Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-45081 July 15, 1936

JOSE A. ANGARA, petitioner,

vs.
THE ELECTORAL COMMISSION, PEDRO YNSUA, MIGUEL CASTILLO, and DIONISIO C. MAYOR, respondents.

Godofredo Reyes for petitioner.

Office of the Solicitor General Hilado for respondent Electoral Commission.
Pedro Ynsua in his own behalf.
No appearance for other respondents.

LAUREL, J.:

This is an original action instituted in this court by the petitioner, Jose A. Angara, for the issuance of a writ of prohibition to restrain and prohibit the Electoral Commission, one of the
respondents, from taking further cognizance of the protest filed by Pedro Ynsua, another respondent, against the election of said petitioner as member of the National Assembly for the first
assembly district of the Province of Tayabas.

The facts of this case as they appear in the petition and as admitted by the respondents are as follows:

(1) That in the elections of September 17, 1935, the petitioner, Jose A. Angara, and the respondents, Pedro Ynsua, Miguel Castillo and Dionisio Mayor, were candidates voted for
the position of member of the National Assembly for the first district of the Province of Tayabas;

(2) That on October 7, 1935, the provincial board of canvassers, proclaimed the petitioner as member-elect of the National Assembly for the said district, for having received the
most number of votes;

(3) That on November 15, 1935, the petitioner took his oath of office;

(4) That on December 3, 1935, the National Assembly in session assembled, passed the following resolution:

[No. 8]

RESOLUCION CONFIRMANDO LAS ACTAS DE AQUELLOS DIPUTADOS CONTRA QUIENES NO SE HA PRESENTADO PROTESTA.

Se resuelve: Que las actas de eleccion de los Diputados contra quienes no se hubiere presentado debidamente una protesta antes de la adopcion de la presente
resolucion sean, como por la presente, son aprobadas y confirmadas.

Adoptada, 3 de diciembre, 1935.

 (5) That on December 8, 1935, the herein respondent Pedro Ynsua filed before the Electoral Commission a "Motion of Protest" against the election of the herein petitioner, Jose A.
Angara, being the only protest filed after the passage of Resolutions No. 8 aforequoted, and praying, among other-things, that said respondent be declared elected member of the
National Assembly for the first district of Tayabas, or that the election of said position be nullified;

(6) That on December 9, 1935, the Electoral Commission adopted a resolution, paragraph 6 of which provides:

6. La Comision no considerara ninguna protesta que no se haya presentado en o antes de este dia.

(7) That on December 20, 1935, the herein petitioner, Jose A. Angara, one of the respondents in the aforesaid protest, filed before the Electoral Commission a "Motion to Dismiss
the Protest", alleging (a) that Resolution No. 8 of Dismiss the Protest", alleging (a) that Resolution No. 8 of the National Assembly was adopted in the legitimate exercise of its
constitutional prerogative to prescribe the period during which protests against the election of its members should be presented; (b) that the aforesaid resolution has for its
object, and is the accepted formula for, the limitation of said period; and (c) that the protest in question was filed out of the prescribed period;

(8) That on December 27, 1935, the herein respondent, Pedro Ynsua, filed an "Answer to the Motion of Dismissal" alleging that there is no legal or constitutional provision barring
the presentation of a protest against the election of a member of the National Assembly after confirmation;

(9) That on December 31, 1935, the herein petitioner, Jose A. Angara, filed a "Reply" to the aforesaid "Answer to the Motion of Dismissal";

(10) That the case being submitted for decision, the Electoral Commission promulgated a resolution on January 23, 1936, denying herein petitioner's "Motion to Dismiss the
Protest."

The application of the petitioner sets forth the following grounds for the issuance of the writ prayed for:

(a) That the Constitution confers exclusive jurisdiction upon the electoral Commission solely as regards the merits of contested elections to the National Assembly;

(b) That the Constitution excludes from said jurisdiction the power to regulate the proceedings of said election contests, which power has been reserved to the Legislative
Department of the Government or the National Assembly;

(c) That like the Supreme Court and other courts created in pursuance of the Constitution, whose exclusive jurisdiction relates solely to deciding the merits of controversies
submitted to them for decision and to matters involving their internal organization, the Electoral Commission can regulate its proceedings only if the National Assembly has not
availed of its primary power to so regulate such proceedings;

(d) That Resolution No. 8 of the National Assembly is, therefore, valid and should be respected and obeyed;

(e) That under paragraph 13 of section 1 of the ordinance appended to the Constitution and paragraph 6 of article 7 of the Tydings-McDuffie Law (No. 127 of the 73rd Congress of
the United States) as well as under section 1 and 3 (should be sections 1 and 2) of article VIII of the Constitution, this Supreme Court has jurisdiction to pass upon the fundamental
question herein raised because it involves an interpretation of the Constitution of the Philippines.

On February 25, 1936, the Solicitor-General appeared and filed an answer in behalf of the respondent Electoral Commission interposing the following special defenses:

(a) That the Electoral Commission has been created by the Constitution as an instrumentality of the Legislative Department invested with the jurisdiction to decide "all contests
relating to the election, returns, and qualifications of the members of the National Assembly"; that in adopting its resolution of December 9, 1935, fixing this date as the last day
for the presentation of protests against the election of any member of the National Assembly, it acted within its jurisdiction and in the legitimate exercise of the implied powers
granted it by the Constitution to adopt the rules and regulations essential to carry out the power and functions conferred upon the same by the fundamental law; that in adopting
its resolution of January 23, 1936, overruling the motion of the petitioner to dismiss the election protest in question, and declaring itself with jurisdiction to take cognizance of
 said protest, it acted in the legitimate exercise of its quasi-judicial functions a an instrumentality of the Legislative Department of the Commonwealth Government, and hence said
act is beyond the judicial cognizance or control of the Supreme Court;

(b) That the resolution of the National Assembly of December 3, 1935, confirming the election of the members of the National Assembly against whom no protest had thus far
been filed, could not and did not deprive the electoral Commission of its jurisdiction to take cognizance of election protests filed within the time that might be set by its own rules:

(c) That the Electoral Commission is a body invested with quasi-judicial functions, created by the Constitution as an instrumentality of the Legislative Department, and is not an
"inferior tribunal, or corporation, or board, or person" within the purview of section 226 and 516 of the Code of Civil Procedure, against which prohibition would lie.

The respondent Pedro Ynsua, in his turn, appeared and filed an answer in his own behalf on March 2, 1936, setting forth the following as his special defense:

(a) That at the time of the approval of the rules of the Electoral Commission on December 9, 1935, there was no existing law fixing the period within which protests against the
election of members of the National Assembly should be filed; that in fixing December 9, 1935, as the last day for the filing of protests against the election of members of the
National Assembly, the Electoral Commission was exercising a power impliedly conferred upon it by the Constitution, by reason of its quasi-judicial attributes;

(b) That said respondent presented his motion of protest before the Electoral Commission on December 9, 1935, the last day fixed by paragraph 6 of the rules of the said Electoral
Commission;

(c) That therefore the Electoral Commission acquired jurisdiction over the protest filed by said respondent and over the parties thereto, and the resolution of the Electoral
Commission of January 23, 1936, denying petitioner's motion to dismiss said protest was an act within the jurisdiction of the said commission, and is not reviewable by means of a
writ of prohibition;

(d) That neither the law nor the Constitution requires confirmation by the National Assembly of the election of its members, and that such confirmation does not operate to limit
the period within which protests should be filed as to deprive the Electoral Commission of jurisdiction over protest filed subsequent thereto;

(e) That the Electoral Commission is an independent entity created by the Constitution, endowed with quasi-judicial functions, whose decision are final and unappealable;

( f ) That the electoral Commission, as a constitutional creation, is not an inferior tribunal, corporation, board or person, within the terms of sections 226 and 516 of the Code of
Civil Procedure; and that neither under the provisions of sections 1 and 2 of article II (should be article VIII) of the Constitution and paragraph 13 of section 1 of the Ordinance
appended thereto could it be subject in the exercise of its quasi-judicial functions to a writ of prohibition from the Supreme Court;

(g) That paragraph 6 of article 7 of the Tydings-McDuffie Law (No. 127 of the 73rd Congress of the united States) has no application to the case at bar.

The case was argued before us on March 13, 1936. Before it was submitted for decision, the petitioner prayed for the issuance of a preliminary writ of injunction against the respondent
Electoral Commission which petition was denied "without passing upon the merits of the case" by resolution of this court of March 21, 1936.

There was no appearance for the other respondents.

The issues to be decided in the case at bar may be reduced to the following two principal propositions:

1. Has the Supreme Court jurisdiction over the Electoral Commission and the subject matter of the controversy upon the foregoing related facts, and in the affirmative,

2. Has the said Electoral Commission acted without or in excess of its jurisdiction in assuming to the cognizance of the protest filed the election of the herein petitioner
notwithstanding the previous confirmation of such election by resolution of the National Assembly?
We could perhaps dispose of this case by passing directly upon the merits of the controversy. However, the question of jurisdiction having been presented, we do not feel justified in
evading the issue. Being a case prim impressionis, it would hardly be consistent with our sense of duty to overlook the broader aspect of the question and leave it undecided. Neither
would we be doing justice to the industry and vehemence of counsel were we not to pass upon the question of jurisdiction squarely presented to our consideration.

The separation of powers is a fundamental principle in our system of government. It obtains not through express provision but by actual division in our Constitution. Each department of
the government has exclusive cognizance of matters within its jurisdiction, and is supreme within its own sphere. But it does not follow from the fact that the three powers are to be kept
separate and distinct that the Constitution intended them to be absolutely unrestrained and independent of each other. The Constitution has provided for an elaborate system of checks
and balances to secure coordination in the workings of the various departments of the government. For example, the Chief Executive under our Constitution is so far made a check on the
legislative power that this assent is required in the enactment of laws. This, however, is subject to the further check that a bill may become a law notwithstanding the refusal of the
President to approve it, by a vote of two-thirds or three-fourths, as the case may be, of the National Assembly. The President has also the right to convene the Assembly in special session
whenever he chooses. On the other hand, the National Assembly operates as a check on the Executive in the sense that its consent through its Commission on Appointments is necessary in
the appointments of certain officers; and the concurrence of a majority of all its members is essential to the conclusion of treaties. Furthermore, in its power to determine what courts other
than the Supreme Court shall be established, to define their jurisdiction and to appropriate funds for their support, the National Assembly controls the judicial department to a certain
extent. The Assembly also exercises the judicial power of trying impeachments. And the judiciary in turn, with the Supreme Court as the final arbiter, effectively checks the other
departments in the exercise of its power to determine the law, and hence to declare executive and legislative acts void if violative of the Constitution.

But in the main, the Constitution has blocked out with deft strokes and in bold lines, allotment of power to the executive, the legislative and the judicial departments of the government. The
overlapping and interlacing of functions and duties between the several departments, however, sometimes makes it hard to say just where the one leaves off and the other begins. In times
of social disquietude or political excitement, the great landmarks of the Constitution are apt to be forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial department
is the only constitutional organ which can be called upon to determine the proper allocation of powers between the several departments and among the integral or constituent units
thereof.

As any human production, our Constitution is of course lacking perfection and perfectibility, but as much as it was within the power of our people, acting through their delegates to so
provide, that instrument which is the expression of their sovereignty however limited, has established a republican government intended to operate and function as a harmonious whole,
under a system of checks and balances, and subject to specific limitations and restrictions provided in the said instrument. The Constitution sets forth in no uncertain language the
restrictions and limitations upon governmental powers and agencies. If these restrictions and limitations are transcended it would be inconceivable if the Constitution had not provided for
a mechanism by which to direct the course of government along constitutional channels, for then the distribution of powers would be mere verbiage, the bill of rights mere expressions of
sentiment, and the principles of good government mere political apothegms. Certainly, the limitation and restrictions embodied in our Constitution are real as they should be in any living
constitution. In the United States where no express constitutional grant is found in their constitution, the possession of this moderating power of the courts, not to speak of its historical
origin and development there, has been set at rest by popular acquiescence for a period of more than one and a half centuries. In our case, this moderating power is granted, if not
expressly, by clear implication from section 2 of article VIII of our constitution.

The Constitution is a definition of the powers of government. Who is to determine the nature, scope and extent of such powers? The Constitution itself has provided for the instrumentality
of the judiciary as the rational way. And when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in
reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under
the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is
termed "judicial supremacy" which properly is the power of judicial review under the Constitution. Even then, this power of judicial review is limited to actual cases and controversies to
be exercised after full opportunity of argument by the parties, and limited further to the constitutional question raised or the very lis mota presented. Any attempt at abstraction could only
lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities. Narrowed as its function is in this manner, the judiciary does not pass upon questions of
wisdom, justice or expediency of legislation. More than that, courts accord the presumption of constitutionality to legislative enactments, not only because the legislature is presumed to
abide by the Constitution but also because the judiciary in the determination of actual cases and controversies must reflect the wisdom and justice of the people as expressed through their
representatives in the executive and legislative departments of the governments of the government.

But much as we might postulate on the internal checks of power provided in our Constitution, it ought not the less to be remembered that, in the language of James Madison, the system
itself is not "the chief palladium of constitutional liberty . . . the people who are authors of this blessing must also be its guardians . . . their eyes must be ever ready to mark, their voice to
pronounce . . . aggression on the authority of their constitution." In the Last and ultimate analysis, then, must the success of our government in the unfolding years to come be tested in the
crucible of Filipino minds and hearts than in consultation rooms and court chambers.
In the case at bar, the national Assembly has by resolution (No. 8) of December 3, 1935, confirmed the election of the herein petitioner to the said body. On the other hand, the Electoral
Commission has by resolution adopted on December 9, 1935, fixed said date as the last day for the filing of protests against the election, returns and qualifications of members of the
National Assembly, notwithstanding the previous confirmation made by the National Assembly as aforesaid. If, as contended by the petitioner, the resolution of the National Assembly has
the effect of cutting off the power of the Electoral Commission to entertain protests against the election, returns and qualifications of members of the National Assembly, submitted after
December 3, 1935, then the resolution of the Electoral Commission of December 9, 1935, is mere surplusage and had no effect. But, if, as contended by the respondents, the Electoral
Commission has the sole power of regulating its proceedings to the exclusion of the National Assembly, then the resolution of December 9, 1935, by which the Electoral Commission fixed
said date as the last day for filing protests against the election, returns and qualifications of members of the National Assembly, should be upheld.

Here is then presented an actual controversy involving as it does a conflict of a grave constitutional nature between the National Assembly on the one hand, and the Electoral Commission
on the other. From the very nature of the republican government established in our country in the light of American experience and of our own, upon the judicial department is thrown the
solemn and inescapable obligation of interpreting the Constitution and defining constitutional boundaries. The Electoral Commission, as we shall have occasion to refer hereafter, is a
constitutional organ, created for a specific purpose, namely to determine all contests relating to the election, returns and qualifications of the members of the National Assembly. Although
the Electoral Commission may not be interfered with, when and while acting within the limits of its authority, it does not follow that it is beyond the reach of the constitutional mechanism
adopted by the people and that it is not subject to constitutional restrictions. The Electoral Commission is not a separate department of the government, and even if it were, conflicting
claims of authority under the fundamental law between department powers and agencies of the government are necessarily determined by the judiciary in justifiable and appropriate
cases. Discarding the English type and other European types of constitutional government, the framers of our constitution adopted the American type where the written constitution is
interpreted and given effect by the judicial department. In some countries which have declined to follow the American example, provisions have been inserted in their constitutions
prohibiting the courts from exercising the power to interpret the fundamental law. This is taken as a recognition of what otherwise would be the rule that in the absence of direct
prohibition courts are bound to assume what is logically their function. For instance, the Constitution of Poland of 1921, expressly provides that courts shall have no power to examine the
validity of statutes (art. 81, chap. IV). The former Austrian Constitution contained a similar declaration. In countries whose constitutions are silent in this respect, courts have assumed this
power. This is true in Norway, Greece, Australia and South Africa. Whereas, in Czechoslovakia (arts. 2 and 3, Preliminary Law to constitutional Charter of the Czechoslovak Republic,
February 29, 1920) and Spain (arts. 121-123, Title IX, Constitutional of the Republic of 1931) especial constitutional courts are established to pass upon the validity of ordinary laws. In our
case, the nature of the present controversy shows the necessity of a final constitutional arbiter to determine the conflict of authority between two agencies created by the Constitution.
Were we to decline to take cognizance of the controversy, who will determine the conflict? And if the conflict were left undecided and undetermined, would not a void be thus created in
our constitutional system which may be in the long run prove destructive of the entire framework? To ask these questions is to answer them. Natura vacuum abhorret, so must we avoid
exhaustion in our constitutional system. Upon principle, reason and authority, we are clearly of the opinion that upon the admitted facts of the present case, this court has jurisdiction over
the Electoral Commission and the subject mater of the present controversy for the purpose of determining the character, scope and extent of the constitutional grant to the Electoral
Commission as "the sole judge of all contests relating to the election, returns and qualifications of the members of the National Assembly."

Having disposed of the question of jurisdiction, we shall now proceed to pass upon the second proposition and determine whether the Electoral Commission has acted without or in excess
of its jurisdiction in adopting its resolution of December 9, 1935, and in assuming to take cognizance of the protest filed against the election of the herein petitioner notwithstanding the
previous confirmation thereof by the National Assembly on December 3, 1935. As able counsel for the petitioner has pointed out, the issue hinges on the interpretation of section 4 of
Article VI of the Constitution which provides:

"SEC. 4. There shall be an Electoral Commission composed of three Justice of the Supreme Court designated by the Chief Justice, and of six Members chosen by the National Assembly, three
of whom shall be nominated by the party having the largest number of votes, and three by the party having the second largest number of votes therein. The senior Justice in the
Commission shall be its Chairman. The Electoral Commission shall be the sole judge of all contests relating to the election, returns and qualifications of the members of the National
Assembly." It is imperative, therefore, that we delve into the origin and history of this constitutional provision and inquire into the intention of its framers and the people who adopted it so
that we may properly appreciate its full meaning, import and significance.

The original provision regarding this subject in the Act of Congress of July 1, 1902 (sec. 7, par. 5) laying down the rule that "the assembly shall be the judge of the elections, returns, and
qualifications of its members", was taken from clause 1 of section 5, Article I of the Constitution of the United States providing that "Each House shall be the Judge of the Elections, Returns,
and Qualifications of its own Members, . . . ." The Act of Congress of August 29, 1916 (sec. 18, par. 1) modified this provision by the insertion of the word "sole" as follows: "That the Senate
and House of Representatives, respectively, shall be the sole judges of the elections, returns, and qualifications of their elective members . . ." apparently in order to emphasize the exclusive
the Legislative over the particular case s therein specified. This court has had occasion to characterize this grant of power to the Philippine Senate and House of Representatives,
respectively, as "full, clear and complete" (Veloso vs. Boards of Canvassers of Leyte and Samar [1919], 39 Phil., 886, 888.)

The first step towards the creation of an independent tribunal for the purpose of deciding contested elections to the legislature was taken by the sub-committee of five appointed by the
Committee on Constitutional Guarantees of the Constitutional Convention, which sub-committee submitted a report on August 30, 1934, recommending the creation of a Tribunal of
Constitutional Security empowered to hear legislature but also against the election of executive officers for whose election the vote of the whole nation is required, as well as to initiate
impeachment proceedings against specified executive and judicial officer. For the purpose of hearing legislative protests, the tribunal was to be composed of three justices designated by
the Supreme Court and six members of the house of the legislature to which the contest corresponds, three members to be designed by the majority party and three by the minority, to be
presided over by the Senior Justice unless the Chief Justice is also a member in which case the latter shall preside. The foregoing proposal was submitted by the Committee on
Constitutional Guarantees to the Convention on September 15, 1934, with slight modifications consisting in the reduction of the legislative representation to four members, that is, two
senators to be designated one each from the two major parties in the Senate and two representatives to be designated one each from the two major parties in the House of Representatives,
and in awarding representation to the executive department in the persons of two representatives to be designated by the President.

Meanwhile, the Committee on Legislative Power was also preparing its report. As submitted to the Convention on September 24, 1934 subsection 5, section 5, of the proposed Article on
the Legislative Department, reads as follows:

The elections, returns and qualifications of the members of either house and all cases contesting the election of any of their members shall be judged by an Electoral Commission,
constituted, as to each House, by three members elected by the members of the party having the largest number of votes therein, three elected by the members of the party having
the second largest number of votes, and as to its Chairman, one Justice of the Supreme Court designated by the Chief Justice.

The idea of creating a Tribunal of Constitutional Security with comprehensive jurisdiction as proposed by the Committee on Constitutional Guarantees which was probably inspired by the
Spanish plan (art. 121, Constitution of the Spanish Republic of 1931), was soon abandoned in favor of the proposition of the Committee on Legislative Power to create a similar body with
reduced powers and with specific and limited jurisdiction, to be designated as a Electoral Commission. The Sponsorship Committee modified the proposal of the Committee on Legislative
Power with respect to the composition of the Electoral Commission and made further changes in phraseology to suit the project of adopting a unicameral instead of a bicameral legislature.
The draft as finally submitted to the Convention on October 26, 1934, reads as follows:

(6) The elections, returns and qualifications of the Members of the National Assembly and all cases contesting the election of any of its Members shall be judged by an Electoral
Commission, composed of three members elected by the party having the largest number of votes in the National Assembly, three elected by the members of the party having the
second largest number of votes, and three justices of the Supreme Court designated by the Chief Justice, the Commission to be presided over by one of said justices.

During the discussion of the amendment introduced by Delegates Labrador, Abordo, and others, proposing to strike out the whole subsection of the foregoing draft and inserting in lieu
thereof the following: "The National Assembly shall be the soled and exclusive judge of the elections, returns, and qualifications of the Members", the following illuminating remarks were
made on the floor of the Convention in its session of December 4, 1934, as to the scope of the said draft:

xxx xxx xxx

Mr. VENTURA. Mr. President, we have a doubt here as to the scope of the meaning of the first four lines, paragraph 6, page 11 of the draft, reading: "The elections, returns and
qualifications of the Members of the National Assembly and all cases contesting the election of any of its Members shall be judged by an Electoral Commission, . . ." I should like to
ask from the gentleman from Capiz whether the election and qualification of the member whose elections is not contested shall also be judged by the Electoral Commission.

Mr. ROXAS. If there is no question about the election of the members, there is nothing to be judged; that is why the word "judge" is used to indicate a controversy. If there is no
question about the election of a member, there is nothing to be submitted to the Electoral Commission and there is nothing to be determined.

Mr. VENTURA. But does that carry the idea also that the Electoral Commission shall confirm also the election of those whose election is not contested?

Mr. ROXAS. There is no need of confirmation. As the gentleman knows, the action of the House of Representatives confirming the election of its members is just a matter of the
rules of the assembly. It is not constitutional. It is not necessary. After a man files his credentials that he has been elected, that is sufficient, unless his election is contested.

Mr. VENTURA. But I do not believe that that is sufficient, as we have observed that for purposes of the auditor, in the matter of election of a member to a legislative body, because
he will not authorize his pay.
Mr. ROXAS. Well, what is the case with regards to the municipal president who is elected? What happens with regards to the councilors of a municipality? Does anybody confirm
their election? The municipal council does this: it makes a canvass and proclaims in this case the municipal council proclaims who has been elected, and it ends there, unless
there is a contest. It is the same case; there is no need on the part of the Electoral Commission unless there is a contest. The first clause refers to the case referred to by the
gentleman from Cavite where one person tries to be elected in place of another who was declared elected. From example, in a case when the residence of the man who has been
elected is in question, or in case the citizenship of the man who has been elected is in question.

However, if the assembly desires to annul the power of the commission, it may do so by certain maneuvers upon its first meeting when the returns are submitted to the
assembly. The purpose is to give to the Electoral Commission all the powers exercised by the assembly referring to the elections, returns and qualifications of the members. When there
is no contest, there is nothing to be judged.

Mr. VENTURA. Then it should be eliminated.

Mr. ROXAS. But that is a different matter, I think Mr. Delegate.

Mr. CINCO. Mr. President, I have a similar question as that propounded by the gentleman from Ilocos Norte when I arose a while ago. However I want to ask more questions from
the delegate from Capiz. This paragraph 6 on page 11 of the draft cites cases contesting the election as separate from the first part of the sections which refers to elections, returns
and qualifications.

Mr. ROXAS. That is merely for the sake of clarity. In fact the cases of contested elections are already included in the phrase "the elections, returns and qualifications." This phrase "and
contested elections" was inserted merely for the sake of clarity.

Mr. CINCO. Under this paragraph, may not the Electoral Commission, at its own instance, refuse to confirm the elections of the members."

Mr. ROXAS. I do not think so, unless there is a protest.

Mr. LABRADOR. Mr. President, will the gentleman yield?

THE PRESIDENT. The gentleman may yield, if he so desires.

Mr. ROXAS. Willingly.

Mr. LABRADOR. Does not the gentleman from Capiz believe that unless this power is granted to the assembly, the assembly on its own motion does not have the right to contest
the election and qualification of its members?

Mr. ROXAS. I have no doubt but that the gentleman is right. If this draft is retained as it is, even if two-thirds of the assembly believe that a member has not the qualifications
provided by law, they cannot remove him for that reason.

Mr. LABRADOR. So that the right to remove shall only be retained by the Electoral Commission.

Mr. ROXAS. By the assembly for misconduct.

Mr. LABRADOR. I mean with respect to the qualifications of the members.

Mr. ROXAS. Yes, by the Electoral Commission.

 Mr. LABRADOR. So that under this draft, no member of the assembly has the right to question the eligibility of its members?

Mr. ROXAS. Before a member can question the eligibility, he must go to the Electoral Commission and make the question before the Electoral Commission.

Mr. LABRADOR. So that the Electoral Commission shall decide whether the election is contested or not contested.

Mr. ROXAS. Yes, sir: that is the purpose.

Mr. PELAYO. Mr. President, I would like to be informed if the Electoral Commission has power and authority to pass upon the qualifications of the members of the National
Assembly even though that question has not been raised.

Mr. ROXAS. I have just said that they have no power, because they can only judge.

In the same session, the first clause of the aforesaid draft reading "The election, returns and qualifications of the members of the National Assembly and" was eliminated by the
Sponsorship Committee in response to an amendment introduced by Delegates Francisco, Ventura, Vinzons, Rafols, Lim, Mumar and others. In explaining the difference between the
original draft and the draft as amended, Delegate Roxas speaking for the Sponsorship Committee said:

xxx xxx xxx

Sr. ROXAS. La diferencia, seor Presidente, consiste solamente en obviar la objecion apuntada por varios Delegados al efecto de que la primera clausula del draft que dice: "The
elections, returns and qualifications of the members of the National Assembly" parece que da a la Comision Electoral la facultad de determinar tambien la eleccion de los
miembros que no ha sido protestados y para obviar esa dificultad, creemos que la enmienda tien razon en ese sentido, si enmendamos el draft, de tal modo que se lea como sigue:
"All cases contesting the election", de modo que los jueces de la Comision Electoral se limitaran solamente a los casos en que haya habido protesta contra las actas." Before the
amendment of Delegate Labrador was voted upon the following interpellation also took place:

El Sr. CONEJERO. Antes de votarse la enmienda, quisiera

El Sr. PRESIDENTE. Que dice el Comite?

El Sr. ROXAS. Con mucho gusto.

El Sr. CONEJERO. Tal como esta el draft, dando tres miembros a la mayoria, y otros tres a la minoria y tres a la Corte Suprema, no cree Su Seoria que esto equivale practicamente
a dejar el asunto a los miembros del Tribunal Supremo?

El Sr. ROXAS. Si y no. Creemos que si el tribunal o la Commission esta constituido en esa forma, tanto los miembros de la mayoria como los de la minoria asi como los miembros de
la Corte Suprema consideraran la cuestion sobre la base de sus meritos, sabiendo que el partidismo no es suficiente para dar el triunfo.

El Sr. CONEJERO. Cree Su Seoria que en un caso como ese, podriamos hacer que tanto los de la mayoria como los de la minoria prescindieran del partidismo?

El Sr. ROXAS. Creo que si, porque el partidismo no les daria el triunfo.

xxx xxx xxx

The amendment introduced by Delegates Labrador, Abordo and others seeking to restore the power to decide contests relating to the election, returns and qualifications of members of the
National Assembly to the National Assembly itself, was defeated by a vote of ninety-eight (98) against fifty-six (56).
In the same session of December 4, 1934, Delegate Cruz (C.) sought to amend the draft by reducing the representation of the minority party and the Supreme Court in the Electoral
Commission to two members each, so as to accord more representation to the majority party. The Convention rejected this amendment by a vote of seventy-six (76) against forty-six (46),
thus maintaining the non-partisan character of the commission.

As approved on January 31, 1935, the draft was made to read as follows:

(6) All cases contesting the elections, returns and qualifications of the Members of the National Assembly shall be judged by an Electoral Commission, composed of three members
elected by the party having the largest number of votes in the National Assembly, three elected by the members of the party having the second largest number of votes, and three
justices of the Supreme Court designated by the Chief Justice, the Commission to be presided over by one of said justices.

The Style Committee to which the draft was submitted revised it as follows:

SEC. 4. There shall be an Electoral Commission composed of three Justices of the Supreme Court designated by the Chief Justice, and of six Members chosen by the National
Assembly, three of whom shall be nominated by the party having the largest number of votes, and three by the party having the second largest number of votes therein. The senior
Justice in the Commission shall be its chairman. The Electoral Commission shall be the sole judge of the election, returns, and qualifications of the Members of the National
Assembly.

When the foregoing draft was submitted for approval on February 8, 1935, the Style Committee, through President Recto, to effectuate the original intention of the Convention, agreed to
insert the phrase "All contests relating to" between the phrase "judge of" and the words "the elections", which was accordingly accepted by the Convention.

The transfer of the power of determining the election, returns and qualifications of the members of the legislature long lodged in the legislative body, to an independent, impartial and non-
partisan tribunal, is by no means a mere experiment in the science of government.

Cushing, in his Law and Practice of Legislative Assemblies (ninth edition, chapter VI, pages 57, 58), gives a vivid account of the "scandalously notorious" canvassing of votes by political
parties in the disposition of contests by the House of Commons in the following passages which are partly quoted by the petitioner in his printed memorandum of March 14, 1936:

153. From the time when the commons established their right to be the exclusive judges of the elections, returns, and qualifications of their members, until the year 1770, two
modes of proceeding prevailed, in the determination of controverted elections, and rights of membership. One of the standing committees appointed at the commencement of
each session, was denominated the committee of privileges and elections, whose functions was to hear and investigate all questions of this description which might be referred to
them, and to report their proceedings, with their opinion thereupon, to the house, from time to time. When an election petition was referred to this committee they heard the
parties and their witnesses and other evidence, and made a report of all the evidence, together with their opinion thereupon, in the form of resolutions, which were considered
and agreed or disagreed to by the house. The other mode of proceeding was by a hearing at the bar of the house itself. When this court was adopted, the case was heard and
decided by the house, in substantially the same manner as by a committee. The committee of privileges and elections although a select committee. The committee of privileges and
elections although a select committee was usually what is called an open one; that is to say, in order to constitute the committee, a quorum of the members named was required to
be present, but all the members of the house were at liberty to attend the committee and vote if they pleased.

154. With the growth of political parties in parliament questions relating to the right of membership gradually assumed a political character; so that for many years previous to
the year 1770, controverted elections had been tried and determined by the house of commons, as mere party questions, upon which the strength of contending factions might be
tested. Thus, for Example, in 1741, Sir Robert Walpole, after repeated attacks upon his government, resigned his office in consequence of an adverse vote upon the Chippenham
election. Mr. Hatsell remarks, of the trial of election cases, as conducted under this system, that "Every principle of decency and justice were notoriously and openly prostituted,
from whence the younger part of the house were insensibly, but too successfully, induced to adopt the same licentious conduct in more serious matters, and in questions of higher
importance to the public welfare." Mr. George Grenville, a distinguished member of the house of commons, undertook to propose a remedy for the evil, and, on the 7th of March,
1770, obtained the unanimous leave of the house to bring in a bill, "to regulate the trial of controverted elections, or returns of members to serve in parliament." In his speech to
explain his plan, on the motion for leave, Mr. Grenville alluded to the existing practice in the following terms: "Instead of trusting to the merits of their respective causes, the
principal dependence of both parties is their private interest among us; and it is scandalously notorious that we are as earnestly canvassed to attend in favor of the opposite sides,
as if we were wholly self-elective, and not bound to act by the principles of justice, but by the discretionary impulse of our own inclinations; nay, it is well known, that in every
contested election, many members of this house, who are ultimately to judge in a kind of judicial capacity between the competitors, enlist themselves as parties in the contention,
and take upon themselves the partial management of the very business, upon which they should determine with the strictest impartiality."
 155. It was to put an end to the practices thus described, that Mr. Grenville brought in a bill which met with the approbation of both houses, and received the royal assent on the
12th of April, 1770. This was the celebrated law since known by the name of the Grenville Act; of which Mr. Hatsell declares, that it "was one of the nobles works, for the honor of
the house of commons, and the security of the constitution, that was ever devised by any minister or statesman." It is probable, that the magnitude of the evil, or the apparent
success of the remedy, may have led many of the contemporaries of the measure to the information of a judgement, which was not acquiesced in by some of the leading statesmen
of the day, and has not been entirely confirmed by subsequent experience. The bill was objected to by Lord North, Mr. De Grey, afterwards chief justice of the common pleas, Mr.
Ellis, Mr. Dyson, who had been clerk of the house, and Mr. Charles James Fox, chiefly on the ground, that the introduction of the new system was an essential alteration of the
constitution of parliament, and a total abrogation of one of the most important rights and jurisdictions of the house of commons.

As early as 1868, the House of Commons in England solved the problem of insuring the non-partisan settlement of the controverted elections of its members by abdicating its prerogative
to two judges of the King's Bench of the High Court of Justice selected from a rota in accordance with rules of court made for the purpose. Having proved successful, the practice has become
imbedded in English jurisprudence (Parliamentary Elections Act, 1868 [31 & 32 Vict. c. 125] as amended by Parliamentary Elections and Corrupt Practices Act. 1879 [42 & 43 Vict. c. 75], s.
2; Corrupt and Illegal Practices Preventions Act, 1883 [46 & 47 Vict. c. 51;, s. 70; Expiring Laws Continuance Act, 1911 [1 & 2 Geo. 5, c. 22]; Laws of England, vol. XII, p. 408, vol. XXI, p. 787).
In the Dominion of Canada, election contests which were originally heard by the Committee of the House of Commons, are since 1922 tried in the courts. Likewise, in the Commonwealth of
Australia, election contests which were originally determined by each house, are since 1922 tried in the High Court. In Hungary, the organic law provides that all protests against the
election of members of the Upper House of the Diet are to be resolved by the Supreme Administrative Court (Law 22 of 1916, chap. 2, art. 37, par. 6). The Constitution of Poland of March
17, 1921 (art. 19) and the Constitution of the Free City of Danzig of May 13, 1922 (art. 10) vest the authority to decide contested elections to the Diet or National Assembly in the Supreme
Court. For the purpose of deciding legislative contests, the Constitution of the German Reich of July 1, 1919 (art. 31), the Constitution of the Czechoslovak Republic of February 29, 1920
(art. 19) and the Constitution of the Grecian Republic of June 2, 1927 (art. 43), all provide for an Electoral Commission.

The creation of an Electoral Commission whose membership is recruited both from the legislature and the judiciary is by no means unknown in the United States. In the presidential
elections of 1876 there was a dispute as to the number of electoral votes received by each of the two opposing candidates. As the Constitution made no adequate provision for such a
contingency, Congress passed a law on January 29, 1877 (United States Statutes at Large, vol. 19, chap. 37, pp. 227-229), creating a special Electoral Commission composed of five members
elected by the Senate, five members elected by the House of Representatives, and five justices of the Supreme Court, the fifth justice to be selected by the four designated in the Act. The
decision of the commission was to be binding unless rejected by the two houses voting separately. Although there is not much of a moral lesson to be derived from the experience of
America in this regard, judging from the observations of Justice Field, who was a member of that body on the part of the Supreme Court (Countryman, the Supreme Court of the United
States and its Appellate Power under the Constitution [Albany, 1913] Relentless Partisanship of Electoral Commission, p. 25 et seq.), the experiment has at least abiding historical
interest.

The members of the Constitutional Convention who framed our fundamental law were in their majority men mature in years and experience. To be sure, many of them were familiar with
the history and political development of other countries of the world. When , therefore, they deemed it wise to create an Electoral Commission as a constitutional organ and invested it with
the exclusive function of passing upon and determining the election, returns and qualifications of the members of the National Assembly, they must have done so not only in the light of
their own experience but also having in view the experience of other enlightened peoples of the world. The creation of the Electoral Commission was designed to remedy certain evils of
which the framers of our Constitution were cognizant. Notwithstanding the vigorous opposition of some members of the Convention to its creation, the plan, as hereinabove stated, was
approved by that body by a vote of 98 against 58. All that can be said now is that, upon the approval of the constitutional the creation of the Electoral Commission is the expression of the
wisdom and "ultimate justice of the people". (Abraham Lincoln, First Inaugural Address, March 4, 1861.)

From the deliberations of our Constitutional Convention it is evident that the purpose was to transfer in its totality all the powers previously exercised by the legislature in matters
pertaining to contested elections of its members, to an independent and impartial tribunal. It was not so much the knowledge and appreciation of contemporary constitutional precedents,
however, as the long-felt need of determining legislative contests devoid of partisan considerations which prompted the people, acting through their delegates to the Convention, to
provide for this body known as the Electoral Commission. With this end in view, a composite body in which both the majority and minority parties are equally represented to off-set
partisan influence in its deliberations was created, and further endowed with judicial temper by including in its membership three justices of the Supreme Court.

The Electoral Commission is a constitutional creation, invested with the necessary authority in the performance and execution of the limited and specific function assigned to it by the
Constitution. Although it is not a power in our tripartite scheme of government, it is, to all intents and purposes, when acting within the limits of its authority, an independent organ. It is, to
be sure, closer to the legislative department than to any other. The location of the provision (section 4) creating the Electoral Commission under Article VI entitled "Legislative
Department" of our Constitution is very indicative. Its compositions is also significant in that it is constituted by a majority of members of the legislature. But it is a body separate from and
independent of the legislature.
The grant of power to the Electoral Commission to judge all contests relating to the election, returns and qualifications of members of the National Assembly, is intended to be as complete
and unimpaired as if it had remained originally in the legislature. The express lodging of that power in the Electoral Commission is an implied denial of the exercise of that power by the
National Assembly. And this is as effective a restriction upon the legislative power as an express prohibition in the Constitution (Ex parte Lewis, 45 Tex. Crim. Rep., 1; State vs. Whisman, 36
S.D., 260; L.R.A., 1917B, 1). If we concede the power claimed in behalf of the National Assembly that said body may regulate the proceedings of the Electoral Commission and cut off the
power of the commission to lay down the period within which protests should be filed, the grant of power to the commission would be ineffective. The Electoral Commission in such case
would be invested with the power to determine contested cases involving the election, returns and qualifications of the members of the National Assembly but subject at all times to the
regulative power of the National Assembly. Not only would the purpose of the framers of our Constitution of totally transferring this authority from the legislative body be frustrated, but a
dual authority would be created with the resultant inevitable clash of powers from time to time. A sad spectacle would then be presented of the Electoral Commission retaining the bare
authority of taking cognizance of cases referred to, but in reality without the necessary means to render that authority effective whenever and whenever the National Assembly has chosen
to act, a situation worse than that intended to be remedied by the framers of our Constitution. The power to regulate on the part of the National Assembly in procedural matters will
inevitably lead to the ultimate control by the Assembly of the entire proceedings of the Electoral Commission, and, by indirection, to the entire abrogation of the constitutional grant. It is
obvious that this result should not be permitted.

We are not insensible to the impassioned argument or the learned counsel for the petitioner regarding the importance and necessity of respecting the dignity and independence of the
national Assembly as a coordinate department of the government and of according validity to its acts, to avoid what he characterized would be practically an unlimited power of the
commission in the admission of protests against members of the National Assembly. But as we have pointed out hereinabove, the creation of the Electoral Commission carried with it ex
necesitate rei the power regulative in character to limit the time with which protests intrusted to its cognizance should be filed. It is a settled rule of construction that where a general
power is conferred or duty enjoined, every particular power necessary for the exercise of the one or the performance of the other is also conferred (Cooley, Constitutional Limitations, eight
ed., vol. I, pp. 138, 139). In the absence of any further constitutional provision relating to the procedure to be followed in filing protests before the Electoral Commission, therefore, the
incidental power to promulgate such rules necessary for the proper exercise of its exclusive power to judge all contests relating to the election, returns and qualifications of members of the
National Assembly, must be deemed by necessary implication to have been lodged also in the Electoral Commission.

It is, indeed, possible that, as suggested by counsel for the petitioner, the Electoral Commission may abuse its regulative authority by admitting protests beyond any reasonable time, to the
disturbance of the tranquillity and peace of mind of the members of the National Assembly. But the possibility of abuse is not argument against the concession of the power as there is no
power that is not susceptible of abuse. In the second place, if any mistake has been committed in the creation of an Electoral Commission and in investing it with exclusive jurisdiction in all
cases relating to the election, returns, and qualifications of members of the National Assembly, the remedy is political, not judicial, and must be sought through the ordinary processes of
democracy. All the possible abuses of the government are not intended to be corrected by the judiciary. We believe, however, that the people in creating the Electoral Commission reposed
as much confidence in this body in the exclusive determination of the specified cases assigned to it, as they have given to the Supreme Court in the proper cases entrusted to it for decision.
All the agencies of the government were designed by the Constitution to achieve specific purposes, and each constitutional organ working within its own particular sphere of discretionary
action must be deemed to be animated with the same zeal and honesty in accomplishing the great ends for which they were created by the sovereign will. That the actuations of these
constitutional agencies might leave much to be desired in given instances, is inherent in the perfection of human institutions. In the third place, from the fact that the Electoral Commission
may not be interfered with in the exercise of its legitimate power, it does not follow that its acts, however illegal or unconstitutional, may not be challenge in appropriate cases over which
the courts may exercise jurisdiction.

But independently of the legal and constitutional aspects of the present case, there are considerations of equitable character that should not be overlooked in the appreciation of the
intrinsic merits of the controversy. The Commonwealth Government was inaugurated on November 15, 1935, on which date the Constitution, except as to the provisions mentioned in
section 6 of Article XV thereof, went into effect. The new National Assembly convened on November 25th of that year, and the resolution confirming the election of the petitioner, Jose A.
Angara was approved by that body on December 3, 1935. The protest by the herein respondent Pedro Ynsua against the election of the petitioner was filed on December 9 of the same year.
The pleadings do not show when the Electoral Commission was formally organized but it does appear that on December 9, 1935, the Electoral Commission met for the first time and
approved a resolution fixing said date as the last day for the filing of election protest. When, therefore, the National Assembly passed its resolution of December 3, 1935, confirming the
election of the petitioner to the National Assembly, the Electoral Commission had not yet met; neither does it appear that said body had actually been organized. As a mater of fact,
according to certified copies of official records on file in the archives division of the National Assembly attached to the record of this case upon the petition of the petitioner, the three
justices of the Supreme Court the six members of the National Assembly constituting the Electoral Commission were respectively designated only on December 4 and 6, 1935. If Resolution
No. 8 of the National Assembly confirming non-protested elections of members of the National Assembly had the effect of limiting or tolling the time for the presentation of protests, the
result would be that the National Assembly on the hypothesis that it still retained the incidental power of regulation in such cases had already barred the presentation of protests
before the Electoral Commission had had time to organize itself and deliberate on the mode and method to be followed in a matter entrusted to its exclusive jurisdiction by the
Constitution. This result was not and could not have been contemplated, and should be avoided.
From another angle, Resolution No. 8 of the National Assembly confirming the election of members against whom no protests had been filed at the time of its passage on December 3, 1935,
can not be construed as a limitation upon the time for the initiation of election contests. While there might have been good reason for the legislative practice of confirmation of the election
of members of the legislature at the time when the power to decide election contests was still lodged in the legislature, confirmation alone by the legislature cannot be construed as
depriving the Electoral Commission of the authority incidental to its constitutional power to be "the sole judge of all contest relating to the election, returns, and qualifications of the
members of the National Assembly", to fix the time for the filing of said election protests. Confirmation by the National Assembly of the returns of its members against whose election no
protests have been filed is, to all legal purposes, unnecessary. As contended by the Electoral Commission in its resolution of January 23, 1936, overruling the motion of the herein petitioner
to dismiss the protest filed by the respondent Pedro Ynsua, confirmation of the election of any member is not required by the Constitution before he can discharge his duties as such
member. As a matter of fact, certification by the proper provincial board of canvassers is sufficient to entitle a member-elect to a seat in the national Assembly and to render him eligible to
any office in said body (No. 1, par. 1, Rules of the National Assembly, adopted December 6, 1935).

Under the practice prevailing both in the English House of Commons and in the Congress of the United States, confirmation is neither necessary in order to entitle a member-elect to take
his seat. The return of the proper election officers is sufficient, and the member-elect presenting such return begins to enjoy the privileges of a member from the time that he takes his oath
of office (Laws of England, vol. 12, pp. 331. 332; vol. 21, pp. 694, 695; U. S. C. A., Title 2, secs. 21, 25, 26). Confirmation is in order only in cases of contested elections where the decision is
adverse to the claims of the protestant. In England, the judges' decision or report in controverted elections is certified to the Speaker of the House of Commons, and the House, upon being
informed of such certificate or report by the Speaker, is required to enter the same upon the Journals, and to give such directions for confirming or altering the return, or for the issue of a
writ for a new election, or for carrying into execution the determination as circumstances may require (31 & 32 Vict., c. 125, sec. 13). In the United States, it is believed, the order or
decision of the particular house itself is generally regarded as sufficient, without any actual alternation or amendment of the return (Cushing, Law and Practice of Legislative Assemblies,
9th ed., sec. 166).

