SO ORDERED.
G.R. No. 157036 June 9, 2004
FRANCISCO I. CHAVEZ Petitioner,
vs.
HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS EXECUTIVE SECRETARY; DIRECTOR GENERAL
HERMOGENES E. EBDANE, JR., IN HIS CAPACITY AS THE CHIEF OF THE PNP, ET. AL., respondents.
48
DECISION
SANDOVAL-GUTIERREZ, J.:
The right of individuals to bear arms is not absolute, but is subject to regulation. The maintenance of peace
and order1 and the protection of the people against violence are constitutional duties of the State, and the
right to bear arms is to be construed in connection and in harmony with these constitutional duties.
Before us is a petition for prohibition and injunction seeking to enjoin the implementation of the
"Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of
Residence"2 (Guidelines) issued on January 31, 2003, by respondent Hermogenes E. Ebdane, Jr., Chief of
the Philippine National Police (PNP).
The facts are undisputed:
In January 2003, President Gloria Macapagal-Arroyo delivered a speech before the members of
the PNP stressing the need for a nationwide gun ban in all public places to avert the rising crime
incidents. She directed the then PNP Chief, respondent Ebdane, to suspend the issuance of
Permits to Carry Firearms Outside of Residence (PTCFOR), thus:
"THERE IS ALSO NEED TO FOCUS ON THE HIGH PROFILE CRIMES THAT TEND TO DISTURB
THE PSYCHOLOGICAL PERIMETERS OF THE COMMUNITY – THE LATEST BEING THE
KILLING OF FORMER NPA LEADER ROLLY KINTANAR. I UNDERSTAND WE ALREADY HAVE
THE IDENTITY OF THE CULPRIT. LET US BRING THEM TO THE BAR OF JUSTICE.
THE NPA WILL FIND IT MORE DIFFICULT TO CARRY OUT THEIR PLOTS IF OUR LAW
ENFORCEMENT AGENCIES CAN RID THEMSELVES OF RASCALS IN UNIFORM, AND ALSO IF
WE ENFORCE A GUN BAN IN PUBLIC PLACES.
THUS, I AM DIRECTING THE PNP CHIEF TO SUSPEND INDEFINITELY THE ISSUANCE OF
PERMIT TO CARRY FIREARMS IN PUBLIC PLACES. THE ISSUANCE OF PERMITS WILL NOW
BE LIMITED ONLY TO OWNERSHIP AND POSSESSION OF GUNS AND NOT TO CARRYING
THEM IN PUBLIC PLACES. FROM NOW ON, ONLY THE UNIFORMED MEN IN THE MILITARY
AND AUTHORIZED LAW ENFORCEMENT OFFICERS CAN CARRY FIREARMS IN PUBLIC
PLACES, AND ONLY PURSUANT TO EXISTING LAW. CIVILIAN OWNERS MAY NO LONGER
BRING THEIR FIREARMS OUTSIDE THEIR RESIDENCES. THOSE WHO WANT TO USE THEIR
GUNS FOR TARGET PRACTICE WILL BE GIVEN SPECIAL AND TEMPORARY PERMITS FROM
TIME TO TIME ONLY FOR THAT PURPOSE. AND THEY MAY NOT LOAD THEIR GUNS WITH
BULLETS UNTIL THEY ARE IN THE PREMISES OF THE FIRING RANGE.
WE CANNOT DISREGARD THE PARAMOUNT NEED FOR LAW AND ORDER. JUST AS WE
CANNOT BE HEEDLESS OF OUR PEOPLE’S ASPIRATIONS FOR PEACE."

Acting on President Arroyo’s directive, respondent Ebdane issued the assailed Guidelines quoted as
follows:
"TO : All Concerned
FROM : Chief, PNP
SUBJECT : Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of
Residence.
DATE : January 31, 2003
1. Reference: PD 1866 dated June 29, 1983 and its Implementing Rules and Regulations.
2. General: The possession and carrying of firearms outside of residence is a privilege granted by the State
to its citizens for their individual protection against all threats of lawlessness and security.
As a rule, persons who are lawful holders of firearms (regular license, special permit, certificate of
registration or MR) are prohibited from carrying their firearms outside of residence. However, the Chief,
Philippine National Police may, in meritorious cases as determined by him and under conditions as he may
impose, authorize such person or persons to carry firearms outside of residence.
3. Purposes: This Memorandum prescribes the guidelines in the implementation of the ban on the carrying
of firearms outside of residence as provided for in the Implementing Rules and Regulations, Presidential
Decree No. 1866, dated June 29, 1983 and as directed by PGMA. It also prescribes the conditions,
requirements and procedures under which exemption from the ban may be granted.
4. Specific Instructions on the Ban on the Carrying of Firearms:
a. All PTCFOR are hereby revoked. Authorized holders of licensed firearms covered with valid PTCFOR may
re-apply for a new PTCFOR in accordance with the conditions hereinafter prescribed.
b. All holders of licensed or government firearms are hereby prohibited from carrying their firearms
outside their residence except those covered with mission/letter orders and duty detail orders issued by
competent authority pursuant to Section 5, IRR, PD 1866, provided, that the said exception shall pertain
only to organic and regular employees.
5. The following persons may be authorized to carry firearms outside of residence.
a. All persons whose application for a new PTCFOR has been approved, provided, that the persons and
security of those so authorized are under actual threat, or by the nature of their position, occupation and
profession are under imminent danger.
49
b. All organic and regular employees with Mission/Letter Orders granted by their respective agencies so
authorized pursuant to Section 5, IRR, PD 1866, provided, that such Mission/Letter Orders is valid only for
the duration of the official mission which in no case shall be more than ten (10) days.
c. All guards covered with Duty Detail Orders granted by their respective security agencies so authorized
pursuant to Section 4, IRR, PD 1866, provided, that such DDO shall in no case exceed 24-hour duration. d.
Members of duly recognized Gun Clubs issued Permit to Transport (PTT) by the PNP for purposes of
practice and competition, provided, that such firearms while in transit must not be loaded with
ammunition and secured in an appropriate box or case detached from the person. e. Authorized members
of the Diplomatic Corps. 6. Requirements for issuance of new PTCFOR: a. Written request by the applicant
addressed to Chief, PNP stating his qualification to possess firearm and the reasons why he needs to carry
firearm outside of residence. b. Xerox copy of current firearm license duly authenticated by Records
Branch, FED; c. Proof of actual threat, the details of which should be issued by the Chief of
Police/Provincial or City Directors and duly validated by C, RIID; d. Copy of Drug Test Clearance, duly
authenticated by the Drug Testing Center, if photocopied; e. Copy of DI/ RIID clearance, duly authenticated
by ODI/RIID, if photocopied; f. Copy of Neuro-Psychiatric Clearance duly authenticated by NP Testing
Center, if photocopied; g. Copy of Certificate of Attendance to a Gun Safety Seminar, duly validated by
Chief, Operations Branch, FED; h. NBI Clearance; i. Two (2) ID pictures (2" x 2") taken not earlier than one
(1) year from date of filing of application; and j. Proof of Payment
7. Procedures: a. Applications may be filed directly to the Office of the PTCFOR Secretariat in Camp Crame.
In the provinces, the applications may also be submitted to the Police Regional Offices (PROs) and
Provincial/City Police Offices (P/CPOs) for initial processing before they are forwarded to the office of the
PTCFOR Secretariat. The processors, after ascertaining that the documentary requirements are in order,
shall issue the Order of Payment (OP) indicating the amount of fees payable by the applicant, who in turn
shall pay the fees to the Land Bank. b. Applications, which are duly processed and prepared in accordance
with existing rules and regulations, shall be forwarded to the OCPNP for approval. c. Upon approval of the
application, OCPNP will issue PTCFOR valid for one (1) year from date of issue. d. Applications for renewal
of PTCFOR shall be processed in accordance with the provisions of par. 6 above. e. Application for
possession and carrying of firearms by diplomats in the Philippines shall be processed in accordance with
NHQ PNP Memo dated September 25, 2000, with Subj: Possession and Carrying of Firearms by Diplomats
in the Philippines. 8. Restrictions in the Carrying of Firearms: a. The firearm must not be displayed or
exposed to public view, except those authorized in uniform and in the performance of their official duties.
b. The firearm shall not be brought inside public drinking and amusement places, and all other commercial
or public establishments."
Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR has been issued, requested the
Department of Interior and Local Government (DILG) to reconsider the implementation of the assailed
Guidelines. However, his request was denied. Thus, he filed the present petition impleading public
respondents Ebdane, as Chief of PNP; Alberto G. Romulo, as Executive Secretary; and Gerry L. Barias, as
Chief of the PNP-Firearms and Explosives Division. He anchored his petition on the following grounds:
"I

