1.
a JVA is concluded between PNCC and the private entity
Reference for Acronyms  Metro Manila Expressway (MMEX)
Toll Regulatory Board (TRB) Memorandum of Understanding (MOU)
Toll Operation Certificate (TOC) Joint Venture Agreement (JVA)
Phil. Natl Construction Corp. (PNCC) Supplemental Toll Operation Agreement
North/South Luzon Expressway (NLEX/SLEX) (STOA)
Toll Operation Agreement (TOA)
FACTS.
 PD 1112 – Marcos decreed the creation of the TRB and granted it the
power to “enter, for the Republic, into contracts for the construction,
maintenance and operation of toll ways, grant authority to operate a
toll facility, issue the necessary TOC
 and fix initial toll rates, and, from time to time, adjust the same after
due notice and hearing“.
 PD 1113 – On the same day, Marcos granted PNCC “for a period of 30
years (ending in May 2007) a franchise to construct, maintain and
operate toll facilities in the NLEX and SLEX, w/ the right to collect toll
fees at such rates as the TRB may fix”.
 The franchise wasn’t self-executing. It was subject to “such conditions as
may be imposed by the Board in an appropriate contract to be executed
for such purpose”, thus, TRB and PNCC entered into a TOA for the
above-mentioned purpose.
 PD 1894 – PNCC was granted another franchise this time over the
MMEX. articularly, PNCC was granted the “right, privilege and authority
to construct, maintain and operate any and all such extensions or
linkages together with the toll facilities appurtenant thereto, from any
part of the NLEX, SLEX and/or MMEX and/or to divert the original route
and change the original end-points of the NLEX and/or SLEX as may be
approved by the TRB.”
 As laid down in both PD 1113 and PD 1894, PNCC may sell or assign its
franchise with the President’s approval.
 The 1987 Constitution containing the franchise provision took effect.
 1994 MOU – DPWH, TRB, PNCC, Benpres Holdings Corporation
(Benpres) and First Philippine Holdings Corporation (FPHC) entered into
an MOU opening the door of the expressway projects over which PNCC
has a franchise, to private funding.
 Consequent to the MOU execution, PNCC entered into financial and/or
technical JVAs with private entities/investors for the toll operation of its
franchised areas in this pattern:
2. upon approval of the Pres of the assignment of the usufruct of
PNCC’s franchise, a new JV company is formed to undertake a
defined toll road project
3. the Republic of the Philippines, thru the TRB, as grantor, PNCC, as
operator, and the new corp, as investor/concessionaire then
execute an STOA
4. The STOA defines the scope of the road project coverage, the
terminal date of the concession, and includes provisions on initial
toll rate and a built-in formula for adjustment of toll rates, etc.
 Projects which transpired thereafter: (putting this here, in case he asks
for details of the projects)
1. South Metro Manila Skyway (SMMS) - Buendia Bicutan elevated
stretch – Project
 Partnership was w/ P.T. Citra, an Indonesian company. They
formed the he Citra Metro Manila Tollways Corporation
(CMMTC) then entered into the STOA.
 The project was completed and TRB issued a resolution
pproving the periodic toll rate adjustment for the SMMS.
2. NLEX Expansion Project (Rehabilitated and Widened NLEX,
Subic Expressway, Circumferential Road C-5)
 The JV was concluded with FPIDC. They formed the Manila
North Tollways Corporation (MNTC) then executed an STOA.
 TRB again issued a resolution for the toll rates.
3. South Luzon Expressway Project (Nichols to Lucena City)
 JV with Hopewell Holdings Limited (HHL)
 Company formed: JV company Hopewell Crown
Infrastructure, Inc. (HCII), now MTD Manila Expressways, Inc.,
(MTDME).
 Executed an STOA with a clause that stated after completion,
they would apply for a permit with the TRB w/c shall include a
request for a review and approval by the TRB of the
calculation of their toll rates
 Francisco and Hizon, as taxpayers, seek to nullify the STOAs and the
corresponding TRB resolutions which fixed initial rates and requiring
approval of subsequent toll rate adjustments.
