EN BANC

 
 
ABAKADA GURO PARTY LIST (Formerly AASJAS) OFFICERS   G.R. No. 168056
SAMSON S. ALCANTARA and ED VINCENT S. ALBANO,
                                         Petitioners,   Present:
     
       DAVIDE, JR., C.J.,
       PUNO,
       PANGANIBAN,
       QUISUMBING,
       YNARES-SANTIAGO,
       SANDOVAL-GUTIERREZ,
- versus -      CARPIO,
       AUSTRIA-MARTINEZ,
       CORONA,
       CARPIO-MORALES,
       CALLEJO, SR.,
       AZCUNA,
       TINGA,
       CHICO-NAZARIO, and
       GARCIA, JJ.
THE HONORABLE EXECUTIVE SECRETARY EDUARDO ERMITA;    
HONORABLE SECRETARY OF THE DEPARTMENT OF FINANCE
CESAR PURISIMA; and HONORABLE COMMISSIONER OF
INTERNAL REVENUE GUILLERMO PARAYNO, JR.,
                                         Respondents.    
     
x - - - - - - - - - - - - - - - - - - - - - - - - -  x    
     
AQUILINO Q. PIMENTEL, JR., LUISA P. EJERCITO-ESTRADA,   G.R. No. 168207
JINGGOY E. ESTRADA, PANFILO M. LACSON, ALFREDO S. LIM,
JAMBY A.S. MADRIGAL, AND SERGIO R. OSMEÑA III,
                                         Petitioners,    
     
- versus -    
     
EXECUTIVE SECRETARY EDUARDO R. ERMITA, CESAR V.    
PURISIMA, SECRETARY OF FINANCE, GUILLERMO L. PARAYNO,
JR., COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE,
                                         Respondents.    
     
x - - - - - - - - - - - - - - - - - - - - - - - - -  x    
     
ASSOCIATION OF PILIPINAS SHELL DEALERS, INC. represented by   G.R. No. 168461
its President, ROSARIO ANTONIO; PETRON DEALERS’
ASSOCIATION represented by its President, RUTH E. BARBIBI;
ASSOCIATION OF CALTEX DEALERS’ OF THE PHILIPPINES
represented by its President, MERCEDITAS A. GARCIA; ROSARIO
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 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 STATION”; MARIAN SHEILA A. LEE doing
business under the name and style of “NTE GASOLINE & SERVICE
STATION”; JULIAN CESAR P. POSADAS doing business under the
name and style of “STARCARGA ENTERPRISES”; ADORACION
MAÑEBO doing business under the name and style of “CMA
1
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
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; 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 “ROMMAN GASOLINE STATION”; ANTHONY ALBERT
CRUZ III doing business under the name and style of “TRUE
SERVICE STATION”,
                                         Petitioners,    
     
- versus -    
     
CESAR V. PURISIMA, in his capacity as Secretary of the    
Department of Finance and GUILLERMO L. PARAYNO, JR., in his
capacity as Commissioner of Internal Revenue,
                                         Respondents.    
     
x - - - - - - - - - - - - - - - - - - - - - - - - -  x    
     
FRANCIS JOSEPH G. ESCUDERO, VINCENT CRISOLOGO,   G.R. No. 168463
EMMANUEL JOEL J. VILLANUEVA, RODOLFO G. PLAZA, DARLENE
ANTONINO-CUSTODIO, OSCAR G. 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,    
     
- versus -    
     
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,  
 
                                         Respondents.    
     
x - - - - - - - - - - - - - - - - - - - - - - - - -  x    
     
BATAAN GOVERNOR ENRIQUE T. GARCIA, JR.   G.R. No. 168730
                                         Petitioner,    
     
- versus -    
     
HON. EDUARDO R. ERMITA, in his capacity as the Executive    
Secretary; HON. MARGARITO TEVES, in his capacity as Secretary  
of Finance; HON. JOSE 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,  
 
 
Promulgated:
2
                                          Respondents.   September 1, 2005
 
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -  x
 
 
DECISION
 
 
AUSTRIA-MARTINEZ, J.:
 
 
The expenses of government, having for their object the interest of all, should be borne by everyone, and the more man
enjoys the advantages of society, the more he ought to hold himself honored in contributing to those expenses.
                                                -Anne Robert Jacques Turgot (1727-1781)
                                                 French statesman and economist
 
Mounting budget deficit, revenue generation, inadequate fiscal allocation for education, increased emoluments for health workers, and wider
coverage for full value-added tax benefits … these are the reasons why Republic Act No. 9337 (R.A. No. 9337)[1] was enacted.  Reasons, the wisdom of which,
the Court even with its extensive constitutional power of review, cannot probe.  The petitioners in these cases, however, question not only the wisdom of
the law, but also perceived constitutional infirmities in its passage.
 
Every law enjoys in its favor the presumption of constitutionality.  Their arguments notwithstanding, petitioners failed to justify their call for the
invalidity of the law.  Hence, R.A. No. 9337 is not unconstitutional.
 
LEGISLATIVE HISTORY
 
R.A. No. 9337 is a consolidation of three legislative bills namely, House Bill Nos. 3555 and 3705, and Senate Bill No. 1950. 
 
House Bill No. 3555[2]  was introduced on first reading on January 7, 2005.  The House Committee on Ways and Means approved the bill, in
substitution of House Bill No. 1468, which Representative (Rep.) Eric D. Singson introduced on August 8, 2004.  The President certified the bill on January 7,
2005 for immediate enactment.  On January 27, 2005, the House of Representatives approved the bill on second and third reading.
 
House Bill No. 3705[3]  on the other hand, substituted House Bill No. 3105 introduced by Rep. Salacnib F. Baterina, and House Bill No. 3381
introduced by Rep. Jacinto V. Paras.  Its “mother bill” is House Bill No. 3555.  The House Committee on Ways and Means approved the bill on February 2,
2005.  The President also certified it as urgent on February 8, 2005.  The House of Representatives approved the bill on second and third reading
on February 28, 2005.
 
Meanwhile, the Senate Committee on Ways and Means approved Senate Bill No. 1950[4]  on March 7, 2005, “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 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?
 
3
 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 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:
 
4
 (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 (P1, 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. 
 
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 onJune 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
5
  
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 P1,000,000.00, 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
 
 
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.  
 

6
 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:
7
  
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.
 
                        . . .
 
 
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 Senate bills.  Akin to the Fariñas  case,[22]  the present petitions also raise an issue
regarding the actions taken by the conference committee on matters regarding Congress’ compliance with its own internal rules.  As stated earlier, one of
the most basic and inherent power of the legislature is the power to formulate rules for its proceedings and the discipline of its members.   Congress is the
best judge of how it should conduct its own business  expeditiously  and  in  the most  orderly manner.  It is also the  sole
concern of Congress to instill discipline among the members of its conference committee if it believes that said members violated any of its rules of
proceedings.  Even the expanded jurisdiction of this Court cannot apply to questions regarding only the internal operation of Congress, thus, the Court is
wont to deny a review of the internal proceedings of a co-equal branch of government.
 
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 Bicameral Conference Committee] it must be sought in Congress since this question is
not covered by any constitutional provision but is only an internal rule of each house.” [24]  To date, Congress has not seen it fit to make such changes
adverted to by the Court.  It seems, therefore, that Congress finds the practices of the bicameral conference committee to be very useful for purposes of
prompt and efficient legislative action.
 
8
 Nevertheless, just to put minds at ease that no blatant irregularities tainted the proceedings of the bicameral conference committees, the Court
deems it necessary to dwell on the issue.  The Court observes that there was a necessity for a conference committee because a comparison of the
provisions of House Bill Nos. 3555 and 3705 on one hand, and Senate Bill No. 1950 on the other, reveals that there were indeed disagreements.  As pointed
out in the petitions, said disagreements were as follows: 
         
House Bill No. 3555 House Bill No.3705 Senate Bill No. 1950
 
 
With regard to “Stand-By Authority” in favor of President
 
Provides for 12% VAT on every sale of   Provides for 12% VAT in general on sales of   Provides for a single rate of 10% VAT on sale of
goods or properties (amending Sec. 106 goods or properties and reduced rates for sale goods or properties (amending Sec. 106 of NIRC),
of NIRC); 12% VAT on importation of of certain locally manufactured goods and  10% VAT on sale of services including sale of
goods (amending Sec. 107 of NIRC); and petroleum products and raw materials to be electricity by generation companies, transmission
12% VAT on sale of services and use or used in the manufacture thereof (amending and distribution companies, and use or lease of
lease of properties (amending Sec. 108 of Sec. 106 of NIRC); 12% VAT on importation of properties (amending Sec. 108 of NIRC)
NIRC) goods and reduced rates for certain imported
products including petroleum products
(amending Sec. 107 of NIRC); and 12% VAT on
sale of services and use or lease of properties
and a reduced rate for certain services including
power generation (amending Sec. 108 of NIRC)
 
 
With regard to the “no pass-on” provision
 
No similar provision   Provides that the VAT imposed on power   Provides that the VAT imposed on sales of
generation and on the sale of petroleum electricity by generation companies and services
products shall be absorbed by generation of transmission companies and distribution
companies or sellers, respectively, and shall not companies, as well as those of franchise grantees
be passed on to consumers of electric utilities shall not apply to residential
end-users.  VAT shall be absorbed by generation,
transmission, and distribution companies.
With regard to 70% limit on input tax credit
 
Provides that the input tax credit for   No similar provision   Provides that the input tax credit for capital
capital goods on which a VAT has been goods on which a VAT has been paid shall be
paid shall be equally distributed over 5 equally distributed over 5 years or the
years or the depreciable life of such depreciable life of such capital goods; the input
capital goods; the input tax credit for tax credit for goods and services other than
goods and services other than capital capital goods shall not exceed 90% of the output
goods shall not exceed 5% of the total VAT.
amount of such goods and services; and
for persons engaged in retail trading of
goods, the allowable input tax credit shall
not exceed 11% of the total amount of
goods purchased.
 
 
With regard to amendments to be made to NIRC provisions regarding income and excise taxes
 
No similar provision   No similar provision   Provided for amendments to several NIRC
provisions regarding corporate income,
percentage, franchise and excise taxes
 
 
The disagreements between the provisions in the House bills and the Senate bill were with regard to (1) what rate of VAT is to be imposed; (2)
whether only the VAT imposed on electricity generation, transmission and distribution companies should not be passed on to consumers, as proposed in
the Senate bill, or both the VAT imposed on electricity generation, transmission and distribution companies and the 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:
 
9
 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 (P1,000,000.00): 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 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-onprovision 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]
 

10
 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, but again, the change  introduced  by the Bicameral Conference Committee was totally
within  the intent  of  both  houses  to  put  a  cap  on  input  tax  that  may  be
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. Prado [29] 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 theTolentino  case, it was held that:
 
. . . it is within the power of a conference committee to include in its report an entirely new provision that is not found either
in the House bill or in the Senate bill.  If the committee can propose an amendment 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 germane to the subject of the bills before the committee.  After all, its report was not final but needed the
approval of both houses of Congress to become valid as an act of the legislative department.  The charge that in this case the
Conference Committee acted as a third legislative chamber is thus without any basis. [31] (Emphasis supplied)
 
 
B.        R.A. No. 9337 Does Not Violate Article VI, Section 26(2) of the Constitution on the “No-Amendment Rule”
 
 
  Article VI, Sec. 26 (2) of the Constitution, states: 
 
No bill passed by either House shall become a law unless it has passed three readings on separate days, and printed copies
thereof in its final form have been distributed to its Members three days before its passage, except when the President certifies to the
necessity of its immediate enactment to meet a public calamity or emergency. Upon the last reading of a bill, no amendment thereto
shall be allowed, and the vote thereon shall be taken immediately thereafter, and the yeas and nays entered in the Journal.
 
 
Petitioners’ argument that the practice where a bicameral conference committee is allowed to add or delete provisions in the House bill and the
Senate bill after these had passed three readings is in effect a circumvention of the “no amendment rule” (Sec. 26 (2), Art. VI of the 1987 Constitution), fails
to convince the Court to deviate from its ruling in the Tolentino  case 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
 
 
Coming to the issue of the validity of the amendments made regarding the NIRC provisions on corporate income taxes and percentage, excise
taxes.  Petitioners refer to the following provisions, to wit:
 
Section 27  
Rates of Income Tax on Domestic Corporation
28(A)(1) Tax on Resident Foreign Corporation
28(B)(1) Inter-corporate Dividends
34(B)(1) Inter-corporate Dividends
11
 116 Tax on Persons Exempt from VAT
117 Percentage Tax on domestic carriers and keepers of
Garage
119 Tax on franchises
121 Tax on banks and Non-Bank Financial Intermediaries
148 Excise Tax on manufactured oils and other fuels
151 Excise Tax on mineral products
236 Registration requirements
237 Issuance of receipts or sales or commercial invoices
288 Disposition of Incremental Revenue
 
 
Petitioners claim that the amendments to these provisions of the NIRC did not at all originate from the House. They aver that House Bill No. 3555
proposed amendments only regarding Sections 106, 107, 108, 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.
 
…
 
…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 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
12
 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 beginning, but in the long run prove effective
and beneficial to the overall status of our economy.  One 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 P64.3 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 P48.7 billion amount is from the VAT on twelve goods and
services. The rest of the tab – P10.5 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 raiseP10.5 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.
 
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.
 
...
13
  
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 –
 

14
 (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)
 
 
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.
 
 

15
 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.’
 
...
 
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
16
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 wordshall, 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 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 (2 4/5%) 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. 

17
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 2 4/5 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]
 
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:
 
18
 First, let me explain the position that the Philippines finds itself in right now.  We are in a position where 90 percent of our
revenue is used for debt service.  So, for every peso of revenue that we currently raise, 90 goes to debt service.  That’s interest plus
amortization of our debt.  So clearly, this is not a sustainable situation.  That’s the first fact.
 
The second fact is that our debt to GDP level is way out of line compared to other peer countries that borrow money from
that international financial markets.  Our debt to GDP is approximately equal to our GDP.  Again, that shows you that this is not a
sustainable situation.
 
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.
 
What do I mean by that?
 
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 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 markets.
 
When the President made her speech in July last year, the environment was not as bad as it is now, at least based on the
forecast of most financial institutions.  So, we were assuming that raising 80 billion would put us in a position where we can then
convince them to improve our ability to borrow at lower rates.  But conditions have changed on us because the interest rates have
gone up.  In fact, just within this 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 25-year bond at 9.7 percent
cost.  We were trying to access last week and the market was not as favorable and up to now we have not accessed and we might pull
back because the conditions are not very good.
 
So given this situation, we at the Department of Finance believe that we really need to front-end our deficit reduction. 
Because it is deficit that is causing the increase of the debt and we are in what we call a 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 out of this debt spiral is really have a front-end adjustment in our revenue base.[65]
 
 
The image portrayed is chilling.  Congress passed the law hoping for rescue from an inevitable catastrophe.  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 wisdom of Section 14 of R.A. No. 9006 (The Fair Election Act), pronouncing that:
 
. . . policy matters are not the concern of the Court.  Government policy is within the exclusive dominion of the political
branches of the government.  It is not for this Court to look into the wisdom or propriety of 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 legislative discretion within its prescribed limits should be exercised in a particular manner are matters
for the judgment of the legislature, and the serious conflict of opinions does not suffice to bring them within the range of judicial
cognizance.[66]
 
 
In the same vein, the Court in this case will not dawdle on the purpose of Congress or the executive policy, given that it is not for the judiciary to
"pass upon questions of wisdom, justice or expediency of legislation.”[67]
 
II.
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
 
 
A.        Due Process and Equal Protection Clauses
 
 
Petitioners Association of Pilipinas  Shell Dealers, Inc., et al. argue that Section 8 of R.A. No. 9337, amending Sections 110 (A)(2), 110 (B), and
Section 12 of R.A. No. 9337, amending Section 114 (C) of the NIRC are arbitrary, oppressive, excessive and confiscatory.  Their argument is premised on the
constitutional right against deprivation of life, liberty of property without due process of law, as embodied in Article III, Section 1 of the Constitution.
 
Petitioners also contend that these provisions violate the constitutional guarantee of equal protection of the law.
The doctrine is that where the due process and equal protection clauses are invoked, considering that they are not fixed rules but rather broad
standards, there is a need for proof of such persuasive character as would lead to such a conclusion. Absent such a showing, the presumption of validity
must prevail.[68]
19
  
Section 8 of R.A. No. 9337, amending Section 110(B) of the NIRC imposes a limitation on the amount of 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 shall not exceed seventy percent (70%) of the output VAT: …”
 
Input Tax is defined under Section 110(A) of the NIRC, as amended, as the value-added tax 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
person, and Output Tax  is the value-added tax due  on the sale or lease of taxable goods or properties or services by any person registered or required to
register under the law.
 
 
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]
 
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,
20
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
(P1,000,000.00):  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 P1 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.  
 
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. …
21
  
(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.
 
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.
22
  
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 P1,500,000.00.[88]   Also, 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 P200,000.00. 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 P1.5 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 products[91] and natural gas[92] 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’sCanons of Taxation,
and it states:
23
  
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.  
 
Let us not be overly influenced by the plea that for every wrong there is a remedy, and that the judiciary should stand ready
to afford relief. There are undoubtedly many wrongs the judicature may not correct, for instance, those involving political questions.  . .
.
 
Let us likewise disabuse our minds from the notion that the judiciary is the repository of remedies for all political or social
ills; We should not forget that the Constitution has judiciously allocated the powers of government to three distinct and separate
compartments; and that judicial interpretation has tended to the preservation of the independence of the three, and a zealous regard
of the prerogatives of each, knowing full well that one is not the guardian of the others and that, for official wrong-doing, each may be
brought to account, either by impeachment, trial or by the ballot box.[100]
 
 
The words of the Court in Vera vs. Avelino[101] holds true then, as it still holds true now.  All things considered, there is noraison d'être for the
unconstitutionality of R.A. No. 9337.  
 
WHEREFORE, Republic Act No. 9337 not being unconstitutional, the petitions in G.R. Nos. 168056, 168207, 168461, 168463, and 168730, are
hereby DISMISSED.
 
There being no constitutional impediment to the full enforcement and implementation of R.A. No. 9337, the temporary restraining order issued
by the Court on July 1, 2005 is LIFTED upon finality of herein decision.
 
SO ORDERED.

24
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 203766               April 2, 2013
ATONG PAGLAUM, INC., represented by its President, Mr. Alan Igot, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. Nos. 203818-19
AKO BICOL POLITICAL PARTY (AKB), Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 203922
ASSOCIATION OF PHILIPPINE ELECTRIC COOPERATIVES (APEC),represented by its President Congressman Ponciano D. Payuyo, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 203936
AKSYON MAGSASAKA-PARTIDO TINIG NG MASA, represented by its President Michael Abas Kida,Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 203958
KAPATIRAN NG MGA NAKULONG NA WALANG SALA, INC. (KAKUSA), Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 203960
1st CONSUMERS ALLIANCE FOR RURAL ENERGY, INC. (1-CARE), Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 203976
ALLIANCE FOR RURAL AND AGRARIAN RECONSTRUCTION, INC. (ARARO), Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 203981
ASSOCIATION FOR RIGHTEOUSNESS ADVOCACY ON LEADERSHIP (ARAL) PARTY-LIST, represented herein by Ms. Lourdes L. Agustin, the party’s Secretary
General, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204002
ALLIANCE FOR RURAL CONCERNS, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204094
ALLIANCE FOR NATIONALISM AND DEMOCRACY (ANAD), Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204100
1-BRO PHILIPPINE GUARDIANS BROTHERHOOD, INC., (1BRO-PGBI) formerly PGBI, Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204122
1 GUARDIANS NATIONALIST PHILIPPINES, INC., (1GANAP/GUARDIANS), Petitioner, 
vs.

25
COMMISSION ON ELECTIONS EN BANC composed of SIXTO S. BRILLANTES, JR., Chairman, RENE V. SARMIENTO, Commissioner,LUCENITO N. TAGLE,
Commissioner,ARMANDO C. VELASCO, Commissioner,ELIAS R. YUSOPH, Commissioner, andCHRISTIAN ROBERT S. LIM, Commissioner,Respondents.
x-----------------------x
G.R. No. 204125
AGAPAY NG INDIGENOUS PEOPLES RIGHTS ALLIANCE, INC. (A-IPRA), represented by its Secretary General,Ronald D. Macaraig, Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204126
KAAGAPAY NG NAGKAKAISANG AGILANG PILIPINONG MAGSASAKA (KAP), formerly known as AKO AGILA NG NAGKAKAISANG MAGSASAKA (AKO
AGILA), represented by its Secretary General, Leo R. San Buenaventura, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204139
ALAB NG MAMAMAHAYAG (ALAM), represented by Atty. Berteni Cataluña Causing, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204141
BANTAY PARTY LIST, represented by Maria Evangelina F. Palparan, President, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204153
PASANG MASDA NATIONWIDE PARTY by its President Roberto "Ka Obet" Martin, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondents.
x-----------------------x
G.R. No. 204158
ABROAD PARTY LIST, Petitioner, 
vs.
COMMISSION ON ELECTIONS, CHAIRMAN SIXTO S. BRILLANTES, JR., COMMISSIONERS RENE V. SARMIENTO, ARMANDO C. VELASCO, ELIAS R. YUSOPH,
CHRISTIAN ROBERT S. LIM, MARIA GRACIA CIELO M. PADACA, LUCENITO TAGLE, AND ALL OTHER PERSONS ACTING ON THEIR BEHALF, Respondents.
x-----------------------x
G.R. No. 204174
AANGAT TAYO PARTY LIST-PARTY, represented by its President Simeon T. Silva, Jr., Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204216
COCOFED-PHILIPPINE COCONUT PRODUCERS FEDERATION, INC., Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204220
ABANG LINGKOD PARTY-LIST, Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204236
FIRM 24-K ASSOCIATION, INC., Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204238
ALLIANCE OF BICOLNON PARTY (ABP), Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204239
GREEN FORCE FOR THE ENVIRONMENT SONS AND DAUGHTERS OF MOTHER EARTH (GREENFORCE),Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204240
26
AGRI-AGRA NA REPORMA PARA SA MAGSASAKA NG PILIPINAS MOVEMENT (AGRI), represented by its Secretary General, Michael Ryan A.
Enriquez, Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204263
A BLESSED PARTY LIST A.K.A. BLESSEDFEDERATION OF FARMERS AND FISHERMEN INTERNATIONAL, INC., Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204318
UNITED MOVEMENT AGAINST DRUGS FOUNDATION (UNIMAD) PARTY-LIST, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204321
ANG AGRIKULTURA NATIN ISULONG (AANI), represented by its Secretary General Jose C. Policarpio, Jr.,Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204323
BAYANI PARTYLIST as represented byHomer Bueno, Fitrylin Dalhani,Israel de Castro, Dante Navarroand Guiling Mamondiong, Petitioner, 
vs.
COMMISSION ON ELECTIONS, CHAIRMAN SIXTO S. BRILLANTES, JR., COMMISSIONERS RENE V. SARMIENTO, LUCENITO N. TAGLE, ARMANDO C. VELASCO,
ELIAS R. YUSOPH, CHRISTIAN ROBERT S. LIM, and MARIA GRACIA CIELO M. PADACA, Respondents.
x-----------------------x
G.R. No. 204341
ACTION LEAGUE OF INDIGENOUS MASSES(ALIM) PARTY-LIST, represented herein by its President Fatani S. Abdul Malik, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204356
BUTIL FARMERS PARTY, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204358
ALLIANCE OF ADVOCATES IN MININGADVANCEMENT FOR NATIONAL PROGRESS (AAMA), Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204359
SOCIAL MOVEMENT FOR ACTIVEREFORM AND TRANSPARENCY (SMART), represented by its Chairman, Carlito B. Cubelo, Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204364
ADHIKAIN AT KILUSAN NG ORDINARYONG-TAO, PARA SA LUPA, PABAHAY, HANAPBUHAY AT KAUNLARAN (AKO BUHAY), Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, SIXTO S. BRILLANTES, JR., RENE V. SARMIENTO, LUCENITO N. TAGLE, ARMANDO C. VELASCO, ELIAS R. YUSOPH,
CHRISTIAN ROBERT S. LIM, and MA. GRACIA CIELO M. PADACA, in their capacities as Commissioners thereof, Respondents.
x-----------------------x
G.R. No. 204367
AKBAY KALUSUGAN INCORPORATION(AKIN), Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204370
AKO AN BISAYA (AAB), represented by itsSecretary General, Rodolfo T. Tuazon, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204374
BINHI-PARTIDO NG MGA MAGSASAKA PARA SA MGA MAGSASAKA, Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
27
x-----------------------x
G.R. No. 204379
ALAGAD NG SINING (ASIN) represented by its President, Faye Maybelle Lorenz, Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204394
ASSOCIATION OF GUARD UTILITY HELPER, AIDER, RIDER, DRIVER/DOMESTIC HELPER, JANITOR, AGENT AND NANNY OF THE PHILIPPINES, INC.
(GUARDJAN), Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204402
KALIKASAN PARTY-LIST, represented by its President, Clemente G. Bautista, Jr., and Secretary General, Frances Q. Quimpo, Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204408
PILIPINO ASSOCIATION FOR COUNTRY-URBAN POOR YOUTH ADVANCEMENT AND WELFARE (PACYAW),Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204410
1-UNITED TRANSPORT KOALISYON (1-UTAK), Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204421
COALITION OF ASSOCIATIONS OF SENIOR CITIZENS IN THE PHILIPPINES, INC. SENIOR CITIZEN PARTY-LIST, represented herein by its 1st nominee and
Chairman, Francisco G. Datol, Jr., Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204425
COALITION OF ASSOCIATIONS OF SENIOR CITIZENS IN THE PHILIPPINES, INC., Petitioner, 
vs.
COMMISSION ON ELECTIONS and ANY OF ITS OFFICERS AND AGENTS, ACTING FOR AND IN ITS BEHALF, INCLUDING THE CHAIR AND MEMBERSOF THE
COMMISSION, Respondents.
x-----------------------x
G.R. No. 204426
ASSOCIATION OF LOCAL ATHLETICS ENTREPRENEURS AND HOBBYISTS, INC. (ALA-EH), Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, SIXTO S. BRILLANTES, JR., RENE V. SARMIENTO, LUCENITO N. TAGLE, ARMANDO C. VELASCO, ELIAS R. YUSOPH,
CHRISTIAN ROBERT S. LIM, and MA. GRACIA CIELO M. PADACA, in their respective capacities as COMELEC Chairperson and Commissioners, Respondents.
x-----------------------x
G.R. No. 204428
ANG GALING PINOY (AG), represented by its Secretary General, Bernardo R. Corella, Jr., Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204435
1 ALLIANCE ADVOCATING AUTONOMY PARTY (1AAAP), Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204436
ABYAN ILONGGO PARTY (AI), represented byits Party President, Rolex T. Suplico, Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204455
MANILA TEACHER SAVINGS AND LOAN ASSOCIATION, INC., Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204484
28
PARTIDO NG BAYAN ANG BIDA (PBB), represented by its Secretary General, Roger M. Federazo,Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204485
ALLIANCE OF ORGANIZATIONS, NETWORKS AND ASSOCIATIONS OF THE PHILIPPINES, INC. (ALONA),Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
x-----------------------x
G.R. No. 204486
1st KABALIKAT NG BAYAN GINHAWANG SANGKATAUHAN (1st KABAGIS), Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.
x-----------------------x
G.R. No. 204490
PILIPINAS PARA SA PINOY (PPP), Petitioner, 
vs.
COMMISSION ON ELECTIONS EN BANC, Respondent.
PERLAS-BERNABE,*
DECISION
CARPIO, J.:
The Cases
These cases constitute 54 Petitions for Certiorari and Petitions for Certiorari and Prohibition1 filed by 52 party-list groups and organizations assailing the
Resolutions issued by the Commission on Elections (COMELEC) disqualifying them from participating in the 13 May 2013 party-list elections, either by denial
of their petitions for registration under the party-list system, or cancellation of their registration and accreditation as party-list organizations.
This Court resolved to consolidate the 54 petitions in the Resolutions dated 13 November 2012,2 20 November 2012,3 27 November 2012,4 4 December
2012,5 11 December 2012,6 and 19 February 2013.7
The Facts Pursuant to the provisions of Republic Act No. 7941 (R.A. No. 7941) and COMELEC Resolution Nos. 9366 and 9531, approximately 280 groups and
organizations registered and manifested their desire to participate in the 13 May 2013 party-list elections.
  G.R. No. SPP No. Group Grounds for Denial

A. Via the COMELEC En Banc’s automatic review of the COMELEC

Division’s resolutions approving registration of groups/organizations

Resolution dated 23 November 20128

1 204379 12-099 Alagad ng - The "artists" sector is not

(PLM) Sining (ASIN) considered marginalized and
underrepresented;
- Failure to prove track
record; and
- Failure of the nominees to
qualify under RA 7941 and
Ang Bagong Bayani.

Omnibus Resolution dated 27 November 20129

2 204455 12-041 Manila Teachers - A non-stock savings and

(PLM) Savings and loan association cannot be
Loan considered marginalized and
Association, Inc. underrepresented; and
(Manila - The first and second
Teachers) nominees are not teachers by
profession.

3 204426 12-011 Association of - Failure to show that its

(PLM) Local Athletics members belong to the
Entrepreneurs marginalized; and
and Hobbyists, - Failure of the nominees to
Inc. (ALA-EH) qualify.

Resolution dated 27 November 201210

4 204435 12-057 1 Alliance - Failure of the nominees to

(PLM) Advocating qualify: although registering
Autonomy Party as a regional political party,
(1AAAP) two of the nominees are not

29
 residents of the region; and
four of the five nominees do
not belong to the
marginalized and underrepresented.

Resolution dated 27 November 201211

5 204367 12-104 (PL) Akbay - Failure of the group to show

Kalusugan that its nominees belong to
(AKIN), Inc. the urban poor sector.

Resolution dated 29 November 201212

6 204370 12-011 (PP) Ako An Bisaya - Failure to represent a

(AAB) marginalized sector of
society, despite the formation
of a sectoral wing for the
benefit of farmers of Region
8;
- Constituency has district
representatives;
- Lack of track record in
representing peasants and
farmers; and
- Nominees are neither
farmers nor peasants.

Resolution dated 4 December 201213

7 204436 12-009 (PP), Abyan Ilonggo - Failure to show that the

12-165 Party (AI) party represents a
(PLM) marginalized and
underrepresented sector, as
the Province of Iloilo has
district representatives;
- Untruthful statements in the
memorandum; and
- Withdrawal of three of its
five nominees.

Resolution dated 4 December 201214

8 204485 12-175 (PL) Alliance of - Failure to establish that the

Organizations, group can represent 14
Networks and Associations of sectors; - The sectors of homeowners’
the Philippines, associations, entrepreneurs
Inc. (ALONA) and cooperatives are not
marginalized and
underrepresented; and
- The nominees do not belong
to the marginalized and
underrepresented.

B. Via the COMELEC En Banc’s review on motion for reconsideration

of the COMELEC Division’s resolutions denying registration of groups
and organizations

Resolution dated 7 November 201215

9 204139 12-127 (PL) Alab ng - Failure to prove track

Mamamahayag record as an organization;
(ALAM) - Failure to show that the
group actually represents the
marginalized and
underrepresented; and
- Failure to establish that the
group can represent all
sectors it seeks to represent.

30
 Resolution dated 7 November 201216

10 204402 12-061 (PP) Kalikasan Party-List - The group reflects an

(KALIKASAN) advocacy for the
environment, and is not
representative of the
marginalized and
underrepresented;
- There is no proof that
majority of its members
belong to the marginalized
and underrepresented;
- The group represents
sectors with conflicting
interests; and
- The nominees do not belong
to the sector which the group
claims to represent.

Resolution dated 14 November 201217

11 204394 12-145 (PL) Association of - Failure to prove

Guard, Utility membership base and track
Helper, Aider, record;
Rider, Driver/ - Failure to present activities
Domestic that sufficiently benefited its
Helper, intended constituency; and
Janitor, Agent - The nominees do not belong
and to any of the sectors which
Nanny of the the group seeks to represent.
Philippines, Inc.
(GUARDJAN)

Resolution dated 5 December 201218

12 204490 12-073 Pilipinas Para sa - Failure to show that the

(PLM) Pinoy (PPP) group represents a
marginalized and
underrepresented sector, as
Region 12 has district
representatives; and
- Failure to show a track
record of undertaking
programs for the welfare of
the sector the group seeks to
represent.
In a Resolution dated 5 December 2012,19 the COMELEC En Banc affirmed the COMELEC Second Division’s resolution to grant Partido ng Bayan ng Bida’s
(PBB) registration and accreditation as a political party in the National Capital Region. However, PBB was denied participation in the 13 May 2013 party-list
elections because PBB does not represent any "marginalized and underrepresented" sector; PBB failed to apply for registration as a party-list group; and
PBB failed to establish its track record as an organization that seeks to uplift the lives of the "marginalized and underrepresented." 20
These 13 petitioners (ASIN, Manila Teachers, ALA-EH, 1AAAP, AKIN, AAB, AI, ALONA, ALAM, KALIKASAN, GUARDJAN, PPP, and PBB) were not able to secure
a mandatory injunction from this Court. The COMELEC, on 7 January 2013 issued Resolution No. 9604,21 and excluded the names of these 13 petitioners in
the printing of the official ballot for the 13 May 2013 party-list elections.
Pursuant to paragraph 222 of Resolution No. 9513, the COMELEC En Banc scheduled summary evidentiary hearings to determine whether the groups and
organizations that filed manifestations of intent to participate in the 13 May 2013 party-list elections have continually complied with the requirements of
R.A. No. 7941 and Ang Bagong Bayani-OFW Labor Party v. COMELEC23 (Ang Bagong Bayani). The COMELEC disqualified the following groups and
organizations from participating in the 13 May 2013 party-list elections:
  G.R. No. SPP No. Group Grounds for Denial

Resolution dated 10 October 201224

1 203818-19 12-154 AKO Bicol Retained registration and

(PLM) Political Party accreditation as a political
12-177 (AKB) party, but denied participation
(PLM) in the May 2013 party-list
elections

31
 - Failure to represent any
marginalized and
underrepresented sector;
- The Bicol region already
has representatives in
Congress; and
- The nominees are not
marginalized and
underrepresented.