THE PRESIDENT HAS NO POWER OR AUTHORITY – MUCH LESS BY A MERE SPEECH – TO ALTER, MODIFY OR
AMEND THE LAW ON FIREARMS BY IMPOSING A GUN BAN AND CANCELING EXISTING PERMITS FOR GUNS
TO BE CARRIED OUTSIDE RESIDENCES.
II
OFFICIALLY, THERE IS NO PRESIDENTIAL ISSUANCE ON THE GUN BAN; THE PRESIDENTIAL SPEECH NEVER
INVOKED POLICE POWER TO JUSTIFY THE GUN BAN; THE PRESIDENT’S VERBAL DECLARATION ON GUN BAN
VIOLATED THE PEOPLE’S RIGHT TO PROTECT LIFE AND THEIR PROPERTY RIGHT TO CARRY FIREARMS.
III
THE PNP CHIEF HAS NO POWER OR AUTHORITY TO ISSUE THE QUESTIONED GUIDELINES BECAUSE:
1) THERE IS NO LAW, STATUTE OR EXECUTIVE ORDER WHICH GRANTS THE PNP CHIEF THE AUTHORITY TO
PROMULGATE THE PNP GUIDELINES.
2) THE IMPLEMENTING RULES AND REGULATIONS OF PD 1866 CANNOT BE THE SUBJECT OF ANOTHER SET
OF IMPLEMENTING GUIDELINES.
3) THE PRESIDENT’S SPEECH CANNOT BE A BASIS FOR THE PROMULGATION OF IMPLEMENTNG
GUIDELINES ON THE GUN BAN.
IV
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES IMPLEMENT PD 1866, AND THE AMENDMENTS
THERETO, THE PNP CHIEF STILL HAS NO POWER OR AUTHORITY TO ISSUE THE SAME BECAUSE –
1) PER SEC 6, RA 8294, WHICH AMENDS PD 1866, THE IRR SHALL BE PROMULGATED JOINTLY BY THE DOJ
AND THE DILG.
2) SEC. 8, PD 1866 STATES THAT THE IRR SHALL BE PROMULGATED BY THE CHIEF OF THE PHILIPPINE
CONSTABULARY.
V
THE PNP GUIDELINES VIOLATE THE DUE PROCESS CLAUSE OF THE CONSTITUTION BECAUSE:
1) THE RIGHT TO OWN AND CARRY A FIREARM IS NECESSARILY INTERTWINED WITH THE PEOPLE’S
INHERENT RIGHT TO LIFE AND TO PROTECT LIFE. THUS, THE PNP GUIDELINES DEPRIVE PETITIONER OF THIS
RIGHT WITHOUT DUE PROCESS OF LAW FOR:
50
A) THE PNP GUIDELINES DEPRIVE PETITIONER OF HIS MOST POTENT, IF NOT HIS ONLY, MEANS TO DEFEND
HIMSELF.
B) THE QUESTIONED GUIDELINES STRIPPED PETITIONER OF HIS MEANS OF PROTECTION AGAINST CRIME
DESPITE THE FACT THAT THE STATE COULD NOT POSSIBLY PROTECT ITS CITIZENS DUE TO THE
INADEQUACY AND INEFFICIENCY OF THE POLICE FORCE.
2) THE OWNESHIP AND CARRYING OF FIREARMS ARE CONSTITUTIONALLY PROTECTED PROPERTY RIGHTS
WHICH CANNOT BE TAKEN AWAY WITHOUT DUE PROCESS OF LAW AND WITHOUT JUST CAUSE.
VI
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES WERE ISSUED IN THE EXERCISE OF POLICE POWER,
THE SAME IS AN INVALID EXERCISE THEREOF SINCE THE MEANS USED THEREFOR ARE UNREASONABLE
AND UNNCESSARY FOR THE ACCOMPLISHMENT OF ITS PURPOSE – TO DETER AND PREVENT CRIME –
THEREBY BECOMING UNDULY OPPRESSIVE TO LAW-ABIDING GUN-OWNERS.
VII
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND CONFISCATORY SINCE IT REVOKED ALL EXISTING
PERMITS TO CARRY WITHOUT, HOWEVER, REFUNDING THE PAYMENT THE PNP RECEIVED FROM THOSE
WHO ALREADY PAID THEREFOR.
VIII
THE PNP GUIDELINES VIOLATE THE EQUAL PROTECTION CLAUSE OF THE CONSTITUTION BECAUSE THEY
ARE DIRECTED AT AND OPPRESSIVE ONLY TO LAW-ABIDING GUN OWNERS WHILE LEAVING OTHER GUN-
OWNERS – THE LAWBREAKERS (KIDNAPPERS, ROBBERS, HOLD-UPPERS, MNLF, MILF, ABU SAYYAF
COLLECTIVELY, AND NPA) – UNTOUCHED.
IX
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND UNFAIR BECAUSE THEY WERE IMPLEMENTED LONG
BEFORE THEY WERE PUBLISHED.
X
THE PNP GUIDELINES ARE EFFECTIVELY AN EX POST FACTO LAW SINCE THEY APPLY RETROACTIVELY AND
PUNISH ALL THOSE WHO WERE ALREADY GRANTED PERMITS TO CARRY OUTSIDE OF RESIDENCE LONG
BEFORE THEIR PROMULGATION."
Petitioner’s submissions may be synthesized into five (5) major issues:

First, whether respondent Ebdane is authorized to issue the assailed Guidelines;
Second, whether the citizens’ right to bear arms is a constitutional right?;
Third, whether the revocation of petitioner’s PTCFOR pursuant to the assailed Guidelines is a
violation of his right to property?;
Fourth, whether the issuance of the assailed Guidelines is a valid exercise of police power?; and
Fifth, whether the assailed Guidelines constitute an ex post facto law?
The Solicitor General seeks the dismissal of the petition pursuant to the doctrine of hierarchy of courts.
Nonetheless, in refutation of petitioner’s arguments, he contends that: (1) the PNP Chief is authorized to
issue the assailed Guidelines; (2) petitioner does not have a constitutional right to own and carry firearms;
(3) the assailed Guidelines do not violate the due process clause of the Constitution; and (4) the assailed
Guidelines do not constitute an ex post facto law.
Initially, we must resolve the procedural barrier.
On the alleged breach of the doctrine of hierarchy of courts, suffice it to say that the doctrine is not an
iron-clad dictum. In several instances where this Court was confronted with cases of national interest and
of serious implications, it never hesitated to set aside the rule and proceed with the judicial determination
of the cases.3 The case at bar is of similar import as it involves the citizens’ right to bear arms.
I provides that any person or entity desiring to possess any firearm "shall first secure the necessary
Authority of the PNP Chief
Relying on the principle of separation of powers, petitioner argues that only Congress can withhold his
right to bear arms. In revoking all existing PTCFOR, President Arroyo and respondent Ebdane transgressed
the settled principle and arrogated upon themselves a power they do not possess – the legislative power.
We are not persuaded.
It is true that under our constitutional system, the powers of government are distributed among three
coordinate and substantially independent departments: the legislative, the executive and the judiciary.
Each has exclusive cognizance of the matters within its jurisdiction and is supreme within its own sphere.4
Pertinently, the power to make laws – the legislative power – is vested in Congress.5 Congress may not
escape its duties and responsibilities by delegating that power to any other body or authority. Any attempt
to abdicate the power is unconstitutional and void, on the principle that "delegata potestas non potest
delegari" – "delegated power may not be delegated."6
51
The rule which forbids the delegation of legislative power, however, is not absolute and inflexible. It
admits of exceptions. An exception sanctioned by immemorial practice permits the legislative body to
delegate its licensing power to certain persons, municipal corporations, towns, boards, councils,
commissions, commissioners, auditors, bureaus and directors.7 Such licensing power includes the power to
promulgate necessary rules and regulations.8
The evolution of our laws on firearms shows that since the early days of our Republic, the legislature’s
tendency was always towards the delegation of power. Act No. 1780, 9 delegated upon the Governor-
General (now the President) the authority (1) to approve or disapprove applications of any person for a
license to deal in firearms or to possess the same for personal protection, hunting and other lawful
purposes; and (2) to revoke such license any time.10 Further, it authorized him to issue regulations which
he may deem necessary for the proper enforcement of the Act.11 With the enactment of Act No. 2711, the
"Revised Administrative Code of 1917," the laws on firearms were integrated.12 The Act retained the
authority of the Governor General provided in Act No. 1780. Subsequently, the growing complexity in the
Office of the Governor-General resulted in the delegation of his authority to the Chief of the Constabulary.
On January 21, 1919, Acting Governor-General Charles E. Yeater issued Executive Order No. 813 authorizing
and directing the Chief of Constabulary to act on his behalf in approving and disapproving applications for
personal, special and hunting licenses. This was followed by Executive Order No. 6114 designating the
Philippine Constabulary (PC) as the government custodian of all firearms, ammunitions and explosives.
Executive Order No. 215,15 issued by President Diosdado Macapagal on December 3, 1965, granted the
Chief of the Constabulary, not only the authority to approve or disapprove applications for personal,
special and hunting license, but also the authority to revoke the same. With the foregoing developments,
it is accurate to say that the Chief of the Constabulary had exercised the authority for a long time. In fact,
subsequent issuances such as Sections 2 and 3 of the Implementing Rules and Regulations of Presidential
Decree No. 186616 perpetuate such authority of the Chief of the Constabulary. Section 2 specifically
permit/license/authority from the Chief of the Constabulary." With regard to the issuance of PTCFOR,
Section 3 imparts: "The Chief of Constabulary may, in meritorious cases as determined by him and under
such conditions as he may impose, authorize lawful holders of firearms to carry them outside of
residence." These provisions are issued pursuant to the general power granted by P.D. No. 1866
empowering him to promulgate rules and regulations for the effective implementation of the decree. 17 At
this juncture, it bears emphasis that P.D. No. 1866 is the chief law governing possession of firearms in the
Philippines and that it was issued by President Ferdinand E. Marcos in the exercise of his legislative
power.18 In an attempt to evade the application of the above-mentioned laws and regulations, petitioner
argues that the "Chief of the PNP" is not the same as the "Chief of the Constabulary," the PC being a mere
unit or component of the newly established PNP. He contends further that Republic Act No.
829419 amended P.D. No. 1866 such that the authority to issue rules and regulations regarding firearms is
now jointly vested in the Department of Justice and the DILG, not the Chief of the Constabulary.20
Petitioner’s submission is bereft of merit.
By virtue of Republic Act No. 6975,21 the Philippine National Police (PNP) absorbed the Philippine
Constabulary (PC). Consequently, the PNP Chief succeeded the Chief of the Constabulary and, therefore,
assumed the latter’s licensing authority. Section 24 thereof specifies, as one of PNP’s powers, the issuance