Under the practice prevailing when the Jones Law was still in force, each house of the Philippine Legislature fixed the time when protests against the election of any of its members should
be filed. This was expressly authorized by section 18 of the Jones Law making each house the sole judge of the election, return and qualifications of its members, as well as by a law (sec.
478, Act No. 3387) empowering each house to respectively prescribe by resolution the time and manner of filing contest in the election of member of said bodies. As a matter of formality,
after the time fixed by its rules for the filing of protests had already expired, each house passed a resolution confirming or approving the returns of such members against whose election
no protests had been filed within the prescribed time. This was interpreted as cutting off the filing of further protests against the election of those members not theretofore contested
(Amistad vs. Claravall [Isabela], Second Philippine Legislature, Record First Period, p. 89; Urguello vs. Rama [Third District, Cebu], Sixth Philippine Legislature; Fetalvero vs. Festin
[Romblon], Sixth Philippine Legislature, Record First Period, pp. 637-640; Kintanar vs. Aldanese [Fourth District, Cebu], Sixth Philippine Legislature, Record First Period, pp. 1121,
1122; Aguilar vs. Corpus [Masbate], Eighth Philippine Legislature, Record First Period, vol. III, No. 56, pp. 892, 893). The Constitution has repealed section 18 of the Jones Law. Act No.
3387, section 478, must be deemed to have been impliedly abrogated also, for the reason that with the power to determine all contest relating to the election, returns and qualifications of
members of the National Assembly, is inseparably linked the authority to prescribe regulations for the exercise of that power. There was thus no law nor constitutional provisions which
authorized the National Assembly to fix, as it is alleged to have fixed on December 3, 1935, the time for the filing of contests against the election of its members. And what the National
Assembly could not do directly, it could not do by indirection through the medium of confirmation.

Summarizing, we conclude:

(a) That the government established by the Constitution follows fundamentally the theory of separation of power into the legislative, the executive and the judicial.

(b) That the system of checks and balances and the overlapping of functions and duties often makes difficult the delimitation of the powers granted.

(c) That in cases of conflict between the several departments and among the agencies thereof, the judiciary, with the Supreme Court as the final arbiter, is the only constitutional
mechanism devised finally to resolve the conflict and allocate constitutional boundaries.

(d) That judicial supremacy is but the power of judicial review in actual and appropriate cases and controversies, and is the power and duty to see that no one branch or agency of
the government transcends the Constitution, which is the source of all authority.

(e) That the Electoral Commission is an independent constitutional creation with specific powers and functions to execute and perform, closer for purposes of classification to the
legislative than to any of the other two departments of the governments.

(f ) That the Electoral Commission is the sole judge of all contests relating to the election, returns and qualifications of members of the National Assembly.
 (g) That under the organic law prevailing before the present Constitution went into effect, each house of the legislature was respectively the sole judge of the elections, returns,
and qualifications of their elective members.

(h) That the present Constitution has transferred all the powers previously exercised by the legislature with respect to contests relating to the elections, returns and qualifications
of its members, to the Electoral Commission.

(i) That such transfer of power from the legislature to the Electoral Commission was full, clear and complete, and carried with it ex necesitate rei the implied power inter alia to
prescribe the rules and regulations as to the time and manner of filing protests.

( j) That the avowed purpose in creating the Electoral Commission was to have an independent constitutional organ pass upon all contests relating to the election, returns and
qualifications of members of the National Assembly, devoid of partisan influence or consideration, which object would be frustrated if the National Assembly were to retain the
power to prescribe rules and regulations regarding the manner of conducting said contests.

(k) That section 4 of article VI of the Constitution repealed not only section 18 of the Jones Law making each house of the Philippine Legislature respectively the sole judge of the
elections, returns and qualifications of its elective members, but also section 478 of Act No. 3387 empowering each house to prescribe by resolution the time and manner of filing
contests against the election of its members, the time and manner of notifying the adverse party, and bond or bonds, to be required, if any, and to fix the costs and expenses of
contest.

(l) That confirmation by the National Assembly of the election is contested or not, is not essential before such member-elect may discharge the duties and enjoy the privileges of a
member of the National Assembly.

(m) That confirmation by the National Assembly of the election of any member against whom no protest had been filed prior to said confirmation, does not and cannot deprive the
Electoral Commission of its incidental power to prescribe the time within which protests against the election of any member of the National Assembly should be filed.

We hold, therefore, that the Electoral Commission was acting within the legitimate exercise of its constitutional prerogative in assuming to take cognizance of the protest filed by the
respondent Pedro Ynsua against the election of the herein petitioner Jose A. Angara, and that the resolution of the National Assembly of December 3, 1935 can not in any manner toll the
time for filing protests against the elections, returns and qualifications of members of the National Assembly, nor prevent the filing of a protest within such time as the rules of the Electoral
Commission might prescribe.

In view of the conclusion reached by us relative to the character of the Electoral Commission as a constitutional creation and as to the scope and extent of its authority under the facts of the
present controversy, we deem it unnecessary to determine whether the Electoral Commission is an inferior tribunal, corporation, board or person within the purview of sections 226 and
516 of the Code of Civil Procedure.

The petition for a writ of prohibition against the Electoral Commission is hereby denied, with costs against the petitioner. So ordered.

Avancea, C. J., Diaz, Concepcion, and Horrilleno, JJ., concur.

Separate Opinions

ABAD SANTOS, J., concurring:

I concur in the result and in most of the views so ably expressed in the preceding opinion. I am, however, constrained to withhold my assent to certain conclusions therein advanced.
The power vested in the Electoral Commission by the Constitution of judging of all contests relating to the election, returns, and qualifications of the members of the National Assembly, is
judicial in nature. (Thomas vs. Loney, 134 U.S., 372; 33 Law. ed., 949, 951.) On the other hand, the power to regulate the time in which notice of a contested election may be given, is
legislative in character. (M'Elmoyle vs. Cohen, 13 Pet., 312; 10 Law. ed., 177; Missouri vs. Illinois, 200 U. S. 496; 50 Law. ed., 572.)

It has been correctly stated that the government established by the Constitution follows fundamentally the theory of the separation of powers into legislative, executive, and judicial.
Legislative power is vested in the National Assembly. (Article VI, sec. 1.) In the absence of any clear constitutional provision to the contrary, the power to regulate the time in which notice
of a contested election may be given, must be deemed to be included in the grant of legislative power to the National Assembly.

The Constitution of the United States contains a provision similar to the that found in Article VI, section 4, of the Constitution of the Philippines. Article I, section 5, of the Constitution of the
United States provides that each house of the Congress shall be the judge of the elections, returns, and qualifications of its own members. Notwithstanding this provision, the Congress has
assumed the power to regulate the time in which notice of a contested election may be given. Thus section 201, Title 2, of the United States Code Annotated prescribes:

Whenever any person intends to contest an election of any Member of the House of Representatives of the United States, he shall, within thirty days after the result of such
election shall have been determined by the officer or board of canvassers authorized by law to determine the same, give notice, in writing, to the Member whose seat he designs to
contest, of his intention to contest the same, and, in such notice, shall specify particularly the grounds upon which he relies in the contest. (R. S., par. 105.)

The Philippine Autonomy Act, otherwise known as the Jones Law, also contained a provision to the effect that the Senate and House of Representatives, respectively, shall be the sole judges
of the elections, returns, and qualifications of their elective members. Notwithstanding this provision, the Philippine Legislature passed the Election Law, section 478 of which reads as
follows:

The Senate and the House of Representatives shall by resolution respectively prescribe the time and manner of filing contest in the election of members of said bodies, the time
and manner of notifying the adverse party, and bond or bonds, to be required, if any, and shall fix the costs and expenses of contest which may be paid from their respective funds.

The purpose sought to be attained by the creation of the Electoral Commission was not to erect a body that would be above the law, but to raise legislative elections contests from the
category of political to that of justiciable questions. The purpose was not to place the commission beyond the reach of the law, but to insure the determination of such contests with the due
process of law.

Section 478 of the Election Law was in force at the time of the adoption of the Constitution, Article XV, section 2, of which provides that

All laws of the Philippine Islands shall continue in force until the inauguration of the Commonwealth of the Philippines; thereafter, such laws shall remain operative, unless
inconsistent with this Constitution, until amended, altered, modified, or repealed by the National Assembly, and all references in such laws to the Government or officials of the
Philippine Islands shall be construed, in so far as applicable, to refer to the Government and corresponding officials under this Constitution.

The manifest purpose of this constitutional provision was to insure the orderly processes of government, and to prevent any hiatus in its operations after the inauguration of the
Commonwealth of the Philippines. It was thus provided that all laws of the Philippine Islands shall remain operative even after the inauguration of the Commonwealth of the Philippines,
unless inconsistent with the Constitution, and that all references in such laws to the government or officials of the Philippine Islands shall be construed, in so far as applicable, to refer to
the government and corresponding officials under the Constitution. It would seem to be consistent not only with the spirit but the letter of the Constitution to hold that section 478 of the
Election Law remains operative and should now be construed to refer to the Electoral Commission, which, in so far as the power to judge election contests is concerned, corresponds to
either the Senate or the House of Representative under the former regime. It is important to observe in this connection that said section 478 of the Election Law vested the power to
regulate the time and manner in which notice of a contested election may be given, not in the Philippine Legislature but in the Senate and House of Representatives singly. In other words,
the authority to prescribe the time and manner of filing contests in the elections of members of the Philippine Legislature was by statute lodged separately in the bodies clothed with power
to decide such contests. Construing section 478 of the Election Law to refer to the National Assembly, as required by Article XV, section 2, of the Constitution, it seems reasonable to
conclude that the authority to prescribe the time and manner of filing contests in the election of members of the National Assembly is vested in the Electoral Commission, which is now the
body clothed with power to decide such contests.
In the light of what has been said, the resolution of the National Assembly of December 3, 1935, could not have the effect of barring the right of the respondent Pedro Ynsua to contest the
election of the petitioner. By the same token, the Electoral Commission was authorized by law to adopt its resolution of December 9, 1935, which fixed the time with in which written
contests must be filed with the commission.

Having been filed within the time fixed by its resolutions, the Electoral Commission has jurisdiction to hear and determine the contest filed by the respondent Pedro Ynsua against the
petitioner Jose A. Angara.
 EN BANC

[G.R. No. 122156. February 3, 1997]

MANILA PRINCE HOTEL, petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE
GOVERNMENT CORPORATE COUNSEL, respondents.

DECISION
BELLOSILLO, J.:

The Filipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give
preference to qualified Filipinos,[1] is invoked by petitioner in its bid to acquire 51% of the shares of the Manila Hotel Corporation (MHC) which owns the historic Manila Hotel. Opposing,
respondents maintain that the provision is not self-executing but requires an implementing legislation for its enforcement. Corollarily, they ask whether the 51% shares form part of the
national economy and patrimony covered by the protective mantle of the Constitution.

The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization program of the Philippine Government under Proclamation No. 50
dated 8 December 1986, decided to sell through public bidding 30% to 51% of the issued and outstanding shares of respondent MHC. The winning bidder, or the eventual strategic partner,
is to provide management expertise and/or an international marketing/reservation system, and financial support to strengthen the profitability and performance of the Manila Hotel.[2] In a close
bidding held on 18 September 1995 only two (2) bidders participated: petitioner Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or 15,300,000
shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than
the bid of petitioner.
Pertinent provisions of the bidding rules prepared by respondent GSIS state -

I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC -

1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November 3, 1995) or the Highest Bidder will lose the right to purchase the Block of
Shares and GSIS will instead offer the Block of Shares to the other Qualified Bidders:

a. The Highest Bidder must negotiate and execute with the GSIS/MHC the Management Contract, International Marketing/Reservation System Contract or other type of contract specified
by the Highest Bidder in its strategic plan for the Manila Hotel x x x x

b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS x x x x

K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER -

The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met:

a. Execution of the necessary contracts with GSIS/MHC not later than October 23, 1995 (reset to November 3, 1995); and

b. Requisite approvals from the GSIS/MHC and COP (Committee on Privatization)/ OGCC (Office of the Government Corporate Counsel) are obtained.[3]
 Pending the declaration of Renong Berhard as the winning bidder/strategic partner and the execution of the necessary contracts, petitioner in a letter to respondent GSIS dated 28
September 1995 matched the bid price of P44.00 per share tendered by Renong Berhad.[4] In a subsequent letter dated 10 October 1995 petitioner sent a managers check issued by Philtrust
Bank for Thirty-three Million Pesos (P33,000,000.00) as Bid Security to match the bid of the Malaysian Group, Messrs. Renong Berhad x x x x[5] which respondent GSIS refused to accept.
On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid and that the sale of 51% of the MHC may be hastened by respondent
GSIS and consummated with Renong Berhad, petitioner came to this Court on prohibition and mandamus. On 18 October 1995 the Court issued a temporary restraining order enjoining
respondents from perfecting and consummating the sale to the Malaysian firm.
On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by the First Division. The case was then set for oral arguments with former Chief
Justice Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has been identified with the Filipino nation and has practically
become a historical monument which reflects the vibrancy of Philippine heritage and culture. It is a proud legacy of an earlier generation of Filipinos who believed in the nobility and sacredness
of independence and its power and capacity to release the full potential of the Filipino people.To all intents and purposes, it has become a part of the national patrimony.[6] Petitioner also argues
that since 51% of the shares of the MHC carries with it the ownership of the business of the hotel which is owned by respondent GSIS, a government-owned and controlled corporation, the
hotel business of respondent GSIS being a part of the tourism industry is unquestionably a part of the national economy. Thus, any transaction involving 51% of the shares of stock of the
MHC is clearly covered by the term national economy, to which Sec. 10, second par., Art. XII, 1987 Constitution, applies. [7]
It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also unquestionably part of the national economy petitioner should be preferred
after it has matched the bid offer of the Malaysian firm. For the bidding rules mandate that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to
the other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share.[8]
Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of principle and policy since it is not a self-executing provision
and requires implementing legislation(s) x x x x Thus, for the said provision to operate, there must be existing laws to lay down conditions under which business may be done. [9]
Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national patrimonywhich only refers to lands of the public domain, waters, minerals,
coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna and all marine wealth in its territorial sea, and exclusive marine zone
as cited in the first and second paragraphs of Sec. 2, Art. XII, 1987 Constitution. According to respondents, while petitioner speaks of the guests who have slept in the hotel and the events
that have transpired therein which make the hotel historic, these alone do not make the hotel fall under the patrimony of the nation. What is more, the mandate of the Constitution is addressed
to the State, not to respondent GSIS which possesses a personality of its own separate and distinct from the Philippines as a State.
Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision invoked is still inapplicable since what is being sold is only 51% of the outstanding
shares of the corporation, not the hotel building nor the land upon which the building stands. Certainly, 51% of the equity of the MHC cannot be considered part of the national
patrimony. Moreover, if the disposition of the shares of the MHC is really contrary to the Constitution, petitioner should have questioned it right from the beginning and not after it had lost
in the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may
offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share, is
misplaced. Respondents postulate that the privilege of submitting a matching bid has not yet arisen since it only takes place if for any reason, the Highest Bidder cannot be awarded the Block
of Shares. Thus the submission by petitioner of a matching bid is premature since Renong Berhad could still very well be awarded the block of shares and the condition giving rise to the
exercise of the privilege to submit a matching bid had not yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of discretion should fail since respondent GSIS did not exercise its discretion in a capricious, whimsical manner, and if ever
it did abuse its discretion it was not so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. Similarly, the petition for mandamus
should fail as petitioner has no clear legal right to what it demands and respondents do not have an imperative duty to perform the act required of them by petitioner.
We now resolve. A constitution is a system of fundamental laws for the governance and administration of a nation.It is supreme, imperious, absolute and unalterable except by the
authority from which it emanates. It has been defined as the fundamental and paramount law of the nation.[10] It prescribes the permanent framework of a system of government, assigns to
the different departments their respective powers and duties, and establishes certain fixed principles on which government is founded. The fundamental conception in other words is that it
is a supreme law to which all other laws must conform and in accordance with which all private rights must be determined and all public authority administered.[11] Under the doctrine of
constitutional supremacy, if a law or contract violates any norm of the constitution that law or contract whether promulgated by the legislative or by the executive branch or entered into by
private persons for private purposes is null and void and without any force and effect. Thus, since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed
written in every statute and contract.
 Admittedly, some constitutions are merely declarations of policies and principles. Their provisions command the legislature to enact laws and carry out the purposes of the framers
who merely establish an outline of government providing for the different departments of the governmental machinery and securing certain fundamental and inalienable rights of
citizens.[12] A provision which lays down a general principle, such as those found in Art. II of the 1987 Constitution, is usually not self-executing. But a provision which is complete in itself
and becomes operative without the aid of supplementary or enabling legislation, or that which supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is
self-executing. Thus a constitutional provision is self-executing if the nature and extent of the right conferred and the liability imposed are fixed by the constitution itself, so that they can be
determined by an examination and construction of its terms, and there is no language indicating that the subject is referred to the legislature for action.[13]
As against constitutions of the past, modern constitutions have been generally drafted upon a different principle and have often become in effect extensive codes of laws intended to
operate directly upon the people in a manner similar to that of statutory enactments, and the function of constitutional conventions has evolved into one more like that of a legislative
body. Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the presumption now is that all provisions of the constitution are self-
executing. If the constitutional provisions are treated as requiring legislation instead of self-executing, the legislature would have the power to ignore and practically nullify the mandate of
the fundamental law.[14] This can be cataclysmic. That is why the prevailing view is, as it has always been, that -

x x x x in case of doubt, the Constitution should be considered self-executing rather than non-self-executing x x x x Unless the contrary is clearly intended, the provisions of the Constitution
should be considered self-executing, as a contrary rule would give the legislature discretion to determine when, or whether, they shall be effective. These provisions would be subordinated
to the will of the lawmaking body, which could make them entirely meaningless by simply refusing to pass the needed implementing statute.[15]

Respondents argue that Sec. 10, second par., Art. XII, of the 1987 Constitution is clearly not self-executing, as they quote from discussions on the floor of the 1986 Constitutional
Commission -
MR. RODRIGO. Madam President, I am asking this question as the Chairman of the Committee on Style. If the wording of PREFERENCE is given to QUALIFIED FILIPINOS, can it be
understood as a preference to qualified Filipinos vis-a-vis Filipinos who are not qualified. So, why do we not make it clear? To qualified Filipinos as against aliens?

THE PRESIDENT. What is the question of Commissioner Rodrigo? Is it to remove the word QUALIFIED?
MR. RODRIGO. No, no, but say definitely TO QUALIFIED FILIPINOS as against whom? As against aliens or over aliens ?
MR. NOLLEDO. Madam President, I think that is understood. We use the word QUALIFIED because the existing laws or prospective laws will always lay down conditions under
which business may be done. For example, qualifications on capital, qualifications on the setting up of other financial structures, et cetera (underscoring supplied by
respondents).
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO. Yes.[16]
Quite apparently, Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it is non-self-executing but simply for purposes of style. But, certainly, the
legislature is not precluded from enacting further laws to enforce the constitutional provision so long as the contemplated statute squares with the Constitution. Minor details may be left to
the legislature without impairing the self-executing nature of constitutional provisions.
In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers directly granted by the constitution, further the operation of
such a provision, prescribe a practice to be used for its enforcement, provide a convenient remedy for the protection of the rights secured or the determination thereof, or place reasonable
safeguards around the exercise of the right. The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a self-executing constitutional provision does
not render such a provision ineffective in the absence of such legislation. The omission from a constitution of any express provision for a remedy for enforcing a right or liability is not
necessarily an indication that it was not intended to be self-executing. The rule is that a self-executing provision of the constitution does not necessarily exhaust legislative power on the
subject, but any legislation must be in harmony with the constitution, further the exercise of constitutional right and make it more available.[17] Subsequent legislation however does not
necessarily mean that the subject constitutional provision is not, by itself, fully enforceable.
Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is implied from the tenor of the first and third paragraphs of the same section which
undoubtedly are not self-executing.[18] The argument is flawed. If the first and third paragraphs are not self-executing because Congress is still to enact measures to encourage the formation
and operation of enterprises fully owned by Filipinos, as in the first paragraph, and the State still needs legislation to regulate and exercise authority over foreign investments within its
national jurisdiction, as in the third paragraph, then a fortiori, by the same logic, the second paragraph can only be self-executing as it does not by its language require any legislation in order
to give preference to qualified Filipinos in the grant of rights, privileges and concessions covering the national economy and patrimony. A constitutional provision may be self-executing in
one part and non-self-executing in another.[19]
 Even the cases cited by respondents holding that certain constitutional provisions are merely statements of principles and policies, which are basically not self-executing and only
placed in the Constitution as moral incentives to legislation, not as judicially enforceable rights - are simply not in point. Basco v. Philippine Amusements and Gaming Corporation[20] speaks of
constitutional provisions on personal dignity, [21] the sanctity of family life,[22] the vital role of the youth in nation-building,[23] the promotion of social justice,[24] and the values of
education.[25] Tolentino v. Secretary of Finance[26] refers to constitutional provisions on social justice and human rights[27] and on education.[28] Lastly, Kilosbayan, Inc. v. Morato[29] cites
provisions on the promotion of general welfare,[30] the sanctity of family life,[31] the vital role of the youth in nation-building[32] and the promotion of total human liberation and
development.[33] A reading of these provisions indeed clearly shows that they are not judicially enforceable constitutional rights but merely guidelines for legislation. The very terms of the
provisions manifest that they are only principles upon which legislations must be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in itself and which needs no further guidelines or
implementing laws or rules for its enforcement. From its very words the provision does not require any legislation to put it in operation. It is per se judicially enforceable. When our
Constitution mandates that [i]n the grant of rights, privileges, and concessions covering national economy and patrimony, the State shall give preference to qualified Filipinos, it means just that
- qualified Filipinos shall be preferred.And when our Constitution declares that a right exists in certain specified circumstances an action may be maintained to enforce such right
notwithstanding the absence of any legislation on the subject; consequently, if there is no statute especially enacted to enforce such constitutional right, such right enforces itself by its own
inherent potency and puissance, and from which all legislations must take their bearings. Where there is a right there is a remedy. Ubi jus ibi remedium.
As regards our national patrimony, a member of the 1986 Constitutional Commission[34] explains -

The patrimony of the Nation that should be conserved and developed refers not only to our rich natural resources but also to the cultural heritage of our race. It also refers to
our intelligence in arts, sciences and letters. Therefore, we should develop not only our lands, forests, mines and other natural resources but also the mental ability or faculty of
our people.

We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage.[35] When the Constitution speaks of national patrimony, it refers not only to the natural resources
of the Philippines, as the Constitution could have very well used the term natural resources, but also to the cultural heritage of the Filipinos.
Manila Hotel has become a landmark - a living testimonial of Philippine heritage. While it was restrictively an American hotel when it first opened in 1912, it immediately evolved to be
truly Filipino. Formerly a concourse for the elite, it has since then become the venue of various significant events which have shaped Philippine history. It was called the Cultural Center of
the 1930s. It was the site of the festivities during the inauguration of the Philippine Commonwealth. Dubbed as the Official Guest House of the Philippine Government it plays host to dignitaries
and official visitors who are accorded the traditional Philippine hospitality.[36]
The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City.[37]During World War II the hotel was converted by the Japanese Military
Administration into a military headquarters.When the American forces returned to recapture Manila the hotel was selected by the Japanese together with Intramuros as the two (2) places
for their final stand. Thereafter, in the 1950s and 1960s, the hotel became the center of political activities, playing host to almost every political convention. In 1970 the hotel reopened after
a renovation and reaped numerous international recognitions, an acknowledgment of the Filipino talent and ingenuity. In 1986 the hotel was the site of a failed coup d etat where an aspirant
for vice-president was proclaimed President of the Philippine Republic.
For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of the Filipinos; its existence is impressed with public interest;
its own historicity associated with our struggle for sovereignty, independence and nationhood. Verily, Manila Hotel has become part of our national economy and patrimony. For sure, 51%
of the equity of the MHC comes within the purview of the constitutional shelter for it comprises the majority and controlling stock, so that anyone who acquires or owns the 51% will have
actual control and management of the hotel. In this instance, 51% of the MHC cannot be disassociated from the hotel and the land on which the hotel edifice stands. Consequently, we cannot
sustain respondents claim that the Filipino First Policy provision is not applicable since what is being sold is only 51% of the outstanding shares of the corporation, not the Hotel building nor
the land upon which the building stands.[38]
The argument is pure sophistry. The term qualified Filipinos as used in our Constitution also includes corporations at least 60% of which is owned by Filipinos. This is very clear from
the proceedings of the 1986 Constitutional Commission -
THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. I would like to introduce an amendment to the Nolledo amendment. And the amendment would consist in substituting the words QUALIFIED FILIPINOS with the
following: CITIZENS OF THE PHILIPPINES OR CORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY SUCH CITIZENS.
xxxx
 MR. MONSOD. Madam President, apparently the proponent is agreeable, but we have to raise a question. Suppose it is a corporation that is 80-percent Filipino, do we not give it
preference?
MR. DAVIDE. The Nolledo amendment would refer to an individual Filipino. What about a corporation wholly owned by Filipino citizens?
MR. MONSOD. At least 60 percent, Madam President.
MR. DAVIDE. Is that the intention?
MR. MONSOD. Yes, because, in fact, we would be limiting it if we say that the preference should only be 100-percent Filipino.
MR. DAVIDE. I want to get that meaning clear because QUALIFIED FILIPINOS may refer only to individuals and not to juridical personalities or entities.
MR. MONSOD. We agree, Madam President.[39]
xxxx
MR. RODRIGO. Before we vote, may I request that the amendment be read again.
MR. NOLLEDO. The amendment will read: IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE
SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS. And the word Filipinos here, as intended by the proponents, will include not only individual Filipinos but also Filipino-
controlled entities or entities fully-controlled by Filipinos.[40]
The phrase preference to qualified Filipinos was explained thus -
MR. FOZ. Madam President, I would like to request Commissioner Nolledo to please restate his amendment so that I can ask a question.
MR. NOLLEDO. IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFEREN CE TO
QUALIFIED FILIPINOS.
MR. FOZ. In connection with that amendment, if a foreign enterprise is qualified and a Filipino enterprise is also qualified, will the Filipino enterprise still be given a preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred?
MR. NOLLEDO. The answer is yes.
MR. FOZ. Thank you.[41]
Expounding further on the Filipino First Policy provision Commissioner Nolledo continues
MR. NOLLEDO. Yes, Madam President. Instead of MUST, it will be SHALL - THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS. This embodies the so-called Filipino
First policy. That means that Filipinos should be given preference in the grant of concessions, privileges and rights covering the national patrimony.[42]
The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was still further clarified by Commissioner Nolledo[43] -

Paragraph 2 of Section 10 explicitly mandates the Pro-Filipino bias in all economic concerns. It is better known as the FILIPINO FIRST Policy x x x x This provision was never found in
previous Constitutions x x x x

The term qualified Filipinos simply means that preference shall be given to those citizens who can make a viable contribution to the common good, because of credible competence and
efficiency. It certainly does NOT mandate the pampering and preferential treatment to Filipino citizens or organizations that are incompetent or inefficient, since such an indiscriminate
preference would be counterproductive and inimical to the common good.

In the granting of economic rights, privileges, and concessions, when a choice has to be made between a qualified foreigner and a qualified Filipino, the latter shall be chosen over the
former.
 Lastly, the word qualified is also determinable. Petitioner was so considered by respondent GSIS and selected as one of the qualified bidders. It was pre-qualified by respondent GSIS in
accordance with its own guidelines so that the sole inference here is that petitioner has been found to be possessed of proven management expertise in the hotel industry, or it has significant
equity ownership in another hotel company, or it has an overall management and marketing proficiency to successfully operate the Manila Hotel.[44]
The penchant to try to whittle away the mandate of the Constitution by arguing that the subject provision is not self-executory and requires implementing legislation is quite
disturbing. The attempt to violate a clear constitutional provision - by the government itself - is only too distressing. To adopt such a line of reasoning is to renounce the duty to ensure
faithfulness to the Constitution. For, even some of the provisions of the Constitution which evidently need implementing legislation have juridical life of their own and can be the source of a
judicial remedy. We cannot simply afford the government a defense that arises out of the failure to enact further enabling, implementing or guiding legislation. In fine, the discourse of Fr.
Joaquin G. Bernas, S.J., on constitutional government is apt -

The executive department has a constitutional duty to implement laws, including the Constitution, even before Congress acts - provided that there are discoverable legal standards for
executive action. When the executive acts, it must be guided by its own understanding of the constitutional command and of applicable laws. The responsibility for reading and
understanding the Constitution and the laws is not the sole prerogative of Congress. If it were, the executive would have to ask Congress, or perhaps the Court, for an interpretation every
time the executive is confronted by a constitutional command. That is not how constitutional government operates.[45]

Respondents further argue that the constitutional provision is addressed to the State, not to respondent GSIS which by itself possesses a separate and distinct personality. This argument
again is at best specious. It is undisputed that the sale of 51% of the MHC could only be carried out with the prior approval of the State acting through respondent Committee on
Privatization. As correctly pointed out by Fr. Joaquin G. Bernas, S.J., this fact alone makes the sale of the assets of respondents GSIS and MHC a state action. In constitutional jurisprudence,
the acts of persons distinct from the government are considered state action covered by the Constitution (1) when the activity it engages in is a public function; (2) when the government is
so significantly involved with the private actor as to make the government responsible for his action; and, (3) when the government has approved or authorized the action. It is evident that
the act of respondent GSIS in selling 51% of its share in respondent MHC comes under the second and third categories of state action. Without doubt therefore the transaction, although
entered into by respondent GSIS, is in fact a transaction of the State and therefore subject to the constitutional command. [46]
When the Constitution addresses the State it refers not only to the people but also to the government as elements of the State. After all, government is composed of three (3) divisions
of power - legislative, executive and judicial.Accordingly, a constitutional mandate directed to the State is correspondingly directed to the three (3) branches of government. It is undeniable
that in this case the subject constitutional injunction is addressed among others to the Executive Department and respondent GSIS, a government instrumentality deriving its authority from
the State.
It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning bidder. The bidding rules expressly provide that the highest bidder shall only be
declared the winning bidder after it has negotiated and executed the necessary contracts, and secured the requisite approvals. Since the Filipino First Policy provision of the Constitution
bestows preference on qualified Filipinos the mere tending of the highest bid is not an assurance that the highest bidder will be declared the winning bidder. Resultantly, respondents are not
bound to make the award yet, nor are they under obligation to enter into one with the highest bidder. For in choosing the awardee respondents are mandated to abide by the dictates of the
1987 Constitution the provisions of which are presumed to be known to all the bidders and other interested parties.
Adhering to the doctrine of constitutional supremacy, the subject constitutional provision is, as it should be, impliedly written in the bidding rules issued by respondent GSIS, lest the
bidding rules be nullified for being violative of the Constitution. It is a basic principle in constitutional law that all laws and contracts must conform with the fundamental law of the land. Those
which violate the Constitution lose their reason for being.
Paragraph V. J. 1 of the bidding rules provides that [i]f for any reason the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to other Qualified Bidders that have
validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share. [47] Certainly, the constitutional mandate itself is reason enough not
to award the block of shares immediately to the foreign bidder notwithstanding its submission of a higher, or even the highest, bid. In fact, we cannot conceive of a stronger reason than the
constitutional injunction itself.
In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the grant of rights, privileges and concessions covering the national economy and
patrimony, thereby exceeding the bid of a Filipino, there is no question that the Filipino will have to be allowed to match the bid of the foreign entity. And if the Filipino matches the bid of a
foreign firm the award should go to the Filipino. It must be so if we are to give life and meaning to the Filipino First Policy provision of the 1987 Constitution. For, while this may neither be
expressly stated nor contemplated in the bidding rules, the constitutional fiat is omnipresent to be simply disregarded. To ignore it would be to sanction a perilous skirting of the basic law.

This Court does not discount the apprehension that this policy may discourage foreign investors. But the Constitution and laws of the Philippines are understood to be always open to
public scrutiny. These are given factors which investors must consider when venturing into business in a foreign jurisdiction. Any person therefore desiring to do business in the Philippines
or with any of its agencies or instrumentalities is presumed to know his rights and obligations under the Constitution and the laws of the forum.
 The argument of respondents that petitioner is now estopped from questioning the sale to Renong Berhad since petitioner was well aware from the beginning that a foreigner could
participate in the bidding is meritless. Undoubtedly, Filipinos and foreigners alike were invited to the bidding. But foreigners may be awarded the sale only if no Filipino qualifies, or if the
qualified Filipino fails to match the highest bid tendered by the foreign entity. In the case before us, while petitioner was already preferred at the inception of the bidding because of the
constitutional mandate, petitioner had not yet matched the bid offered by Renong Berhad. Thus it did not have the right or personality then to compel respondent GSIS to accept its earlier
bid. Rightly, only after it had matched the bid of the foreign firm and the apparent disregard by respondent GSIS of petitioners matching bid did the latter have a cause of action.
Besides, there is no time frame for invoking the constitutional safeguard unless perhaps the award has been finally made. To insist on selling the Manila Hotel to foreigners when there
is a Filipino group willing to match the bid of the foreign group is to insist that government be treated as any other ordinary market player, and bound by its mistakes or gross errors of
judgment, regardless of the consequences to the Filipino people. The miscomprehension of the Constitution is regrettable. Thus we would rather remedy the indiscretion while there is still
an opportunity to do so than let the government develop the habit of forgetting that the Constitution lays down the basic conditions and parameters for its actions.
Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the bidding rules, respondent GSIS is left with no alternative but to award to petitioner the
block of shares of MHC and to execute the necessary agreements and documents to effect the sale in accordance not only with the bidding guidelines and procedures but with the Constitution
as well. The refusal of respondent GSIS to execute the corresponding documents with petitioner as provided in the bidding rules after the latter has matched the bid of the Malaysian firm
clearly constitutes grave abuse of discretion.
The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987 Constitution not merely to be used as a guideline for future legislation but primarily to be
enforced; so must it be enforced. This Court as the ultimate guardian of the Constitution will never shun, under any reasonable circumstance, the duty of upholding the majesty of the
Constitution which it is tasked to defend. It is worth emphasizing that it is not the intention of this Court to impede and diminish, much less undermine, the influx of foreign investments. Far
from it, the Court encourages and welcomes more business opportunities but avowedly sanctions the preference for Filipinos whenever such preference is ordained by the Constitution. The
position of the Court on this matter could have not been more appropriately articulated by Chief Justice Narvasa -

As scrupulously as it has tried to observe that it is not its function to substitute its judgment for that of the legislature or the executive about the wisdom and feasibility of legislation
economic in nature, the Supreme Court has not been spared criticism for decisions perceived as obstacles to economic progress and development x x x x in connection with a temporary
injunction issued by the Courts First Division against the sale of the Manila Hotel to a Malaysian Firm and its partner, certain statements were published in a major daily to the effect that
that injunction again demonstrates that the Philippine legal system can be a major obstacle to doing business here.

Let it be stated for the record once again that while it is no business of the Court to intervene in contracts of the kind referred to or set itself up as the judge of whether they are viable or
attainable, it is its bounden duty to make sure that they do not violate the Constitution or the laws, or are not adopted or implemented with grave abuse of discretion amounting to lack or
excess of jurisdiction. It will never shirk that duty, no matter how buffeted by winds of unfair and ill-informed criticism.[48]

Privatization of a business asset for purposes of enhancing its business viability and preventing further losses, regardless of the character of the asset, should not take precedence over
non-material values. A commercial, nay even a budgetary, objective should not be pursued at the expense of national pride and dignity. For the Constitution enshrines higher and nobler non-
material values. Indeed, the Court will always defer to the Constitution in the proper governance of a free society; after all, there is nothing so sacrosanct in any economic policy as to draw
itself beyond judicial review when the Constitution is involved.[49]
Nationalism is inherent in the very concept of the Philippines being a democratic and republican state, with sovereignty residing in the Filipino people and from whom all government
authority emanates. In nationalism, the happiness and welfare of the people must be the goal. The nation-state can have no higher purpose. Any interpretation of any constitutional provision
must adhere to such basic concept. Protection of foreign investments, while laudible, is merely a policy. It cannot override the demands of nationalism.[50]
The Manila Hotel or, for that matter, 51% of the MHC, is not just any commodity to be sold to the highest bidder solely for the sake of privatization. We are not talking about an ordinary
piece of property in a commercial district. We are talking about a historic relic that has hosted many of the most important events in the short history of the Philippines as a nation. We are
talking about a hotel where heads of states would prefer to be housed as a strong manifestation of their desire to cloak the dignity of the highest state function to their official visits to the
Philippines.Thus the Manila Hotel has played and continues to play a significant role as an authentic repository of twentieth century Philippine history and culture. In this sense, it has become
truly a reflection of the Filipino soul - a place with a history of grandeur; a most historical setting that has played a part in the shaping of a country.[51]
This Court cannot extract rhyme nor reason from the determined efforts of respondents to sell the historical landmark - this Grand Old Dame of hotels in Asia - to a total stranger. For,
indeed, the conveyance of this epic exponent of the Filipino psyche to alien hands cannot be less than mephistophelian for it is, in whatever manner viewed, a veritable alienation of a nations
soul for some pieces of foreign silver. And so we ask: What advantage, which cannot be equally drawn from a qualified Filipino, can be gained by the Filipinos if Manila Hotel - and all that it
stands for - is sold to a non-Filipino? How much of national pride will vanish if the nations cultural heritage is entrusted to a foreign entity? On the other hand, how much dignity will be
preserved and realized if the national patrimony is safekept in the hands of a qualified, zealous and well-meaning Filipino? This is the plain and simple meaning of the Filipino First
Policy provision of the Philippine Constitution. And this Court, heeding the clarion call of the Constitution and accepting the duty of being the elderly watchman of the nation, will continue
to respect and protect the sanctity of the Constitution.
WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT
CORPORATE COUNSEL are directed to CEASE and DESIST from selling 51% of the shares of the Manila Hotel Corporation to RENONG BERHAD, and to ACCEPT the matching bid of petitioner
MANILA PRINCE HOTEL CORPORATION to purchase the subject 51% of the shares of the Manila Hotel Corporation at P44.00 per share and thereafter to execute the necessary agreements
and documents to effect the sale, to issue the necessary clearances and to do such other acts and deeds as may be necessary for the purpose.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 92024 November 9, 1990

CONGRESSMAN ENRIQUE T. GARCIA (Second District of Bataan), petitioner,

vs.
THE BOARD OF INVESTMENTS, THE DEPARTMENT OF TRADE AND INDUSTRY, LUZON PETROCHEMICAL CORPORATION, and PILIPINAS SHELL CORPORATION, respondents.

Abraham C. La Vina for petitioner.

Sycip, Salazar, Hernandez & Gatmaitan for Luzon Petrochemical Corporation.

Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for Pilipinas Shell Petroleum Corporation.

GUTIERREZ, JR., J.:

This is a petition to annul and set aside the decision of the Board of Investments (BOI)/Department of Trade and Industry (DTI) approving the transfer of the site of the proposed
petrochemical plant from Bataan to Batangas and the shift of feedstock for that plant from naphtha only to naphtha and/or liquefied petroleum gas (LPG).

This petition is a sequel to the petition in G.R. No. 88637 entitled "Congressman Enrique T. Garcia v. the Board of Investments", September 7, 1989, where this Court issued a decision,
ordering the BOI as follows:

WHEREFORE, the petition for certiorari is granted. The Board of Investments is ordered: (1) to publish the amended application for registration of the Bataan
Petrochemical Corporation, (2) to allow the petitioner to have access to its records on the original and amended applications for registration, as a petrochemical
manufacturer, of the respondent Bataan Petrochemical Corporation, excluding, however, privileged papers containing its trade secrets and other business and financial
information, and (3) to set for hearing the petitioner's opposition to the amended application in order that he may present at such hearing all the evidence in his
possession in support of his opposition to the transfer of the site of the BPC petrochemical plant to Batangas province. The hearing shall not exceed a period of ten (10)
days from the date fixed by the BOI, notice of which should be served by personal service to the petitioner through counsel, at least three (3) days in advance. The
hearings may be held from day to day for a period of ten (10) days without postponements. The petition for a writ of prohibition or preliminary injunction is denied. No
costs. (Rollo, pages 450-451)

However, acting on the petitioner's motion for partial reconsideration asking that we rule on the import of P.D. Nos. 949 and 1803 and on the foreign investor's claim of right of final choice
of plant site, in the light of the provisions of the Constitution and the Omnibus Investments Code of 1987, this Court on October 24, 1989, made the observation that P.D. Nos. 949 and 1803
"do not provide that the Limay site should be the only petrochemical zone in the country, nor prohibit the establishment of a petrochemical plant elsewhere in the country, that the
establishment of a petrochemical plant in Batangas does not violate P.D. No. 949 and P.D. No. 1803.

Our resolution skirted the issue of whether the investor given the initial inducements and other circumstances surrounding its first choice of plant site may change it simply because it has
the final choice on the matter. The Court merely ruled that the petitioner appears to have lost interest in the case by his failure to appear at the hearing that was set by the BOI after receipt
of the decision, so he may be deemed to have waived the fruit of the judgment. On this ground, the motion for partial reconsideration was denied.
A motion for reconsideration of said resolution was filed by the petitioner asking that we resolve the basic issue of whether or not the foreign investor has the right of final choice of plant
site; that the non-attendance of the petitioner at the hearing was because the decision was not yet final and executory; and that the petitioner had not therefor waived the right to a hearing
before the BOI.

In the Court's resolution dated January 17, 1990, we stated:

Does the investor have a "right of final choice" of plant site? Neither under the 1987 Constitution nor in the Omnibus Investments Code is there such a 'right
of final choice.' In the first place, the investor's choice is subject to processing and approval or disapproval by the BOI (Art. 7, Chapter II, Omnibus Investments Code). By
submitting its application and amended application to the BOI for approval, the investor recognizes the sovereign prerogative of our Government, through the BOI, to
approve or disapprove the same after determining whether its proposed project will be feasible, desirable and beneficial to our country. By asking that his opposition to
the LPC's amended application be heard by the BOI, the petitioner likewise acknowledges that the BOI, not the investor, has the last word or the "final choice" on the
matter.

Secondly, as this case has shown, even a choice that had been approved by the BOI may not be 'final', for supervening circumstances and changes in the conditions of a
place may dictate a corresponding change in the choice of plant site in order that the project will not fail. After all, our country will benefit only when a project succeeds,
not when it fails. (Rollo, pp. 538-539)

Nevertheless, the motion for reconsideration of the petitioner was denied.

A minority composed of Justices Melencio-Herrera, Gancayco, Sarmiento and this ponente voted to grant the motion for reconsideration stating that the hearing set by the BOI was
premature as the decision of the Court was not yet final and executory; that as contended by the petitioner the Court must first rule on whether or not the investor has the right of final
choice of plant site for if the ruling is in the affirmative, the hearing would be a useless exercise; that in the October 19, 1989 resolution, the Court while upholding validity of the transfer of
the plant site did not rule on the issue of who has the final choice; that they agree with the observation of the majority that "the investor has no final choice either under the 1987
Constitution or in the Omnibus Investments Code and that it is the BOI who decides for the government" and that the plea of the petitioner should be granted to give him the chance to
show the justness of his claim and to enable the BOI to give a second hard look at the matter.

Thus, the herein petition which relies on the ruling of the Court in the resolution of January 17, 1990 in G.R. No. 88637 that the investor has no right of final choice under the 1987
Constitution and the Omnibus Investments Code.

Under P.D. No. 1803 dated January 16, 1981, 576 hectares of the public domain located in Lamao, Limay, Bataan were reserved for the Petrochemical Industrial Zone under the
administration, management, and ownership of the Philippine National Oil Company (PNOC).

The Bataan Refining Corporation (BRC) is a wholly government owned corporation, located at Bataan. It produces 60% of the national output of naphtha.

Taiwanese investors in a petrochemical project formed the Bataan Petrochemical Corporation (BPC) and applied with BOI for registration as a new domestic producer of petrochemicals.
Its application specified Bataan as the plant site. One of the terms and conditions for registration of the project was the use of "naphtha cracker" and "naphtha" as feedstock or fuel for its
petrochemical plant. The petrochemical plant was to be a joint venture with PNOC. BPC was issued a certificate of registration on February 24, 1988 by BOI.

BPC was given pioneer status and accorded fiscal and other incentives by BOI, like: (1) exemption from taxes on raw materials, (2) repatriation of the entire proceeds of liquidation
investments in currency originally made and at the exchange rate obtaining at the time of repatriation; and (3) remittance of earnings on investments. As additional incentive, the House of
Representatives approved a bill introduced by the petitioner eliminating the 48% ad valorem tax on naphtha if and when it is used as raw materials in the petrochemical plant. (G.R. No.
88637, September 7, 1989, pp. 2-3. Rollo, pp. 441-442)

However, in February, 1989, A.T. Chong, chairman of USI Far East Corporation, the major investor in BPC, personally delivered to Trade Secretary Jose Concepcion a letter dated January
25, 1989 advising him of BPC's desire to amend the original registration certification of its project by changing the job site from Limay, Bataan, to Batangas. The reason adduced for the
transfer was the insurgency and unstable labor situation, and the presence in Batangas of a huge liquefied petroleum gas (LPG) depot owned by the Philippine Shell Corporation.
The petitioner vigorously opposed the proposal and no less than President Aquino expressed her preference that the plant be established in Bataan in a conference with the Taiwanese
investors, the Secretary of National Defense and The Chief of Staff of the Armed Forces.

Despite speeches in the Senate and House opposing the Transfer of the project to Batangas, BPC filed on April 11, 1989 its request for approval of the amendments. Its application is as
follows: "(l) increasing the investment amount from US $220 million to US $320 million; (2) increasing the production capacity of its naphtha cracker, polythylene plant and polypropylene
plant; (3) changing the feedstock from naphtha only to "naphtha and/or liquefied petroleum gas;" and (4) transferring the job site from Limay, Bataan, to Batangas. (Annex B to Petition;
Rollo, p. 25)

Notwithstanding opposition from any quarters and the request of the petitioner addressed to Secretary Concepcion to be furnished a copy of the proposed amendment with its
attachments which was denied by the BOI on May 25, 1989, BOI approved the revision of the registration of BPC's petrochemical project. (Petition, Annex F; Rollo, p. 32; See pp. 4 to 6,
Decision in G.R. No. 88637; supra.)