Omnibus Resolution dated 11 October 201225

2 203766 12-161 Atong Paglaum, Cancelled registration and

(PLM) Inc. (Atong accreditation
Paglaum) - The nominees do not belong
to the sectors which the party
represents; and
- The party failed to file its
Statement of Contributions
and Expenditures for the
2010 Elections.

3 203981 12-187 Association for Cancelled registration and

(PLM) Righteousness accreditation
Advocacy on - Failure to comply, and for
Leadership violation of election laws;
(ARAL) - The nominees do not
represent the sectors which
the party represents; and
- There is doubt that the party
is organized for religious
purposes.

4 204002 12-188 Alliance for Cancelled registration and

(PLM) Rural Concerns accreditation
(ARC) - Failure of the nominees to
qualify; and
- Failure of the party to prove
that majority of its members
belong to the sectors it seeks
to represent.

5 204318 12-220 United Cancelled registration and

(PLM) Movement accreditation
Against Drugs - The sectors of drug
Foundation counsellors and lecturers,
(UNIMAD) veterans and the youth, are
not marginalized and
underrepresented;
- Failure to establish track
record; and
- Failure of the nominees to
qualify as representatives of
the youth and young urban
professionals.

Omnibus Resolution dated 16 October 201226

6 204100 12-196 1-Bro Philippine Cancelled registration

(PLM) Guardians - Failure to define the sector
Brotherhood, it seeks to represent; and
Inc. (1BRO-PGBI) - The nominees do not belong
to a marginalized and
underrepresented sector.

7 204122 12-223 1 Guardians Cancelled registration

(PLM) Nationalist - The party is a military

32
 Philippines, Inc. fraternity;
(1GANAP/ - The sector of community
GUARDIANS) volunteer workers is too
broad to allow for meaningful
representation; and
- The nominees do not appear
to belong to the sector of
community volunteer
workers.

8 20426 12-257 Blessed Cancelled registration

(PLM) Federation of - Three of the seven
Farmers and nominees do not belong to
Fishermen the sector of farmers and
International, fishermen, the sector sought
Inc. (A to be represented; and
BLESSED - None of the nominees are
Party-List) registered voters of Region
XI, the region sought to be
represented.

Resolution dated 16 October 201227

9 203960 12-260 1st Cancelled registration

(PLM) Consumers - The sector of rural energy
Alliance for consumers is not
Rural Energy, marginalized and
Inc. (1-CARE) underrepresented;
- The party’s track record is
related to electric
cooperatives and not rural
energy consumers; and
- The nominees do not belong
to the sector of rural energy
consumers.

Resolution dated 16 October 201228

10 203922 12-201 Association of Cancelled registration and

(PLM) Philippine accreditation
Electric - Failure to represent a
Cooperatives marginalized and
(APEC) underrepresented sector; and
- The nominees do not belong
to the sector that the party
claims to represent.

Resolution dated 23 October 201229

11 204174 12-232 Aangat Tayo Cancelled registration and

(PLM) Party-List Party accreditation
( AT ) - The incumbent
representative in Congress
failed to author or sponsor
bills that are beneficial to the
sectors that the party
represents (women, elderly,
youth, urban poor); and
- The nominees do not belong
to the marginalized sectors
that the party seeks to
represent.

Omnibus Resolution dated 24 October 201230

12 203976 12-288 Alliance for Cancelled registration and

(PLM) Rural and accreditation
Agrarian - The interests of the peasant
33
 Reconstruction, and urban poor sectors that
Inc. (ARARO) the party represents differ;
- The nominees do not belong
to the sectors that the party
seeks to represent;
- Failure to show that three of
the nominees are bona fide
party members; and
- Lack of a Board resolution
to participate in the party-list
elections.

Omnibus Resolution dated 24 October 201231

13 204240 12-279 Agri-Agra na Cancelled registration

(PLM) Reporma Para sa - The party ceased to exist for
Magsasaka ng more than a year immediately
Pilipinas after the May 2010 elections;
Movement - The nominees do not belong
(AGRI) to the sector of peasants and
farmers that the party seeks to
represent;
- Only four nominees were
submitted to the COMELEC;
and
- Failure to show meaningful
activities for its constituency.

14 203936 12-248 Aksyon Cancelled registration

(PLM) Magsasaka-Partido Tinig ng - Failure to show that
Masa (AKMA-PTM) majority of its members are
marginalized and
underrepresented;
- Failure to prove that four of
its nine nominees actually
belong to the farmers sector;
and
- Failure to show that five of
its nine nominees work on
uplifting the lives of the
members of the sector.

15 204126 12-263 Kaagapay ng Cancelled registration

(PLM) Nagkakaisang - The Manifestation of Intent
Agilang and Certificate of Nomination
Pilipinong were not signed by an
Magsasaka appropriate officer of the
(KAP) party;
- Failure to show track record
for the farmers and peasants
sector; and
- Failure to show that
nominees actually belong to
the sector, or that they have
undertaken meaningful
activities for the sector.

16 204364 12-180 Adhikain at Cancelled registration

(PLM) Kilusan ng - Failure to show that
Ordinaryong nominees actually belong to
Tao Para sa the sector, or that they have
Lupa, Pabahay, undertaken meaningful
Hanapbuhay at activities for the sector.
Kaunlaran
(AKO-BAHAY)

17 204141 12-229 The True Cancelled registration

34
 (PLM) Marcos Loyalist - Failure to show that
(for God, majority of its members are
Country and marginalized and
People) underrepresented; and
Association of - Failure to prove that two of
the Philippines, its nominees actually belong
Inc. (BANTAY) to the marginalized and
underrepresented.

18 204408 12-217 Pilipino Cancelled registration

(PLM) Association for - Change of sector (from
Country – Urban urban poor youth to urban
Poor Youth poor) necessitates a new
Advancement application;
and Welfare - Failure to show track record
( PA C YAW ) for the marginalized and
underrepresented;
- Failure to prove that
majority of its members and
officers are from the urban
poor sector; and
- The nominees are not
members of the urban poor
sector.

19 204153 12-277 Pasang Masda Cancelled registration

(PLM) Nationwide - The party represents drivers
Party (PASANG and operators, who may have
MASDA) conflicting interests; and
- Nominees are either
operators or former operators.

20 203958 12-015 Kapatiran ng Cancelled registration

(PLM) mga Nakulong - Failure to prove that
na Walang Sala, na Walang Sala,
Inc. (KAKUSA) Inc. (KAKUSA)
majority of its officers and
members belong to the
marginalized and
underrepresented;
- The incumbent
representative in Congress
failed to author or sponsor
bills that are beneficial to the
sector that the party
represents (persons
imprisoned without proof of
guilt beyond reasonable
doubt);
- Failure to show track record
for the marginalized and
underrepresented; and
- The nominees did not
appear to be marginalized and
underrepresented.

Resolution dated 30 October 201232

21 204428 12-256 Ang Galing Cancelled registration and

(PLM) Pinoy (AG) accreditation
- Failure to attend the
summary hearing;
- Failure to show track record
for the marginalized and
underrepresented; and
- The nominees did not
appear to be marginalized and
35
 underrepresented.
33
Resolution dated 7 November 2012

22 204094 12-185 Alliance for Cancelled registration and

(PLM) Nationalism and accreditation
Democracy - Failure to represent an
(ANAD) identifiable marginalized and
underrepresented sector;
- Only three nominees were
submitted to the COMELEC;
- The nominees do not
belong to the marginalized
and underrepresented; and
- Failure to submit its
Statement of Contribution
and Expenditures for the
2007 Elections.

Omnibus Resolution dated 7 November 201234

23 204239 12-060 Green Force for Cancelled registration and

(PLM) the Environment accreditation
Sons and - The party is an advocacy
Daughters of group and does not represent
Mother Earth the marginalized and
(GREENFORCE) underrepresented;
- Failure to comply with the
track record requirement; and
- The nominees are not
marginalized citizens.

24 204236 12-254 Firm 24-K Cancelled registration and

(PLM) Association, Inc. accreditation
(FIRM 24-K) - The nominees do not
belong to the sector that the
party seeks to represent
(urban poor and peasants of
the National Capital Region);
- Only two of its nominees
reside in the National Capital
Region; and
- Failure to comply with the
track record requirement.

25 204341 12-269 Action League Cancelled registration and

(PLM) of Indigenous accreditation
Masses (ALIM) - Failure to establish that its
nominees are members of the
indigenous people in the
Mindanao and Cordilleras
sector that the party seeks to
represent;
- Only two of the party’s
nominees reside in the
Mindanao and Cordilleras;
and
- Three of the nominees do
not appear to belong to the
marginalized.

Resolution dated 7 November 201235

26 204358 12-204 Alliance of Cancelled registration

(PLM) Advocates in - The sector it represents is a
Mining specifically defined group
Advancement which may not be allowed

36
 for National registration under the party-list system; and
Progress - Failure to establish that the
(AAMA) nominees actually belong to
the sector.

Resolution dated 7 November 201236

27 204359 12-272 Social Cancelled registration

(PLM) Movement for - The nominees are
Active Reform disqualified from
and representing the sectors that
Transparency the party represents;
(SMART) - Failure to comply with the
track record requirement; and
- There is doubt as to whether
majority of its members are
marginalized and
underrepresented.

Resolution dated 7 November 201237

28 204238 12-173 Alliance of Cancelled registration and

(PLM) Bicolnon Party accreditation
(ABP) - Defective registration and
accreditation dating back to
2010;
- Failure to represent any
sector; and
- Failure to establish that the
nominees are employed in the construction industry, the
sector it claims to represent.

Resolution dated 7 November 201238

29 204323 12-210 Bayani Party Cancelled registration and

(PLM) List (BAYANI) accreditation
- Failure to prove a track
record of trying to uplift the
marginalized and
underrepresented sector of
professionals; and
- One nominee was declared
unqualified to represent the
sector of professionals.

Resolution dated 7 November 201239

30 204321 12-252 Ang Agrikultura Cancelled registration and

(PLM) Natin Isulong accreditation
(AANI) - Failure to establish a track
record of enhancing the lives
of the marginalized and
underrepresented farmers
which it claims to represent;
and
- More than a majority of the
party’s nominees do not
belong to the farmers sector.

Resolution dated 7 November 201240

31 204125 12-292 Agapay ng Cancelled registration and

(PLM) Indigenous accreditation
Peoples Rights - Failure to prove that its five
Alliance, Inc. nominees are members of the
(A-IPRA) indigenous people sector;
- Failure to prove that its five
nominees actively

37
 participated in the
undertakings of the party; and
- Failure to prove that its five nominees are bona fide
members.

Resolution dated 7 November 201241

32 204216 12-202 Philippine Cancelled registration and

(PLM) Coconut accreditation
Producers - The party is affiliated with
Federation, Inc. private and government
(COCOFED) agencies and is not
marginalized;
- The party is assisted by the
government in various
projects; and
- The nominees are not
members of the marginalized
sector of coconut farmers and
producers.

Resolution dated 7 November 201242

33 204220 12-238 Abang Lingkod Cancelled registration

(PLM) Party-List - Failure to establish a track
(ABANG record of continuously
LINGKOD) representing the peasant
farmers sector;
- Failure to show that its
members actually belong to
the peasant farmers sector;
and
- Failure to show that its
nominees are marginalized
and underrepresented, have
actively participated in
programs for the
advancement of farmers, and
adhere to its advocacies.

Resolution dated 14 November 201243

34 204158 12-158 Action Cancelled registration and

(PLM) Brotherhood for Active accreditation - Failure to show that the
Dreamers, Inc. party is actually able to
(ABROAD) represent all of the sectors it
claims to represent;
- Failure to show a complete
track record of its activities
since its registration; and
- The nominees are not part
of any of the sectors which
the party seeks to represent.

Resolution dated 28 November 201244

35 204374 12-228 Binhi-Partido ng Cancelled registration and

(PLM) mga Magsasaka accreditation
Para sa mga - The party receives
Magsasaka assistance from the
(BINHI) government through the
Department of Agriculture;
and
- Failure to prove that the
group is marginalized and
underrepresented.

Resolution dated 28 November 201245

38
 36 204356 12-136 Butil Farmers Cancelled registration and
(PLM) Party (BUTIL) accreditation
- Failure to establish that the
agriculture and cooperative
sectors are marginalized and
underrepresented; and
- The party’s nominees
neither appear to belong to
the sectors they seek to
represent, nor to have
actively participated in the
undertakings of the party.

Resolution dated 3 December 201246

37 204486 12-194 1st Cancelled registration and

(PLM) Kabalikat ng accreditation
Bayan - Declaration of untruthful
Ginhawang statements;
Sangkatauhan - Failure to exist for at least
(1st one year; and
KABAGIS) - None of its nominees
belong to the labor,
fisherfolk, and urban poor
indigenous cultural
communities sectors which it
seeks to represent.

Resolution dated 4 December 201247

38 204410 12-198 1-United Cancelled accreditation

(PLM) Transport - The party represents drivers
Koalisyon (1-UTAK) and operators, who may have
conflicting interests; and
- The party’s nominees do not
belong to any marginalized
and underrepresented sector.

Resolution dated 4 December 201248

39 204421, 12-157 Coalition of Cancelled registration

204425 (PLM), Senior Citizens - The party violated election
12-191 in the laws because its nominees
(PLM) Philippines, Inc. had a term-sharing
(SENIOR agreement.
CITIZENS)
These 39 petitioners (AKB, Atong Paglaum, ARAL, ARC, UNIMAD, 1BRO-PGBI, 1GANAP/GUARDIANS, A BLESSED Party-List, 1-CARE, APEC, AT, ARARO, AGRI,
AKMA-PTM, KAP, AKO-BAHAY, BANTAY, PACYAW, PASANG MASDA, KAKUSA, AG, ANAD, GREENFORCE, FIRM 24-K, ALIM, AAMA, SMART, ABP, BAYANI,
AANI, A-IPRA, COCOFED, ABANG LINGKOD, ABROAD, BINHI, BUTIL, 1st KABAGIS, 1-UTAK, SENIOR CITIZENS) were able to secure a mandatory injunction
from this Court, directing the COMELEC to include the names of these 39 petitioners in the printing of the official ballot for the 13 May 2013 party-list
elections.
Petitioners prayed for the issuance of a temporary restraining order and/or writ of preliminary injunction. This Court issued Status Quo Ante Orders in all
petitions. This Decision governs only the 54 consolidated petitions that were granted Status Quo Ante Orders, namely:
G.R. No. SPP No. Group

Resolution dated 13 November 2012

203818-19 12-154 AKO Bicol Political Party (AKB)

(PLM)
12-177
(PLM)

203981 12-187 Association for Righteousness Advocacy on

(PLM) Leadership (ARAL)

204002 12-188 Alliance for Rural Concerns (ARC)

(PLM)

39
203922 12-201 Association of Philippine Electric Cooperatives
(PLM) (APEC)

203960 12-260 1st

(PLM) Consumers Alliance for Rural Energy, Inc.
(1-CARE)

203936 12-248 Aksyon Magsasaka-Partido Tinig ng Masa

(PLM) (AKMA-PTM)

203958 12-015 Kapatiran ng mga Nakulong na Walang Sala,

(PLM) Inc. (KAKUSA)

203976 12-288 Alliance for Rural and Agrarian Reconstruction,

(PLM) Inc. (ARARO)

Resolution dated 20 November 2012

204094 12-185 Alliance for Nationalism and Democracy

(PLM) (ANAD)

204125 12-292 Agapay ng Indigenous Peoples Rights Alliance,

(PLM) Inc. (A-IPRA)

204100 12-196 1-Bro Philippine Guardians Brotherhood, Inc.

(PLM) (1BRO-PGBI)

Resolution dated 27 November 2012

204141 12-229 The True Marcos Loyalist (for God, Country

(PLM) and People) Association of the Philippines, Inc.
(BANTAY)

204240 12-279 Agri-Agra na Reporma Para sa Magsasaka ng

(PLM) Pilipinas Movement (AGRI)

204216 12-202 Philippine Coconut Producers Federation, Inc.

(PLM) (COCOFED)

204158 12-158 Action Brotherhood for Active Dreamer, Inc.

(PLM) (ABROAD)

Resolutions dated 4 December 2012

204122 12-223 1 Guardians Nationalist Philippines, Inc.

(PLM) (1GANAP/GUARDIANS)

203766 12-161 Atong Paglaum, Inc. (Atong Paglaum)

(PLM)

204318 12-220 United Movement Against Drugs Foundation

(PLM) (UNIMAD)

204263 12-257 Blessed Federation of Farmers and Fishermen

(PLM) International, Inc. (A BLESSED Party-List)

204174 12-232 Aangat Tayo Party-List Party (AT)

(PLM)

204126 12-263 Kaagapay ng Nagkakaisang Agilang Pilipinong

(PLM) Magsasaka (KAP)

204364 12-180 Adhikain at Kilusan ng Ordinaryong Tao Para sa

(PLM) Lupa, Pabahay, Hanapbuhay at Kaunlaran
(AKO-BAHAY)

204139 12-127 (PL) Alab ng Mamamahayag (ALAM)

204220 12-238 Abang Lingkod Party-List (ABANG

(PLM) LINGKOD)

204236 12-254 Firm 24-K Association, Inc. (FIRM 24-K)

40
 (PLM)

204238 12-173 Alliance of Bicolnon Party (ABP)

(PLM)

204239 12-060 Green Force for the Environment Sons and

(PLM) Daughters of Mother Earth (GREENFORCE)

204321 12-252 Ang Agrikultura Natin Isulong (AANI)

(PLM)

204323 12-210 Bayani Party List (BAYANI)

(PLM)

204341 12-269 Action League of Indigenous Masses (ALIM)

(PLM)

204358 12-204 Alliance of Advocates in Mining Advancement

(PLM) for National Progress (AAMA)

204359 12-272 Social Movement for Active Reform and

(PLM) Transparency (SMART)

204356 12-136 Butil Farmers Party (BUTIL)

(PLM)

Resolution dated 11 December 2012

204402 12-061 (PL) Kalikasan Party-List (KALIKASAN)

204394 12-145 (PL) Association of Guard, Utility Helper, Aider,

Rider, Driver/Domestic Helper, Janitor, Agent
and Nanny of the Philippines, Inc.
(GUARDJAN)

204408 12-217 Pilipino Association for Country – Urban Poor

(PLM) Youth Advancement and Welfare (PACYAW)

204428 12-256 Ang Galing Pinoy (AG)

(PLM)

204490 12-073 Pilipinas Para sa Pinoy (PPP)

(PLM)

204379 12-099 Alagad ng Sining (ASIN)

(PLM)

204367 12-104 (PL) Akbay Kalusugan (AKIN)

204426 12-011 Association of Local Athletics Entrepreneurs

(PLM) and Hobbyists, Inc. (ALA-EH)

204455 12-041 Manila Teachers Savings and Loan Association,

(PLM) Inc. (Manila Teachers)

204374 12-228 Binhi-Partido ng mga Magsasaka Para sa mga

(PLM) Magsasaka (BINHI)

204370 12-011 (PP) Ako An Bisaya (AAB)

204435 12-057 1 Alliance Advocating Autonomy Party

(PLM) (1AAAP)

204486 12-194 1st Kabalikat ng Bayan Ginhawang

(PLM) Sangkatauhan (1st KABAGIS)

204410 12-198 1-United Transport Koalisyon (1-UTAK)

(PLM)

204421, 12-157 Coalition of Senior Citizens in the Philippines,

204425 (PLM) Inc. (SENIOR CITIZENS)
12-191

41
 (PLM)

204436 12-009 (PP), Abyan Ilonggo Party (AI)

12-165
(PLM)

204485 12-175 (PL) Alliance of Organizations, Networks and

Associations of the Philippines, Inc. (ALONA)

204484 11-002 Partido ng Bayan ng Bida (PBB)

Resolution dated 11 December 2012

204153 12-277 Pasang Masda Nationwide Party (PASANG

(PLM) MASDA)
The Issues
We rule upon two issues: first, whether the COMELEC committed grave abuse of discretion amounting to lack or excess of jurisdiction in disqualifying
petitioners from participating in the 13 May 2013 party-list elections, either by denial of their new petitions for registration under the party-list system, or
by cancellation of their existing registration and accreditation as party-list organizations; and second, whether the criteria for participating in the party-list
system laid down in Ang Bagong Bayani and Barangay Association for National Advancement and Transparency v. Commission on Elections 49 (BANAT)
should be applied by the COMELEC in the coming 13 May 2013 party-list elections.
The Court’s Ruling
We hold that the COMELEC did not commit grave abuse of discretion in following prevailing decisions of this Court in disqualifying petitioners from
participating in the coming 13 May 2013 party-list elections. However, since the Court adopts in this Decision new parameters in the qualification of
national, regional, and sectoral parties under the party-list system, thereby abandoning the rulings in the decisions applied by the COMELEC in disqualifying
petitioners, we remand to the COMELEC all the present petitions for the COMELEC to determine who are qualified to register under the party-list system,
and to participate in the coming 13 May 2013 party-list elections, under the new parameters prescribed in this Decision.
The Party-List System
The 1987 Constitution provides the basis for the party-list system of representation. Simply put, the party-list system is intended to democratize political
power by giving political parties that cannot win in legislative district elections a chance to win seats in the House of Representatives.50 The voter elects two
representatives in the House of Representatives: one for his or her legislative district, and another for his or her party-list group or organization of choice.
The 1987 Constitution provides:
Section 5, Article VI
(1) The House of Representatives shall be composed of not more than two hundred and fifty members, unless otherwise fixed by law, who shall
be elected from legislative districts apportioned among the provinces, cities, and the Metropolitan Manila area in accordance with the number of
their respective inhabitants, and on the basis of a uniform and progressive ratio, and those who, as provided by law, shall be elected through a
party-list system of registered national, regional, and sectoral parties or organizations.
(2) The party-list representatives shall constitute twenty per centum of the total number of representatives including those under the party list.
For three consecutive terms after the ratification of this Constitution, one-half of the seats allocated to party-list representatives shall be filled, as
provided by law, by selection or election from the labor, peasant, urban poor, indigenous cultural communities, women, youth, and such other
sectors as may be provided by law, except the religious sector.
Sections 7 and 8, Article IX-C
Sec. 7. No votes cast in favor of a political party, organization, or coalition shall be valid, except for those registered under the party-list system as provided
in this Constitution.
Sec. 8. Political parties, or organizations or coalitions registered under the party-list system, shall not be represented in the voters’ registration boards,
boards of election inspectors, boards of canvassers, or other similar bodies. However, they shall be entitled to appoint poll watchers in accordance with law.
Commissioner Christian S. Monsod, the main sponsor of the party-list system, stressed that "the party-list system is not synonymous with that of the
sectoral representation."51 The constitutional provisions on the party-list system should be read in light of the following discussion among its framers:
MR. MONSOD: x x x.
I would like to make a distinction from the beginning that the proposal for the party list system is not synonymous with that of the sectoral representation.
Precisely, the party list system seeks to avoid the dilemma of choice of sectors and who constitute the members of the sectors. In making the proposal on
the party list system, we were made aware of the problems precisely cited by Commissioner Bacani of which sectors will have reserved seats. In effect, a
sectoral representation in the Assembly would mean that certain sectors would have reserved seats; that they will choose among themselves who would sit
in those reserved seats. And then, we have the problem of which sector because as we will notice in Proclamation No. 9, the sectors cited were the farmers,
fishermen, workers, students, professionals, business, military, academic, ethnic and other similar groups. So these are the nine sectors that were identified
here as "sectoral representatives" to be represented in this Commission. The problem we had in trying to approach sectoral representation in the Assembly
was whether to stop at these nine sectors or include other sectors. And we went through the exercise in a caucus of which sector should be included which
went up to 14 sectors. And as we all know, the longer we make our enumeration, the more limiting the law become because when we make an
enumeration we exclude those who are not in the enumeration. Second, we had the problem of who comprise the farmers. Let us just say the farmers and
the laborers. These days, there are many citizens who are called "hyphenated citizens." A doctor may be a farmer; a lawyer may also be a farmer. And so, it
is up to the discretion of the person to say "I am a farmer" so he would be included in that sector.
The third problem is that when we go into a reserved seat system of sectoral representation in the Assembly, we are, in effect, giving some people two
votes and other people one vote. We sought to avoid these problems by presenting a party list system. Under the party list system, there are no reserved
seats for sectors. Let us say, laborers and farmers can form a sectoral party or a sectoral organization that will then register and present candidates of their
party. How do the mechanics go? Essentially, under the party list system, every voter has two votes, so there is no discrimination. First, he will vote for the
representative of his legislative district. That is one vote. In that same ballot, he will be asked: What party or organization or coalition do you wish to be
represented in the Assembly? And here will be attached a list of the parties, organizations or coalitions that have been registered with the COMELEC and
42
are entitled to be put in that list. This can be a regional party, a sectoral party, a national party, UNIDO, Magsasaka or a regional party in Mindanao. One
need not be a farmer to say that he wants the farmers' party to be represented in the Assembly. Any citizen can vote for any party. At the end of the day,
the COMELEC will then tabulate the votes that had been garnered by each party or each organization — one does not have to be a political party and
register in order to participate as a party — and count the votes and from there derive the percentage of the votes that had been cast in favor of a party,
organization or coalition.
When such parties register with the COMELEC, we are assuming that 50 of the 250 seats will be for the party list system. So, we have a limit of 30 percent of
50. That means that the maximum that any party can get out of these 50 seats is 15. When the parties register they then submit a list of 15 names. They
have to submit these names because these nominees have to meet the minimum qualifications of a Member of the National Assembly. At the end of the
day, when the votes are tabulated, one gets the percentages. Let us say, UNIDO gets 10 percent or 15 percent of the votes; KMU gets 5 percent; a women’s
party gets 2 1/2 percent and anybody who has at least 2 1/2 percent of the vote qualifies and the 50 seats are apportioned among all of these parties who
get at least 2 1/2 percent of the vote.
What does that mean? It means that any group or party who has a constituency of, say, 500,000 nationwide gets a seat in the National Assembly. What is
the justification for that? When we allocate legislative districts, we are saying that any district that has 200,000 votes gets a seat. There is no reason why a
group that has a national constituency, even if it is a sectoral or special interest group, should not have a voice in the National Assembly. It also means that,
let us say, there are three or four labor groups, they all register as a party or as a group. If each of them gets only one percent or five of them get one
percent, they are not entitled to any representative. So, they will begin to think that if they really have a common interest, they should band together, form
a coalition and get five percent of the vote and, therefore, have two seats in the Assembly. Those are the dynamics of a party list system.
We feel that this approach gets around the mechanics of sectoral representation while at the same time making sure that those who really have a national
constituency or sectoral constituency will get a chance to have a seat in the National Assembly. These sectors or these groups may not have the
constituency to win a seat on a legislative district basis. They may not be able to win a seat on a district basis but surely, they will have votes on a
nationwide basis.
The purpose of this is to open the system. In the past elections, we found out that there were certain groups or parties that, if we count their votes
nationwide; have about 1,000,000 or 1,500,000 votes. But they were always third place or fourth place in each of the districts. So, they have no voice in the
Assembly. But this way, they would have five or six representatives in the Assembly even if they would not win individually in legislative districts. So, that is
essentially the mechanics, the purpose and objectives of the party list system.
BISHOP BACANI: Madam President, am I right in interpreting that when we speak now of party list system though we refer to sectors, we would be referring
to sectoral party list rather than sectors and party list?
MR. MONSOD: As a matter of fact, if this body accepts the party list system, we do not even have to mention sectors because the sectors would be included
in the party list system. They can be sectoral parties within the party list system.
xxxx
MR. MONSOD. Madam President, I just want to say that we suggested or proposed the party list system because we wanted to open up the political system
to a pluralistic society through a multiparty system. x x x We are for opening up the system, and we would like very much for the sectors to be there. That
is why one of the ways to do that is to put a ceiling on the number of representatives from any single party that can sit within the 50 allocated under the
party list system. x x x.
xxx
MR. MONSOD. Madam President, the candidacy for the 198 seats is not limited to political parties. My question is this: Are we going to classify for
example Christian Democrats and Social Democrats as political parties? Can they run under the party list concept or must they be under the district
legislation side of it only?
MR. VILLACORTA. In reply to that query, I think these parties that the Commissioner mentioned can field candidates for the Senate as well as for the
House of Representatives. Likewise, they can also field sectoral candidates for the 20 percent or 30 percent, whichever is adopted, of the seats that we
are allocating under the party list system.
MR. MONSOD. In other words, the Christian Democrats can field district candidates and can also participate in the party list system?
MR. VILLACORTA. Why not? When they come to the party list system, they will be fielding only sectoral candidates.
MR. MONSOD. May I be clarified on that? Can UNIDO participate in the party list system?
MR. VILLACORTA. Yes, why not? For as long as they field candidates who come from the different marginalized sectors that we shall designate in this
Constitution.
MR. MONSOD. Suppose Senator Tañada wants to run under BAYAN group and says that he represents the farmers, would he qualify?
MR. VILLACORTA. No, Senator Tañada would not qualify.
MR. MONSOD. But UNIDO can field candidates under the party list system and say Juan dela Cruz is a farmer. Who would pass on whether he is a farmer or
not?
MR. TADEO. Kay Commissioner Monsod, gusto ko lamang linawin ito. Political parties, particularly minority political parties, are not prohibited to
participate in the party list election if they can prove that they are also organized along sectoral lines.
MR. MONSOD. What the Commissioner is saying is that all political parties can participate because it is precisely the contention of political parties that they
represent the broad base of citizens and that all sectors are represented in them. Would the Commissioner agree?
MR. TADEO. Ang punto lamang namin, pag pinayagan mo ang UNIDO na isang political party, it will dominate the party list at mawawalang saysay din yung
sector. Lalamunin mismo ng political parties ang party list system. Gusto ko lamang bigyan ng diin ang "reserve." Hindi ito reserve seat sa marginalized
sectors. Kung titingnan natin itong 198 seats, reserved din ito sa political parties.
MR. MONSOD. Hindi po reserved iyon kasi anybody can run there. But my question to Commissioner Villacorta and probably also to Commissioner Tadeo is
that under this system, would UNIDO be banned from running under the party list system?
MR. VILLACORTA. No, as I said, UNIDO may field sectoral candidates. On that condition alone, UNIDO may be allowed to register for the party list system.
MR. MONSOD. May I inquire from Commissioner Tadeo if he shares that answer?
MR. TADEO. The same.
MR. VILLACORTA. Puwede po ang UNIDO, pero sa sectoral lines.
MR. MONSOD: Sino po ang magsasabi kung iyong kandidato ng UNIDO ay hindi talagang labor leader or isang laborer? Halimbawa, abogado ito.
MR. TADEO: Iyong mechanics.