of licenses for the possession of firearms and explosives in accordance with law. 22 This is in conjunction
with the PNP Chief’s "power to issue detailed implementing policies and instructions" on such "matters as
may be necessary to effectively carry out the functions, powers and duties" of the PNP. 23
Contrary to petitioner’s contention, R.A. No. 8294 does not divest the Chief of the Constabulary (now the
PNP Chief) of his authority to promulgate rules and regulations for the effective implementation of P.D.
No. 1866. For one, R.A. No. 8294 did not repeal entirely P.D. No. 1866. It merely provides for the reduction
of penalties for illegal possession of firearms. Thus, the provision of P.D. No. 1866 granting to the Chief of
the Constabulary the authority to issue rules and regulations regarding firearms remains effective.
Correspondingly, the Implementing Rules and Regulations dated September 15, 1997 jointly issued by the
Department of Justice and the DILG pursuant to Section 6 of R.A. No. 8294 deal only with the automatic
review, by the Director of the Bureau of Corrections or the Warden of a provincial or city jail, of the
records of convicts for violations of P.D. No. 1866. The Rules seek to give effect to the beneficent
provisions of R.A. No. 8294, thereby ensuring the early release and reintegration of the convicts into the
community.
Clearly, both P.D. No. 1866 and R.A. No. 6975 authorize the PNP Chief to issue the assailed guidelines.
Corollarily, petitioner disputes President Arroyo’s declaration of a nationwide gun ban, arguing that "she
has no authority to alter, modify, or amend the law on firearms through a mere speech."
First, it must be emphasized that President Arroyo’s speech was just an expression of her policy and a
directive to her subordinate. It cannot, therefore, be argued that President Arroyo enacted a law through a
mere speech.
Second, at the apex of the entire executive officialdom is the President. Section 17, Article VII of the
Constitution specifies his power as Chief Executive, thus: "The President shall have control of all the
executive departments, bureaus and offices. He shall ensure that the laws be faithfully executed." As Chief
Executive, President Arroyo holds the steering wheel that controls the course of her government. She lays
down policies in the execution of her plans and programs. Whatever policy she chooses, she has her
subordinates to implement them. In short, she has the power of control. Whenever a specific function is
entrusted by law or regulation to her subordinate, she may act directly or merely direct the performance
of a duty.24 Thus, when President Arroyo directed respondent Ebdane to suspend the issuance of PTCFOR,
she was just directing a subordinate to perform an assigned duty. Such act is well within the prerogative of
her office.
II
Right to bear arms: Constitutional or Statutory?
Petitioner earnestly contends that his right to bear arms is a constitutionally-protected right. This, he
mainly anchors on various American authorities. We therefore find it imperative to determine the nature
of the right in light of American jurisprudence.
52
The bearing of arms is a tradition deeply rooted in the English and American society. It antedates not only
the American Constitution but also the discovery of firearms.25
A provision commonly invoked by the American people to justify their possession of firearms is the Second
Amendment of the Constitution of the United States of America, which reads:
"A well regulated militia, being necessary for the security of free state, the right of the people to keep and
bear Arms, shall not be infringed."
An examination of the historical background of the foregoing provision shows that it pertains to the
citizens’ "collective right" to take arms in defense of the State, not to the citizens’ "individual right" to own
and possess arms. The setting under which the right was contemplated has a profound connection with
the keeping and maintenance of a militia or an armed citizenry. That this is how the right was construed is
evident in early American cases.
The first case involving the interpretation of the Second Amendment that reached the United States
Supreme Court is United States vs. Miller.26 Here, the indictment charged the defendants with transporting
an unregistered "Stevens shotgun" without the required stamped written order, contrary to the National
Firearms Act. The defendants filed a demurrer challenging the facial validity of the indictment on the
ground that the National Firearms Act offends the inhibition of the Second Amendment. The District Court
sustained the demurrer and quashed the indictment. On appeal, the Supreme Court interpreted the right
to bear arms under the Second Amendment as referring to the collective right of those comprising the
Militia – a body of citizens enrolled for military discipline. It does not pertain to the individual right of
citizen to bear arm. Miller expresses its holding as follows:
"In the absence of any evidence tending to show that possession or use of a ‘shotgun having a
barrel of less than eighteen inches in length’ at this time has some reasonable relationship to the
preservation or efficiency of a well regulated militia, we cannot say that the Second
Amendment guarantees the right to keep and bear such an instrument. Certainly it is not within
judicial notice that this weapon is any part of the ordinary military equipment or that its use could
contribute to the common defense.
The same doctrine was re-echoed in Cases vs. United States.27 Here, the Circuit Court of Appeals held that
the Federal Firearms Act, as applied to appellant, does not conflict with the Second Amendment. It ruled
that:
"While [appellant’s] weapon may be capable of military use, or while at least familiarity with it
might be regarded as of value in training a person to use a comparable weapon of military type
and caliber, still there is no evidence that the appellant was or ever had been a member of any
military organization or that his use of the weapon under the circumstances disclosed was in
preparation for a military career. In fact, the only inference possible is that the appellant at the
time charged in the indictment was in possession of, transporting, and using the firearm and
ammunition purely and simply on a frolic of his own and without any thought or intention of

contributing to the efficiency of the well regulated militia which the Second amendment was
designed to foster as necessary to the security of a free state."
With the foregoing jurisprudence, it is erroneous to assume that the US Constitution grants upon the
American people the right to bear arms. In a more explicit language, the United States vs.
Cruikshank28 decreed: "The right of the people to keep and bear arms is not a right granted by the
Constitution. Neither is it in any way dependent upon that instrument." Likewise, in People vs.
Persce,29 the Court of Appeals said: "Neither is there any constitutional provision securing the right to bear
arms which prohibits legislation with reference to such weapons as are specifically before us for
consideration. The provision in the Constitution of the United States that the right of the people to keep
and bear arms shall not be infringed is not designed to control legislation by the state."
With more reason, the right to bear arms cannot be classified as fundamental under the 1987 Philippine
Constitution. Our Constitution contains no provision similar to the Second Amendment, as we aptly
observed in the early case of United States vs. Villareal:30
"The only contention of counsel which would appear to necessitate comment is the claim that the
statute penalizing the carrying of concealed weapons and prohibiting the keeping and the use of
firearms without a license, is in violation of the provisions of section 5 of the Philippine Bill of
Rights.
Counsel does not expressly rely upon the prohibition in the United States Constitution against
the infringement of the right of the people of the United States to keep and bear arms (U. S.
Constitution, amendment 2), which is not included in the Philippine Bill. But it may be well, in
passing, to point out that in no event could this constitutional guaranty have any bearing on the
case at bar, not only because it has not been expressly extended to the Philippine Islands, but
also because it has been uniformly held that both this and similar provisions in State
constitutions apply only to arms used in civilized warfare (see cases cited in 40 Cyc., 853, note
18); x x x."
Evidently, possession of firearms by the citizens in the Philippines is the exception, not the rule. The right
to bear arms is a mere statutory privilege, not a constitutional right. It is a mere statutory creation. What
then are the laws that grant such right to the Filipinos? The first real firearm law is Act No. 1780 enacted
by the Philippine Commission on October 12, 1907. It was passed to regulate the importation, acquisition,
possession, use and transfer of firearms. Section 9 thereof provides:
"SECTION 9. Any person desiring to possess one or more firearms for personal protection, or for
use in hunting or other lawful purposes only, and ammunition therefor, shall make application
for a license to possess such firearm or firearms or ammunition as hereinafter provided. Upon
making such application, and before receiving the license, the applicant shall make a cash deposit
in the postal savings bank in the sum of one hundred pesos for each firearm for which the license
is to be issued, or in lieu thereof he may give a bond in such form as the Governor-General may
prescribe, payable to the Government of the Philippine Islands, in the sum of two hundred pesos
for each such firearm: PROVIDED, HOWEVER, That persons who are actually members of gun
53
clubs, duly formed and organized at the time of the passage of this Act, who at such time have a
license to possess firearms, shall not be required to make the deposit or give the bond prescribed
by this section, and the bond duly executed by such person in accordance with existing law shall
continue to be security for the safekeeping of such arms."
The foregoing provision was restated in Section 88731 of Act No. 2711 that integrated the firearm laws.
Thereafter, President Ferdinand E. Marcos issued P.D. No. 1866. It codified the laws on illegal possession,
manufacture, dealing in, acquisition of firearms, ammunitions or explosives and imposed stiffer penalties
for their violation. R.A. No. 8294 amended some of the provisions of P.D. No. 1866 by reducing the
imposable penalties. Being a mere statutory creation, the right to bear arms cannot be considered an
inalienable or absolute right.
III
Vested Property Right
Section 1, Article III of the Constitution provides that "no person shall be deprived of life, liberty or
property without due process of law." Petitioner invokes this provision, asserting that the revocation of his
PTCFOR pursuant to the assailed Guidelines deprived him of his "vested property right" without due
process of law and in violation of the equal protection of law.
Petitioner cannot find solace to the above-quoted Constitutional provision.
In evaluating a due process claim, the first and foremost consideration must be whether life, liberty or
property interest exists.32 The bulk of jurisprudence is that a license authorizing a person to enjoy a certain
privilege is neither a property nor property right. In Tan vs. The Director of Forestry,33 we ruled that "a
license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract
between the authority granting it and the person to whom it is granted; neither is it property or a property
right, nor does it create a vested right." In a more emphatic pronouncement, we held in Oposa vs.
Factoran, Jr.34 that:
"Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a
contract, property or a property right protected by the due process clause of the Constitution."
Petitioner, in arguing that his PTCFOR is a constitutionally protected property right, relied heavily on Bell
vs. Burson35 wherein the U.S. Supreme Court ruled that "once a license is issued, continued possession
may become essential in the pursuit of livelihood. Suspension of issued licenses thus involves state action
that adjudicates important interest of the licensees."
Petitioner’s reliance on Bell is misplaced. This case involves a driver’s license, not a license to bear arms.
The catena of American jurisprudence involving license to bear arms is perfectly in accord with our ruling
that a PTCFOR is neither a property nor a property right. In Erdelyi vs. O’Brien,36 the plaintiff who was
denied a license to carry a firearm brought suit against the defendant who was the Chief of Police of the
City of Manhattan Beach, on the ground that the denial violated her constitutional rights to due process
 54

and equal protection of the laws. The United States Court of Appeals Ninth Circuit ruled that Erdelyi did satisfied with the terms imposed, he should decline to accept them, but, if for the purpose of
not have a property interest in obtaining a license to carry a firearm, ratiocinating as follows: securing possession of the arms he does agree to such conditions, he must fulfill them."