BOI Vice-Chairman Tomas I. Alcantara testifying before the Committee on Ways and Means of the Senate asserted that:

The BOI has taken a public position preferring Bataan over Batangas as the site of the petrochemical complex, as this would provide a better distribution of industries
around the Metro Manila area. ... In advocating the choice of Bataan as the project site for the petrochemical complex, the BOI, however, made it clear, and I would like to
repeat this that the BOI made it clear in its view that the BOI or the government for that matter could only recomend as to where the project should be located. The BOI
recognizes and respect the principle that the final chouce is still with the proponent who would in the final analysis provide the funding or risk capital for the
project. (Petition, P. 13; Annex D to the petition)

This position has not been denied by BOI in its pleadings in G.R. No. 88637 and in the present petition.

Section 1, Article VIII of the 1987 Constitution provides:

SECTION 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

There is before us an actual controversy whether the petrochemical plant should remain in Bataan or should be transferred to Batangas, and whether its feedstock originally of naphtha
only should be changed to naphtha and/or liquefied petroleum gas as the approved amended application of the BPC, now Luzon Petrochemical Corporation (LPC), shows. And in the light
of the categorical admission of the BOI that it is the investor who has the final choice of the site and the decision on the feedstock, whether or not it constitutes a grave abuse of discretion
for the BOI to yield to the wishes of the investor, national interest notwithstanding.

We rule that the Court has a constitutional duty to step into this controversy and determine the paramount issue. We grant the petition.

First, Bataan was the original choice as the plant site of the BOI to which the BPC agreed. That is why it organized itself into a corporation bearing the name Bataan. There is available 576
hectares of public land precisely reserved as the petrochemical zone in Limay, Bataan under P.D. No. 1803. There is no need to buy expensive real estate for the site unlike in the proposed
transfer to Batangas. The site is the result of careful study long before any covetous interests intruded into the choice. The site is ideal. It is not unduly constricted and allows for expansion.
The respondents have not shown nor reiterated that the alleged peace and order situation in Bataan or unstable labor situation warrant a transfer of the plant site to Batangas. Certainly,
these were taken into account when the firm named itself Bataan Petrochemical Corporation. Moreover, the evidence proves the contrary.

Second, the BRC, a government owned Filipino corporation, located in Bataan produces 60% of the national output of naphtha which can be used as feedstock for the plant in Bataan. It can
provide the feedstock requirement of the plant. On the other hand, the country is short of LPG and there is need to import the same for use of the plant in Batangas. The local production
thereof by Shell can hardly supply the needs of the consumers for cooking purposes. Scarce dollars will be diverted, unnecessarily, from vitally essential projects in order to feed the
furnaces of the transferred petrochemical plant.
Third, naphtha as feedstock has been exempted by law from the ad valorem tax by the approval of Republic Act No. 6767 by President Aquino but excluding LPG from exemption from ad
valorem tax. The law was enacted specifically for the petrochemical industry. The policy determination by both Congress and the President is clear. Neither BOI nor a foreign investor
should disregard or contravene expressed policy by shifting the feedstock from naphtha to LPG.

Fourth, under Section 10, Article XII of the 1987 Constitution, it is the duty of the State to "regulate and exercise authority over foreign investments within its national jurisdiction and in
accordance with its national goals and priorities." The development of a self-reliant and independent national economy effectively controlled by Filipinos is mandated in Section 19, Article
II of the Constitution.

In Article 2 of the Omnibus Investments Code of 1987 "the sound development of the national economy in consonance with the principles and objectives of economic nationalism" is the set
goal of government.

Fifth, with the admitted fact that the investor is raising the greater portion of the capital for the project from local sources by way of loan which led to the so-called "petroscam scandal", the
capital requirements would be greatly minimized if LPC does not have to buy the land for the project and its feedstock shall be limited to naphtha which is certainly more economical, more
readily available than LPG, and does not have to be imported.

Sixth, if the plant site is maintained in Bataan, the PNOC shall be a partner in the venture to the great benefit and advantage of the government which shall have a participation in the
management of the project instead of a firm which is a huge multinational corporation.

In the light of all the clear advantages manifest in the plant's remaining in Bataan, practically nothing is shown to justify the transfer to Batangas except a near-absolute discretion given by
BOI to investors not only to freely choose the site but to transfer it from their own first choice for reasons which remain murky to say the least.

And this brings us to a prime consideration which the Court cannot rightly ignore.

Section 1, Article XII of the Constitution provides that:

xxx xxx xxx

The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.

xxx xxx xxx

Every provision of the Constitution on the national economy and patrimony is infused with the spirit of national interest. The non-alienation of natural resources, the State's full control
over the development and utilization of our scarce resources, agreements with foreigners being based on real contributions to the economic growth and general welfare of the country and
the regulation of foreign investments in accordance with national goals and priorities are too explicit not to be noticed and understood.

A petrochemical industry is not an ordinary investment opportunity. It should not be treated like a garment or embroidery firm, a shoe-making venture, or even an assembler of cars or
manufacturer of computer chips, where the BOI reasoning may be accorded fuller faith and credit. The petrochemical industry is essential to the national interest. In other ASEAN countries
like Indonesia and Malaysia, the government superintends the industry by controlling the upstream or cracker facility.

In this particular BPC venture, not only has the Government given unprecedented favors, among them:

(1) For an initial authorized capital of only P20 million, the Central Bank gave an eligible relending credit or relending facility worth US $50 million and a debt to swap
arrangement for US $30 million or a total accommodation of US $80 million which at current exchange rates is around P2080 million.
 (2) A major part of the company's capitalization shall not come from foreign sources but from loans, initially a Pl Billion syndicated loan, to be given by both government
banks and a consortium of Philippine private banks or in common parlance, a case of 'guiniguisa sa sariling manteca.'

(3) Tax exemptions and privileges were given as part of its 'preferred pioneer status.'

(4) Loan applications of other Philippine firms will be crowded out of the Asian Development Bank portfolio because of the petrochemical firm's massive loan request.
(Taken from the proceedings before the Senate Blue Ribbon Committee).

but through its regulatory agency, the BOI, it surrenders even the power to make a company abide by its initial choice, a choice free from any suspicion of unscrupulous machinations and a
choice which is undoubtedly in the best interests of the Filipino people.

The Court, therefore, holds and finds that the BOI committed a grave abuse of discretion in approving the transfer of the petrochemical plant from Bataan to Batangas and authorizing the
change of feedstock from naphtha only to naphtha and/or LPG for the main reason that the final say is in the investor all other circumstances to the contrary notwithstanding. No cogent
advantage to the government has been shown by this transfer. This is a repudiation of the independent policy of the government expressed in numerous laws and the Constitution to run
its own affairs the way it deems best for the national interest.

One can but remember the words of a great Filipino leader who in part said he would not mind having a government run like hell by Filipinos than one subservient to foreign dictation. In
this case, it is not even a foreign government but an ordinary investor whom the BOI allows to dictate what we shall do with our heritage.

WHEREFORE, the petition is hereby granted. The decision of the respondent Board of Investments approving the amendment of the certificate of registration of the Luzon Petrochemical
Corporation on May 23, 1989 under its Resolution No. 193, Series of 1989, (Annex F to the Petition) is SET ASIDE as NULL and VOID. The original certificate of registration of BPC' (now
LPC) of February 24, 1988 with Bataan as the plant site and naphtha as the feedstock is, therefore, ordered maintained.

SO ORDERED.

Cruz, Gancayco, Padilla, Bidin, Sarmiento and Medialdea, JJ., concur.

Fernan, C.J., Paras, JJ., took no part.

Feliciano, J., is on leave.

Separate Opinions

GRIO-AQUINO, J., dissenting Opinion:

This is the petitioner's second petition for certiorari and prohibition with application for a temporary restraining order or preliminary injunction against the respondents Board of
Investments (BOI), Department of Trade and Industry (DTI), the Luzon Petrochemical Corporation (LPC), formerly Bataan Petrochemical Corporation, and Pilipinas Shell Corporation
(SHELL) on the transfer of the LPC petrochemical plant site from Bataan to Batangas. The first case was docketed in this Court as G.R. No. 88637 and was decided on September 7, 1989.
Consistent with my opinion in the first case, I vote once more to deny the petition.
The petitioner filed this second petition supposedly "upon the authority and strength" of this Court's statement in its Resolution of January 9, 1990 in G.R. No. 88637 that the foreign
investor (LPC) does not have a right of final choice of plant site because its choice is subject to approval or disapproval by the BOI (p. 3, Rollo). Ergo, the BOI has the "final choice."

Petitioner contends that since the BOI had earlier approved Bataan as the plant site of the LPG petrochemical complex, and of "naphtha only" as the feedstock, that approval was "final" and
may not be changed. Hence, the BOI allegedly abused its discretion: (1) in approving the transfer of the LPC's plant site from Bataan to Batangas (in spite of the BOI's initial preference for
Bataan) "upon the false and unlawful thesis that the foreign investor has the right of final choice by plant site" (p. 13, Rollo), and (2) in allowing the LPC to shift feedstock from naphtha
only, to naphtha and/or LPG, despite the disadvantages of using LPG. Petitioner prays the Court to annul the BOI's action and prohibit LPC from transferring its plant site to Batangas and
shifting feedstock to naphtha and/ or LPG (p. 22, Rollo).

The petition is not well-taken. There is no provision in the 1987 Investments Code prohibiting the amendment of the investor's application for registration of its project, such as, in this
case, its plant site, the feedstock to be used, and the capitalization of the project.

Neither does the law prohibit the BOI from approving the amended application.

Since the investor may amend its application and the BOI may approve or disapprove the amendments, when may the BOI be deemed to have made a "final choice" regarding those aspects
of the project which have been changed?

Only the BOI or the Chief Executive is competent to answer that question, for the matter of choosing an appropriate site for the investor's project is a political and economic decision which,
under our system of separation of powers, only the executive branch, as implementor of policy formulated by the legislature (in this case, the policy of encouraging and inviting foreign
investments into our country), is empowered to make. It is not for this Court to determine what is, or should be, the BOI's "final choice" of plant site and feedstock, for, as we said in our
decision in G.R. No. 88637:

This Court ... does not possess the necessary technology and scientific expertise to detail e whether the transfer of the proposed BPC (now LPC) petrochemical complex
from Bataan to Batangas and the change of fuel from 'naphtha only to naphtha and/or LPG' will be best for the project and for our country. This Court is not about to
delve into the economics and politics of this case. It is concerned simply with the alleged violation of due process and the alleged extra limitation of power and discretion
on the part of the public respondents in approving the transfer of the project to Batangas without giving due notice and an opportunity to be heard to the vocal
opponents of that move." (pp. 445-446, Rollo of G.R. No. 88637.)

Although we did say in our decision in G.R. No. 88637 that the BOI, not the foreign investor, has the right of "final choice" of plant site for the LPC project, the Court would be overstepping
the bounds of its jurisdiction were it to usurp the prerogative of the BOI to make that choice or change it.

The petitioner's contention that the BOI abused its discretion in approving the transfer of the LPC plant site to Batangas because the BOI, in effect, yielded to the investor's choice, is not
well taken. The record shows that the BOI approved the transfer because "the BOI recognizes the justification given by the proponent of the project (p. 30, Rollo). The fact that the
petitioner disagrees with the BOI's decision does not make it wrong. The petitioner's recourse against the BOI's action is by an appeal to the President (Sec. 36, 1987 Investments Code),
not to this Court.

This Court, in the exercise of its judicial power, may review and annul executive as well as legislative actions when they clash with the Constitution or with existing laws, or when any
branch or instrumentality of the Government has acted with grave abuse of discretion amounting to lack or excess of jurisdiction (Sec. 1, Art. VIII, 1987 Constitution) but the Court may not
do more than that. It may not make the decisions that the executive should have made nor pass the laws that the legislature should have passed. Not even the much publicized "petroscam"
involving the financial arrangements (not the issue in this case) for the LPC project would justify the intervention of this court in a matter that pertains to the exclusive domain of the
executive department. The court does not have a panacea for all the ills that afflict our country nor a solution for every problem that besets it.

Did the BOI gravely abuse its discretion in approving the LPC's amended application for registration of its petrochemical project to warrant the intervention of this Court? Grave abuse of
discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction (Abad Santos vs. Prov. of Tarlac, 67 Phil. 480; Alafriz vs. Nable, 70 Phil. 278).

In light of the LPC's justifications for the transfer of its project site and the shift from one kind of feedstock to two, we are not prepared to hold that the BOI's decision to approve the
changes was the product of a capricious and arbitrary exercise of judgment on its part, despite the seemingly impressive arguments of the petitioner showing the advantages of
establishing the petrochemical plant in Bataan and of using naphtha only as feedstock. We are not prepared to substitute the judgment of the BOI on this matter with one crafted by this
Court.

With regard to the scandalously liberal financial accommodations that local banks have allegedly agreed to grant to the LPC (the so-called "petroscam") to enable it to raise a major part of
its capital requirements from local sources (hence, a betrayal of the people's expectation that foreign investors will bring in foreign exchange to finance their projects in this country) it is
significant that the petitioner has not led an outcry for the disapproval and cancellation of the project on this score. Apparently, the petitioner is not seriously disturbed by the moral
implications of the "scam" provided the petrochemical plant is set up in Bataan.

The decision of the BOI to allow the transfer of the LPC petrochemical project to Batangas and shift feedstock from naphtha only to naphtha and/or LPG, may appear to the petitioner to be
extremely unwise and inadvisable, but the Court may not, for that reason annul the BOI's action or prohibit it from acting on a matter that lies within its particular sphere of competence,
for the Court is not a judge of the wisdom and soundness of the actions of the two other co-equal branches of the Government, but only of their legality and constitutionality.

WHEREFORE, I vote to deny the petition for certiorari and prohibition for lack of merit.

Melencio-Herrera, Narvasa and Regalado, JJ., concur.

MELENCIO-HERRERA, J., dissenting:

Consistent with my dissent in G.R. No. 88637, the first petition, I concur in the dissent herein of Mme. Justice Aquino and merely wish to add that in its Decision, the majority has actually
imposed its own views on matters falling within the competence of a policy-making body of the Government. It decided upon the wisdom of the transfer of the site of the proposed project
(pp. 8-9); the reasonableness of the feedstock to be used (pp. 8-9); the undesirability of the capitalization aspect of the project (p. 10), and injected its own concept of the national interest
as regards the establishment of a basic industry of strategic importance to the country (p. 13).

It is true that the judicial power embodied in Article VIII of the 1987 Constitution speaks of the duty of Courts of justice to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. By no means, however, does it vest in the Courts the power to enter
the realm of policy considerations under the guise of the commission of grave abuse of discretion.

But this is exactly what the majority Decision has resulted in. It has made a sweeping policy determination and has unwittingly transformed itself into what might be termed a "government
by the Judiciary," something never intended by the framers of the Constitution when they provided for separation of powers among the three co-equal branches of government and
excluded the Judiciary from policy-making.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 101083 July 30, 1993

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

Oposa Law Office for petitioners.

The Solicitor General for respondents.

DAVIDE, JR., J.:

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

The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The
principal plaintiffs therein, now the principal petitioners, are all minors duly represented and joined by their respective parents. Impleaded as an additional plaintiff is the Philippine
Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia, engaging in concerted action geared for the protection of our
environment and natural resources. The original defendant was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department of Environment and Natural Resources (DENR).
His substitution in this petition by the new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion by the petitioners. 1 The complaint 2 was instituted as a
taxpayers' class suit 3 and alleges that the plaintiffs "are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of the natural resource
treasure that is the country's virgin tropical forests." The same was filed for themselves and others who are equally concerned about the preservation of said resource but are "so
numerous that it is impracticable to bring them all before the Court." The minors further asseverate that they "represent their generation as well as generations yet
unborn." 4 Consequently, it is prayed for that judgment be rendered:

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

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

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

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

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

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

As their cause of action, they specifically allege that:

CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.

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

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

10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left, barely 2.8% of the entire land mass of the Philippine archipelago
and about 3.0 million hectares of immature and uneconomical secondary growth forests.
11. Public records reveal that the defendant's, predecessors have granted timber license agreements ('TLA's') to various corporations to cut the aggregate area of 3.89
million hectares for commercial logging purposes.

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

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

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

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

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

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

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

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

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

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

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

(a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and enjoyable harmony with each other;

(b) to fulfill the social, economic and other requirements of present and future generations of Filipinos and;

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

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

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

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

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

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

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

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

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

On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. 7 In the said order, not only was the defendant's claim that the complaint states no
cause of action against him and that it raises a political question sustained, the respondent Judge further ruled that the granting of the relief prayed for would result in the impairment of
contracts which is prohibited by the fundamental law of the land.

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

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

Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient allegations concerning their right to a sound environment based on Articles
19, 20 and 21 of the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine
Environmental Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the people to a balanced and healthful ecology, the concept of generational genocide in
Criminal Law and the concept of man's inalienable right to self-preservation and self-perpetuation embodied in natural law. Petitioners likewise rely on the respondent's correlative
obligation per Section 4 of E.O. No. 192, to safeguard the people's right to a healthful environment.

It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting Timber License Agreements (TLAs) to cover more areas for logging than what
is available involves a judicial question.

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

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

As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the State without due process of law. Once issued, a TLA remains effective for a certain
period of time usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor cancelled unless the holder has been found, after due notice and hearing, to
have violated the terms of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs indiscriminately cancelled without the requisite hearing
would be violative of the requirements of due process.
Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No. 90-777 as a class suit. The original defendant and the present respondents
did not take issue with this matter. Nevertheless, We hereby rule that the said civil case is indeed a class suit. The subject matter of the complaint is of common and general interest not just
to several, but to all citizens of the Philippines. Consequently, since the parties are so numerous, it, becomes impracticable, if not totally impossible, to bring all of them before the court. We
likewise declare that the plaintiffs therein are numerous and representative enough to ensure the full protection of all concerned interests. Hence, all the requisites for the filing of a valid
class suit under Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil case and in the instant petition, the latter being but an incident to the former.

This case, however, has a special and novel element. Petitioners minors assert that they represent their generation as well as generations yet unborn. We find no difficulty in ruling that
they can, for themselves, for others of their generation and for the succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be
based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety. 9 Such rhythm and harmony indispensably include, inter alia, the judicious disposition, utilization,
management, renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources to the end that their exploration,
development and utilization be equitably accessible to the present as well as future generations. 10 Needless to say, every generation has a responsibility to the next to preserve that
rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the minors' assertion of their right to a sound environment constitutes, at the same
time, the performance of their obligation to ensure the protection of that right for the generations to come.

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

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

xxx xxx xxx

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

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

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

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

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

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

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

Sec. 15. The State shall protect and promote the right to health of the people and instill health consciousness among them.
While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies and not under the Bill of Rights, it does not follow that it is less
important than any of the civil and political rights enumerated in the latter. Such a right belongs to a different category of rights altogether for it concerns nothing less than self-
preservation and self-perpetuation aptly and fittingly stressed by the petitioners the advancement of which may even be said to predate all governments and constitutions. As a
matter of fact, these basic rights need not even be written in the Constitution for they are assumed to exist from the inception of humankind. If they are now explicitly mentioned in the
fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a balanced and healthful ecology and to health are mandated as state policies by the
Constitution itself, thereby highlighting their continuing importance and imposing upon the state a solemn obligation to preserve the first and protect and advance the second, the day
would not be too far when all else would be lost not only for the present generation, but also for those to come generations which stand to inherit nothing but parched earth incapable of
sustaining life.

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

MR. VILLACORTA:

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

MR. AZCUNA:

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

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

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

Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the other related provisions of the Constitution concerning the conservation,
development and utilization of the country's natural resources, 13 then President Corazon C. Aquino promulgated on 10 June 1987 E.O. No. 192, 14 Section 4 of which expressly mandates
that the Department of Environment and Natural Resources "shall be the primary government agency responsible for the conservation, management, development and proper use of the
country's environment and natural resources, specifically forest and grazing lands, mineral, resources, including those in reservation and watershed areas, and lands of the public domain,
as well as the licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the
present and future generations of Filipinos." Section 3 thereof makes the following statement of policy:

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

This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987, 15specifically in Section 1 thereof which reads:

Sec. 1. Declaration of Policy. (1) The State shall ensure, for the benefit of the Filipino people, the full exploration and development as well as the judicious disposition,
utilization, management, renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources,
consistent with the necessity of maintaining a sound ecological balance and protecting and enhancing the quality of the environment and the objective of making the
exploration, development and utilization of such natural resources equitably accessible to the different segments of the present as well as future generations.
 (2) The State shall likewise recognize and apply a true value system that takes into account social and environmental cost implications relative to the utilization,
development and conservation of our natural resources.

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

Sec. 2. Mandate. (1) The Department of Environment and Natural Resources shall be primarily responsible for the implementation of the foregoing policy.

(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional mandate to control and supervise the exploration, development,
utilization, and conservation of the country's natural resources.

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

It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid special attention to the "environmental right" of the present and future
generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued. The former "declared a continuing policy of
the State (a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and enjoyable harmony with each other, (b) to fulfill the social,
economic and other requirements of present and future generations of Filipinos, and (c) to insure the attainment of an environmental quality that is conducive to a life of dignity and well-
being." 16 As its goal, it speaks of the "responsibilities of each generation as trustee and guardian of the environment for succeeding generations." 17 The latter statute, on the other hand,
gave flesh to the said policy.

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

A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the same gives rise to a cause of action. Petitioners maintain that the granting
of the TLAs, which they claim was done with grave abuse of discretion, violated their right to a balanced and healthful ecology; hence, the full protection thereof requires that no further
TLAs should be renewed or granted.

A cause of action is defined as:

. . . an act or omission of one party in violation of the legal right or rights of the other; and its essential elements are legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in violation of said legal right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a cause of action, 19 the question submitted to the court for resolution
involves the sufficiency of the facts alleged in the complaint itself. No other matter should be considered; furthermore, the truth of falsity of the said allegations is beside the point for the
truth thereof is deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such alleged facts to be true, may the court render a valid judgment in accordance
with the prayer in the complaint? 20 In Militante vs. Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the utmost care and circumspection in passing upon a
motion to dismiss on the ground of the absence thereof [cause of action] lest, by its failure to manifest a correct appreciation of the facts alleged and deemed hypothetically admitted, what
the law grants or recognizes is effectively nullified. If that happens, there is a blot on the legal order. The law itself stands in disrepute."

After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative allegations, as well as the specific averments under the sub-heading
CAUSE OF ACTION, to be adequate enough to show, prima facie, the claimed violation of their rights. On the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for.
It bears stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as party defendants, the grantees thereof for they are indispensable
parties.

The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or determination by the executive or legislative branches of Government is not
squarely put in issue. What is principally involved is the enforcement of a right vis-a-vis policies already formulated and expressed in legislation. It must, nonetheless, be emphasized that
the political question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects executive and legislative actions from
judicial inquiry or review. The second paragraph of section 1, Article VIII of the Constitution states that:

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a distinguished member of this Court, says:

The first part of the authority represents the traditional concept of judicial power, involving the settlement of conflicting rights as conferred as law. The second part of
the authority represents a broadening of judicial power to enable the courts of justice to review what was before forbidden territory, to wit, the discretion of the political
departments of the government.

As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule upon even the wisdom of the decisions of the executive and
the legislature and to declare their acts invalid for lack or excess of jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the meaning of
"grave abuse of discretion," which is a very elastic phrase that can expand or contract according to the disposition of the judiciary.

In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:

In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is that, even if we were to assume that the issue presented
before us was political in nature, we would still not be precluded from revolving it under the expanded jurisdiction conferred upon us that now covers, in proper cases,
even the political question. Article VII, Section 1, of the Constitution clearly provides: . . .

The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause found in the Constitution. The court a quo declared that:

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing
timber license agreements in the country and to cease and desist from receiving, accepting, processing, renewing or approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts" abhored (sic) by the fundamental law. 24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement. In the first place, the respondent Secretary did not, for obvious reasons,
even invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted with utmost infidelity to the Government by providing undue and unwarranted
benefits and advantages to the timber license holders because he would have forever bound the Government to strictly respect the said licenses according to their terms and conditions
regardless of changes in policy and the demands of public interest and welfare. He was aware that as correctly pointed out by the petitioners, into every timber license must be read Section
20 of the Forestry Reform Code (P.D. No. 705) which provides:

. . . Provided, That when the national interest so requires, the President may amend, modify, replace or rescind any contract, concession, permit, licenses or any other
form of privilege granted herein . . .

Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protested by the due process clause of the
Constitution. In Tan vs. Director of Forestry, 25 this Court held:

. . . A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. A timber
license is not a contract within the purview of the due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by public
interest or public welfare as in this case.
 A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal, state, or municipal, granting it and
the person to whom it is granted; neither is it property or a property right, nor does it create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the
granting of license does not create irrevocable rights, neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576).

We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26

. . . Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources to the
end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the
latter a permanent or irrevocable right to the particular concession area and the forest products therein. They may be validly amended, modified, replaced or rescinded
by the Chief Executive when national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause [See Sections 3(ee)
and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302].

Since timber licenses are not contracts, the non-impairment clause, which reads:

Sec. 10. No law impairing, the obligation of contracts shall be passed. 27

cannot be invoked.

In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or even an executive issuance declaring the cancellation or modification of
existing timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting further that a law has actually been passed mandating cancellations or
modifications, the same cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very nature and purpose, such as law could have only been passed in
the exercise of the police power of the state for the purpose of advancing the right of the people to a balanced and healthful ecology, promoting their health and enhancing the general
welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:

The freedom of contract, under our system of government, is not meant to be absolute. The same is understood to be subject to reasonable legislative regulation aimed at
the promotion of public health, moral, safety and welfare. In other words, the constitutional guaranty of non-impairment of obligations of contract is limited by the
exercise of the police power of the State, in the interest of public health, safety, moral and general welfare.

The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American Life Insurance Co. vs. Auditor General, 30 to wit:

Under our form of government the use of property and the making of contracts are normally matters of private and not of public concern. The general rule is that both
shall be free of governmental interference. But neither property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his
property to the detriment of his fellows, or exercise his freedom of contract to work them harm. Equally fundamental with the private right is that of the public to
regulate it in the common interest.

In short, the non-impairment clause must yield to the police power of the state. 31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer to enjoin the respondent Secretary from receiving, accepting,
processing, renewing or approving new timber licenses for, save in cases of renewal, no contract would have as of yet existed in the other instances. Moreover, with respect to renewal, the
holder is not entitled to it as a matter of right.

WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is
hereby set aside. The petitioners may therefore amend their complaint to implead as defendants the holders or grantees of the questioned timber license agreements.

No pronouncement as to costs.
SO ORDERED.

Cruz, Padilla, Bidin, Grio-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ., concur.

Narvasa, C.J., Puno and Vitug, JJ., took no part.

Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is one of the most important cases decided by this Court in the last few
years. The seminal principles laid down in this decision are likely to influence profoundly the direction and course of the protection and management of the environment, which of course
embraces the utilization of all the natural resources in the territorial base of our polity. I have therefore sought to clarify, basically to myself, what the Court appears to be saying.

The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance of this suit (Decision, pp. 11-12). Locus standi is not a function of
petitioners' claim that their suit is properly regarded as a class suit. I understand locus standi to refer to the legal interest which a plaintiff must have in the subject matter of the suit.
Because of the very broadness of the concept of "class" here involved membership in this "class" appears to embrace everyone living in the country whether now or in the
future it appears to me that everyone who may be expected to benefit from the course of action petitioners seek to require public respondents to take, is vested with the necessary locus
standi. The Court may be seen therefore to be recognizing a beneficiaries' right of action in the field of environmental protection, as against both the public administrative agency directly
concerned and the private persons or entities operating in the field or sector of activity involved. Whether such beneficiaries' right of action may be found under any and all circumstances,
or whether some failure to act, in the first instance, on the part of the governmental agency concerned must be shown ("prior exhaustion of administrative remedies"), is not discussed in
the decision and presumably is left for future determination in an appropriate case.

The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right the right to a balanced and healthful ecology" (Decision, p. 14). There
is no question that "the right to a balanced and healthful ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But although it is fundamental in character, I
suggest, with very great respect, that it cannot be characterized as "specific," without doing excessive violence to language. It is in fact very difficult to fashion language more
comprehensive in scope and generalized in character than a right to "a balanced and healthful ecology." The list of particular claims which can be subsumed under this rubic appears to be
entirely open-ended: prevention and control of emission of toxic fumes and smoke from factories and motor vehicles; of discharge of oil, chemical effluents, garbage and raw sewage into
rivers, inland and coastal waters by vessels, oil rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open land, streets and thoroughfares; failure to
rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other living sea resources through the use of dynamite or
cyanide and other chemicals; contamination of ground water resources; loss of certain species of fauna and flora; and so on. The other statements pointed out by the Court: Section 3,
Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 all appear to be formulations of policy,
as general and abstract as the constitutional statements of basic policy in Article II, Section 16 ("the right to a balanced and healthful ecology") and 15 ("the right to health").

P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a compendious collection of more "specific environment management policies"
and "environment quality standards" (fourth "Whereas" clause, Preamble) relating to an extremely wide range of topics:

(a) air quality management;

 (b) water quality management;

(c) land use management;

(d) natural resources management and conservation embracing:

(i) fisheries and aquatic resources;

(ii) wild life;

(iii) forestry and soil conservation;

(iv) flood control and natural calamities;

(v) energy development;

(vi) conservation and utilization of surface and ground water

(vii) mineral resources

Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the particular provision or provisions (if any) of the Philippine Environment
Code which give rise to a specific legal right which petitioners are seeking to enforce. Secondly, the Philippine Environment Code identifies with notable care the particular government
agency charged with the formulation and implementation of guidelines and programs dealing with each of the headings and sub-headings mentioned above. The Philippine Environment
Code does not, in other words, appear to contemplate action on the part of private persons who are beneficiaries of implementation of that Code.

As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the constitutional statements above noted, the Court is in effect saying that Section 15
(and Section 16) of Article II of the Constitution are self-executing and judicially enforceable even in their present form. The implications of this doctrine will have to be explored in future
cases; those implications are too large and far-reaching in nature even to be hinted at here.

My suggestion is simply that petitioners must, before the trial court, show a more specific legal right a right cast in language of a significantly lower order of generality than Article II
(15) of the Constitution that is or may be violated by the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can validly render judgment
granting all or part of the relief prayed for. To my mind, the Court should be understood as simply saying that such a more specific legal right or rights may well exist in our corpus of law,
considering the general policy principles found in the Constitution and the existence of the Philippine Environment Code, and that the trial court should have given petitioners an effective
opportunity so to demonstrate, instead of aborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal right, rather than a constitutional or statutory policy, for at
least two (2) reasons. One is that unless the legal right claimed to have been violated or disregarded is given specification in operational terms, defendants may well be unable to defend
themselves intelligently and effectively; in other words, there are due process dimensions to this matter.

The second is a broader-gauge consideration where a specific violation of law or applicable regulation is not alleged or proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution which reads:

Section 1. . . .
 Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
(Emphasis supplied)

When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are combined with remedial standards as broad ranging as "a
grave abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area of environmental protection and management, our courts have no claim to special technical competence and
experience and professional qualification. Where no specific, operable norms and standards are shown to exist, then the policy making departments the legislative and
executive departments must be given a real and effective opportunity to fashion and promulgate those norms and standards, and to implement them before the courts should
intervene.

My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's petitioners demand public respondents should cancel, must be
impleaded in the proceedings below. It might be asked that, if petitioners' entitlement to the relief demanded is not dependent upon proof of breach by the timber companies of one or
more of the specific terms and conditions of their concession agreements (and this, petitioners implicitly assume), what will those companies litigate about? The answer I suggest is that
they may seek to dispute the existence of the specific legal right petitioners should allege, as well as the reality of the claimed factual nexus between petitioners' specific legal rights and the
claimed wrongful acts or failures to act of public respondent administrative agency. They may also controvert the appropriateness of the remedy or remedies demanded by petitioners,
under all the circumstances which exist.

I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our territory, is of extreme importance for the country. The doctrines set
out in the Court's decision issued today should, however, be subjected to closer examination.

# Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is one of the most important cases decided by this Court in the last few
years. The seminal principles laid down in this decision are likely to influence profoundly the direction and course of the protection and management of the environment, which of course
embraces the utilization of all the natural resources in the territorial base of our polity. I have therefore sought to clarify, basically to myself, what the Court appears to be saying.

The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance of this suit (Decision, pp. 11-12). Locus standi is not a function of
petitioners' claim that their suit is properly regarded as a class suit. I understand locus standi to refer to the legal interest which a plaintiff must have in the subject matter of the suit.
Because of the very broadness of the concept of "class" here involved membership in this "class" appears to embrace everyone living in the country whether now or in the
future it appears to me that everyone who may be expected to benefit from the course of action petitioners seek to require public respondents to take, is vested with the necessary locus
standi. The Court may be seen therefore to be recognizing a beneficiaries' right of action in the field of environmental protection, as against both the public administrative agency directly
concerned and the private persons or entities operating in the field or sector of activity involved. Whether such beneficiaries' right of action may be found under any and all circumstances,
or whether some failure to act, in the first instance, on the part of the governmental agency concerned must be shown ("prior exhaustion of administrative remedies"), is not discussed in
the decision and presumably is left for future determination in an appropriate case.

The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right the right to a balanced and healthful ecology" (Decision, p. 14). There
is no question that "the right to a balanced and healthful ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But although it is fundamental in character, I
suggest, with very great respect, that it cannot be characterized as "specific," without doing excessive violence to language. It is in fact very difficult to fashion language more
comprehensive in scope and generalized in character than a right to "a balanced and healthful ecology." The list of particular claims which can be subsumed under this rubic appears to be
entirely open-ended: prevention and control of emission of toxic fumes and smoke from factories and motor vehicles; of discharge of oil, chemical effluents, garbage and raw sewage into
rivers, inland and coastal waters by vessels, oil rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open land, streets and thoroughfares; failure to
rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other living sea resources through the use of dynamite or
cyanide and other chemicals; contamination of ground water resources; loss of certain species of fauna and flora; and so on. The other statements pointed out by the Court: Section 3,
Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 all appear to be formulations of policy,
as general and abstract as the constitutional statements of basic policy in Article II, Section 16 ("the right to a balanced and healthful ecology") and 15 ("the right to health").

P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a compendious collection of more "specific environment management policies"
and "environment quality standards" (fourth "Whereas" clause, Preamble) relating to an extremely wide range of topics:

(a) air quality management;

(b) water quality management;

(c) land use management;

(d) natural resources management and conservation embracing:

(i) fisheries and aquatic resources;

(ii) wild life;

(iii) forestry and soil conservation;

(iv) flood control and natural calamities;

(v) energy development;

(vi) conservation and utilization of surface and ground water

(vii) mineral resources

Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the particular provision or provisions (if any) of the Philippine Environment
Code which give rise to a specific legal right which petitioners are seeking to enforce. Secondly, the Philippine Environment Code identifies with notable care the particular government
agency charged with the formulation and implementation of guidelines and programs dealing with each of the headings and sub-headings mentioned above. The Philippine Environment
Code does not, in other words, appear to contemplate action on the part of private persons who are beneficiaries of implementation of that Code.

As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the constitutional statements above noted, the Court is in effect saying that Section 15
(and Section 16) of Article II of the Constitution are self-executing and judicially enforceable even in their present form. The implications of this doctrine will have to be explored in future
cases; those implications are too large and far-reaching in nature even to be hinted at here.

My suggestion is simply that petitioners must, before the trial court, show a more specific legal right a right cast in language of a significantly lower order of generality than Article II
(15) of the Constitution that is or may be violated by the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can validly render judgment
granting all or part of the relief prayed for. To my mind, the Court should be understood as simply saying that such a more specific legal right or rights may well exist in our corpus of law,
considering the general policy principles found in the Constitution and the existence of the Philippine Environment Code, and that the trial court should have given petitioners an effective
opportunity so to demonstrate, instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal right, rather than a constitutional or statutory policy, for at
least two (2) reasons. One is that unless the legal right claimed to have been violated or disregarded is given specification in operational terms, defendants may well be unable to defend
themselves intelligently and effectively; in other words, there are due process dimensions to this matter.

The second is a broader-gauge consideration where a specific violation of law or applicable regulation is not alleged or proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution which reads:

Section 1. . . .

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
(Emphasis supplied)

When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are combined with remedial standards as broad ranging as "a
grave abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area of environmental protection and management, our courts have no claim to special technical competence and
experience and professional qualification. Where no specific, operable norms and standards are shown to exist, then the policy making departments the legislative and
executive departments must be given a real and effective opportunity to fashion and promulgate those norms and standards, and to implement them before the courts should
intervene.

My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's petitioners demand public respondents should cancel, must be
impleaded in the proceedings below. It might be asked that, if petitioners' entitlement to the relief demanded is not dependent upon proof of breach by the timber companies of one or
more of the specific terms and conditions of their concession agreements (and this, petitioners implicitly assume), what will those companies litigate about? The answer I suggest is that
they may seek to dispute the existence of the specific legal right petitioners should allege, as well as the reality of the claimed factual nexus between petitioners' specific legal rights and the
claimed wrongful acts or failures to act of public respondent administrative agency. They may also controvert the appropriateness of the remedy or remedies demanded by petitioners,
under all the circumstances which exist.

I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our territory, is of extreme importance for the country. The doctrines set
out in the Court's decision issued today should, however, be subjected to closer examination.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 113375 May 5, 1994

KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE
ABCEDE, CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO, RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE WEBB, SEN. WIGBERTO
TAADA, and REP. JOKER P. ARROYO, petitioners,
vs.
TEOFISTO GUINGONA, JR., in his capacity as Executive Secretary, Office of the President; RENATO CORONA, in his capacity as Assistant Executive Secretary and Chairman of the
Presidential review Committee on the Lotto, Office of the President; PHILIPPINE CHARITY SWEEPSTAKES OFFICE; and PHILIPPINE GAMING MANAGEMENT CORPORATION,
respondents.

Jovito R. Salonga, Fernando Santiago, Emilio C. Capulong, Jr. and Felipe L. Gozon for petitioners.

Renato L. Cayetano and Eleazar B. Reyes for PGMC.

Gamaliel G. Bongco, Oscar Karaan and Jedideoh Sincero for intervenors.

DAVIDE, JR., J.:

This is a special civil action for prohibition and injunction, with a prayer for a temporary restraining order and preliminary injunction, which seeks to prohibit and restrain the
implementation of the "Contract of Lease" executed by the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation (PGMC) in connection with
the on- line lottery system, also known as "lotto."

Petitioner Kilosbayan, Incorporated (KILOSBAYAN) avers that it is a non-stock domestic corporation composed of civic-spirited citizens, pastors, priests, nuns, and lay leaders who are
committed to the cause of truth, justice, and national renewal. The rest of the petitioners, except Senators Freddie Webb and Wigberto Taada and Representative Joker P. Arroyo, are
suing in their capacities as members of the Board of Trustees of KILOSBAYAN and as taxpayers and concerned citizens. Senators Webb and Taada and Representative Arroyo are suing in
their capacities as members of Congress and as taxpayers and concerned citizens of the Philippines.

The pleadings of the parties disclose the factual antecedents which triggered off the filing of this petition.

Pursuant to Section 1 of the charter of the PCSO (R.A. No. 1169, as amended by B.P. Blg. 42) which grants it the authority to hold and conduct "charity sweepstakes races, lotteries and other
similar activities," the PCSO decided to establish an on- line lottery system for the purpose of increasing its revenue base and diversifying its sources of funds. Sometime before March
1993, after learning that the PCSO was interested in operating an on-line lottery system, the Berjaya Group Berhad, "a multinational company and one of the ten largest public companies in
Malaysia," long "engaged in, among others, successful lottery operations in Asia, running both Lotto and Digit games, thru its subsidiary, Sports Toto Malaysia," with its "affiliate, the
International Totalizator Systems, Inc., . . . an American public company engaged in the international sale or provision of computer systems, softwares, terminals, training and other
technical services to the gaming industry," "became interested to offer its services and resources to PCSO." As an initial step, Berjaya Group Berhad (through its individual nominees)
organized with some Filipino investors in March 1993 a Philippine corporation known as the Philippine Gaming Management Corporation (PGMC), which "was intended to be the medium
through which the technical and management services required for the project would be offered and delivered to PCSO." 1

Before August 1993, the PCSO formally issued a Request for Proposal (RFP) for the Lease Contract of an on-line lottery system for the PCSO. 2 Relevant provisions of the RFP are the
following:

1. EXECUTIVE SUMMARY

xxx xxx xxx

1.2. PCSO is seeking a suitable contractor which shall build, at its own expense, all the facilities ('Facilities') needed to operate and maintain a nationwide on-line lottery
system. PCSO shall lease the Facilities for a fixed percentage ofquarterly gross receipts. All receipts from ticket sales shall be turned over directly to PCSO. All capital,
operating expenses and expansion expenses and risks shall be for the exclusive account of the Lessor.

xxx xxx xxx

1.4. The lease shall be for a period not exceeding fifteen (15) years.

1.5. The Lessor is expected to submit a comprehensive nationwide lottery development plan ("Development Plan") which will include the game, the marketing of the
games, and the logistics to introduce the games to all the cities and municipalities of the country within five (5) years.

xxx xxx xxx

1.7. The Lessor shall be selected based on its technical expertise, hardware and software capability, maintenance support, and financial resources. The Development Plan
shall have a substantial bearing on the choice of the Lessor. The Lessor shall be a domestic corporation, with at least sixty percent (60%) of its shares owned by Filipino
shareholders.

xxx xxx xxx

The Office of the President, the National Disaster Control Coordinating Council, the Philippine National Police, and the National Bureau of Investigation shall be
authorized to use the nationwide telecommunications system of the Facilities Free of Charge.

1.8. Upon expiration of the lease, the Facilities shall be owned by PCSO without any additional consideration. 3

xxx xxx xxx

2.2. OBJECTIVES

The objectives of PCSO in leasing the Facilities from a private entity are as follows:

xxx xxx xxx

2.2.2. Enable PCSO to operate a nationwide on-line Lottery system at no expense or risk to the government.

xxx xxx xxx

 2.4. DUTIES AND RESPONSIBILITIES OF THE LESSOR

xxx xxx xxx

2.4.2. THE LESSOR

The Proponent is expected to furnish and maintain the Facilities, including the personnel needed to operate the computers, the communications network and sales
offices under a build-lease basis. The printing of tickets shall be undertaken under the supervision and control of PCSO. The Facilities shall enable PCSO to computerize
the entire gaming system.

The Proponent is expected to formulate and design consumer-oriented Master Games Plan suited to the marketplace, especially geared to Filipino gaming habits and
preferences. In addition, the Master Games Plan is expected to include a Product Plan for each game and explain how each will be introduced into the market. This will be
an integral part of the Development Plan which PCSO will require from the Proponent.

xxx xxx xxx

The Proponent is expected to provide upgrades to modernize the entire gaming system over the life ofthe lease contract.

The Proponent is expected to provide technology transfer to PCSO technical personnel. 4

7. GENERAL GUIDELINES FOR PROPONENTS

xxx xxx xxx

Finally, the Proponent must be able to stand the acid test of proving that it is an entity able to take on the role of responsible maintainer of the on-line lottery system, and
able to achieve PSCO's goal of formalizing an on-line lottery system to achieve its mandated objective. 5

xxx xxx xxx

16. DEFINITION OF TERMS

Facilities: All capital equipment, computers, terminals, software, nationwide telecommunication network, ticket sales offices, furnishings, and fixtures; printing costs;
cost of salaries and wages; advertising and promotion expenses; maintenance costs; expansion and replacement costs; security and insurance, and all other related
expenses needed to operate nationwide on-line lottery system. 6

Considering the above citizenship requirement, the PGMC claims that the Berjaya Group "undertook to reduce its equity stakes in PGMC to 40%," by selling 35% out of the original 75%
foreign stockholdings to local investors.

On 15 August 1993, PGMC submitted its bid to the PCSO. 7

The bids were evaluated by the Special Pre-Qualification Bids and Awards Committee (SPBAC) for the on-line lottery and its Bid Report was thereafter submitted to the Office of the
President. 8 The submission was preceded by complaints by the Committee's Chairperson, Dr. Mita Pardo de Tavera. 9
On 21 October 1993, the Office of the President announced that it had given the respondent PGMC the go-signal to operate the country's on-line lottery system and that the corresponding
implementing contract would be submitted not later than 8 November 1993 "for final clearance and approval by the Chief Executive." 10 This announcement was published in the Manila
Standard, Philippine Daily Inquirer, and the Manila Times on 29 October 1993. 11

On 4 November 1993, KILOSBAYAN sent an open letter to Presidential Fidel V. Ramos strongly opposing the setting up to the on-line lottery system on the basis of serious moral and
ethical considerations. 12

At the meeting of the Committee on Games and Amusements of the Senate on 12 November 1993, KILOSBAYAN reiterated its vigorous opposition to the on-line lottery on account of its
immorality and illegality. 13

On 19 November 1993, the media reported that despite the opposition, "Malacaang will push through with the operation of an on-line lottery system nationwide" and that it is actually the
respondent PCSO which will operate the lottery while the winning corporate bidders are merely "lessors." 14

On 1 December 1993, KILOSBAYAN requested copies of all documents pertaining to the lottery award from Executive Secretary Teofisto Guingona, Jr. In his answer of 17 December 1993,
the Executive Secretary informed KILOSBAYAN that the requested documents would be duly transmitted before the end of the month. 15. However, on that same date, an agreement
denominated as "Contract of Lease" was finally executed by respondent PCSO and respondent PGMC. 16 The President, per the press statement issued by the Office of the President,
approved it on 20 December 1993. 17

In view of their materiality and relevance, we quote the following salient provisions of the Contract of Lease:

1. DEFINITIONS

The following words and terms shall have the following respective meanings:

1.1 Rental Fee Amount to be paid by PCSO to the LESSOR as compensation for the fulfillment of the obligations of the LESSOR under this Contract, including, but not
limited to the lease of the Facilities.

xxx xxx xxx

1.3 Facilities All capital equipment, computers, terminals, software (including source codes for the On-Line Lottery application software for the terminals,
telecommunications and central systems), technology, intellectual property rights, telecommunications network, and furnishings and fixtures.