43
MR. MONSOD: Hindi po mechanics iyon because we are trying to solve an inherent problem of sectoral representation. My question is: Suppose UNIDO
fields a labor leader, would he qualify?
MR. TADEO: The COMELEC may look into the truth of whether or not a political party is really organized along a specific sectoral line. If such is verified or
confirmed, the political party may submit a list of individuals who are actually members of such sectors. The lists are to be published to give individuals
or organizations belonging to such sector the chance to present evidence contradicting claims of membership in the said sector or to question the claims
of the existence of such sectoral organizations or parties. This proceeding shall be conducted by the COMELEC and shall be summary in character. In
other words, COMELEC decisions on this matter are final and unappealable. 52 (Emphasis supplied)
Indisputably, the framers of the 1987 Constitution intended the party-list system to include not only sectoral parties but also non-sectoral parties. The
framers intended the sectoral parties to constitute a part, but not the entirety, of the party-list system. As explained by Commissioner Wilfredo Villacorta,
political parties can participate in the party-list system "For as long as they field candidates who come from the different marginalized sectors that we
shall designate in this Constitution."53
In fact, the framers voted down, 19-22, a proposal to reserve permanent seats to sectoral parties in the House of Representatives, or alternatively, to
reserve the party-list system exclusively to sectoral parties. As clearly explained by Justice Jose C. Vitug in his Dissenting Opinion in Ang Bagong Bayani:
The draft provisions on what was to become Article VI, Section 5, subsection (2), of the 1987 Constitution took off from two staunch positions — the first
headed by Commissioner Villacorta, advocating that of the 20 per centum of the total seats in Congress to be allocated to party-list representatives half
were to be reserved to appointees from the marginalized and underrepresented sectors. The proposal was opposed by some Commissioners. Mr. Monsod
expressed the difficulty in delimiting the sectors that needed representation. He was of the view that reserving seats for the marginalized and
underrepresented sectors would stunt their development into full-pledged parties equipped with electoral machinery potent enough to further the sectoral
interests to be represented. The Villacorta group, on the other hand, was apprehensive that pitting the unorganized and less-moneyed sectoral groups in an
electoral contest would be like placing babes in the lion's den, so to speak, with the bigger and more established political parties ultimately gobbling them
up. R.A. 7941 recognized this concern when it banned the first five major political parties on the basis of party representation in the House of
Representatives from participating in the party-list system for the first party-list elections held in 1998 (and to be automatically lifted starting with the 2001
elections). The advocates for permanent seats for sectoral representatives made an effort towards a compromise — that the party-list system be open only
to underrepresented and marginalized sectors. This proposal was further whittled down by allocating only half of the seats under the party-list system to
candidates from the sectors which would garner the required number of votes. The majority was unyielding. Voting 19-22, the proposal for permanent
seats, and in the alternative the reservation of the party-list system to the sectoral groups, was voted down. The only concession the Villacorta group was
able to muster was an assurance of reserved seats for selected sectors for three consecutive terms after the enactment of the 1987 Constitution, by which
time they would be expected to gather and solidify their electoral base and brace themselves in the multi-party electoral contest with the more veteran
political groups.54 (Emphasis supplied)
Thus, in the end, the proposal to give permanent reserved seats to certain sectors was outvoted. Instead, the reservation of seats to sectoral
representatives was only allowed for the first three consecutive terms.55 There can be no doubt whatsoever that the framers of the 1987 Constitution
expressly rejected the proposal to make the party-list system exclusively for sectoral parties only, and that they clearly intended the party-list system to
include both sectoral and non-sectoral parties.
The common denominator between sectoral and non-sectoral parties is that they cannot expect to win in legislative district elections but they can garner, in
nationwide elections, at least the same number of votes that winning candidates can garner in legislative district elections. The party-list system will be the
entry point to membership in the House of Representatives for both these non-traditional parties that could not compete in legislative district elections.
The indisputable intent of the framers of the 1987 Constitution to include in the party-list system both sectoral and non-sectoral parties is clearly written in
Section 5(1), Article VI of the Constitution, which states:
Section 5. (1) The House of Representative shall be composed of not more that two hundred and fifty members, unless otherwise fixed by law, who shall be
elected from legislative districts apportioned among the provinces, cities, and the Metropolitan Manila area in accordance with the number of their
respective inhabitants, and on the basis of a uniform and progressive ratio, and those who, as provided by law, shall be elected through a party-list system
of registered national, regional, and sectoral parties or organizations. (Emphasis supplied)
Section 5(1), Article VI of the Constitution is crystal-clear that there shall be "a party-list system of registered national, regional, and sectoral parties or
organizations." The commas after the words "national," and "regional," separate national and regional parties from sectoral parties. Had the framers of the
1987 Constitution intended national and regional parties to be at the same time sectoral, they would have stated "national and regional sectoral parties."
They did not, precisely because it was never their intention to make the party-list system exclusively sectoral.
What the framers intended, and what they expressly wrote in Section 5(1), could not be any clearer: the party-list system is composed of three different
groups, and the sectoral parties belong to only one of the three groups. The text of Section 5(1) leaves no room for any doubt that national and regional
parties are separate from sectoral parties.
Thus, the party-list system is composed of three different groups: (1) national parties or organizations; (2) regional parties or organizations; and (3) sectoral
parties or organizations. National and regional parties or organizations are different from sectoral parties or organizations. National and regional parties or
organizations need not be organized along sectoral lines and need not represent any particular sector.
Moreover, Section 5(2), Article VI of the 1987 Constitution mandates that, during the first three consecutive terms of Congress after the ratification of the
1987 Constitution, "one-half of the seats allocated to party-list representatives shall be filled, as provided by law, by selection or election from the labor,
peasant, urban poor, indigenous cultural communities, women, youth, and such other sectors as may be provided by law, except the religious sector." This
provision clearly shows again that the party-list system is not exclusively for sectoral parties for two obvious reasons.
First, the other one-half of the seats allocated to party-list representatives would naturally be open to non-sectoral party-list representatives, clearly
negating the idea that the party-list system is exclusively for sectoral parties representing the "marginalized and underrepresented." Second, the
reservation of one-half of the party-list seats to sectoral parties applies only for the first "three consecutive terms after the ratification of this Constitution,"
clearly making the party-list system fully open after the end of the first three congressional terms. This means that, after this period, there will be no seats
reserved for any class or type of party that qualifies under the three groups constituting the party-list system.
Hence, the clear intent, express wording, and party-list structure ordained in Section 5(1) and (2), Article VI of the 1987 Constitution cannot be disputed:
the party-list system is not for sectoral parties only, but also for non-sectoral parties.
Republic Act No. 7941 or the Party-List System Act, which is the law that implements the party-list system prescribed in the Constitution, provides:
Section 3. Definition of Terms. (a) The party-list system is a mechanism of proportional representation in the election of representatives to the House of
Representatives from national, regional and sectoral parties or organizations or coalitions thereof registered with the Commission on Elections (COMELEC).
44
Component parties or organizations of a coalition may participate independently provided the coalition of which they form part does not participate in the
party-list system.
(b) A party means either a political party or a sectoral party or a coalition of parties.
(c) A political party refers to an organized group of citizens advocating an ideology or platform, principles and policies for the general conduct
of government and which, as the most immediate means of securing their adoption, regularly nominates and supports certain of its leaders
and members as candidates for public office.
It is a national party when its constituency is spread over the geographical territory of at least a majority of the regions. It is a regional party when
its constituency is spread over the geographical territory of at least a majority of the cities and provinces comprising the region.
(d) A sectoral party refers to an organized group of citizens belonging to any of the sectors enumerated in Section 5 hereof whose principal
advocacy pertains to the special interest and concerns of their sector.
(e) A sectoral organization refers to a group of citizens or a coalition of groups of citizens who share similar physical attributes or characteristics,
employment, interests or concerns.
(f) A coalition refers to an aggrupation of duly registered national, regional, sectoral parties or organizations for political and/or election
purposes. (Emphasis supplied)
Section 3(a) of R.A. No. 7941 defines a "party" as "either a political party or a sectoral party or a coalition of parties." Clearly, a political party is different
from a sectoral party. Section 3(c) of R.A. No. 7941 further provides that a "political party refers to an organized group of citizens advocating an ideology
or platform, principles and policies for the general conduct of government." On the other hand, Section 3(d) of R.A. No. 7941 provides that a "sectoral
party refers to an organized group of citizens belonging to any of the sectors enumerated in Section 5 hereof whose principal advocacy pertains to the
special interest and concerns of their sector." R.A. No. 7941 provides different definitions for a political and a sectoral party. Obviously, they are separate
and distinct from each other.
R.A. No. 7941 does not require national and regional parties or organizations to represent the "marginalized and underrepresented" sectors. To require
all national and regional parties under the party-list system to represent the "marginalized and underrepresented" is to deprive and exclude, by judicial fiat,
ideology-based and cause-oriented parties from the party-list system. How will these ideology-based and cause-oriented parties, who cannot win in
legislative district elections, participate in the electoral process if they are excluded from the party-list system? To exclude them from the party-list system
is to prevent them from joining the parliamentary struggle, leaving as their only option the armed struggle. To exclude them from the party-list system is,
apart from being obviously senseless, patently contrary to the clear intent and express wording of the 1987 Constitution and R.A. No. 7941.
Under the party-list system, an ideology-based or cause-oriented political party is clearly different from a sectoral party. A political party need not be
organized as a sectoral party and need not represent any particular sector. There is no requirement in R.A. No. 7941 that a national or regional political
party must represent a "marginalized and underrepresented" sector. It is sufficient that the political party consists of citizens who advocate the same
ideology or platform, or the same governance principles and policies, regardless of their economic status as citizens.
Section 5 of R.A. No. 7941 states that "the sectors shall include labor, peasant, fisherfolk, urban poor, indigenous cultural
communities, elderly, handicapped, women, youth, veterans, overseas workers, and professionals."56The sectors mentioned in Section 5 are not all
necessarily "marginalized and underrepresented." For sure, "professionals" are not by definition "marginalized and underrepresented," not even the
elderly, women, and the youth. However, professionals, the elderly, women, and the youth may "lack well-defined political constituencies," and can thus
organize themselves into sectoral parties in advocacy of the special interests and concerns of their respective sectors.
Section 6 of R.A. No. 7941 provides another compelling reason for holding that the law does not require national or regional parties, as well as certain
sectoral parties in Section 5 of R.A. No. 7941, to represent the "marginalized and underrepresented." Section 6 provides the grounds for the COMELEC to
refuse or cancel the registration of parties or organizations after due notice and hearing.
Section 6. Refusal and/or Cancellation of Registration. — The COMELEC may, motu proprio or upon verified complaint of any interested party, refuse or
cancel, after due notice and hearing, the registration of any national, regional or sectoral party, organization or coalition on any of the following grounds:
(1) It is a religious sect or denomination, organization or association organized for religious purposes;
(2) It advocates violence or unlawful means to seek its goal;
(3) It is a foreign party or organization;
(4) It is receiving support from any foreign government, foreign political party, foundation, organization, whether directly or through any of its
officers or members or indirectly through third parties for partisan election purposes;
(5) It violates or fails to comply with laws, rules or regulations relating to elections;
(6) It declares untruthful statements in its petition;
(7) It has ceased to exist for at least one (1) year; or
(8) It fails to participate in the last two (2) preceding elections or fails to obtain at least two per centum (2%) of the votes cast under the party-list
system in the two (2) preceding elections for the constituency in which it has registered.
None of the 8 grounds to refuse or cancel registration refers to non-representation of the "marginalized and underrepresented."
The phrase "marginalized and underrepresented" appears only once in R.A. No. 7941, in Section 2 on Declaration of Policy.57 Section 2 seeks "to promote
proportional representation in the election of representatives to the House of Representatives through the party-list system," which will enable Filipinos
belonging to the"marginalized and underrepresented sectors, organizations and parties, and who lack well-defined political constituencies," to become
members of the House of Representatives. While the policy declaration in Section 2 of R.A. No. 7941 broadly refers to "marginalized and underrepresented
sectors, organizations and parties," the specific implementing provisions of R.A. No. 7941 do not define or require that the sectors, organizations or parties
must be "marginalized and underrepresented." On the contrary, to even interpret that all the sectors mentioned in Section 5 are "marginalized and
underrepresented" would lead to absurdities.
How then should we harmonize the broad policy declaration in Section 2 of R.A. No. 7941 with its specific implementing provisions, bearing in mind the
applicable provisions of the 1987 Constitution on the matter?
The phrase "marginalized and underrepresented" should refer only to the sectors in Section 5 that are,by their nature, economically "marginalized and
underrepresented." These sectors are: labor, peasant, fisherfolk, urban poor, indigenous cultural communities, handicapped, veterans, overseas workers,
and other similar sectors. For these sectors, a majority of the members of the sectoral party must belong to the "marginalized and underrepresented."
The nominees of the sectoral party either must belong to the sector, or must have a track record of advocacy for the sector represented. Belonging to the
"marginalized and underrepresented" sector does not mean one must "wallow in poverty, destitution or infirmity." It is sufficient that one, or his or her

45
sector, is below the middle class. More specifically, the economically "marginalized and underrepresented" are those who fall in the low income group as
classified by the National Statistical Coordination Board.58
The recognition that national and regional parties, as well as sectoral parties of professionals, the elderly, women and the youth, need not be "marginalized
and underrepresented" will allow small ideology-based and cause-oriented parties who lack "well-defined political constituencies" a chance to win seats in
the House of Representatives. On the other hand, limiting to the "marginalized and underrepresented" the sectoral parties for labor, peasant, fisherfolk,
urban poor, indigenous cultural communities, handicapped, veterans, overseas workers, and other sectors that by their nature are economically at the
margins of society, will give the "marginalized and underrepresented" an opportunity to likewise win seats in the House of Representatives.
This interpretation will harmonize the 1987 Constitution and R.A. No. 7941 and will give rise to a multi-party system where those "marginalized and
underrepresented," both in economic and ideological status, will have the opportunity to send their own members to the House of Representatives. This
interpretation will also make the party-list system honest and transparent, eliminating the need for relatively well-off party-list representatives to
masquerade as "wallowing in poverty, destitution and infirmity," even as they attend sessions in Congress riding in SUVs.
The major political parties are those that field candidates in the legislative district elections. Major political parties cannot participate in the party-list
elections since they neither lack "well-defined political constituencies" nor represent "marginalized and underrepresented" sectors. Thus, the national or
regional parties under the party-list system are necessarily those that do not belong to major political parties. This automatically reserves the national
and regional parties under the party-list system to those who "lack well-defined political constituencies," giving them the opportunity to have members in
the House of Representatives.
To recall, Ang Bagong Bayani expressly declared, in its second guideline for the accreditation of parties under the party-list system, that "while even major
political parties are expressly allowed by RA 7941 and the Constitution to participate in the party-list system, they must comply with the declared statutory
policy of enabling ‘Filipino citizens belonging to marginalized and underrepresented sectors xxx to be elected to the House of Representatives.’ "However,
the requirement in Ang Bagong Bayani, in its second guideline, that "the political party xxx must represent the marginalized and underrepresented,"
automatically disqualified major political parties from participating in the party-list system. This inherent inconsistency in Ang Bagong Bayani has been
compounded by the COMELEC’s refusal to register sectoral wings officially organized by major political parties. BANAT merely formalized the prevailing
practice when it expressly prohibited major political parties from participating in the party-list system, even through their sectoral wings.
Section 11 of R.A. No. 7941 expressly prohibited the "first five (5) major political parties on the basis of party representation in the House of
Representatives at the start of the Tenth Congress" from participating in the May 1988 party-list elections.59 Thus, major political parties can participate in
subsequent party-list elections since the prohibition is expressly limited only to the 1988 party-list elections. However, major political parties should
participate in party-list elections only through their sectoral wings. The participation of major political parties through their sectoral wings, a majority of
whose members are "marginalized and underrepresented" or lacking in "well-defined political constituencies," will facilitate the entry of the "marginalized
and underrepresented" and those who "lack well-defined political constituencies" as members of the House of Representatives.
The 1987 Constitution and R.A. No. 7941 allow major political parties to participate in party-list elections so as to encourage them to work assiduously in
extending their constituencies to the "marginalized and underrepresented" and to those who "lack well-defined political constituencies." The participation
of major political parties in party-list elections must be geared towards the entry, as members of the House of Representatives, of the "marginalized and
underrepresented" and those who "lack well-defined political constituencies," giving them a voice in law-making. Thus,to participate in party-list elections, a
major political party that fields candidates in the legislative district elections must organize a sectoral wing, like a labor, peasant, fisherfolk, urban poor,
professional, women or youth wing, that can register under the party-list system.
Such sectoral wing of a major political party must have its own constitution, by-laws, platform or program of government, officers and members, a majority
of whom must belong to the sector represented. The sectoral wing is in itself an independent sectoral party, and is linked to a major political party through
a coalition. This linkage is allowed by Section 3 of R.A. No. 7941, which provides that "component parties or organizations of a coalition may participate
independently (in party-list elections) provided the coalition of which they form part does not participate in the party-list system."
Section 9 of R.A. No. 7941 prescribes the qualifications of party-list nominees. This provision prescribes a special qualification only for the nominee from the
youth sector.
Section 9. Qualifications of Party-List Nominees. No person shall be nominated as party-list representative unless he is a natural-born citizen of the
Philippines, a registered voter, a resident of the Philippines for a period of not less than one (1) year immediately preceding the day of the election, able to
read and write, a bona fide member of the party or organization which he seeks to represent for at least ninety (90) days preceding the day of the election,
and is at least twenty-five (25) years of age on the day of the election.
In case of a nominee of the youth sector, he must at least be twenty-five (25) but not more than thirty (30) years of age on the day of the election.
Any youth sectoral representative who attains the age of thirty (30) during his term shall be allowed to continue in office until the expiration of his
term.1âwphi1
A party-list nominee must be a bona fide member of the party or organization which he or she seeks to represent.In the case of sectoral parties, to be a
bona fide party-list nominee one must either belong to the sector represented, or have a track record of advocacy for such sector.
In disqualifying petitioners, the COMELEC used the criteria prescribed in Ang Bagong Bayani and BANAT. Ang Bagong Bayani laid down the guidelines for
qualifying those who desire to participate in the party-list system:
First, the political party, sector, organization or coalition must represent the marginalized and underrepresented groups identified in Section 5 of RA
7941. x x x
Second, while even major political parties are expressly allowed by RA 7941 and the Constitution to participate in the party-list system, they must comply
with the declared statutory policy of enabling "Filipino citizens belonging to marginalized and underrepresented sectors x x x to be elected to the House of
Representatives." x x x.
xxxx
Third, x x x the religious sector may not be represented in the party-list system. x x x.
xxxx
Fourth, a party or an organization must not be disqualified under Section 6 of RA 7941, which enumerates the grounds for disqualification as follows:
"(1) It is a religious sect or denomination, organization or association, organized for religious purposes;
(2) It advocates violence or unlawful means to seek its goal;
(3) It is a foreign party or organization;
(4) It is receiving support from any foreign government, foreign political party, foundation, organization, whether directly or through any of its
officers or members or indirectly through third parties for partisan election purposes;
46
 (5) It violates or fails to comply with laws, rules or regulations relating to elections;
(6) It declares untruthful statements in its petition;
(7) It has ceased to exist for at least one (1) year; or
(8) It fails to participate in the last two (2) preceding elections or fails to obtain at least two per centum (2%) of the votes cast under the party-list
system in the two (2) preceding elections for the constituency in which it has registered."
Fifth, the party or organization must not be an adjunct of, or a project organized or an entity funded or assisted by, the government. x x x.
xxxx
Sixth, the party must not only comply with the requirements of the law; its nominees must likewise do so. Section 9 of RA 7941 reads as follows:
"SEC 9. Qualifications of Party-List Nominees. - No person shall be nominated as party-list representative unless he is a natural-born citizen of the
Philippines, a registered voter, a resident of the Philippines for a period of not less than one (1)year immediately preceding the day of the election, able to
read and write, a bona fide member of the party or organization which he seeks to represent for at least ninety (90) days preceding the day of the election,
and is at least twenty-five (25) years of age on the day of the election.
In case of a nominee of the youth sector, he must at least be twenty-five (25) but not more than thirty (30) years of age on the day of the election. Any
youth sectoral representative who attains the age of thirty (30) during his term shall be allowed to continue in office until the expiration of his term."
Seventh, not only the candidate party or organization must represent marginalized and underrepresented sectors; so also must its nominees. x x x.
Eighth, x x x the nominee must likewise be able to contribute to the formulation and enactment of appropriate legislation that will benefit the nation as a
whole. (Emphasis supplied)
In 2009, by a vote of 8-7 in BANAT, this Court stretched the Ang Bagong Bayani ruling further. In BANAT, the majority officially excluded major political
parties from participating in party-list elections,60 abandoning even the lip-service that Ang Bagong Bayani accorded to the 1987 Constitution and R.A.No.
7941 that major political parties can participate in party-list elections.
The minority in BANAT, however, believed that major political parties can participate in the party-list system through their sectoral wings. The minority
expressed that "[e]xcluding the major political parties in party-list elections is manifestly against the Constitution, the intent of the Constitutional
Commission, and R.A. No. 7941. This Court cannot engage in socio-political engineering and judicially legislate the exclusion of major political parties from
the party-list elections in patent violation of the Constitution and the law."61 The experimentations in socio-political engineering have only resulted in
confusion and absurdity in the party-list system. Such experimentations, in clear contravention of the 1987 Constitution and R.A. No. 7941, must now come
to an end.
We cannot, however, fault the COMELEC for following prevailing jurisprudence in disqualifying petitioners. In following prevailing jurisprudence, the
COMELEC could not have committed grave abuse of discretion. However, for the coming 13 May 2013 party-list elections, we must now impose and
mandate the party-list system actually envisioned and authorized under the 1987 Constitution and R.A. No. 7941. In BANAT, this Court devised a new
formula in the allocation of party-list seats, reversing the COMELEC's allocation which followed the then prevailing formula in Ang Bagong Bayani. In BANAT,
however, the Court did not declare that the COMELEC committed grave abuse of discretion. Similarly, even as we acknowledge here that the COMELEC did
not commit grave abuse of discretion, we declare that it would not be in accord with the 1987 Constitution and R.A. No. 7941 to apply the criteria in Ang
Bagong Bayani and BANAT in determining who are qualified to participate in the coming 13 May 2013 party-list elections. For this purpose, we suspend
our rule62 that a party may appeal to this Court from decisions or orders of the COMELEC only if the COMELEC committed grave abuse of discretion.
Thus, we remand all the present petitions to the COMELEC. In determining who may participate in the coming 13 May 2013 and subsequent party-list
elections, the COMELEC shall adhere to the following parameters:
1. Three different groups may participate in the party-list system: (1) national parties or organizations, (2) regional parties or organizations, and
(3) sectoral parties or organizations.
2. National parties or organizations and regional parties or organizations do not need to organize along sectoral lines and do not need to
represent any "marginalized and underrepresented" sector.
3. Political parties can participate in party-list elections provided they register under the party-list system and do not field candidates in legislative
district elections. A political party, whether major or not, that fields candidates in legislative district elections can participate in party-list elections
only through its sectoral wing that can separately register under the party-list system. The sectoral wing is by itself an independent sectoral party,
and is linked to a political party through a coalition.
4. Sectoral parties or organizations may either be "marginalized and underrepresented" or lacking in "well-defined political constituencies." It is
enough that their principal advocacy pertains to the special interest and concerns of their sector. The sectors that are "marginalized and
underrepresented" include labor, peasant, fisherfolk, urban poor, indigenous cultural communities, handicapped, veterans, and overseas
workers. The sectors that lack "well-defined political constituencies" include professionals, the elderly, women, and the youth.
5. A majority of the members of sectoral parties or organizations that represent the "marginalized and underrepresented" must belong to the
"marginalized and underrepresented" sector they represent. Similarly, a majority of the members of sectoral parties or organizations that lack
"well-defined political constituencies" must belong to the sector they represent. The nominees of sectoral parties or organizations that represent
the "marginalized and underrepresented," or that represent those who lack "well-defined political constituencies," either must belong to their
respective sectors, or must have a track record of advocacy for their respective sectors. The nominees of national and regional parties or
organizations must be bona-fide members of such parties or organizations.
6. National, regional, and sectoral parties or organizations shall not be disqualified if some of their nominees are disqualified, provided that they
have at least one nominee who remains qualified.
The COMELEC excluded from participating in the 13 May 2013 party-list elections those that did not satisfy these two criteria: (1) all national, regional, and
sectoral groups or organizations must represent the "marginalized and underrepresented" sectors, and (2) all nominees must belong to the "marginalized
and underrepresented" sector they represent. Petitioners may have been disqualified by the COMELEC because as political or regional parties they are not
organized along sectoral lines and do not represent the "marginalized and underrepresented." Also, petitioners' nominees who do not belong to the sectors
they represent may have been disqualified, although they may have a track record of advocacy for their sectors. Likewise, nominees of non-sectoral parties
may have been disqualified because they do not belong to any sector. Moreover, a party may have been disqualified because one or more of its nominees
failed to qualify, even if the party has at least one remaining qualified nominee. As discussed above, the disqualification of petitioners, and their nominees,
under such circumstances is contrary to the 1987 Constitution and R.A. No. 7941.
This Court is sworn to uphold the 1987 Constitution, apply its provisions faithfully, and desist from engaging in socio-economic or political experimentations
contrary to what the Constitution has ordained. Judicial power does not include the power to re-write the Constitution. Thus, the present petitions should
47
be remanded to the COMELEC not because the COMELEC committed grave abuse of discretion in disqualifying petitioners, but because petitioners may now
possibly qualify to participate in the coming 13 May 2013 party-list elections under the new parameters prescribed by this Court.
WHEREFORE, all the present 54 petitions are GRANTED. The 13 petitions, which have been granted Status Quo Ante Orders but without mandatory
injunction to include the names of petitioners in the printing of ballots, are remanded to the Commission on Elections only for determination whether
petitioners are qualified to register under the party-list system under the parameters prescribed in this Decision but they shall not participate in the 13 May
2013 part-list elections. The 41 petitions, which have been granted mandatory injunctions to include the names of petitioners in the printing of ballots, are
remanded to the Commission on Elections for determination whether petitioners are qualified to register under the party-list system and to participate in
the 13 May 2013 party-list elections under the parameters prescribed in this Decision. The Commission on Elections may conduct summary evidentiary
hearings for this purpose. This Decision is immediately executory.
SO ORDERED.

48
 EN BANC
 
 
BARANGAY ASSOCIATION FOR                     G.R. No. 179271
NATIONAL  ADVANCEMENT
AND TRANSPARENCY (BANAT),
                                     Petitioner,
 
                  - versus -
 
COMMISSION ON ELECTIONS
(sitting as the National Board of
Canvassers),
                                    Respondent.
 
ARTS BUSINESS AND SCIENCE
PROFESSIONALS,
                                    Intervenor.
 
AANGAT TAYO,
                                   Intervenor.
 
COALITION OF ASSOCIATIONS
OF SENIOR CITIZENS IN THE
PHILIPPINES, INC. (SENIOR
CITIZENS),
                                   Intervenor.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x
BAYAN MUNA, ADVOCACY FOR                 G.R. No. 179295
TEACHER EMPOWERMENT
THROUGH ACTION, COOPERATION         Present:
AND  HARMONY TOWARDS
EDUCATIONAL REFORMS, INC.,                 PUNO, C.J.,
and ABONO,                                                      QUISUMBING,
                                  Petitioners,                           YNARES-SANTIAGO,
                                                                            CARPIO,
                                                                          AUSTRIA-MARTINEZ,
                                                                           CORONA,   
                    - versus -                                        CARPIO MORALES,
                 TINGA,
                 CHICO-NAZARIO,
                 VELASCO, JR.,
              
               NACHURA,
               LEONARDO-DE CASTRO,
               BRION, 
               PERALTA, and
               BERSAMIN, JJ.
 
 
COMMISSION ON ELECTIONS,                 Promulgated:
                                 Respondent.
                         _______________________
 
x---------------------------------------------------x
 
 
DECISION
 
CARPIO, J.:
 
The Case
 

49
          Petitioner in G.R. No. 179271 —  Barangay Association for National Advancement and Transparency (BANAT) — in a petition for certiorari and
mandamus,[1] assails the Resolution[2] promulgated on 3 August 2007 by the Commission on Elections (COMELEC) in NBC No. 07-041 (PL).  The COMELEC’s
resolution in NBC No. 07-041 (PL) approved the recommendation of Atty. Alioden D. Dalaig, Head of the National Board of Canvassers (NBC) Legal Group, to
deny the petition of BANAT for being moot.  BANAT filed before the COMELEC En Banc, acting as NBC, a Petition to Proclaim the Full Number of Party-List
Representatives Provided by the Constitution.
 
          The following are intervenors in G.R. No. 179271:  Arts Business and Science Professionals (ABS), Aangat Tayo (AT), and Coalition of Associations of
Senior Citizens in the Philippines, Inc. (Senior Citizens).
 
          Petitioners in G.R. No. 179295 — Bayan Muna, Abono, and Advocacy for Teacher Empowerment Through Action, Cooperation and Harmony Towards
Educational Reforms (A Teacher) — in a petition for certiorari with mandamus and prohibition,[3] assails NBC Resolution No. 07-60[4] promulgated on 9 July
2007.  NBC No. 07-60 made a partial proclamation of parties, organizations and coalitions that obtained at least two percent of the total votes cast under
the Party-List System.  The COMELEC announced that, upon completion of the canvass of the party-list results, it would determine the total number of seats
of each winning party, organization, or coalition in accordance with Veterans Federation Party v. COMELEC[5]    (Veterans).
 
          Estrella DL Santos, in her capacity as President and First Nominee of the Veterans Freedom Party, filed a motion to intervene in both G.R. Nos. 179271
and 179295.
 
The Facts
         
          The 14 May 2007 elections included the elections for the party-list representatives.  The COMELEC counted 15,950,900 votes cast for 93 parties under
the Party-List System.[6]
          On 27 June 2002, BANAT filed a Petition to Proclaim the Full Number of Party-List Representatives Provided by the Constitution, docketed as NBC No.
07-041 (PL) before the NBC.    BANAT filed its petition because “[t]he Chairman and the Members of the [COMELEC] have recently been quoted in the
national papers that the [COMELEC] is duty bound to and shall implement the Veterans ruling, that is, would apply the Panganiban formula in allocating
party-list seats.”[7]  There were no intervenors in BANAT’s petition before the NBC.  BANAT filed a memorandum on 19 July 2007. 
         
          On 9 July 2007, the COMELEC, sitting as the NBC, promulgated NBC Resolution No. 07-60.  NBC Resolution No. 07-60 proclaimed thirteen (13) parties
as winners in the party-list elections, namely: Buhay Hayaan Yumabong (BUHAY), Bayan Muna, Citizens’ Battle Against Corruption (CIBAC), Gabriela’s
Women Party (Gabriela), Association of Philippine Electric Cooperatives (APEC), A Teacher, Akbayan! Citizen’s Action Party (AKBAYAN), Alagad, Luzon
Farmers Party (BUTIL), Cooperative-Natco Network Party (COOP-NATCCO), Anak Pawis, Alliance of Rural Concerns (ARC), and Abono.  We quote NBC
Resolution No. 07-60 in its entirety below:
 
            WHEREAS, the Commission on Elections sitting en banc as National Board of Canvassers, thru its Sub-Committee for Party-List, as
of 03 July 2007, had officially canvassed, in open and public proceedings, a total of fifteen million two hundred eighty three thousand
six hundred fifty-nine (15,283,659) votes under the Party-List System of Representation, in connection with the National and Local
Elections conducted last 14 May 2007;
           
            WHEREAS, the study conducted by the Legal and Tabulation Groups of the National Board of Canvassers reveals that the
projected/maximum total party-list votes cannot go any higher than sixteen million seven hundred twenty three thousand one
hundred twenty-one (16,723,121) votes given the following statistical data:
 
            Projected/Maximum Party-List Votes for May 2007 Elections
 
i.  Total party-list votes already canvassed/tabulated 15,283,659
ii. Total party-list votes remaining uncanvassed/ untabulated (i.e. canvass  
deferred) 1,337,032
iii. Maximum party-list votes (based on 100% outcome) from areas not yet  
submitted for canvass (Bogo, Cebu; Bais City; Pantar, Lanao del Norte; and  
Pagalungan, Maguindanao)  
102,430
Maximum Total Party-List Votes 16,723,121
 
            WHEREAS, Section 11 of Republic Act No. 7941 (Party-List System Act) provides in part:
 
            The parties, organizations, and coalitions receiving at least two percent (2%) of the total votes cast for the
party-list system shall be entitled to one seat each: provided, that those garnering more than two percent (2%) of
the votes shall be entitled to additional seats in proportion to their total number of votes: provided, finally, that
each party, organization, or coalition shall be entitled to not more than three (3) seats.
           
            WHEREAS, for the 2007 Elections, based on the above projected total of party-list votes, the presumptive two percent (2%)
threshold can be pegged at three hundred thirty four thousand four hundred sixty-two (334,462) votes;
           

50
            WHEREAS, the Supreme Court, in Citizen’s Battle Against Corruption (CIBAC) versus COMELEC, reiterated its ruling in  Veterans
Federation Party versus COMELEC  adopting a formula for the additional seats of each party, organization or coalition receving more
than the required two percent (2%) votes, stating that the same shall be determined only after all party-list ballots have been
completely canvassed;
 
            WHEREAS, the parties, organizations, and coalitions that have thus far garnered at least three hundred thirty four thousand
four hundred sixty-two (334,462) votes are as follows:
 
RANK PARTY/ORGANIZATION/ VOTES
COALITION RECEIVED
1 BUHAY                   1,163,218

2 BAYAN MUNA                      972,730

3 CIBAC                      760,260
4 GABRIELA                      610,451
5 APEC                      538,971
6 A TEACHER                      476,036
7 AKBAYAN                      470,872
8 ALAGAD                      423,076
9 BUTIL                      405,052
10 COOP-NATCO                      390,029
11 BATAS                      386,361
12 ANAK PAWIS                      376,036
13 ARC                      338,194
14 ABONO                      337,046
 
            WHEREAS, except for Bagong Alyansang Tagapagtaguyod ng Adhikaing Sambayanan (BATAS), against which an URGENT
PETITION FOR CANCELLATION/REMOVAL OF REGISTRATION AND DISQUALIFICATION OF PARTY-LIST NOMINEE (With Prayer for the
Issuance of Restraining Order) has been filed before the Commission, docketed as SPC No. 07-250, all the parties, organizations and
coalitions included in the aforementioned list are therefore entitled to at least one seat under the party-list system of representation in
the meantime.
 