"Property interests protected by the Due Process Clause of the Fourteenth Amendment do not arise IV
whenever a person has only ‘an abstract need or desire for’, or ‘unilateral expectation of a benefit. x x x
Rather, they arise from ‘legitimate claims of entitlement… defined by existing rules or understanding that Police Power
stem from an independent source, such as state law. x x x Concealed weapons are closely regulated by the
State of California. x x x Whether the statute creates a property interest in concealed weapons licenses At any rate, assuming that petitioner’s PTCFOR constitutes a property right protected by the Constitution,
depends ‘largely upon the extent to which the statute contains mandatory language that restricts the the same cannot be considered as absolute as to be placed beyond the reach of the State’s police power.
discretion of the [issuing authority] to deny licenses to applicants who claim to meet the minimum All property in the state is held subject to its general regulations, necessary to the common good and
eligibility requirements. x x x Where state law gives the issuing authority broad discretion to grant or deny general welfare.
license application in a closely regulated field, initial applicants do not have a property right in such
licenses protected by the Fourteenth Amendment. See Jacobson, supra, 627 F.2d at 180 (gaming license
In a number of cases, we laid down the test to determine the validity of a police measure, thus:
under Nevada law);"
(1) The interests of the public generally, as distinguished from those of a particular class, require
Similar doctrine was announced in Potts vs. City of Philadelphia, 37 Conway vs. King,38 Nichols vs. County of
the exercise of the police power; and
Sta. Clara,39 and Gross vs. Norton.40 These cases enunciated that the test whether the statute creates a
property right or interest depends largely on the extent of discretion granted to the issuing authority.
(2) The means employed are reasonably necessary for the accomplishment of the purpose and
not unduly oppressive upon individuals.
In our jurisdiction, the PNP Chief is granted broad discretion in the issuance of PTCFOR. This is evident
from the tenor of the Implementing Rules and Regulations of P.D. No. 1866 which state that "the Chief of
Deeper reflection will reveal that the test merely reiterates the essence of the constitutional guarantees of
Constabulary may, in meritorious cases as determined by him and under such conditions as he may
substantive due process, equal protection, and non-impairment of property rights.
impose, authorize lawful holders of firearms to carry them outside of residence." Following the American
doctrine, it is indeed logical to say that a PTCFOR does not constitute a property right protected under our
Constitution. It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace and order
in the society. Owing to the proliferation of crimes, particularly those committed by the New People’s
Army (NPA), which tends to disturb the peace of the community, President Arroyo deemed it best to
Consequently, a PTCFOR, just like ordinary licenses in other regulated fields, may be revoked any time. It
impose a nationwide gun ban. Undeniably, the motivating factor in the issuance of the assailed Guidelines
does not confer an absolute right, but only a personal privilege to be exercised under existing restrictions,
is the interest of the public in general.
and such as may thereafter be reasonably imposed.41 A licensee takes his license subject to such
conditions as the Legislature sees fit to impose, and one of the statutory conditions of this license is that it
might be revoked by the selectmen at their pleasure. Such a license is not a contract, and a revocation of The only question that can then arise is whether the means employed are appropriate and reasonably
it does not deprive the defendant of any property, immunity, or privilege within the meaning of these necessary for the accomplishment of the purpose and are not unduly oppressive. In the instant case, the
words in the Declaration of Rights.42 The US Supreme Court, in Doyle vs. Continental Ins. Co,43 held: "The assailed Guidelines do not entirely prohibit possession of firearms. What they proscribe is merely the
correlative power to revoke or recall a permission is a necessary consequence of the main power. A mere carrying of firearms outside of residence. However, those who wish to carry their firearms outside of their
license by the State is always revocable." residences may re-apply for a new PTCFOR. This we believe is a reasonable regulation. If the carrying of
firearms is regulated, necessarily, crime incidents will be curtailed. Criminals carry their weapon to hunt
for their victims; they do not wait in the comfort of their homes. With the revocation of all PTCFOR, it
The foregoing jurisprudence has been resonating in the Philippines as early as 1908. Thus, in The
would be difficult for criminals to roam around with their guns. On the other hand, it would be easier for
Government of the Philippine Islands vs. Amechazurra44 we ruled:
the PNP to apprehend them.
"x x x no private person is bound to keep arms. Whether he does or not is entirely optional with
himself, but if, for his own convenience or pleasure, he desires to possess arms, he must do so Notably, laws regulating the acquisition or possession of guns have frequently been upheld as reasonable
exercise of the police power.45 In State vs. Reams,46 it was held that the legislature may regulate the right
upon such terms as the Government sees fit to impose, for the right to keep and bear arms is not
to bear arms in a manner conducive to the public peace. With the promotion of public peace as its
secured to him by law. The Government can impose upon him such terms as it pleases. If he is not
objective and the revocation of all PTCFOR as the means, we are convinced that the issuance of the

assailed Guidelines constitutes a reasonable exercise of police power. The ruling in United States vs.
Villareal,47 is relevant, thus:
"We think there can be no question as to the reasonableness of a statutory regulation prohibiting
the carrying of concealed weapons as a police measure well calculated to restrict the too frequent
resort to such weapons in moments of anger and excitement. We do not doubt that the strict
enforcement of such a regulation would tend to increase the security of life and limb, and to
suppress crime and lawlessness, in any community wherein the practice of carrying concealed
weapons prevails, and this without being unduly oppressive upon the individual owners of these
weapons. It follows that its enactment by the legislature is a proper and legitimate exercise of the
police power of the state."
V decision of the then Court of First Instance of Leyte, Branch IV, dated September 8,1976, 1 penned by
Ex post facto law
In Mekin vs. Wolfe,48 an ex post facto law has been defined as one – (a) which makes an action done
before the passing of the law and which was innocent when done criminal, and punishes such action; or
(b) which aggravates a crime or makes it greater than it was when committed; or (c) which changes the
punishment and inflicts a greater punishment than the law annexed to the crime when it was committed;
or (d) which alters the legal rules of evidence and receives less or different testimony than the law
required at the time of the commission of the offense in order to convict the defendant.
We see no reason to devote much discussion on the matter. Ex post facto law prohibits retrospectivity of
penal laws.49 The assailed Guidelines cannot be considered as an ex post facto law because it is
prospective in its application. Contrary to petitioner’s argument, it would not result in the punishment of
acts previously committed.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-45127 May 5, 1989
PEOPLE OF THE PHILIPPINES, represented by the Provincial Fiscal of Leyte, petitioner,
vs.
55
HON. JUDGE AUXENCIO C. DACUYCUY, CELESTINO S. MATONDO, SEGUNDINO A, CAVAL and CIRILO M.
ZANORIA, respondents.
The Office of the Solicitor General for petitioner.
Adelino B. Sitoy for private respondents.
REGALADO, J.:
Involved in this special civil action is the unique situation, to use an euphemistic phrase, of an alternative
penal sanction of imprisonment imposed by law but without a specification as to the term or duration
thereof.
As a consequence of such legislative faux pas or oversight, the petition at bar seeks to set aside the
herein respondent judge and granting the petition for certiorari and prohibition with preliminary
injunction filed by herein private respondents and docketed therein as Civil Case No. 5428, as well as his
resolution of October 19, 1976 2 denying the motions for reconsideration filed by the parties therein.
Subject of said decision were the issues on jurisdiction over violations of Republic Act No. 4670, otherwise
known as the Magna Carta for Public School Teachers, and the constitutionality of Section 32 thereof.
In a complaint filed by the Chief of Police of Hindang, Leyte on April 4, 1975, herein private respondents
Celestino S. Matondo, Segundino A. Caval and Cirilo M. Zanoria, public school officials of Leyte, were
charged before the Municipal Court of Hindang, Leyte in Criminal Case No. 555 thereof for violation of
Republic Act No. 4670. The case was set for arraignment and trial on May 29, 1975. At the arraignment,
the herein private respondents, as the accused therein, pleaded not guilty to the charge. Immediately
thereafter, they orally moved to quash the complaint for lack of jurisdiction over the offense allegedly due
to the correctional nature of the penalty of imprisonment prescribed for the offense. The motion to quash
was subsequently reduced to writing on June 13, 1975. 3 On August 21, 1975, the municipal court denied
the motion to quash for lack of merit. 4 On September 2, 1975, private respondents filed a motion for the
reconsideration of the aforesaid denial order on the same ground of lack of jurisdiction, but with the
further allegation that the facts charged do not constitute an offense considering that Section 32 of
Republic Act No. 4670 is null and void for being unconstitutional. In an undated order received by the
counsel for private respondents on October 20,1975, the motion for reconsideration was denied. 5
On October 26, 1975, private respondents filed a petitions 6 for certiorari and prohibition with preliminary
injunction before the former Court of First Instance of Leyte, Branch VIII, where it was docketed as Civil
Case No. B-622, to restrain the Municipal Judge, Provincial Fiscal and Chief of Police of Hindang, Leyte from
proceeding with the trial of said Criminal Case No. 555 upon the ground that the former Municipal Court of
Hindang had no jurisdiction over the offense charged. Subsequently, an amended petition 7 alleged the
additional ground that the facts charged do not constitute an offense since the penal provision, which is
Section 32 of said law, is unconstitutional for the following reasons: (1) It imposes a cruel and unusual
punishment, the term of imprisonment being unfixed and may run to reclusion perpetua; and (2) It also
constitutes an undue delegation of legislative power, the duration of the penalty of imprisonment being
solely left to the discretion of the court as if the latter were the legislative department of the Government.

On March 30, 1976, having been advised that the petition of herein private respondents was related to
Criminal Case No. 1978 for violation of Presidential Decree No. 442 previously transferred from Branch VIII
to Branch IV of the erstwhile Court of First Instance of Leyte, Judge Fortunate B. Cuna of the former branch
transferred the said petition to the latter branch for further proceedings and where it was subsequently
docketed therein as Civil Case No. 5428. 8 On March 15, 1976, the petitioner herein filed an opposition to
the admission of the said amended petitions 9 but respondent judge denied the same in his resolution of
April 20, 1976. 10 On August 2, 1976, herein petitioner filed a supplementary memorandum in answer to
the amended petition. 11
On September 8, 1976, respondent judge rendered the aforecited challenged decision holding in
substance that Republic Act No. 4670 is valid and constitutional but cases for its violation fall outside of
the jurisdiction of municipal and city courts, and remanding the case to the former Municipal Court of
Hindang, Leyte only for preliminary investigation.
As earlier stated, on September 25, 1976, petitioner filed a motion for reconsideration. 12 Likewise, private
respondents filed a motion for reconsideration of the lower court's decision but the same was limited only
to the portion thereof which sustains the validity of Section 32 of Republic Act No. 4670. 13 Respondent
judge denied both motions for reconsideration in a resolution dated October 19, 1976. 14
The instant petition to review the decision of respondent judge poses the following questions of law: (1)
Whether the municipal and city courts have jurisdiction over violations of Republic Act No. 4670; and (2)
Whether Section 32 of said Republic Act No. 4670 is constitutional.
We shall resolve said queries in inverse order, since prior determination of the constitutionality of the
assailed provision of the law involved is necessary for the adjudication of the jurisdictional issue raised in
this petition.
1. The disputed section of Republic Act No. 4670 provides:
Sec. 32. Penal Provision. — A person who shall wilfully interfere with, restrain or coerce any
teacher in the exercise of his rights guaranteed by this Act or who shall in any other manner commit any
act to defeat any of the provisions of this Act shall, upon conviction, be punished by a fine of not less than
one hundred pesos nor more than one thousand pesos, or by imprisonment, in the discretion of the court.
(Emphasis supplied).
Two alternative and distinct penalties are consequently imposed, to wit: (a) a fine ranging from P100.00 to
P1,000.00; or (b) imprisonment. It is apparent that the law has no prescribed period or term for the
imposable penalty of imprisonment. While a minimum and maximum amount for the penalty of fine is
specified, there is no equivalent provision for the penalty of imprisonment, although both appear to be
qualified by the phrase "in the discretion of the court.
Private respondents contend that a judicial determination of what Congress intended to be the duration of
the penalty of imprisonment would be violative of the constitutional prohibition against undue delegation
of legislative power, and that the absence of a provision on the specific term of imprisonment constitutes
56
that penalty into a cruel and unusual form of punishment. Hence, it is vigorously asserted, said Section 32
is unconstitutional.
The basic principle underlying the entire field of legal concepts pertaining to the validity of legislation is
that in the enactment of legislation a constitutional measure is thereby created. In every case where a
question is raised as to the constitutionality of an act, the court employs this doctrine in scrutinizing the
terms of the law. In a great volume of cases, the courts have enunciated the fundamental rule that there is
a presumption in favor of the constitutionality of a legislative enactment. 15
It is contended that Republic Act No. 4670 is unconstitutional on the ground that the imposable but
indefinite penalty of imprisonment provided therein constitutes a cruel and unusual punishment, in
defiance of the express mandate of the Constitution. This contention is inaccurate and should be rejected.
We note with approval the holding of respondent judge that —
The rule is established beyond question that a punishment authorized by statute is not cruel or
unusual or disproportionate to the nature of the offense unless it is a barbarous one unknown to
the law or so wholly disproportionate to the nature of the offense as to shock the moral sense of
the community. Based on the principle, our Supreme Court has consistently overruled
contentions of the defense that the punishment of fine or imprisonment authorized by the
statute involved is cruel and unusual. (Legarda vs. Valdez, 1 Phil. 146; U.S. vs. Pico, 18 Phil. 386;
People vs. Garay, 2 ACR 149; People vs. Estoista 93 Phil. 647; People vs. Tiu Ua. 96 Phil. 738;
People vs. Dionisio, 22 SCRA 1299). The language of our Supreme Court in the first of the cases it
decided after the last world war is appropriate here:
The Constitution directs that 'Excessive fines shall not be imposed, nor cruel and unusual
punishment inflicted.' The prohibition of cruel and unusual punishments is generally
aimed at the form or character of the punishment rather than its severity in respect of
duration or amount, and apply to punishments which never existed in America, or which
public sentiment has regarded as cruel or obsolete (15 Am. Jur., p. 172), for instance
there (sic) inflicted at the whipping post, or in the pillory, burning at the stake, breaking
on the wheel, disemboweling, and the like (15 Am. Jur. Supra, Note 35 L.R.A. p. 561).
Fine and imprisonment would not thus be within the prohibition.' (People vs. de la Cruz,
92 Phil. 906). 16
The question that should be asked, further, is whether the constitutional prohibition looks only to the form
or nature of the penalty and not to the proportion between the penalty and the crime.
The answer thereto may be gathered from the pronouncement in People vs. Estoista, 17 where an
"excessive" penalty was upheld as constitutional and was imposed but with a recommendation for
executive clemency, thus:
... If imprisonment from 5 to 10 years is out of proportion to the present case in view of
certain circumstances, the law is not to be declared unconstitutional for this reason. The