1.4 Maintenance and Other Costs All costs and expenses relating to printing, manpower, salaries and wages, advertising and promotion, maintenance, expansion and
replacement, security and insurance, and all other related expenses needed to operate an On-Line Lottery System, which shall be for the account of the LESSOR. All
expenses relating to the setting-up, operation and maintenance of ticket sales offices of dealers and retailers shall be borne by PCSO's dealers and retailers.

1.5 Development Plan The detailed plan of all games, the marketing thereof, number of players, value of winnings and the logistics required to introduce the games,
including the Master Games Plan as approved by PCSO, attached hereto as Annex "A", modified as necessary by the provisions of this Contract.

xxx xxx xxx

1.8 Escrow Deposit The proposal deposit in the sum of Three Hundred Million Pesos (P300,000,000.00) submitted by the LESSOR to PCSO pursuant to the
requirements of the Request for Proposals.

2. SUBJECT MATTER OF THE LEASE

The LESSOR shall build, furnish and maintain at its own expense and risk the Facilities for the On-Line Lottery System of PCSO in the Territory on an exclusive basis. The
LESSOR shall bear all Maintenance and Other Costs as defined herein.

xxx xxx xxx

3. RENTAL FEE

For and in consideration of the performance by the LESSOR of its obligations herein, PCSO shall pay LESSOR a fixed Rental Fee equal to four point nine percent (4.9%) of
gross receipts from ticket sales, payable net of taxes required by law to be withheld, on a semi-monthly basis. Goodwill, franchise and similar fees shall belong to PCSO.

4. LEASE PERIOD

The period of the lease shall commence ninety (90) days from the date of effectivity of this Contract and shall run for a period of eight (8) years thereafter, unless sooner
terminated in accordance with this Contract.

5. RIGHTS AND OBLIGATIONS OF PCSO AS OPERATOR OF THE ON-LINE LOTTERY SYSTEM

PCSO shall be the sole and individual operator of the On-Line Lottery System. Consequently:

5.1 PCSO shall have sole responsibility to decide whether to implement, fully or partially, the Master Games Plan of the LESSOR. PCSO shall have the sole responsibility to
determine the time for introducing new games to the market. The Master Games Plan included in Annex "A" hereof is hereby approved by PCSO.

5.2 PCSO shall have control over revenues and receipts of whatever nature from the On-Line Lottery System. After paying the Rental Fee to the LESSOR, PCSO shall have
exclusive responsibility to determine the Revenue Allocation Plan; Provided, that the same shall be consistent with the requirement of R.A. No. 1169, as amended, which
fixes a prize fund of fifty five percent (55%) on the average.

5.3 PCSO shall have exclusive control over the printing of tickets, including but not limited to the design, text, and contents thereof.

5.4 PCSO shall have sole responsibility over the appointment of dealers or retailers throughout the country. PCSO shall appoint the dealers and retailers in a timely
manner with due regard to the implementation timetable of the On-Line Lottery System. Nothing herein shall preclude the LESSOR from recommending dealers or
retailers for appointment by PCSO, which shall act on said recommendation within forty-eight (48) hours.

5.5 PCSO shall designate the necessary personnel to monitor and audit the daily performance of the On-Line Lottery System. For this purpose, PCSO designees shall be
given, free of charge, suitable and adequate space, furniture and fixtures, in all offices of the LESSOR, including but not limited to its headquarters, alternate site, regional
and area offices.

5.6 PCSO shall have the responsibility to resolve, and exclusive jurisdiction over, all matters involving the operation of the On-Line Lottery System not otherwise
provided in this Contract.

5.7 PCSO shall promulgate procedural and coordinating rules governing all activities relating to the On-Line Lottery System.

5.8 PCSO will be responsible for the payment of prize monies, commissions to agents and dealers, and taxes and levies (if any) chargeable to the operator of the On-Line
Lottery System. The LESSOR will bear all other Maintenance and Other Costs, except as provided in Section 1.4.

5.9 PCSO shall assist the LESSOR in the following:

 5.9.1 Work permits for the LESSOR's staff;

5.9.2 Approvals for importation of the Facilities;

5.9.3 Approvals and consents for the On-Line Lottery System; and

5.9.4 Business and premises licenses for all offices of the LESSOR and licenses for the telecommunications network.

5.10 In the event that PCSO shall pre-terminate this Contract or suspend the operation of the On-Line Lottery System, in breach of this Contract and through no fault of
the LESSOR, PCSO shall promptly, and in any event not later than sixty (60) days, reimburse the LESSOR the amount of its total investment cost associated with the On-
Line Lottery System, including but not limited to the cost of the Facilities, and further compensate the LESSOR for loss of expected net profit after tax, computed over the
unexpired term of the lease.

6. DUTIES AND RESPONSIBILITIES OF THE LESSOR

The LESSOR is one of not more than three (3) lessors of similar facilities for the nationwide On-Line Lottery System of PCSO. It is understood that the rights of the
LESSOR are primarily those of a lessor of the Facilities, and consequently, all rights involving the business aspects of the use of the Facilities are within the jurisdiction of
PCSO. During the term of the lease, the LESSOR shall.

6.1 Maintain and preserve its corporate existence, rights and privileges, and conduct its business in an orderly, efficient, and customary manner.

6.2 Maintain insurance coverage with insurers acceptable to PCSO on all Facilities.

6.3 Comply with all laws, statues, rules and regulations, orders and directives, obligations and duties by which it is legally bound.

6.4 Duly pay and discharge all taxes, assessments and government charges now and hereafter imposed of whatever nature that may be legally levied upon it.

6.5 Keep all the Facilities in fail safe condition and, if necessary, upgrade, replace and improve the Facilities from time to time as new technology develops, in order to
make the On-Line Lottery System more cost-effective and/or competitive, and as may be required by PCSO shall not impose such requirements unreasonably nor
arbitrarily.

6.6 Provide PCSO with management terminals which will allow real-time monitoring of the On-Line Lottery System.

6.7 Upon effectivity of this Contract, commence the training of PCSO and other local personnel and the transfer of technology and expertise, such that at the end of the
term of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System.

6.8 Undertake a positive advertising and promotions campaign for both institutional and product lines without engaging in negative advertising against other lessors.

6.9 Bear all expenses and risks relating to the Facilities including, but not limited to, Maintenance and Other Costs and:

xxx xxx xxx

6.10 Bear all risks if the revenues from ticket sales, on an annualized basis, are insufficient to pay the entire prize money.
6.11 Be, and is hereby, authorized to collect and retain for its own account, a security deposit from dealers and retailers, in an amount determined with the approval of
PCSO, in respect of equipment supplied by the LESSOR. PCSO's approval shall not be unreasonably withheld.

xxx xxx xxx

6.12 Comply with procedural and coordinating rules issued by PCSO.

7. REPRESENTATIONS AND WARRANTIES

The LESSOR represents and warrants that:

7.1 The LESSOR is corporation duly organized and existing under the laws of the Republic of the Philippines, at least sixty percent (60%) of the outstanding capital stock
of which is owned by Filipino shareholders. The minimum required Filipino equity participation shall not be impaired through voluntary or involuntary transfer,
disposition, or sale of shares of stock by the present stockholders.

7.2 The LESSOR and its Affiliates have the full corporate and legal power and authority to own and operate their properties and to carry on their business in the place
where such properties are now or may be conducted. . . .

7.3 The LESSOR has or has access to all the financing and funding requirements to promptly and effectively carry out the terms of this Contract. . . .

7.4 The LESSOR has or has access to all the managerial and technical expertise to promptly and effectively carry out the terms of this Contract. . . .

xxx xxx xxx

10. TELECOMMUNICATIONS NETWORK

The LESSOR shall establish a telecommunications network that will connect all municipalities and cities in the Territory in accordance with, at the LESSOR's option,
either of the LESSOR's proposals (or a combinations of both such proposals) attached hereto as Annex "B," and under the following PCSO schedule:

xxx xxx xxx

PCSO may, at its option, require the LESSOR to establish the telecommunications network in accordance with the above Timetable in provinces where the LESSOR has
not yet installed terminals. Provided, that such provinces have existing nodes. Once a municipality or city is serviced by land lines of a licensed public telephone
company, and such lines are connected to Metro Manila, then the obligation of the LESSOR to connect such municipality or city through a telecommunications network
shall cease with respect to such municipality or city. The voice facility will cover the four offices of the Office of the President, National Disaster Control Coordinating
Council, Philippine National Police and the National Bureau of Investigation, and each city and municipality in the Territory except Metro Manila, and those cities and
municipalities which have easy telephone access from these four offices. Voice calls from the four offices shall be transmitted via radio or VSAT to the remote
municipalities which will be connected to this voice facility through wired network or by radio. The facility shall be designed to handle four private conversations at any
one time.

xxx xxx xxx

13. STOCK DISPERSAL PLAN

Within two (2) years from the effectivity of this Contract, the LESSOR shall cause itself to be listed in the local stock exchange and offer at least twenty five percent (25%)
of its equity to the public.

14. NON-COMPETITION

The LESSOR shall not, directly or indirectly, undertake any activity or business in competition with or adverse to the On-Line Lottery System of PCSO unless it obtains
the latter's prior written consent thereto.

15. HOLD HARMLESS CLAUSE

15.1 The LESSOR shall at all times protect and defend, at its cost and expense, PCSO from and against any and all liabilities and claims for damages and/or suits for or by
reason of any deaths of, or any injury or injuries to any person or persons, or damages to property of any kind whatsoever, caused by the LESSOR, its subcontractors, its
authorized agents or employees, from any cause or causes whatsoever.

15.2 The LESSOR hereby covenants and agrees to indemnify and hold PCSO harmless from all liabilities, charges, expenses (including reasonable counsel fees) and costs
on account of or by reason of any such death or deaths, injury or injuries, liabilities, claims, suits or losses caused by the LESSOR's fault or negligence.

15.3 The LESSOR shall at all times protect and defend, at its own cost and expense, its title to the facilities and PCSO's interest therein from and against any and all claims
for the duration of the Contract until transfer to PCSO of ownership of the serviceable Facilities.

16. SECURITY

16.1 To ensure faithful compliance by the LESSOR with the terms of the Contract, the LESSOR shall secure a Performance Bond from a reputable insurance company or
companies acceptable to PCSO.

16.2 The Performance Bond shall be in the initial amount of Three Hundred Million Pesos (P300,000,000.00), to its U.S. dollar equivalent, and shall be renewed to cover
the duration of the Contract. However, the Performance Bond shall be reduced proportionately to the percentage of unencumbered terminals installed; Provided, that
the Performance Bond shall in no case be less than One Hundred Fifty Million Pesos (P150,000,000.00).

16.3 The LESSOR may at its option maintain its Escrow Deposit as the Performance Bond. . . .

17. PENALTIES

17.1 Except as may be provided in Section 17.2, should the LESSOR fail to take remedial measures within seven (7) days, and rectify the breach within thirty (30) days,
from written notice by PCSO of any wilfull or grossly negligent violation of the material terms and conditions of this Contract, all unencumbered Facilities shall
automatically become the property of PCSO without consideration and without need for further notice or demand by PCSO. The Performance Bond shall likewise be
forfeited in favor of PCSO.

17.2 Should the LESSOR fail to comply with the terms of the Timetables provided in Section 9 and 10, it shall be subject to an initial Penalty of Twenty Thousand Pesos
(P20,000.00), per city or municipality per every month of delay; Provided, that the Penalty shall increase, every ninety (90) days, by the amount of Twenty Thousand
Pesos (P20,000.00) per city or municipality per month, whilst shall failure to comply persists. The penalty shall be deducted by PCSO from the rental fee.

xxx xxx xxx

20. OWNERSHIP OF THE FACILITIES

 After expiration of the term of the lease as provided in Section 4, the Facilities directly required for the On-Line Lottery System mentioned in Section 1.3 shall
automatically belong in full ownership to PCSO without any further consideration other than the Rental Fees already paid during the effectivity of the lease.

21. TERMINATION OF THE LEASE

PCSO may terminate this Contract for any breach of the material provisions of this Contract, including the following:

21.1 The LESSOR is insolvent or bankrupt or unable to pay its debts, stops or suspends or threatens to stop or suspend payment of all or a material part of its debts, or
proposes or makes a general assignment or an arrangement or compositions with or for the benefit of its creditors; or

21.2 An order is made or an effective resolution passed for the winding up or dissolution of the LESSOR or when it ceases or threatens to cease to carry on all or a
material part of its operations or business; or

21.3 Any material statement, representation or warranty made or furnished by the LESSOR proved to be materially false or misleading;

said termination to take effect upon receipt of written notice of termination by the LESSOR and failure to take remedial action within seven (7) days
and cure or remedy the same within thirty (30) days from notice.

Any suspension, cancellation or termination of this Contract shall not relieve the LESSOR of any liability that may have already accrued hereunder.

xxx xxx xxx

Considering the denial by the Office of the President of its protest and the statement of Assistant Executive Secretary Renato Corona that "only a court injunction can stop Malacaang," and
the imminent implementation of the Contract of Lease in February 1994, KILOSBAYAN, with its co-petitioners, filed on 28 January 1994 this petition.

In support of the petition, the petitioners claim that:

. . . X X THE OFFICE OF THE PRESIDENT, ACTING THROUGH RESPONDENTS EXECUTIVE SECRETARY AND/OR ASSISTANT EXECUTIVE SECRETARY
FOR LEGAL AFFAIRS, AND THE PCSO GRAVELY ABUSE[D] THEIR DISCRETION AND/OR FUNCTIONS TANTAMOUNT TO LACK OF JURISDICTION
AND/OR AUTHORITY IN RESPECTIVELY: (A) APPROVING THE AWARD OF THE CONTRACT TO, AND (B) ENTERING INTO THE SO-CALLED
"CONTRACT OF LEASE" WITH, RESPONDENT PGMC FOR THE INSTALLATION, ESTABLISHMENT AND OPERATION OF THE ON-LINE LOTTERY AND
TELECOMMUNICATION SYSTEMS REQUIRED AND/OR AUTHORIZED UNDER THE SAID CONTRACT, CONSIDERING THAT:

a) Under Section 1 of the Charter of the PCSO, the PCSO is prohibited from holding and conducting lotteries "in collaboration, association or joint venture with any
person, association, company or entity";

b) Under Act No. 3846 and established jurisprudence, a Congressional franchise is required before any person may be allowed to establish and operate said
telecommunications system;

c) Under Section 11, Article XII of the Constitution, a less than 60% Filipino-owned and/or controlled corporation, like the PGMC, is disqualified from operating a public
service, like the said telecommunications system; and

d) Respondent PGMC is not authorized by its charter and under the Foreign Investment Act (R.A. No. 7042) to install, establish and operate the on-line lotto and
telecommunications systems. 18
Petitioners submit that the PCSO cannot validly enter into the assailed Contract of Lease with the PGMC because it is an arrangement wherein the PCSO would hold and conduct the on-line
lottery system in "collaboration" or "association" with the PGMC, in violation of Section 1(B) of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and
conducting charity sweepstakes races, lotteries, and other similar activities "in collaboration, association or joint venture with any person, association, company or entity, foreign or
domestic." Even granting arguendo that a lease of facilities is not within the contemplation of "collaboration" or "association," an analysis, however, of the Contract of Lease clearly shows
that there is a "collaboration, association, or joint venture between respondents PCSO and PGMC in the holding of the On-Line Lottery System," and that there are terms and conditions of
the Contract "showing that respondent PGMC is the actual lotto operator and not respondent PCSO." 19

The petitioners also point out that paragraph 10 of the Contract of Lease requires or authorizes PGMC to establish a telecommunications network that will connect all the municipalities
and cities in the territory. However, PGMC cannot do that because it has no franchise from Congress to construct, install, establish, or operate the network pursuant to Section 1 of Act No.
3846, as amended. Moreover, PGMC is a 75% foreign-owned or controlled corporation and cannot, therefore, be granted a franchise for that purpose because of Section 11, Article XII of the
1987 Constitution. Furthermore, since "the subscribed foreign capital" of the PGMC "comes to about 75%, as shown by paragraph EIGHT of its Articles of Incorporation," it cannot lawfully
enter into the contract in question because all forms of gambling and lottery is one of them are included in the so-called foreign investments negative list under the Foreign
Investments Act (R.A. No. 7042) where only up to 40% foreign capital is allowed. 20

Finally, the petitioners insist that the Articles of Incorporation of PGMC do not authorize it to establish and operate an on-line lottery and telecommunications systems. 21

Accordingly, the petitioners pray that we issue a temporary restraining order and a writ of preliminary injunction commanding the respondents or any person acting in their places or
upon their instructions to cease and desist from implementing the challenged Contract of Lease and, after hearing the merits of the petition, that we render judgment declaring the Contract
of Lease void and without effect and making the injunction permanent. 22

We required the respondents to comment on the petition.

In its Comment filed on 1 March 1994, private respondent PGMC asserts that "(1) [it] is merely an independent contractor for a piece of work, (i.e., the building and maintenance of a
lottery system to be used by PCSO in the operation of its lottery franchise); and (2) as such independent contractor, PGMC is not a co-operator of the lottery franchise with PCSO, nor is
PCSO sharing its franchise, 'in collaboration, association or joint venture' with PGMC as such statutory limitation is viewed from the context, intent, and spirit of Republic Act 1169, as
amended by Batas Pambansa 42." It further claims that as an independent contractor for a piece of work, it is neither engaged in "gambling" nor in "public service" relative to the
telecommunications network, which the petitioners even consider as an "indispensable requirement" of an on-line lottery system. Finally, it states that the execution and implementation
of the contract does not violate the Constitution and the laws; that the issue on the "morality" of the lottery franchise granted to the PCSO is political and not judicial or legal, which should
be ventilated in another forum; and that the "petitioners do not appear to have the legal standing or real interest in the subject contract and in obtaining the reliefs sought." 23

In their Comment filed by the Office of the Solicitor General, public respondents Executive Secretary Teofisto Guingona, Jr., Assistant Executive Secretary Renato Corona, and the PCSO
maintain that the contract of lease in question does not violate Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and that the petitioner's interpretation of the phrase "in collaboration,
association or joint venture" in Section 1 is "much too narrow, strained and utterly devoid of logic" for it "ignores the reality that PCSO, as a corporate entity, is vested with the basic and
essential prerogative to enter into all kinds of transactions or contracts as may be necessary for the attainment of its purposes and objectives." What the PCSO charter "seeks to prohibit is
that arrangement akin to a "joint venture" or partnership where there is "community of interest in the business, sharing of profits and losses, and a mutual right of control," a characteristic
which does not obtain in a contract of lease." With respect to the challenged Contract of Lease, the "role of PGMC is limited to that of a lessor of the facilities" for the on-line lottery system;
in "strict technical and legal sense," said contract "can be categorized as a contract for a piece of work as defined in Articles 1467, 1713 and 1644 of the Civil Code."

They further claim that the establishment of the telecommunications system stipulated in the Contract of Lease does not require a congressional franchise because PGMC will not operate a
public utility; moreover, PGMC's "establishment of a telecommunications system is not intended to establish a telecommunications business," and it has been held that where the facilities
are operated "not for business purposes but for its own use," a legislative franchise is not required before a certificate of public convenience can be granted. 24 Even granting arguendo that
PGMC is a public utility, pursuant to Albano S.
Reyes, 25 "it can establish a telecommunications system even without a legislative franchise because not every public utility is required to secure a legislative franchise before it could
establish, maintain, and operate the service"; and, in any case, "PGMC's establishment of the telecommunications system stipulated in its contract of lease with PCSO falls within the
exceptions under Section 1 of Act No. 3846 where a legislative franchise is not necessary for the establishment of radio stations."

They also argue that the contract does not violate the Foreign Investment Act of 1991; that the Articles of Incorporation of PGMC authorize it to enter into the Contract of Lease; and that
the issues of "wisdom, morality and propriety of acts of the executive department are beyond the ambit of judicial review."
Finally, the public respondents allege that the petitioners have no standing to maintain the instant suit, citing our resolution in Valmonte vs. Philippine Charity Sweepstakes Office. 26

Several parties filed motions to intervene as petitioners in this case, 27 but only the motion of Senators Alberto Romulo, Arturo Tolentino, Francisco Tatad, Gloria Macapagal-Arroyo,
Vicente Sotto III, John Osmea, Ramon Revilla, and Jose Lina 28 was granted, and the respondents were required to comment on their petition in intervention, which the public respondents
and PGMC did.

In the meantime, the petitioners filed with the Securities and Exchange Commission on 29 March 1994 a petition against PGMC for the nullification of the latter's General Information
Sheets. That case, however, has no bearing in this petition.

On 11 April 1994, we heard the parties in oral arguments. Thereafter, we resolved to consider the matter submitted for resolution and pending resolution of the major issues in this case, to
issue a temporary restraining order commanding the respondents or any person acting in their place or upon their instructions to cease and desist from implementing the challenged
Contract of Lease.

In the deliberation on this case on 26 April 1994, we resolved to consider only these issues: (a) the locus standi of the petitioners, and (b) the legality and validity of the Contract of Lease in
the light of Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any
person, association, company or entity, whether domestic or foreign." On the first issue, seven Justices voted to sustain the locus standi of the petitioners, while six voted not to. On the
second issue, the seven Justices were of the opinion that the Contract of Lease violates the exception to Section 1(B) of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid
and contrary to law. The six Justices stated that they wished to express no opinion thereon in view of their stand on the first issue. The Chief Justice took no part because one of the
Directors of the PCSO is his brother-in-law.

This case was then assigned to this ponente for the writing of the opinion of the Court.

The preliminary issue on the locus standi of the petitioners should, indeed, be resolved in their favor. A party's standing before this Court is a procedural technicality which it may, in the
exercise of its discretion, set aside in view of the importance of the issues raised. In the landmark Emergency Powers Cases, 29 this Court brushed aside this technicality because "the
transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure. (Avelino vs. Cuenco, G.R.
No. L-2821)." Insofar as taxpayers' suits are concerned, this Court had declared that it "is not devoid of discretion as to whether or not it should be entertained," 30 or that it "enjoys an open
discretion to entertain the same or not." 31 In De La Llana vs. Alba, 32 this Court declared:

1. The argument as to the lack of standing of petitioners is easily resolved. As far as Judge de la Llana is concerned, he certainly falls within the principle set forth in
Justice Laurel's opinion in People vs. Vera [65 Phil. 56 (1937)]. Thus: "The unchallenged rule is that the person who impugns the validity of a statute must have a personal
and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement [Ibid, 89]. The other petitioners as members of
the bar and officers of the court cannot be considered as devoid of "any personal and substantial interest" on the matter. There is relevance to this excerpt from a
separate opinion in Aquino, Jr. v. Commission on Elections [L-40004, January 31, 1975, 62 SCRA 275]: "Then there is the attack on the standing of petitioners, as
vindicating at most what they consider a public right and not protecting their rights as individuals. This is to conjure the specter of the public right dogma as an
inhibition to parties intent on keeping public officials staying on the path of constitutionalism. As was so well put by Jaffe; "The protection of private rights is an essential
constituent of public interest and, conversely, without a well-ordered state there could be no enforcement of private rights. Private and public interests are, both in a
substantive and procedural sense, aspects of the totality of the legal order." Moreover, petitioners have convincingly shown that in their capacity as taxpayers, their
standing to sue has been amply demonstrated. There would be a retreat from the liberal approach followed in Pascual v. Secretary of Public Works, foreshadowed by the
very decision of People v. Vera where the doctrine was first fully discussed, if we act differently now. I do not think we are prepared to take that step. Respondents,
however, would hard back to the American Supreme Court doctrine in Mellon v. Frothingham, with their claim that what petitioners possess "is an interest which is
shared in common by other people and is comparatively so minute and indeterminate as to afford any basis and assurance that the judicial process can act on it." That is
to speak in the language of a bygone era, even in the United States. For as Chief Justice Warren clearly pointed out in the later case of Flast v. Cohen, the barrier thus set
up if not breached has definitely been lowered.

In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan, 33 reiterated in Basco vs. Philippine Amusements and Gaming Corporation, 34 this Court stated:

Objections to taxpayers' suits for lack of sufficient personality standing or interest are, however, in the main procedural matters. Considering the importance to the
public of the cases at bar, and in keeping with the Court's duty, under the 1987 Constitution, to determine whether or not the other branches of government have kept
 themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them, this Court has brushed aside technicalities of
procedure and has taken cognizance of these petitions.

and in Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 35 it declared:

With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the petitioners and intervenors because
each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained of. [Ex Parte Levitt, 303 US 633]. And even if,
strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its
addressing and resolving the serious constitutional questions raised.

In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President
Quirino although they were invoking only an indirect and general interest shared in common with the public. The Court dismissed the objective that they were not
proper parties and ruled that the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we
must, technicalities of procedure. We have since then applied this exception in many other cases. (Emphasis supplied)

In Daza vs. Singson, 36 this Court once more said:

. . . For another, we have early as in the Emergency Powers Cases that where serious constitutional questions are involved, "the transcendental importance to the public
of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." The same policy has since then been
consistently followed by the Court, as in Gonzales vs. Commission on Elections [21 SCRA 774] . . .

The Federal Supreme Court of the United States of America has also expressed its discretionary power to liberalize the rule on locus standi. In United States vs. Federal Power
Commission and Virginia Rea Association vs. Federal Power Commission, 37 it held:

We hold that petitioners have standing. Differences of view, however, preclude a single opinion of the Court as to both petitioners. It would not further clarification of
this complicated specialty of federal jurisdiction, the solution of whose problems is in any event more or less determined by the specific circumstances of individual
situations, to set out the divergent grounds in support of standing in these cases.

In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and even association of planters, and non-profit civic organizations were allowed to
initiate and prosecute actions before this Court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies or instrumentalities.
Among such cases were those assailing the constitutionality of (a) R.A. No. 3836 insofar as it allows retirement gratuity and commutation of vacation and sick leave to Senators and
Representatives and to elective officials of both Houses of Congress; 38 (b) Executive Order No. 284, issued by President Corazon C. Aquino on 25 July 1987, which allowed members of the
cabinet, their undersecretaries, and assistant secretaries to hold other government offices or positions; 39 (c) the automatic appropriation for debt service in the General Appropriations
Act; 40 (d) R.A. No. 7056 on the holding of desynchronized elections; 41 (d) R.A. No. 1869 (the charter of the Philippine Amusement and Gaming Corporation) on the ground that it is
contrary to morals, public policy, and order; 42 and (f) R.A. No. 6975, establishing the Philippine National
Police. 43

Other cases where we have followed a liberal policy regarding locus standi include those attacking the validity or legality of (a) an order allowing the importation of rice in the light of the
prohibition imposed by R.A. No. 3452; 44 (b) P.D. Nos. 991 and 1033 insofar as they proposed amendments to the Constitution and P.D. No. 1031 insofar as it directed the COMELEC to
supervise, control, hold, and conduct the referendum-plebiscite on 16 October 1976; 45 (c) the bidding for the sale of the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo,
Japan; 46 (d) the approval without hearing by the Board of Investments of the amended application of the Bataan Petrochemical Corporation to transfer the site of its plant from Bataan to
Batangas and the validity of such transfer and the shift of feedstock from naphtha only to naphtha and/or liquefied petroleum gas; 47 (e) the decisions, orders, rulings, and resolutions of
the Executive Secretary, Secretary of Finance, Commissioner of Internal Revenue, Commissioner of Customs, and the Fiscal Incentives Review Board exempting the National Power
Corporation from indirect tax and duties; 48 (f) the orders of the Energy Regulatory Board of 5 and 6 December 1990 on the ground that the hearings conducted on the second provisional
increase in oil prices did not allow the petitioner substantial cross-examination; 49 (g) Executive Order No. 478 which levied a special duty of P0.95 per liter or P151.05 per barrel of
imported crude oil and P1.00 per liter of imported oil products; 50 (h) resolutions of the Commission on Elections concerning the apportionment, by district, of the number of elective
members of Sanggunians; 51 and (i) memorandum orders issued by a Mayor affecting the Chief of Police of Pasay City. 52
In the 1975 case of Aquino vs. Commission on Elections, 53 this Court, despite its unequivocal ruling that the petitioners therein had no personality to file the petition, resolved nevertheless
to pass upon the issues raised because of the far-reaching implications of the petition. We did no less in De Guia vs. COMELEC 54 where, although we declared that De Guia "does not appear
to have locus standi, a standing in law, a personal or substantial interest," we brushed aside the procedural infirmity "considering the importance of the issue involved, concerning as it does
the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent."

We find the instant petition to be of transcendental importance to the public. The issues it raised are of paramount public interest and of a category even higher than those involved in
many of the aforecited cases. The ramifications of such issues immeasurably affect the social, economic, and moral well-being of the people even in the remotest barangays of the country
and the counter-productive and retrogressive effects of the envisioned on-line lottery system are as staggering as the billions in pesos it is expected to raise. The legal standing then of the
petitioners deserves recognition and, in the exercise of its sound discretion, this Court hereby brushes aside the procedural barrier which the respondents tried to take advantage of.

And now on the substantive issue.

Section 1 of R.A. No. 1169, as amending by B.P. Blg. 42, prohibits the PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person, association,
company or entity, whether domestic or foreign." Section 1 provides:

Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government
agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general
powers conferred in section thirteen of Act Numbered One thousand four hundred fifty-nine, as amended, and shall have the authority:

A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and
subject to such rules and regulations as shall be promulgated by the Board of Directors.

B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and
activities which may be profit-oriented, by itself or in collaboration, association or joint venture with any person, association, company or entity,
whether domestic or foreign, except for the activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and
continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services, and/or charitable grants:
Provided, That such investment will not compete with the private sector in areas where investments are adequate as may be determined by the
National Economic and Development Authority. (emphasis supplied)

The language of the section is indisputably clear that with respect to its franchise or privilege "to hold and conduct charity sweepstakes races, lotteries and other similar activities," the
PCSO cannot exercise it "in collaboration, association or joint venture" with any other party. This is the unequivocal meaning and import of the phrase "except for the activities mentioned
in the preceding paragraph (A)," namely, "charity sweepstakes races, lotteries and other similar activities."

B.P. Blg. 42 originated from Parliamentary Bill No. 622, which was covered by Committee Report No. 103 as reported out by the Committee on Socio-Economic Planning and Development
of the Interim Batasang Pambansa. The original text of paragraph B, Section 1 of Parliamentary Bill No. 622 reads as follows:

To engage in any and all investments and related profit-oriented projects or programs and activities by itself or in collaboration, association or joint venture with any
person, association, company or entity, whether domestic or foreign, for the main purpose of raising funds for health and medical assistance and services and charitable
grants. 55

During the period of committee amendments, the Committee on Socio-Economic Planning and Development, through Assemblyman Ronaldo B. Zamora, introduced an amendment by
substitution to the said paragraph B such that, as amended, it should read as follows:

Subject to the approval of the Minister of Human Settlements, to engage in health-oriented investments, programs, projects and activities which may be profit- oriented,
by itself or in collaboration, association, or joint venture with any person, association, company or entity, whether domestic or foreign, for the purpose of providing for
permanent and continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services and/or charitable grants. 56
Before the motion of Assemblyman Zamora for the approval of the amendment could be acted upon, Assemblyman Davide introduced an amendment to the amendment:

MR. DAVIDE.

Mr. Speaker.

THE SPEAKER.

The gentleman from Cebu is recognized.

MR. DAVIDE.

May I introduce an amendment to the committee amendment? The amendment would be to insert after "foreign" in the
amendment just read the following: EXCEPT FOR THE ACTIVITY IN LETTER (A) ABOVE.

When it is joint venture or in collaboration with any entity such collaboration or joint venture must not include activity activity letter
(a) which is the holding and conducting of sweepstakes races, lotteries and other similar acts.

MR. ZAMORA.

We accept the amendment, Mr. Speaker.

MR. DAVIDE.

Thank you, Mr. Speaker.

THE SPEAKER.

Is there any objection to the amendment? (Silence) The amendment, as amended, is approved. 57

Further amendments to paragraph B were introduced and approved. When Assemblyman Zamora read the final text of paragraph B as further amended, the earlier approved amendment
of Assemblyman Davide became "EXCEPT FOR THE ACTIVITIES MENTIONED IN PARAGRAPH (A)"; and by virtue of the amendment introduced by Assemblyman Emmanuel Pelaez, the
word PRECEDING was inserted before PARAGRAPH. Assemblyman Pelaez introduced other amendments. Thereafter, the new paragraph B was approved. 58

This is now paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42.

No interpretation of the said provision to relax or circumvent the prohibition can be allowed since the privilege to hold or conduct charity sweepstakes races, lotteries, or other similar
activities is a franchise granted by the legislature to the PCSO. It is a settled rule that "in all grants by the government to individuals or corporations of rights, privileges and franchises, the
words are to be taken most strongly against the grantee .... [o]ne who claims a franchise or privilege in derogation of the common rights of the public must prove his title thereto by a grant
which is clearly and definitely expressed, and he cannot enlarge it by equivocal or doubtful provisions or by probable inferences. Whatever is not unequivocally granted is withheld.
Nothing passes by mere implication." 59

In short then, by the exception explicitly made in paragraph B, Section 1 of its charter, the PCSO cannot share its franchise with another by way of collaboration, association or joint
venture. Neither can it assign, transfer, or lease such franchise. It has been said that "the rights and privileges conferred under a franchise may, without doubt, be assigned or transferred
when the grant is to the grantee and assigns, or is authorized by statute. On the other hand, the right of transfer or assignment may be restricted by statute or the constitution, or be made
subject to the approval of the grantor or a governmental agency, such as a public utilities commission, exception that an existing right of assignment cannot be impaired by subsequent
legislation." 60

It may also be pointed out that the franchise granted to the PCSO to hold and conduct lotteries allows it to hold and conduct a species of gambling. It is settled that "a statute which
authorizes the carrying on of a gambling activity or business should be strictly construed and every reasonable doubt so resolved as to limit the powers and rights claimed under its
authority." 61

Does the challenged Contract of Lease violate or contravene the exception in Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting
lotteries "in collaboration, association or joint venture with" another?

We agree with the petitioners that it does, notwithstanding its denomination or designation as a (Contract of Lease). We are neither convinced nor moved or fazed by the insistence and
forceful arguments of the PGMC that it does not because in reality it is only an independent contractor for a piece of work, i.e., the building and maintenance of a lottery system to be used
by the PCSO in the operation of its lottery franchise. Whether the contract in question is one of lease or whether the PGMC is merely an independent contractor should not be decided on
the basis of the title or designation of the contract but by the intent of the parties, which may be gathered from the provisions of the contract itself. Animus hominis est anima scripti. The
intention of the party is the soul of the instrument. In order to give life or effect to an instrument, it is essential to look to the intention of the individual who executed it. 62 And, pursuant to
Article 1371 of the Civil Code, "to determine the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered." To put it more bluntly, no
one should be deceived by the title or designation of a contract.

A careful analysis and evaluation of the provisions of the contract and a consideration of the contemporaneous acts of the PCSO and PGMC indubitably disclose that the contract is not in
reality a contract of lease under which the PGMC is merely an independent contractor for a piece of work, but one where the statutorily proscribed collaboration or association, in the least,
or joint venture, at the most, exists between the contracting parties. Collaboration is defined as the acts of working together in a joint project. 63 Association means the act of a number of
persons in uniting together for some special purpose or business. 64 Joint venture is defined as an association of persons or companies jointly undertaking some commercial enterprise;
generally all contribute assets and share risks. It requires a community of interest in the performance of the subject matter, a right to direct and govern the policy in connection therewith,
and duty, which may be altered by agreement to share both in profit and
losses. 65

The contemporaneous acts of the PCSO and the PGMC reveal that the PCSO had neither funds of its own nor the expertise to operate and manage an on-line lottery system, and that
although it wished to have the system, it would have it "at no expense or risks to the government." Because of these serious constraints and unwillingness to bear expenses and assume
risks, the PCSO was candid enough to state in its RFP that it is seeking for "a suitable contractor which shall build, at its own expense, all the facilities needed to operate and maintain" the
system; exclusively bear "all capital, operating expenses and expansion expenses and risks"; and submit "a comprehensive nationwide lottery development plan . . . which will include the
game, the marketing of the games, and the logistics to introduce the game to all the cities and municipalities of the country within five (5) years"; and that the operation of the on-line
lottery system should be "at no expense or risk to the government" meaning itself, since it is a government-owned and controlled agency. The facilities referred to means "all capital
equipment, computers, terminals, software, nationwide telecommunications network, ticket sales offices, furnishings and fixtures, printing costs, costs of salaries and wages, advertising
and promotions expenses, maintenance costs, expansion and replacement costs, security and insurance, and all other related expenses needed to operate a nationwide on-line lottery
system."

In short, the only contribution the PCSO would have is its franchise or authority to operate the on-line lottery system; with the rest, including the risks of the business, being borne by the
proponent or bidder. It could be for this reason that it warned that "the proponent must be able to stand to the acid test of proving that it is an entity able to take on the role of responsible
maintainer of the on-line lottery system." The PCSO, however, makes it clear in its RFP that the proponent can propose a period of the contract which shall not exceed fifteen years, during
which time it is assured of a "rental" which shall not exceed 12% of gross receipts. As admitted by the PGMC, upon learning of the PCSO's decision, the Berjaya Group Berhad, with its
affiliates, wanted to offer its services and resources to the PCSO. Forthwith, it organized the PGMC as "a medium through which the technical and management services required for the
project would be offered and delivered to PCSO." 66

Undoubtedly, then, the Berjaya Group Berhad knew all along that in connection with an on-line lottery system, the PCSO had nothing but its franchise, which it solemnly guaranteed it had
in the General Information of the RFP. 67Howsoever viewed then, from the very inception, the PCSO and the PGMC mutually understood that any arrangement between them would
necessarily leave to the PGMC the technical, operations, and management aspects of the on-line lottery system while the PCSO would, primarily, provide the franchise. The
words Gaming and Management in the corporate name of respondent Philippine Gaming Management Corporation could not have been conceived just for euphemistic purposes. Of course,
the RFP cannot substitute for the Contract of Lease which was subsequently executed by the PCSO and the PGMC. Nevertheless, the Contract of Lease incorporates their intention and
understanding.

The so-called Contract of Lease is not, therefore, what it purports to be. Its denomination as such is a crafty device, carefully conceived, to provide a built-in defense in the event that the
agreement is questioned as violative of the exception in Section 1 (B) of the PCSO's charter. The acuity or skill of its draftsmen to accomplish that purpose easily manifests itself in the
Contract of Lease. It is outstanding for its careful and meticulous drafting designed to give an immediate impression that it is a contract of lease. Yet, woven therein are provisions which
negate its title and betray the true intention of the parties to be in or to have a joint venture for a period of eight years in the operation and maintenance of the on-line lottery system.

Consistent with the above observations on the RFP, the PCSO has only its franchise to offer, while the PGMC represents and warrants that it has access to all managerial and technical
expertise to promptly and effectively carry out the terms of the contract. And, for a period of eight years, the PGMC is under obligation to keep all the Facilities in safe condition and if
necessary, upgrade, replace, and improve them from time to time as new technology develops to make the on-line lottery system more cost-effective and competitive; exclusively bear all
costs and expenses relating to the printing, manpower, salaries and wages, advertising and promotion, maintenance, expansion and replacement, security and insurance, and all other
related expenses needed to operate the on-line lottery system; undertake a positive advertising and promotions campaign for both institutional and product lines without engaging in
negative advertising against other lessors; bear the salaries and related costs of skilled and qualified personnel for administrative and technical operations; comply with procedural and
coordinating rules issued by the PCSO; and to train PCSO and other local personnel and to effect the transfer of technology and other expertise, such that at the end of the term of the
contract, the PCSO will be able to effectively take over the Facilities and efficiently operate the on-line lottery system. The latter simply means that, indeed, the managers, technicians or
employees who shall operate the on-line lottery system are not managers, technicians or employees of the PCSO, but of the PGMC and that it is only after the expiration of the contract that
the PCSO will operate the system. After eight years, the PCSO would automatically become the owner of the Facilities without any other further consideration.

For these reasons, too, the PGMC has the initial prerogative to prepare the detailed plan of all games and the marketing thereof, and determine the number of players, value of winnings,
and the logistics required to introduce the games, including the Master Games Plan. Of course, the PCSO has the reserved authority to disapprove them. 68 And, while the PCSO has the sole
responsibility over the appointment of dealers and retailers throughout the country, the PGMC may, nevertheless, recommend for appointment dealers and retailers which shall be acted
upon by the PCSO within forty-eight hours and collect and retain, for its own account, a security deposit from dealers and retailers in respect of equipment supplied by it.

This joint venture is further established by the following:

(a) Rent is defined in the lease contract as the amount to be paid to the PGMC as compensation for the fulfillment of its obligations under the contract, including, but not limited to the lease
of the Facilities. However, this rent is not actually a fixed amount. Although it is stated to be 4.9% of gross receipts from ticket sales, payable net of taxes required by law to be withheld, it
may be drastically reduced or, in extreme cases, nothing may be due or demandable at all because the PGMC binds itself to "bear all risks if the revenue from the ticket sales, on an
annualized basis, are insufficient to pay the entire prize money." This risk-bearing provision is unusual in a lessor-lessee relationship, but inherent in a joint venture.

(b) In the event of pre-termination of the contract by the PCSO, or its suspension of operation of the on-line lottery system in breach of the contract and through no fault of the PGMC, the
PCSO binds itself "to promptly, and in any event not later than sixty (60) days, reimburse the Lessor the amount of its total investment cost associated with the On-Line Lottery System,
including but not limited to the cost of the Facilities, and further compensate the LESSOR for loss of expected net profit after tax, computed over the unexpired term of the lease." If the
contract were indeed one of lease, the payment of the expected profits or rentals for the unexpired portion of the term of the contract would be enough.

(c) The PGMC cannot "directly or indirectly undertake any activity or business in competition with or adverse to the On-Line Lottery System of PCSO unless it obtains the latter's prior
written consent." If the PGMC is engaged in the business of leasing equipment and technology for an on-line lottery system, we fail to see any acceptable reason why it should allow a
restriction on the pursuit of such business.

(d) The PGMC shall provide the PCSO the audited Annual Report sent to its stockholders, and within two years from the effectivity of the contract, cause itself to be listed in the local stock
exchange and offer at least 25% of its equity to the public. If the PGMC is merely a lessor, this imposition is unreasonable and whimsical, and could only be tied up to the fact that the PGMC
will actually operate and manage the system; hence, increasing public participation in the corporation would enhance public interest.

(e) The PGMC shall put up an Escrow Deposit of P300,000,000.00 pursuant to the requirements of the RFP, which it may, at its option, maintain as its initial performance bond required to
ensure its faithful compliance with the terms of the contract.
(f) The PCSO shall designate the necessary personnel to monitor and audit the daily performance of the on-line lottery system; and promulgate procedural and coordinating rules governing
all activities relating to the on-line lottery system. The first further confirms that it is the PGMC which will operate the system and the PCSO may, for the protection of its interest, monitor
and audit the daily performance of the system. The second admits the coordinating and cooperative powers and functions of the parties.

(g) The PCSO may validly terminate the contract if the PGMC becomes insolvent or bankrupt or is unable to pay its debts, or if it stops or suspends or threatens to stop or suspend payment
of all or a material part of its debts.

All of the foregoing unmistakably confirm the indispensable role of the PGMC in the pursuit, operation, conduct, and management of the On-Line Lottery System. They exhibit and
demonstrate the parties' indivisible community of interest in the conception, birth and growth of the on-line lottery, and, above all, in its profits, with each having a right in the formulation
and implementation of policies related to the business and sharing, as well, in the losses with the PGMC bearing the greatest burden because of its assumption of expenses and risks, and
the PCSO the least, because of its confessed unwillingness to bear expenses and risks. In a manner of speaking, each is wed to the other for better or for worse. In the final analysis,
however, in the light of the PCSO's RFP and the above highlighted provisions, as well as the "Hold Harmless Clause" of the Contract of Lease, it is even safe to conclude that the
actual lessor in this case is the PCSO and the subject matter thereof is its franchise to hold and conduct lotteries since it is, in reality, the PGMC which operates and manages the on-line
lottery system for a period of eight years.

We thus declare that the challenged Contract of Lease violates the exception provided for in paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid for
being contrary to law. This conclusion renders unnecessary further discussion on the other issues raised by the petitioners.

WHEREFORE, the instant petition is hereby GRANTED and the challenged Contract of Lease executed on 17 December 1993 by respondent Philippine Charity Sweepstakes Office (PCSO)
and respondent Philippine Gaming Management Corporation (PGMC) is hereby DECLARED contrary to law and invalid.

The Temporary Restraining Order issued on 11 April 1994 is hereby MADE PERMANENT.

No pronouncement as to costs.

SO ORDERED.

Regalado, Romero and Bellosillo, JJ., concur.

Narvasa, C.J., took no part.

Separate Opinions

CRUZ, J., concurring:

I am happy to join Mr. Justice Hilario G. Davide, Jr. in his excellent ponencia. I will add the following personal observations only for emphasis as it is not necessary to supplement his
thorough exposition.
The respondents take great pains to cite specific provisions of the contract to show that it is PCSO that is actually operating the on-line lottery, but they have not succeeded in disproving
the obvious, to wit, that the document was intentionally so crafted to make it appear that the operation is not a joint undertaking of PCSO and PGMC but a mere lease of services. It is a
clever instrument, to be sure, but we are, gratifyingly, not deluded. Lawyers have a special talent to disguise the real intention of the parties in a contract to make it come ostensibly within
the provisions of a law although the real if furtive purpose is to violate it. That talent has been exercised in this case, but not convincingly enough.

It should be quite clear, from the adroit way the contract has been drafted, that the primary objective was to avoid the conclusion that PCSO will be operating a lottery "in association,
collaboration or joint venture with any person, association, company or entity," which is prohibited by Section 1 of Rep. Act No. 1169 as amended by B.P. Blg. 42. Citing the self-serving
provisions of the contract, the respondents would have us believe that the contract is perfectly lawful because all it does is provide for the lease to PCSO of the technical know-how and
equipment of PGMC, with PCSO acting as "the sole and individual operator" of the lottery. I am glad we are not succumbing to this sophistry.