            NOW, THEREFORE,  by virtue of the powers vested in it by the Constitution, the Omnibus Election Code, Executive Order No.
144, Republic Act Nos. 6646, 7166, 7941, and other election laws, the Commission on Elections, sitting en banc as the National Board of
Canvassers, hereby RESOLVES to PARTIALLY PROCLAIM, subject to certain conditions set forth below, the following parties,
organizations and coalitions participating under the Party-List System:
 
1 Buhay Hayaan Yumabong BUHAY
2 Bayan Muna BAYAN MUNA
3 Citizens Battle Against Corruption CIBAC
4 Gabriela Women’s Party GABRIELA
5 Association of Philippine Electric Cooperatives APEC
6 Advocacy for Teacher Empowerment Through Action, A TEACHER
Cooperation and Harmony Towards Educational Reforms, Inc.
7 Akbayan! Citizen’s Action Party AKBAYAN
8 Alagad ALAGAD
9 Luzon Farmers Party BUTIL
10 Cooperative-Natco Network Party COOP-NATCCO
11 Anak Pawis ANAKPAWIS
12 Alliance of Rural Concerns ARC

51
 13 Abono ABONO
 
            This is without prejudice to the proclamation of other parties, organizations, or coalitions which may later on be established to
have obtained at least two percent (2%) of the total actual votes cast under the Party-List System.
 
            The total number of seats of each winning party, organization or coalition shall be determined pursuant to Veterans Federation
Party versus COMELEC  formula upon completion of the canvass of the party-list results.
 
            The proclamation of Bagong Alyansang Tagapagtaguyod ng Adhikaing Sambayanan (BATAS) is hereby deferred until final
resolution of SPC No. 07-250, in order not to render the proceedings therein moot and academic.
 
            Finally, all proclamation of the nominees of concerned parties, organizations and coalitions with pending disputes shall likewise
be held in abeyance until final resolution of their respective cases.
 
            Let the Clerk of the Commission implement this Resolution, furnishing a copy thereof to the Speaker of the House of
Representatives of the Philippines.
 
            SO ORDERED.[8] (Emphasis in the original)
 
 
          Pursuant to NBC Resolution No. 07-60, the COMELEC, acting as NBC, promulgated NBC Resolution No. 07-72, which declared the additional seats
allocated to the appropriate parties.  We quote from the COMELEC’s interpretation of the Veteransformula as found in NBC Resolution No. 07-72:
 
 
            WHEREAS, on July 9, 2007, the Commission on Elections sitting en banc as the National Board of Canvassers proclaimed thirteen
(13) qualified parties, organization[s] and coalitions based on the presumptive two percent (2%) threshold of 334,462 votes from the
projected maximum total number of party-list votes of 16,723,121, and were thus given one (1) guaranteed party-list seat each;
           
            WHEREAS, per Report of the Tabulation Group and Supervisory Committee of the National Board of Canvassers, the projected
maximum total party-list votes, as of July 11, 2007, based on the votes actually canvassed, votes canvassed but not included in Report
No. 29, votes received but uncanvassed, and maximum votes expected for Pantar, Lanao del Norte, is 16,261,369; and that the
projected maximum total votes for the thirteen (13) qualified parties, organizations and coalition[s] are as follows:
 
  Party-List Projected total number of votes
1 BUHAY 1,178,747
2 BAYAN MUNA 977,476
3 CIBAC 755,964
4 GABRIELA 621,718
5 APEC 622,489
6 A TEACHER 492,369
7 AKBAYAN 462,674
8 ALAGAD 423,190
9 BUTIL 409,298
10 COOP-NATCO 412,920
11 ANAKPAWIS 370,165
12 ARC 375,846
13 ABONO 340,151
 
            WHEREAS, based on the above Report, Buhay Hayaan Yumabong (Buhay) obtained the highest number of votes among the
thirteen (13) qualified parties, organizations and coalitions, making it the “first party” in accordance with Veterans Federation Party
versus COMELEC, reiterated in Citizen’s Battle Against Corruption (CIBAC) versus COMELEC;
           
            WHEREAS,  qualified parties, organizations and coalitions participating under the party-list system of representation that have
obtained one guaranteed (1) seat may be entitled to an additional seat or seats based on the formula prescribed by the Supreme Court
in Veterans;
           

52
            WHEREAS, in determining the additional seats for the “first party”, the correct formula as expressed in Veterans, is:
 
          Number of votes of first party             Proportion of votes of first
          - - - - - - - - - - - - - - - - - - - - -      =     party relative to total votes for
          Total votes for party-list system          party-list system
 
wherein the proportion of votes received by the first party (without rounding off) shall entitle it to additional seats:
 
Proportion of votes received Additional seats
by the first party
Equal to or at least 6% Two (2) additional seats
Equal to or greater than 4% but less than 6% One (1) additional seat
Less than 4% No additional seat
 
            WHEREAS, applying the above formula, Buhay obtained the following percentage:
 
                         1,178,747
                        - - - - - - - -     = 0.07248 or 7.2%
                        16,261,369
 
which entitles it to two (2) additional seats.
 
            WHEREAS, in determining the additional seats for the other qualified parties, organizations and coalitions, the correct formula as
expressed in Veterans and reiterated in CIBAC is, as follows:
 
                                                No. of votes of
                                                concerned party                No. of additional
  Additional seats for    =        -------------------            x    seats allocated to
   a concerned party                 No. of votes of                        first party
                                                     first party
 
            WHEREAS, applying the above formula, the results are as follows:
 
Party List Percentage Additional Seat
BAYAN MUNA 1.65 1
CIBAC 1.28 1
GABRIELA 1.05 1
APEC 1.05 1
A TEACHER 0.83 0
AKBAYAN 0.78 0
ALAGAD 0.71 0
BUTIL 0.69 0
COOP-NATCO 0.69 0
ANAKPAWIS 0.62 0
ARC 0.63 0
ABONO 0.57 0
 
                       
            NOW THEREFORE, by virtue of the powers vested in it by the Constitution, Omnibus Election Code, Executive Order No. 144,
Republic Act Nos. 6646, 7166, 7941 and other elections laws, the Commission on Elections en banc sitting as the National Board of
Canvassers, hereby RESOLVED, as it hereby RESOLVES, to proclaim the following parties, organizations or coalitions as entitled to
additional seats, to wit:
 
 

53
 Party List Additional Seats
BUHAY 2
BAYAN MUNA 1
CIBAC 1
GABRIELA 1
APEC 1
 
            This is without prejudice to the proclamation of other parties, organizations or coalitions which may later on be established to
have obtained at least two per cent (2%) of the total votes cast under the party-list system to entitle them to one (1) guaranteed seat,
or to the appropriate percentage of votes to entitle them to one (1) additional seat.
           
            Finally, all proclamation of the nominees of concerned parties, organizations and coalitions with pending disputes shall likewise
be held in abeyance until final resolution of their respective cases.
 
            Let the National Board of Canvassers Secretariat implement this Resolution, furnishing a copy hereof to the Speaker of the
House of Representatives of the Philippines.
 
            SO ORDERED.[9]
         
 
          Acting on BANAT’s petition, the NBC promulgated NBC Resolution No. 07-88 on 3 August 2007, which reads as follows:
 
 
            This pertains to the Petition to Proclaim the Full Number of Party-List Representatives Provided by the Constitution filed by the
Barangay Association for National Advancement and Transparency (BANAT).
 
            Acting on the foregoing Petition of the Barangay Association for National Advancement and Transparency (BANAT) party-list,
Atty. Alioden D. Dalaig, Head, National Board of Canvassers Legal Group submitted his comments/observations and recommendation
thereon [NBC 07-041 (PL)], which reads:
 
COMMENTS / OBSERVATIONS:
 
Petitioner Barangay Association for National Advancement and Transparency (BANAT), in its Petition to Proclaim
the Full Number of Party-List Representatives Provided by the Constitution prayed for the following reliefs, to wit:
 
1.          That the full number -- twenty percent (20%) -- of Party-List representatives as mandated by Section 5,
Article VI of the Constitution shall be proclaimed.
 
2.          Paragraph (b), Section 11 of RA 7941 which prescribes the 2% threshold votes, should be harmonized with
Section 5, Article VI of the Constitution and with Section 12 of the same RA 7941 in that it should be applicable
only to the first party-list representative seats to be allotted on the basis of their initial/first ranking.
 
3.          The 3-seat limit prescribed by RA 7941 shall be applied; and
 
4.          Initially, all party-list groups shall be given the number of seats corresponding to every 2% of the votes they
received and the additional seats shall be allocated in accordance with Section 12 of RA 7941, that is, in proportion
to the percentage of votes obtained by each party-list group in relation to the total nationwide votes cast in the
party-list election, after deducting the corresponding votes of those which were allotted seats under the 2%
threshold rule.  In fine, the formula/procedure prescribed in the “ALLOCATION OF PARTY-LIST SEATS, ANNEX “A” of
COMELEC RESOLUTION 2847 dated 25 June 1996, shall be used for [the] purpose of determining how many seats
shall be proclaimed, which party-list groups are entitled to representative seats and how many of their nominees
shall seat [sic].
 
5.          In the alternative, to declare as unconstitutional Section 11 of Republic Act No. 7941 and that the
procedure in allocating seats for party-list representative prescribed by Section 12 of RA 7941 shall be followed.
 
RECOMMENDATION:
 
The    petition of BANAT is now moot and academic.
 
The Commission En Banc in NBC Resolution              No. 07-60 promulgated July 9, 2007 re “In the Matter of the
Canvass of Votes and Partial Proclamation of the Parties, Organizations and Coalitions Participating Under the
54
 Party-List System During the May 14, 2007 National and Local Elections” resolved among others that the total
number of seats of each winning party, organization or coalition shall be determined pursuant to the  Veterans
Federation Party versus  COMELEC formula upon completion of the canvass of the party-list results.”
           
            WHEREFORE, premises considered, the National Board of Canvassers RESOLVED, as it hereby RESOLVES, to approve and adopt
the recommendation of Atty. Alioden D. Dalaig, Head, NBC Legal Group, to DENY the herein petition of BANAT for being moot and
academic. 
           
            Let the Supervisory Committee implement this resolution.
           
            SO ORDERED.[10]
 
 
          BANAT filed a petition for certiorari and mandamus assailing the ruling in NBC Resolution No. 07-88.  BANAT did not file a motion for reconsideration
of NBC Resolution No. 07-88.
 
          On 9 July 2007, Bayan Muna, Abono, and A Teacher asked the COMELEC, acting as NBC, to reconsider its decision to use the Veterans formula as
stated in its NBC Resolution No. 07-60 because the Veterans  formula is violative of the Constitution and of Republic Act No. 7941 (R.A. No. 7941).  On the
same day, the COMELEC denied reconsideration during the proceedings of the NBC.[11]
 
          Aside from the thirteen party-list organizations proclaimed on 9 July 2007, the COMELEC proclaimed three other party-list organizations as qualified
parties entitled to one guaranteed seat under the Party-List System:  Agricultural Sector Alliance of the Philippines, Inc. (AGAP),[12] Anak Mindanao (AMIN),
[13]
 and An Waray.[14]  Per the certification[15] by COMELEC, the following party-list organizations have been proclaimed as of 19 May 2008:
 
  Party-List No. of Seat(s)
1.1 Buhay 3
1.2 Bayan Muna 2
1.3 CIBAC 2
1.4 Gabriela 2
1.5 APEC 2
1.6 A Teacher 1
1.7 Akbayan 1
1.8 Alagad 1
1.9 Butil 1
1.10 Coop-Natco [sic] 1
1.11 Anak Pawis 1
1.12 ARC 1
1.13 Abono 1
1.14 AGAP 1
1.15 AMIN 1
 
The proclamation of Bagong Alyansang Tagapagtaguyod ng Adhikaing Sambayanan (BATAS), against which an Urgent Petition for Cancellation/Removal of
Registration and Disqualification of Party-list Nominee (with Prayer for the Issuance of Restraining Order) has been filed before the COMELEC, was deferred
pending final resolution of SPC        No. 07-250.
 
Issues
 
          BANAT brought the following issues before this Court:
 
1.         Is the twenty percent allocation for party-list representatives            provided in Section 5(2), Article VI of the Constitution
mandatory      or is it merely a ceiling?
 
2.         Is the three-seat limit provided in Section 11(b) of RA 7941            constitutional?
 
3.         Is the two percent threshold and “qualifier” votes prescribed by the            same Section 11(b) of RA 7941 constitutional?
 
4.         How shall the party-list representatives be allocated?[16]

55
         
 
          Bayan Muna, A Teacher, and Abono, on the other hand, raised the following issues in their petition:
 
I.          Respondent Commission on Elections, acting as National Board of Canvassers, committed grave abuse of discretion amounting
to          lack or excess of jurisdiction when it promulgated NBC Resolution       No. 07-60 to implement the First-Party Rule in the
allocation of      seats to qualified party-list organizations as said rule:
 
            A.        Violates the constitutional principle of proportional                          representation.
 
            B.        Violates the provisions of RA 7941 particularly:
 
                        1.         The 2-4-6 Formula used by the First Party Rule in                             allocating additional seats for the “First
Party”                          violates the principle of proportional representation                          under RA 7941.
 
                        2.         The  use of two formulas in the allocation of                                     additional seats, one for the “First Party”
and                            another for the qualifying parties, violates Section                                    11(b) of RA 7941.
 
                        3.         The proportional relationships under the First Party                           Rule are different from those required under
RA                               7941;
 
            C.        Violates the “Four Inviolable Parameters” of the Philippine              party-list system as provided for under the same case
of             Veterans Federation Party, et al. v. COMELEC.
 
II.        Presuming that the Commission on Elections did not commit grave             abuse of discretion amounting to lack or excess of
jurisdiction   when it implemented the First-Party Rule in the allocation of seats       to qualified party-list organizations, the same being
merely in           consonance with the ruling in Veterans Federations Party, et al. v.                    COMELEC, the instant Petition is a justiciable
case as the issues    involved herein are constitutional in nature, involving the correct            interpretation and implementation of RA
7941, and are of   transcendental importance to our nation.[17]
 
          Considering the allegations in the petitions and the comments of the parties in these cases, we defined the following issues in our advisory for the oral
arguments set on 22 April 2008:
 
1.         Is the twenty percent allocation for party-list representatives in        Section 5(2), Article VI of the Constitution mandatory or
merely a        ceiling?
 
2.         Is the three-seat limit in Section 11(b) of RA 7941 constitutional?
 
3.         Is the two percent threshold prescribed in Section 11(b) of RA        7941 to qualify for one seat constitutional?
 
4.         How shall the party-list representative seats be allocated?
 
5.         Does the Constitution prohibit the major political parties from         participating in the party-list elections?  If not, can the
major    political parties be barred from participating in the party-list             elections?[18]
 
 
The Ruling of the Court
 
          The petitions have partial merit.  We maintain that a Philippine-style party-list election has at least four inviolable parameters as clearly stated
in  Veterans.  For easy reference, these are:
 
            First, the twenty percent allocation — the combined number of all  party-list congressmen shall not exceed twenty percent of
the total membership of the House of Representatives, including those elected under the party list;
 
            Second,  the two percent threshold — only those parties garnering a minimum of two percent of the total valid votes cast for the
party-list system are “qualified” to have a seat in the House of Representatives;
 
            Third, the three-seat limit — each qualified party, regardless of the number of votes it actually obtained, is entitled to a
maximum of three seats; that is, one “qualifying” and two additional seats;
 
            Fourth, proportional representation— the additional seats which a qualified party is entitled to shall be computed “in proportion
to their total number of votes.”[19]
 
 
However, because the formula in Veterans  has flaws in its mathematical interpretation of the term “proportional representation,” this Court is compelled
to revisit the formula for the allocation of additional seats to party-list organizations.
56
 
Number of Party-List Representatives:
The Formula Mandated by the Constitution
 
 
          Section 5, Article VI of the Constitution provides:
 
            Section 5. (1) The House of Representatives shall be composed of not more than two hundred and fifty members, unless
otherwise fixed by law, who shall be elected from legislative districts apportioned among the provinces, cities, and the Metropolitan
Manila area in accordance with the number of their respective inhabitants, and on the basis of a uniform and progressive ratio, and
those who, as provided by law, shall be elected through a party-list system of registered national, regional, and sectoral parties or
organizations.
 
            (2)  The party-list representatives shall constitute twenty per centum of the total number of representatives including those
under the party-list.  For three consecutive terms after the ratification of this Constitution, one-half of the seats allocated to party-list
representatives shall be filled, as provided by law, by selection or election from the labor, peasant, urban poor, indigenous cultural
communities, women, youth, and such other sectors as may be provided by law, except the religious sector.
 
 
          The first paragraph of Section 11 of R.A. No. 7941 reads:
 
            Section 11.  Number of Party-List Representatives. — The party-list representatives shall constitute twenty per centum (20%) of
the total number of the members of the House of Representatives including those under the party-list.
            x x x
 
 
          Section 5(1), Article VI of the Constitution states that the “House of Representatives shall be composed of not more than two hundred and fifty
members, unless otherwise fixed by law.”  The House of Representatives shall be composed of district representatives and party-list representatives.  The
Constitution allows the legislature to modify the number of the members of the House of Representatives.
         
          Section 5(2), Article VI of the Constitution, on the other hand, states the ratio of party-list representatives to the total number of representatives.   We
compute the number of seats available to party-list representatives from the number of legislative districts. On this point, we do not deviate from the first
formula in Veterans, thus:
 
Number of seats available to   Number of seats available to
legislative districts x .20  = party-list representatives
.80    
 
 
This formula allows for the corresponding increase in the number of seats available for party-list representatives whenever a legislative district is created by
law. Since the 14th Congress of the Philippines has 220 district representatives, there are 55 seats available to party-list representatives.
 
220 x .20  = 55
.80    
 
          After prescribing the ratio of the number of party-list representatives to the total number of representatives, the Constitution left the manner of
allocating the seats available to party-list representatives to the wisdom of the legislature.
 
Allocation of Seats for Party-List Representatives:
The Statutory Limits Presented by the Two Percent Threshold
and the Three-Seat Cap
 
 
          All parties agree on the formula to determine the maximum number of seats reserved under the Party-List System, as well as on the formula to
determine the guaranteed seats to party-list candidates garnering at least two-percent of the total party-list votes. However, there are numerous
interpretations of the provisions of R.A. No. 7941 on the allocation of “additional seats” under the Party-List System.  Veterans produced the First Party
Rule,[20] and Justice Vicente V. Mendoza’s dissent in Veterans presented Germany’s Niemeyer formula[21] as an alternative. 
 
          The Constitution left to Congress the determination of the manner of   allocating the seats for party-list representatives. Congress enacted R.A.    No.
7941,  paragraphs (a) and (b) of Section 11 and Section 12 of which provide:
 
            Section 11.  Number of Party-List Representatives. — x x x
 
            In determining the allocation of seats for the second vote,[22] the following procedure shall be observed:
57
  
(a)        The parties, organizations, and coalitions shall be ranked from the highest to the lowest based on the number of votes they
garnered during the elections.
 
(b)        The parties, organizations, and coalitions receiving at least two percent (2%) of the total votes cast for the party-list system shall
be entitled to one seat each: Provided, That those garnering more than two percent (2%) of the votes shall be entitled to additional
seats in proportion to their total number of votes: Provided, finally, That each party, organization, or coalition shall be entitled to not
more than three (3) seats.
 
            Section 12.  Procedure in Allocating Seats for Party-List Representatives. — The COMELEC shall tally all the votes for the parties,
organizations, or coalitions on a nationwide basis, rank them according to the number of votes received and allocate party-list
representatives proportionately according to the percentage of votes obtained by each party, organization, or coalition as against the
total nationwide votes cast for the party-list system. (Emphasis supplied)
 
 
            In G.R. No. 179271, BANAT presents two interpretations through three formulas to allocate party-list representative seats.  
 
          The first interpretation allegedly harmonizes the provisions of Section 11(b) on the 2% requirement with Section 12 of R.A. No. 7941.  BANAT
described this procedure as follows:
 
(a)        The party-list representatives shall constitute twenty percent (20%) of the total Members of the House of Representatives
including those from the party-list groups as prescribed by Section 5, Article VI of the Constitution, Section 11 (1st par.) of RA 7941 and
Comelec Resolution No. 2847 dated 25 June 1996.  Since there are 220 District Representatives in the 14th Congress, there shall be 55
Party-List Representatives.  All seats shall have to be proclaimed.
 
(b)        All party-list groups shall initially be allotted one (1) seat for every two per centum (2%) of the total party-list votes they
obtained; provided, that no party-list groups shall have more than three (3) seats (Section 11, RA 7941).
 
(c)        The remaining seats shall, after deducting the seats obtained by the party-list groups under the immediately preceding
paragraph and after deducting from their total the votes corresponding to those seats, the remaining seats shall be allotted
proportionately to all the party-list groups which have not secured the maximum three (3) seats under the 2% threshold rule, in
accordance with Section 12 of RA 7941.[23]
 
 
Forty-four (44) party-list seats will be awarded under BANAT’s first interpretation.
 
          The second interpretation presented by BANAT assumes that the 2% vote requirement is declared unconstitutional, and apportions the seats for
party-list representatives by following Section 12 of R.A. No. 7941.  BANAT states that the COMELEC:
 
(a)        shall tally all the votes for the parties, organizations, or coalitions     on a nationwide basis;
(b)        rank them according to the number of votes received; and,
(c)        allocate party-list representatives proportionately  according to the percentage of votes obtained by each party, organization
or         coalition as against the total nationwide votes cast for the party-list    system.[24]
 
BANAT used two formulas to obtain the same results: one is based on the proportional percentage of the votes received by each party as against the total
nationwide party-list votes, and the other is “by making the votes of a party-list with a median percentage of votes as the divisor in computing the allocation
of seats.”[25]  Thirty-four (34) party-list seats will be awarded under BANAT’s second interpretation.
 
          In G.R. No. 179295, Bayan Muna, Abono, and A Teacher criticize both the COMELEC’s original 2-4-6 formula and theVeterans formula for
systematically preventing all the party-list seats from being filled up.  They claim that both formulas do not factor in the total number of seats alloted for the
entire Party-List System.    Bayan Muna, Abono, and A Teacher reject the three-seat cap, but accept the 2% threshold.  After determining the qualified
parties, a second percentage is generated by dividing the votes of a qualified party  by the total votes of all qualified parties only.  The number of seats
allocated to a qualified party is computed by multiplying the total party-list seats available with the second percentage.  There will be a first round of seat
allocation, limited to using the whole integers as the equivalent of the number of seats allocated to the concerned party-list.  After all the qualified parties
are given their seats, a second round of seat allocation is  conducted.  The fractions, or remainders, from the whole integers are ranked from highest to
lowest and the remaining seats on the basis of this ranking are allocated until all the seats are filled up.[26] 
 
          We examine what R.A. No. 7941 prescribes to allocate seats for party-list representatives.
 
          Section 11(a) of R.A. No. 7941 prescribes the ranking of the participating parties from the highest to the lowest based on the number of votes they
garnered during the elections. 
 
 
 
Table 1.   Ranking of the participating parties from the highest to the lowest based on the number of votes garnered during the
elections.[27] 
58
 
 
Rank Party Votes Garnered Rank Party Votes Garnered
1 BUHAY 1,169,234 48 KALAHI 88,868
2 BAYAN MUNA 979,039 49 APOI 79,386
3 CIBAC 755,686 50 BP 78,541
4 GABRIELA 621,171 51 AHONBAYAN 78,424
5 APEC 619,657 52 BIGKIS 77,327
6 A TEACHER 490,379 53 PMAP 75,200
7 AKBAYAN 466,112 54 AKAPIN 74,686
8 ALAGAD 423,149 55 PBA 71,544
9 COOP-NATCCO 409,883 56 GRECON 62,220
10 BUTIL 409,160 57 BTM 60,993
11 BATAS 385,810 58 A SMILE 58,717
12 ARC 374,288 59 NELFFI 57,872
13 ANAKPAWIS 370,261 60 AKSA 57,012
14 ABONO 339,990 61 BAGO 55,846
15 AMIN 338,185 62 BANDILA 54,751
16 AGAP 328,724 63 AHON 54,522
17 AN WARAY 321,503 64 ASAHAN MO 51,722
18 YACAP 310,889 65 AGBIAG! 50,837
19 FPJPM 300,923 66 SPI 50,478
20 UNI-MAD 245,382 67 BAHANDI 46,612
21 ABS 235,086 68 ADD 45,624
22 KAKUSA 228,999 69 AMANG 43,062
23 KABATAAN 228,637 70 ABAY PARAK 42,282
24 ABA-AKO 218,818 71 BABAE KA 36,512
25 ALIF 217,822 72 SB 34,835
26 SENIOR CITIZENS 213,058 73 ASAP 34,098
27 AT 197,872 74 PEP 33,938
28 VFP 196,266 75 ABA ILONGGO 33,903
29 ANAD 188,521 76 VENDORS 33,691
30 BANAT 177,028 77 ADD-TRIBAL 32,896
31 ANG KASANGGA 170,531 78 ALMANA 32,255
32 BANTAY 169,801 79 AANGAT KA PILIPINO 29,130
33 ABAKADA 166,747 80 AAPS 26,271
34 1-UTAK 164,980 81 HAPI 25,781
35 TUCP 162,647 82 AAWAS 22,946
36 COCOFED 155,920 83 SM 20,744
37 AGHAM 146,032 84 AG 16,916
38 ANAK 141,817 85 AGING PINOY 16,729

59
 39 ABANSE! PINAY 130,356 86 APO 16,421
40 PM 119,054 87 BIYAYANG BUKID 16,241
41 AVE 110,769 88 ATS 14,161
42 SUARA 110,732 89 UMDJ 9,445
43 ASSALAM 110,440 90 BUKLOD FILIPINA 8,915
44 DIWA 107,021 91 LYPAD 8,471
45 ANC 99,636 92 AA-KASOSYO 8,406
46 SANLAKAS 97,375 93 KASAPI 6,221
47 ABC 90,058   TOTAL 15,950,900
 
 
          The first clause of Section 11(b) of R.A. No. 7941 states that “parties, organizations, and coalitions receiving at least two percent (2%) of the total votes
cast for the party-list system shall be entitled to one seat each.”  This clause guarantees a seat to the two-percenters.  In Table 2 below, we use the first 20
party-list candidates for illustration purposes.  The percentage of votes garnered by each party is arrived at by dividing the number of votes garnered by
each party by 15,950,900, the total number of votes cast for all party-list candidates.
 
Table 2.   The first 20 party-list candidates and their respective percentage of votes garnered over the total votes for the party-list.[28]
 
Votes Garnered over
Votes
Rank Party Total Votes for Party- Guaranteed Seat
Garnered
List, in %
1 BUHAY 1,169,234 7.33% 1
2 BAYAN MUNA 979,039 6.14% 1
3 CIBAC 755,686 4.74% 1
4 GABRIELA 621,171 3.89% 1
5 APEC 619,657 3.88% 1
6 A TEACHER 490,379 3.07% 1
7 AKBAYAN 466,112 2.92% 1
8 ALAGAD 423,149 2.65% 1
9 COOP-NATCCO 409,883 2.57% 1
10 BUTIL 409,160 2.57% 1
[29]
11 BATAS 385,810 2.42% 1
12 ARC 374,288 2.35% 1
13 ANAKPAWIS 370,261 2.32% 1
14 ABONO 339,990 2.13% 1
15 AMIN 338,185 2.12% 1
16 AGAP 328,724 2.06% 1
17 AN WARAY 321,503 2.02% 1
  Total     17
18 YACAP 310,889 1.95% 0
19 FPJPM 300,923 1.89% 0
20 UNI-MAD 245,382 1.54% 0
         
 

60
            From Table 2 above, we see that only 17 party-list candidates received at least 2% from the total number of votes cast for party-list candidates.   The
17 qualified party-list candidates, or the two-percenters, are the party-list candidates that are “entitled to one seat each,” or the guaranteed seat.  In this
first round of seat allocation, we distributed 17 guaranteed seats.
          The second clause of  Section 11(b) of R.A. No. 7941 provides that “those garnering more than two percent (2%) of the votes shall be entitled to
additional seats in proportion to their total number of votes.”  This is where petitioners’ and intervenors’ problem with the formula
in Veterans  lies.  Veterans interprets the clause “in proportion to their total number of votes” to be in proportion to the votes of the first party.  This
interpretation is contrary to the express language of R.A. No. 7941.
 
          We rule that, in computing the allocation of additional seats, the continued operation of the two percent threshold for the distribution of the
additional seats as found in the second clause of  Section 11(b) of R.A. No. 7941 is unconstitutional.  This Court finds that the two percent threshold makes
it mathematically impossible to achieve the maximum number of available party list seats when the number of available party list seats exceeds 50.  The
continued operation of the two percent threshold in the distribution of the additional seats frustrates the attainment of the permissive ceiling that 20% of
the members of the House of Representatives shall consist of party-list representatives.
 
          To illustrate:  There are 55 available party-list seats.  Suppose there are 50 million votes cast for the 100 participants in the party list elections.    A
party that has two percent of the votes cast, or one million votes, gets a guaranteed seat.  Let us further assume that the first 50 parties all get one million
votes.  Only 50 parties get a seat despite the availability of 55 seats.  Because of the operation of the two percent threshold, this situation will repeat itself
even if we increase the available party-list seats to 60 seats and even if we increase the votes cast to 100 million.  Thus, even if the maximum number of
parties get two percent of the votes for every party, it is always impossible for the number of occupied party-list seats to exceed 50 seats as long as the two
percent threshold is present.
 
          We therefore strike down the two percent threshold only in relation to the distribution of the additional seats as found in the second clause of Section
11(b) of R.A. No. 7941.  The two percent threshold presents an unwarranted obstacle to the full implementation of Section 5(2), Article VI of the
Constitution and prevents the attainment of “the broadest possible representation of party, sectoral or group interests in the House of Representatives.”[30]
 
          In determining the allocation of seats for party-list representatives under Section 11 of R.A. No. 7941, the following procedure shall be observed:
 
1.                 The parties, organizations, and coalitions shall be ranked from the highest to the lowest based on the number of votes they garnered during the
elections.
 
2.                 The parties, organizations, and coalitions receiving at least two percent (2%) of the total votes cast for the party-list system shall be entitled to
one guaranteed seat each.
 
3.                 Those garnering sufficient number of votes, according to the ranking in paragraph 1, shall be entitled to additional seats in proportion to their
total number of votes until all the additional seats are allocated.
 
4.                 Each party, organization, or coalition shall be entitled to not more than three (3) seats.
 
          In computing the additional seats, the guaranteed seats shall no longer be included because they have already been allocated, at one seat each, to
every two-percenter.  Thus, the remaining available seats for allocation as “additional seats”  are  the maximum seats reserved under the Party List System
less the guaranteed seats.  Fractional seats are disregarded in the absence of a provision in R.A. No. 7941 allowing for a rounding off of fractional seats.
 