1. They assail the STOAs and the TRBs as unconstitutional for
imposing on the public the burden of financing tollways by way
of exorbitant fees and thus depriving the public of property
without due process.
2. They likewise assail the STOA for violating the BOT law as no
public bidding was conducted for the projects.
 3. They contend that Sections 3 (a) and (d) of P.D. 1112 in relation to
Section 8 (b) of P.D. 1894 are unconstitutional insofar as they
vested the TRB, on one hand, toll operation awarding power
while, on the other hand, granting it also the power to issue,
modify and promulgate toll rate charges.
4. They also seek to nullify certain provisions of P.D. 1113 and P.D.
1894, which uniformly grant the President the power to approve
the transfer or assignment of rights under the franchise. They
argue that such authority partakes of an exercise of legislative
power under Art. VI Sec.1 of the Constitution.
 The 3 other cases essentially reiterates most of the contentions of the
first case as described above. Additionally, petitioners Imee Marcos, et.
al. assail the virtual amendment and extension of a statutory franchise by
way of administrative action (e.g., the execution of a STOA, issuance of a
TOC)
RATIO.
1. ISSUE ON FRANCHISE FROM CONGRESS/AMENDMENTS: WON the TRB
has the power to grant authority to operate a toll facility and issue a toll
operating permit or TOC? YES in view of Sections 3 (a) and (e) of P.D.
1112 and Section 4 of P.D. 1894.
 By explicit provision of law, the TRB was given the power to grant
administrative franchise for toll facility projects.
 Petitioners argue that only Congress has, under the 1987
Constitution, the exclusive prerogative to grant franchise to operate
public utilities.
 SC disagrees. The power to authorize and control a public utility is
admittedly a prerogative that stems from the Legislature. Any
suggestion, however, that only Congress has the authority to
grant a public utility franchise is less than accurate.
 Albano v. Reyes: Nothing in the Constitution remotely indicates the
necessity of a congressional franchise before each and every public
utility may operate.
 In such a case, therefore, a special franchise directly emanating
from Congress is not necessary if the law already specifically
authorizes an administrative body to grant a franchise or to award
a contract.
 Altho PNCCs PD 1113 franchise had already expired effective May
2007, this fact of expiration did not, however, carry w/ it the
cancellation of PNCCs authority and that of its JV partners granted
under PD 1112 IRT Section 1 of PD 1894 to construct and operate
extensions or linkages, together w/ the toll facilities appurtenant
thereto, from any part of NLEX/SLEX/MMEX and/or to divert the
original route and change the original end-points of the
[NLEX]and/or [SLEX] as may be approved by the [TRB].all such
 As to the alterations/amendments in the STOA and the reqt of
approval of the TRB, Court held that TRB’s charter empowers it to do
so under Section 3 of P.D. 1113 w/c provides that the franchise
granted to PNCC is “subject to such conditions as may be imposed by
the TRB in an appropriate contract to be executed for this purpose,
and w/ the understanding and upon the condition that it shall be
subject to amendment, alteration or repeal when public interest so
requires.” A similar provision can also be found under PD 1894.
 Such provisions allowed TRB to enter into into the subject STOAs in
order to allow the infusion of additional investments. Moreover, TRB
entered into the STOAs before the expiration of PNCCs original
franchise on May 1, 2007. It cannot be over-emphasized that the
respective STOAs of MNTC and SLTC each contain provisions
addressing the eventual expiration of PNCCs P.D. 1113 franchise and
authorizing, thru the issuance by the TRB of a TOC, the
implementation of a given toll project even after May 1, 2007.

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NOTES.
Preliminary Issue:
Existence of an Actual Controversy, Ripeness and Locus Standi
 Dami sinabi ng court but in the end, it said the magic words:
“Accordingly, We take cognizance of the present case on
account of its transcendental importance to the public.”