constitutionality of an act of the legislature is not to be judged in the light of exceptional
cases. Small transgressors for which the heavy net was not spread are, like small fishes,
bound to be caught, and it is to meet such a situation as this that courts are advised to
make a recommendation to the Chief Executive for clemency or reduction of the
penalty...
That the penalty is grossly disproportionate to the crime is an insufficient basis to declare the law
unconstitutional on the ground that it is cruel and unusual. The fact that the punishment authorized by the
statute is severe does not make it cruel or unusual. 18 In addition, what degree of disproportion the Court
will consider as obnoxious to the Constitution has still to await appropriate determination in due time
since, to the credit of our legislative bodies, no decision has as yet struck down a penalty for being "cruel
and unusual" or "excessive."
We turn now to the argument of private respondents that the entire penal provision in question should be
invalidated as an 49 "undue delegation of legislative power, the duration of penalty of imprisonment being
solely left to the discretion of the court as if the lattter were the legislative department of the
government."
Petitioner counters that the discretion granted therein by the legislature to the courts to determine the
period of imprisonment is a matter of statutory construction and not an undue delegation of legislative
power. It is contended that the prohibition against undue delegation of legislative power is concerned only
with the delegation of power to make laws and not to interpret the same. It is also submitted that
Republic Act No. 4670 vests in the courts the discretion, not to fix the period of imprisonment, but to
choose which of the alternative penalties shall be imposed.
Respondent judge sustained these theses of petitioner on his theory that "the principle of separation of
powers is not violated by vesting in courts discretion as to the length of sentence or amount of fine
between designated limits in sentencing persons convicted of crime. In such instance, the exercise of
judicial discretion by the courts is not an attempt to use legislative power or to prescribe and create a law
but is an instance of the administration of justice and the application of existing laws to the facts of
particular cases." 19 What respondent judge obviously overlooked is his own reference to penalties
"between designated limits."
In his commentary on the Constitution of the United States, Corwin wrote:
.. At least three distinct ideas have contributed to the development of the principle that legislative
power cannot be delegated. One is the doctrine of separation of powers: Why go to the trouble of
separating the three powers of government if they can straightway remerge on their own
motion? The second is the concept of due process of laws which precludes the transfer of
regulatory functions to private persons. Lastly, there is the maxim of agency "Delegata potestas
non potest delegari." 20
An apparent exception to the general rule forbidding the delegation of legislative authority to the courts
exists in cases where discretion is conferred upon said courts. It is clear, however, that when the courts are
57
said to exercise a discretion, it must be a mere legal discretion which is exercised in discerning the course
prescribed by law and which, when discerned, it is the duty of the court to follow. 21
So it was held by the Supreme Court of the United States that the principle of separation of powers is not
violated by vesting in courts discretion as to the length of sentence or the amount of fine between
designated limits in sentencing persons convicted of a crime. 22
In the case under consideration, the respondent judge erronneously assumed that since the penalty of
imprisonment has been provided for by the legislature, the court is endowed with the discretion to
ascertain the term or period of imprisonment. We cannot agree with this postulate. It is not for the courts
to fix the term of imprisonment where no points of reference have been provided by the legislature. What
valid delegation presupposes and sanctions is an exercise of discretion to fix the length of service of a term
of imprisonment which must be encompassed within specific or designated limits provided by law, the
absence of which designated limits well constitute such exercise as an undue delegation, if not-an outright
intrusion into or assumption, of legislative power.
Section 32 of Republic Act No. 4670 provides for an indeterminable period of imprisonment, with neither a
minimum nor a maximum duration having been set by the legislative authority. The courts are thus given a
wide latitude of discretion to fix the term of imprisonment, without even the benefit of any sufficient
standard, such that the duration thereof may range, in the words of respondent judge, from one minute to
the life span of the accused. Irremissibly, this cannot be allowed. It vests in the courts a power and a duty
essentially legislative in nature and which, as applied to this case, does violence to the rules on separation
of powers as well as the non-delegability of legislative powers. This time, the preumption of
constitutionality has to yield.
On the foregoing considerations, and by virtue of the separability clause in Section 34 of Republic Act No.
4670, the penalty of imprisonment provided in Section 32 thereof should be, as it is hereby, declared
unconstitutional.
It follows, therefore, that a ruling on the proper interpretation of the actual term of imprisonment, as may
have been intended by Congress, would be pointless and academic. It is, however, worth mentioning that
the suggested application of the so-called rule or principle of parallelism, whereby a fine of P1,000.00
would be equated with one year of imprisonment, does not merit judicial acceptance. A fine, whether
imposed as a single or as an alternative penalty, should not and cannot be reduced or converted into a
prison term; it is to be considered as a separate and independent penalty consonant with Article 26 of the
Revised Penal Code. 23 It is likewise declared a discrete principal penalty in the graduated scales of
penalties in Article 71 of said Code. There is no rule for transmutation of the amount of a fine into a term
of imprisonment. Neither does the Code contain any provision that a fine when imposed in conjunction
with imprisonment is subordinate to the latter penalty. In sum, a fine is as much a principal penalty as
imprisonment. Neither is subordinate to the other. 24
2. It has been the consistent rule that the criminal jurisdiction of the court is determined by the statute in
force at the time of the commencement of the action. 25

With the deletion by invalidation of the provision on imprisonment in Section 32 of Republic Act No. 4670,
as earlier discussed, the imposable penalty for violations of said law should be limited to a fine of not less
than P100.00 and not more than P1,000.00, the same to serve as the basis in determining which court may
properly exercise jurisdiction thereover. When the complaint against private respondents was filed in
1975, the pertinent law then in force was Republic Act No. 296, as amended by Republic Act No. 3828,
under which crimes punishable by a fine of not more than P 3,000.00 fall under the original jurisdiction of
the former municipal courts. Consequently, Criminal Case No. 555 against herein private respondents falls
within the original jurisdiction of the Municipal Trial Court of Hindang, Leyte.
WHEREFORE, the decision and resolution of respondent judge are hereby REVERSED and SET ASIDE.
Criminal Case No. 555 filed against private respondents herein is hereby ordered to be remanded to the
Municipal Trial Court of Hindang, Leyte for trial on the merits.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 181704 December 6, 2011
BUREAU OF CUSTOMS EMPLOYEES ASSOCIATION (BOCEA), represented by its National President
(BOCEA National Executive Council) Mr. Romulo A. Pagulayan, Petitioner,
vs.
HON. MARGARITO B. TEVES, in his capacity as Secretary of the Department of Finance, HON. NAPOLEON
L. MORALES, in his capacity as Commissioner of the Bureau of Customs, HON. LILIAN B. HEFTI, in her
capacity as Commissioner of the Bureau of Internal Revenue, Respondents.
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition1 for certiorari and prohibition with prayer for injunctive relief/s under Rule
65 of the 1997 Rules of Civil Procedure, as amended, to declare Republic Act (R.A.) No. 9335,2 otherwise
known as the Attrition Act of 2005, and its Implementing Rules and Regulations3 (IRR) unconstitutional,
and the implementation thereof be enjoined permanently.
The Facts
On January 25, 2005, former President Gloria Macapagal-Arroyo signed into law R.A. No. 9335 which took
effect on February 11, 2005.
58
In Abakada Guro Party List v. Purisima4 (Abakada), we said of R.A. No. 9335:
RA [No.] 9335 was enacted to optimize the revenue-generation capability and collection of the Bureau of
Internal Revenue (BIR) and the Bureau of Customs (BOC). The law intends to encourage BIR and BOC
officials and employees to exceed their revenue targets by providing a system of rewards and sanctions
through the creation of a Rewards and Incentives Fund (Fund) and a Revenue Performance Evaluation
Board (Board). It covers all officials and employees of the BIR and the BOC with at least six months of
service, regardless of employment status.
The Fund is sourced from the collection of the BIR and the BOC in excess of their revenue targets for the
year, as determined by the Development Budget and Coordinating Committee (DBCC). Any incentive or
reward is taken from the fund and allocated to the BIR and the BOC in proportion to their contribution in
the excess collection of the targeted amount of tax revenue.
The Boards in the BIR and the BOC are composed of the Secretary of the Department of Finance (DOF) or
his/her Undersecretary, the Secretary of the Department of Budget and Management (DBM) or his/her
Undersecretary, the Director General of the National Economic Development Authority (NEDA) or his/her
Deputy Director General, the Commissioners of the BIR and the BOC or their Deputy Commissioners, two
representatives from the rank-and-file employees and a representative from the officials nominated by
their recognized organization.
Each Board has the duty to (1) prescribe the rules and guidelines for the allocation, distribution and
release of the Fund; (2) set criteria and procedures for removing from the service officials and employees
whose revenue collection falls short of the target; (3) terminate personnel in accordance with the criteria
adopted by the Board; (4) prescribe a system for performance evaluation; (5) perform other functions,
including the issuance of rules and regulations and (6) submit an annual report to Congress.
The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were tasked to promulgate and
issue the implementing rules and regulations of RA [No.] 9335, to be approved by a Joint Congressional
Oversight Committee created for such purpose.5
The Joint Congressional Oversight Committee approved the assailed IRR on May 22, 2006. Subsequently,
the IRR was published on May 30, 2006 in two newspapers of general circulation, the Philippine Star and
the Manila Standard, and became effective fifteen (15) days later.6
Contending that the enactment and implementation of R.A. No. 9335 are tainted with constitutional
infirmities in violation of the fundamental rights of its members, petitioner Bureau of Customs Employees
Association (BOCEA), an association of rank-and-file employees of the Bureau of Customs (BOC), duly
registered with the Department of Labor and Employment (DOLE) and the Civil Service Commission (CSC),
and represented by its National President, Mr. Romulo A. Pagulayan (Pagulayan), directly filed the present
petition before this Court against respondents Margarito B. Teves, in his capacity as Secretary of the
Department of Finance (DOF), Commissioner Napoleon L. Morales (Commissioner Morales), in his capacity
as BOC Commissioner, and Lilian B. Hefti, in her capacity as Commissioner of the Bureau of Internal
Revenue (BIR). In its petition, BOCEA made the following averments:

Sometime in 2008, high-ranking officials of the BOC pursuant to the mandate of R.A. No. 9335 and its IRR,
and in order to comply with the stringent deadlines thereof, started to disseminate Collection District
Performance Contracts7 (Performance Contracts) for the lower ranking officials and rank-and-file
employees to sign. The Performance Contract pertinently provided:
x x x x WHEREAS, pursuant to the provisions of Sec. 25 (b) of the Implementing Rules and Regulations (IRR)
of the Attrition Act of 2005, that provides for the setting of criteria and procedures for removing from the
service Officials and Employees whose revenue collection fall short of the target in accordance with
Section 7 of Republic Act 9335.
x x x x NOW, THEREFORE, for and in consideration of the foregoing premises, parties unto this Agreement
hereby agree and so agreed to perform the following:
x x x x 2. The "Section 2, PA/PE" hereby accepts the allocated Revenue Collection Target and further
accepts/commits to meet the said target under the following conditions:
a.) That he/she will meet the allocated Revenue Collection Target and thereby undertakes and binds
himself/herself that in the event the revenue collection falls short of the target with due consideration of
all relevant factors affecting the level of collection as provided in the rules and regulations promulgated
under the Act and its IRR, he/she will voluntarily submit to the provisions of Sec. 25 (b) of the IRR and Sec.
7 of the Act; and
b.) That he/she will cascade and/or allocate to respective Appraisers/Examiners or Employees under
his/her section the said Revenue Collection Target and require them to execute a Performance Contract,
and direct them to accept their individual target. The Performance Contract executed by the respective
Examiners/Appraisers/Employees shall be submitted to the Office of the Commissioner through the LAIC
on or before March 31, 2008. x x x x8
BOCEA opined that the revenue target was impossible to meet due to the Government’s own policies on
reduced tariff rates and tax breaks to big businesses, the occurrence of natural calamities and because of
other economic factors. BOCEA claimed that some BOC employees were coerced and forced to sign the
Performance Contract. The majority of them, however, did not sign. In particular, officers of BOCEA were
summoned and required to sign the Performance Contracts but they also refused. To ease the brewing
tension, BOCEA claimed that its officers sent letters, and sought several dialogues with BOC officials but
the latter refused to heed them.
In addition, BOCEA alleged that Commissioner Morales exerted heavy pressure on the District Collectors,
Chiefs of Formal Entry Divisions, Principal Customs Appraisers and Principal Customs Examiners of the BOC
during command conferences to make them sign their Performance Contracts. Likewise, BOC Deputy
Commissioner Reynaldo Umali (Deputy Commissioner Umali) individually spoke to said personnel to
convince them to sign said contracts. Said personnel were threatened that if they do not sign their
respective Performance Contracts, they would face possible reassignment, reshuffling, or worse, be placed
on floating status. Thus, all the District Collectors, except a certain Atty. Carlos So of the Collection District
III of the Ninoy Aquino International Airport (NAIA), signed the Performance Contracts.
59
BOCEA further claimed that Pagulayan was constantly harassed and threatened with lawsuits. Pagulayan
approached Deputy Commissioner Umali to ask the BOC officials to stop all forms of harassment, but the
latter merely said that he would look into the matter. On February 5, 2008, BOCEA through counsel wrote
the Revenue Performance Evaluation Board (Board) to desist from implementing R.A. No. 9335 and its IRR
and from requiring rank-and-file employees of the BOC and BIR to sign Performance Contracts. 9 In his
letter-reply10 dated February 12, 2008, Deputy Commissioner Umali denied having coerced any BOC
employee to sign a Performance Contract. He also defended the BOC, invoking its mandate of merely
implementing the law. Finally, Pagulayan and BOCEA’s counsel, on separate occasions, requested for a
certified true copy of the Performance Contract from Deputy Commissioner Umali but the latter failed to
furnish them a copy.11
This petition was filed directly with this Court on March 3, 2008. BOCEA asserted that in view of the
unconstitutionality of R.A. No. 9335 and its IRR, and their adverse effects on the constitutional rights of
BOC officials and employees, direct resort to this Court is justified. BOCEA argued, among others, that its
members and other BOC employees are in great danger of losing their jobs should they fail to meet the
required quota provided under the law, in clear violation of their constitutional right to security of tenure,
and at their and their respective families’ prejudice.
In their Comment,12 respondents, through the Office of the Solicitor General (OSG), countered that R.A.
No. 9335 and its IRR do not violate the right to due process and right to security of tenure of BIR and BOC
employees. The OSG stressed that the guarantee of security of tenure under the 1987 Constitution is not a
guarantee of perpetual employment. R.A. No. 9335 and its IRR provided a reasonable and valid ground for
the dismissal of an employee which is germane to the purpose of the law. Likewise, R.A. No. 9335 and its
IRR provided that an employee may only be separated from the service upon compliance with substantive
and procedural due process. The OSG added that R.A. No. 9335 and its IRR must enjoy the presumption of
constitutionality.
In its Reply,13 BOCEA claimed that R.A. No. 9335 employs means that are unreasonable to achieve its
stated objectives; that the law is unduly oppressive of BIR and BOC employees as it shifts the extreme
burden upon their shoulders when the Government itself has adopted measures that make collection
difficult such as reduced tariff rates to almost zero percent and tax exemption of big businesses; and that
the law is discriminatory of BIR and BOC employees. BOCEA manifested that only the high-ranking officials
of the BOC benefited largely from the reward system under R.A. No. 9335 despite the fact that they were
not the ones directly toiling to collect revenue. Moreover, despite the BOCEA’s numerous requests, 14 BOC
continually refused to provide BOCEA the Expenditure Plan on how such reward was distributed.
Since BOCEA was seeking similar reliefs as that of the petitioners in Abakada Guro Party List v. Purisima,
BOCEA filed a Motion to Consolidate15 the present case with Abakada on April 16, 2008. However, pending
action on said motion, the Court rendered its decision in Abakada on August 14, 2008. Thus, the
consolidation of this case with Abakada was rendered no longer possible. 16
In Abakada, this Court, through then Associate Justice, now Chief Justice Renato C. Corona, declared
Section 1217of R.A. No. 9335 creating a Joint Congressional Oversight Committee to approve the IRR as
unconstitutional and violative of the principle of separation of powers. However, the constitutionality of

the remaining provisions of R.A. No. 9335 was upheld pursuant to Section 13 18 of R.A. No. 9335. The Court
also held that until the contrary is shown, the IRR of R.A. No. 9335 is presumed valid and effective even
without the approval of the Joint Congressional Oversight Committee. 19
Notwithstanding our ruling in Abakada, both parties complied with our Resolution 20 dated February 10,
2009, requiring them to submit their respective Memoranda.
The Issues
BOCEA raises the following issues:
I.
WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.] 9335, AND ITS IMPLEMENTING RULES AND
REGULATIONS ARE UNCONSTITUTIONAL AS THESE VIOLATE THE RIGHT TO DUE PROCESS OF THE COVERED
BIR AND BOC OFFICIALS AND EMPLOYEES[;]
II.
WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.] 9335, AND ITS IMPLEMENTING RULES AND
REGULATIONS ARE UNCONSTITUTIONAL AS THESE VIOLATE THE RIGHT OF BIR AND BOC OFFICIALS AND
EMPLOYEES TO THE EQUAL PROTECTION OF THE LAWS[;]
III.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS IMPLEMENTING RULES AND REGULATIONS VIOLATE
THE RIGHT TO SECURITY OF TENURE OF BIR AND BOC OFFICIALS AND EMPLOYEES AS ENSHRINED UNDER
SECTION 2 (3), ARTICLE IX (B) OF THE CONSTITUTION[;]
IV.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS IMPLEMENTING RULES AND REGULATIONS ARE
UNCONSTITUTIONAL AS THEY CONSTITUTE UNDUE DELEGATION OF LEGISLATIVE POWERS TO THE
REVENUE PERFORMANCE EVALUATION BOARD IN VIOLATION OF THE PRINCIPLE OF SEPARATION OF
POWERS ENSHRINED IN THE CONSTITUTION[; AND]
V.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 IS A BILL OF ATTAINDER AND HENCE[,] UNCONSTITUTIONAL
BECAUSE IT INFLICTS PUNISHMENT THROUGH LEGISLATIVE FIAT UPON A PARTICULAR GROUP OR CLASS OF
OFFICIALS AND EMPLOYEES WITHOUT TRIAL.21
60
BOCEA manifested that while waiting for the Court to give due course to its petition, events unfolded
showing the patent unconstitutionality of R.A. No. 9335. It narrated that during the first year of the
implementation of R.A. No. 9335, BOC employees exerted commendable efforts to attain their revenue
target of ₱196 billion which they surpassed by as much as ₱2 billion for that year alone. However, this was
attained only because oil companies made advance tax payments to BOC. Moreover, BOC employees were
given their "reward" for surpassing said target only in 2008, the distribution of which they described as
unjust, unfair, dubious and fraudulent because only top officials of BOC got the huge sum of reward while
the employees, who did the hard task of collecting, received a mere pittance of around ₱8,500.00. In the
same manner, the Bonds Division of BOC-NAIA collected 400+% of its designated target but the higher
management gave out to the employees a measly sum of ₱8,500.00 while the top level officials partook of
millions of the excess collections. BOCEA relies on a piece of information revealed by a newspaper showing
the list of BOC officials who apparently earned huge amounts of money by way of reward.22 It claims that
the recipients thereof included lawyers, support personnel and other employees, including a dentist, who
performed no collection functions at all. These alleged anomalous selection, distribution and allocation of
rewards was due to the failure of R.A. No. 9335 to set out clear guidelines. 23
In addition, BOCEA avers that the Board initiated the first few cases of attrition for the Fiscal Year 2007 by
subjecting five BOC officials from the Port of Manila to attrition despite the fact that the Port of Manila
substantially complied with the provisions of R.A. No. 9335. It is thus submitted that the selection of these
officials for attrition without proper investigation was nothing less than arbitrary. Further, the legislative
and executive departments’ promulgation of issuances and the Government’s accession to regional trade
agreements have caused a significant diminution of the tariff rates, thus, decreasing over-all collection.
These unrealistic settings of revenue targets seriously affect BIR and BOC employees tasked with the
burden of collection, and worse, subjected them to attrition.24
BOCEA assails the constitutionality of R.A. No. 9335 and its IRR on the following grounds:
1. R.A. No. 9335 and its IRR violate the BIR and BOC employees’ right to due process because the
termination of employees who had not attained their revenue targets for the year is peremptory
and done without any form of hearing to allow said employees to ventilate their side. Moreover,
R.A. No. 9335 and its IRR do not comply with the requirements under CSC rules and regulations as
the dismissal in this case is immediately executory. Such immediately executory nature of the
Board’s decision negates the remedies available to an employee as provided under the CSC rules.
2. R.A. No. 9335 and its IRR violate the BIR and BOC employees’ right to equal protection of the
law because R.A. No. 9335 and its IRR unduly discriminates against BIR and BOC employees as
compared to employees of other revenue generating government agencies like the Philippine
Amusement and Gaming Corporation, Department of Transportation and Communication, the Air
Transportation Office, the Land Transportation Office, and the Philippine Charity Sweepstakes
Office, among others, which are not subject to attrition.
3. R.A. No. 9335 and its IRR violate the BIR and BOC employees’ right to security of tenure
because R.A. No. 9335 and its IRR effectively removed remedies provided in the ordinary course
of administrative procedure afforded to government employees. The law likewise created