Despite the artfulness of the contract (authorship of which was pointedly denied by both counsel for the government and the private respondent during the oral argument on this case), a
careful study will reveal telling stipulations that it is PGMC and not PCSO that will actually be operating the lottery. Thus, it is provided inter alia that PGMC shall furnish all capital
equipment and other facilities needed for the operation; bear all expenses relating to the operation, including those for the salaries and wages of the administrative and technical
personnel; undertake a positive advertising and promotion campaign for public support of the lottery; establish a radio communications network throughout the country as part of the
operation; and assume all risks if the revenues from ticket sales are insufficient to pay the entire prize money. Most significantly, to show that it is only after eight years from the effectivity
of the contract that PCSO will actually operate the lottery, Par. 6.7 of the agreement provides that PGMC shall:

6.7. Upon effectivity of this Contract, commence the training of PCSO and other local personnel and the transfer of technology and expertise, such that at the end of the
term of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System. (Emphasis supplied).

In the meantime, that is to say during the entire 8-year term of the contract, it will be PGMC that will be operating the lottery. Only "at the end of the term of this Contract" will PCSO "be
able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System."

Even on the assumption that it is PCSO that will be operating the lottery at the very start, the authority granted to PGMC by the agreement will readily show that PCSO will not be
acting alone, as the respondents pretend. In fact, it cannot. PGMC is an indispensable co-worker because it has the equipment and the technology and the management skills that PCSO does
not have at this time for the operation of the lottery, PCSO cannot deny that it needs the assistance of PGMC for this purpose, which was its reason for entering into the contract in the first
place.

And when PCSO does avail itself of such assistance, how will it be operating the lottery? Undoubtedly, it will be doing so "in collaboration, association or joint venture" with PGMC, which,
let it be added, will not be serving as a mere "hired help" of PCSO subject to its control. PGMC will be functioning independently in the discharge of its own assigned role as stipulated in
detail under the contract. PGMC is plainly a partner of PCSO in violation of law, no matter how PGMC's assistance is called or the contract is denominated.

Even if it be conceded that the assistance partakes of a lease of services, the undeniable fact is that PCSO would still be collaborating or cooperating with PGMC in the operation of the
lottery. What is even worse is that PCSO and PGMC may be actually engaged in a joint venture, considering that PGMC does not collect the usual fixed rentals due an ordinary lessor but is
entitled to a special "Rental Fee," as the contract calls it, "equal to four point nine percent (4.9%) of gross receipts from ticket sales."

The flexibility of this amount is significant. As may be expected, it will induce in PGMC an active interest and participation in the success of PCSO that is not expected of an ordinary
detached lessor who gets to be paid his rentals not a rental fee whether the lessee's business prospers or not. PGMC's share in the operation depends on its own performance and the
effectiveness of its collaboration with PCSO. Although the contract pretends otherwise, PGMC is a co-investor with PCSO in what is practically, if not in a strictly legal sense, a joint venture.

Concerning the doctrine of locus standi, I cannot agree that out of the sixty million Filipinos affected by the proposed lottery, not a single solitary citizen can question the agreement. Locus
standi is not such an absolute rule that it cannot admit of exceptions under certain conditions or circumstances like those attending this transaction. As I remarked in my dissent in Guazon
v. De Villa, 181 SCRA 623, "It is not only the owner of the burning house who has the right to call the firemen. Every one has the right and responsibility to prevent the fire from spreading
even if he lives in the other block."
What is especially galling is that the transaction in question would foist upon our people an essentially immoral activity through the instrumentality of a foreign corporation, which
naturally does not have the same concern for our interests as we ourselves have. I am distressed that foreigners should be allowed to exploit the weakness of some of us for instant gain
without work, and with the active collaboration and encouragement of our own government at that.

Feliciano, J., concurring

I agree with the conclusions reached by my distinguished brother in the Court Davide, Jr., J., both in respect of the question of locus standi and in respect of the merits of this case, that is, the
issues of legality and constitutionality of the Contract of Lease entered into between the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation
(PGMC).

In this separate opinion, I propose to address only the question of locus standi. It is with some hesitation that I do so, considering the extensive separate opinions on this question written
by my learned brothers Melo, Puno and Vitug, JJ. I agree with the great deal of what my brothers Melo, Puno and Vitug say about locus standi in their separate opinions and there is no need
to go over the ground that I share with them. Because, however, I reach a different conclusion in respect of the presence or absence of locus standi on the part of the petitioners in the case
before the Court, there is an internal need (a need internal to myself) to articulate the considerations which led me to that conclusion.

There is no dispute that the doctrine of locus standi reflects an important constitutional principle, that is, the principle of separation of powers which, among other things, mandates that
each of the great Departments of government is responsible for performance of its constitutionally allotted tasks. Insofar as the Judicial Department is concerned, the exercise of judicial
power and carrying out of judicial functions commonly take place within the context of actual cases or controversies. This, in turn, reflects the basic notion of judicial power as the power to
resolve actual disputes and of the traditional business of courts as the hearing and deciding of specific controversies brought before them. In our own jurisdiction, and at least since the
turn of the present century, judicial power has always included the power of judicial review, understood as the authority of courts (more specifically the Supreme Court) to assay contested
legislative and executive acts in terms of their constitutionality or legality. Thus, the general proposition has been that a petitioner who assails the legal or constitutional quality of an
executive or legislative act must be able to show that he has locus standi. Otherwise, the petition becomes vulnerable to prompt dismissal by the court.

There is, upon the other hand, little substantive dispute that the possession of locus standi 1 is not, in each and every case, a rigid and absolute requirement for access to the courts.
Certainly that is the case where great issues of public law are at stake, issues which cannot be approached in the same way that a court approaches a suit for the collection of a sum of
money or a complaint for the recovery of possession of a particular piece of land. The broad question is when, or in what types of cases, the court should insist on a clear showing of locus
standi understood as a direct and personal interest in the subject matter of the case at bar, and when the court may or should relax that apparently stringent requirement and proceed to
deal with the legal or constitutional issues at stake in a particular case.

I submit, with respect, that it is not enough for the Court simply to invoke "public interest" or even "paramount considerations of national interest," and to say that the specific
requirements of such public interest can only be ascertained on a "case to case" basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears
to come too close to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has
arisen.

This is not, however, to say that there is somewhere an over-arching juridical principle or theory, waiting to be discovered, that permits a ready answer to the question of when, or in what
types of cases, the need to show locus standi may be relaxed in greater or lesser degree. To my knowledge, no satisfactory principle or theory has been discovered and none has been
crafted, whether in our jurisdiction or in the United States. 2 I have neither the competence nor the opportunity to try to craft such principle or formula. It might, however, be useful to
attempt to indicate the considerations of principle which, in the present case, appear to me to require an affirmative answer to the question of whether or not petitioners are properly
regarded as imbued with the standing necessary to bring and maintain the present petition.

Firstly, the character of the funds or other assets involved in the case is of major importance. In the case presently before the Court, the funds involved are clearly public in nature. The
funds to be generated by the proposed lottery are to be raised from the population at large. Should the proposed operation be as successful as its proponents project, those funds will come
from well-nigh every town and barrio of Luzon. The funds here involved are public in another very real sense: they will belong to the PCSO, a government owned or controlled corporation
and an instrumentality of the government and are destined for utilization in social development projects which, at least in principle, are designed to benefit the general public. My learned
brothers Melo, Puno and Vitug, JJ. concede that taxpayers' suits have been recognized as an exception to the traditional requirement of recognized as an exception to the traditional
requirement of locus standi. They insist, however, that because the funds here involved will not have been generated by the exercise of the taxing power of the Government, the present
petition cannot be regarded as a taxpayer's suit and therefore, must be dismissed by the Court. It is my respectful submission that that constitutes much too narrow a conception of the
taxpayer's suit and of the public policy that it embodies. It is also to overlook the fact that tax monies, strictly so called, constitute only one (1) of the major categories of funds today raised
and used for public purposes. It is widely known that the principal sources of funding for government operations today include, not just taxes and customs duties, but also revenues
derived from activities of the Philippine Amusement Gaming Corporation (PAGCOR), as well as the proceeds of privatization of government owned or controlled corporations and other
government owned assets. The interest of a private citizen in seeing to it that public funds, from whatever source they may have been derived, go only to the uses directed and permitted by
law is as real and personal and substantial as the interest of a private taxpayer in seeing to it that tax monies are not intercepted on their way to the public treasury or otherwise diverted
from uses prescribed or allowed by law. It is also pertinent to note that the more successful the government is in raising revenues by non-traditional methods such as PAGCOR operations
and privatization measures, the lesser will be the pressure upon the traditional sources of public revenues, i.e., the pocket books of individual taxpayers and importers.

A second factor of high relevance is the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the
government. A showing that a constitutional or legal provision is patently being disregarded by the agency or instrumentality whose act is being assailed, can scarcely be disregarded by
court. The concept of locus standi which is part and parcel of the broader notion of ripeness of the case "does not operate independently and is not alone decisive. . . . [I]t is in
substantial part a function of a judge's estimate of the merits of the constitutional [or legal] issue." 3 The notion of locus standi and the judge's conclusions about the merits of the case, in
other words, interact with each other. Where the Court perceives a serious issue of violation of some constitutional or statutory limitation, it will be much less difficult for the Court to
find locus standi in the petitioner and to confront the legal or constitutional issue. In the present case, the majority of the Court considers that a very substantial showing has been made
that the Contract of Lease between the PCSO and the PGMC flies in the face of legal limitations.

A third consideration of importance in the present case is the lack of any other party with a more direct and specific interest in raising the questions here being raised. Though a public
bidding was held, no losing or dissatisfied bidder has come before the Court. The Office of the Ombudsman has not, to the knowledge of the Court, raised questions about the legality or
constitutionality of the Contract of Lease here involved. The National Government itself, through the Office of the Solicitor General, is defending the PCSO Contract (though it had not
participated in the drafting thereof). In a situation like that here obtaining, the submission may be made that the institution, so well known in corporation law and practice, of the corporate
stockholders' derivative suit furnishes an appropriate analogy and that on the basis of such an analogy, a taxpayer's derivative suit should be recognized as available.

The wide range of impact of the Contract of Lease here assailed and of its implementation, constitutes still another consideration of significance. In the case at bar, the agreement if
implemented will be practically nationwide in its scope and reach (the PCSO-PGMC Contract is limited in its application to the Island of Luzon; but if the PCSO Contracts with the other two
[2] private "gaming management" corporations in respect of the Visayas and Mindanao are substantially similar to PCSO's Contract with PGMC, then the Contract before us may be said to
be national indeed in its implications and consequences). Necessarily, the amounts of money expected to be raised by the proposed activities of the PCSO and PGMC will be very substantial,
probably in the hundreds of millions of pesos. It is not easy to conceive of a contract with greater and more far-reaching consequences, literally speaking, for the country than the Contract
of Lease here involved. Thus, the subject matter of the petition is not something that the Court may casually pass over as unimportant and as not warranting the expenditure of significant
judicial resources.

In the examination of the various features of this case, the above considerations have appeared to me to be important and as pressing for acceptance and exercise of jurisdiction on the part
of this Court. It is with these considerations in mind that I vote to grant due course to the Petition and to hold that the Contract of Lease between the PCSO and PGMC in its present form
and content, and given the present state of the law, is fatally defective.

PADILLA, J., concurring:

My views against gambling are a matter of judicial record. In Basco v. PAGCOR, (G.R. No. 91649, 14 May 1991, 197 SCRA 52) I expressed these views in a separate opinion where I was
joined by that outstanding lady jurist, Mme. Justice A. Melencio-Herrera whose incisive approach to legal problems is today missed in this Court. I reproduce here those views because they
are highly persuasive to the conclusions I reach in the present controversy:

I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree with the decision insofar as it holds that the prohibition,
control, and regulation of the entire activity known as gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the
legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such
policy.

The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted by the political departments of government in areas which
fall within their authority, except only when such policies pose a clear and present danger to the life, liberty or property of the individual. This case does not involve such
a factual situation.
 However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human personality, destroys self-confidence and eviscerates one's
self-respect, which in the long run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and homes; it
is an antithesis to individual reliance and reliability as well as personal industry which are the touchstones of real economic progress and national development.

Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the government out of "legalized" gambling will, in the long run,
be more than offset and negated by the irreparable damage to the people's moral values.

Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed and becomes untenable when it itself engages in the very
activity it seeks to eradicate.

One can go through the Court's decision today and mentally replace the activity referred to therein as gambling, which is legal only because it is authorized by law and
run by the government, with the activity known as prostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised, and "regulated"
by the government, in return for the substantial revenues it would yield the government to carry out its laudable projects, such as infrastructure and social amelioration?
The question, I believe, answers itself. I submit that the sooner the legislative department outlaws all forms of gambling, as a fundamental state policy, and the sooner the
executive implements such policy, the better it will be for the nation.

We presently have the sweepstakes lotteries; we already have the PAGCOR's gambling casinos; the Filipino people will soon, if plans do not miscarry, be initiated into an even more
sophisticated and encompassing nationwide gambling network known as the "on-line hi-tech lotto system." To be sure, it is not wealth producing; it is not export oriented. It will draw
from existing wealth in the hands of Filipinos and transfer it into the coffers of the PCSO and its foreign partners at a price of further debasement of the moral standards of the Filipino
people, the bulk of whom are barely subsisting below the poverty line.

1. It is said that petitioners 1 have no locus standi to bring this suit even as they challenge the legality and constitutionality of a contract of lease between the PCSO, a
government-owned corporation and the PGMC, a private corporation with substantial (if not controlling) foreign composition and content. Such contract of lease
contains the terms and conditions under which an "on-line hi-tech lotto system" will operate in the country.

As the ponente of the extended, unsigned en banc resolution in Valmonte v. PCSO, (G.R. No. 78716 and G.R. No. 79084, 22 September 1987), I would be the last to downgrade the rule,
therein reiterated, that in order to maintain a suit challenging the constitutionality and/or legality of a statute, order or regulation or assailing a particular governmental action as done
with grave abuse of discretion or with lack of jurisdiction, the petitioner must show that he has a clear personal or legal right that would be violated with the enforcement of the challenged
statute, order or regulation or the implementation of the questioned governmental action. But, in my considered view, this rule maybe (and should be) relaxed when the issue involved or
raised in the petition is of such paramount national interest and importance as to dwarf the above procedural rule into a barren technicality. As a unanimous Court en banc aptly put it in De
Guia vs. COMELEC, G.R. No. 104712, 6 May 1992, 208 SCRA 420.

Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for re-election, much less, that he is prejudiced by the
election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-
4640, October 12, 1976. 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533) He does not also allege any legal right that
has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action.

However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner
alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the
petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmea vs. Commission on Elections.

I view the present case as falling within the De Guia case doctrine. For, when the contract of lease in question seeks to establish and operate a nationwide gambling network with
substantial if not controlling foreign participation, then the issue is of paramount national interest and importance as to justify and warrant a relaxation of the above-mentioned procedural
rule on locus standi.

2. The charter of the PCSO Republic Act No. 1169 as amended by BP No. 42 insofar as relevant, reads:
 Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government
agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general
powers conferred in section thirteen of Act Numbered One Thousand Four Hundred Fifty-Nine, as amended, and shall have the authority:

A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules
and regulations as shall be promulgated by the Board of Directors.

B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and activities which may be
profit-oriented, by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, except for the
activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and continuing sources of funds for health programs, including the
expansion of existing ones, medical assistance and services, and/or charitable grants: Provided, That such investments will not compete with the private sector in areas
where investments are adequate as may be determined by the National Economic and Development Authority.

It is at once clear from the foregoing legal provisions that, while the PCSO charter allows the PCSO to itself engage in lotteries, it does not however permit the PCSO to undertake or engage
in lotteries in "collaboration, association or joint venture" with others. The palpable reason for this prohibition is, that PCSO should not and cannot be made a vehicle for an otherwise
prohibited foreign or domestic entity to engage in lotteries (gambling activities) in the Philippines.

The core question then is whether the lease contract between PCSO and PGMC is a device whereby PCSO will engage in lottery in collaboration, association or joint venture with another,
i.e. PGMC. I need not go here into the details and different specific features of the contract to show that it is a joint venture between PCSO and PGMC. That has been taken care of in the
opinion of Mr. Justice Davide to which I fully subscribe.

On a slightly different plane and, perhaps simplified, I consider the agreement or arrangement between the PCSO and PGMC a joint venture because each party to the contract contributes
its share in the enterprise or project. PGMC contributes its facilities, equipment and know-how (expertise). PCSO contributes (aside from its charter) the market, directly or through dealers
and this to me is most important in the totality or mass of the Filipino gambling elements who will invest in lotto tickets. PGMC will get its 4.9% of gross receipts (with assumption of
certain risks in the course of lotto operations); the residue of the whole exercise will go to PCSO. To any person with a minimum of business know-how, this is a joint venture between
PCSO and PGMC, plain and simple.

But assuming ex gratia argumenti that such arrangement between PCSO and PGMC is not a joint venture between the two of them to install and operate an "on-line hi-tech lotto system" in
the country, it can hardly be denied that it is, at the very least, an association or collaboration between PCSO and PGMC. For one cannot do without the other in the installation, operation
and, most importantly, marketing of the entire enterprise or project in this country.

Indeed, the contract of lease in question is a clear violation of Republic Act No. 1169 as amended by BP No. 42 (the PCSO charter).

Having arrived at the conclusion that the contract of lease in question between the PCSO and PGMC is illegal and, therefore, invalid, I find it unnecessary to dwell on the other issues raised
in the pleadings and arguments of the parties.

I, therefore, vote to give DUE COURSE to the petition and to declare the contract of lease in question between PCSO and PGMC, for the reasons aforestated, of no force and effect.

MELO, J., dissenting:

I submit that the petition before the Court deserves no less than outright dismissal for the reason that petitioners, as concerned citizens and as taxpayers and as members of Congress, do
not possess the necessary legal standing to assail the validity of the contract of lease entered into by the Philippine Charity Sweepstakes Office and the Philippine Gaming Management
Corporation relative to the establishment and operation of an "On-line Hi-Tech Lottery System" in the country.

As announced in Lamb vs. Phipps (22 Phil. [1912], 559), "[J]udicial power in its nature, is the power to hear and decide causes pending between parties who have the right to sue and be sued
in the courts of law and equity." Necessarily, this implies that a party must show a personal stake in the outcome of the controversy or an injury to himself that can be addressed by a
favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the court's remedial powers in his behalf (Warth vs. Seldin, 422 U.S. 490; Guzman vs. Marrero, 180
U.S. 81; McMicken vs. United States, 97 U.S. 204). Here, we have yet to see any of petitioners acquiring a personal stake in the outcome of the controversy or being placed in a situation
whereby injury may be sustained if the contract of lease in question is implemented. It may be that the contract has somehow evoked public interest which petitioners claim to represent.
But the alleged public interest which they pretend to represent is not only broad and encompassing but also strikingly and veritably indeterminate that one cannot truly say whether a
handful of the public, like herein petitioners, may lay a valid claim of representation in behalf of the millions of citizens spread all over the land who may have just as many varied reactions
relative to the contract in question.

Any effort to infuse personality on petitioners by considering the present case as a "taxpayer's suit" could not cure the lack of locus standi on the part of petitioners. As understood in this
jurisdiction, a "taxpayer's suit" refers to a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation (Pascual vs. Secretary of Public
Works, 110 Phil. [1960] 331; Maceda vs. Macaraig, 197 SCRA [1991]; Lozada vs. COMELEC, 120 SCRA [1983] 337; Dumlao vs. COMELEC, 95 SCRA [1980] 392; Gonzales vs. Marcos, 65 SCRA
[1975] 624). It cannot be overstressed that no public fund raised by taxation is involved in this case. In fact, it is even doubtful if the rentals which the PCSO will pay to the lessor for its
operation of the lottery system may be regarded as "public fund". The PCSO is not a revenue- collecting arm of the government. Income or money realized by it from its operations will not
and need not be turned over to the National Treasury. Rather, this will constitute corporate funds which will remain with the corporation to finance its various activities as authorized in its
charter. And if ever some semblance of "public character" may be said to attach to its earnings, it is simply because PCSO is a government-owned or controlled entity and not a purely
private enterprise.

It must be conceded though that a "taxpayer's suit" had been allowed in a number of instances in this jurisdiction. For sure, after the trial was blazed by Pascual vs. Secretary of Public
Works, supra, several more followed. It is to be noted, however, that in those occasions where this Court allowed such a suit, the case invariably involved either the constitutionality of a
statute or the legality of the disbursement of public funds through the enforcement of what was perceived to be an invalid or unconstitutional statute or legislation (Pascual, supra;
Philippine Constitution Association, Inc. vs. Jimenez, 15 SCRA [1965] 479; Philippine Constitution Association, Inc. vs. Mathay, 18 SCRA [1966] 300; Tolentino vs. COMELEC, 41 SCRA
[1971] 702; Pelaez vs. Auditor General, 15 SCRA [1965] 569; Iloilo Palay and Corn Planters Association vs. Feliciano, 13 SCRA [1965] 377).

The case before us is not a challenge to the validity of a statute or an attempt to restrain expenditure of public funds pursuant to an alleged invalid congressional enactment. What
petitioners ask us to do is to nullify a simple contract of lease entered into by a government-owned corporation with a private entity. That contract, as earlier pointed out, does not involve
the disbursement of public funds but of strictly corporate money. If every taxpayer, claiming to have interest in the contract, no matter how remote, could come to this Court and seek
nullification of said contract, the day may come when the activities of government corporate entities will ground to a standstill on account of nuisance suits filed against them by persons
whose supposed interest in the contract is as remote and as obscure as the interest of any man in the street. The dangers attendant thereto are not hard to discern and this Court must not
allow them to come to pass.

One final observation must be emphasized. When the petition at bench was filed, the Court decided to hear the case on oral argument on the initial perception that a constitutional issue
could be involved. However, it now appears that no question of constitutional dimension is at stake as indeed the majority barely touches on such an issue, concentrating as it does on its
interpretation of the contract between the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation.

I, therefore, vote to dismiss the petition.

PUNO, J., dissenting:

At the outset, let me state that my religious faith and family upbringing compel me to regard gambling, regardless of its garb, with hostile eyes. Such antagonism tempts me to view the case
at bench as a struggle between good and evil, a fight between the forces of light against the forces of darkness. I will not, however, yield to that temptation for we are not judges of the Old
Testament type who were not only arbiters of law but were also high priests of morality.

I will therefore strictly confine the peregrinations of my mind to the legal issues for resolution: (1) whether or not the petitioners have the Locus standi to file the petition at bench; and (2)
assuming their locus standi, whether or not the Contract of Lease between PCSO and PGMC is null and void considering: (a) section 1 of R.A. No. 1169, as amended by B.P. Blg. 42 (Charter of
PCSO) which prohibits PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity"; (b) Act No. 3836 which
requires a congressional franchise before any person or entity can establish and operate a telecommunication system; (c) section 11, Art. XII of the Constitution, which requires that for a
corporation to operate a public utility, at least 60% of its capital must be owned by Filipino citizens; and (d) R.A. No. 7042, otherwise known as the "Foreign Investments Act", which
includes all forms of gambling in its "negative list."
While the legal issues abound, I deferentially submit that the threshold issue is the locus standi, or standing to sue, of petitioners. The petition describes petitioner Kilosbayan, Inc., as a non-
stock corporation composed of "civic spirited citizens, pastors, priests, nuns, and lay leaders who are committed to the cause of truth, justice, and national renewal." 1 Petitioners Jovito R.
Salonga, Cirilo A. Rigos, Ernie Camba, Emilio C. Capulong, Jr., Jose Abcede, Christine Tan, Felipe L. Gozon, Rafael G. Fernando, Raoul V. Victorino, Jose Cunanan, and Quintin S. Doromal joined
the petition in their capacity as trustees of Kilosbayan, Inc., and as taxpayers and concerned citizens. 2 Petitioners Freddie Webb and Wigberto Taada joined the petition as senators,
taxpayers and concerned citizens. 3 Petitioner Joker P. Arroyo joined the petition as a member of the House of Representative, a taxpayer and a concerned citizen. 4

With due respect to the majority opinion, I wish to focus on the interstices of locus standi, a concept described by Prof. Paul Freund as "among the most amorphous in the entire domain of
public law." The requirement of standing to sue inheres from the definition of judicial power. It is not merely a technical rule of procedure which we are at liberty to disregard. Section 1,
Article VIII of the Constitution provides:

xxx xxx xxx

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
(Italics supplied)

The phrase "actual controversies involving rights which are legally demandable and enforceable" has acquired a cultivated meaning given by courts. It spells out the requirements that
must be satisfied before one can come to court to litigate a constitutional issue. Our distinguished colleague, Mr. Justice Isagani A. Cruz, gives a shorthand summary of these requirements
when he states that no constitutional question will be heard and decided by courts unless there is a showing of the following: . . . (1) there must be an actual case or controversy; (2) the
question of constitutionality must be raised by the proper party; (3) the constitutional question must be raised at the earliest possible opportunity; and (4) the decision of the
constitutional question must be necessary to the determination of the case itself. 5

The complexion of the rule on locus standi has been undergoing a change. Mr. Justice Cruz has observed the continuing relaxation of the rule on
standing, 6 thus:

xxx xxx xxx

A proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of. Until and unless such actual or potential
injury is established, the complainant cannot have the legal personality to raise the constitutional question.

In Tileson v. Ullmann, a physician questioned the constitutionality of a law prohibiting the use of contraceptives, upon the ground that it might prove dangerous to the life
or health of some of his patients whose physical condition would not enable them to bear the rigors of childbirth. The court dismissed the challenge, holding that the
patients of the physician and not the physician himself were the proper parties.

In Cuyegkeng v. Cruz, the petitioner challenged in a quo warranto proceeding the title of the respondent who, he claimed, had been appointed to the board of medical
examiners in violation of the provisions of the Medical Act of 1959. The Supreme Court dismissed the petition, holding that Cuyegkeng had not made a claim to the
position held by Cruz and therefore could not be regarded as a proper party who had sustained an injury as a result of the questioned act.

In People v. Vera, it was held that the Government of the Philippines was a proper party to challenge the constitutionality of the Probation Act because, more than any
other, it was the government itself that should be concerned over the validity of its own laws.

In Ex Parte Levitt, the petitioner, an American taxpayer and member of the bar, filed a motion for leave to question the qualifications of Justice Black who, he averred, had
been appointed to the U.S. Supreme Court in violation of the Constitution of the United States. The Court dismissed the petition, holding that Levitt was not a proper
party since he was not claiming the position held by Justice Black.

The rule before was that an ordinary taxpayer did not have the proper party personality to question the legality of an appropriation law since his interest in the sum
appropriated was not substantial enough. Thus, in Custodio v. Senate President, a challenge by an ordinary taxpayer to the validity of a law granting back pay to
 government officials, including members of Congress, during the period corresponding to the Japanese Occupation was dismissed as having been commenced by one
who was not a proper party.

Since the first Emergency Powers Cases, however, the rule has been changed and it is now permissible for an ordinary taxpayer, or a group of taxpayers, to raise the
question of the validity of an appropriation law. As the Supreme Court then put it. "The transcendental importance to the public of these cases demands that they be
settled promptly and definitely, brushing aside, if we must, technicalities of procedure."

In Tolentino v. Commission on Elections, it was held that a senator had the proper party personality to seek the prohibition of a plebiscite for the ratification of a proposed
constitutional amendment. In PHILCONSA v. Jimenez, an organization of taxpayers and citizens was held to be a proper party to question the constitutionality of a law
providing for special retirement benefits for members of the legislature.

In Sanidad v. Commission on Elections, the Supreme Court upheld the petitioners as proper parties, thus

As a preliminary resolution, We rule that the petitioners in L-44640 (Pablo C. Sanidad and Pablito V. Sanidad) possess locus standi to challenge the
constitutional premise of Presidential Decree Nos. 991, 1031, and 1033. It is now an ancient rule that the valid source of a statute Presidential
Decrees are of such nature may be contested by one who will sustain a direct injury as a result of its enforcement. At the instance of taxpayers, laws
providing for the disbursement of public funds may be enjoined, upon the theory that the expenditure of public funds by an officer of the State for the
purpose of executing an unconstitutional act constitutes a misapplication of such funds. The breadth of Presidential Decree No. 991 carries an
appropriation of Five Million Pesos for the effective implementation of its purposes. Presidential Decree No. 1031 appropriates the sum of Eight
Million Pesos to carry out its provisions. The interest of the aforenamed petitioners as taxpayers in the lawful expenditure of these amounts of public
money sufficiently clothes them with that personality to litigate the validity of the Decrees appropriating said funds. Moreover, as regard taxpayer's
suits, this Court enjoys that open discretion to entertain the same or not. For the present case, We deem it sound to exercise that discretion
affirmatively so that the authority upon which the disputed Decrees are predicated may be inquired into.

In Lozada v. Commission on Elections, however, the petitioners were held without legal standing to demand the filling of vacancies in the legislature because they had
only "a generalized interest' shared with the rest of the citizenry."

Last July 30, 1993, we further relaxed the rule on standing in Oposa, et al. v. Hon. Fulgencio S. Factoran, Jr., 7where we recognized the locus standi of minors representing themselves as well
as generations unborn to protect their constitutional right to a balanced and healthful ecology.

I am perfectly at peace with the drift of our decisions liberalizing the rule on locus standi. The once stubborn disinclination to decide constitutional issues due to lack of locus standi is
incompatible with the expansion of judicial power mandated in section 1 of Article VIII of the Constitution, i.e., "to determine whether or not there has been a grave abuse of discretion,
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government." As we held thru the ground breaking ponencia of Mr. Justice Cruz in Daza v.
Singson, 8 this provision no longer precludes the Court from resolving political questions in proper cases. But even perusing this provision as a constitutional warrant for the court to enter
the once forbidden political thicket, it is clear that the requirement of locus standi has not been jettisoned by the Constitution for it still commands courts in no uncertain terms to
settle only "actual controversies involving rights which are legally demandable and enforceable." Stated otherwise, courts are neither free to decide all kinds of cases dumped into their laps
nor are they free to open their doors to all parties or entities claiming a grievance. The rationale for this constitutional requirement of locus standi is by no means trifle. It is intended "to
assure a vigorous adversary presentation of the case, and, perhaps more importantly to warrant the judiciary's overruling the determination of a coordinate, democratically elected organ
of government." 9 It thus goes to the very essence of representative democracies. As Mr. Justice Powell carefully explained in U.S. v.
Richardson, 10 viz:

Relaxation of standing requirements is directly related to the expansion of judicial power. It seems to me inescapable that allowing unrestricted taxpayer or citizen
standing would significantly alter the allocation of power at the national level, with a shift away from a democratic form of government. I also believe that repeated and
essentially head-on confrontations between the life-tenured branch and the representative branches of government will not, in the long run, be beneficial to either. The
public confidence essential to the former and the vitality critical to the latter may well erode if we do not exercise self- restraint in the utilization of our power to
negative the actions of the other branches. We should be ever mindful of the contradictions that would arise if a democracy were to permit at large oversight of the
elected branches of government by a non-representative, and in large measure insulated, judicial branch. Moreover, the argument that the Court should allow
unrestricted taxpayer or citizen standing underestimates the ability of the representative branches of the Federal Government to respond to the citizen pressure that has
 been responsible in large measure for the current drift toward expanded standing. Indeed, taxpayer or citizen advocacy, given its potentially broad base, is precisely the
type of leverage that in a democracy ought to be employed against the branches that were intended to be responsive to public attitudes about the appropriate operation
of government. "We must as judges recall that, as Mr. Justice Holmes wisely observed, the other branches of Government are ultimate guardians of the liberties and
welfare of the people in quite as great a degree as the courts."

Unrestrained standing in federal taxpayer or citizen suits would create a remarkably illogical system of judicial supervision of the coordinate branches of the Federal
Government. Randolph's proposed Council of Revision, which was repeatedly rejected by the Framers, at least had the virtue of being systematic; every law passed by
the legislature automatically would have been previewed by the judiciary before the law could take effect. On the other hand, since the judiciary cannot select the
taxpayers or citizens who bring suit or the nature of the suits, the allowance of public actions would produce uneven and sporadic review, the quality of which would be
influenced by the resources and skill of the particular plaintiff. And issues would be presented in abstract form, contrary to the Court's recognition that "judicial review
is effective largely because it is not available simply at the behest of a partisan faction, but is exercised only to remedy a particular, concrete injury." Sierra Club v. Morton,
405 U.S. 727, 740-741, n. 16 (1972).

A lesser but not insignificant reason for screening the standing of persons who desire to litigate constitutional issues is economic in character. Given the sparseness of our resources, the
capacity of courts to render efficient judicial service to our people is severely limited. For courts to indiscriminately open their doors to all types of suits and suitors is for them to unduly
overburden their dockets, and ultimately render themselves ineffective dispensers of justice. To be sure, this is an evil that clearly confronts our judiciary today.

Prescinding from these premises, and with great reluctance, I am not prepared to concede the standing to sue of petitioners. On a personal level, they have not shown that elemental injury
in fact which will endow them with a standing to sue. It must be stressed that petitioners are in the main, seeking the nullity not of a law but of a Contract of Lease. Not one of the
petitioners is a party to the Contract of Lease executed between PCSO and PGMC. None of the petitioners participated in the bidding, and hence they are not losing bidders. They are
complete strangers to the contract. They stand neither to gain nor to lose economically by its enforcement. It seems to me unusual that an unaffected third party to a contract could be
allowed to question its validity. Petitioner Kilosbayan cannot justify this officious interference on the ground of its commitment to "truth, justice and national renewal." Such commitment
to truth, justice and national renewal, however noble it may be, cannot give Kilosbayan a roving commission to check the validity of contracts entered into by the government and its
agencies. Kilosbayan is not a private commission on audit.

Neither can I perceive how the other petitioners can be personally injured by the Contract of Lease between PCSO and PGMC even if petitioner Salonga assails as unmitigated fraud the
statistical probability of winning the lotto as he compared it to the probability of being struck twice by lightning. The reason is obvious: none of the petitioners will be exposed to this
alleged fraud for all of them profess to abjure playing the lotto. It is self-evident that lotto cannot physically or spiritually injure him who does not indulge in it.

Petitioners also contend they have locus standi as taxpayers. But the case at bench does not involve any expenditure of public money on the part of PCSO. In fact, paragraph 2 of the
Contract of Lease provides that it is PGMC that shall build, furnish, and maintain at its own expense and risk the facilities for the On-Line Lottery System of PCSO and shall bear all
maintenance and other costs. Thus, PGMC alleged it has already spent P245M in equipment and fixtures and would be investing close to P1 billion to supply adequately the technology and
other requirements of PCSO. 11 If no tax money is being illegally deflected in the Contract of Lease between PCSO and PGMC, petitioners have no standing to impugn its validity as
taxpayers. Our ruling in Dumlao v. Comelec, 12 settled this issue well enough, viz:

However, the statutory provisions questioned in this case, namely, sec. 7, BP Blg. 51, and sections 4, 1, and 5 BP Blg. 52, do not directly involve the disbursement of
public funds. While, concededly, the elections to be held involve the expenditure of public moneys, nowhere in their Petition do said petitioners allege that their tax
money is "being extracted and spent in violation of specific constitutional protections against abuses of legislative power" (Flast v. Cohen, 392 U.S. 83 [1960]), or that
there is a misapplication of such funds by respondent COMELEC (see Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]), or that public money is being deflected
to any improper purpose. Neither do petitioners seek to restrain respondent from wasting public funds through the enforcement of an invalid or unconstitutional law.
(Philippine Constitution Association vs. Mathay, 18 SCRA 300 [1966]), citing Philippine Constitution Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the institution
of a taxpayer's suit, per se, is no assurance of judicial review. As held by this Court in Yan vs. Macapagal (43 SCRA 677 [1972]), speaking through our present Chief
Justice, this Court is vested with discretion as to whether or not a taxpayer's suit should be entertained.

Next, petitioners plead their standing as "concerned citizens." As citizens, petitioners are pleading that they be allowed to advocate the constitutional rights of other persons who are not
before the court and whose protection is allegedly their concern. A citizen qua citizen suit urges a greater relaxation of the rule on locus standi. I feel no aversion to the further relaxation of
the rule on standing to accommodate what in other jurisdictions is known as an assertion of jus tertii in constitutional litigation provided the claimant can demonstrate: (1) an injury in fact
to himself, and (2) the need to prevent the erosion of a preferred constitutional right of a third person. As stressed before, the first requirement of injury in fact cannot be abandoned for it
is an essential element for the exercise of judicial power. Again, as stressed by Mr. Justice Powell, viz: 13

The revolution in standing doctrine that has occurred, particularly in the 12 years since Baker v. Carr, supra, has not meant, however, that standing barriers have
disappeared altogether. As the Court noted in Sierra Club, "broadening the categories of injury that may be alleged in support of standing is a different matter from
abandoning the requirement that the party seeking review must himself have suffered an injury." 405 U.S., at 738 . . . Indeed, despite the diminution of standing
requirements in the last decade, the Court has not broken with the traditional requirement that, in the absence of a specific statutory grant of the right of review, a
plaintiff must allege some particularized injury that sets him apart from the man on the street.

I recognize that the Court's allegiance to a requirement of particularized injury has on occasion required a reading of the concept that threatens to transform it beyond
recognition. E.G., Baker v. Carr, supra; Flast v. Cohen, supra. But despite such occasional digressions, the requirement remains, and I think it does so for the reasons
outlined above. In recognition of those considerations, we should refuse to go the last mile towards abolition of standing requirements that is implicit in broadening the
"precarious opening" for federal taxpayers created by Flast, see 392 U.S., at 116 (Mr. Justice Fortas, concurring) or in allowing a citizen qua citizen to invoke the power of
the federal courts to negative unconstitutional acts of the Federal Government.

In sum, I believe we should limit the expansion of federal taxpayer and citizen standing in the absence of specific statutory authorization to an outer boundary drawn by
the results in Flast and Baker v. Carr. I think we should face up to the fact that all such suits are an effort "to employ a federal court as a forum in which to air . . .
generalized grievances about the conduct of government or the allocation of power in the Federal System." Flast v. Cohen, 392 U.S., at 106. The Court should explicitly
reaffirm traditional prudential barriers against such public actions. My reasons for this view are rooted in respect for democratic processes and in the conviction that
"[t]he powers of the federal judiciary will be adequate for the great burdens placed upon them only if they are employed prudently, with recognition of the strengths as
well as the hazards that go with our kind of representative government." Id., at 131

The second requirement recognizes society's right in the protection of certain preferred rights in the Constitution even when the rightholders are not before the court. The theory is that
their dilution has a substantial fall out detriment to the rights of others, hence the latter can vindicate them.

In the case at bench, it is difficult to see how petitioners can satisfy these two requirements to maintain a jus tertii claim. They claim violation of two constitutional provisions, to wit:

Section 1, Article XIII. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity,
reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

and

Section 11, Article XII. - No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the
Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall
such franchise, certificate, or authorizations be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except
under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity
participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their
proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizen of the Philippines.

Section 1, Article XIII of the Constitution cannot be the matrix of petitioners' jus tertii claim for it expresses no more than a policy direction to the legislative in the discharge of its ordained
duty to give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities and
remove cultural inequities by equitably diffusing wealth and political power for the common good. Whether the act of the legislature in amending the charter of PCSO by giving it the
authority to conduct lotto and whether the Contract of Lease entered into between PCSO and PGMC are incongruent to the policy direction of this constitutional provision is a highly
debatable proposition and can be endlessly argued. Respondents steadfastly insist that the operation of lotto will increase the revenue base of PCSO and enable government to provide a
wider range of social services to the people. They also allege that the operation of high-tech lotto will eradicate illegal jueteng. Petitioners are scandalized by this submission. They dismiss
gambling as evil per se and castigate government for attempting to correct a wrong by committing another wrong. In any event, the proper forum for this debate, however cerebrally
exciting it may be, is not this court but congress. So we held in PCSO v. Inopiquez, to wit: 14

By bringing their suit in the lower court, the private respondents in G.R. No. 79084 do not question the power of PCSO to conduct the Instant Sweepstakes game. Rather,
they assail the wisdom of embarking upon this project because of their fear of the "pernicious repercussions" which may be brought about by the Instant Sweepstakes
Game which they have labelled as "the worst form of gambling" which thus "affects the moral values" of the people.

The Court, as held in several cases, does not pass upon questions of wisdom, justice, or expediency of legislation and executive acts. It is not the province of the courts to
supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of
the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. (Italics supplied)

I am not also convinced that petitioners can justify their locus standi to advocate the rights of hypothetical third parties not before the court by invoking the need to keep inviolate section
11, Article XII of the Constitution which imposes a nationality requirement on operators of a public utility. For even assuming arguendo that PGMC is a public utility, still, the records do not
at the moment bear out the claim of petitioners that PGMC is a foreign owned and controlled corporation. This factual issue remains unsettled and is still the subject of litigation by the
parties in the Securities and Exchange Commission. We are not at liberty to anticipate the verdict on this contested factual issue. But over and above this consideration, I respectfully
submit that this constitutional provision does not confer on third parties any right of a preferred status comparable to the Bill of Rights whose dilution will justify petitioners to vindicate
them in behalf of its rightholders. The legal right of hypothetical third parties they profess to advocate is to my mind too impersonal, too unsubstantial, too indirect, too amorphous to
justify their access to this Court and the further lowering of the constitutional barrier of locus standi.

Again, with regret, I do not agree that the distinguished status of some of the petitioners as lawmakers gives them the appropriate locus standi. I cannot perceive how their constitutional
rights and prerogatives as legislators can be adversely affected by the contract in question. Their right to enact laws for the general conduct of our society remains unimpaired and
undiminished. 15 Their status as legislators, notwithstanding, they have to demonstrate that the said contract has caused them to suffer a personal, direct, and substantial injury in fact.
They cannot simply advance a generic grievance in common with the people in general.

I am not unaware of our ruling in De Guia v. Comelec, 16 viz:

Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for reelection, much less, that he is prejudiced by the
election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-
44640, October 12, 1976, 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533). He does not also allege any legal right that
has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action.

However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner
alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the
petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmena vs. Commission on Elections.

It is my respectful submission, however, that we should re-examine de Guia. It treated the rule on locus standi as a mere procedural rule. It is not a plain procedural rule but a constitutional
requirement derived from section 1, Article VIII of the Constitution which mandates courts of justice to settle only "actual controversies involving rights which are legally demandable and
enforceable." The phrase has been construed since time immemorial to mean that a party in a constitutional litigation must demonstrate a standing to sue. By downgrading the
requirement on locus standi as a procedural rule which can be discarded in the name of public interest, we are in effect amending the Constitution by judicial fiat.

De Guia would also brush aside the rule on locus standi if a case raises an important issue. In this regard, I join the learned observation of Mr. Justice Feliciano: "that it is not enough for the
Court simply to invoke 'public interest' or even 'paramount considerations of national interest,' and to say that the specific requirements of such public interest can only be ascertained on
a 'case to case' basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close to saying that locus standi exists whenever at
least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen."

I also submit that de Guia failed to perceive that the rule on locus standi has little to do with the issue posed in a case, however, important it may be. As well pointed out in Flast v. Cohen: 17
 The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated.
The "gist of the question of standing" is whether the party seeking relief has "alleged such a personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions." Baker v. Carr, 369
U.S. 186, 204 (1962). In other words, when standing is placed in issue in a case, the question is whether the person whose standing is challenged is a proper party to
request an adjudication of a particular issue and not whether the issue itself is justiciable. Thus, a party may have standing in a particular case, but the federal court may
nevertheless decline to pass on the merits of the case because, for example, it presents a political question. A proper party is demanded so that federal courts will not be
asked to decide "ill-defined controversies over constitutional issues," United public Workers v. Mitchell, 330 U.S. 75, 90 (1947), or a case which is of "a hypothetical or
abstract character," Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240 (1937).

It is plain to see that in de Guia, the court took an unorthodox posture, to say the least. It held there was no proper party before it, and yet it resolved the issues posed by the petition. As
there was no proper party before the court, its decision is vulnerable to be criticized as an advisory opinion.

With due respect, the majority decision appears to have set a dangerous precedent by unduly trivializing the rule on locus standi. By its decision, the majority has entertained a public
action to annul a private contract. In so doing, the majority may have given sixty (60) million Filipinos the standing to assail contracts of government and its agencies. This is an invitation
for chaos to visit our law on contract, and certainly will not sit well with prospective foreign investors. Indeed, it is difficult to tread the path of the majority on this significant issue. The
majority granted locus standi to petitioners because of lack of any other party with more direct and specific interest. But one has standing because he has standing on his own and standing
cannot be acquired because others with standing have refused to come to court. The thesis is also floated that petitioners have standing as they can be considered taxpayers with right to
file derivative suit like a stockholder's derivative suit in private corporations. The fact, however, is that PCSO is not a private but a quasi-public corporation. Our law on private corporation
categorically sanctions stockholder's derivative suit. In contrast, our law on public corporation does not recognize this so-called taxpayer's derivative suit. Hence, the idea of a taxpayer's
derivative suit, while alluring, has no legal warrant.

Our brethren in the majority have also taken the unprecedented step of striking down a contrast at the importunings of strangers thereto, but without justifying the interposition of judicial
power on any felt need to prevent violation of an important constitutional provision. The contract in question was voided on the sole ground that it violated an ordinary statute, section 1 of
R.A. 1169, as amended by B.P. Blg. 42. If there is no provision of the Constitution that is involved in the case at bench, it boggles the mind how the majority can invoke considerations of
national interest to justify its abandonment of the rule on locus standi. The volume of noise created by the case cannot magically convert it to a case of paramount national importance. By
its ruling, the majority has pushed the Court in unchartered water bereft of any compass, and it may have foisted the false hope that it is the repository of all remedies.

If I pay an unwavering reverence to the rule of locus standi, it is because I consider it as a touchstone in maintaining the proper balance of power among the three branches of our
government. The survival of our democracy rests in a large measure on our ability to maintain this delicate equipoise of powers. For this reason, I look at judicial review from a distinct
prism. I see it both as a power and a duty. It is a power because it enables the judiciary to check excesses of the Executive and the Legislative. But, it is also a duty because its requirement
of locus standi, among others, Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, keeps the judiciary from overreaching the powers of
the other branches of government. By balancing this duality, we are able to breathe life to the principle of separation of powers and prevent tyranny. To be sure, it is our eternal concern to
prevent tyranny but that includes tyranny by ourselves. The Constitution did not install a government by the judiciary, nay, not a government by the unelected. In offering this submission, I
reject the sublimal fear that an unyielding insistence on the rule on locus standi will weaken the judiciary vis-a-vis the other branches of government. The hindsight of history ought to tell
us that it is not power per se that strengthens. Power unused is preferable than power misused. We contribute to constitutionalism both by the use of our power to decide and its non use.
As well said, the cases we decide are as significant as the cases we do not decide. Real power belongs to him who has power over power.