          In declaring the two percent threshold unconstitutional, we do not limit our allocation of additional seats in Table 3 below to the two-percenters.  The
percentage of votes garnered by each party-list candidate is arrived at by dividing the number of votes garnered by each party by 15,950,900, the total
number of votes cast for party-list candidates.  There are two steps in the second round of seat allocation. First, the percentage is multiplied by the
remaining available seats, 38, which is the difference between the 55 maximum seats reserved under the Party-List System and the 17 guaranteed seats of
the two-percenters.  The whole integer of the product of the percentage and of the remaining available seats corresponds to a party’s share in the
remaining available seats. Second, we assign one party-list seat to each of the parties next in rank until all available seats are completely distributed.  We
distributed all of the remaining 38 seats in the second round of seat allocation.  Finally, we apply the three-seat cap to determine the number of seats each
qualified party-list candidate is entitled.  Thus: 
 
 
 
 
 
 
 
Table 3.  Distribution of Available Party-List Seats
 
Rank Party Votes Garnered Votes Guaranteed Seat Additional (B) plus (C), Applying the
Garnered over   Seats in whole three seat
Total Votes for     integers cap
Party List, in %        
         
         

61
  
   
(First Round) (Second
     
  Round)
(A)    
(B)  
(D) (E)
(C)
1 BUHAY 1,169,234 7.33% 1 2.79 3 N.A.
2 BAYAN MUNA 979,039 6.14% 1 2.33 3 N.A.
3 CIBAC 755,686 4.74% 1 1.80 2 N.A.
4 GABRIELA 621,171 3.89% 1 1.48 2 N.A.
5 APEC 619,657 3.88% 1 1.48 2 N.A.
6 A Teacher 490,379 3.07% 1 1.17 2 N.A.
7 AKBAYAN 466,112 2.92% 1 1.11 2 N.A.
8 ALAGAD 423,149 2.65% 1 1.01 2 N.A.
[31]
9 COOP-NATCCO 409,883 2.57% 1 1 2 N.A.
10 BUTIL 409,160 2.57% 1 1 2 N.A.
11 BATAS 385,810 2.42% 1 1 2 N.A.
12 ARC 374,288 2.35% 1 1 2 N.A.
13 ANAKPAWIS 370,261 2.32% 1 1 2 N.A.
14 ABONO 339,990 2.13% 1 1 2 N.A.
15 AMIN 338,185 2.12% 1 1 2 N.A.
16 AGAP 328,724 2.06% 1 1 2 N.A.
17 AN WARAY 321,503 2.02% 1 1 2 N.A.
18 YACAP 310,889 1.95% 0 1 1 N.A.
19 FPJPM 300,923 1.89% 0 1 1 N.A.
20 UNI-MAD 245,382 1.54% 0 1 1 N.A.
21 ABS 235,086 1.47% 0 1 1 N.A.
22 KAKUSA 228,999 1.44% 0 1 1 N.A.
23 KABATAAN 228,637 1.43% 0 1 1 N.A.
24 ABA-AKO 218,818 1.37% 0 1 1 N.A.
25 ALIF 217,822 1.37% 0 1 1 N.A.
26 SENIOR CITIZENS 213,058 1.34% 0 1 1 N.A.
27 AT 197,872 1.24% 0 1 1 N.A.
28 VFP 196,266 1.23% 0 1 1 N.A.
29 ANAD 188,521 1.18% 0 1 1 N.A.
30 BANAT 177,028 1.11% 0 1 1 N.A.
31 ANG KASANGGA 170,531 1.07% 0 1 1 N.A.
32 BANTAY 169,801 1.06% 0 1 1 N.A.
33 ABAKADA 166,747 1.05% 0 1 1 N.A.
34 1-UTAK 164,980 1.03% 0 1 1 N.A.
35 TUCP 162,647 1.02% 0 1 1 N.A.
36 COCOFED 155,920 0.98% 0 1 1 N.A.
Total       17   55  

62
 
 
          Applying the procedure of seat allocation as illustrated in Table 3 above, there are 55 party-list representatives from the 36 winning party-list
organizations.  All 55 available party-list seats are filled.   The additional seats allocated to the parties with sufficient number of votes for one whole seat, in
no case to exceed a total of three seats for each party, are shown in column (D).
 
  Participation of Major Political Parties in Party-List Elections
 
          The Constitutional Commission adopted a multi-party system that allowed all political parties to participate in the party-list elections.   The
deliberations of the Constitutional Commission clearly bear this out, thus:
 
            MR. MONSOD.  Madam President, I just want to say that we suggested or proposed the party list system because we wanted to
open up the political system to a pluralistic society through a multiparty system.    x x x  We are for opening up the system, and we
would like very much for the sectors to be there.  That is why one of the ways to do that is to put a ceiling on the number of
representatives from any single party that can sit within the 50 allocated under the party list system. x x x.
 
xxx
 
            MR. MONSOD.  Madam President, the candidacy for the 198 seats is not limited to political parties.  My question is this: Are we
going to classify for example Christian Democrats and Social Democrats as political parties?  Can they run under the party list concept
or must they be under the district legislation side of it only?
 
            MR. VILLACORTA.  In reply to that query, I think these parties that the Commissioner mentioned can field candidates for the
Senate as well as for the House of Representatives.  Likewise, they can also field sectoral candidates for the 20 percent or 30 percent,
whichever is adopted, of the seats that we are allocating under the party list system.
 
            MR. MONSOD.  In other words, the Christian Democrats can field district candidates and can also participate in the party list
system?
 
            MR. VILLACORTA.  Why not?  When they come to the party list system, they will be fielding only sectoral candidates. 
 
            MR. MONSOD.  May I be clarified on that?  Can UNIDO participate in the party list system?
 
            MR. VILLACORTA.  Yes, why not?  For as long as they field candidates who come from the different marginalized sectors that
we shall designate in this Constitution.
 
            MR. MONSOD.  Suppose Senator Tañada wants to run under BAYAN group and says that he represents the farmers, would he
qualify?
 
            MR. VILLACORTA.  No, Senator Tañada would not qualify.
 
            MR. MONSOD.  But UNIDO can field candidates under the party list system and say Juan dela Cruz is a farmer.  Who would pass
on whether he is a farmer or not?
 
            MR. TADEO.  Kay Commissioner Monsod, gusto ko lamang linawin ito.  Political parties, particularly minority political parties,
are not prohibited to participate in the party list election if they can prove that they are also organized along sectoral lines.
 
            MR. MONSOD.  What the Commissioner is saying is that all political parties can participate because it is precisely the contention
of political parties that they represent the broad base of citizens and that all sectors are represented in them.  Would the
Commissioner agree?
 
            MR. TADEO.  Ang punto lamang namin, pag pinayagan mo ang UNIDO na isang political party, it will dominate the party list at
mawawalang saysay din yung sector.  Lalamunin mismo ng political parties ang party list system.  Gusto ko lamang bigyan ng diin ang
“reserve.” Hindi ito reserve seat sa marginalized sectors.  Kung titingnan natin itong 198 seats, reserved din ito sa political parties. 
 
            MR. MONSOD.  Hindi po reserved iyon kasi anybody can run there.  But my question to Commissioner Villacorta and probably
also to Commissioner Tadeo is that under this system, would UNIDO be banned from running under the party list system?
 
            MR. VILLACORTA.  No, as I said, UNIDO may field sectoral candidates.  On that condition alone, UNIDO may be allowed to
register for the party list system.
 
            MR. MONSOD.  May I inquire from Commissioner Tadeo if he shares that answer?
 
            MR.  TADEO.  The same.
 
            MR.  VILLACORTA.  Puwede po ang UNIDO, pero sa sectoral lines.
63
  
            x x x x
 
            MR.  OPLE.  x x x  In my opinion, this will also create the stimulus for political parties and mass organizations to seek common
ground.  For example, we have the PDP-Laban and the UNIDO.  I see no reason why they should not be able to make common goals
with mass organizations so that the very leadership of these parties can be transformed through the participation of mass
organizations.  And if this is true of the administration parties, this will be true of others like the Partido ng Bayan which is now being
formed.  There is no question that they will be attractive to many mass organizations.  In the opposition parties to which we belong,
there will be a stimulus for us to contact mass organizations so that with their participation, the policies of such parties can be radically
transformed because this amendment will create conditions that will challenge both the mass organizations and the political parties to
come together.  And the party list system is certainly available, although it is open to all the parties.  It is understood that the parties
will enter in the roll of the COMELEC the names of representatives of mass organizations affiliated with them.  So that we may, in time,
develop this excellent system that they have in Europe where labor organizations and cooperatives, for example, distribute themselves
either in the Social Democratic Party and the Christian Democratic Party in Germany, and their very presence there has a transforming
effect upon the philosophies and the leadership of those parties.
 
            It is also a fact well known to all that in the United States, the AFL-CIO always vote with the Democratic Party.   But the
businessmen, most of them, always vote with the Republican Party, meaning that there is no reason at all why political parties and
mass organizations should not combine, reenforce, influence and interact with each other so that the very objectives that we set in this
Constitution for sectoral representation are achieved in a wider, more lasting, and more institutionalized way. Therefore, I support this
[Monsod-Villacorta] amendment.  It installs sectoral representation as a constitutional gift, but at the same time, it challenges the
sector to rise to the majesty of being elected representatives later on through a party list system; and even beyond that, to become
actual political parties capable of contesting political power in the wider constitutional arena for major political parties.
 
            x x x [32] (Emphasis supplied)
          R.A. No. 7941 provided the details for the concepts put forward by the Constitutional Commission.  Section 3 of R.A. No. 7941 reads:
 
                        Definition of Terms. (a) The party-list system is a mechanism of proportional representation in the election of representatives
to the House of Representatives from national, regional and sectoral parties or organizations or coalitions thereof registered with the
Commission on Elections (COMELEC). Component parties or organizations of a coalition may participate independently provided the
coalition of which they form part does not participate in the party-list system.
 
            (b) A party means either a political party or a sectoral party or a coalition of parties.
 
            (c) A political party refers to an organized group of citizens advocating an ideology or platform, principles and policies for the
general conduct of government and which, as the most immediate means of securing their adoption, regularly nominates and supports
certain of its leaders and members as candidates for public office.
 
            It is a national party when its constituency is spread over the geographical territory of at least a majority of the regions. It is a
regional party when its constituency is spread over the geographical territory of at least a majority of the cities and provinces
comprising the region.
 
            (d) A sectoral party refers to an organized group of citizens belonging to any of the sectors enumerated in Section 5 hereof
whose principal advocacy pertains to the special interests and concerns of their sector,
 
            (e) A sectoral organization refers to a group of citizens or a coalition of groups of citizens who share similar physical attributes or
characteristics, employment, interests or concerns.
 
            (f) A coalition refers to an aggrupation of duly registered national, regional, sectoral parties or organizations for political and/or
election purposes.
 
Congress, in enacting R.A. No. 7941, put the three-seat cap to prevent any party from dominating the party-list elections. 
 
            Neither the Constitution nor R.A. No. 7941 prohibits major political parties from participating in the party-list system.  On the contrary, the framers of
the Constitution clearly intended the major political parties to participate in party-list elections through their sectoral wings.  In fact, the  members of the
Constitutional Commission voted down, 19-22, any permanent sectoral seats, and in the alternative the reservation of the party-list system to the sectoral
groups.[33]  In defining a “party” that participates in party-list elections as either “a political party or a sectoral party,”  R.A. No. 7941 also clearly intended
that major political parties will participate in the party-list elections.  Excluding the major political parties in party-list elections is manifestly against the
Constitution, the intent of the Constitutional Commission, and R.A. No. 7941.  This Court cannot engage in socio-political engineering and judicially legislate
the exclusion of major political parties from the party-list elections in patent violation of the Constitution and the law.
 
          Read together, R.A. No. 7941 and the deliberations of the Constitutional Commission state that major political parties are allowed to establish, or form
coalitions with, sectoral organizations for electoral or political purposes.  There should not be a problem if, for example, the Liberal Party participates in the
party-list election through the Kabataang Liberal ng Pilipinas (KALIPI), its sectoral youth wing.   The other major political parties can thus organize, or affiliate
with, their chosen sector or sectors.  To further illustrate, the Nacionalista Party can establish a fisherfolk wing to participate in the party-list election, and
this fisherfolk  wing can field its fisherfolk nominees.  Kabalikat ng Malayang Pilipino (KAMPI) can do the same for the urban poor.
64
 
          The  qualifications of party-list nominees  are prescribed in Section 9 of R.A. No. 7941:
 
 
                        Qualifications of Party-List Nominees.    —  No person shall be nominated as party-list representative unless he is a natural
born citizen of the Philippines, a registered voter, a resident of the Philippines for a period of not less than one (1) year immediately
preceding the day of the elections, able to read and write, bona fide member of the party or organization which he seeks to represent
for at least ninety (90) days preceding the day of the election, and is at least twenty-five (25) years of age on the day of the election.
 
            In case of a nominee of the youth sector, he must at least be twenty-five (25) but not more than thirty (30) years of age on the
day of the election.  Any youth sectoral representative who attains             the age of thirty (30) during his term shall be allowed to
continue until the expiration of his term.
 
Under Section 9 of R.A. No. 7941, it is not necessary that the party-list organization’s nominee “wallow in poverty, destitution and infirmity” [34] as there is no
financial status required in the law.  It is enough that the nominee of the sectoral party/organization/coalition belongs to the marginalized and
underrepresented sectors,[35] that is, if the nominee represents the fisherfolk, he or she must be a fisherfolk, or if the nominee represents the senior
citizens, he or she must be a senior citizen.
 
          Neither the Constitution nor R.A. No. 7941 mandates the filling-up of the entire 20% allocation of party-list representatives found in the
Constitution.  The Constitution, in paragraph 1, Section 5 of Article VI, left the determination of the number of the members of the House of
Representatives to Congress:  “The House of Representatives shall be composed of not more than two hundred and fifty members, unless otherwise fixed
by law, x x x.”  The 20% allocation of party-list representatives is merely a ceiling; party-list representatives cannot be more than 20% of the members of the
House of Representatives.  However, we cannot allow the continued existence of a provision in the law which will systematically prevent the
constitutionally allocated 20% party-list representatives from being filled.  The three-seat cap, as a limitation to the number of seats that a qualified party-
list organization may occupy, remains a valid statutory device that prevents any party from dominating the party-list elections.   Seats for party-list
representatives shall thus be allocated in accordance with the procedure used in Table 3 above.
 
          However, by a vote of 8-7, the Court decided to continue the ruling in Veterans disallowing major political parties from participating in the party-list
elections, directly or indirectly.  Those who voted to continue disallowing major political parties from the party-list elections joined Chief Justice Reynato S.
Puno in his separate opinion.  On the formula to allocate  party-list seats, the Court is unanimous in concurring with this ponencia.  
 
          WHEREFORE, we PARTIALLY GRANT the petition.  We SET ASIDE the Resolution of the COMELEC dated 3 August 2007 in NBC No. 07-041 (PL) as well
as the Resolution dated 9 July 2007 in NBC No. 07-60.    We declare unconstitutional the two percent threshold in the distribution of additional party-list
seats.  The allocation of additional seats under the Party-List System shall be in accordance with the procedure used in Table 3 of this Decision.   Major
political parties are disallowed from participating in party-list elections.  This Decision is immediately executory.  No pronouncement as to costs.
 
          SO ORDERED.

65
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 172103             April 13, 2007
CITIZENS’ BATTLE AGAINST CORRUPTION (CIBAC), Petitioner, 
vs.
COMMISSION ON ELECTIONS GARCIA, (COMELEC), represented by CHAIRMAN BENJAMIN ABALOS, SR.,Respondent.
DECISION
VELASCO, JR., J.:
The Case
Before us is a Petition for Certiorari1 under Rule 65 of the Rules of Court assailing the March 7, 2006 Commission on Elections (COMELEC) Resolution No. 06-
0248,2 which rejected the Motion for Proclamation of the Second Nominees of Citizens’ Battle Against Corruption (CIBAC), et al. under the party-list system
in connection with the May 2004 National and Local Elections.
The Facts
The COMELEC, sitting en banc as the National Board of Canvassers for the Party-List System, issued Resolution No. NBC 04-0043 promulgated on June 2,
2004, which proclaimed petitioner CIBAC as one of those which qualified to occupy a seat in Congress having received the required two percent (2%) of the
total votes cast for the party-list representatives. Based on Party-List Canvass Report No. 19,4 CIBAC received a total number of 493,546 votes out of the
12,627,852 votes cast for all the party-list participants, which, by applying the formula adopted by the Supreme Court in Veterans Federation Party v.
COMELEC,5 resulted in a percentage of 3.9084.6 In the computation for additional seats for the parties, the COMELEC adopted a simplified formula of one
additional seat per additional 2%, thereby foreclosing the chances of CIBAC to gain an additional seat under the party-list system for having received less
than what was prescribed by the poll body.7
On June 22, 2004, petitioner CIBAC, together with Luzon Farmers Party (BUTIL) and Partido ng Manggagawa (PM), filed a Joint Motion for Immediate
Proclamation8 entreating the COMELEC en banc to recognize their entitlement to an additional seat and that their second nominees be immediately
proclaimed. They based their claim on Ang Bagong Bayani-OFW Labor Party v. COMELEC (Ang Bagong Bayani and Bayan Muna), applying the following
Veterans formula:
1awphi1.nét
Votes Cast for Qualified Party
Additional Seats = x Allotted Seats
Votes Cast for First Party for First Party9
On March 7, 2006, the COMELEC en banc issued the challenged Resolution No. 06-0248 contained in the Excerpt from the Minutes of the Regular En Banc
Meeting of the COMELEC,10 which adopted the March 6, 2006 Memorandum of the Supervisory Committee relative to the Urgent Motion to Resolve the
Motion for Proclamation of the Second Nominees of CIBAC, BUTIL, and PM party-lists, in connection with the May 2004 elections for party-list
representatives. The pertinent portion reads:
"On 01 May 2004, Commissioner Mehol K. Sadain, then CIC on Party-List Concerns, acting on queries from several party-list candidates regarding the
formula to be used by the Commission in determining the additional seats for party list winners in the 10 May 2004 elections, issued a memorandum on the
matter to the Commission en-banc. As a result, on the [sic] 08 May 2004, the Commission en banc promulgated Resolution No. 6835 (Annex ‘A’) the
resolutory portion of which reads… ‘RESOLVES, to adopt the simplified formula of one additional seat per additional two percent (underscoring supplied) of
the total party-list votes in the proclamation of the party-list winners in the coming 10 May 2004 National and Local Elections.’
The Party List Canvass Report No. 22 of the National Board of Canvassers, (Annex ‘B’) shows that CIBAC, BUTIL and PM have the following percentage of
total votes garnered:
CIBAC - 3.8638
BUTIL - 3.3479
PM - 3.4947

66
Following the simplified formula of the Commission, after the first 2% is deducted from the percentage of votes of the above-named party-lists, they are no
longer entitled to an additional seat. It is worth mentioning that the Commission, consistent with its formula, denied the petition for a seat of ABA-AKO and
ANAD after garnering a percentage of votes of 1.9900 and 1.9099 respectively.
For consideration."
Considering the foregoing, the Commission RESOLVED, as it hereby RESOLVES, to adopt the recommendation of the Supervisory Committee to deny the
foregoing Motion of CIBAC, BUTIL and PM party-lists for proclamation of second nominees, following the simplified formula of the Commission on the
matter per Comelec Resolution No. 6835 promulgated 08 May 2004.
The Issues
Undeterred, CIBAC filed the instant Petition for Certiorari11 before this Court, raising two issues, viz:1^vvphi1.net
A.
WHETHER OR NOT THE COMMISSION ON ELECTIONS, IN ADOPTING THE SIMPLIFIED FORMULA OF ONE ADDITIONAL SEAT PER ADDITIONAL TWO PERCENT
OF THE TOTAL PARTY-LIST VOTES IN THE PROCLAMATION OF THE PARTY-LIST WINNERS IN THE MAY 10, 2004 NATIONAL AND LOCAL ELECTION, THUS,
ADJUDGING THE PETITIONER HEREIN AS ENTITLED ONLY TO ONE (1) SEAT, ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION.
B.
WHETHER OR NOT PETITIONER CIBAC, AND OTHER PARTY-LIST GROUPS SIMILARLY SITUATED, ARE ENTITLED TO ONE (1) ADDITIONAL SEAT BASED ON THE
FORMULA CRAFTED BY THE SUPREME COURT IN THE CASES OF ANG BAGONG BAYANI AND BAYAN MUNA.12
In gist, the core issue is whether or not the COMELEC gravely abused its discretion when it denied petitioner CIBAC an additional seat in the House of
Representatives under the party-list system by using the simplified formula instead of the claimed Ang Bagong Bayani and Bayan Muna formula.
Petitioner CIBAC asseverates that the COMELEC committed a serious departure from settled jurisprudence amounting to grave abuse of discretion when it
mistakenly relied on the "simplified formula" as the basis for its resolution. Moreover, it stressed that the COMELEC simplified formula runs counter to the
Ang Bagong Bayani and Bayan Muna formula which used the "number of allotted seats for the first party" as multiplier. If the Ang Bagong Bayani and Bayan
Muna formula were applied, CIBAC would be entitled to one additional seat, thus:
495,193 x 3
Additional seats = = 1.2345
1,203,305
Lastly, petitioner faults the COMELEC for its failure to act on and so dismiss the petitions for disqualification filed by the other party-list groups which could
have enabled the COMELEC to "make an accurate determination of the votes that each party-list group has actually obtained." It therefore asks the Court to
set aside the assailed COMELEC Resolution No. 06-0248; and direct the COMELEC to declare CIBAC as entitled to one (1) additional seat and to immediately
proclaim Ma. Blanca Kim Bernardo-Lokin, its second nominee, as member of the House of Representatives.
The Court’s Ruling
Entitlement to an additional seat
In deciding the controversy at hand, a second look at the enabling law, Republic Act No. (R.A.) 7941, "An Act Providing for the Election of Party-List
Representatives through the Party-List System, and Appropriating Funds Therefor," is in order. The objective of the law was made clear in Section 2, thus:
Declaration of Policy.––The State shall promote proportional representation in the election of representatives to the House of Representatives through a
party-list system of registered national, regional and sectoral parties or organizations or coalitions thereof, which will enable Filipino citizens belonging to
the marginalized and underrepresented sectors, organizations and parties, and who lack well-defined political constituencies but who could contribute to
the formulation and enactment of appropriate legislation that will benefit the nation as a whole, to become members of the House of Representatives.
Towards this end, the State shall develop and guarantee a full, free and open party system in order to attain the broadest possible representation of party,
sectoral or group interests in the House of Representatives by enhancing their chances to compete for and win seats in the legislature, and shall provide the
simplest scheme possible. (Emphasis supplied.)
In determining the number of seats a party-list is entitled to, Sec. 11 prescribes that:
The parties, organizations, and coalitions receiving at least two percent (2%) of the total votes cast for the party-list system shall be entitled to one seat
each: provided, that those garnering more than two percent (2%) of the votes shall be entitled to additional seats in proportion to their total number of
votes: provided, finally, that each party, organization, or coalition shall be entitled to not more than three (3) seats (emphasis supplied).
The Court, in the leading case of Veterans, listed the four (4) inviolable parameters to determine the winners in a Philippine-style party-list election
mandated by the Constitution and R.A. 7941, as follows:
First, the twenty percent allocation––the combined number of all party-list congressmen shall not exceed twenty percent of the total membership of the
House of Representatives, including those elected under the party list.
Second, the two percent threshold––only those parties garnering a minimum of two percent of the total valid votes cast for the party-list system are
"qualified" to have a seat in the House of Representatives.
Third, the three-seat limit––each qualified party, regardless of the number of votes it actually obtained, is entitled to a maximum of three seats; that is, one
"qualifying" and two additional seats.
Fourth, proportional representation––the additional seats which a qualified party is entitled to shall be computed "in proportion to their total number of
votes."13 (Emphasis supplied.)
In determining the number of additional seats for each party-list that has met the 2% threshold, "proportional representation" is the touchstone to
ascertain entitlement to extra seats.
The correct formula in ascertaining the entitlement to additional seats of the first party and other qualified party-list groups was clearly explicated in
Veterans:
[H]ow do we determine the number of seats the first party is entitled to? The only basis given by the law is that a party receiving at least two percent of the
total votes shall be entitled to one seat. Proportionally, if the first party were to receive twice the number of votes of the second party, it should be entitled
to twice the latter’s number of seats and so on. The formula, therefore, for computing the number of seats to which the first party is entitled is as follows:
Number of votes of first party = Proportion of votes of first party relative to 
total votes for party-list system

67
 Total votes for party-list
system
If the proportion of votes received by the first party without rounding it off is equal to at least six percent of the total valid votes cast for all the party list
groups, then the first party shall be entitled to two additional seats or a total of three seats overall. If the proportion of votes without a rounding off is equal
to or greater than four percent, but less than six percent, then the first party shall have one additional or a total of two seats. And if the proportion is less
than four percent, then the first party shall not be entitled to any additional seat.
We adopted the six percent bench mark, because the first party is not always entitled to the maximum number of additional seats. Likewise, it would
prevent the allotment of more than the total number of available seats, such as in an extreme case wherein 18 or more parties tie for the highest rank and
are thus entitled to three seats each. In such scenario, the number of seats to which all the parties are entitled may exceed the maximum number of party-
list seats reserved in the House of Representatives.
xxxx
Formula for Additional Seats of Other Qualified Parties
The next step is to solve for the number of additional seats that the other qualified parties are entitled to, based on proportional representation. x x x
xxxx
In simplified form, it is written as follows:
1ªvvphi1.nét
No. of votes of
Additional seats concerned party
No. of additional seats allocated to first party 
for concerned = x
(Emphasis supplied.)
party No. of votes of 
the first party
xxxx
The above formula does not give an exact mathematical representation of the number of additional seats to be awarded since, in order to be entitled to
one additional seat, an exact whole number is necessary. In fact, most of the actual mathematical proportions are not whole numbers and are not rounded
off for the reasons explained earlier. To repeat, rounding off may result in the awarding of a number of seats in excess of that provided by the law.
Furthermore, obtaining absolute proportional representation is restricted by the three-seat-per-party limit to a maximum of two additional slots. An
increase in the maximum number of additional representatives a party may be entitled to would result in a more accurate proportional representation. But
the law itself has set the limit: only two additional seats. Hence, we need to work within such extant parameter.14 (Emphasis supplied.)
On June 25, 2003, the formula was put to test in Ang Bagong Bayani and Bayan Muna.1ªvvphi1.nét In determining the additional seats for the other
qualified parties—BUHAY, AMIN, ABA, COCOFED, PM, SANLAKAS, and ABANSE! PINAY––the following computation was made:
Applying the relevant formula in Veterans to BUHAY, we arrive at 0.51:
Votes Cast for 
Qualified Party
Additional Seats = x Allotted Seats for First Party
Votes Cast for 
First Party

290,760
= x3
1,708,253

= 0.51
Since 0.51 is less than one, BUHAY is not entitled to any additional seat.15
From a scrutiny of the Veterans and Ang Bagong Bayani and Bayan Muna formulae in determining the additional seats for party-list representatives, it is
readily apparent that the Veterans formula is materially different from the one used in Ang Bagong Bayani and Bayan Muna. In Veterans, the multiplier used
was "the [number] of additional seats allocated to the first party," while in the Ang Bagong Bayani and Bayan Muna formula, the multiplier "allotted seats
for first party" was applied. The dissimilarity in the multiplier used spells out a big difference in the outcome of the equation. This divergence on the
multiplier was pointed out and stressed by respondent COMELEC. Nevertheless, petitioner insists that the correct multiplier is the ALLOTTED seats for the
first party referring to the three (3) seats won by Bayan Muna which emerged as the winning first party, as allegedly prescribed in Ang Bagong Bayani and
Bayan Muna. On this issue, petitioner ratiocinates this way:
It cannot be emphasized enough that the formula in the Ang Bagong Bayani and Bayan Muna cases rendered in 2003, effectively modified the earlier
Veterans formula, with the clear and explicit use of the "allotted seats for the first party". Considering that the first party, Bayan Muna, was allotted to the
maximum three (3) seats under the law, it is therefore clear that the multiplier to be used is three (3), the allotted seats for the first party.16
However, this postulation is bereft of merit and basis.1awphi1.nét
A careful perusal of the four corners of Ang Bagong Bayani and Bayan Muna betrays petitioner’s claim as it did not mention any revision or reshaping of the
Veterans formula. As a matter of fact, the Court had in mind the application of the original Veterans formula in Ang Bagong Bayani and Bayan Muna. This
conclusion is based on the aforequoted formula in Ang Bagong Bayani and Bayan Muna, as follows:
Applying the relevant formula in Veterans to BUHAY, we arrive at 0.51:
Votes Cast for Qualified Party
Additional Seats = x Allotted Seats for First Party
Votes Cast for First Party

= 290,760 x 3
68
 1,708,253

= 0.51
The phrase "applying the relevant formula in Veterans to BUHAY" admits of no other conclusion than that the Court merely applied the Veterans formula to
Ang Bagong Bayani and Bayan Muna in resolving the additional seats by the other qualified party-list groups. However, it appears that there was an
inaccurate presentation of the Veterans formula as the Court used the multiplier "allotted seats for the first party" in Ang Bagong Bayani and Bayan Muna
instead of the "[number] of additional seats allocated to the first party" prescribed in the Veterans formula. It is apparent that the phrase "[number] of
additional" was omitted, possibly by inadvertence from the phrase "allotted seats for First Party." The disparity is material, substantial, and significant since
the multiplier "[number] of additional seats allocated to the First Party" prescribed in the Veterans formula pertains to a multiplier of two (2) seats, while
the multiplier "allotted seats for the first party" in Ang Bagong Bayani and Bayan Muna formula can mean a multiplier of maximum three (3) seats, since the
first party can garner a maximum of three (3) seats.
Moreover, footnote 37 of Ang Bagong Bayani and Bayan Muna states that "for a discussion of how to compute additional nominees for parties other than
the first, see Veterans x x x." It clarifies the confusion created by the imprecise formula expressed in Ang Bagong Bayani and Bayan Muna. Thus, the Court
rules that the claimed Ang Bagong Bayani and Bayan Muna formula has not modified the Veterans formula. As a matter of fact, there was really no other
formula approved by the Court other than the Veterans formula in fixing the number of additional seats for the other qualified party-list groups. Also, in
Partido ng Manggagawa v. COMELEC, the Court found that the confusion in the computation of additional seats for the other qualified party-list groups
arose "[from] the way the Veterans formula was cited in the June 25, 2003 Resolution of the Court in Ang Bagong Bayani." We reiterated that "the
prevailing formula for the computation of additional seats for party-list winners is the formula stated in the landmark case of Veterans x x x."17
Applying the Veterans formula in petitioner’s case, we reach the conclusion that CIBAC is not entitled to an additional seat. Party-List Canvass Report No.
2018 contained in the petition shows that the first party, Bayan Muna, garnered the highest number of votes, that is, a total of 1,203,305 votes. Petitioner
CIBAC, on the other hand, received a total of 495,190 votes. It was proclaimed that the first party, Bayan Muna, was entitled to a maximum of three (3)
seats19 based on June 2, 2004 Resolution No. NBC 04-004 of the COMELEC. A computation using the Veterans formula would therefore lead us to the
following result:
1awphi1.nét
No. of votes of concerned No. of additional 
party seats allocated to 
x = Additional Seats for concerned party
the first party
No. of votes of the first party (Emphasis supplied.)

Applying this formula, the result is as follows:

495,190
x 2 =
1,203,305

0.41152493 x 2 = 0.82304986
This is a far cry from the claimed Ang Bagong Bayani and Bayan Muna formula which used the multiplier "allotted seats for the first party," viz:
Votes Cast for 
Qualified Party
Additional Seats = x Allotted Seats for First Party
Votes Cast for 
First Party

Applying the Ang Bagong Bayani and Bayan Muna formula to CIBAC, it yields the following
result:

495,190
Additional seats = x 3 = 1.2345
1,203,305
Unfortunately, it is the Veterans formula that is sanctioned by the Court and not the Ang Bagong Bayani and Bayan Muna formula that petitioner alleges.
Since petitioner CIBAC got a result of 0.82304986 only, which is less than one (1), then it did not obtain or reach a whole number. Petitioner has not
convinced us to deviate from our ruling in Veterans that "in order to be entitled to one additional seat, an exact whole number is necessary." Clearly,
petitioner is not entitled to an additional seat.
COMELEC’s application of Ang Bagong Bayani and Bayan Muna is incorrect
The Court laments the fact that the COMELEC insisted in using a simplified formula when it is fully aware of the ruling in the Veterans case. The COMELEC
explained that it "merely based its judgment on Comelec Resolution No. 6835 which cited Supreme Court Resolution20 dated 20 November 2003 granting
BUHAY’s Motion for Reconsideration and entitling it to one additional seat for having garnered more than four percent (4%) of the total number of votes
validly cast for the party-list system, thus recognizing once again the simplified formula." However, in said Resolution, the Court, in granting BUHAY an
additional seat, meant to apply it on that specific case alone, not being a precedent––pro hac vice (for this one particular occasion); thus, this Resolution
cannot be applied as a precedent to future cases. The simplified formula having already been abandoned, the COMELEC should have used and adhered to
the Veterans formula.
The Court has consistently reminded the COMELEC of its "function to enforce and administer all laws and regulations relative to the conduct of an election."
As judicial decisions form part of the law of the land, the COMELEC cannot just ignore or be oblivious to the rulings issued by the Court. Basic is the rule that
69
lower courts and quasi-judicial tribunals must bow to the decisions and resolutions of the highest court of the land. The COMELEC is not an exception. It
cannot do otherwise.
WHEREFORE, the petition is DENIED for lack of merit. The assailed March 7, 2006 Comelec Resolution No. 06-0248 is hereby AFFIRMED only insofar as it
denied petitioner CIBAC’s motion for the proclamation of its second nominee to an additional seat under the 2004 party-list elections. The portion of
Comelec Resolution No. 06-0248, which adopted and applied the "simplified formula of the Commission on the matter per Comelec Resolution No. 6835
promulgated 08 May 2004," is annulled and set aside. Respondent Comelec is ordered to strictly apply the Veterans formula in determining the entitlement
of qualified party-list groups to additional seats in the party-list system. No costs.
SO ORDERED.