another ground for dismissal, i.e., non-attainment of revenue collection target, which is not
provided under CSC rules and which is, by its nature, unpredictable and therefore arbitrary and
unreasonable.
4. R.A. No. 9335 and its IRR violate the 1987 Constitution because Congress granted to the
Revenue Performance Evaluation Board (Board) the unbridled discretion of formulating the
criteria for termination, the manner of allocating targets, the distribution of rewards and the
determination of relevant factors affecting the targets of collection, which is tantamount to
undue delegation of legislative power.
5. R.A. No. 9335 is a bill of attainder because it inflicts punishment upon a particular group or
class of officials and employees without trial. This is evident from the fact that the law confers
upon the Board the power to impose the penalty of removal upon employees who do not meet
their revenue targets; that the same is without the benefit of hearing; and that the removal from
service is immediately executory. Lastly, it disregards the presumption of regularity in the
performance of the official functions of a public officer.25
On the other hand, respondents through the OSG stress that except for Section 12 of R.A. No. 9335, R.A.
No. 9335 and its IRR are constitutional, as per our ruling in Abakada. Nevertheless, the OSG argues that the
classification of BIR and BOC employees as public officers under R.A. No. 9335 is based on a valid and
substantial distinction since the revenue generated by the BIR and BOC is essentially in the form of taxes,
which is the lifeblood of the State, while the revenue produced by other agencies is merely incidental or
secondary to their governmental functions; that in view of their mandate, and for purposes of tax
collection, the BIR and BOC are sui generis; that R.A. No. 9335 complies with the "completeness" and
"sufficient standard" tests for the permissive delegation of legislative power to the Board; that the Board
exercises its delegated power consistent with the policy laid down in the law, that is, to optimize the
revenue generation capability and collection of the BIR and the BOC; that parameters were set in order
that the Board may identify the officials and employees subject to attrition, and the proper procedure for
their removal in case they fail to meet the targets set in the Performance Contract were provided; and that
the rights of BIR and BOC employees to due process of law and security of tenure are duly accorded by
R.A. No. 9335. The OSG likewise maintains that there was no encroachment of judicial power in the
enactment of R.A. No. 9335 amounting to a bill of attainder since R.A. No. 9335 and its IRR merely defined
the offense and provided for the penalty that may be imposed. Finally, the OSG reiterates that the
separation from the service of any BIR or BOC employee under R.A. No. 9335 and its IRR shall be done only
upon due consideration of all relevant factors affecting the level of collection, subject to Civil Service laws,
rules and regulations, and in compliance with substantive and procedural due process. The OSG opines
that the Performance Contract, far from violating the BIR and BOC employees’ right to due process,
actually serves as a notice of the revenue target they have to meet and the possible consequences of
failing to meet the same. More, there is nothing in the law which prevents the aggrieved party from
appealing the unfavorable decision of dismissal.26
In essence, the issues for our resolution are:
1. Whether there is undue delegation of legislative power to the Board;
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2. Whether R.A. No. 9335 and its IRR violate the rights of BOCEA’s members to: (a) equal
protection of laws, (b) security of tenure and (c) due process; and
3. Whether R.A. No. 9335 is a bill of attainder.
Our Ruling
Prefatorily, we note that it is clear, and in fact uncontroverted, that BOCEA has locus standi. BOCEA
impugns the constitutionality of R.A. No. 9335 and its IRR because its members, who are rank-and-file
employees of the BOC, are actually covered by the law and its IRR. BOCEA’s members have a personal and
substantial interest in the case, such that they have sustained or will sustain, direct injury as a result of the
enforcement of R.A. No. 9335 and its IRR.27
However, we find no merit in the petition and perforce dismiss the same.
It must be noted that this is not the first time the constitutionality of R.A. No. 9335 and its IRR are being
challenged. The Court already settled the majority of the same issues raised by BOCEA in our decision in
Abakada, which attained finality on September 17, 2008. As such, our ruling therein is worthy of
reiteration in this case.
We resolve the first issue in the negative.
The principle of separation of powers ordains that each of the three great branches of government has
exclusive cognizance of and is supreme in matters falling within its own constitutionally allocated
sphere.28 Necessarily imbedded in this doctrine is the principle of non-delegation of powers, as expressed
in the Latin maxim potestas delegata non delegari potest, which means "what has been delegated, cannot
be delegated." This doctrine is based on the ethical principle that such delegated power constitutes not
only a right but a duty to be performed by the delegate through the instrumentality of his own judgment
and not through the intervening mind of another.29However, this principle of non-delegation of powers
admits of numerous exceptions,30 one of which is the delegation of legislative power to various specialized
administrative agencies like the Board in this case.
The rationale for the aforementioned exception was clearly explained in our ruling in Gerochi v.
Department of Energy,31 to wit:
In the face of the increasing complexity of modern life, delegation of legislative power to various
specialized administrative agencies is allowed as an exception to this principle. Given the volume and
variety of interactions in today’s society, it is doubtful if the legislature can promulgate laws that will deal
adequately with and respond promptly to the minutiae of everyday life. Hence, the need to delegate to
administrative bodies — the principal agencies tasked to execute laws in their specialized fields — the
authority to promulgate rules and regulations to implement a given statute and effectuate its policies. All
that is required for the valid exercise of this power of subordinate legislation is that the regulation be
germane to the objects and purposes of the law and that the regulation be not in contradiction to, but in

conformity with, the standards prescribed by the law. These requirements are denominated as the
completeness test and the sufficient standard test.32
Thus, in Abakada, we held,
Two tests determine the validity of delegation of legislative power: (1) the completeness test and (2) the
sufficient standard test. A law is complete when it sets forth therein the policy to be executed, carried out
or implemented by the delegate. It lays down a sufficient standard when it provides adequate guidelines
or limitations in the law to map out the boundaries of the delegate’s authority and prevent the delegation
from running riot. To be sufficient, the standard must specify the limits of the delegate’s authority,
announce the legislative policy and identify the conditions under which it is to be implemented.
RA [No.] 9335 adequately states the policy and standards to guide the President in fixing revenue targets
and the implementing agencies in carrying out the provisions of the law. Section 2 spells out the policy of
the law:
"SEC. 2. Declaration of Policy. — It is the policy of the State to optimize the revenue-generation capability
and collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) by providing for a
system of rewards and sanctions through the creation of a Rewards and Incentives Fund and a Revenue
Performance Evaluation Board in the above agencies for the purpose of encouraging their officials and
employees to exceed their revenue targets."
Section 4 "canalized within banks that keep it from overflowing" the delegated power to the President to
fix revenue targets:
"SEC. 4. Rewards and Incentives Fund. — A Rewards and Incentives Fund, hereinafter referred to as the
Fund, is hereby created, to be sourced from the collection of the BIR and the BOC in excess of their
respective revenue targets of the year, as determined by the Development Budget and Coordinating
Committee (DBCC), in the following percentages:
Excess of Collection [Over] the Percent (%) of the Excess Collection
Revenue Targets to Accrue to the Fund
30% or below — 15%
More than 30% — 15% of the first 30% plus 20% of the
remaining excess
The Fund shall be deemed automatically appropriated the year immediately following the year when the
revenue collection target was exceeded and shall be released on the same fiscal year.
Revenue targets shall refer to the original estimated revenue collection expected of the BIR and the BOC
for a given fiscal year as stated in the Budget of Expenditures and Sources of Financing (BESF) submitted by
the President to Congress. The BIR and the BOC shall submit to the DBCC the distribution of the agencies’
62
revenue targets as allocated among its revenue districts in the case of the BIR, and the collection districts
in the case of the BOC. x x x xxx x x x"
Revenue targets are based on the original estimated revenue collection expected respectively of the BIR
and the BOC for a given fiscal year as approved by the DBCC and stated in the BESF submitted by the
President to Congress. Thus, the determination of revenue targets does not rest solely on the President as
it also undergoes the scrutiny of the DBCC.
On the other hand, Section 7 specifies the limits of the Board’s authority and identifies the conditions
under which officials and employees whose revenue collection falls short of the target by at least 7.5%
may be removed from the service:
"SEC. 7. Powers and Functions of the Board. — The Board in the agency shall have the following powers
and functions:x x x xxx xxx
(b) To set the criteria and procedures for removing from service officials and employees whose revenue
collection falls short of the target by at least seven and a half percent (7.5%), with due consideration of all
relevant factors affecting the level of collection as provided in the rules and regulations promulgated
under this Act, subject to civil service laws, rules and regulations and compliance with substantive and
procedural due process: Provided, That the following exemptions shall apply:
1. Where the district or area of responsibility is newly-created, not exceeding two years in
operation, and has no historical record of collection performance that can be used as basis for
evaluation; and
2. Where the revenue or customs official or employee is a recent transferee in the middle of the
period under consideration unless the transfer was due to nonperformance of revenue targets or
potential nonperformance of revenue targets: Provided, however, That when the district or area
of responsibility covered by revenue or customs officials or employees has suffered from
economic difficulties brought about by natural calamities or force majeure or economic causes as
may be determined by the Board, termination shall be considered only after careful and proper
review by the Board.
(c) To terminate personnel in accordance with the criteria adopted in the preceding paragraph: Provided,
That such decision shall be immediately executory: Provided, further, That the application of the criteria
for the separation of an official or employee from service under this Act shall be without prejudice to the
application of other relevant laws on accountability of public officers and employees, such as the Code of
Conduct and Ethical Standards of Public Officers and Employees and the Anti-Graft and Corrupt Practices
Act;
xxx xxx x x x"
At any rate, this Court has recognized the following as sufficient standards: "public interest", "justice and
equity", "public convenience and welfare" and "simplicity, economy and welfare". In this case, the