IN VIEW WHEREOF, and strictly on the ground of lack of locus standi on the part of petitioners, I vote to DENY the petition.

VITUG, J., dissenting:

Judicial power encompasses both an authority and duty to resolve "actual controversies involving rights which are legally demandable and enforceable" (Article VIII, Section 1, 1987
Constitution). As early as the case of Lamb vs. Phipps, 1 this Court ruled: "Judicial power, in its nature, is the power to hear and decide causes pending between parties who have the right to
sue in the courts of law and equity." 2 An essential part of, and corollary to, this principle is the locus standi of a party litigant, referring to one who is directly affected by, and whose interest
is immediate and substantial in, the controversy. The rule requires that a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a
favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. 3 If it were otherwise, the exercise of that
power can easily become too unwieldy by its sheer magnitude and scope to a point that may, in no small degree, adversely affect its intended essentiality, stability and consequentiality.
Locus standi, nevertheless, admits of the so-called "taxpayer's suit." Taxpayer's suits are actions or proceedings initiated by one or more taxpayers in their own behalf or, conjunctively, in
representation of others similarly situated for the purpose of declaring illegal or unauthorized certain acts of public officials which are claimed to be injurious to their common interests as
such taxpayers (Cf. 71 Am Jur 2d., 179-180). The principle is predicated upon the theory that taxpayers are, in equity, the cestui que trust of tax funds, and any illegal diminution thereof by
public officials constitutes a breach of trust even as it may result in an increased burden on taxpayers (Haddock vs. Board of Public Education, 86 A 2d 157; Henderson vs. McCormick, 17
ALR 2d 470).

Justice Brandeis of the United States Supreme Court, in his concurring opinion in Ashwander vs. Tennessee Valley Authority (297 U.S. 288), said:

. . . . The Court will not pass upon the validity of a statute upon complaint of one who fails to show that he is injured by its operation. Tyler v. The Judges, 179 U.S.
405; Hendrick v. Maryland, 234 U.S. 610, 621. Among the many applications of this rule, none is more striking than the denial of the right of challenge to one who lacks a
personal or property right. Thus, the challenge by a public official interested only in the performance of his official duty will not be entertained. Columbus & Greenville Ry.
v. Miller, 283 U.S. 96, 99-100. In Fairchild v. Hughes, 258 U.S. 126, the Court affirmed the dismissal of a suit brought by a citizen who sought to have the Nineteenth
Amendment declared unconstitutional. In Massachusetts v. Mellon, 262 U.S. 447, the challenge of the federal Maternity Act was not entertained although made by the
Commonwealth on behalf of all its citizens."

Justice Brandeis' view, shared by Justice Frankfurter in Joint Anti-Fascist Refugee Commission vs. McGrath (351 U.S. 123), was adopted by the U.S. Supreme Court in Flast vs. Cohen (392 U.S.
83) which held that it is only when a litigant is able to show such a personal stake in the controversy as to assure a concrete adverseness in the issues submitted that legal standing can
attach.

A "taxpayer's suit," enough to confer locus standi to a party, we have held before, is understood to be a case where the act complained of directly involves the illegal disbursement of public
funds derived from taxation. 4 It is not enough that the dispute concerns public funds. A contrary rule could easily lead to a limitless application of the term "taxpayer's suit," already by
itself a broad concept, since a questioned act of government would almost so invariably entail, as a practical matter, a financial burden of some kind.

To be sure, serious doubts have even been raised on the propriety and feasibility of unqualifiedly recognizing the "taxpayer's suit" as an exception from the standard rule of requiring a
party who invokes the exercise of judicial power to have a real and personal interest or a direct injury in the outcome of a controversy. This Court has heretofore spoken on the matter, at
times even venturing beyond the usual understanding of its applicability in the name of national or public interest. It is remarkable, nevertheless, that the accepted connotation of locus
standi has still managed to be the rule, sanctioning, by way of exception, the so-called "taxpayer's suit" which courts accept on valid and compelling reasons.

A provision which has been introduced by the 1987 Constitution is a definition, for the first time in our fundamental law, of the term "judicial power," as such authority and duty of courts
of justice "to settle actual controversies involving rights which are legally demandable and enforceable and to determine whether or not there has been a grave abuse of discretion,
amounting to lack or excess of jurisdiction, on the part of any branch or instrumentality of the Government" (Article VIII, Section 1, Constitution). I take it that the provision has not been
intended to unduly mutate, let alone to disregard, the long established rules on locus standi. Neither has it been meant, I most respectfully submit, to do away with the principle of
separation of powers and its essential incidents such as by, in effect, conferring omnipotence on, or allowing an intrusion by, the courts in respect to purely political decisions, the exercise
of which is explicitly vested elsewhere, and subordinate, to that of their own, the will of either the Legislative Department or the Executive Department both co- equal, independent and
coordinate branches, along with the Judiciary, in our system of government. Again, if it were otherwise, there indeed would be truth to the charge, in the words of some constitutionalists,
that "judicial tyranny" has been institutionalized by the 1987 Constitution, an apprehension which should, I submit, rather be held far from truth and reality.

In sum, while any act of government, be it executive in nature or legislative in character, may be struck down and declared a nullity either because it contravenes an express provision of
the Constitution or because it is perceived and found to be attended by or the result of grave abuse of discretion, amounting to lack or excess of jurisdiction, that issue, however, must first
be raised in a proper judicial controversy. The Court's authority to look into and grant relief in such cases would necessitate locus standi on the part of party litigants. This requirement, in
my considered view, is not merely procedural or technical but goes into the essence of jurisdiction and the competence of courts to take cognizance of justiciable disputes.

In Bugnay Construction and Development Corporation vs. Laron, 5 this Court ruled:

. . . . Considering the importance to the public of a suit assailing the constitutionality of a tax law, and in keeping with the Court's duty, specially explicated in the 1987
Constitution, to determine whether or not the other branches of the Government have kept themselves within the limits of the Constitution and the laws and that they
have not abused the discretion given to them, the Supreme Court may brush aside technicalities of procedure and take cognizance of the suit. (Citing Kapatiran vs. Tan,
G.R. No. 81311, June 30, 1988.)
 However, for the above rule to apply, it is exigent that the taxpayer-plaintiff sufficiently show that he would be benefited or injured by the judgment or entitled to the
avails of the suit as a real party in interest. (Citing Estate of George Litton vs. Mendoza, G.R. No. 49120, June 30, 1988.) Before he can invoke the power of judicial review,
he must specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation (citing 11 Am. Jur. 761; Dumlao, et al. vs.
Commission on Elections, 95 SCRA 392) and that he will sustain a direct injury as a result of the enforcement of the questioned statute or contract. (Citing Sanidad, et al.
vs. Commission on Elections, et al., 73 SCRA 333.) It is not sufficient that he has merely a general interest common to all members of the public. (Citing Ex Parte Levitt,
302 U.S. 633, cited in 15 SCRA 497, Annotation.)

As so well pointed out by Mr. Justice Camilo D. Quiason during the Court's deliberations, "due respect and proper regard for the rule on locus standi would preclude the rendition of
advisory opinions and other forms of pronouncement on abstract issues, avoid an undue interference on matters which are not justiciable in nature and spare the Court from getting itself
involved in political imbroglio."

The words of Senate President Edgardo J. Angara, carry wisdom; we quote:

The powers of the political branches of our government over economic policies is rather clear: the Congress is to set in broad but definite strokes the legal framework
and structures for economic development, while the Executive provides the implementing details for realizing the economic ends identified by Congress and executes
the same.

xxx xxx xxx

If each economic decision made by the political branches of government, particularly by the executive, are fully open to re-examination by the judicial branch, then very
little, if any, reliance can be placed by private economic actors on those decisions. Investors would always have to factor in possible costs arising from judicially-
determined changes affecting their immediate business, notwithstanding assurances by executive authorities.

Judicial decisions are, in addition, inflexible and can never substitute for sound decision-making at the level of those who are assigned to execute the laws of the land.
Since judicial power cannot be exercised unless an actual controversy is brought before the courts for resolution, decisions cannot be properly modified unless another
appropriate controversy arises." (Sen. Edgardo J. Angara, "The Supreme Court in Economic Policy Making," Policy Review A Quarterly Journal of Policy Studies, Vol. 1,
No. 1, January-March 1994, published by the Senate Policy Studies Group, pp. 2-3.)

A further set-back in entertaining the petition is that it unfortunately likewise strikes at factual issues. The allegations to the effect that irregularities have been committed in the processing
and evaluation of the bids to favor respondent PGMC; that the Malacaang Special Review Committee did not verify warranties embodied in the contract; that the operation of
telecommunication facilities is indispensable in the operation of the lottery system; the involvement of multi-national corporations in the operation of the on-line "hi-tech" lottery system,
and the like, require the submission of evidence. This Court is not a trier of facts, and it cannot, at this time, resolve the above issues. Just recently, the Court has noted petitioners'
manifestation of its petition with the Securities and Exchange Commission "for the nullification of the General Information Sheets of PGMC" in respect particularly to the nationality
holdings in the corporation. The doctrine of primary jurisdiction would not justify a disregard of the jurisdiction of, nor would it permit us to now preempt, said Commission on the matter.

Petitioners strongly assert, in an attempt to get the Court's concurrence in accepting the petition, that since lottery is a game of chance, the "lotto" system would itself be a "crime against
morals" defined by Articles 195-199 6 of the Revised Penal Code.

Being immoral and a criminal offense under the Revised Penal Code, petitioners contend, any special law authorizing gambling must, by all canons of statutory constructions, be
interpreted strictly against the grantee. Citing previous decisions of this Court, they maintain that lottery is gambling, pure and simple, 7 and that this Court has consistently condemned the
immorality and illegality of gambling to be a "national offense and not a minor transgression;" 8"that it is a social scourge which must be stamped out;" 9 and, "that it is pernicious to the
body politic and detrimental to the nation and its citizens." 10

I most certainly will not renounce this Court's above concerns. Nevertheless, the Court must recognize the limitations of its own authority. Courts neither legislate nor ignore legal
mandates. Republic Act No. 1169, as amended, explicitly gives public respondent

PCSO the authority and power "to hold and conduct sweepstakes races, lotteries, and other similar activities." In addition, it is authorized:
 c. To undertake any other activity that will enhance its funds generation, operations and funds management capabilities, subject to the same limitations provided for in
the preceding paragraph.

It shall have a Board of Directors, hereinafter designated the Board, composed of five members who shall be appointed, and whose compensation and term of office shall
be fixed, by the President.

xxx xxx xxx

Sec.9. Powers and functions of the Board of Directors. The Board of Directors of the Office shall have the following powers and functions.

(a) To adopt or amend such rules and regulations to implement the provisions of this Act.

xxx xxx xxx

(d) To promulgate rules and regulations for the operation of the Office and to do such act or acts as may be necessary for the attainment of its purposes and objectives.
(Emphasis supplied).

In People vs. Dionisio, 11 cited by the petitioners themselves, we remarked: "What evils should be corrected as pernicious to the body politic, and how correction should be done, is a
matter primarily addressed to the discretion of the legislativedepartment, not of the courts . . . ." In Valmonte vs. PCSO, 12 we also said:

The Court, as held in several cases, does not pass upon questions of wisdom, justice or expediency of legislation and executive acts. It is not the province of the courts to
supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of
the political departments of the government; otherwise, there will be a violation of the principle of separation of powers.

The constraints on judicial power are clear. I feel, the Court must thus beg off, albeit not without reluctance, from giving due course to the instant petition.

Accordingly, I vote for the dismissal of the petition.

KAPUNAN, J., dissenting:

I regret that I am unable to join my colleagues in the majority in spite of my own personal distaste for gambling and other gaming operations. Such considerations aside, I feel there are
compelling reasons why the instant petition should be dismissed. I shall forthwith state the reasons why.

Petitioners anchor their principal objections against the contract entered into between the Philippine Charity Sweepstakes Office (PCSO) and the PGMC on the ground that the contract
entered into by the PCSO with the PGMC violates the PCSO Charter (R.A. No. 1169 as amended by B.P. Blg 427, specifically section 1 thereof which bars the said body from holding
conducting lotteries "in collaboration, association or joint venture with any person association, company or entity."). However, a perusal of the petition reveals that the compelling reasons
behind it, while based on apparently legal questions involving the contract between the PCSO and the PGMC, are prompted by the petitioners' moral objections against the whole idea of
gambling operations operated by the government through the PCSO. The whole point of the petition, in essence, is a fight between good and evil, between the morality or amorality of
lottery operations conducted on a wide scale involving millions of individuals and affecting millions of lives. Their media of opposition are the above stated defects in the said contract
which they assail to be fatally defective. They come to this Court, as taxpayers and civic spirted citizens, asserting a right of standing on a transcendental issue which they assert to be of
paramount public interest.

Moral or legal questions aside, I believe that there are unfortunately certain standards 1 that have to be followed in the exercise of this Court's awesome power of review before this Court
could even begin to assay the validity of the contract between the PCSO and the PGMC. This, in spite of the apparent expansion of judicial power granted by Section 1 of Article VIII of the
1987 Constitution. It is fundamental that such standards be complied with before this Court could even begin to explore the substantive issues raised by any controversy brought before it,
for no issue brought before this court could possibly be so fundamental and paramount as to warrant a relaxation of the requisite rules for judicial review developed by settled
jurisprudence inorder to avoid entangling this court in controversies which properly belong to the legislative or executive branches of our government. The potential harm to our system of
government, premised on the concept of separation of powers, by the Court eager to exercise its powers and prerogatives at every turn, cannot be gainsaid. The Constitution does not
mandate this Court to wield the power of judicial review with excessive vigor and alacrity in every area or at every turn, except in appropriate cases and controversies which meet
established requirements for constitutional adjudication. Article VIII Sec. 1 of the Constitution notwithstanding, there are questions which I believe are still beyond the pale of judicial
power. Moreover, it is my considered opinion that the instant petition does not meet the requirements set by this court for a valid exercise of judicial review.

Our Constitution expressly defines judicial power as including "the duty to settle actual cases and controversies involving rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of discretion amounting to a lack or excess of jurisdiction on the part of any branch or instrumentality of the government." 2 This
constitutional requirement for an actual case and controversy limits this Court's power of review to precisely those suits between adversary litigants with real interests at stake 2 thus
preventing it from making all sorts of hypothetical pronouncements on abstract, contingent and amorphous issues. The Court will therefore not pass upon the validity of an act of
government or a statute passed by a legislative body without a requisite showing of injury. 3 A personal stake is essential, which absence renders our pronouncements gratuitous and
certainly violative of the constitutional requirement for actual cases and controversies.

The requirement for standing based on personal injury may of course be bypassed, as the petitioners in this case attempt to do, by considering the case as a "taxpayer suit" which would
thereby clothe them with the personality they would lack under ordinary circumstances. However, the act assailed by the petitioners on the whole involves the generation rather than
disbursement of public funds. In a line of cases starting from Pascual v. Secretary of Public Works 4 "taxpayer suits" have been understood to refer only to those cases where the act or
statute assailed involves the illegal or unconstitutional disbursement of public funds derived from taxation. The main premise behind the "taxpayer suit" is that the pecuniary interest of
the taxpayer is involved whenever there is an illegal or wasteful use of public funds which grants them the right to question the appropriation or disbursement on the basis of their
contribution to government funds. 5 Since it has not been alleged that an illegal appropriation or disbursement of a fund derived from taxation would be made in the instant case, I fail to
see how the petitioners in this case would be able to satisfy the locus standi requirement on the basis of a "taxpayer's suit". This alone should inhibit this Court from proceeding with the
case at bench. The interest alleged and the potential injury asserted are far too general and hypothetical for us to rush into a judicial determination of what to me appears to be judgment
better left to executive branch of our government.

This brings me to one more important point: The idea that a norm of constitutional adjudication could be lightly brushed aside on the mere supposition that an issue before the Court is of
paramount public concern does great harm to a democratic system which espouses a delicate balance between three separate but co-equal branches of government. It is equally of
paramount public concern, certainly paramount to the survival of our democracy, that acts of the other branches of government are accorded due respect by this Court. Such acts, done
within their sphere of competence, have been and should always be accorded with a presumption of regularity. When such acts are assailed as illegal or unconstitutional, the burden
falls upon those who assail these acts to prove that they satisfy the essential norms of constitutional adjudication, because when we finally proceed to declare an act of the executive or
legislative branch of our government unconstitutional or illegal, what we actually accomplish is the thwarting of the will of the elected representatives of the people in the executive or
legislative branches government.6 Notwithstanding Article VIII, Section 1 of the Constitution, since the exercise of the power of judicial review by this Court is inherently antidemocratic,
this Court should exercise a becoming modesty in acting as a revisor of an act of the executive or legislative branch. The tendency of a frequent and easy resort to the function of judicial
review, particularly in areas of economic policy has become lamentably too common as to dwarf the political capacity of the people expressed through their representatives in the policy
making branches of government and to deaden their sense of moral responsibility. 7

This court has been accused, of late, of an officious tendency to delve into areas better left to the political branches of government. 8 This tendency, if exercised by a court running riot over
the other co-equal branches of government, poses a greater danger to our democratic system than the perceived danger real or imagined of an executive branch espousing economic
or social policies of doubtful moral worth. Moreover economic policy decisions in the current milieu- including the act challenged in the instant case-involve complex factors requiring
flexibility and a wide range of discretion on the part of our economic managers which this Court should respect because our power of review, under the constitution, is a power to check,
not to supplant those acts or decisions of the elected representatives of the people.

Finally, the instant petition was brought to this Court on the assumption that the issue at bench raises primarily constitutional issues. As it has ultimately turned out, the core foundation of
the petitioners' objections to the LOTTO operations was based on the validity of the contract between the PCSO and the PGMC in the light of Section 1 of R.A. 1169 as amended by B.P. Blg.
427. It might have been much more appropriate for the issue to have taken its normal course in the courts below.

I vote to deny the petition.

# Separate Opinions

CRUZ, J., concurring:

I am happy to join Mr. Justice Hilario G. Davide, Jr. in his excellent ponencia. I will add the following personal observations only for emphasis as it is not necessary to supplement his
thorough exposition.

The respondents take great pains to cite specific provisions of the contract to show that it is PCSO that is actually operating the on-line lottery, but they have not succeeded in disproving
the obvious, to wit, that the document was intentionally so crafted to make it appear that the operation is not a joint undertaking of PCSO and PGMC but a mere lease of services. It is a
clever instrument, to be sure, but we are, gratifyingly, not deluded. Lawyers have a special talent to disguise the real intention of the parties in a contract to make it come ostensibly within
the provisions of a law although the real if furtive purpose is to violate it. That talent has been exercised in this case, but not convincingly enough.

It should be quite clear, from the adroit way the contract has been drafted, that the primary objective was to avoid the conclusion that PCSO will be operating a lottery "in association,
collaboration or joint venture with any person, association, company or entity," which is prohibited by Section 1 of Rep. Act No. 1169 as amended by B.P. Blg. 42. Citing the self-serving
provisions of the contract, the respondents would have us believe that the contract is perfectly lawful because all it does is provide for the lease to PCSO of the technical know-how and
equipment of PGMC, with PCSO acting as "the sole and individual operator" of the lottery. I am glad we are not succumbing to this sophistry.

Despite the artfulness of the contract (authorship of which was pointedly denied by both counsel for the government and the private respondent during the oral argument on this case), a
careful study will reveal telling stipulations that it is PGMC and not PCSO that will actually be operating the lottery. Thus, it is provided inter alia that PGMC shall furnish all capital
equipment and other facilities needed for the operation; bear all expenses relating to the operation, including those for the salaries and wages of the administrative and technical
personnel; undertake a positive advertising and promotion campaign for public support of the lottery; establish a radio communications network throughout the country as part of the
operation; and assume all risks if the revenues from ticket sales are insufficient to pay the entire prize money. Most significantly, to show that it is only after eight years from the effectivity
of the contract that PCSO will actually operate the lottery, Par. 6.7 of the agreement provides that PGMC shall:

6.7. Upon effectivity of this Contract, commence the training of PCSO and other local personnel and the transfer of technology and expertise, such that at the end of the
term of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System. (Emphasis supplied).

In the meantime, that is to say during the entire 8-year term of the contract, it will be PGMC that will be operating the lottery. Only "at the end of the term of this Contract" will PCSO "be
able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System."

Even on the assumption that it is PCSO that will be operating the lottery at the very start, the authority granted to PGMC by the agreement will readily show that PCSO will not be
acting alone, as the respondents pretend. In fact, it cannot. PGMC is an indispensable co-worker because it has the equipment and the technology and the management skills that PCSO does
not have at this time for the operation of the lottery, PCSO cannot deny that it needs the assistance of PGMC for this purpose, which was its reason for entering into the contract in the first
place.

And when PCSO does avail itself of such assistance, how will it be operating the lottery? Undoubtedly, it will be doing so "in collaboration, association or joint venture" with PGMC, which,
let it be added, will not be serving as a mere "hired help" of PCSO subject to its control. PGMC will be functioning independently in the discharge of its own assigned role as stipulated in
detail under the contract. PGMC is plainly a partner of PCSO in violation of law, no matter how PGMC's assistance is called or the contract is denominated.

Even if it be conceded that the assistance partakes of a lease of services, the undeniable fact is that PCSO would still be collaborating or cooperating with PGMC in the operation of the
lottery. What is even worse is that PCSO and PGMC may be actually engaged in a joint venture, considering that PGMC does not collect the usual fixed rentals due an ordinary lessor but is
entitled to a special "Rental Fee," as the contract calls it, "equal to four point nine percent (4.9%) of gross receipts from ticket sales."

The flexibility of this amount is significant. As may be expected, it will induce in PGMC an active interest and participation in the success of PCSO that is not expected of an ordinary
detached lessor who gets to be paid his rentals not a rental fee whether the lessee's business prospers or not. PGMC's share in the operation depends on its own performance and the
effectiveness of its collaboration with PCSO. Although the contract pretends otherwise, PGMC is a co-investor with PCSO in what is practically, if not in a strictly legal sense, a joint venture.
Concerning the doctrine of locus standi, I cannot agree that out of the sixty million Filipinos affected by the proposed lottery, not a single solitary citizen can question the agreement. Locus
standi is not such an absolute rule that it cannot admit of exceptions under certain conditions or circumstances like those attending this transaction. As I remarked in my dissent in Guazon
v. De Villa, 181 SCRA 623, "It is not only the owner of the burning house who has the right to call the firemen. Every one has the right and responsibility to prevent the fire from spreading
even if he lives in the other block."

What is especially galling is that the transaction in question would foist upon our people an essentially immoral activity through the instrumentality of a foreign corporation, which
naturally does not have the same concern for our interests as we ourselves have. I am distressed that foreigners should be allowed to exploit the weakness of some of us for instant gain
without work, and with the active collaboration and encouragement of our own government at that.

Feliciano, J., concurring

I agree with the conclusions reached by my distinguished brother in the Court Davide, Jr., J., both in respect of the question of locus standi and in respect of the merits of this case, that is, the
issues of legality and constitutionality of the Contract of Lease entered into between the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation
(PGMC).

In this separate opinion, I propose to address only the question of locus standi. It is with some hesitation that I do so, considering the extensive separate opinions on this question written
by my learned brothers Melo, Puno and Vitug, JJ. I agree with the great deal of what my brothers Melo, Puno and Vitug say about locus standi in their separate opinions and there is no need
to go over the ground that I share with them. Because, however, I reach a different conclusion in respect of the presence or absence of locus standi on the part of the petitioners in the case
before the Court, there is an internal need (a need internal to myself) to articulate the considerations which led me to that conclusion.

There is no dispute that the doctrine of locus standi reflects an important constitutional principle, that is, the principle of separation of powers which, among other things, mandates that
each of the great Departments of government is responsible for performance of its constitutionally allotted tasks. Insofar as the Judicial Department is concerned, the exercise of judicial
power and carrying out of judicial functions commonly take place within the context of actual cases or controversies. This, in turn, reflects the basic notion of judicial power as the power to
resolve actual disputes and of the traditional business of courts as the hearing and deciding of specific controversies brought before them. In our own jurisdiction, and at least since the
turn of the present century, judicial power has always included the power of judicial review, understood as the authority of courts (more specifically the Supreme Court) to assay contested
legislative and executive acts in terms of their constitutionality or legality. Thus, the general proposition has been that a petitioner who assails the legal or constitutional quality of an
executive or legislative act must be able to show that he has locus standi. Otherwise, the petition becomes vulnerable to prompt dismissal by the court.

There is, upon the other hand, little substantive dispute that the possession of locus standi 1 is not, in each and every case, a rigid and absolute requirement for access to the courts.
Certainly that is the case where great issues of public law are at stake, issues which cannot be approached in the same way that a court approaches a suit for the collection of a sum of
money or a complaint for the recovery of possession of a particular piece of land. The broad question is when, or in what types of cases, the court should insist on a clear showing of locus
standi understood as a direct and personal interest in the subject matter of the case at bar, and when the court may or should relax that apparently stringent requirement and proceed to
deal with the legal or constitutional issues at stake in a particular case.

I submit, with respect, that it is not enough for the Court simply to invoke "public interest" or even "paramount considerations of national interest," and to say that the specific
requirements of such public interest can only be ascertained on a "case to case" basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears
to come too close to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has
arisen.

This is not, however, to say that there is somewhere an over-arching juridical principle or theory, waiting to be discovered, that permits a ready answer to the question of when, or in what
types of cases, the need to show locus standi may be relaxed in greater or lesser degree. To my knowledge, no satisfactory principle or theory has been discovered and none has been
crafted, whether in our jurisdiction or in the United States. 2 I have neither the competence nor the opportunity to try to craft such principle or formula. It might, however, be useful to
attempt to indicate the considerations of principle which, in the present case, appear to me to require an affirmative answer to the question of whether or not petitioners are properly
regarded as imbued with the standing necessary to bring and maintain the present petition.

Firstly, the character of the funds or other assets involved in the case is of major importance. In the case presently before the Court, the funds involved are clearly public in nature. The
funds to be generated by the proposed lottery are to be raised from the population at large. Should the proposed operation be as successful as its proponents project, those funds will come
from well-nigh every town and barrio of Luzon. The funds here involved are public in another very real sense: they will belong to the PCSO, a government owned or controlled corporation
and an instrumentality of the government and are destined for utilization in social development projects which, at least in principle, are designed to benefit the general public. My learned
brothers Melo, Puno and Vitug, JJ. concede that taxpayers' suits have been recognized as an exception to the traditional requirement of recognized as an exception to the traditional
requirement of locus standi. They insist, however, that because the funds here involved will not have been generated by the exercise of the taxing power of the Government, the present
petition cannot be regarded as a taxpayer's suit and therefore, must be dismissed by the Court. It is my respectful submission that that constitutes much too narrow a conception of the
taxpayer's suit and of the public policy that it embodies. It is also to overlook the fact that tax monies, strictly so called, constitute only one (1) of the major categories of funds today raised
and used for public purposes. It is widely known that the principal sources of funding for government operations today include, not just taxes and customs duties, but also revenues
derived from activities of the Philippine Amusement Gaming Corporation (PAGCOR), as well as the proceeds of privatization of government owned or controlled corporations and other
government owned assets. The interest of a private citizen in seeing to it that public funds, from whatever source they may have been derived, go only to the uses directed and permitted by
law is as real and personal and substantial as the interest of a private taxpayer in seeing to it that tax monies are not intercepted on their way to the public treasury or otherwise diverted
from uses prescribed or allowed by law. It is also pertinent to note that the more successful the government is in raising revenues by non-traditional methods such as PAGCOR operations
and privatization measures, the lesser will be the pressure upon the traditional sources of public revenues, i.e., the pocket books of individual taxpayers and importers.

A second factor of high relevance is the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the
government. A showing that a constitutional or legal provision is patently being disregarded by the agency or instrumentality whose act is being assailed, can scarcely be disregarded by
court. The concept of locus standi which is part and parcel of the broader notion of ripeness of the case "does not operate independently and is not alone decisive. . . . [I]t is in
substantial part a function of a judge's estimate of the merits of the constitutional [or legal] issue." 3 The notion of locus standi and the judge's conclusions about the merits of the case, in
other words, interact with each other. Where the Court perceives a serious issue of violation of some constitutional or statutory limitation, it will be much less difficult for the Court to
find locus standi in the petitioner and to confront the legal or constitutional issue. In the present case, the majority of the Court considers that a very substantial showing has been made
that the Contract of Lease between the PCSO and the PGMC flies in the face of legal limitations.

A third consideration of importance in the present case is the lack of any other party with a more direct and specific interest in raising the questions here being raised. Though a public
bidding was held, no losing or dissatisfied bidder has come before the Court. The Office of the Ombudsman has not, to the knowledge of the Court, raised questions about the legality or
constitutionality of the Contract of Lease here involved. The National Government itself, through the Office of the Solicitor General, is defending the PCSO Contract (though it had not
participated in the drafting thereof). In a situation like that here obtaining, the submission may be made that the institution, so well known in corporation law and practice, of the corporate
stockholders' derivative suit furnishes an appropriate analogy and that on the basis of such an analogy, a taxpayer's derivative suit should be recognized as available.

The wide range of impact of the Contract of Lease here assailed and of its implementation, constitutes still another consideration of significance. In the case at bar, the agreement if
implemented will be practically nationwide in its scope and reach (the PCSO-PGMC Contract is limited in its application to the Island of Luzon; but if the PCSO Contracts with the other two
[2] private "gaming management" corporations in respect of the Visayas and Mindanao are substantially similar to PCSO's Contract with PGMC, then the Contract before us may be said to
be national indeed in its implications and consequences). Necessarily, the amounts of money expected to be raised by the proposed activities of the PCSO and PGMC will be very substantial,
probably in the hundreds of millions of pesos. It is not easy to conceive of a contract with greater and more far-reaching consequences, literally speaking, for the country than the Contract
of Lease here involved. Thus, the subject matter of the petition is not something that the Court may casually pass over as unimportant and as not warranting the expenditure of significant
judicial resources.

In the examination of the various features of this case, the above considerations have appeared to me to be important and as pressing for acceptance and exercise of jurisdiction on the part
of this Court. It is with these considerations in mind that I vote to grant due course to the Petition and to hold that the Contract of Lease between the PCSO and PGMC in its present form
and content, and given the present state of the law, is fatally defective.

PADILLA, J., concurring:

My views against gambling are a matter of judicial record. In Basco v. PAGCOR, (G.R. No. 91649, 14 May 1991, 197 SCRA 52) I expressed these views in a separate opinion where I was
joined by that outstanding lady jurist, Mme. Justice A. Melencio-Herrera whose incisive approach to legal problems is today missed in this Court. I reproduce here those views because they
are highly persuasive to the conclusions I reach in the present controversy:

I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree with the decision insofar as it holds that the prohibition,
control, and regulation of the entire activity known as gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the
legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such
policy.
 The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted by the political departments of government in areas which
fall within their authority, except only when such policies pose a clear and present danger to the life, liberty or property of the individual. This case does not involve such
a factual situation.

However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human personality, destroys self-confidence and eviscerates one's
self-respect, which in the long run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and homes; it
is an antithesis to individual reliance and reliability as well as personal industry which are the touchstones of real economic progress and national development.

Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the government out of "legalized" gambling will, in the long run,
be more than offset and negated by the irreparable damage to the people's moral values.

Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed and becomes untenable when it itself engages in the very
activity it seeks to eradicate.

One can go through the Court's decision today and mentally replace the activity referred to therein as gambling, which is legal only because it is authorized by law and
run by the government, with the activity known as prostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised, and "regulated"
by the government, in return for the substantial revenues it would yield the government to carry out its laudable projects, such as infrastructure and social amelioration?
The question, I believe, answers itself. I submit that the sooner the legislative department outlaws all forms of gambling, as a fundamental state policy, and the sooner the
executive implements such policy, the better it will be for the nation.

We presently have the sweepstakes lotteries; we already have the PAGCOR's gambling casinos; the Filipino people will soon, if plans do not miscarry, be initiated into an even more
sophisticated and encompassing nationwide gambling network known as the "on-line hi-tech lotto system." To be sure, it is not wealth producing; it is not export oriented. It will draw
from existing wealth in the hands of Filipinos and transfer it into the coffers of the PCSO and its foreign partners at a price of further debasement of the moral standards of the Filipino
people, the bulk of whom are barely subsisting below the poverty line.

1. It is said that petitioners 1 have no locus standi to bring this suit even as they challenge the legality and constitutionality of a contract of lease between the PCSO, a
government-owned corporation and the PGMC, a private corporation with substantial (if not controlling) foreign composition and content. Such contract of lease
contains the terms and conditions under which an "on-line hi-tech lotto system" will operate in the country.

As the ponente of the extended, unsigned en banc resolution in Valmonte v. PCSO, (G.R. No. 78716 and G.R. No. 79084, 22 September 1987), I would be the last to downgrade the rule,
therein reiterated, that in order to maintain a suit challenging the constitutionality and/or legality of a statute, order or regulation or assailing a particular governmental action as done
with grave abuse of discretion or with lack of jurisdiction, the petitioner must show that he has a clear personal or legal right that would be violated with the enforcement of the challenged
statute, order or regulation or the implementation of the questioned governmental action. But, in my considered view, this rule maybe (and should be) relaxed when the issue involved or
raised in the petition is of such paramount national interest and importance as to dwarf the above procedural rule into a barren technicality. As a unanimous Court en banc aptly put it in De
Guia vs. COMELEC, G.R. No. 104712, 6 May 1992, 208 SCRA 420.

Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for re-election, much less, that he is prejudiced by the
election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-
4640, October 12, 1976. 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533) He does not also allege any legal right that
has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action.

However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner
alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the
petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmea vs. Commission on Elections.
I view the present case as falling within the De Guia case doctrine. For, when the contract of lease in question seeks to establish and operate a nationwide gambling network with
substantial if not controlling foreign participation, then the issue is of paramount national interest and importance as to justify and warrant a relaxation of the above-mentioned procedural
rule on locus standi.

2. The charter of the PCSO Republic Act No. 1169 as amended by BP No. 42 insofar as relevant, reads:

Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government
agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general
powers conferred in section thirteen of Act Numbered One Thousand Four Hundred Fifty-Nine, as amended, and shall have the authority:

A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules
and regulations as shall be promulgated by the Board of Directors.

B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and activities which may be
profit-oriented, by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, except for the
activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and continuing sources of funds for health programs, including the
expansion of existing ones, medical assistance and services, and/or charitable grants: Provided, That such investments will not compete with the private sector in areas
where investments are adequate as may be determined by the National Economic and Development Authority.

It is at once clear from the foregoing legal provisions that, while the PCSO charter allows the PCSO to itself engage in lotteries, it does not however permit the PCSO to undertake or engage
in lotteries in "collaboration, association or joint venture" with others. The palpable reason for this prohibition is, that PCSO should not and cannot be made a vehicle for an otherwise
prohibited foreign or domestic entity to engage in lotteries (gambling activities) in the Philippines.

The core question then is whether the lease contract between PCSO and PGMC is a device whereby PCSO will engage in lottery in collaboration, association or joint venture with another,
i.e. PGMC. I need not go here into the details and different specific features of the contract to show that it is a joint venture between PCSO and PGMC. That has been taken care of in the
opinion of Mr. Justice Davide to which I fully subscribe.

On a slightly different plane and, perhaps simplified, I consider the agreement or arrangement between the PCSO and PGMC a joint venture because each party to the contract contributes
its share in the enterprise or project. PGMC contributes its facilities, equipment and know-how (expertise). PCSO contributes (aside from its charter) the market, directly or through dealers
and this to me is most important in the totality or mass of the Filipino gambling elements who will invest in lotto tickets. PGMC will get its 4.9% of gross receipts (with assumption of
certain risks in the course of lotto operations); the residue of the whole exercise will go to PCSO. To any person with a minimum of business know-how, this is a joint venture between
PCSO and PGMC, plain and simple.

But assuming ex gratia argumenti that such arrangement between PCSO and PGMC is not a joint venture between the two of them to install and operate an "on-line hi-tech lotto system" in
the country, it can hardly be denied that it is, at the very least, an association or collaboration between PCSO and PGMC. For one cannot do without the other in the installation, operation
and, most importantly, marketing of the entire enterprise or project in this country.

Indeed, the contract of lease in question is a clear violation of Republic Act No. 1169 as amended by BP No. 42 (the PCSO charter).

Having arrived at the conclusion that the contract of lease in question between the PCSO and PGMC is illegal and, therefore, invalid, I find it unnecessary to dwell on the other issues raised
in the pleadings and arguments of the parties.

I, therefore, vote to give DUE COURSE to the petition and to declare the contract of lease in question between PCSO and PGMC, for the reasons aforestated, of no force and effect.

MELO, J., dissenting:

I submit that the petition before the Court deserves no less than outright dismissal for the reason that petitioners, as concerned citizens and as taxpayers and as members of Congress, do
not possess the necessary legal standing to assail the validity of the contract of lease entered into by the Philippine Charity Sweepstakes Office and the Philippine Gaming Management
Corporation relative to the establishment and operation of an "On-line Hi-Tech Lottery System" in the country.

As announced in Lamb vs. Phipps (22 Phil. [1912], 559), "[J]udicial power in its nature, is the power to hear and decide causes pending between parties who have the right to sue and be sued
in the courts of law and equity." Necessarily, this implies that a party must show a personal stake in the outcome of the controversy or an injury to himself that can be addressed by a
favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the court's remedial powers in his behalf (Warth vs. Seldin, 422 U.S. 490; Guzman vs. Marrero, 180
U.S. 81; McMicken vs. United States, 97 U.S. 204). Here, we have yet to see any of petitioners acquiring a personal stake in the outcome of the controversy or being placed in a situation
whereby injury may be sustained if the contract of lease in question is implemented. It may be that the contract has somehow evoked public interest which petitioners claim to represent.
But the alleged public interest which they pretend to represent is not only broad and encompassing but also strikingly and veritably indeterminate that one cannot truly say whether a
handful of the public, like herein petitioners, may lay a valid claim of representation in behalf of the millions of citizens spread all over the land who may have just as many varied reactions
relative to the contract in question.

Any effort to infuse personality on petitioners by considering the present case as a "taxpayer's suit" could not cure the lack of locus standi on the part of petitioners. As understood in this
jurisdiction, a "taxpayer's suit" refers to a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation (Pascual vs. Secretary of Public
Works, 110 Phil. [1960] 331; Maceda vs. Macaraig, 197 SCRA [1991]; Lozada vs. COMELEC, 120 SCRA [1983] 337; Dumlao vs. COMELEC, 95 SCRA [1980] 392; Gonzales vs. Marcos, 65 SCRA
[1975] 624). It cannot be overstressed that no public fund raised by taxation is involved in this case. In fact, it is even doubtful if the rentals which the PCSO will pay to the lessor for its
operation of the lottery system may be regarded as "public fund". The PCSO is not a revenue- collecting arm of the government. Income or money realized by it from its operations will not
and need not be turned over to the National Treasury. Rather, this will constitute corporate funds which will remain with the corporation to finance its various activities as authorized in its
charter. And if ever some semblance of "public character" may be said to attach to its earnings, it is simply because PCSO is a government-owned or controlled entity and not a purely
private enterprise.

It must be conceded though that a "taxpayer's suit" had been allowed in a number of instances in this jurisdiction. For sure, after the trial was blazed by Pascual vs. Secretary of Public
Works, supra, several more followed. It is to be noted, however, that in those occasions where this Court allowed such a suit, the case invariably involved either the constitutionality of a
statute or the legality of the disbursement of public funds through the enforcement of what was perceived to be an invalid or unconstitutional statute or legislation (Pascual, supra;
Philippine Constitution Association, Inc. vs. Jimenez, 15 SCRA [1965] 479; Philippine Constitution Association, Inc. vs. Mathay, 18 SCRA [1966] 300; Tolentino vs. COMELEC, 41 SCRA
[1971] 702; Pelaez vs. Auditor General, 15 SCRA [1965] 569; Iloilo Palay and Corn Planters Association vs. Feliciano, 13 SCRA [1965] 377).

The case before us is not a challenge to the validity of a statute or an attempt to restrain expenditure of public funds pursuant to an alleged invalid congressional enactment. What
petitioners ask us to do is to nullify a simple contract of lease entered into by a government-owned corporation with a private entity. That contract, as earlier pointed out, does not involve
the disbursement of public funds but of strictly corporate money. If every taxpayer, claiming to have interest in the contract, no matter how remote, could come to this Court and seek
nullification of said contract, the day may come when the activities of government corporate entities will ground to a standstill on account of nuisance suits filed against them by persons
whose supposed interest in the contract is as remote and as obscure as the interest of any man in the street. The dangers attendant thereto are not hard to discern and this Court must not
allow them to come to pass.

One final observation must be emphasized. When the petition at bench was filed, the Court decided to hear the case on oral argument on the initial perception that a constitutional issue
could be involved. However, it now appears that no question of constitutional dimension is at stake as indeed the majority barely touches on such an issue, concentrating as it does on its
interpretation of the contract between the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation.

I, therefore, vote to dismiss the petition.

PUNO, J., dissenting:

At the outset, let me state that my religious faith and family upbringing compel me to regard gambling, regardless of its garb, with hostile eyes. Such antagonism tempts me to view the case
at bench as a struggle between good and evil, a fight between the forces of light against the forces of darkness. I will not, however, yield to that temptation for we are not judges of the Old
Testament type who were not only arbiters of law but were also high priests of morality.
I will therefore strictly confine the peregrinations of my mind to the legal issues for resolution: (1) whether or not the petitioners have the Locus standi to file the petition at bench; and (2)
assuming their locus standi, whether or not the Contract of Lease between PCSO and PGMC is null and void considering: (a) section 1 of R.A. No. 1169, as amended by B.P. Blg. 42 (Charter of
PCSO) which prohibits PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity"; (b) Act No. 3836 which
requires a congressional franchise before any person or entity can establish and operate a telecommunication system; (c) section 11, Art. XII of the Constitution, which requires that for a
corporation to operate a public utility, at least 60% of its capital must be owned by Filipino citizens; and (d) R.A. No. 7042, otherwise known as the "Foreign Investments Act", which
includes all forms of gambling in its "negative list."

While the legal issues abound, I deferentially submit that the threshold issue is the locus standi, or standing to sue, of petitioners. The petition describes petitioner Kilosbayan, Inc., as a non-
stock corporation composed of "civic spirited citizens, pastors, priests, nuns, and lay leaders who are committed to the cause of truth, justice, and national renewal." 1 Petitioners Jovito R.
Salonga, Cirilo A. Rigos, Ernie Camba, Emilio C. Capulong, Jr., Jose Abcede, Christine Tan, Felipe L. Gozon, Rafael G. Fernando, Raoul V. Victorino, Jose Cunanan, and Quintin S. Doromal joined
the petition in their capacity as trustees of Kilosbayan, Inc., and as taxpayers and concerned citizens. 2 Petitioners Freddie Webb and Wigberto Taada joined the petition as senators,
taxpayers and concerned citizens. 3 Petitioner Joker P. Arroyo joined the petition as a member of the House of Representative, a taxpayer and a concerned citizen. 4

With due respect to the majority opinion, I wish to focus on the interstices of locus standi, a concept described by Prof. Paul Freund as "among the most amorphous in the entire domain of
public law." The requirement of standing to sue inheres from the definition of judicial power. It is not merely a technical rule of procedure which we are at liberty to disregard. Section 1,
Article VIII of the Constitution provides:

xxx xxx xxx

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
(Italics supplied)

The phrase "actual controversies involving rights which are legally demandable and enforceable" has acquired a cultivated meaning given by courts. It spells out the requirements that
must be satisfied before one can come to court to litigate a constitutional issue. Our distinguished colleague, Mr. Justice Isagani A. Cruz, gives a shorthand summary of these requirements
when he states that no constitutional question will be heard and decided by courts unless there is a showing of the following: . . . (1) there must be an actual case or controversy; (2) the
question of constitutionality must be raised by the proper party; (3) the constitutional question must be raised at the earliest possible opportunity; and (4) the decision of the
constitutional question must be necessary to the determination of the case itself. 5

The complexion of the rule on locus standi has been undergoing a change. Mr. Justice Cruz has observed the continuing relaxation of the rule on
standing, 6 thus:

xxx xxx xxx

A proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of. Until and unless such actual or potential
injury is established, the complainant cannot have the legal personality to raise the constitutional question.

In Tileson v. Ullmann, a physician questioned the constitutionality of a law prohibiting the use of contraceptives, upon the ground that it might prove dangerous to the life
or health of some of his patients whose physical condition would not enable them to bear the rigors of childbirth. The court dismissed the challenge, holding that the
patients of the physician and not the physician himself were the proper parties.

In Cuyegkeng v. Cruz, the petitioner challenged in a quo warranto proceeding the title of the respondent who, he claimed, had been appointed to the board of medical
examiners in violation of the provisions of the Medical Act of 1959. The Supreme Court dismissed the petition, holding that Cuyegkeng had not made a claim to the
position held by Cruz and therefore could not be regarded as a proper party who had sustained an injury as a result of the questioned act.

In People v. Vera, it was held that the Government of the Philippines was a proper party to challenge the constitutionality of the Probation Act because, more than any
other, it was the government itself that should be concerned over the validity of its own laws.
 In Ex Parte Levitt, the petitioner, an American taxpayer and member of the bar, filed a motion for leave to question the qualifications of Justice Black who, he averred, had
been appointed to the U.S. Supreme Court in violation of the Constitution of the United States. The Court dismissed the petition, holding that Levitt was not a proper
party since he was not claiming the position held by Justice Black.