EN BANC
 
 
PARTIDO NG MANGGAGAWA            G.R. No. 164702
(PM) and BUTIL FARMERS
PARTY (BUTIL),                                               
                             Petitioners,          
 
                                                                   Present:                        
                                      
                                                                    PANGANIBAN, C.J.,
                                                PUNO,
                                                QUISUMBING,
                                                YNARES-SANTIAGO,
- versus -                                  SANDOVAL-GUTIERREZ,
                                                CARPIO,                      
                                                                   AUSTRIA-MARTINEZ,
                                                                  *CORONA,
                                                                    CARPIO MORALES,
                                                                   CALLEJO, SR.,
                                                                   AZCUNA,
                                                                   TINGA, 
                                                                   CHICO-NAZARIO, and
THE HON. COMMISSION ON               GARCIA,  JJ.
ELECTIONS (COMELEC),                                                          
represented by its HON. CHAIRMAN      Promulgated:
BENJAMIN ABALOS, SR., 
          Respondent.                   March 15, 2006
x--------------------------------------------------x
 
DECISION
 
PUNO, J.:
          The petition at bar involves the formula for computing the additional seats due, if any, for winners in party-list elections.
          The antecedents are undisputed.
Several party-list participants sent queries to the respondent COMELEC regarding the formula to be adopted in computing the additional seats
for the party-list winners in the May 10, 2004 elections. In response, the respondent Commission issued Resolution No. 6835,[1] adopting the simplified
formula of "one additional seat per additional two percent of the total party-list votes." The resolution reads:
70
 Considering that the simplified formula has long been the one adopted by the Commission and is now the formula of
choice of the Supreme Court in its latest resolution on the matter, the Commission RESOLVED, as it hereby RESOLVES, to adopt the
simplified formula of one additional seat per additional two percent of the total party-list votes in the proclamation of the party-
list winners in the coming May 10, 2004 National and Local Elections.[2] (emphasis supplied)
 
In finding that this simplified formula is the "formula of choice of the Supreme Court," respondent Commission quoted the memorandum of
Commissioner Mehol K. Sadain, Commissioner-In-Charge for Party-List concerns, viz:
         By way of review, following is a highlight of the legal discourse on the two [percent] vote requirement for the party-list system
and the corollary issue on additional seat allocation.
         Section 11(b) and Section 12 of R.A. 7941 (Party-List System Act) provide that "the parties, organizations, and coalitions receiving
at least two percent (2%) of the total votes cast for the party-list system shall be entitled to one seat each, provided that those
garnering more than two percent (2%) of the votes shall be entitled to additional seats in proportion to their total number of votes
xxx.  The COMELEC shall tally all the votes for the parties, organizations, or coalitions on a nationwide basis, rank them according to
the number of votes received and allocate party-list representatives proportionately according to the percentage of votes obtained by
each party, organization or coalition as against the total nationwide votes cast for the party-list system."
         These provisions of [the] statute were transformed into the following formulas by the Supreme Court in Veterans Federation
Party vs. COMELEC (G.R. Nos. 136781, 136786 & 136795, October 6, 2000).
         For the party-list candidate garnering the highest number of votes, the following formula was adopted:
Number of votes of first party          Proportion of votes of first
-----------------------------------      =     party relative to total votes
Total votes for party-list system       for the party-list system
         And for the additional seats of other parties who reached the required two percent mark, the following formula applies:
                                  No. of votes of
Additional seats           concerned party          No. of additional
for concerned       =    ---------------------    x   seats allocated to
party                           No. of votes of first      the first party
                                            party
         The applicability of these formulas was reiterated in the June 25, 2003 Resolution of the Supreme Court in Ang Bagong Bayani-
OFW Labor Party vs. COMELEC, et al. (G.R. No. 147589) and Bayan Muna vs. COMELEC, et al. (G.R. No. 147613) penned by
Justice Artemio Panganiban, wherein the Court declared that party-list BUHAY was not entitled to an additional seat even if it
garnered 4.46 [percent] of the total party-list votes, contrary to BUHAY'scontention which was based on the COMELEC simplified
formula of one additional seat per an additional two percent of the total party-list votes.
         However, on November 10, 2003,[3] the Supreme Court promulgated a Resolution in the same case, this time penned by Chief
Justice Hilario Davide, Jr., granting BUHAY's motion for reconsideration of the June 25, 2003 Resolution, to wit:
         It is thus established in the Resolution of 25 June 2003 that, like APEC, BUTIL, CIBAC and AKBAYAN, BUHAY
had obtained more than four percent (4%) of the total number of votes validly cast for the party-list system and
obtained more than 0.50 for the additional seats.  Accordingly, just like the first four whose additional nominees
are now holding office as member of the House of Representatives, BUHAY should be declared entitled to one
additional seat. 
         Effectively, the Supreme Court, with Justices Jose Vitug and Panganiban registering separate opinions, adopted the simplified
COMELEC formula of one additional seat per additional two percent of the total party-list votes garnered when it declared BUHAY
entitled to one additional seat and proceeded to order the COMELEC to proclaim BUHAY's second nominee.[4] (emphasis supplied)
 
Party-List Canvass Report No. 20[5] showed that the total number of votes cast for all the party-list participants in the May 10, 2004 elections was
12,721,952 and the following parties, organizations and coalitions received at least two percent (2%) of the total votes cast for the party-list system, to wit:
Rank Party-List Group Votes Received Percentage to Total Votes
Cast (%)
1 Bayan Muna (BAYAN MUNA) 1,203,305 9.4585
2 Association of Philippine Electric Cooperatives 934,995 7.3495
(APEC)
3 Akbayan! Citizen's Action Party (AKBAYAN!) 852,473 6.7008
4 Buhay Hayaan Yumabong (BUHAY) 705,730 5.5473
5 Anakpawis (AP) 538,396 4.2320
6 Citizen's Battle Against Corruption (CIBAC) 495,193 3.8924
7 Gabriela Women's Party (GABRIELA) 464,586 3.6518
8 Partido ng Manggagawa (PM) 448,072 3.5220
9 Butil Farmers Party (BUTIL) 429,259 3.3742
10 Alliance of Volunteer Educators (AVE) 343,498 2.7000
11 Alagad (ALAGAD) 340,977 2.6802
12 Veterans Freedom Party (VFP) 340,759 2.6785
13 Cooperative Natcco Network Party (COOP- 270,950 2.1298
NATCCO)
14 Anak Mindanao (AMIN) 269,750 2.1204
15 Ang Laban ng Indiginong Filipino (ALIF) 269,345 2.1172

71
 16 An Waray (AN WARAY) 268,164 2.1079
 
Based on the simplified formula, respondent Commission issued Resolution No. NBC 04-004[6] proclaiming the following parties, organizations and
coalition as winners and their qualified nominees as representatives to the House of Representatives:
BAYAN MUNA (BAYAN MUNA) - 3 seats
1.  Saturnino C. Ocampo
2.  Teodoro A. Casiño, Jr.
3.  Joel G. Virador
 
ASSOCIATION OF PHILIPPINE ELECTRIC COOPERATIVES (APEC) - 3 seats
1.  Edgar L. Valdez
2.  Ernesto G. Pablo
3.  Sunny Rose A. Madamba
 
AKBAYAN! CITIZEN'S ACTION PARTY (AKBAYAN!) -  3 seats
1.  Loreta Ann P. Rosales
2.  Mario Joyo Aguja
3.  Ana Theresa Hontiveros-Baraquel
 
BUHAY HAYAAN YUMABONG (BUHAY) - 2 seats
1.  Rene M. Velarde
2.  Hans Christian M. Señeres
 
ANAKPAWIS (AP) - 2 seats
1.  Crispin B. Beltran
2.  Rafael V. Mariano
 
CITIZEN'S BATTLE AGAINST CORRUPTION (CIBAC) -  1 seat
Emmanuel Joel J. Villanueva
 
GABRIELA WOMEN'S PARTY (GABRIELA) - 1 seat
Liza Largoza-Maza
 
PARTIDO NG MANGGAGAWA (PM) - 1 seat
Renato B. Magtubo
 
BUTIL FARMERS PARTY (BUTIL) - 1 seat
Benjamin A. Cruz
 
ALLIANCE OF VOLUNTEER EDUCATORS (AVE) - 1 seat
Eulogio R. Magsaysay
 
ALAGAD (ALAGAD) - 1 seat
x x x
 
VETERANS FREEDOM PARTY (VFP) - 1 seat
Ernesto S. Gidaya
 
COOPERATIVE NATCCO NETWORK PARTY (COOP-NATCCO) - 1 seat
Guillermo P. Cua
 
AN WARAY (AN WARAY) - 1 seat
Florencio G. Noel
ANAK MINDANAO (AMIN) - 1 seat
Mujiv S. Hataman[7]
          Subsequently, ALIF was also proclaimed as "duly-elected party-list participant and its nominee, Hadji Acmad M. Tomawis, as elected representative to
the House of Representatives." [8]  
          On June 22, 2004, petitioners PM and BUTIL, together with CIBAC, filed a Joint Motion for Immediate Proclamation[9] with the respondent
Commission en banc.  They prayed that they be declared as entitled to one (1) additional seat each and their respective second nominees be proclaimed as
duly elected members of the House of Representatives.  As basis, they cited the formula used by the Court in Ang Bagong Bayani-OFW Labor Party v.
COMELEC,[10] viz:
                                      Votes Cast for
                                      Qualified Party                          Allotted Seats
Additional Seats    =       ------------------------------      x    for First Party
                                      Votes Cast for First Party
 
72
 On June 25, 2004, petitioners and CIBAC filed a Supplement to the Joint Motion (For Immediate Proclamation) [11] to justify their entitlement to an
additional seat, as follows:
5.  To compute the additional seats that movants are entitled to using the Veterans formula of the Supreme Court in the
aforesaid Ang Bagong Bayani-OFW Labor Party and Bayan Muna cases, and Party List Canvass Report No. 20, the following process is
done:  Bayan Muna is the "First Party" with 1,203,305 votes.  To determine the number of seats allocated to the first party, we use
the Veterans formula, to wit:
Number of votes                        Proportion of votes
of first party                               of first party relative
----------------------           =       to total votes for
Total votes for                          party-list system   
party-list system
Applying this formula, we arrive at 9.4585%
1,203,305
--------------            =       9.4585%
12,721,952
6. Having obtained 9.4585%, the first party, Bayan Muna, is allotted three (3) seats.
7.  The number of additional seats that the movants are entitled to are determined as follows:
                                 Votes Cast for
     Qualified Party
Additional Seats   =   ------------------   x   Allotted Seats
                                 Votes Cast for        for First Party
                                 First Party
 
For BUTIL, the computation is as follows:
              429,259
Additional Seats   =   -------------   x   3   =   1.0701
                                   1,203,305
 
For CIBAC, the computation is:
                                    495,193
Additional Seats    =   -------------   x   3   =   1.2345
                                    1,203,305
 
For PM, the computation is:
                                    448,072
Additional Seats   =   -------------   x   3   =   1.1171
                                    1,203,305
8.  All the foregoing results are greater than one (1); therefore, the movant-party list organizations are entitled to one (1)
additional seat each.[12]
 
          On July 31, 2004, respondent Commission en banc,  issued Resolution No. NBC 04-011,[13] viz:
This pertains to the 06 July 2004 Memorandum of the Supervisory Committee, National Board of Canvassers, submitting its
comment/recommendation on the petition filed by Luzon Farmers Party (BUTIL), Citizens Battle Against Corruption
(CIBAC), Partido ng Manggagawa (PM) and Gabriela Women's Party for additional seat and to immediately proclaim their respective
second nominees to the House of Representatives, and the letter of Atty. IvyPerucho, Legal counsel of the CIBAC, relative to the Joint
Motion for Immediate Proclamation filed by BUTIL, CIBAC, PM requesting to calendar for resolution the said Joint Motion.
The Memorandum of the Supervisory Committee reads:
"This has reference to the Urgent Motion for Resolution (re: Joint Motion for Immediate Proclamation dated 22 June 2004)
filed on July 1, 2004 by  movants  Luzon Farmers Party (BUTIL), Citizens Battle Against Corruption (CIBAC)
and  Partido  ng  Manggagawa  (PM), NBC Case No. 04-197 (195) and a similar motion filed by party-list Gabriela Women's Party (NBC
No. 04-200) through counsel, praying to declare that the herein  movants  are entitled to one (1) additional seat each, and to
immediately proclaim the second nominees, to wit: x  x  x
The Supreme Court, in its latest Resolution promulgated on November 10, 2003 (sic) in Ang BagongBayani-OFW Labor
Party vs.  Comelec, et al. (G.R. No. 147589) and  Bayan  Muna vs.  Comelec, et al. (G.R. No. 147613), laid down a simplified formula
of one additional seat per additional two (2) percent of the total party list votes.
The same simplified formula was adopted by the Commission in its Resolution No. 6835 promulgated   08 May 2004, to
quote:
"The additional seats of other parties who reached the required two percent mark, the following formula applies:
                                            No. of votes of
Additional seats            concerned party              No. of additional
                    for concerned        =    --------------------    x      seats allocated to 
                    party                                                              No. of votes of                the first party
                                    first party
The  aforenamed  party-list organizations have not obtained the required additional two (2) percent of the total party-list
votes for them to merit an additional seat.

73
 For your Honors' consideration."
x x x
Considering the foregoing, the Commission RESOLVED, as it hereby RESOLVES, to direct the Supervisory Committee to
cause the re-tabulation of the votes for Citizens Battle Against Corruption (CIBAC), Luzon Farmers Party
(BUTIL), Partido ng Manggagawa (PM) and Gabriela Women's Party (Gabriela) and to submit its comment/recommendation,
together with the tabulated figures of the foregoing parties, for appropriate action of the Commission.
Let the Supervisory Committee implement this resolution and to furnish copies hereof to the parties concerned for their
information and guidance.
SO ORDERED.[14] (emphases supplied)
 
          For failure of the respondent Commission to resolve the substantive issues raised by petitioners and to cause the re-tabulation of the party-list votes
despite the lapse of time, petitioners PM and BUTIL filed the instant petition on August 18, 2004.  They seek the issuance of a writ of mandamus to compel
respondent Commission: a) to convene as the National Board of Canvassers for the Party-List System; b) to declare them as entitled to one (1) additional
seat each; c) to immediately proclaim their respective second nominees; d) to declare other similarly situated party-list organizations as entitled to one (1)
additional seat each; and e) to immediately proclaim similarly situated parties' second nominees as duly elected representatives to the House of
Representatives.[15]  They submit as sole issue:
WHETHER OR NOT RESPONDENT COMELEC EN BANC, AS THE NATIONAL BOARD OF CANVASSERS FOR THE PARTY-LIST SYSTEM,
COULD BE COMPELLED BY THE HONORABLE COURT TO MECHANICALLY APPLY THE FORMULA STATED IN ITS 25 JUNE 2003
RESOLUTION REITERATED IN THE 20 NOVEMBER 2003 RESOLUTION IN ANG BAGONG BAYANI CASES IN THE DETERMINATION OF
QUALIFIED PARTY-LIST ORGANIZATIONS AND IN THE PROCLAMATION OF THEIR RESPECTIVE NOMINEES.[16]
 
          We shall first resolve the procedural issues.  Respondent Commission, through the Office of the Solicitor General, submits that petitioners' recourse to
a petition for mandamus with this Court is improper.  It raises the following procedural issues: (a) the proper remedy from the assailed resolution of the
respondent Commission is a petition for certiorari under Rule 65 of the Rules of Court; (b) the instant action was filed out of time; and (c) failure to file a
motion for reconsideration of the assailed resolution with the respondent Commission is fatal to petitioners' action.[17]
In assailing petitioners' recourse to a petition for mandamus, respondent Commission relies on Section 7, Article IX(A) of the 1987 Constitution
which provides that "any decision, order or ruling" of the respondent Commission "may be brought to the Supreme Court on certiorari by the aggrieved
party within thirty days from receipt of a copy thereof."  It contends that in Aratuc v. COMELEC[18] and Dario v. Mison,[19] this provision was construed as the
special civil action of certiorari under Rule 65 and not the appeal by certiorari under Rule 45.  Respondent Commission further contends that its duty to
proclaim the second nominees of PM and BUTIL is not ministerial but discretionary, hence, it is not subject to the writ of mandamus.
The arguments fail to impress.
Under the Constitution, this Court has original jurisdiction over petitions for certiorari, prohibition and mandamus.[20]  We have consistently ruled
that where the duty of the respondent Commission is ministerial, mandamus lies to compel its performance.[21]  A purely ministerial act, as distinguished
from a discretionary act, is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the mandate of legal
authority, without regard to or the exercise of his own judgment upon the propriety or impropriety of the act done.[22]
The case at bar is one of mandamus over which this Court has jurisdiction for it is respondent Commission's ministerial duty to apply the formula
as decided by this Court after interpreting the existing law on party-list representation.  It is given that this Court has the ultimate authority to interpret laws
and the Constitution.[23] Respondent Commission has no discretion to refuse enforcement of any decision of this Court under any guise or guile.  
In any event, it is the averments in the complaint, and not the nomenclature given by the parties, that determine the nature of the action.
[24]
 Though captioned as a Petition for Mandamus, the same may be treated as a petition for certiorari and mandamusconsidering that it alleges that the
respondent Commission acted contrary to prevailing jurisprudence,     hence,    with    grave  abuse   of   discretion   and   without jurisdiction.  In
previous rulings,[25] we have treated differently labeled actions as special civil actions for certiorari under Rule 65 for reasons such as "justice, equity
and fairplay"[26] and "novelty of the issue presented and its far-reaching effects." [27] The petition at bar involves the rightful representation in the House of
Representatives of the marginalized groups by the party-list winners and their constitutional claim merits more than a disposition based on thin technicality.
Next, respondent Commission contends that the petition at bar was filed belatedly.  Under Article IX(A), Section 7 of the Constitution and Rule
64,  Section 3 of the Rules of Court, the instant petition must be filed within thirty (30) days from receipt of the notice of the decision, order or ruling to be
reviewed.  Since more than 30 days have lapsed from the time PM and BUTIL allegedly received notice of respondent Commission's Resolution No. 6835, it
is urged that the instant petition was filed out of time.[28] 
Again, the contention is without merit. 
We have interpreted Article IX(A), Section 7 of the Constitution and Rule 64, Section 3 of the Rules of Court to mean final orders, rulings and
decisions of the respondent Commission rendered in the exercise of its adjudicatory or quasi-judicial powers.[29]  Before resolving whether Resolution No.
6835 was rendered in the exercise of respondent Commission's adjudicatory or quasi-judicial powers, we recapitulate the pertinent events.
On May 8, 2004, respondent Commission issued Resolution No. 6835.  On June 2, 2004, it also issued Resolution No. NBC 04-004 holding
petitioners entitled to only one (1) nominee each on the basis of Resolution No. 6835. On June 22, 2004, petitioners filed a Joint Motion for Immediate
Proclamation with party-list co-participant CIBAC, claiming entitlement to an additional seat using the formula stated in Ang Bagong Bayani.  Thereafter,
they filed their Supplement to the Joint Motion (For Immediate Proclamation).  On July 1, 2004, they filed an Urgent Motion for Resolution (Re: Joint
Motion for Immediate Proclamation dated 22 June 2004) and again, on July 12, 2004, they filed their Motion to Resolve (Re: Joint Motion for Immediate
Proclamation filed on 22 June 2004).  In response, respondent Commission en banc issued Resolution No. NBC 04-011 quoted above, which directed the
Supervisory Committee "to cause the re-tabulation of the votes" of CIBAC, GABRIELA and petitioners PM and BUTIL.  The resolution referred to the
Memorandum of the Supervisory Committee which adopted the simplified formula in Resolution No. 6835.  Without further ado, petitioners BUTIL and PM
filed the instant petition on August 18, 2004 or eighteen (18) days after the promulgation of Resolution No. NBC 04-011.  Clearly, the instant petition was
timely filed.  We hold that Resolution No. 6835 was not rendered in the exercise of respondent COMELEC's quasi-judicial powers.  Its issuance was not
brought about by a matter or case filed before the respondent Commission.  Rather, it was issued by the respondent Commission in the exercise of its
administrative function to enforce and administer election laws to ensure an orderly election. 
Finally, respondent Commission contends that petitioners' failure to file a motion for reconsideration of Resolution No. 6835 is fatal. 
          Again, the argument is without merit.
74
 Under Rule 13, Section 1(d) of the COMELEC Rules of Procedure, a motion for reconsideration of an en banc ruling, order or decision of the
respondent Commission is not allowed. Moreover, the issue of what formula applies in determining the additional seats to be allocated to party-list winners
is a pure question of law that is a recognized exception to the rule on exhaustion of administrative remedies.[30]
We shall now resolve the substantive issue:  the formula for computing the additional seats due, if any, for winners in party-list elections.
Petitioners cite the formula crafted by the Court in the landmark case of Veterans Federation Party v. COMELEC.[31] They allege that the June 25,
2003 Resolution of the Court in Ang Bagong Bayani-OFW v. COMELEC [32] "reiterated that the additional seats for qualified party-list organizations shall be
computed in accordance with the above formula in Veterans"  and that  the  November 20, 2003 Resolution[33] of the Court in the same case "had not
departed from its 25 June 2003 Resolution."[34]
A review of the pertinent legal provisions and jurisprudence on the party-list system is appropriate.
The Constitution provides:
Art. VI, Section 5. (1)  The House of Representatives shall be composed of not more than two hundred and fifty members,
unless otherwise fixed by law, who shall be elected from legislative districts apportioned among the provinces, cities, and the
Metropolitan Manila area in accordance with the number of their respective inhabitants, and on the basis of a uniform and
progressive ratio, and those who, as provided by law, shall be elected through a party-list system of registered national, regional,
and sectoral parties or organizations. (emphasis supplied)
 
          Pursuant to the Constitution's mandate, Congress enacted R.A. No. 7941, also known as the "Party-List System Act," to "promote proportional
representation in the election of representatives to the House of Representatives through a party-list system." The law provides as follows:
Section 11. Number of Party-List Representatives.-- xxx
         In determining the allocation of seats for the second vote, the following procedure shall be observed:
         (a)  The parties, organizations, and coalitions shall be ranked from the highest to the lowest based on the number of votes
they garnered during the elections.
         (b) The parties, organizations, and coalitions receiving at least two percent (2%) of the total votes cast for the party-list
system shall be entitled to one seat each: Provided, That those garnering more than two percent (2%) of the votes shall be entitled
to additional seats in the proportion of their total number of votes: Provided, finally, That each party, organization, or coalition
shall be entitled to not more than three (3) seats. 
Section 12.  Procedure in Allocating Seats for Party-List Representatives.-- The COMELEC shall tally all the votes for the
parties, organizations, or coalitions on a nationwide basis, rank them according to the number of votes received and allocate party-
list representatives proportionately according to the percentage of votes obtained by each party, organization, or coalition as
against the total nationwide votes cast for the party-list system. (emphases supplied)
 
These provisions on the party-list system were put to test in the May 11, 1998 elections.  In the landmark case of Veterans,[35] several petitions
for certiorari, prohibition and mandamus, with prayers for the issuance of temporary restraining orders or writs of preliminary injunction, were filed by
some parties and organizations that had obtained at least two percent of the total party-list votes cast in the May 11, 1998 party-list elections, against
COMELEC and 38 other parties, organizations and coalitions which had been declared by COMELEC as entitled to party-list seats in the House of
Representatives.   The following issues were raised: 1) whether the twenty percent constitutional allocation is mandatory;  2)  whether the two percent
threshold requirement and the three-seat limit under Section 11(b) of R.A. No. 7941 is constitutional; and 3) how the additional seats of a qualified party
should be determined.  In said case, the Court set the "four inviolable parameters" of the party-list system under the Constitution and R.A. No. 7941, to wit:
         First, the twenty percent allocation -- the combined number of all party-list congressmen shall not exceed twenty percent of the
total membership of the House of Representatives, including those elected under the party list.
         Second, the two percent threshold  -- only those parties garnering a minimum of two percent of the total valid votes cast for the
party-list system are "qualified" to have a seat in the House of Representatives.
         Third, the three-seat limit -- each qualified party, regardless of the number of votes it actually obtained, is entitled to a maximum
of three seats; that is, one "qualifying" and two additional seats.
         Fourth, proportional representation -- the additional seats which a qualified party is entitled to shall be computed "in proportion
to their total number of votes."
 
Likewise, the Court spelled out the formula for allocating the seats for party-list winners, thus:
Step One.  There is no dispute among the petitioners, the public and the private respondents, as well as the members of
this Court, that the initial step is to rank all the participating parties, organizations and coalitions from the highest to the lowest
based on the number of votes they each received.  Then the ratio for each party is computed by dividing its votes by the total votes
cast for all the parties participating in the system.  All parties with at least two percent of the total votes are guaranteed one seat
each.  Only these parties shall be considered in the computation of additional  seats.  The party receiving the highest number of
votes shall thenceforth be referred to as the "first" party. 
Step Two.  The next step is to determine the number of seats the first party is entitled to, in order to be able to compute
that for the other parties.  Since the distribution is based on proportional representation, the number of seats to be allotted to the
other parties cannot possibly exceed that to which the first party is entitled by virtue of its obtaining the most number of votes.
x x x
         Now, how do we determine the number of seats the first party is entitled to?  x x x  The formula x x x is as follows:
Number of votes
of first party                  Proportion of votes of
--------------------    =       first party relative to
Total votes for              total votes for party-list system
Party-list system
         If the proportion of votes received by the first party without rounding it off is equal to at least six percent of the total valid votes
cast for all the party list groups, then the first party shall be entitled to two additional seats or a total of three seats overall.  If the
75
 proportion of votes without a rounding off is equal to or greater than four percent, but less than six percent, then the first party shall
have one additional or a total of two seats.  And if the proportion is less than four percent, then the first party shall not be entitled to
any additional seat.
x x x
Step Three.  The next step is to solve for the number of additional seats that the other qualified parties are entitled
to, based on proportional representation.  The formula is encompassed by the following complex fraction:
 
                              No. of votes of
                              concerned party
                               ----------------------
                              Total No. of votes
Additional seats       for party-list system
for concerned   =   --------------------------   x    No. of additional
party                       No. of votes of                  seats allocated  
 first party                         to the first party
                               ----------------------
                              Total No. of votes
                              for party-list system
         In simplified form, it is written as follows:
                              No. of votes of
Additional seats  concerned party
for concerned  =    ------------------------   x  No. of additional
party                     No. of votes of            seats allocated
                              first party                    to the first party[36]
 
(emphases supplied)
 
          Applying this formula, the Court found the outcome of the May 11, 1998 party-list elections as follows:
Organization                   Votes      %age of     Initial               Additional Seats          Total
                                    Garnered   Total           No. of
                                                      Votes         Seats
1.  APEC                       503,487   5.50%           1                                        1                2
2.  ABA                         321,646   3.51%           1         321,646/503,487 * 1 = 0.64    1
3.  ALAGAD                 312,500   3.41%           1         312,500/503,487 * 1 = 0.62    1
4.  VETERANS             304,802   3.33%           1         304,802/503,487 * 1 = 0.61    1
     FEDERATION
5.  PROMDI                  255,184   2.79%           1         255,184/503,487 * 1 = 0.51    1
6.  AKO                        239,042   2.61%           1         239,042/503,487 * 1 = 0.47    1
7.  NCSFO                    238,303   2.60%           1         238,303/503,487 * 1 = 0.47    1
8.  ABANSE!PINAY    235,548   2.57%           1         235,548/503,487 * 1 = 0.47    1
9.  AKBAYAN!            232,376   2.54%           1         232,376/503,487 * 1 = 0.46    1
10.  BUTIL                    215,643   2.36%           1         215,643/503,487 * 1 = 0.43    1
11.  SANLAKAS          194,617   2.13%           1         194,617/503,487 * 1 = 0.39    1
12.  COOP-NATCCO              189,802   2.07%           1         189,802/503,487 * 1 = 0.38    1
13.  COCOFED            186,388   2.04%           1         186,388/503,487 * 1 = 0.37    1[37]
 
The case of Ang Bagong Bayani arose during the May 14, 2001 party-list elections. Two petitions for certiorari  were filed by several party-list
candidates: (a) to challenge a resolution of the COMELEC approving the participation of some 154 organizations and parties in the May 14, 2001 party-list
elections; and (b) to disqualify certain parties classified as "political parties" and "organizations/coalitions" by COMELEC.  In a Decision dated June 26, 2001,
the Court established the eight-point guideline[38]for the screening of party-list participants.  The case was then remanded to the COMELEC for the
immediate conduct of summary evidentiary hearings to implement the eight-point guideline.   
In due time, COMELEC submitted its compliance reports to the Court.  Based on the compliance reports, the Court issued several resolutions
proclaiming BAYAN MUNA with its three nominees and AKBAYAN!, BUTIL, APEC and CIBAC, with one nominee each, as party-list winners.[39]
Subsequently, several motions for proclamation were filed by other party-list participants.  In resolving the motions, the Court had to consider,
among others, the effect of the disqualification after the elections of many party-list participants to the total votes cast for the party-list elections. In the
previous case of Labo v. COMELEC,[40] this Court ruled that the votes cast for an ineligible or disqualified candidate cannot be considered "stray" except
when the electorate is fully aware in fact and in law of a candidate's disqualification so as to bring such awareness within the realm of notoriety but
nonetheless cast their votes in favor of the ineligible candidate.  In its Resolution dated June 25, 2003, the Court held that the Labo doctrine cannot be
applied to the party-list system in view of Sec. 10 of R.A. No. 7941 which expressly provides that the votes cast for a party, a sectoral organization or a
coalition "not entitled to be voted for shall not be counted." The Court then proceeded to determine the number of nominees the party-list winners were
entitled, thus:[41]
         We shall now determine the number of nominees each winning party is entitled to,  in accordance with the formula in
Veterans.  For purposes of determining the number of its nominees, BAYAN MUNA (the party that obtained the highest number of
votes) is considered the first party.  The applicable formula is as follows:
Number of votes of first party          Proportion of votes of first
-------------------------------------   =   party relative to total votes
76
 Total votes for party-list system       for party-list system
         Applying this formula, we arrive at 26.19 percent:
         x x x
         Having obtained 26.19 percent, BAYAN MUNA is entitled to three (3) seats.  This finding is pursuant to our ruling
in Veterans x x x.
         x x x
         [W]e shall compute only the additional seat or seats to be allocated, if any, to the other qualified parties -- BUHAY, AMIN, ABA,
COCOFED, PM, SANLAKAS and ABANSE! PINAY.
Applying the relevant formula in Veterans to BUHAY, we arrive at 0.51:
     Votes Cast for
     Qualified Party
Additional Seats   =   -------------------   x   Allotted Seats
                                           Votes Cast for                  for First Party
                                           First Party
                                              290,760
=    -------------     x     3
       1,708,253
=     0.51
         Since 0.51 is less than one, BUHAY is not entitled to any additional seat.  It is entitled to only one qualifying seat like all the other
qualified parties that are ranked below it, as shown in Table No. 3:
Table No. 3
 
  Rank Party-list Votes Percentage Additional
(%) Seats
2 APEC 802,060 12.29 n/c
3 AKBAYAN! 377,852 5.79 n/c
4 BUTIL 330,282 5.06 n/c
5 CIBAC 323,810 4.96 n/c
6 BUHAY 290,760 4.46 0.51
7 AMIN 252,051 3.86 0.44
8 ABA 242,199 3.71 0.42
9 COCOFED 229,165 3.51 0.40
10 PM 216,823 3.32 0.38
11 SANLAKAS 151,017 2.31 0.26
12 ABANSE! PINAY 135,211 2.07 0.24
 
          The additional seats for APEC, AKBAYAN!, BUTIL and CIBAC, if any, were not determined in the Court's Resolution dated June 25, 2003, as there was a
separate pending motion filed by BAYAN MUNA to set aside the resolution of the COMELEC proclaiming APEC, AKBAYAN!, BUTIL and CIBAC's respective
additional nominees. 
Dissatisfied by the Court's June 25, 2003 Resolution, BUHAY filed a motion to have it declared as entitled to one (1) additional
seat.  On November 20, 2003, in the same case of Ang Bagong Bayani,[42] the Court computed the additional seats for APEC, AKBAYAN!, BUTIL and CIBAC in
accordance with the formula stated in the Court's Resolution dated June 25, 2003, and found the results as follows:
APEC           --     1.40
AKBAYAN  --      0.66
BUTIL          --     0.58
CIBAC         --     0.56
 
Then, the Court resolved  pro  hac  vice to grant BUHAY's motion, reasoning that:
It is thus established in the Resolution of 25 June 2003 that, like APEC, BUTIL, CIBAC and AKBAYAN, BUHAY had obtained more than
four percent (4%) of the total number of votes validly cast for the party-list system and obtained more than 0.50 for the additional
seats.  Accordingly, just like the first four whose additional nominees are now holding office as member of the House of
Representatives, BUHAY should be declared entitled to additional seat.[43] 
 
In light of all these antecedents, we deny the petition.
The formula in the landmark case of Veterans prevails. 
First, the June 25, 2003 Resolution of the Court in Ang Bagong Bayani referred to the Veterans case in determining the number of seats due for
the party-list winners.  The footnote on said resolution in computing the additional seats for the party-list winners states:   "[f]or a discussion of how to
compute additional nominees for parties other than the first, see Veterans, supra, at pp. 280-282. x x x."[44]  The Court likewise held that:
We also take this opportunity to emphasize that the formulas devised in Veterans for computing the number of
nominees that the party-list winners are entitled to cannot be disregarded by the concerned agencies of government, especially the
Commission on Elections.  These formulas ensure that the number of seats allocated to the winning party-list candidates conform
to the principle of proportional representationmandated by the law.[45]  (emphases supplied)
 

77
 Second, in the November 20, 2003 Resolution in Ang Bagong Bayani, the Court gave an additional seat to BUHAY only because it was similarly
situated to APEC, BUTIL, CIBAC and AKBAYAN which "had obtained more than four percent (4%) of the total number of votes validly cast for the party-list
system and obtained more than 0.50 for the additional seats."  Well to note, the grant of an additional seat to BUHAY was pro  hac  vice, thus:
ACCORDINGLY, the Court hereby RESOLVES, pro  hac  vice
  1.  To consider closed and terminated the issue regarding the proclamation by the COMELEC of the additional nominees of
APEC, BUTIL, CIBAC and AKBAYAN, such nominees having taken their oath and assumed office;
2. To DECLARE that BUHAY is entitled to one (1) additional seat in the party-list system in the elections of May 2001 and;
3.  To ORDER the COMELEC to proclaim BUHAY's second nominee.
          SO ORDERED.[46] (emphasis supplied)
 
Pro  hac  vice is a Latin term meaning "for this one particular occasion." [47]  A ruling expressly qualified as pro  hac  vicecannot be relied upon as a
precedent to govern other cases. It was therefore erroneous for respondent Commission to apply theNovember 20, 2003 Resolution and rule that the
formula in Veterans has been abandoned. 
The confusion in the petition at bar must have been created by the way the Veterans formula was cited in the June 25, 2003Resolution of the
Court in Ang Bagong Bayani.[48]  Be that as it may, we reiterate that the prevailing formula for the computation of additional seats for party-list winners is
the formula stated in the landmark case of Veterans, viz:
                                                No. of votes of
Additional seats               concerned party              No. of additional
for concerned        =       -------------------      x        seats allocated to
party                               No. of votes of               the first party[49]                                                    first party
 
Applying said formula to the undisputed figures in Party-List Canvass Report No. 20, we do not find petitioners entitled to any additional
seat.  Thus:
                                      448,072
Additional seats     =       ------------     x        2
for PM                           1,203,305
 
                             =       0.74
                                     
                                      429,259
Additional seats     =       ------------     x        2
for BUTIL                     1,203,305
 
                             =       0.71
 
IN VIEW WHEREOF, the petition is DENIED.
          SO ORDERED.