declared policy of optimization of the revenue-generation capability and collection of the BIR and the BOC
is infused with public interest.33
We could not but deduce that the completeness test and the sufficient standard test were fully satisfied by
R.A. No. 9335, as evident from the aforementioned Sections 2, 4 and 7 thereof. Moreover, Section 5 34 of
R.A. No. 9335 also provides for the incentives due to District Collection Offices. While it is apparent that
the last paragraph of Section 5 provides that "[t]he allocation, distribution and release of the district
reward shall likewise be prescribed by the rules and regulations of the Revenue Performance and
Evaluation Board," Section 7 (a)35 of R.A. No. 9335 clearly mandates and sets the parameters for the Board
by providing that such rules and guidelines for the allocation, distribution and release of the fund shall be
in accordance with Sections 4 and 5 of R.A. No. 9335. In sum, the Court finds that R.A. No. 9335, read and
appreciated in its entirety, is complete in all its essential terms and conditions, and that it contains
sufficient standards as to negate BOCEA’s supposition of undue delegation of legislative power to the
Board.
Similarly, we resolve the second issue in the negative.
Equal protection simply provides that all persons or things similarly situated should be treated in a similar
manner, both as to rights conferred and responsibilities imposed. The purpose of the equal protection
clause is to secure every person within a state’s jurisdiction against intentional and arbitrary
discrimination, whether occasioned by the express terms of a statute or by its improper execution through
the state’s duly constituted authorities. In other words, the concept of equal justice under the law requires
the state to govern impartially, and it may not draw distinctions between individuals solely on differences
that are irrelevant to a legitimate governmental objective.361awphil
Thus, on the issue on equal protection of the laws, we held in Abakada:
The equal protection clause recognizes a valid classification, that is, a classification that has a reasonable
foundation or rational basis and not arbitrary. With respect to RA [No.] 9335, its expressed public policy is
the optimization of the revenue-generation capability and collection of the BIR and the BOC. Since the
subject of the law is the revenue-generation capability and collection of the BIR and the BOC, the
incentives and/or sanctions provided in the law should logically pertain to the said agencies. Moreover, the
law concerns only the BIR and the BOC because they have the common distinct primary function of
generating revenues for the national government through the collection of taxes, customs duties, fees and
charges.
The BIR performs the following functions:
"Sec. 18. The Bureau of Internal Revenue. — The Bureau of Internal Revenue, which shall be headed by
and subject to the supervision and control of the Commissioner of Internal Revenue, who shall be
appointed by the President upon the recommendation of the Secretary [of the DOF], shall have the
following functions:
(1) Assess and collect all taxes, fees and charges and account for all revenues collected;
63
(2) Exercise duly delegated police powers for the proper performance of its functions and duties;
(3) Prevent and prosecute tax evasions and all other illegal economic activities;
(4) Exercise supervision and control over its constituent and subordinate units; and
(5) Perform such other functions as may be provided by law. x x x xxx x x x"
On the other hand, the BOC has the following functions:
"Sec. 23. The Bureau of Customs. — The Bureau of Customs which shall be headed and subject to the
management and control of the Commissioner of Customs, who shall be appointed by the President upon
the recommendation of the Secretary [of the DOF] and hereinafter referred to as Commissioner, shall have
the following functions:
(1) Collect custom duties, taxes and the corresponding fees, charges and penalties;
(2) Account for all customs revenues collected;
(3) Exercise police authority for the enforcement of tariff and customs laws;
(4) Prevent and suppress smuggling, pilferage and all other economic frauds within all ports of
entry;
(5) Supervise and control exports, imports, foreign mails and the clearance of vessels and aircrafts
in all ports of entry;
(6) Administer all legal requirements that are appropriate;
(7) Prevent and prosecute smuggling and other illegal activities in all ports under its jurisdiction;
(8) Exercise supervision and control over its constituent units;
(9) Perform such other functions as may be provided by law. x x x xxx x x x"
Both the BIR and the BOC are bureaus under the DOF. They principally perform the special function of
being the instrumentalities through which the State exercises one of its great inherent functions —
taxation. Indubitably, such substantial distinction is germane and intimately related to the purpose of the
law. Hence, the classification and treatment accorded to the BIR and the BOC under RA [No.] 9335 fully
satisfy the demands of equal protection.37
As it was imperatively correlated to the issue on equal protection, the issues on the security of tenure of
affected BIR and BOC officials and employees and their entitlement to due process were also settled in
Abakada:
Clearly, RA [No.] 9335 in no way violates the security of tenure of officials and employees of the BIR and
the BOC. The guarantee of security of tenure only means that an employee cannot be dismissed from the
service for causes other than those provided by law and only after due process is accorded the employee.
In the case of RA [No.] 9335, it lays down a reasonable yardstick for removal (when the revenue collection
falls short of the target by at least 7.5%) with due consideration of all relevant factors affecting the level of
collection. This standard is analogous to inefficiency and incompetence in the performance of official
duties, a ground for disciplinary action under civil service laws. The action for removal is also subject to
civil service laws, rules and regulations and compliance with substantive and procedural due process.38
 64

In addition, the essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, a fair and reasonable opportunity to explain one’s side. 39 BOCEA’s
apprehension of deprivation of due process finds its answer in Section 7 (b) and (c) of R.A. No. 9335. 40 The
concerned BIR or BOC official or employee is not simply given a target revenue collection and capriciously
left without any quarter. R.A. No. 9335 and its IRR clearly give due consideration to all relevant
factors41 that may affect the level of collection. In the same manner, exemptions42 were set, contravening
BOCEA’s claim that its members may be removed for unattained target collection even due to causes
which are beyond their control. Moreover, an employee’s right to be heard is not at all prevented and his
right to appeal is not deprived of him.43 In fine, a BIR or BOC official or employee in this case cannot be
arbitrarily removed from the service without according him his constitutional right to due process. No less
than R.A. No. 9335 in accordance with the 1987 Constitution guarantees this.
We have spoken, and these issues were finally laid to rest. Now, the Court proceeds to resolve the last, but
new issue raised by BOCEA, that is, whether R.A. No. 9335 is a bill of attainder proscribed under Section
22,44 Article III of the 1987 Constitution.
On this score, we hold that R.A. No. 9335 is not a bill of attainder. A bill of attainder is a legislative act
which inflicts punishment on individuals or members of a particular group without a judicial trial. Essential
to a bill of attainder are a specification of certain individuals or a group of individuals, the imposition of a
punishment, penal or otherwise, and the lack of judicial trial.451avvphi1
We find that BOCEA’s petition is replete with allegations of defects and anomalies in allocation,
distribution and receipt of rewards. While BOCEA intimates that it intends to curb graft and corruption in
the BOC in particular and in the government in general which is nothing but noble, these intentions do not
actually pertain to the constitutionality of R.A. No. 9335 and its IRR, but rather in the faithful
implementation thereof. R.A. No. 9335 itself does not tolerate these pernicious acts of graft and
corruption.48 As the Court is not a trier of facts, the investigation on the veracity of, and the proper action
on these anomalies are in the hands of the Executive branch. Correlatively, the wisdom for the enactment
of this law remains within the domain of the Legislative branch. We merely interpret the law as it is. The
Court has no discretion to give statutes a meaning detached from the manifest intendment and language
thereof.49 Just like any other law, R.A. No. 9335 has in its favor the presumption of constitutionality, and to
justify its nullification, there must be a clear and unequivocal breach of the Constitution and not one that
is doubtful, speculative, or argumentative.50 We have so declared in Abakada, and we now reiterate that
R.A. No. 9335 and its IRR are constitutional.
WHEREFORE, the present petition for certiorari and prohibition with prayer for injunctive relief/s is
DISMISSED.
No costs.
SO ORDERED.

In his Concurring Opinion in Tuason v. Register of Deeds, Caloocan City, 46 Justice Florentino P. Feliciano
traces the roots of a Bill of Attainder, to wit:

Bills of attainder are an ancient instrument of tyranny. In England a few centuries back, Parliament would
at times enact bills or statutes which declared certain persons attainted and their blood corrupted so that
it lost all heritable quality (Ex Parte Garland, 4 Wall. 333, 18 L.Ed. 366 [1867]). In more modern terms, a bill
of attainder is essentially a usurpation of judicial power by a legislative body. It envisages and effects the
imposition of a penalty — the deprivation of life or liberty or property — not by the ordinary processes of
judicial trial, but by legislative fiat. While cast in the form of special legislation, a bill of attainder (or bill of
pains and penalties, if it prescribed a penalty other than death) is in intent and effect a penal judgment
visited upon an identified person or group of persons (and not upon the general community) without a
prior charge or demand, without notice and hearing, without an opportunity to defend, without any of the
civilized forms and safeguards of the judicial process as we know it (People v. Ferrer, 48 SCRA 382 [1972];
Cummings and Missouri, 4 Wall. 277, 18 L. Ed. 356 [1867]; U.S. v. Lovett, 328, U.S. 303, 90 L.Ed. 1252
[1945]; U.S. v. Brown, 381 U.S. 437, 14 L.Ed. 2d. 484 [1965]. Such is the archetypal bill of attainder wielded
as a means of legislative oppression. x x x47

R.A. No. 9335 does not possess the elements of a bill of attainder. It does not seek to inflict punishment
without a judicial trial. R.A. No. 9335 merely lays down the grounds for the termination of a BIR or BOC
official or employee and provides for the consequences thereof. The democratic processes are still
followed and the constitutional rights of the concerned employee are amply protected.

A final note.