The rule before was that an ordinary taxpayer did not have the proper party personality to question the legality of an appropriation law since his interest in the sum
appropriated was not substantial enough. Thus, in Custodio v. Senate President, a challenge by an ordinary taxpayer to the validity of a law granting back pay to
government officials, including members of Congress, during the period corresponding to the Japanese Occupation was dismissed as having been commenced by one
who was not a proper party.

Since the first Emergency Powers Cases, however, the rule has been changed and it is now permissible for an ordinary taxpayer, or a group of taxpayers, to raise the
question of the validity of an appropriation law. As the Supreme Court then put it. "The transcendental importance to the public of these cases demands that they be
settled promptly and definitely, brushing aside, if we must, technicalities of procedure."

In Tolentino v. Commission on Elections, it was held that a senator had the proper party personality to seek the prohibition of a plebiscite for the ratification of a proposed
constitutional amendment. In PHILCONSA v. Jimenez, an organization of taxpayers and citizens was held to be a proper party to question the constitutionality of a law
providing for special retirement benefits for members of the legislature.

In Sanidad v. Commission on Elections, the Supreme Court upheld the petitioners as proper parties, thus

As a preliminary resolution, We rule that the petitioners in L-44640 (Pablo C. Sanidad and Pablito V. Sanidad) possess locus standi to challenge the
constitutional premise of Presidential Decree Nos. 991, 1031, and 1033. It is now an ancient rule that the valid source of a statute Presidential
Decrees are of such nature may be contested by one who will sustain a direct injury as a result of its enforcement. At the instance of taxpayers, laws
providing for the disbursement of public funds may be enjoined, upon the theory that the expenditure of public funds by an officer of the State for the
purpose of executing an unconstitutional act constitutes a misapplication of such funds. The breadth of Presidential Decree No. 991 carries an
appropriation of Five Million Pesos for the effective implementation of its purposes. Presidential Decree No. 1031 appropriates the sum of Eight
Million Pesos to carry out its provisions. The interest of the aforenamed petitioners as taxpayers in the lawful expenditure of these amounts of public
money sufficiently clothes them with that personality to litigate the validity of the Decrees appropriating said funds. Moreover, as regard taxpayer's
suits, this Court enjoys that open discretion to entertain the same or not. For the present case, We deem it sound to exercise that discretion
affirmatively so that the authority upon which the disputed Decrees are predicated may be inquired into.

In Lozada v. Commission on Elections, however, the petitioners were held without legal standing to demand the filling of vacancies in the legislature because they had
only "a generalized interest' shared with the rest of the citizenry."

Last July 30, 1993, we further relaxed the rule on standing in Oposa, et al. v. Hon. Fulgencio S. Factoran, Jr., 7where we recognized the locus standi of minors representing themselves as well
as generations unborn to protect their constitutional right to a balanced and healthful ecology.

I am perfectly at peace with the drift of our decisions liberalizing the rule on locus standi. The once stubborn disinclination to decide constitutional issues due to lack of locus standi is
incompatible with the expansion of judicial power mandated in section 1 of Article VIII of the Constitution, i.e., "to determine whether or not there has been a grave abuse of discretion,
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government." As we held thru the ground breaking ponencia of Mr. Justice Cruz in Daza v.
Singson, 8 this provision no longer precludes the Court from resolving political questions in proper cases. But even perusing this provision as a constitutional warrant for the court to enter
the once forbidden political thicket, it is clear that the requirement of locus standi has not been jettisoned by the Constitution for it still commands courts in no uncertain terms to
settle only "actual controversies involving rights which are legally demandable and enforceable." Stated otherwise, courts are neither free to decide all kinds of cases dumped into their laps
nor are they free to open their doors to all parties or entities claiming a grievance. The rationale for this constitutional requirement of locus standi is by no means trifle. It is intended "to
assure a vigorous adversary presentation of the case, and, perhaps more importantly to warrant the judiciary's overruling the determination of a coordinate, democratically elected organ
of government." 9 It thus goes to the very essence of representative democracies. As Mr. Justice Powell carefully explained in U.S. v.
Richardson, 10 viz:
 Relaxation of standing requirements is directly related to the expansion of judicial power. It seems to me inescapable that allowing unrestricted taxpayer or citizen
standing would significantly alter the allocation of power at the national level, with a shift away from a democratic form of government. I also believe that repeated and
essentially head-on confrontations between the life-tenured branch and the representative branches of government will not, in the long run, be beneficial to either. The
public confidence essential to the former and the vitality critical to the latter may well erode if we do not exercise self- restraint in the utilization of our power to
negative the actions of the other branches. We should be ever mindful of the contradictions that would arise if a democracy were to permit at large oversight of the
elected branches of government by a non-representative, and in large measure insulated, judicial branch. Moreover, the argument that the Court should allow
unrestricted taxpayer or citizen standing underestimates the ability of the representative branches of the Federal Government to respond to the citizen pressure that has
been responsible in large measure for the current drift toward expanded standing. Indeed, taxpayer or citizen advocacy, given its potentially broad base, is precisely the
type of leverage that in a democracy ought to be employed against the branches that were intended to be responsive to public attitudes about the appropriate operation
of government. "We must as judges recall that, as Mr. Justice Holmes wisely observed, the other branches of Government are ultimate guardians of the liberties and
welfare of the people in quite as great a degree as the courts."

Unrestrained standing in federal taxpayer or citizen suits would create a remarkably illogical system of judicial supervision of the coordinate branches of the Federal
Government. Randolph's proposed Council of Revision, which was repeatedly rejected by the Framers, at least had the virtue of being systematic; every law passed by
the legislature automatically would have been previewed by the judiciary before the law could take effect. On the other hand, since the judiciary cannot select the
taxpayers or citizens who bring suit or the nature of the suits, the allowance of public actions would produce uneven and sporadic review, the quality of which would be
influenced by the resources and skill of the particular plaintiff. And issues would be presented in abstract form, contrary to the Court's recognition that "judicial review
is effective largely because it is not available simply at the behest of a partisan faction, but is exercised only to remedy a particular, concrete injury." Sierra Club v. Morton,
405 U.S. 727, 740-741, n. 16 (1972).

A lesser but not insignificant reason for screening the standing of persons who desire to litigate constitutional issues is economic in character. Given the sparseness of our resources, the
capacity of courts to render efficient judicial service to our people is severely limited. For courts to indiscriminately open their doors to all types of suits and suitors is for them to unduly
overburden their dockets, and ultimately render themselves ineffective dispensers of justice. To be sure, this is an evil that clearly confronts our judiciary today.

Prescinding from these premises, and with great reluctance, I am not prepared to concede the standing to sue of petitioners. On a personal level, they have not shown that elemental injury
in fact which will endow them with a standing to sue. It must be stressed that petitioners are in the main, seeking the nullity not of a law but of a Contract of Lease. Not one of the
petitioners is a party to the Contract of Lease executed between PCSO and PGMC. None of the petitioners participated in the bidding, and hence they are not losing bidders. They are
complete strangers to the contract. They stand neither to gain nor to lose economically by its enforcement. It seems to me unusual that an unaffected third party to a contract could be
allowed to question its validity. Petitioner Kilosbayan cannot justify this officious interference on the ground of its commitment to "truth, justice and national renewal." Such commitment
to truth, justice and national renewal, however noble it may be, cannot give Kilosbayan a roving commission to check the validity of contracts entered into by the government and its
agencies. Kilosbayan is not a private commission on audit.

Neither can I perceive how the other petitioners can be personally injured by the Contract of Lease between PCSO and PGMC even if petitioner Salonga assails as unmitigated fraud the
statistical probability of winning the lotto as he compared it to the probability of being struck twice by lightning. The reason is obvious: none of the petitioners will be exposed to this
alleged fraud for all of them profess to abjure playing the lotto. It is self-evident that lotto cannot physically or spiritually injure him who does not indulge in it.

Petitioners also contend they have locus standi as taxpayers. But the case at bench does not involve any expenditure of public money on the part of PCSO. In fact, paragraph 2 of the
Contract of Lease provides that it is PGMC that shall build, furnish, and maintain at its own expense and risk the facilities for the On-Line Lottery System of PCSO and shall bear all
maintenance and other costs. Thus, PGMC alleged it has already spent P245M in equipment and fixtures and would be investing close to P1 billion to supply adequately the technology and
other requirements of PCSO. 11 If no tax money is being illegally deflected in the Contract of Lease between PCSO and PGMC, petitioners have no standing to impugn its validity as
taxpayers. Our ruling in Dumlao v. Comelec, 12 settled this issue well enough, viz:

However, the statutory provisions questioned in this case, namely, sec. 7, BP Blg. 51, and sections 4, 1, and 5 BP Blg. 52, do not directly involve the disbursement of
public funds. While, concededly, the elections to be held involve the expenditure of public moneys, nowhere in their Petition do said petitioners allege that their tax
money is "being extracted and spent in violation of specific constitutional protections against abuses of legislative power" (Flast v. Cohen, 392 U.S. 83 [1960]), or that
there is a misapplication of such funds by respondent COMELEC (see Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]), or that public money is being deflected
to any improper purpose. Neither do petitioners seek to restrain respondent from wasting public funds through the enforcement of an invalid or unconstitutional law.
(Philippine Constitution Association vs. Mathay, 18 SCRA 300 [1966]), citing Philippine Constitution Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the institution
 of a taxpayer's suit, per se, is no assurance of judicial review. As held by this Court in Yan vs. Macapagal (43 SCRA 677 [1972]), speaking through our present Chief
Justice, this Court is vested with discretion as to whether or not a taxpayer's suit should be entertained.

Next, petitioners plead their standing as "concerned citizens." As citizens, petitioners are pleading that they be allowed to advocate the constitutional rights of other persons who are not
before the court and whose protection is allegedly their concern. A citizen qua citizen suit urges a greater relaxation of the rule on locus standi. I feel no aversion to the further relaxation of
the rule on standing to accommodate what in other jurisdictions is known as an assertion of jus tertii in constitutional litigation provided the claimant can demonstrate: (1) an injury in fact
to himself, and (2) the need to prevent the erosion of a preferred constitutional right of a third person. As stressed before, the first requirement of injury in fact cannot be abandoned for it
is an essential element for the exercise of judicial power. Again, as stressed by Mr. Justice Powell, viz: 13

The revolution in standing doctrine that has occurred, particularly in the 12 years since Baker v. Carr, supra, has not meant, however, that standing barriers have
disappeared altogether. As the Court noted in Sierra Club, "broadening the categories of injury that may be alleged in support of standing is a different matter from
abandoning the requirement that the party seeking review must himself have suffered an injury." 405 U.S., at 738 . . . Indeed, despite the diminution of standing
requirements in the last decade, the Court has not broken with the traditional requirement that, in the absence of a specific statutory grant of the right of review, a
plaintiff must allege some particularized injury that sets him apart from the man on the street.

I recognize that the Court's allegiance to a requirement of particularized injury has on occasion required a reading of the concept that threatens to transform it beyond
recognition. E.G., Baker v. Carr, supra; Flast v. Cohen, supra. But despite such occasional digressions, the requirement remains, and I think it does so for the reasons
outlined above. In recognition of those considerations, we should refuse to go the last mile towards abolition of standing requirements that is implicit in broadening the
"precarious opening" for federal taxpayers created by Flast, see 392 U.S., at 116 (Mr. Justice Fortas, concurring) or in allowing a citizen qua citizen to invoke the power of
the federal courts to negative unconstitutional acts of the Federal Government.

In sum, I believe we should limit the expansion of federal taxpayer and citizen standing in the absence of specific statutory authorization to an outer boundary drawn by
the results in Flast and Baker v. Carr. I think we should face up to the fact that all such suits are an effort "to employ a federal court as a forum in which to air . . .
generalized grievances about the conduct of government or the allocation of power in the Federal System." Flast v. Cohen, 392 U.S., at 106. The Court should explicitly
reaffirm traditional prudential barriers against such public actions. My reasons for this view are rooted in respect for democratic processes and in the conviction that
"[t]he powers of the federal judiciary will be adequate for the great burdens placed upon them only if they are employed prudently, with recognition of the strengths as
well as the hazards that go with our kind of representative government." Id., at 131

The second requirement recognizes society's right in the protection of certain preferred rights in the Constitution even when the rightholders are not before the court. The theory is that
their dilution has a substantial fall out detriment to the rights of others, hence the latter can vindicate them.

In the case at bench, it is difficult to see how petitioners can satisfy these two requirements to maintain a jus tertii claim. They claim violation of two constitutional provisions, to wit:

Section 1, Article XIII. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity,
reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

and

Section 11, Article XII. - No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the
Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall
such franchise, certificate, or authorizations be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except
under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity
participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their
proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizen of the Philippines.
Section 1, Article XIII of the Constitution cannot be the matrix of petitioners' jus tertii claim for it expresses no more than a policy direction to the legislative in the discharge of its ordained
duty to give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities and
remove cultural inequities by equitably diffusing wealth and political power for the common good. Whether the act of the legislature in amending the charter of PCSO by giving it the
authority to conduct lotto and whether the Contract of Lease entered into between PCSO and PGMC are incongruent to the policy direction of this constitutional provision is a highly
debatable proposition and can be endlessly argued. Respondents steadfastly insist that the operation of lotto will increase the revenue base of PCSO and enable government to provide a
wider range of social services to the people. They also allege that the operation of high-tech lotto will eradicate illegal jueteng. Petitioners are scandalized by this submission. They dismiss
gambling as evil per se and castigate government for attempting to correct a wrong by committing another wrong. In any event, the proper forum for this debate, however cerebrally
exciting it may be, is not this court but congress. So we held in PCSO v. Inopiquez, to wit: 14

By bringing their suit in the lower court, the private respondents in G.R. No. 79084 do not question the power of PCSO to conduct the Instant Sweepstakes game. Rather,
they assail the wisdom of embarking upon this project because of their fear of the "pernicious repercussions" which may be brought about by the Instant Sweepstakes
Game which they have labelled as "the worst form of gambling" which thus "affects the moral values" of the people.

The Court, as held in several cases, does not pass upon questions of wisdom, justice, or expediency of legislation and executive acts. It is not the province of the courts to
supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of
the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. (Italics supplied)

I am not also convinced that petitioners can justify their locus standi to advocate the rights of hypothetical third parties not before the court by invoking the need to keep inviolate section
11, Article XII of the Constitution which imposes a nationality requirement on operators of a public utility. For even assuming arguendo that PGMC is a public utility, still, the records do not
at the moment bear out the claim of petitioners that PGMC is a foreign owned and controlled corporation. This factual issue remains unsettled and is still the subject of litigation by the
parties in the Securities and Exchange Commission. We are not at liberty to anticipate the verdict on this contested factual issue. But over and above this consideration, I respectfully
submit that this constitutional provision does not confer on third parties any right of a preferred status comparable to the Bill of Rights whose dilution will justify petitioners to vindicate
them in behalf of its rightholders. The legal right of hypothetical third parties they profess to advocate is to my mind too impersonal, too unsubstantial, too indirect, too amorphous to
justify their access to this Court and the further lowering of the constitutional barrier of locus standi.

Again, with regret, I do not agree that the distinguished status of some of the petitioners as lawmakers gives them the appropriate locus standi. I cannot perceive how their constitutional
rights and prerogatives as legislators can be adversely affected by the contract in question. Their right to enact laws for the general conduct of our society remains unimpaired and
undiminished. 15 Their status as legislators, notwithstanding, they have to demonstrate that the said contract has caused them to suffer a personal, direct, and substantial injury in fact.
They cannot simply advance a generic grievance in common with the people in general.

I am not unaware of our ruling in De Guia v. Comelec, 16 viz:

Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for reelection, much less, that he is prejudiced by the
election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-
44640, October 12, 1976, 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533). He does not also allege any legal right that
has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action.

However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner
alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the
petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmena vs. Commission on Elections.

It is my respectful submission, however, that we should re-examine de Guia. It treated the rule on locus standi as a mere procedural rule. It is not a plain procedural rule but a constitutional
requirement derived from section 1, Article VIII of the Constitution which mandates courts of justice to settle only "actual controversies involving rights which are legally demandable and
enforceable." The phrase has been construed since time immemorial to mean that a party in a constitutional litigation must demonstrate a standing to sue. By downgrading the
requirement on locus standi as a procedural rule which can be discarded in the name of public interest, we are in effect amending the Constitution by judicial fiat.

De Guia would also brush aside the rule on locus standi if a case raises an important issue. In this regard, I join the learned observation of Mr. Justice Feliciano: "that it is not enough for the
Court simply to invoke 'public interest' or even 'paramount considerations of national interest,' and to say that the specific requirements of such public interest can only be ascertained on
a 'case to case' basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close to saying that locus standi exists whenever at
least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen."

I also submit that de Guia failed to perceive that the rule on locus standi has little to do with the issue posed in a case, however, important it may be. As well pointed out in Flast v. Cohen: 17

The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated.
The "gist of the question of standing" is whether the party seeking relief has "alleged such a personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions." Baker v. Carr, 369
U.S. 186, 204 (1962). In other words, when standing is placed in issue in a case, the question is whether the person whose standing is challenged is a proper party to
request an adjudication of a particular issue and not whether the issue itself is justiciable. Thus, a party may have standing in a particular case, but the federal court may
nevertheless decline to pass on the merits of the case because, for example, it presents a political question. A proper party is demanded so that federal courts will not be
asked to decide "ill-defined controversies over constitutional issues," United public Workers v. Mitchell, 330 U.S. 75, 90 (1947), or a case which is of "a hypothetical or
abstract character," Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240 (1937).

It is plain to see that in de Guia, the court took an unorthodox posture, to say the least. It held there was no proper party before it, and yet it resolved the issues posed by the petition. As
there was no proper party before the court, its decision is vulnerable to be criticized as an advisory opinion.

With due respect, the majority decision appears to have set a dangerous precedent by unduly trivializing the rule on locus standi. By its decision, the majority has entertained a public
action to annul a private contract. In so doing, the majority may have given sixty (60) million Filipinos the standing to assail contracts of government and its agencies. This is an invitation
for chaos to visit our law on contract, and certainly will not sit well with prospective foreign investors. Indeed, it is difficult to tread the path of the majority on this significant issue. The
majority granted locus standi to petitioners because of lack of any other party with more direct and specific interest. But one has standing because he has standing on his own and standing
cannot be acquired because others with standing have refused to come to court. The thesis is also floated that petitioners have standing as they can be considered taxpayers with right to
file derivative suit like a stockholder's derivative suit in private corporations. The fact, however, is that PCSO is not a private but a quasi-public corporation. Our law on private corporation
categorically sanctions stockholder's derivative suit. In contrast, our law on public corporation does not recognize this so-called taxpayer's derivative suit. Hence, the idea of a taxpayer's
derivative suit, while alluring, has no legal warrant.

Our brethren in the majority have also taken the unprecedented step of striking down a contrast at the importunings of strangers thereto, but without justifying the interposition of judicial
power on any felt need to prevent violation of an important constitutional provision. The contract in question was voided on the sole ground that it violated an ordinary statute, section 1 of
R.A. 1169, as amended by B.P. Blg. 42. If there is no provision of the Constitution that is involved in the case at bench, it boggles the mind how the majority can invoke considerations of
national interest to justify its abandonment of the rule on locus standi. The volume of noise created by the case cannot magically convert it to a case of paramount national importance. By
its ruling, the majority has pushed the Court in unchartered water bereft of any compass, and it may have foisted the false hope that it is the repository of all remedies.

If I pay an unwavering reverence to the rule of locus standi, it is because I consider it as a touchstone in maintaining the proper balance of power among the three branches of our
government. The survival of our democracy rests in a large measure on our ability to maintain this delicate equipoise of powers. For this reason, I look at judicial review from a distinct
prism. I see it both as a power and a duty. It is a power because it enables the judiciary to check excesses of the Executive and the Legislative. But, it is also a duty because its requirement
of locus standi, among others, Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, keeps the judiciary from overreaching the powers of
the other branches of government. By balancing this duality, we are able to breathe life to the principle of separation of powers and prevent tyranny. To be sure, it is our eternal concern to
prevent tyranny but that includes tyranny by ourselves. The Constitution did not install a government by the judiciary, nay, not a government by the unelected. In offering this submission, I
reject the sublimal fear that an unyielding insistence on the rule on locus standi will weaken the judiciary vis-a-vis the other branches of government. The hindsight of history ought to tell
us that it is not power per se that strengthens. Power unused is preferable than power misused. We contribute to constitutionalism both by the use of our power to decide and its non use.
As well said, the cases we decide are as significant as the cases we do not decide. Real power belongs to him who has power over power.

IN VIEW WHEREOF, and strictly on the ground of lack of locus standi on the part of petitioners, I vote to DENY the petition.

VITUG, J., dissenting:

Judicial power encompasses both an authority and duty to resolve "actual controversies involving rights which are legally demandable and enforceable" (Article VIII, Section 1, 1987
Constitution). As early as the case of Lamb vs. Phipps, 1 this Court ruled: "Judicial power, in its nature, is the power to hear and decide causes pending between parties who have the right to
sue in the courts of law and equity." 2 An essential part of, and corollary to, this principle is the locus standi of a party litigant, referring to one who is directly affected by, and whose interest
is immediate and substantial in, the controversy. The rule requires that a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a
favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. 3 If it were otherwise, the exercise of that
power can easily become too unwieldy by its sheer magnitude and scope to a point that may, in no small degree, adversely affect its intended essentiality, stability and consequentiality.

Locus standi, nevertheless, admits of the so-called "taxpayer's suit." Taxpayer's suits are actions or proceedings initiated by one or more taxpayers in their own behalf or, conjunctively, in
representation of others similarly situated for the purpose of declaring illegal or unauthorized certain acts of public officials which are claimed to be injurious to their common interests as
such taxpayers (Cf. 71 Am Jur 2d., 179-180). The principle is predicated upon the theory that taxpayers are, in equity, the cestui que trust of tax funds, and any illegal diminution thereof by
public officials constitutes a breach of trust even as it may result in an increased burden on taxpayers (Haddock vs. Board of Public Education, 86 A 2d 157; Henderson vs. McCormick, 17
ALR 2d 470).

Justice Brandeis of the United States Supreme Court, in his concurring opinion in Ashwander vs. Tennessee Valley Authority (297 U.S. 288), said:

. . . . The Court will not pass upon the validity of a statute upon complaint of one who fails to show that he is injured by its operation. Tyler v. The Judges, 179 U.S.
405; Hendrick v. Maryland, 234 U.S. 610, 621. Among the many applications of this rule, none is more striking than the denial of the right of challenge to one who lacks a
personal or property right. Thus, the challenge by a public official interested only in the performance of his official duty will not be entertained. Columbus & Greenville Ry.
v. Miller, 283 U.S. 96, 99-100. In Fairchild v. Hughes, 258 U.S. 126, the Court affirmed the dismissal of a suit brought by a citizen who sought to have the Nineteenth
Amendment declared unconstitutional. In Massachusetts v. Mellon, 262 U.S. 447, the challenge of the federal Maternity Act was not entertained although made by the
Commonwealth on behalf of all its citizens."

Justice Brandeis' view, shared by Justice Frankfurter in Joint Anti-Fascist Refugee Commission vs. McGrath (351 U.S. 123), was adopted by the U.S. Supreme Court in Flast vs. Cohen (392 U.S.
83) which held that it is only when a litigant is able to show such a personal stake in the controversy as to assure a concrete adverseness in the issues submitted that legal standing can
attach.

A "taxpayer's suit," enough to confer locus standi to a party, we have held before, is understood to be a case where the act complained of directly involves the illegal disbursement of public
funds derived from taxation. 4 It is not enough that the dispute concerns public funds. A contrary rule could easily lead to a limitless application of the term "taxpayer's suit," already by
itself a broad concept, since a questioned act of government would almost so invariably entail, as a practical matter, a financial burden of some kind.

To be sure, serious doubts have even been raised on the propriety and feasibility of unqualifiedly recognizing the "taxpayer's suit" as an exception from the standard rule of requiring a
party who invokes the exercise of judicial power to have a real and personal interest or a direct injury in the outcome of a controversy. This Court has heretofore spoken on the matter, at
times even venturing beyond the usual understanding of its applicability in the name of national or public interest. It is remarkable, nevertheless, that the accepted connotation of locus
standi has still managed to be the rule, sanctioning, by way of exception, the so-called "taxpayer's suit" which courts accept on valid and compelling reasons.

A provision which has been introduced by the 1987 Constitution is a definition, for the first time in our fundamental law, of the term "judicial power," as such authority and duty of courts
of justice "to settle actual controversies involving rights which are legally demandable and enforceable and to determine whether or not there has been a grave abuse of discretion,
amounting to lack or excess of jurisdiction, on the part of any branch or instrumentality of the Government" (Article VIII, Section 1, Constitution). I take it that the provision has not been
intended to unduly mutate, let alone to disregard, the long established rules on locus standi. Neither has it been meant, I most respectfully submit, to do away with the principle of
separation of powers and its essential incidents such as by, in effect, conferring omnipotence on, or allowing an intrusion by, the courts in respect to purely political decisions, the exercise
of which is explicitly vested elsewhere, and subordinate, to that of their own, the will of either the Legislative Department or the Executive Department both co- equal, independent and
coordinate branches, along with the Judiciary, in our system of government. Again, if it were otherwise, there indeed would be truth to the charge, in the words of some constitutionalists,
that "judicial tyranny" has been institutionalized by the 1987 Constitution, an apprehension which should, I submit, rather be held far from truth and reality.

In sum, while any act of government, be it executive in nature or legislative in character, may be struck down and declared a nullity either because it contravenes an express provision of
the Constitution or because it is perceived and found to be attended by or the result of grave abuse of discretion, amounting to lack or excess of jurisdiction, that issue, however, must first
be raised in a proper judicial controversy. The Court's authority to look into and grant relief in such cases would necessitate locus standi on the part of party litigants. This requirement, in
my considered view, is not merely procedural or technical but goes into the essence of jurisdiction and the competence of courts to take cognizance of justiciable disputes.

In Bugnay Construction and Development Corporation vs. Laron, 5 this Court ruled:
 . . . . Considering the importance to the public of a suit assailing the constitutionality of a tax law, and in keeping with the Court's duty, specially explicated in the 1987
Constitution, to determine whether or not the other branches of the Government have kept themselves within the limits of the Constitution and the laws and that they
have not abused the discretion given to them, the Supreme Court may brush aside technicalities of procedure and take cognizance of the suit. (Citing Kapatiran vs. Tan,
G.R. No. 81311, June 30, 1988.)

However, for the above rule to apply, it is exigent that the taxpayer-plaintiff sufficiently show that he would be benefited or injured by the judgment or entitled to the
avails of the suit as a real party in interest. (Citing Estate of George Litton vs. Mendoza, G.R. No. 49120, June 30, 1988.) Before he can invoke the power of judicial review,
he must specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation (citing 11 Am. Jur. 761; Dumlao, et al. vs.
Commission on Elections, 95 SCRA 392) and that he will sustain a direct injury as a result of the enforcement of the questioned statute or contract. (Citing Sanidad, et al.
vs. Commission on Elections, et al., 73 SCRA 333.) It is not sufficient that he has merely a general interest common to all members of the public. (Citing Ex Parte Levitt,
302 U.S. 633, cited in 15 SCRA 497, Annotation.)

As so well pointed out by Mr. Justice Camilo D. Quiason during the Court's deliberations, "due respect and proper regard for the rule on locus standi would preclude the rendition of
advisory opinions and other forms of pronouncement on abstract issues, avoid an undue interference on matters which are not justiciable in nature and spare the Court from getting itself
involved in political imbroglio."

The words of Senate President Edgardo J. Angara, carry wisdom; we quote:

The powers of the political branches of our government over economic policies is rather clear: the Congress is to set in broad but definite strokes the legal framework
and structures for economic development, while the Executive provides the implementing details for realizing the economic ends identified by Congress and executes
the same.

xxx xxx xxx

If each economic decision made by the political branches of government, particularly by the executive, are fully open to re-examination by the judicial branch, then very
little, if any, reliance can be placed by private economic actors on those decisions. Investors would always have to factor in possible costs arising from judicially-
determined changes affecting their immediate business, notwithstanding assurances by executive authorities.

Judicial decisions are, in addition, inflexible and can never substitute for sound decision-making at the level of those who are assigned to execute the laws of the land.
Since judicial power cannot be exercised unless an actual controversy is brought before the courts for resolution, decisions cannot be properly modified unless another
appropriate controversy arises." (Sen. Edgardo J. Angara, "The Supreme Court in Economic Policy Making," Policy Review A Quarterly Journal of Policy Studies, Vol. 1,
No. 1, January-March 1994, published by the Senate Policy Studies Group, pp. 2-3.)

A further set-back in entertaining the petition is that it unfortunately likewise strikes at factual issues. The allegations to the effect that irregularities have been committed in the processing
and evaluation of the bids to favor respondent PGMC; that the Malacaang Special Review Committee did not verify warranties embodied in the contract; that the operation of
telecommunication facilities is indispensable in the operation of the lottery system; the involvement of multi-national corporations in the operation of the on-line "hi-tech" lottery system,
and the like, require the submission of evidence. This Court is not a trier of facts, and it cannot, at this time, resolve the above issues. Just recently, the Court has noted petitioners'
manifestation of its petition with the Securities and Exchange Commission "for the nullification of the General Information Sheets of PGMC" in respect particularly to the nationality
holdings in the corporation. The doctrine of primary jurisdiction would not justify a disregard of the jurisdiction of, nor would it permit us to now preempt, said Commission on the matter.

Petitioners strongly assert, in an attempt to get the Court's concurrence in accepting the petition, that since lottery is a game of chance, the "lotto" system would itself be a "crime against
morals" defined by Articles 195-199 6 of the Revised Penal Code.

Being immoral and a criminal offense under the Revised Penal Code, petitioners contend, any special law authorizing gambling must, by all canons of statutory constructions, be
interpreted strictly against the grantee. Citing previous decisions of this Court, they maintain that lottery is gambling, pure and simple, 7 and that this Court has consistently condemned the
immorality and illegality of gambling to be a "national offense and not a minor transgression;" 8"that it is a social scourge which must be stamped out;" 9 and, "that it is pernicious to the
body politic and detrimental to the nation and its citizens." 10
I most certainly will not renounce this Court's above concerns. Nevertheless, the Court must recognize the limitations of its own authority. Courts neither legislate nor ignore legal
mandates. Republic Act No. 1169, as amended, explicitly gives public respondent

PCSO the authority and power "to hold and conduct sweepstakes races, lotteries, and other similar activities." In addition, it is authorized:

c. To undertake any other activity that will enhance its funds generation, operations and funds management capabilities, subject to the same limitations provided for in
the preceding paragraph.

It shall have a Board of Directors, hereinafter designated the Board, composed of five members who shall be appointed, and whose compensation and term of office shall
be fixed, by the President.

xxx xxx xxx

Sec.9. Powers and functions of the Board of Directors. The Board of Directors of the Office shall have the following powers and functions.

(a) To adopt or amend such rules and regulations to implement the provisions of this Act.

xxx xxx xxx

(d) To promulgate rules and regulations for the operation of the Office and to do such act or acts as may be necessary for the attainment of its purposes and objectives.
(Emphasis supplied).

In People vs. Dionisio, 11 cited by the petitioners themselves, we remarked: "What evils should be corrected as pernicious to the body politic, and how correction should be done, is a
matter primarily addressed to the discretion of the legislativedepartment, not of the courts . . . ." In Valmonte vs. PCSO, 12 we also said:

The Court, as held in several cases, does not pass upon questions of wisdom, justice or expediency of legislation and executive acts. It is not the province of the courts to
supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of
the political departments of the government; otherwise, there will be a violation of the principle of separation of powers.

The constraints on judicial power are clear. I feel, the Court must thus beg off, albeit not without reluctance, from giving due course to the instant petition.

Accordingly, I vote for the dismissal of the petition.

KAPUNAN, J., dissenting:

I regret that I am unable to join my colleagues in the majority in spite of my own personal distaste for gambling and other gaming operations. Such considerations aside, I feel there are
compelling reasons why the instant petition should be dismissed. I shall forthwith state the reasons why.

Petitioners anchor their principal objections against the contract entered into between the Philippine Charity Sweepstakes Office (PCSO) and the PGMC on the ground that the contract
entered into by the PCSO with the PGMC violates the PCSO Charter (R.A. No. 1169 as amended by B.P. Blg 427, specifically section 1 thereof which bars the said body from holding
conducting lotteries "in collaboration, association or joint venture with any person association, company or entity."). However, a perusal of the petition reveals that the compelling reasons
behind it, while based on apparently legal questions involving the contract between the PCSO and the PGMC, are prompted by the petitioners' moral objections against the whole idea of
gambling operations operated by the government through the PCSO. The whole point of the petition, in essence, is a fight between good and evil, between the morality or amorality of
lottery operations conducted on a wide scale involving millions of individuals and affecting millions of lives. Their media of opposition are the above stated defects in the said contract
which they assail to be fatally defective. They come to this Court, as taxpayers and civic spirted citizens, asserting a right of standing on a transcendental issue which they assert to be of
paramount public interest.
Moral or legal questions aside, I believe that there are unfortunately certain standards 1 that have to be followed in the exercise of this Court's awesome power of review before this Court
could even begin to assay the validity of the contract between the PCSO and the PGMC. This, in spite of the apparent expansion of judicial power granted by Section 1 of Article VIII of the
1987 Constitution. It is fundamental that such standards be complied with before this Court could even begin to explore the substantive issues raised by any controversy brought before it,
for no issue brought before this court could possibly be so fundamental and paramount as to warrant a relaxation of the requisite rules for judicial review developed by settled
jurisprudence inorder to avoid entangling this court in controversies which properly belong to the legislative or executive branches of our government. The potential harm to our system of
government, premised on the concept of separation of powers, by the Court eager to exercise its powers and prerogatives at every turn, cannot be gainsaid. The Constitution does not
mandate this Court to wield the power of judicial review with excessive vigor and alacrity in every area or at every turn, except in appropriate cases and controversies which meet
established requirements for constitutional adjudication. Article VIII Sec. 1 of the Constitution notwithstanding, there are questions which I believe are still beyond the pale of judicial
power. Moreover, it is my considered opinion that the instant petition does not meet the requirements set by this court for a valid exercise of judicial review.

Our Constitution expressly defines judicial power as including "the duty to settle actual cases and controversies involving rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of discretion amounting to a lack or excess of jurisdiction on the part of any branch or instrumentality of the government." 2 This
constitutional requirement for an actual case and controversy limits this Court's power of review to precisely those suits between adversary litigants with real interests at stake 2 thus
preventing it from making all sorts of hypothetical pronouncements on abstract, contingent and amorphous issues. The Court will therefore not pass upon the validity of an act of
government or a statute passed by a legislative body without a requisite showing of injury. 3 A personal stake is essential, which absence renders our pronouncements gratuitous and
certainly violative of the constitutional requirement for actual cases and controversies.

The requirement for standing based on personal injury may of course be bypassed, as the petitioners in this case attempt to do, by considering the case as a "taxpayer suit" which would
thereby clothe them with the personality they would lack under ordinary circumstances. However, the act assailed by the petitioners on the whole involves the generation rather than
disbursement of public funds. In a line of cases starting from Pascual v. Secretary of Public Works 4 "taxpayer suits" have been understood to refer only to those cases where the act or
statute assailed involves the illegal or unconstitutional disbursement of public funds derived from taxation. The main premise behind the "taxpayer suit" is that the pecuniary interest of
the taxpayer is involved whenever there is an illegal or wasteful use of public funds which grants them the right to question the appropriation or disbursement on the basis of their
contribution to government funds. 5 Since it has not been alleged that an illegal appropriation or disbursement of a fund derived from taxation would be made in the instant case, I fail to
see how the petitioners in this case would be able to satisfy the locus standi requirement on the basis of a "taxpayer's suit". This alone should inhibit this Court from proceeding with the
case at bench. The interest alleged and the potential injury asserted are far too general and hypothetical for us to rush into a judicial determination of what to me appears to be judgment
better left to executive branch of our government.

This brings me to one more important point: The idea that a norm of constitutional adjudication could be lightly brushed aside on the mere supposition that an issue before the Court is of
paramount public concern does great harm to a democratic system which espouses a delicate balance between three separate but co-equal branches of government. It is equally of
paramount public concern, certainly paramount to the survival of our democracy, that acts of the other branches of government are accorded due respect by this Court. Such acts, done
within their sphere of competence, have been and should always be accorded with a presumption of regularity. When such acts are assailed as illegal or unconstitutional, the burden
falls upon those who assail these acts to prove that they satisfy the essential norms of constitutional adjudication, because when we finally proceed to declare an act of the executive or
legislative branch of our government unconstitutional or illegal, what we actually accomplish is the thwarting of the will of the elected representatives of the people in the executive or
legislative branches government.6 Notwithstanding Article VIII, Section 1 of the Constitution, since the exercise of the power of judicial review by this Court is inherently antidemocratic,
this Court should exercise a becoming modesty in acting as a revisor of an act of the executive or legislative branch. The tendency of a frequent and easy resort to the function of judicial
review, particularly in areas of economic policy has become lamentably too common as to dwarf the political capacity of the people expressed through their representatives in the policy
making branches of government and to deaden their sense of moral responsibility. 7

This court has been accused, of late, of an officious tendency to delve into areas better left to the political branches of government. 8 This tendency, if exercised by a court running riot over
the other co-equal branches of government, poses a greater danger to our democratic system than the perceived danger real or imagined of an executive branch espousing economic
or social policies of doubtful moral worth. Moreover economic policy decisions in the current milieu- including the act challenged in the instant case-involve complex factors requiring
flexibility and a wide range of discretion on the part of our economic managers which this Court should respect because our power of review, under the constitution, is a power to check,
not to supplant those acts or decisions of the elected representatives of the people.

Finally, the instant petition was brought to this Court on the assumption that the issue at bench raises primarily constitutional issues. As it has ultimately turned out, the core foundation of
the petitioners' objections to the LOTTO operations was based on the validity of the contract between the PCSO and the PGMC in the light of Section 1 of R.A. 1169 as amended by B.P. Blg.
427. It might have been much more appropriate for the issue to have taken its normal course in the courts below.

I vote to deny the petition.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 118910 November 16, 1995

KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE
ABCEDE, CHRISTINE TAN, RAFAEL G. FERNANDO, RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE WEBB, SEN. WIGBERTO TAADA, REP. JOKER P.
ARROYO, petitioners,
vs.
MANUEL L. MORATO, in his capacity as Chairman of the Philippine Charity Sweepstakes Office, and the PHILIPPINE GAMING MANAGEMENT CORPORATION, respondents.

RESOLUTION

MENDOZA, J.:

Petitioners seek reconsideration of our decision in this case. They insist that the decision in the first case has already settled (1) whether petitioner Kilosbayan, Inc. has a standing to sue
and (2) whether under its charter (R.A. No. 1169, as amended) the Philippine Charity Sweepstakes Office can enter into any form of association or collaboration with any party in operating
an on-line lottery. Consequently, petitioners contend, these questions can no longer be reopened.

Because two members of the Court did not consider themselves bound by the decision in the first case, petitioners suggest that the two, in joining the dissenters in the first case in
reexamining the questions in the present case, acted otherwise than according to law. They cite the following statement in the opinion of the Court:

The voting on petitioners' standing in the previous case was a narrow one, with seven (7) members sustaining petitioners' standing and six (6) denying petitioners' right
to bring the suit. The majority was thus a tenuous one that is not likely to be maintained in any subsequent litigation. In addition, there have been changes in the
membership of the Court, with the retirement of Justices Cruz and Bidin and the appointment of the writer of this opinion and Justice Francisco. Given this fact it is
hardly tenable to insist on the maintenance of the ruling as to petitioners' standing.

Petitioners claim that this statement "conveys a none too subtle suggestion, perhaps a Freudian slip, that the two new appointees, regardless of the merit of the Decision in the
first Kilosbayan case against the lotto (Kilosbayan, et al. v. Guingona, 232 SCRA 110 (1994)) must of necessity align themselves with all the Ramos appointees who were
dissenters in the first case and constitute the new majority in the second lotto case." And petitioners ask, "why should it be so?"

Petitioners ask a question to which they have made up an answer. Their attempt at psychoanalysis, detecting a Freudian slip where none exists, may be more revealing of their own
unexpressed wish to find motives where there are none which they can impute to some members of the Court.

For the truth is that the statement is no more than an effort to explain rather than to justify the majority's decision to overrule the ruling in the previous case. It is simply meant to
explain that because the five members of the Court who dissented in the first case (Melo, Quiason, Puno, Vitug and Kapunan, JJ.) and the two new members (Mendoza and Francisco, JJ.)
thought the previous ruling to be erroneous and its reexamination not to be barred by stare decisis, res judicata or conclusiveness of judgment, or law of the case, it was hardly tenable for
petitioners to insist on the first ruling.
Consequently to petitioners' question "What is the glue that holds them together," implying some ulterior motives on the part of the new majority in reexamining the two questions, the
answer is: None, except a conviction on the part of the five, who had been members of the Court at the time they dissented in the first case, and the two new members that the previous
ruling was erroneous. The eighth Justice (Padilla, J.) on the other hand agrees with the seven Justices that the ELA is in a real sense a lease agreement and therefore does not violate R.A. No.
1169.

The decision in the first case was a split decision: 7-6. With the retirement of one of the original majority (Cruz, J.) and one of the dissenters (Bidin, J.) it was not surprising that the first
decision in the first case was later reversed.

It is argued that, in any case, a reexamination of the two questions is barred because the PCSO and the Philippine Gaming Management Corporation made a " formal commitment not to ask
for a reconsideration of the Decision in the first lotto case and instead submit a new agreement that would be in conformity with the PCSO Charter (R.A. No. 1169, as amended) and with
the Decision of the Supreme Court in the first Kilosbayan case against on-line, hi-tech lotto."

To be sure, a new contract was entered into which the majority of the Court finds has been purged of the features which made the first contract objectionable. Moreover, what the PCSO
said in its manifestation in the first case was the following:

1. They are no longer filing a motion for reconsideration of the Decision of this Honorable Court dated May 5, 1994, a copy of which was received on May 6, 1994.

2. Respondents PCSO and PGMC are presently negotiating a new lease agreement consistent with the authority of PCSO under its charter (R.A. No. 1169, as amended by
B.P. Blg. 42) and conformable with the pronouncements of this Honorable Court in its Decision of May 5, 1995.

The PGMC made substantially the same manifestation as the PCSO.

There was thus no "formal commitment" but only a manifestation that the parties were not filing a motion for reconsideration. Even if the parties made a "formal commitment," the
six (6) dissenting Justices certainly could not be bound thereby not to insist on their contrary view on the question of standing. Much less were the two new members bound by any "formal
commitment" made by the parties. They believed that the ruling in the first case was erroneous. Since in their view reexamination was not barred by the doctrine of stare decisis, res
judicata or conclusiveness of judgment or law of the case, they voted the way they did with the remaining five (5) dissenters in the first case to form a new majority of eight.

Petitioners ask, "Why should this be so?" Because, as explained in the decision, the first decision was erroneous and no legal doctrine stood in the way of its reexamination. It can, therefore,
be asked "with equal candor": "Why should this not be so?"

Nor is this the first time a split decision was tested, if not reversed, in a subsequent case because of change in the membership of a court. In 1957, this Court, voting 6-5, held in Feliciano
v. Aquinas, G.R. No. L-10201, Sept. 23, 1957 that the phrase "at the time of the election" in 2174 of the Revised Administrative Code of 1917 meant that a candidate for municipal elective
position must be at least 23 years of age on the date of the election. On the other hand, the dissenters argued that it was enough if he attained that age on the day he assumed office.

Less than three years later, the same question was before the Court again, as a candidate for municipal councilor stated under oath in her certificate of candidacy that she was eligible for
that position although she attained the requisite age (23 years) only when she assumed office. The question was whether she could be prosecuted for falsification. In People v. Yang, 107
Phi. 888 (1960), the Court ruled she could not. Justice, later Chief Justice, Benison, who dissented in the first case, Feliciano v. Aquinas, supra, wrote the opinion of the Court, holding that
while the statement that the accused was eligible was "inexact or erroneous, according to the majority in the Feliciano case," the accused could not be held liable for falsification, because

the question [whether the law really required candidates to have the required age on the day of the election or whether it was sufficient that they attained it at the
beginning of the term of office] has not been discussed anew, despite the presence of new members; we simply assume for the purpose of this decision that the doctrine
stands.

Thus because in the meantime there had been a change in the membership of the Court with the retirement of two members (Recess and Flex, JJ.) who had taken part in the decision in the
first case and their replacement by new members (Barrera and Gutierrez-David, JJ.) and the fact that the vote in the first case was a narrow one (6 to 5), the Court allowed that the
continuing validity of its ruling in the first case might well be doubted. For this reason it gave the accused the benefit of the doubt that she had acted in the good faith belief that it was
sufficient that she was 23 years of age when she assumed office.
In that case, the change in the membership of the Court and the possibility of change in the ruling were noted without anyone much less would-be psychoanalysts finding in the
statement of the Court any Freudian slip. The possibility of change in the rule as a result of change in membership was accepted as a sufficient reason for finding good faith and lack of
criminal intent on the part of the accused.

Indeed, a change in the composition of the Court could prove the means of undoing an erroneous decision. This was the lesson of Knox v. Lee, 12 Wall. 457 (1871). The Legal Tender Acts,
which were passed during the Civil War, made U.S. notes (greenbacks) legal tender for the payment of debts, public or private, with certain exceptions. The validity of the acts, as applied to
preexisting debts, was challenged in Hepburn v. Griswold, 8 Wall. 603 (1869). The Court was then composed of only eight (8) Justices because of Congressional effort to limit the appointing
power of President Johnson. Voting 5-3, the Court declared the acts void. Chief Justice Chase wrote the opinion of the Court in which four others, including Justice Grier, concurred. Justices
Miller, Swayne and Davis dissented. A private memorandum left by the dissenting Justices described how an effort was made "to convince an aged and infirm member of the court [Justice
Grier] that he had not understood the question on which he voted," with the result that what was originally a 4-4 vote was converted into a majority (5-3) for holding the acts invalid.