78
 EN BANC
 
AQUILINO Q. PIMENTEL, JR.,           G.R. No. 164978
EDGARDO J. ANGARA,  
JUAN PONCE ENRILE,           Present:
LUISA P. EJERCITO-ESTRADA,               Davide, Jr., C.J.,
JINGGOY E. ESTRADA,               Puno,
PANFILO M. LACSON,     Panganiban,
ALFREDO S. LIM,     Quisumbing,
JAMBY A.S. MADRIGAL, and               Ynares-Santiago,
SERGIO R. OSMEÑA III,     Sandoval-Gutierrez,
                                       Petitioners,               Carpio,
                Austria-Martinez,
                   - versus -                              Corona,
                                Carpio Morales,
EXEC. SECRETARY EDUARDO                     Callejo, Sr.,
R. ERMITA, FLORENCIO B. ABAD,               Azcuna,
AVELINO J. CRUZ, JR.,               Tinga,
MICHAEL T. DEFENSOR,                                        Chico-Nazario, and
JOSEPH H. DURANO,                                                                                                             Garcia,  JJ.
RAUL M. GONZALEZ,                                                                                     
ALBERTO G. ROMULO,                                                                                                    
RENE C. VILLA, and                                                                                                            Promulgated:
ARTHUR C. YAP,
                                                                                               Respondents.                    October 13, 2005
x-----------------------------------------------------x
 
DECISION
 
CARPIO, J.:
 
 
 
                                                                            The Case
 
 

79
 This is a petition for certiorari and prohibition[1] with a prayer for the issuance of a writ of preliminary injunction to declare unconstitutional the
appointments issued by President Gloria Macapagal-Arroyo (“President Arroyo”) through Executive Secretary Eduardo R. Ermita (“Secretary Ermita”) to
Florencio B. Abad, Avelino J. Cruz, Jr., Michael T. Defensor, Joseph H. Durano, Raul M. Gonzalez, Alberto G. Romulo, Rene C. Villa, and Arthur C. Yap
(“respondents”) as acting secretaries of their respective departments.  The petition also seeks to prohibit respondents from performing the duties of
department secretaries.
 
 
Antecedent Facts
 
 
The Senate and the House of Representatives (“Congress”) commenced their regular session on 26 July 2004. The Commission on Appointments,
composed of Senators and Representatives, was constituted on 25 August 2004.
 
Meanwhile, President Arroyo issued appointments[2] to respondents as acting secretaries of their respective departments.
 
Appointee Department Date of Appointment
Arthur C. Yap Agriculture 15 August 2004
Alberto G. Romulo Foreign Affairs 23 August 2004
Raul M. Gonzalez Justice 23 August 2004
Florencio B. Abad Education 23 August 2004
Avelino J. Cruz, Jr. National Defense 23 August 2004
Rene C. Villa Agrarian Reform 23 August 2004
Joseph H. Durano Tourism 23 August 2004
Michael T. Defensor Environment and Natural Resources 23 August 2004
 
The appointment papers are uniformly worded as follows:
 
 
Sir:
 
Pursuant to the provisions of existing laws, you are hereby appointed ACTING SECRETARY, DEPARTMENT OF (appropriate
department) vice (name of person replaced).
 
By virtue hereof, you may qualify and enter upon the performance of the duties and functions of the office, furnishing this
Office and the Civil Service Commission with copies of your Oath of Office.
 
(signed)
Gloria Arroyo
 
 
 
          Respondents took their oath of office and assumed duties as acting secretaries.
 
          On 8 September 2004, Aquilino Q. Pimentel, Jr. (“Senator Pimentel”), Edgardo J. Angara (“Senator Angara”), Juan Ponce Enrile (“Senator Enrile”), Luisa
P. Ejercito-Estrada (“Senator Ejercito-Estrada”), Jinggoy E. Estrada (“Senator Estrada”), Panfilo M. Lacson (“Senator Lacson”), Alfredo S. Lim (“Senator Lim”),
Jamby A.S. Madrigal (“Senator Madrigal”), and Sergio R. Osmeña, III (“Senator Osmeña”) (“petitioners”) filed the present petition as Senators of the
Republic of the Philippines.
 
 
Congress adjourned on 22 September 2004.  On 23 September 2004, President Arroyo issued ad interim appointments[3] to respondents as
secretaries of the departments to which they were previously appointed in an acting capacity.  The appointment papers are uniformly worded as follows:
 
Sir:
 
Pursuant to the provisions of existing laws, you are hereby appointed SECRETARY [AD INTERIM], DEPARTMENT OF
(appropriate department).
 
By virtue hereof, you may qualify and enter upon the performance of the duties and functions of the office, furnishing this
Office and the Civil Service Commission with copies of your oath of office.
 
(signed)
Gloria Arroyo
 
 

80
 Issue
 
 
The petition questions the constitutionality of President Arroyo’s  appointment of respondents as acting secretaries without the consent of the
Commission on Appointments while Congress is in session. 
 
 
The Court’s Ruling
 
 
 
          The petition has no merit.
 
 
 
 
Preliminary Matters
 
 
On the Mootness of the Petition
 
 
          The Solicitor General argues that the petition is moot because  President Arroyo had extended to respondents ad interimappointments on 23
September 2004 immediately after the recess of Congress.  
 
As a rule, the writ of prohibition will not lie to enjoin acts already done.[4]  However, as an exception to the rule on mootness, courts will decide a
question otherwise moot if it is capable of repetition yet evading review.[5]
         
          In the present case, the mootness of the petition does not bar its resolution.  The question of the constitutionality of the President’s appointment of
department secretaries in an acting capacity while Congress is in session will arise in every such appointment.
 
 
On the Nature of the Power to Appoint
 
 
          The power to appoint is essentially executive in nature, and the legislature may not interfere with the exercise of this executive power except in those
instances when the Constitution expressly allows it to interfere.[6]  Limitations on the executive power to appoint are construed strictly against the
legislature.[7]  The scope of the legislature’s interference in the executive’s power to appoint is limited to the power to prescribe the qualifications to an  
appointive office.  Congress cannot appoint a person to an office in the guise of prescribing qualifications to that office.  Neither may Congress impose on
the President the duty to appoint any particular person to an office.[8]
 
          However, even if the Commission on Appointments is composed of members of Congress, the exercise of its powers is executive and not legislative. 
The Commission on Appointments does not legislate when it exercises its power to give or withhold consent to presidential appointments. Thus:
 
xxx The Commission on Appointments is a creature of the Constitution.  Although its membership is confined to members of Congress,
said Commission is independent of Congress.  The powers of the Commission do not come from Congress, but emanate directly from
the Constitution.  Hence, it is not an agent of Congress.  In fact, the functions of the Commissioner are purely executive in nature. xxx[9] 
 
 
 
 
 
On Petitioners’ Standing
 
 
          The Solicitor General states that the present petition is a quo warranto proceeding because, with the exception of Secretary Ermita, petitioners
effectively seek to oust respondents for unlawfully exercising the powers of department secretaries.  The Solicitor General further states that petitioners
may not claim standing as Senators because no power of the Commission on Appointments has been “infringed upon or violated by the President. xxx If at
all, the Commission on Appointments as a body (rather than individual members of the Congress) may possess standing in this case.”[10]
 
          Petitioners, on the other hand, state that the Court can exercise its certiorari jurisdiction over unconstitutional acts of the President. [11]  Petitioners
further contend that they possess standing because President Arroyo’s appointment of department secretaries in an acting capacity while Congress is in
session impairs the powers of Congress.   Petitioners cite Sanlakas v. Executive Secretary [12]  as basis, thus:
 
To the extent that the powers of Congress are impaired, so is the power of each member thereof, since his office confers a
right to participate in the exercise of the powers of that institution.
81
  
An act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which
can be questioned by a member of Congress.  In such a case, any member of Congress can have a resort to the courts.
 
 
 
          Considering the independence of the Commission on Appointments from Congress, it is error for petitioners to claim standing in the present case as
members of Congress.  President Arroyo’s issuance of acting appointments while Congress is in session impairs no power of Congress.  Among the
petitioners, only the following are members of the Commission on Appointments of the 13th Congress:  Senator Enrile as Minority Floor Leader, Senator
Lacson as Assistant Minority Floor Leader, and Senator Angara, Senator Ejercito-Estrada, and Senator Osmeña as members.
 
Thus, on the impairment of the prerogatives of members of the Commission on Appointments, only Senators Enrile, Lacson, Angara, Ejercito-
Estrada, and Osmeña have standing in the present petition.  This is in contrast to Senators Pimentel, Estrada, Lim, and Madrigal, who, though vigilant in
protecting their perceived prerogatives as members of Congress, possess no standing in the present petition.
 
 
The Constitutionality of President  Arroyo’s Issuance
of Appointments to Respondents as Acting Secretaries
 
 
Petitioners contend that President Arroyo should not have appointed respondents as acting secretaries because “in case of a vacancy in the
Office of a Secretary, it is only an Undersecretary who can be designated as Acting Secretary.”[13]  Petitioners base their argument on Section 10, Chapter 2,
Book IV of Executive Order No. 292 (“EO 292”),[14]  which enumerates the powers and duties of the undersecretary.   Paragraph 5 of Section 10 reads: 
 
SEC. 10. Powers and Duties of the Undersecretary. - The Undersecretary shall:
 
xxx
 
(5)  Temporarily discharge the duties of the Secretary in the latter’s absence or inability to discharge his duties for any cause
or in case of vacancy of the said office, unless otherwise provided by law.  Where there are more than one Undersecretary, the
Secretary shall allocate the foregoing powers and duties among them.  The President shall likewise make the temporary designation of
Acting Secretary from among them; and
 
xxx
 
 
Petitioners further assert that “while Congress is in session, there can be no appointments, whether regular or acting, to a vacant position of an office
needing confirmation by the Commission on Appointments, without first having obtained its consent.”[15]
 
          In sharp contrast, respondents maintain that the President can issue appointments in an acting capacity to department secretaries without the
consent of the Commission on Appointments even while Congress is in session.  Respondents point to Section 16, Article VII of the 1987 Constitution. 
Section 16 reads:
 
SEC. 16.  The President shall nominate and, with the consent of the Commission on Appointments, appoint the heads of the
executive departments, ambassadors, other public ministers and consuls, or officers of the armed forces from the rank of colonel or
naval captain, and other officers whose appointments are vested in him in this Constitution.  He shall also appoint all other officers of
the Government whose appointments are not otherwise provided for by law, and those whom he may be authorized by law to
appoint.  The Congress may, by law, vest the appointment of other officers lower in rank in the President alone, in the courts, or in the
heads of departments, agencies, commissions, or boards.
 
The President shall have the power to make appointments during the recess of the Congress, whether voluntary or
compulsory, but such appointments shall be effective only until disapproval by the Commission on Appointments or until the next
adjournment of the Congress.
 
 
 
Respondents also rely on EO 292, which devotes a chapter to the President’s power of appointment.  Sections 16 and 17, Chapter 5, Title I, Book
III of EO 292 read:
 
SEC. 16.   Power of Appointment. — The President shall exercise the power to appoint such officials as provided for in the
Constitution and laws.
 
SEC. 17.  Power to Issue Temporary Designation.  — (1) The President may temporarily designate an officer already in the
government service or any other competent person to perform the functions of an office in the executive branch, appointment to
which is vested in him by law, when: (a) the officer regularly appointed to the office is unable to perform his duties by reason of
illness, absence or any other cause; or (b) there exists a vacancy[.]
82
  
(2)  The person designated shall receive the compensation attached to the position, unless he is already in the government
service in which case he shall receive only such additional compensation as, with his existing salary, shall not exceed the salary
authorized by law for the position filled. The compensation hereby authorized shall be paid out of the funds appropriated for the office
or agency concerned.
(3) In no case shall a temporary designation exceed one (1) year.   (Emphasis supplied)
 
 
 
          Petitioners and respondents maintain two diametrically opposed lines of thought.  Petitioners assert that the President cannot issue appointments in
an acting capacity to department secretaries while Congress is in session because the law does not give the President such power. In contrast, respondents
insist that the President can issue such appointments because no law prohibits such appointments.
 
          The essence of an appointment in an acting capacity is its temporary nature.  It is a stop-gap measure intended to fill an office for a limited time until
the appointment of a permanent occupant to the office.[16]  In case of vacancy in an office occupied by analter ego of the President, such as the office of a
department secretary, the President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice
could assume office.  
 
Congress, through a law, cannot impose on the President the obligation to appoint automatically the undersecretary as her temporary alter
ego.    An alter ego, whether temporary or permanent, holds a position of great trust and confidence.  Congress, in the guise of prescribing qualifications to
an office, cannot impose on the President who her alter ego  should be.
 
The office of a department secretary may become vacant while Congress is in session.  Since a department secretary is thealter ego of the
President, the acting appointee to the office must necessarily have the President’s confidence. Thus, by the very nature of the office of a department
secretary, the President must appoint in an acting capacity a person of her choice even while Congress is in session.  That person may or may not be the
permanent appointee, but practical reasons may make it expedient that the acting appointee will also be the permanent appointee. 
 
The law expressly allows the President to make such acting appointment.  Section 17, Chapter 5, Title I, Book III of EO 292 states that “[t]he
President may temporarily designate an officer already in the government service or any other competent personto perform the functions of an office in
the executive branch.”  Thus, the President may even appoint in an acting capacity a person not yet in the government service, as long as the President
deems that person competent.
 
          Petitioners assert that Section 17 does not apply to appointments vested in the President by the Constitution, because it only applies to appointments
vested in the President by law.  Petitioners forget that Congress is not the only source of law.   “Law” refers to the Constitution, statutes or acts of Congress,
municipal ordinances, implementing rules issued pursuant to law, and judicial decisions.[17] 
 
          Finally, petitioners claim that the issuance of appointments in an acting capacity is susceptible to abuse.  Petitioners fail to consider that acting
appointments cannot exceed one year as expressly provided in Section 17(3), Chapter 5, Title I, Book III of EO 292.   The law has incorporated this safeguard
to prevent abuses, like the use of acting appointments as a way to circumvent confirmation by the Commission on Appointments.
 
In distinguishing ad interim  appointments from appointments in an acting capacity, a noted textbook writer on constitutional law has observed:
 
Ad-interim appointments must be distinguished from appointments in an acting capacity.  Both of them are effective upon
acceptance.  But ad-interim appointments are extended only during a recess of Congress, whereas acting appointments may be
extended any time there is a vacancy.  Moreover ad-interim appointments are submitted to the Commission on Appointments for
confirmation or rejection; acting appointments are not submitted to the Commission on Appointments.  Acting appointments are a
way of temporarily filling important offices but, if abused, they can also be a way of circumventing the need for confirmation by the
Commission on Appointments.[18]
 
 
However, we find no abuse in the present case.  The absence of abuse is readily apparent from President Arroyo’s issuance of ad interim  appointments to
respondents immediately upon the recess of Congress, way before the lapse of one year.
 
WHEREFORE, we DISMISS the present petition for certiorari and prohibition.
 
SO ORDERED.

83
EN BANC
[G.R. No. 136781. October 6, 2000]
VETERANS FEDERATION PARTY, ALYANSANG BAYANIHAN NG MGA MAGSASAKA, MANGGAGAWANG BUKID AT MANGINGISDA, ADHIKAIN AT KILUSAN
NG ORDINARYONG TAO PARA SA LUPA, PABAHAY AT KAUNLARAN, and LUZON FARMERS PARTY, petitioners, vs.  COMMISSION ON ELECTIONS,
PAG-ASA, SENIOR CITIZENS, AKAP AKSYON, PINATUBO, NUPA, PRP, AMIN, PAG-ASA, MAHARLIKA, OCW-UNIFIL, PCCI, AMMA-KATIPUNAN,
KAMPIL, BANTAY-BAYAN, AFW, ANG LAKAS OCW, WOMEN-POWER, INC., FEJODAP, CUP, VETERANS CARE, 4L, AWATU, PMP, ATUCP, NCWP,
ALU, BIGAS, COPRA, GREEN, ANAKBAYAN, ARBA, MINFA, AYOS, ALL COOP, PDP-LABAN, KATIPUNAN, ONEWAY PRINT, AABANTE KA PILIPINAS
-- All Being Party-List Parties/Organizations -- and Hon. MANUEL B. VILLAR, JR. in His Capacity as Speaker of the House of
Representatives, respondents.
[G.R. No. 136786. October 6, 2000]
AKBAYAN! (CITIZENS' ACTION PARTY), ADHIKAIN AT KILUSAN NG ORDINARYONG TAO PARA SA LUPA, PABAHAY AT KAUNLARAN (AKO), and
ASSOCIATION OF PHILIPPINE ELECTRIC COOPERATIVES (APEC), petitioners, vs.  COMMISSION ON ELECTIONS (COMELEC), HOUSE OF
REPRESENTATIVES represented by Speaker Manuel B. Villar, PAG-ASA, SENIOR CITIZENS, AKAP, AKSYON, PINATUBO, NUPA, PRP, AMIN,
MAHARLIKA, OCW, UNIFIL, PCCI, AMMA-KATIPUNAN, KAMPIL, BANTAY-BAYAN, AFW, ANG LAKAS OCW, WOMENPOWER INC., FEJODAP, CUP,
VETERANS CARE, FOUR "L", AWATU, PMP, ATUCP, NCWP, ALU, BIGAS, COPRA, GREEN, ANAK-BAYAN, ARBA, MINFA, AYOS, ALL COOP, PDP-
LABAN, KATIPUNAN, ONEWAY PRINT, AABANTE KA PILIPINAS, respondents.
[G.R. No. 136795. October 6, 2000]
ALAGAD (PARTIDO NG MARALITANG-LUNGSOD), NATIONAL CONFEDERATION OF SMALL COCONUT FARMERS' ORGANIZATIONS (NCSFCO), and LUZON
FARMERS' PARTY (BUTIL), petitioners, vs.COMMISSION ON ELECTIONS, SENIOR CITIZENS, AKAP, AKSYON, PINATUBO, NUPA, PRP, AMIN, PAG-
ASA, MAHARLIKA, OCW, UNIFIL, PCCI, AMMA-KATIPUNAN, KAMPIL, BANTAY-BAYAN, AFW, ANG LAKAS OCW, WOMENPOWER INC., FEJODAP,
CUP, VETERANS CARE, 4L, AWATU, PMP, ATUCP, NCWP, ALU, BIGAS, COPRA, GREEN, ANAK-BAYAN, ARBA, MINFA, AYOS, ALL COOP, PDP-
LABAN, KATIPUNAN, ONEWAY PRINT, and AABANTE KA PILIPINAS, respondents.
DECISION
PANGANIBAN,  J.:*
Prologue
To determine the winners in a Philippine-style party-list election, the Constitution and Republic Act (RA) No. 7941 mandate at least four inviolable
parameters. These are:
First, the twenty percent allocation - the combined number of all  party-list congressmen shall not exceed twenty percent of the total membership of
the House of Representatives, including those elected under the party list.
Second,  the two percent threshold - only those parties garnering a minimum of two percent of the total valid votes cast for the party-list system are
“qualified” to have a seat in the House of Representatives;
Third,  the three-seat limit - each qualified party, regardless of the number of votes it actually obtained, is entitled to a maximum of three seats; that
is, one “qualifying” and two additional seats.
Fourth,  proportional representation - the additional seats which a qualified party is entitled to shall be computed “in proportion to their total
number of votes.”

84
 Because the Comelec violated these legal parameters, the assailed Resolutions must be struck down for having been issued in grave abuse of
discretion. The poll body is mandated to enforce and administer election-related laws. It has no power to contravene or amend them.Neither does it have
authority to decide the wisdom, propriety or rationality of the acts of Congress.
Its bounden duty is to craft rules, regulations, methods and formulas to implement election laws -- not to reject, ignore, defeat, obstruct or
circumvent them.
In fine, the constitutional introduction of the party-list system - a normal feature of parliamentary democracies - into our presidential form of
government, modified by unique Filipino statutory parameters, presents new paradigms and novel questions, which demand innovative legal solutions
convertible into mathematical formulations which are, in turn, anchored on time-tested jurisprudence.
The Case
Before the Court are three consolidated Petitions for Certiorari (with applications for the issuance of a temporary restraining order or writ of
preliminary injunction) under Rule 65 of the Rules of Court, assailing (1) the October 15, 1998 Resolution[1] of the Commission on Elections (Comelec),
Second Division, in Election Matter 98-065;[2] and (2) the January 7, 1999 Resolution[3] of the Comelec en banc, affirming the said disposition. The assailed
Resolutions ordered the proclamation of thirty-eight (38) additional party-list representatives "to complete the full complement of 52 seats in the House of
Representatives as provided under Section 5, Article VI of the 1987 Constitution and R.A. 7941.”
The Facts and the Antecedents
Our 1987 Constitution introduced a novel feature into our presidential system of government -- the party-list method of representation. Under this
system, any national, regional or sectoral party or organization registered with the Commission on Elections may participate in the election of party-list
representatives who, upon their election and proclamation, shall sit in the House of Representatives as regular members. [4] In effect, a voter is given two (2)
votes for the House -- one for a district congressman and another for a party-list representative.[5]
Specifically, this system of representation is mandated by Section 5, Article VI of the Constitution, which provides:
“Sec. 5. (1) The House of Representatives shall be composed of not more than two hundred and fifty members, unless otherwise fixed by law, who shall be
elected from legislative districts apportioned among the provinces, cities, and the Metropolitan Manila area in accordance with the number of their
respective inhabitants, and on the basis of a uniform and progressive ratio, and those who, as provided by law, shall be elected by a party-list system of
registered national, regional, and sectoral parties or organizations.
(2) The party-list representatives shall constitute twenty per centum of the total number of representatives including those under the party-list. For three
consecutive terms after the ratification of this Constitution, one half of the seats allocated to party-list representatives shall be filled, as provided by law, by
selection or election from the labor, peasant, urban poor, indigenous cultural communities, women, youth, and such other sectors as may be provided by
law, except the religious sector.”
Complying with its constitutional duty to provide by law  the “selection or election” of party-list representatives, Congress enacted RA 7941 on March
3, 1995. Under this statute’s policy declaration, the State shall "promote proportional representation in the election of representatives  to the House of
Representatives through a party-list system of registered national, regional and sectoral parties or organizations or coalitions thereof, which will enable
Filipino citizens belonging to marginalized and underrepresented sectors, organizations and parties, and who lack well-defined political constituencies but
who could contribute to the formulation and enactment of appropriate legislation that will benefit the nation as a whole, to become members of the House
of Representatives. Towards this end, the State shall develop and guarantee a full, free and open party system in order to attain the broadest possible
representation of party, sectoral or group interests in the House of Representatives by enhancing their chances to compete for and win seats in the
legislature, and shall provide the simplest scheme possible.” (italics ours.)
The requirements for entitlement to a party-list seat in the House are prescribed by this law (RA 7941) in this wise:
“Sec. 11. Number of Party-List Representatives. --  The party-list representatives shall constitute twenty per centum (20%) of the total number of the
members of the House of Representatives including those under the party-list.
For purposes of the May 1998 elections, the first five (5) major political parties on the basis of party representation in the House of Representatives at the
start of the Tenth Congress of the Philippines shall not be entitled to participate in the party-list system.
In determining the allocation of seats for the second vote, the following procedure shall be observed:
(a) The parties, organizations, and coalitions shall be ranked from the highest to the lowest based on the number of votes they garnered during the
elections.
(b) The parties, organizations, and coalitions receiving at least two percent (2%) of the total votes cast for the party-list system shall be entitled to one seat
each; Provided, That those garnering more than two percent (2%) of the votes shall be entitled to additional seats in proportion to their total number of
votes; Provided, finally, That each party, organization, or coalition shall be entitled to not more than three (3) seats.
Pursuant to Section 18 of RA 7941, the Comelec en banc promulgated Resolution No. 2847, prescribing the rules and regulations governing the
election of party-list representatives through the party-list system.
Election of the Fourteen Party-List Representatives
On May 11, 1998, the first election for party-list representation was held simultaneously with the national elections. A total of one hundred twenty-
three (123) parties, organizations and coalitions participated. On June 26, 1998, the Comelec en banc proclaimed thirteen (13) party-list representatives
from twelve (12) parties and organizations, which had obtained at least two percent of the total number of votes cast for the party-list system.  Two of the
proclaimed representatives belonged to Petitioner APEC, which obtained 5.5 percent of the votes. The proclaimed winners and the votes cast in their favor
were as follows:[6]
Party/Organization/ Number of Percentage of Nominees
Coalition Votes Obtained Total Votes
1. APEC 503,487 5.5% Rene M. Silos
Melvyn D. Eballe
2. ABA 321,646 3.51% Leonardo Q. Montemayor
3. ALAGAD 312,500 3.41% Diogenes S. Osabel
4. VETERANS 304,802 3.33% Eduardo P. Pilapil
FEDERATION
5. PROMDI 255,184 2.79% Joy A.G. Young
6. AKO 239,042 2.61% Ariel A. Zartiga
7. NCSCFO 238,303 2.60% Gorgonio P. Unde
85
8. ABANSE! PINAY 235,548 2.57% Patricia M. Sarenas
9. AKBAYAN 232,376 2.54% Loreta Ann P. Rosales
10. BUTIL 215,643 2.36% Benjamin A. Cruz
11. SANLAKAS 194,617 2.13% Renato B. Magtubo
12. COOP-NATCCO 189,802 2.07% Cresente C. Paez
After passing upon the results of the special elections held on July 4, 18, and 25, 1998, the Comelec en banc further determined that COCOFED
(Philippine Coconut Planters’ Federation, Inc.) was entitled to one party-list seat for having garnered 186,388 votes, which were equivalent to 2.04 percent
of the total votes cast for the party-list system. Thus, its first nominee, Emerito S. Calderon, was proclaimed on September 8, 1998 as the 14th party-list
representative.[7]
On July 6, 1998, PAG-ASA (People’s Progressive Alliance for Peace and Good Government Towards Alleviation of Poverty and Social Advancement)
filed with the Comelec a "Petition to Proclaim [the] Full Number of Party-List Representatives provided by the Constitution."  It alleged that the filling up of
the twenty percent membership of party-list representatives in the House of Representatives, as provided under the Constitution, was mandatory. It further
claimed that the literal application of the two percent vote requirement and the three-seat limit under RA 7941 would defeat this constitutional provision,
for only 25 nominees would be declared winners, short of the 52 party-list representatives who should actually sit in the House.
Thereafter, nine other party-list organizations[8] filed their respective Motions for Intervention, seeking the same relief as that sought by PAG-ASA on
substantially the same grounds. Likewise, PAG-ASA’s Petition was joined by other party-list organizations in a Manifestation they filed on August 28,
1998. These organizations were COCOFED, Senior Citizens, AKAP, AKSYON, PINATUBO, NUPA, PRP, AMIN, PCCI, AMMA-KATIPUNAN, OCW-UNIFIL, KAMPIL,
MAHARLIKA, AFW, Women Power, Inc., Ang Lakas OCW, FEJODAP, CUP, Veterans Care, Bantay Bayan, 4L, AWATU, PMP, ATUCP, ALU and BIGAS.
On October 15, 1998, the Comelec Second Division promulgated the present assailed Resolution granting PAG-ASA's Petition. It also ordered the
proclamation of herein 38 respondents who, in addition to the 14 already sitting, would thus total 52 party-list representatives.  It held that "at all times, the
total number of congressional[9] seats must be filled up by eighty (80%) percent district representatives and twenty (20%) percent party-list
representatives." In allocating the 52 seats, it disregarded the two percent-vote requirement prescribed under Section 11 (b) of RA 7941. Instead, it
identified three "elements of the party-list system," which should supposedly determine "how the 52 seats should be filled up." First,  "the system was
conceived to enable the marginalized sectors of the Philippine society to be represented in the House of Representatives." Second, "the system should
represent the broadest sectors of the Philippine society." Third,  "it should encourage [the] multi-party system.” (Boldface in the original.) Considering these
elements, but ignoring the two percent threshold requirement of RA 7941, itconcluded that "the party-list groups ranked Nos. 1 to 51 x x x should have at
least one representative.” It thus disposed as follows:
"WHEREFORE, by virtue of the powers vested in it by the Constitution, the Omnibus Election Code (B.P. 881), Republic Act No. 7941 and other election laws,
the Commission (Second Division) hereby resolves to GRANT the instant petition and motions for intervention, to include those similarly situated.
ACCORDINGLY, the nominees from the party-list hereinbelow enumerated based on the list of names submitted by their respective parties, organizations
and coalitions are PROCLAIMED as party-list representatives, to wit:
1. SENIOR CITIZENS
2. AKAP
3. AKSYON
4. PINATUBO
5. NUPA
6. PRP
7. AMIN
8. PAG-ASA
9. MAHARLIKA
10. OCW-UNIFIL
11. FCL
12. AMMA-KATIPUNAN
13. KAMPIL
14. BANTAY BAYAN
15. AFW
16. ANG LAKAS OCW
17. WOMENPOWER, INC.
18. FEJODAP
19. CUP
20. VETERANS CARE
21. 4L
22. AWATU
23. PMP
24. ATUCP
25. NCWP
26. ALU
27. BIGAS
28. COPRA
29. GREEN
30. ANAKBAYAN
31. ARBA
32. MINFA
33. AYOS
34. ALL COOP
35. PDP-LABAN
86
 36. KATIPUNAN
37. ONEWAY PRINT
38. AABANTE KA PILIPINAS
to complete the full complement of 52 seats in the House of Representatives as provided in Section 5, Article VI of the 1987 Constitution and R.A. 7941.”
The foregoing disposition sums up a glaring bit of inconsistency and flip-flopping. In its Resolution No. 2847 dated June 25, 1996, the Comelec en banc
had unanimously promulgated a set of “Rules and Regulations Governing the Election of x x x Party-List Representatives Through the Party-List System.”
Under these Rules and Regulations, one additional seat shall be given for every two percent of the vote, a formula the Comelec illustrated in its Annex “A.”
It apparently relied on this method when it proclaimed the 14 incumbent party-list solons (two for APEC and one each for the 12 other qualified
parties). However, for inexplicable reasons, it abandoned said unanimous Resolution and proclaimed, based on its three “elements,” the “Group of 38”
private respondents.[10]
The twelve (12) parties and organizations, which had earlier been proclaimed winners on the basis of having obtained at least two percent of the
votes cast for the party-list system, objected to the proclamation of the 38 parties and filed separate Motions for Reconsideration. They contended that (1)
under Section 11 (b) of RA 7941, only parties, organizations or coalitions garnering at least two percent of the votes for the party-list system were entitled
to seats in the House of Representatives; and (2) additional seats, not exceeding two for each, should be allocated to those which had garnered the two
percent threshold in proportion to the number of votes cast for the winning parties, as provided by said Section 11.
Ruling of the Comelec En Banc
Noting that all the parties -- movants and oppositors alike - had agreed that the twenty percent membership of party-list representatives in the House
"should be filled up,” the Comelec en banc resolved only the issue concerning the apportionment or allocation of the remaining seats.In other words, the
issue was: Should the remaining 38 unfilled seats allocated to party-list solons be given (1) to the thirteen qualified parties that had each garnered at least
two percent of the total votes, or (2) to the Group of 38 - herein private respondents - even if they had not passed the two percent threshold?
The poll body held that to allocate the remaining seats only to those who had hurdled the two percent vote requirement "will mean the
concentration of representation of party, sectoral or group interests in the House of Representatives to thirteen organizations representing two political
parties, three coalitions and four sectors: urban poor, veterans, women and peasantry x x x. Such strict application of the 2% 'threshold' does not serve the
essence and object of the Constitution and the legislature -- to develop and guarantee a full, free and open party system in order to attain the broadest
possible representation of party, sectoral or group interests in the House of Representatives x x x.” Additionally, it "will also prevent this Commission from
complying with the constitutional and statutory decrees for party-list representatives to compose 20% of the House of Representatives.”
Thus, in its Resolution dated January 7, 1999, the Comelec en banc, by a razor-thin majority -- with three commissioners concurring [11] and two
members[12] dissenting -- affirmed the Resolution of its Second Division. It, however, held in abeyance the proclamation of the 51 st party (AABANTE KA
PILIPINAS), "pending the resolution of petitions for correction of manifest errors.”
Without expressly declaring as unconstitutional or void the two percent vote requirement imposed by RA 7941, the Commission blithely rejected and
circumvented its application, holding that there were more important considerations than this statutory threshold.
Consequently, several petitions for certiorari, prohibition and mandamus, with prayers for the issuance of temporary restraining orders or writs of
preliminary injunction, were filed before this Court by the parties and organizations that had obtained at least two per cent of the total votes cast for the
party-list system.[13] In the suits, made respondents together with the Comelec were the 38 parties, organizations and coalitions that had been declared by
the poll body as likewise entitled to party-list seats in the House of Representatives. Collectively, petitioners sought the proclamation of additional
representatives from each of their parties and organizations, all of which had obtained at least two percent of the total votes cast for the party-list system.
On January 12, 1999, this Court issued a Status Quo Order directing the Comelec “to CEASE and DESIST from constituting itself as a National Board of
Canvassers on 13 January 1999 or on any other date and proclaiming as winners the nominees of the parties, organizations and coalitions enumerated in
the dispositive portions of its 15 October 1998 Resolution or its 7 January 1999 Resolution, until further orders from this Court.”
On July 1, 1999, oral arguments were heard from the parties. Atty. Jeremias U. Montemayor appeared for petitioners in GR No. 136781; Atty.
Gregorio A. Andolana, for petitioners in GR No. 136786; Atty. Rodante D. Marcoleta for petitioners in GR No. 136795; Attys. Ricardo Blancaflor and Pete
Quirino Quadra, for all the private respondents; Atty. Porfirio V. Sison for Intervenor NACUSIP; and Atty. Jose P. Balbuena for Respondent Comelec. Upon
invitation of the Court, retired Comelec Commissioner Regalado E. Maambong acted as amicus curiae.Solicitor General Ricardo P. Galvez appeared, not for
any party but also as a friend of the Court.
Thereafter, the parties and the amici curiae  were required to submit their respective Memoranda in amplification of their verbal arguments.[14]
The Issues
The Court believes, and so holds, that the main question of how to determine the winners of the subject party-list election can be fully settled by
addressing the following issues:
1. Is the twenty percent allocation for party-list representatives mentioned in Section 5 (2), Article VI of the Constitution, mandatory or is it merely a
ceiling? In other words, should the twenty percent allocation for party-list solons be filled up completely and all the time?
2. Are the two percent threshold requirement and the three-seat limit provided in Section 11 (b) of RA 7941 constitutional?
3. If the answer to Issue 2 is in the affirmative, how should the additional seats of a qualified party be determined?
The Court’s Ruling
The Petitions are partly meritorious. The Court agrees with petitioners that the assailed Resolutions should be nullified, but disagrees that they should
all be granted additional seats.
First Issue: Whether the Twenty Percent Constitutional Allocation Is Mandatory
The pertinent provision[15] of the Constitution on the composition of the House of Representatives reads as follows:
“Sec. 5. (1) The House of Representatives shall be composed of not more than two hundred and fifty members, unless otherwise fixed by law, who shall be
elected from legislative districts apportioned among the provinces, cities, and the Metropolitan Manila area in accordance with the number of their
respective inhabitants, and on the basis of a uniform and progressive ratio, and those who, as provided by law, shall be elected by a party-list system of
registered national, regional, and sectoral parties or organizations.
(2) The party-list representatives shall constitute twenty per centum of the total number of representatives including those under the party-list. For three
consecutive terms after the ratification of this Constitution, one half of the seats allocated to party-list representatives shall be filled, as provided by law, by
selection or election from the labor, peasant, urban poor, indigenous cultural communities, women, youth, and such other sectors as may be provided by
law, except the religious sector.”
Determination of the Total Number of Party-List Lawmakers
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 Clearly, the Constitution makes the number of district representatives the determinant in arriving at the number of seats allocated for party-list
lawmakers, who shall comprise "twenty per centum of the total number of representatives including those under the party-list." We thus translate this legal
provision into a mathematical formula, as follows:
No. of district representatives
---------------------------------- x .20 = No. of party-list
.80 representatives
This formulation[16] means that any increase in the number of district representatives, as may be provided by law, will necessarily result in a
corresponding increase in the number of party-list seats. To illustrate, considering that there were 208 district representatives to be elected during the 1998
national elections, the number of party-list seats would be 52, computed as follows:
208
-------- x .20 = 52
.80
The foregoing computation of seat allocation is easy enough to comprehend. The problematic question, however, is this: Does the Constitution
require all such allocated seats to be filled up all the time and under all circumstances? Our short answer is “No.”
Twenty Percent Allocation a Mere Ceiling
The Constitution simply states that "[t]he party-list representatives shall constitute twenty per centum of the total number of representatives
including those under the party-list.”
According to petitioners, this percentage is a ceiling; the mechanics by which it is to be filled up has been left to Congress. In the exercise of its
prerogative, the legislature enacted RA 7941, by which it prescribed that a party, organization or coalition participating in the party-list election must obtain
at least two percent of the total votes cast for the system in order to qualify for a seat in the House of Representatives.
Petitioners further argue that the constitutional provision must be construed together with this legislative requirement. If there is no sufficient
number of participating parties, organizations or coalitions which could hurdle the two percent vote threshold and thereby fill up the twenty percent party-
list allocation in the House, then naturally such allocation cannot be filled up completely. The Comelec cannot be faulted for the "incompleteness," for
ultimately the voters themselves are the ones who, in the exercise of their right of suffrage, determine who and how many should represent them.
On the other hand, Public Respondent Comelec, together with the respondent parties, avers that the twenty percent allocation for party-list
lawmakers is mandatory, and that the two percent vote requirement in RA 7941 is unconstitutional, because its strict application would make it
mathematically impossible to fill up the House party-list complement.
We rule that a simple reading of Section 5, Article VI of the Constitution, easily conveys the equally simple message that Congress was vested with the
broad power to define and prescribe the mechanics of the party-list system of representation. The Constitution explicitly sets down only the percentage of
the total membership in the House of Representatives reserved for party-list representatives.
In the exercise of its constitutional prerogative, Congress enacted RA 7941. As said earlier, Congress declared therein a policy to promote
"proportional representation" in the election of party-list representatives in order to enable Filipinos belonging to the marginalized and underrepresented
sectors to contribute legislation that would benefit them. It however deemed it necessary to require parties, organizations and coalitions participating in
the system to obtain at least two percent of the total votes cast for the party-list system in order to be entitled to a party-list seat.  Those garnering more
than this percentage could have "additional seats in proportion to their total number of votes.” Furthermore, no winning party, organization or coalition can
have more than three seats in the House of Representatives. Thus the relevant portion of Section 11(b) of the law provides:
“(b) The parties, organizations, and coalitions receiving at least two percent (2%) of the total votes cast for the party-list system shall be entitled to one seat
each; Provided, That those garnering more than two percent (2%) of the votes shall be entitled to additional seats in proportion to their total number of
votes; Provided, finally, That each party, organization, or coalition shall be entitled to not more than three (3) seats.”
Considering the foregoing statutory requirements, it will be shown presently that Section 5 (2), Article VI of the Constitution is not mandatory.It
merely provides a ceiling for party-list seats in Congress.
On the contention that a strict application of the two percent threshold may result in a “mathematical impossibility,” suffice it to say that the
prerogative to determine whether to adjust or change this percentage requirement rests in Congress.[17] Our task now, as should have been the Comelec’s,
is not to find fault in the wisdom of the law through highly unlikely scenarios of clinical extremes, but to craft an innovative mathematical formula that can,
as far as practicable, implement it within the context of the actual election process.
Indeed, the function of the Supreme Court, as well as of all judicial and quasi-judicial agencies, is to apply the law as we find it, not to reinvent or
second-guess it. Unless declared unconstitutional, ineffective, insufficient or otherwise void by the proper tribunal, a statute remains a valid command of
sovereignty that must be respected and obeyed at all times. This is the essence of the rule of law.
Second Issue: The Statutory Requirement and Limitation
The Two Percent Threshold
In imposing a two percent threshold, Congress wanted to ensure that only those parties, organizations and coalitions having a sufficient number of
constituents deserving of representation are actually represented in Congress. This intent can be gleaned from the deliberations on the proposed bill. We
quote below a pertinent portion of the Senate discussion:
“SENATOR GONZALES: For purposes of continuity, I would want to follow up a point that was raised by, I think, Senator Osmeña when he said that a political
party must have obtained at least a minimum percentage to be provided in this law in order to qualify for a seat under the party-list system.
They do that in many other countries. A party must obtain at least 2 percent of the votes cast, 5 percent or 10 percent of the votes cast. Otherwise, as I
have said, this will actually proliferate political party groups and those who have not really been given by the people sufficient basis for them to represent
their constituents and, in turn, they will be able to get to the Parliament through the backdoor under the name of the party-list system, Mr. President."[18]
A similar intent is clear from the statements of the bill sponsor in the House of Representatives, as the following shows:
“MR. ESPINOSA. There is a mathematical formula which this computation is based at, arriving at a five percent ratio which would distribute equitably the
number of seats among the different sectors. There is a mathematical formula which is, I think, patterned after that of the party list of the other parliaments
or congresses, more particularly the Bundestag of Germany.”[19]
Moreover, even the framers of our Constitution had in mind a minimum-vote requirement, the specification of which they left to Congress to
properly determine. Constitutional Commissioner Christian S. Monsod explained:
“MR. MONSOD. x x x We are amenable to modifications in the minimum percentage of votes. Our proposal is that anybody who has two-and-a-half percent
of the votes gets a seat. There are about 20 million who cast their votes in the last elections. Two-and-a-half percent would mean 500,000 votes. Anybody
88
who has a constituency of 500,000 votes nationwide deserves a seat in the Assembly. If we bring that down to two percent, we are talking about 400,000
votes. The average vote per family is three. So, here we are talking about 134,000 families. We believe that there are many sectors who will be able to get
seats in the Assembly because many of them have memberships of over 10,000. In effect, that is the operational implication of our proposal. What we are
trying to avoid is this selection of sectors, the reserve seat system. We believe that it is our job to open up the system and that we should not have within
that system a reserve seat. We think that people should organize, should work hard, and should earn their seats within that system.”[20]
The two percent threshold is consistent not only with the intent of the framers of the Constitution and the law, but with the very essence of
"representation." Under a republican or representative state, all government authority emanates from the people, but is exercised by representatives
chosen by them.[21] But to have meaningful representation, the elected persons must have the mandate of a sufficient number of people. Otherwise, in a
legislature that features the party-list system, the result might be the proliferation of small groups which are incapable of contributing significant legislation,
and which might even pose a threat to the stability of Congress. Thus, even legislative districts are apportioned according to "the number of their respective
inhabitants, and on the basis of a uniform and progressive ratio"[22] to ensure meaningful local representation.
All in all, we hold that the statutory provision on this two percent requirement is precise and crystalline. When the law is clear, the function of courts
is simple application, not interpretation or circumvention.[23]
The Three-Seat-Per-Party Limit
An important consideration in adopting the party-list system is to promote and encourage a multiparty system of representation. Again, we quote
Commissioner Monsod:
“MR. MONSOD. Madam President, I just want to say that we suggested or proposed the party list system because we wanted to open up the political
system to a pluralistic society through a multiparty system. But we also wanted to avoid the problems of mechanics and operation in the implementation of
a concept that has very serious shortcomings of classification and of double or triple votes. We are for opening up the system, and we would like very much
for the sectors to be there. That is why one of the ways to do that is to put a ceiling on the number of representatives from any single party that can sit
within the 50 allocated under the party list system. This way, we will open it up and enable sectoral groups, or maybe regional groups, to earn their seats
among the fifty. x x x.”[24]
Consistent with the Constitutional Commission's pronouncements, Congress set the seat-limit to three (3) for each qualified party, organization or
coalition. "Qualified" means having hurdled the two percent vote threshold. Such three-seat limit ensures the entry of various interest-representations into
the legislature; thus, no single group, no matter how large its membership, would dominate the party-list seats, if not the entire House.
We shall not belabor this point, because the validity of the three-seat limit is not seriously challenged in these consolidated cases.
Third Issue: Method of Allocating Additional Seats
Having determined that the twenty percent seat allocation is merely a ceiling, and having upheld the constitutionality of the two percent vote
threshold and the three-seat limit imposed under RA 7941, we now proceed to the method of determining how many party-list seats the qualified parties,
organizations and coalitions are entitled to. The very first step - there is no dispute on this - is to rank all the participating parties, organizations and
coalitions (hereafter collectively referred to as "parties") according to the votes they each obtained. The percentage of their respective votes as against the
total number of votes cast for the party-list system is then determined. All those that garnered at least two percent of the total votes cast have an assured
or guaranteed seat in the House of Representatives. Thereafter, "those garnering more than two percent of the votes shall be entitled to additional seats in
proportion to their total number of votes." The problem is how to distribute additional seats "proportionally," bearing in mind the three-seat limit further
imposed by the law.
One Additional Seat Per Two Percent Increment
One proposed formula is to allocate one additional seat for every additional proportion of the votes obtained equivalent to the two percent vote
requirement for the first seat.[25] Translated in figures, a party that wins at least six percent of the total votes cast will be entitled to three seats; another
party that gets four percent will be entitled to two seats; and one that gets two percent will be entitled to one seat only.  This proposal has the advantage of
simplicity and ease of comprehension. Problems arise, however, when the parties get very lop-sided votes -- for example, when Party A receives 20 percent
of the total votes cast; Party B, 10 percent; and Party C, 6 percent. Under the method just described, Party A would be entitled to 10 seats; Party B, to 5
seats and Party C, to 3 seats. Considering the three-seat limit imposed by law, all the parties will each uniformly have three seats only. We would then have
the spectacle of a party garnering two or more times the number of votes obtained by another, yet getting the same number of seats as the other one with
the much lesser votes. In effect, proportional representation will be contravened and the law rendered nugatory by this suggested solution. Hence, the
Court discarded it.
The Niemeyer Formula
Another suggestion that the Court considered was the Niemeyer formula, which was developed by a German mathematician and adopted by
Germany as its method of distributing party-list seats in the Bundestag. Under this formula, the number of additional seats to which a qualified party would
be entitled is determined by multiplying the remaining number of seats to be allocated by the total number of votes obtained by that party and dividing the
product by the total number of votes garnered by all the qualified parties. The integer portion of the resulting product will be the number of additional
seats that the party concerned is entitled to. Thus:
No. of remaining seats
to be allocated No. of additional
--------------------------- x No. of votes of = seats of party
Total no. of votes of party concerned concerned
qualified parties (Integer.decimal)
The next step is to distribute the extra seats left among the qualified parties in the descending order of the decimal portions of the resulting
products. Based on the 1998 election results, the distribution of party-list seats under the Niemeyer method would be as follows:
Party Number of Guaranteed Additional Extra Total
Votes Seats Seats Seats
1. APEC 503,487 1 5.73 1 7
2. ABA 321,646 1 3.66 1 5
3. ALAGAD 312,500 1 3.55 4
4. VETERANS 304,802 1 3.47 4
FEDERATION
5. PROMDI 255,184 1 2.90 1 4
89
6. AKO 239,042 1 2.72 1 4
7. NCSCFO 238,303 1 2.71 1 4
8. ABANSE! PINAY 235,548 1 2.68 1 4
9. AKBAYAN 232,376 1 2.64 1 4
10. BUTIL 215,643 1 2.45 3
11. SANLAKAS 194,617 1 2.21 3
12. COOP-NATCCO 189,802 1 2.16 3
13. COCOFED 186,388 1 2.12 3
Total 3,429,338 13 32 7 52
However, since Section 11 of RA 7941 sets a limit of three (3) seats for each party, those obtaining more than the limit will have to give up their
excess seats. Under our present set of facts, the thirteen qualified parties will each be entitled to three seats, resulting in an overall total of 39.  Note that
like the previous proposal, the Niemeyer formula would violate the principle of "proportional representation," a basic tenet of our party-list system.
The Niemeyer formula, while no doubt suitable for Germany, finds no application in the Philippine setting, because of our three-seat limit and the
non-mandatory character of the twenty percent allocation. True, both our Congress and the Bundestag  have threshold requirements -- two percent for us
and five for them. There are marked differences between the two models, however. As ably pointed out by private respondents,[26]one half of the German
Parliament is filled up by party-list members. More important, there are no seat limitations, because German law discourages the proliferation of small
parties. In contrast, RA 7941, as already mentioned, imposes a three-seat limit to encourage the promotion of the multiparty system.  This major statutory
difference makes the Niemeyer formula completely inapplicable to the Philippines.
Just as one cannot grow Washington apples in the Philippines or Guimaras mangoes in the Arctic because of fundamental environmental differences,
neither can the Niemeyer formula be transplanted in toto here because of essential variances between the two party-list models.
The Legal and Logical Formula for the Philippines
It is now obvious that the Philippine style party-list system is a unique paradigm which demands an equally unique formula. In crafting a legally
defensible and logical solution to determine the number of additional  seats that a qualified  party is entitled to, we need to review the parameters of the
Filipino party-list system.
As earlier mentioned in the Prologue, they are as follows:
First, the twenty percent allocation - the combined number of all  party-list congressmen shall not exceed twenty percent of the total membership of
the House of Representatives, including those elected under the party list.
Second,  the two percent threshold - only those parties garnering a minimum of two percent of the total valid votes cast for the party-list system are
“qualified” to have a seat in the House of Representatives;
Third,  the three-seat limit - each qualified party, regardless of the number of votes it actually obtained, is entitled to a maximum of three seats; that
is, one “qualifying” and two additional seats.
Fourth,  proportional representation - the additional seats which a qualified party is entitled to shall be computed “in proportion to their total
number of votes.”
The problem, as already stated, is to find a way to translate “proportional representation” into a mathematical formula that will not contravene,
circumvent or amend the above-mentioned parameters.
After careful deliberation, we now explain such formula, step by step.
Step One.  There is no dispute among the petitioners, the public and the private respondents, as well as the members of this Court, that the initial step
is to rank all the participating parties, organizations and coalitions from the highest to the lowest based on the number of votes they each received. Then
the ratio for each party is computed by dividing its votes by the total votes cast for all the parties participating in the system.All parties with at least two
percent of the total votes are guaranteed one seat each. Only these parties shall be considered in the computation ofadditional seats. The party receiving
the highest number of votes shall thenceforth be referred to as the “first” party.
Step Two.  The next step is to determine the number of seats the first party is entitled to, in order to be able to compute that for the other
parties. Since the distribution is based on proportional representation, the number of seats to be allotted to the other parties cannot possibly exceed that to
which the first party is entitled by virtue of its obtaining the most number of votes.
For example, the first party received 1,000,000 votes and is determined to be entitled to two additional seats. Another qualified party which received
500,000 votes cannot be entitled to the same number of seats, since it garnered only fifty percent of the votes won by the first party.Depending on the
proportion of its votes relative to that of the first party whose number of seats has already been predetermined, the second party should be given less than
that to which the first one is entitled.
The other qualified parties will always be allotted less additional seats than the first party for two reasons: (1) the ratio between said parties and the
first party will always be less than 1:1, and (2) the formula does not admit of mathematical rounding off, because there is no such thing as a fraction of a
seat. Verily, an arbitrary rounding off could result in a violation of the twenty percent allocation. An academic mathematical demonstration of such incipient
violation is not necessary because the present set of facts, given the number of qualified parties and the voting percentages obtained, will
definitely not  end up in such constitutional contravention.
The Court has previously ruled in Guingona Jr. v. Gonzales[27] that a fractional membership cannot be converted into a whole membership of one
when it would, in effect, deprive another party's fractional membership. It would be a violation of the constitutional mandate of proportional
representation. We said further that "no party can claim more than what it is entitled to x x x.”
In any case, the decision on whether to round off the fractions is better left to the legislature. Since Congress did not provide for it in the present law,
neither will this Court. The Supreme Court does not make the law; it merely applies it to a given set of facts.
Formula for Determining Additional Seats for the First Party
Now, how do we determine the number of seats the first party  is entitled to? The only basis given by the law is that a party receiving at least two
percent of the total votes shall be entitled to one seat. Proportionally, if the first party were to receive twice the number of votes of the second party, it
should be entitled to twice the latter's number of seats and so on. The formula, therefore, for computing the number of seats to which thefirst party  is
entitled is as follows:
Number of votes
of first party Proportion of votes of
-------------------- = first party relative to
90
Total votes for total votes for party-list system
party-list system
If the proportion of votes received by the first party without rounding it off is equal to at least six percent of the total valid votes cast for all the party
list groups, then the first party shall be entitled to two additional seats or a total of three seats overall. If the proportion of votes without a rounding off is
equal to or greater than four percent, but less than six percent, then the first party shall have one additional or a total of two seats.And if the proportion is
less than four percent, then the first party shall not be entitled to any additional seat.
We adopted this six percent bench mark, because the first party is not always entitled to the maximum number of additional seats. Likewise, it would
prevent the allotment of more than the total number of available seats, such as in an extreme case wherein 18 or more parties tie for the highest rank and
are thus entitled to three seats each. In such scenario, the number of seats to which all the parties are entitled may exceed the maximum number of party-
list seats reserved in the House of Representatives.
Applying the above formula, APEC, which received 5.5% of the total votes cast, is entitled to one additional seat or a total of two seats.
Note that the above formula will be applicable only in determining the number of additional seats the first party  is entitled to. It cannot be used to
determine the number of additional seats of the other qualified parties. As explained earlier, the use of the same formula for all would contravene the
proportional representation parameter. For example, a second party obtains six percent of the total number of votes cast.According to the above formula,
the said party would be entitled to two additional seats or a total of three seats overall. However, if the first party received a significantly higher amount of
votes -- say, twenty percent -- to grant it the same number of seats as the second party would violate the statutory mandate of proportional representation,
since a party getting only six percent of the votes will have an equal number of representatives as the one obtaining twenty percent. The proper solution,
therefore, is to grant the first party a total of three seats; and the party receiving six percent, additional seats in proportion to those of the first party.
Formula for Additional Seats of Other Qualified Parties
Step Three  The next step is to solve for the number of additional seats that the other qualified parties  are entitled to, based on proportional
representation. The formula is encompassed by the following complex fraction:
No. of votes of
concerned party
------------------
Total no. of votes
Additional seats for party-list system No. of additional
for concerned = ----------------------- x seats allocated to
party No. of votes of the first party
first party
------------------
Total no. of votes
for party list system
In simplified form, it is written as follows:
No. of votes of
Additional seats concerned party No. of additional
for concerned = ------------------ x seats allocated to
party No. of votes of the first party
first party
Thus, in the case of ABA, the additional number of seats it would be entitled to is computed as follows:
No. of votes of
Additional seats ABA No. of additional
for concerned = -------------------- x seats allocated to
party (ABA) No. of votes of the first party
first party (APEC)
Substituting actual values would result in the following equation:
Additional seats 321,646
for concerned = ----------- x 1 = .64 or 0 additional seat, since
party (ABA) 503,487 rounding off is not to be applied
Applying the above formula, we find the outcome of the 1998 party-list election to be as follows:
Organization Votes %age of Initial No. Additional Total
Garnered Total Votes of Seats Seats
1. APEC 503,487 5.50% 1 1 2
2. ABA 321,646 3.51% 1 321,646 / 503,487 * 1 = 0.64 1
3. ALAGAD 312,500 3.41% 1 312,500 / 503,487 * 1 = 0.62 1
4. VETERANS 304,802 3.33% 1 304,802 / 503,487 * 1 = 0.61 1
FEDERATION
5. PROMDI 255,184 2.79% 1 255,184 / 503,487 * 1 = 0.51 1
6. AKO 239,042 2.61% 1 239,042 / 503,487 * 1 = 0.47 1
7. NCSFO 238,303 2.60% 1 238,303 / 503,487 * 1 = 0.47 1
8. ABANSE! 235,548 2.57% 1 321,646 / 503,487 * 1 = 0.47 1
PINAY
9. AKBAYAN! 232,376 2.54% 1 232,376 / 503,487 * 1 = 0.46 1
10. BUTIL 215,643 2.36% 1 215,643 / 503,487 * 1 = 0.43 1
11. SANLAKAS 194,617 2.13% 1 194,617 / 503,487 * 1 = 0.39 1
12. COOP- 189,802 2.07% 1 189,802 / 503,487 * 1 = 0.38 1
NATCCO
91
13. COCOFED 186,388 2.04% 1 186,388 / 503,487 * 1 = 0.37 1
Incidentally, if the first party is not entitled to any additional seat, then the ratio of the number of votes for the other party to that for the first one is
multiplied by zero. The end result would be zero additional seat for each of the other qualified parties as well.
The above formula does not give an exact mathematical representation of the number of additional seats to be awarded since, in order to be entitled
to one additional seat, an exact whole number is necessary. In fact, most of the actual mathematical proportions are not whole numbers and are not
rounded off for the reasons explained earlier. To repeat, rounding off may result in the awarding of a number of seats in excess of that provided by the
law. Furthermore, obtaining absolute proportional representation is restricted by the three-seat-per-party limit to a maximum of two additional slots. An
increase in the maximum number of additional representatives a party may be entitled to would result in a more accurate proportional representation.  But
the law itself has set the limit: only two additional seats. Hence, we need to work within such extant parameter.
The net result of the foregoing formula for determining additional seats happily coincides with the present number of incumbents; namely, two for
the first party (APEC) and one each for the twelve other qualified parties. Hence, we affirm the legality of the incumbencies of their nominees, albeit
through the use of a different formula and methodology.
In his Dissent, Justice Mendoza criticizes our methodology for being too strict. We say, however, that our formula merely translated the Philippine
legal parameters into a mathematical equation, no more no less. If Congress in its wisdom decides to modify RA 7941 to make it “less strict,” then the
formula will also be modified to reflect the changes willed by the lawmakers.
Epilogue
In sum, we hold that the Comelec gravely abused its discretion in ruling that the thirty-eight (38) herein respondent parties, organizations and
coalitions are each entitled to a party-list seat, because it glaringly violated two requirements of RA 7941: the two percent threshold and proportional
representation.
In disregarding, rejecting and circumventing these statutory provisions, the Comelec effectively arrogated unto itself what the Constitution expressly
and wholly vested in the legislature: the power and the discretion to define the mechanics for the enforcement of the system. The wisdom and the
propriety of these impositions, absent any clear transgression of the Constitution or grave abuse of discretion amounting to lack or excess of jurisdiction,
are beyond judicial review.[28]
Indeed, the Comelec and the other parties in these cases - both petitioners and respondents - have failed to demonstrate that our
lawmakers gravely abused their discretion in prescribing such requirements. By grave abuse of discretion is meant such capricious or whimsical exercise of
judgment equivalent to lack or excess of jurisdiction.[29]
The Comelec, which is tasked merely to enforce and administer election-related laws, [30] cannot simply disregard an act of Congress exercised within
the bounds of its authority. As a mere implementing body, it cannot judge the wisdom, propriety or rationality of such act. Its recourse is to draft an
amendment to the law and lobby for its approval and enactment by the legislature.
Furthermore, a reading of the entire Constitution reveals no violation of any of its provisions by the strict enforcement of RA 7941. It is basic that to
strike down a law or any of its provisions as unconstitutional, there must be a clear and unequivocal showing that what the Constitution prohibits, the
statute permits.[31]
Neither can we grant petitioners’ prayer that they each be given additional seats (for a total of three each), because granting such plea would plainly
and simply violate the “proportional representation” mandated by Section 11 (b) of RA 7941.
The low turnout of the party-list votes during the 1998 elections should not be interpreted as a total failure of the law in fulfilling the object of this
new system of representation. It should not be deemed a conclusive indication that the requirements imposed by RA 7941 wholly defeated the
implementation of the system. Be it remembered that the party-list system, though already popular in parliamentary democracies, is still quite new in our
presidential system. We should allow it some time to take root in the consciousness of our people and in the heart of our tripartite form of
republicanism. Indeed, the Comelec and the defeated litigants should not despair.
Quite the contrary, the dismal result of the first election for party-list representatives should serve as a challenge to our sectoral parties and
organizations. It should stir them to be more active and vigilant in their campaign for representation in the State's lawmaking body. It should also serve as a
clarion call for innovation and creativity in adopting this novel system of popular democracy.
With adequate information dissemination to the public and more active sectoral parties, we are confident our people will be more responsive to
future party-list elections. Armed with patience, perseverance and perspicacity, our marginalized sectors, in time, will fulfill the Filipino dream of full
representation in Congress under the aegis of the party-list system, Philippine style.
WHEREFORE, the Petitions are hereby partially GRANTED.  The assailed Resolutions of the Comelec are SET ASIDE  and NULLIFIED.The proclamations
of the fourteen (14) sitting party-list representatives - two for APEC and one each for the remaining twelve (12) qualified parties - are AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., Purisima, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon Jr., JJ., concur.
Bellosillo, Melo,  and Vitug, JJ.,  in the result.
Puno, J.,  see separate concurring opinion.
Mendoza, J.,  dissents.
Kapunan,  and Quisumbing, JJ.,  join the opinion of J. Mendoza.
 
Consolidated Table
DISTRIBUTION OF SEATS
 
Group (1) (2) (3) (4) (5) (6) (7) (8)
Actual votes Percentage of Guaranteed Additional Extra Total6 Seats in Total number
received1 votes cast for seat3 seats4 seats5 excess of of seats
party-list2 3 allowed7
1. APEC 503,487 5.50% 1 5.73 1 7 4 3
2. ABA 321,646 3.51% 1 3.66 1 5 2 3
3. ALAGAD 312,500 3.41% 1 3.55 4 1 3

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 4. VETERANS 304,902 3.33% 1 3.47 4 1 3
FEDERATION
5. PROMDI 255,184 2.79% 1 2.90 1 4 1 3
6. AKO 239,042 2.61% 1 2.72 1 4 1 3
7. NCSFO 338,303 2.60% 1 2.71 1 4 1 3
8. ABANSE! PINAY 235,548 2.57% 1 2.68 1 4 1 3
9. AKBAYAN! 232,376 2.54% 1 2.64 1 4 1 3
10 BUTIL 215,643 2.36% 1 2.45 3 - 3
11. SANLAKAS 194,617 2.13% 1 2.21 3 - 3
12. COOP-NATCCO 189,802 2.07% 1 2.16 3 - 3
13. COCOFED 186,388 2.04% 1 2.12 3 - 3
14. SENIOR 143,444 1.57%
CITIZENS
15. Other Parties 5,582,427 Each with less
than 2%
TOTAL 9,155,309 100% 13 32 7 52 13 39
 

*
 At the outset of this case, I offered to inhibit myself from participating in these cases because, prior to my appointment to this Court, I had been a general
counsel and director of one of the respondents. However, the Court unanimously resolved to deny my request for the following reasons: (1) I was merely a
voluntary non-compensated officer of the non-profit Philippine Chamber of Commerce and Industry (PCCI), (2) the present case and its antecedents were
not extant during my incumbency at PCCI, and (3) this case involved important constitutional questions, and the Court believed that all justices should as
much as possible participate and vote. This Court action was announced during the Oral Argument on July 1, 1999.
 

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