On the day the decision was announced, President Grant nominated to the Court William Strong and Joseph P. Bradley to fill the vacancy caused by the resignation of Justice Grier and to
restore the membership of the Court to nine. In 1871, Hepburn v. Griswold was overruled in the Legal Tender Cases, as Knox v. Lee came to be known, in an opinion by Justice Strong, with a
dissenting opinion by Chief Justice Chase and the three other surviving members of the former majority. There were allegations that the new Justices were appointed for their known views
on the validity of the Legal Tender Acts, just as there were others who defended the character and independence of the new Justices. History has vindicated the overruling of the Hepburn
case by the new majority. The Legal Tender Cases proved to be the Court's means of salvation from what Chief Justice Hughes later described as one of the Court's "self-inflicted wounds." 1

We now consider the specific grounds for petitioners' motion for reconsideration.

I. We have held that because there are no genuine issues of constitutionality in this case, the rule concerning real party in interest, applicable to private litigation rather than the more
liberal rule on standing, applies to petitioners. Two objections are made against that ruling: (1) that the constitutional policies and principles invoked by petitioners, while not supplying
the basis for affirmative relief from the courts, may nonetheless be resorted to for striking down laws or official actions which are inconsistent with them and (2) that the Constitution, by
guaranteeing to independent people's organizations "effective and reasonable participation at all levels of social, political and economic decision-making" (Art. XIII, 16), grants them
standing to sue on constitutional grounds.

The policies and principles of the Constitution invoked by petitioner read:

Art. II, 5. The maintenance of peace and order, the protection life, liberty, and property, and the promotion of the general welfare are essential for the enjoyment by all
the people of the blessings of democracy.

Id., 12. The natural and primary right and duty of parents in the rearing of the youth for civic efficiency and the development of moral character shall receive the support
of the Government.

Id., 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being.
It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Id., 17. The State shall give priority to education, science and technology, arts, culture, and sports to foster patriotism and nationalism, accelerate social progress, and
promote total human liberation and development.

As already stated, however, these provisions are not self-executing. They do not confer rights which can be enforced in the courts but only provide guidelines for legislative or executive
action. By authorizing the holding of lottery for charity, Congress has in effect determined that consistently with these policies and principles of the Constitution, the PCSO may be given
this authority. That is why we said with respect to the opening by the PAGCOR of a casino in Cagayan de Oro, "the morality of gambling is not a justiciable issue. Gambling is not illegal per
se. . . . It is left to Congress to deal with the activity as it sees fit." (Magtajas v. Pryce Properties Corp., Inc., 234 SCRA 255, 268 [1994]).

It is noteworthy that petitioners do not question the validity of the law allowing lotteries. It is the contract entered into by the PCSO and the PGMC which they are assailing. This case,
therefore, does not raise issues of constitutionality but only of contract law, which petitioners, not being privies to the agreement, cannot raise.
Nor does Kilosbayan's status as a people's organization give it the requisite personality to question the validity of the contract in this case. The Constitution provides that "the State shall
respect the role of independent people's organizations to enable the people to pursue and protect, within the democratic framework, their legitimate and collective interests and
aspirations through peaceful and lawful means," that their right to "effective and reasonable participation at all levels of social, political, and economic decision-making shall not be
abridged." (Art. XIII, 15-16)

These provisions have not changed the traditional rule that only real parties in interest or those with standing, as the case may be, may invoke the judicial power. The jurisdiction of this
Court, even in cases involving constitutional questions, is limited by the "case and controversy" requirement of Art. VIII, 5. This requirement lies at the very heart of the judicial function. It
is what differentiates decision-making in the courts from decision-making in the political departments of the government and bars the bringing of suits by just any party.

Petitioners quote extensively from the speech of Commissioner Garcia before the Constitutional Commission, explaining the provisions on independent people's organizations. There is
nothing in the speech, however, which supports their claim of standing. On the contrary, the speech points the way to the legislative and executive branches of the government, rather than
to the courts, as the appropriate fora for the advocacy of petitioners' views.2 Indeed, the provisions on independent people's organizations may most usefully be read in connection with
the provision on initiative and referendum as a means whereby the people may propose or enact laws or reject any of those passed by Congress. For the fact is that petitioners' opposition
to the contract in question is nothing more than an opposition to the government policy on lotteries.

It is nevertheless insisted that this Court has in the past accorded standing to taxpayers and concerned citizens in cases involving "paramount public interest." Taxpayers, voters, concerned
citizens and legislators have indeed been allowed to sue but then only (1) in cases involving constitutional issues and
(2) under certain conditions. Petitioners do not meet these requirements on standing.

Taxpayers are allowed to sue, for example, where there is a claim of illegal disbursement of public funds. (Pascual v. Secretary of Public Works, 110 Phi. 331 (1960); Sanidad v. Comelec, 73
SCRA 333 (1976); Bugnay Const. & Dev. v. Laron, 176 SCRA 240 (1989); City Council of Cebu v. Cuizon, 47 SCRA 325 [1972]) or where a tax measure is assailed as unconstitutional. (VAT
Cases [Tolentino v. Secretary of Finance], 235 SCRA 630 [1994]) Voters are allowed to question the validity of election laws because of their obvious interest in the validity of such laws.
(Gonzales v. Comelec, 21 SCRA 774 [1967]) Concerned citizens can bring suits if the constitutional question they raise is of "transcendental importance" which must be settled early.
(Emergency Powers Cases [Araneta v. Dinglasan], 84 Phi. 368 (1949); Iloilo Palay and Corn Planters Ass'n v. Feliciano, 121 Phi. 358 (1965); Philconsa v. Gimenez, 122 Phi. 894 (1965); CLU
v. Executive Secretary, 194 SCRA 317 [1991]) Legislators are allowed to sue to question the validity of any official action which they claim infringes their prerogatives qua legislators.
(Philconsa v. Enriquez, 235 506 (1994); Guingona v. PCGG, 207 SCRA 659 (1992); Gonzales v. Macaraig, 191 SCRA 452 (1990); Tolentino v. Comelec, 41 SCRA 702 (1971); Tatad v. Garcia,
G.R. No. 114222, April 16, 1995 (Mendoza, J., concurring))

Petitioners do not have the same kind of interest that these various litigants have. Petitioners assert an interest as taxpayers, but they do not meet the standing requirement for bringing
taxpayer's suits as set forth in Dumlao v. Comelec, 95 SCRA 392, 403 (1980), to wit:

While, concededly, the elections to be held involve the expenditure of public moneys, nowhere in their Petition do said petitioners allege that their tax money is "being
extracted and spent in violation of specific constitutional protections against abuses of legislative power" (Flast v. Cohen, 392 U.S., 83 [1960]), or that there is a
misapplication of such funds by respondent COMELEC (see Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]), or that public money is being deflected to any
improper purpose. Neither do petitioners seek to restrain respondent from wasting public funds through the enforcement of an invalid or unconstitutional law.
(Philippine Constitution Association vs. Mathay, 18 SCRA 300 [1966]), citing Philippine Constitution Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the
institution of a taxpayer's suit, per se, is no assurance of judicial review. As held by this Court in Tan vs. Macapagal (43 SCRA 677 [1972]), speaking through our present
Chief Justice, this Court is vested with discretion as to whether or not a taxpayer's suit should be entertained. (Emphasis added)

Petitioners' suit does not fall under any of these categories of taxpayers' suits.

Neither do the other cases cited by petitioners support their contention that taxpayers have standing to question government contracts regardless of whether public funds are involved or
not. In Gonzales v. National Housing, Corp., 94 SCRA 786 (1979), petitioner filed a taxpayer's suit seeking the annulment of a contract between the NHC and a foreign corporation. The case
was dismissed by the trial court. The dismissal was affirmed by this Court on the grounds of res judicata and pendency of a prejudicial question, thus avoiding the question of petitioner's
standing.
On the other hand, in Gonzales v. Raquiza, 180 SCRA 254 (1989), petitioner sought the annulment of a contract made by the government with a foreign corporation for the purchase of road
construction equipment. The question of standing was not discussed, but even if it was, petitioner's standing could be sustained because he was a minority stockholder of the Philippine
National Bank, which was one of the defendants in the case.

In the other case cited by petitioners, City Council of Cebu v. Cuizon, 47 SCRA 325 (1972), members of the city council were allowed to sue to question the validity of a contract entered into
by the city government for the purchase of road construction equipment because their contention was that the contract had been made without their authority. In addition, as taxpayers
they had an interest in seeing to it that public funds were spent pursuant to an appropriation made by law.

But, in the case at bar, there is an allegation that public funds are being misapplied or misappropriated. The controlling doctrine is that of Gonzales v. Marcos, 65 SCRA 624 (1975) where it
was held that funds raised from contributions for the benefit of the Cultural Center of the Philippines were not public funds and petitioner had no standing to bring a taxpayer's suit to
question their disbursement by the President of the Philippines.

Thus, petitioners' right to sue as taxpayers cannot be sustained. Nor as concerned citizens can they bring this suit because no specific injury suffered by them is alleged. As for the
petitioners, who are members of Congress, their right to sue as legislators cannot be invoked because they do not complain of any infringement of their rights as legislators.

Finally, in Valmonte v. PCSO, G.R. No. 78716, September 22, 1987, we threw out a petition questioning another form of lottery conducted by the PCSO on the ground that petitioner, who
claimed to be a "citizen, lawyer, taxpayer and father of three minor children," had no direct and personal interest in the lottery. We said: "He must be able to show, not only that the law is
invalid, but also that he has sustained or is in immediate danger of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite
way. It must appear that the person complaining has been or is about to be denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or
penalties by reason of the statute complained of." In the case at bar, petitioners have not shown why, unlike petitioner in the Valmonte case, they should be accorded standing to bring this
suit.

The case of Oposa v. Factoran, Jr. 224 SCRA 792 (1993) is different. Citizens' standing to bring a suit seeking the cancellation of timber licenses was sustained in that case because the Court
considered Art. II, 16 a right-conferring provision which can be enforced in the courts. That provision states:

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

In contrast, the policies and principles invoked by petitioners in this case do not permit of such categorization.

Indeed, as already stated, petitioners' opposition is not really to the validity of the ELA but to lotteries which they regard to be immoral. This is not, however, a legal issue, but a policy
matter for Congress to decide and Congress has permitted lotteries for charity.

Nevertheless, although we have concluded that petitioners do not have standing, we have not stopped there and dismissed their case. For in the view we take, whether a party has a cause
of action and, therefore, is a real party in interest or one with standing to raise a constitutional question must turn on whether he has a right which has been violated. For this reason the
Court has not ducked the substantive issues raised by petitioners.

II. R.A. No. 1169, as amended by B.P No . 42, states:

1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government agency
for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general powers
conferred in section thirteen of Act Numbered One Thousand Four Hundred Fifty-Nine, as amended, and shall have the authority:

A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules
and regulations as shall be promulgated by the Board of Directors.
 B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and activities which may be
profit-oriented, by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, except for the
activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and continuing sources of funds for health programs, including the
expansion of existing ones, medical assistance and services, and/or charitable grants: Provided, That such investments will not compete with the private sector in areas
where investments are adequate as may be determined by the National Economic and Development Authority.

Petitioners insist on the ruling in the previous case that the PCSO cannot hold and conduct charity sweepstakes, lotteries and other similar activities in collaboration, association or joint
venture with any other party because of the clause "except for the activities mentioned in the preceding paragraph (A)" in paragraph (B) of 1. Petitioners contend that the ruling is the law
of this case because the parties are the same and the case involves the same issue, i.e., the meaning of this statutory provision.

The "law of the case" doctrine is inapplicable, because this case is not a continuation of the first one. Petitioners also say that inquiry into the same question as to the meaning of the
statutory provision is barred by the doctrine of res judicata. The general rule on the "conclusiveness of judgment," however, is subject to the exception that a question may be reopened if it
is a legal question and the two actions involve substantially different claims. This is generally accepted in American law from which our Rules of Court was adopted. (Montana v. United
States, 440 U.S. 59 L.Ed.2d 147, 210 (1979); RESTATEMENT OF THE LAW 2d, ON JUDGMENTS, 28; P. BATOR, D. MELTZER, P. MISHKIN AND D. SHAPIRO, THE FEDERAL COURTS AND THE
FEDERAL SYSTEM 1058, n.2 [3rd Ed., 1988]) There is nothing in the record of this case to suggest that this exception is inapplicable in this jurisdiction.

Indeed, the questions raised in this case are legal questions and the claims involved are substantially different from those involved in the prior case between the parties. As already stated,
the ELA is substantially different from the Contract of Lease declared void in the first case.

Borrowing from the dissenting opinion of Justice Feliciano, petitioners argue that the phrase "by itself or in collaboration, association or joint venture with any other party" qualifies not
only 1 (B) but also 1 (A), because the exception clause ("except for the activities mentioned in the preceding paragraph [A]") "operates, as it were, as a renvoi clause which refers back to
Section 1(A) and in this manner avoids the necessity of simultaneously amending the text of Section 1(A)."

This interpretation, however, fails to take into account not only the location of the phrase in paragraph (B), when it should be in paragraph (A) had that been the intention of the lawmaking
authority, but also the phrase "by itself." In other words, under paragraph (B), the PCSO is prohibited from "engag[ing] in . . . investments, programs, projects and activities" if these involve
sweepstakes races, lotteries and other similar activities not only "in collaboration, association or joint venture" with any other party but also "by itself." Obviously, this prohibition cannot
apply when the PCSO conducts these activities itself. Otherwise, what paragraph (A) authorizes the PCSO to do, paragraph (B) would prohibit.

The fact is that the phrase in question does not qualify the authority of the PCSO under paragraph (A), but rather the authority granted to it by paragraph (B). The amendment of paragraph
(B) by B.P. Blg. 42 was intended to enable the PCSO to engage in certain investments, programs, projects and activities for the purpose of raising funds for health programs and charity.
That is why the law provides that such investments by the PCSO should "not compete with the private sector in areas where investments are adequate as may be determined by the
National Economic and Development Authority." Justice Davide, then an Assemblyman, made a proposal which was accepted, reflecting the understanding that the bill they were discussing
concerned the authority of the PCSO to invest in the business of others. The following excerpt from the Record of the Batasan Pambansa shows this to be the subject of the discussion:

MR. DAVIDE. May I introduce an amendment after "adequate". The intention of the amendment is not to leave the determination of whether it is adequate or not to
anybody. And my amendment is to add after "adequate" the words AS MAY BE DETERMINED BY THE NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY. As a
mater of fact, it will strengthen the authority to invest in these areas, provided that the determination of whether the private sector's activity is already adequate must be
determined by the National Economic and Development Authority.

Mr. ZAMORA. Mr. Speaker, the committee accepts the proposed amendment.

MR. DAVIDE. Thank you, Mr. Speaker.

(2 RECORD OF THE BATASAN PAMBANSA, Sept. 6, 1979,

p. 1007)
Thus what the PCSO is prohibited from doing is from investing in a business engaged in sweepstakes races, lotteries and other similar activities. It is prohibited from doing so whether "in
collaboration, association or joint venture" with others or "by itself." This seems to be the only possible interpretation of 1 (A) and (B) in light of its text and its legislative history. That there
is today no other entity engaged in sweepstakes races, lotteries and the like does not detract from the validity of this interpretation.

III. The Court noted in its decision that the provisions of the first contract, which were considered to be features of a joint venture agreement, had been removed in the new contract. For
instance, 5 of the ELA provides that in the operation of the on-line lottery, the PCSO must employ "its own competent and qualified personnel." Petitioners claim, however, that the
"contemporaneous interpretation" of PGMC officials of this provision is otherwise. They cite the testimony of Glen Barroga of the PGMC before a Senate committee to the effect that under
the ELA the PGMC would be operating the lottery system "side by side" with PCSO personnel as part of the transfer of technology.

Whether the transfer of technology would result in a violation of PCSO's franchise should be determined by facts and not by what some officials of the PGMC state by way of opinion. In the
absence of proof to the contrary, it must be presumed that 5 reflects the true intention of the parties. Thus, Art. 1370 of the Civil Code says that "If the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control." The intention of the parties must be ascertained from their
"contemporaneous and subsequent acts." (Art. 1371; Atlantic Gulf Co. v. Insular Government, 10 Phil. 166 [1908]) It cannot simply be judged from what one of them says. On the other
hand, the claim of third parties, like petitioners, that the clause on upgrading of equipment would enable the parties after a while to change the contract and enter into something else in
violation of the law is mere speculation and cannot be a basis for judging the validity of the contract.

IV. It is contended that 1 of E.O. No. 301 covers all types of "contract[s] for public services or for furnishing of supplies, materials and equipment to the government or to any of its
branches, agencies or instrumentalities" and not only contracts of purchase and sale. Consequently, a lease of equipment, like the ELA, must be submitted to public bidding in order to be
valid. This contention is based on two premises: (1) that 1 of E.O. No. 301 applies to any contract whereby the government acquires title to or the use of the equipment and (2) that the
words "supplies," "materials," and "equipment" are distinct from each other so that when an exception in 1 speaks of "supplies," it cannot be construed to mean "equipment."

Petitioners' contention will not bear analysis. For example, the term "supplies" is used in paragraph (a), which provides that a contract for the furnishing of "supplies" in order to meet an
emergency is exempt from public bidding. Unless "supplies" is construed to include "equipment," however, the lease of heavy equipment needed for rescue operations in case of a calamity
will have to be submitted to public bidding before it can be entered into by the government.

In dissent Justice Feliciano says that in such a situation the government can simply resort to expropriation, paying compensation afterward. This is just like purchasing the equipment
through negotiation when the question is whether the purchase should be by public bidding, not to mention the fact that the power to expropriate may not be exercised when the
government can very well negotiate with private owners.

Indeed, there are fundamental difficulties in simultaneously contending (1) that E.O. No. 301, 1 covers both contracts of sale and lease agreements and (2) that the words "supplies,"
"materials" and "equipment" can not be interchanged. Thus, under paragraph (b) of 1, public bidding is not required "whenever the supplies are to be used in connection with a project or
activity which cannot be delayed without causing detriment to the public service." Following petitioners' theory, there should be a public bidding before the government can enter into a
contract for the lease of bulldozers and dredging equipment even if these are urgently needed in areas ravaged by lahar because, first, lease contracts are covered by the general rule and,
second, the exception to public bidding in paragraph (b) covers only "supplies" but not equipment.

To take still another example. Paragraph (d), which does away with the requirement of public bidding "whenever the supplies under procurement have been unsuccessfully placed on bid
for at least two consecutive times, either due to lack of bidders or the offers received in each instance were exorbitant or nonconforming to specifications." Again, following the theory of
the petitioners, a contract for the lease of equipment cannot be entered into even if there are no bids because, first, lease contracts are governed by the general rule on public bidding and,
second, the exception to public bidding in paragraph (d) applies only to contracts for the furnishing of "supplies."

Other examples can be given to show the absurdity of interpreting 1 as applicable to any contract for the furnishing of supplies, materials and equipment and of considering the words
"supplies," "materials" and "equipment" to be not interchangeable. Our ruling that 1 of E.O. No. 301 does not cover the lease of equipment avoids these fundamental difficulties and is
supported by the text of 1, which is entitled "Guidelines for Negotiated Contracts" and by the fact that the only provisions of E.O. No. 301 on leases, namely, 6 and 7, concern the lease of
buildings by or to the government. Thus the text of 1 reads:

1. Guidelines for Negotiated Contracts. Any provision of law, decree, executive order or other issuances to the contrary notwithstanding, no contract for public
services or for furnishing supplies, materials and equipment to the government or any of its branches, agencies or instrumentalities shall be renewed or entered into
without public bidding, except under any of the following situations:
 a. Whenever the supplies are urgently needed to meet an emergency which may involve the loss of, or danger to, life and/or property;

b. Whenever the supplies are to be used in connection with a project or activity which cannot be delayed without causing detriment to the public
service;

c. Whenever the materials are sold by an exclusive distributor or manufacturer who does not have subdealers selling at lower prices and for which no
suitable substitute can be obtained elsewhere at more advantageous terms to the government;

d. Whenever the supplies under procurement have been unsuccessfully placed on bid for at least two consecutive times, either due to lack of bidders
or the offers received in each instance were exhorbitant or non-conforming to specifications;

e. In cases where it is apparent that the requisition of the needed supplies through negotiated purchase is most advantageous to the government to be
determined by the Department Head concerned; and

f. Whenever the purchase is made from an agency of the government.

Indeed, the purpose for promulgating E.O. No. 301 was merely to decentralize the system of reviewing negotiated contracts of purchase for the furnishing of supplies, materials and
equipment as well as lease contracts of buildings. Theretofore, E.O. No. 298, promulgated on August 12, 1940, required consultation with the Secretary of Justice and the Department Head
concerned and the approval of the President of the Philippines before contracts for the furnishing of supplies, materials and equipment could be made on a negotiated basis, without public
bidding. E.O. No. 301 changed this by providing as follows:

2. Jurisdiction over Negotiated Contracts. In line with the principles of decentralization and accountability, negotiated contracts for public services or for furnishing
supplies, materials or equipment may be entered into by the department or agency head or the governing board of the government-owned or controlled corporation
concerned, without need of prior approval by higher authorities, subject to availability of funds, compliance with the standards or guidelines prescribed in Section 1
hereof, and to the audit jurisdiction of the commission on Audit in accordance with existing rules and regulations.

Negotiated contracts involving P2,000,000 up to P10,000,000 shall be signed by the Secretary and two other Undersecretaries.

xxx xxx xxx

7. Jurisdiction Over Lease Contracts. The heads of agency intending to rent privately-owned buildings or spaces for their use, or to lease out government-owned
buildings or spaces for private use, shall have authority to determine the reasonableness of the terms of the lease and the rental rates thereof, and to enter into such
lease contracts without need of prior approval by higher authorities, subject to compliance with the uniform standards or guidelines established pursuant to Section 6
hereof by the DPWH and to the audit jurisdiction of COA or its duly authorized representative in accordance with existing rules and regulations.

In sum, E.O. No. 301 applies only to contracts for the purchase of supplies, materials and equipment, and it was merely to change the system of administrative review of emergency
purchases, as theretofore prescribed by E.O. No. 298, that E.O. No. 301 was issued on July 26, 1987. Part B of this Executive Order applies to leases of buildings, not of equipment, and
therefore does not govern the lease contract in this case. Even if it applies, it does not require public bidding for entering into it.

Our holding that E.O. No. 301, 1 applies only to contracts of purchase and sale is conformable to P.D. No. 526, promulgated on August 2, 1974, which is in pari materia. P.D. No. 526
requires local governments to hold public bidding in the "procurement of supplies." By specifying "procurement of supplies" and excepting from the general rule "purchases" when made
under certain circumstances, P.D. No. 526, 12 indicates quite clearly that it applies only to contracts of purchase and sale. This provision reads:

12. Procurement without public bidding. Procurement of supplies may be made without the benefit of public bidding in the following modes:

(1) Personal canvass of responsible merchants;

 (2) Emergency purchases;

(3) Direct purchases from manufacturers or exclusive distributors;

(4) Thru the Bureau of Supply Coordination; and

(5) Purchase from other government entities or foreign governments.

Sec. 3 broadly defines the term "supplies" as including

everything except real estate, which may be needed in the transaction of public business, or in the pursuit of any undertaking, project, or activity,
whether of the nature of equipment, furniture, stationery, materials for construction, or personal property of any sort, including non-personal or
contractual services such as the repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and related or
analogous services.

Thus, the texts of both E.O. No. 301, 1 and of P.D. No. 526, 1 and 12, make it clear that only contracts for the purchase and sale of supplies, materials and equipment are contemplated by
the rule concerning public biddings.

Finally, it is contended that equipment leases are attractive and commonly used in place of contracts of purchase and sale because of "multifarious credit and tax constraints" and therefore
could not have been left out from the requirement of public bidding. Obviously these credit and tax constraints can have no attraction to the government when considering the advantages
of sale over lease of equipment. The fact that lease contracts are in common use is not a reason for implying that the rule on public bidding applies not only to government purchases but
also to lease contracts. For the fact also is that the government leases equipment, such as copying machines, personal computers and the like, without going through public bidding.

FOR THE FOREGOING REASONS, the motion for reconsideration of petitioners is DENIED with finality.

SO ORDERED.

Melo, Puno, Kapunan, Francisco and Hermosisima, Jr., JJ., concur.

Narvasa, C.J. and Panganiban , JJ., took no part.

Padilla and Vitug, JJ., maintained their separate concurring opinion.

Feliciano, Regalado, Davide, Jr., Romero and Bellosillo, JJ., maintained their dissenting opinion.
 EN BANC

[G.R. No. 118295. May 2, 1997]

WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of the Philippine Senate and as taxpayers; GREGORIO ANDOLANA and JOKER ARROYO as members of the
House of Representatives and as taxpayers; NICANOR P. PERLAS and HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES UNION, NATIONAL ECONOMIC
PROTECTIONISM ASSOCIATION, CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, LIKAS-KAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL
RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS, INC., and PHILIPPINE PEASANT INSTITUTE, in representation of various
taxpayers and as non-governmental organizations, petitioners, vs. EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ, AGAPITO
AQUINO, RODOLFO BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS OPLE, JOHN OSMEA,
SANTANINA RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their respective capacities as members of the Philippine Senate who
concurred in the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization; SALVADOR ENRIQUEZ, in his capacity as
Secretary of Budget and Management; CARIDAD VALDEHUESA, in her capacity as National Treasurer; RIZALINO NAVARRO, in his capacity as Secretary of Trade and
Industry; ROBERTO SEBASTIAN, in his capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as Secretary of Finance; ROBERTO ROMULO, in his
capacity as Secretary of Foreign Affairs; and TEOFISTO T. GUINGONA, in his capacity as Executive Secretary, respondents.

DECISION
PANGANIBAN, J.:

The emergence on January 1, 1995 of the World Trade Organization, abetted by the membership thereto of the vast majority of countries has revolutionized international business and
economic relations amongst states. It has irreversibly propelled the world towards trade liberalization and economic globalization. Liberalization, globalization, deregulation and
privatization, the third-millennium buzz words, are ushering in a new borderless world of business by sweeping away as mere historical relics the heretofore traditional modes of promoting
and protecting national economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax exemptions and currency controls.Finding market niches and becoming the best
in specific industries in a market-driven and export-oriented global scenario are replacing age-old beggar-thy-neighbor policies that unilaterally protect weak and inefficient domestic
producers of goods and services. In the words of Peter Drucker, the well-known management guru, Increased participation in the world economy has become the key to domestic economic
growth and prosperity.

Brief Historical Background

To hasten worldwide recovery from the devastation wrought by the Second World War, plans for the establishment of three multilateral institutions -- inspired by that grand political
body, the United Nations -- were discussed at Dumbarton Oaks and Bretton Woods. The first was the World Bank (WB) which was to address the rehabilitation and reconstruction of war-
ravaged and later developing countries; the second, the International Monetary Fund (IMF) which was to deal with currency problems; and the third, the International Trade Organization
(ITO), which was to foster order and predictability in world trade and to minimize unilateral protectionist policies that invite challenge, even retaliation, from other states. However, for a
variety of reasons, including its non-ratification by the United States, the ITO, unlike the IMF and WB, never took off. What remained was only GATT -- the General Agreement on Tariffs and
Trade. GATT was a collection of treaties governing access to the economies of treaty adherents with no institutionalized body administering the agreements or dependable system of dispute
settlement.
After half a century and several dizzying rounds of negotiations, principally the Kennedy Round, the Tokyo Round and the Uruguay Round, the world finally gave birth to that
administering body -- the World Trade Organization -- with the signing of the Final Act in Marrakesh, Morocco and the ratification of the WTO Agreement by its members. [1]
Like many other developing countries, the Philippines joined WTO as a founding member with the goal, as articulated by President Fidel V. Ramos in two letters to the Senate (infra),
of improving Philippine access to foreign markets, especially its major trading partners, through the reduction of tariffs on its exports, particularly agricultural and industrial products. The
President also saw in the WTO the opening of new opportunities for the services sector x x x, (the reduction of) costs and uncertainty associated with exporting x x x, and (the attraction of)
more investments into the country. Although the Chief Executive did not expressly mention it in his letter, the Philippines - - and this is of special interest to the legal profession - - will benefit
from the WTO system of dispute settlement by judicial adjudication through the independent WTO settlement bodies called (1) Dispute Settlement Panels and (2) Appellate
Tribunal. Heretofore, trade disputes were settled mainly through negotiations where solutions were arrived at frequently on the basis of relative bargaining strengths, and where naturally,
weak and underdeveloped countries were at a disadvantage.

The Petition in Brief

Arguing mainly (1) that the WTO requires the Philippines to place nationals and products of member-countries on the same footing as Filipinos and local products and (2) that the WTO
intrudes, limits and/or impairs the constitutional powers of both Congress and the Supreme Court, the instant petition before this Court assails the WTO Agreement for violating the mandate
of the 1987 Constitution to develop a self-reliant and independent national economy effectively controlled by Filipinos x x x (to) give preference to qualified Filipinos (and to) promote the
preferential use of Filipino labor, domestic materials and locally produced goods.
Simply stated, does the Philippine Constitution prohibit Philippine participation in worldwide trade liberalization and economic globalization? Does it prescribe Philippine integration
into a global economy that is liberalized, deregulated and privatized? These are the main questions raised in this petition for certiorari, prohibition and mandamus under Rule 65 of the Rules
of Court praying (1) for the nullification, on constitutional grounds, of the concurrence of the Philippine Senate in the ratification by the President of the Philippines of the Agreement
Establishing the World Trade Organization (WTO Agreement, for brevity) and (2) for the prohibition of its implementation and enforcement through the release and utilization of public
funds, the assignment of public officials and employees, as well as the use of government properties and resources by respondent-heads of various executive offices concerned therewith. This
concurrence is embodied in Senate Resolution No. 97, dated December 14, 1994.

The Facts

On April 15, 1994, Respondent Rizalino Navarro, then Secretary of the Department of Trade and Industry (Secretary Navarro, for brevity), representing the Government of the Republic
of the Philippines, signed in Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations (Final Act, for brevity).
By signing the Final Act,[2] Secretary Navarro on behalf of the Republic of the Philippines, agreed:

(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities, with a view to seeking approval of the Agreement in accordance with
their procedures; and

(b) to adopt the Ministerial Declarations and Decisions.

On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994 from the President of the Philippines,[3] stating among others that the Uruguay Round
Final Act is hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution.
On August 13, 1994, the members of the Philippine Senate received another letter from the President of the Philippines [4] likewise dated August 11, 1994, which stated among others
that the Uruguay Round Final Act, the Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial
Services are hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution.
On December 9, 1994, the President of the Philippines certified the necessity of the immediate adoption of P.S. 1083, a resolution entitled Concurring in the Ratification of the Agreement
Establishing the World Trade Organization.[5]
On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which Resolved, as it is hereby resolved, that the Senate concur, as it hereby concurs, in the ratification by the
President of the Philippines of the Agreement Establishing the World Trade Organization.[6] The text of the WTO Agreement is written on pages 137 et seq. of Volume I of the 36-
volume Uruguay Round of Multilateral Trade Negotiations and includes various agreements and associated legal instruments (identified in the said Agreement as Annexes 1, 2 and 3 thereto
and collectively referred to as Multilateral Trade Agreements, for brevity) as follows:
 ANNEX 1

Annex 1A: Multilateral Agreement on Trade in Goods

General Agreement on Tariffs and Trade 1994

Agreement on Agriculture

Agreement on the Application of Sanitary and

Phytosanitary Measures

Agreement on Textiles and Clothing

Agreement on Technical Barriers to Trade

Agreement on Trade-Related Investment Measures

Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994

Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994

Agreement on Pre-Shipment Inspection

Agreement on Rules of Origin

Agreement on Imports Licensing Procedures

Agreement on Subsidies and Coordinating Measures

Agreement on Safeguards

Annex 1B: General Agreement on Trade in Services and Annexes

Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights

ANNEX 2

Understanding on Rules and Procedures Governing the Settlement of Disputes

ANNEX 3

Trade Policy Review Mechanism

 On December 16, 1994, the President of the Philippines signed[7] the Instrument of Ratification, declaring:

NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic of the Philippines, after having seen and considered the aforementioned Agreement Establishing the
World Trade Organization and the agreements and associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are integral parts thereof,
signed at Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm the same and every Article and Clause thereof.

To emphasize, the WTO Agreement ratified by the President of the Philippines is composed of the Agreement Proper and the associated legal instruments included in Annexes one (1),
two (2) and three (3) of that Agreement which are integral parts thereof.
On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO Agreement (and its integral annexes aforementioned) but also (1) the Ministerial Declarations
and Decisions and (2) the Understanding on Commitments in Financial Services. In his Memorandum dated May 13, 1996,[8] the Solicitor General describes these two latter documents as
follows:

The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a wide range of matters, such as measures in favor of least developed countries, notification
procedures, relationship of WTO with the International Monetary Fund (IMF), and agreements on technical barriers to trade and on dispute settlement.

The Understanding on Commitments in Financial Services dwell on, among other things, standstill or limitations and qualifications of commitments to existing non-conforming measures,
market access, national treatment, and definitions of non-resident supplier of financial services, commercial presence and new financial service.

On December 29, 1994, the present petition was filed. After careful deliberation on respondents comment and petitioners reply thereto, the Court resolved on December 12, 1995, to
give due course to the petition, and the parties thereafter filed their respective memoranda. The Court also requested the Honorable Lilia R. Bautista, the Philippine Ambassador to the United
Nations stationed in Geneva, Switzerland, to submit a paper, hereafter referred to as Bautista Paper, [9] for brevity, (1) providing a historical background of and (2) summarizing the said
agreements.
During the Oral Argument held on August 27, 1996, the Court directed:

(a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy and (2) the transcript of proceedings/hearings in the Senate; and

(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties signed prior to the Philippine adherence to the WTO Agreement, which derogate from Philippine
sovereignty and (2) copies of the multi-volume WTO Agreement and other documents mentioned in the Final Act, as soon as possible.

After receipt of the foregoing documents, the Court said it would consider the case submitted for resolution. In a Compliance dated September 16, 1996, the Solicitor General submitted
a printed copy of the 36-volume Uruguay Round of Multilateral Trade Negotiations, and in another Compliance dated October 24, 1996, he listed the various bilateral or multilateral treaties
or international instruments involving derogation of Philippine sovereignty. Petitioners, on the other hand, submitted their Compliance dated January 28, 1997, on January 30, 1997.

The Issues

In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows:

A. Whether the petition presents a political question or is otherwise not justiciable.

B. Whether the petitioner members of the Senate who participated in the deliberations and voting leading to the concurrence are estopped from impugning the validity of the
Agreement Establishing the World Trade Organization or of the validity of the concurrence.
 C. Whether the provisions of the Agreement Establishing the World Trade Organization contravene the provisions of Sec. 19, Article II, and Secs. 10 and 12, Article XII, all of the 1987
Philippine Constitution.

D. Whether provisions of the Agreement Establishing the World Trade Organization unduly limit, restrict and impair Philippine sovereignty specifically the legislative power which,
under Sec. 2, Article VI, 1987 Philippine Constitution is vested in the Congress of the Philippines;

E. Whether provisions of the Agreement Establishing the World Trade Organization interfere with the exercise of judicial power.

F. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of jurisdiction when they voted for concurrence in the ratification of
the constitutionally-infirm Agreement Establishing the World Trade Organization.

G. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of jurisdiction when they concurred only in the ratification of the
Agreement Establishing the World Trade Organization, and not with the Presidential submission which included the Final Act, Ministerial Declaration and Decisions, and the
Understanding on Commitments in Financial Services.

On the other hand, the Solicitor General as counsel for respondents synthesized the several issues raised by petitioners into the following: [10]

1. Whether or not the provisions of the Agreement Establishing the World Trade Organization and the Agreements and Associated Legal Instruments included in Annexes one (1), two (2)
and three (3) of that agreement cited by petitioners directly contravene or undermine the letter, spirit and intent of Section 19, Article II and Sections 10 and 12, Article XII of the 1987
Constitution.

2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the exercise of legislative power by Congress.

3. Whether or not certain provisions of the Agreement impair the exercise of judicial power by this Honorable Court in promulgating the rules of evidence.

4. Whether or not the concurrence of the Senate in the ratification by the President of the Philippines of the Agreement establishing the World Trade Organization implied rejection of the
treaty embodied in the Final Act.

By raising and arguing only four issues against the seven presented by petitioners, the Solicitor General has effectively ignored three, namely: (1) whether the petition presents a
political question or is otherwise not justiciable; (2) whether petitioner-members of the Senate (Wigberto E. Taada and Anna Dominique Coseteng) are estopped from joining this suit; and
(3) whether the respondent-members of the Senate acted in grave abuse of discretion when they voted for concurrence in the ratification of the WTO Agreement. The foregoing
notwithstanding, this Court resolved to deal with these three issues thus:

(1) The political question issue -- being very fundamental and vital, and being a matter that probes into the very jurisdiction of this Court to hear and decide this case -- was deliberated
upon by the Court and will thus be ruled upon as the first issue;

(2) The matter of estoppel will not be taken up because this defense is waivable and the respondents have effectively waived it by not pursuing it in any of their pleadings; in any event, this
issue, even if ruled in respondents favor, will not cause the petitions dismissal as there are petitioners other than the two senators, who are not vulnerable to the defense of estoppel; and

(3) The issue of alleged grave abuse of discretion on the part of the respondent senators will be taken up as an integral part of the disposition of the four issues raised by the Solicitor
General.

During its deliberations on the case, the Court noted that the respondents did not question the locus standi of petitioners. Hence, they are also deemed to have waived the benefit of
such issue. They probably realized that grave constitutional issues, expenditures of public funds and serious international commitments of the nation are involved here, and that
transcendental public interest requires that the substantive issues be met head on and decided on the merits, rather than skirted or deflected by procedural matters.[11]
 To recapitulate, the issues that will be ruled upon shortly are:
(1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED, DOES THE PETITION INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT
HAS NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE PHILIPPINE
CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS ANNEXES SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT INCLUDE THE FINAL
ACT, MINISTERIAL DECLARATIONS AND DECISIONS, AND THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES?

The First Issue: Does the Court Have Jurisdiction Over the Controversy?

In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no doubt raises a justiciable controversy. Where an action of the
legislative branch is seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. The question thus posed is
judicial rather than political. The duty (to adjudicate) remains to assure that the supremacy of the Constitution is upheld.[12] Once a controversy as to the application or interpretation of a
constitutional provision is raised before this Court (as in the instant case), it becomes a legal issue which the Court is bound by constitutional mandate to decide. [13]
The jurisdiction of this Court to adjudicate the matters[14] raised in the petition is clearly set out in the 1987 Constitution,[15] as follows:

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government.

The foregoing text emphasizes the judicial departments duty and power to strike down grave abuse of discretion on the part of any branch or instrumentality of government including
Congress. It is an innovation in our political law.[16]As explained by former Chief Justice Roberto Concepcion,[17] the judiciary is the final arbiter on the question of whether or not a branch of
government or any of its officials has acted without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction. This
is not only a judicial power but a duty to pass judgment on matters of this nature.
As this Court has repeatedly and firmly emphasized in many cases,[18] it will not shirk, digress from or abandon its sacred duty and authority to uphold the Constitution in matters that
involve grave abuse of discretion brought before it in appropriate cases, committed by any officer, agency, instrumentality or department of the government.
As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate remedy in the ordinary course of law, we have no hesitation at all in holding that this
petition should be given due course and the vital questions raised therein ruled upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition and mandamusare appropriate
remedies to raise constitutional issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials. On this, we have no equivocation.
We should stress that, in deciding to take jurisdiction over this petition, this Court will not review the wisdom of the decision of the President and the Senate in enlisting the country
into the WTO, or pass upon the merits of trade liberalization as a policy espoused by said international body. Neither will it rule on the propriety of the governments economic policy of
reducing/removing tariffs, taxes, subsidies, quantitative restrictions, and other import/trade barriers.Rather, it will only exercise its constitutional duty to determine whether or not there
had been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the Senate in ratifying the WTO Agreement and its three annexes.

Second Issue: The WTO Agreement and Economic Nationalism

This is the lis mota, the main issue, raised by the petition.
 Petitioners vigorously argue that the letter, spirit and intent of the Constitution mandating economic nationalism are violated by the so-called parity provisions and national treatment
clauses scattered in various parts not only of the WTO Agreement and its annexes but also in the Ministerial Decisions and Declarations and in the Understanding on Commitments in Financial
Services.
Specifically, the flagship constitutional provisions referred to are Sec. 19, Article II, and Secs. 10 and 12, Article XII, of the Constitution, which are worded as follows:

Article II

DECLARATION OF PRINCIPLES AND STATE POLICIES

xx xx xx xx

Sec. 19. The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.

xx xx xx xx

Article XII

NATIONAL ECONOMY AND PATRIMONY

xx xx xx xx

Sec. 10. x x x. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.

xx xx xx xx

Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.

Petitioners aver that these sacred constitutional principles are desecrated by the following WTO provisions quoted in their memorandum:[19]

a) In the area of investment measures related to trade in goods (TRIMS, for brevity):

Article 2

National Treatment and Quantitative Restrictions.

1. Without prejudice to other rights and obligations under GATT 1994. no Member shall apply any TRIM that is inconsistent with the provisions of Article III or Article XI of
GATT 1994.

2. An Illustrative list of TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions provided for in paragraph I of Article XI of GATT 1994
is contained in the Annex to this Agreement. (Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay Round, Legal Instruments, p.22121, emphasis supplied).

The Annex referred to reads as follows:

 ANNEX

Illustrative List

1. TRIMS that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of GATT 1994 include those which are mandatory or
enforceable under domestic law or under administrative rulings, or compliance with which is necessary to obtain an advantage, and which require:

(a) the purchase or use by an enterprise of products of domestic origin or from any domestic source, whether specified in terms of particular products, in terms of volume or
value of products, or in terms of proportion of volume or value of its local production; or

(b) that an enterprises purchases or use of imported products be limited to an amount related to the volume or value of local products that it exports.

2. TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions provided for in paragraph 1 of Article XI of GATT 1994 include those which are
mandatory or enforceable under domestic laws or under administrative rulings, or compliance with which is necessary to obtain an advantage, and which restrict:

(a) the importation by an enterprise of products used in or related to the local production that it exports;

(b) the importation by an enterprise of products used in or related to its local production by restricting its access to foreign exchange inflows attributable to the enterprise; or

(c) the exportation or sale for export specified in terms of particular products, in terms of volume or value of products, or in terms of a preparation of volume or value of its local
production. (Annex to the Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay Round Legal Documents, p.22125, emphasis supplied).

The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:

The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favorable than that accorded to
like products of national origin in respect of laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. the provisions
of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not
on the nationality of the product. (Article III, GATT 1947, as amended by the Protocol Modifying Part II, and Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to
paragraph 1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round, Legal Instruments p.177, emphasis supplied).

b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity):

Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual
property... (par. 1, Article 3, Agreement on Trade-Related Aspect of Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments, p.25432 (emphasis supplied)

(c) In the area of the General Agreement on Trade in Services:

National Treatment

1. In the sectors inscribed in its schedule, and subject to any conditions and qualifications set out therein, each Member shall accord to services and service suppliers of any
other Member, in respect of all measures affecting the supply of services, treatment no less favourable than it accords to its own like services and service suppliers.

2. A Member may meet the requirement of paragraph I by according to services and service suppliers of any other Member, either formally identical treatment or formally
different treatment to that it accords to its own like services and service suppliers.
 3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of completion in favour of services or service suppliers
of the Member compared to like services or service suppliers of any other Member. (Article XVII, General Agreement on Trade in Services, Vol. 28, Uruguay Round Legal
Instruments, p.22610 emphasis supplied).

It is petitioners position that the foregoing national treatment and parity provisions of the WTO Agreement place nationals and products of member countries on the same footing as
Filipinos and local products, in contravention of the Filipino First policy of the Constitution. They allegedly render meaningless the phrase effectively controlled by Filipinos.The constitutional
conflict becomes more manifest when viewed in the context of the clear duty imposed on the Philippines as a WTO member to ensure the conformity of its laws, regulations and administrative
procedures with its obligations as provided in the annexed agreements.[20] Petitioners further argue that these provisions contravene constitutional limitations on the role exports play in
national development and negate the preferential treatment accorded to Filipino labor, domestic materials and locally produced goods.
On the other hand, respondents through the Solicitor General counter (1) that such Charter provisions are not self-executing and merely set out general policies; (2) that these
nationalistic portions of the Constitution invoked by petitioners should not be read in isolation but should be related to other relevant provisions of Art. XII, particularly Secs. 1 and 13
thereof; (3) that read properly, the cited WTO clauses do not conflict with the Constitution; and (4) that the WTO Agreement contains sufficient provisions to protect developing countries
like the Philippines from the harshness of sudden trade liberalization.
We shall now discuss and rule on these arguments.

Declaration of Principles Not Self-Executing

By its very title, Article II of the Constitution is a declaration of principles and state policies. The counterpart of this article in the 1935 Constitution [21] is called the basic political creed
of the nation by Dean Vicente Sinco.[22] These principles in Article II are not intended to be self-executing principles ready for enforcement through the courts.[23] They are used by the
judiciary as aids or as guides in the exercise of its power of judicial review, and by the legislature in its enactment of laws. As held in the leading case of Kilosbayan, Incorporated vs.
Morato,[24] the principles and state policies enumerated in Article II and some sections of Article XII are not self-executing provisions, the disregard of which can give rise to a cause of action
in the courts. They do not embody judicially enforceable constitutional rights but guidelines for legislation.
In the same light, we held in Basco vs. Pagcor[25] that broad constitutional principles need legislative enactments to implement them, thus:

On petitioners allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2
(Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are merely statements of principles and policies. As such, they are basically not self-executing,
meaning a law should be passed by Congress to clearly define and effectuate such principles.

In general, therefore, the 1935 provisions were not intended to be self-executing principles ready for enforcement through the courts. They were rather directives addressed to the
executive and to the legislature. If the executive and the legislature failed to heed the directives of the article, the available remedy was not judicial but political. The electorate could
express their displeasure with the failure of the executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2).

The reasons for denying a cause of action to an alleged infringement of broad constitutional principles are sourced from basic considerations of due process and the lack of judicial
authority to wade into the uncharted ocean of social and economic policy making. Mr. Justice Florentino P. Feliciano in his concurring opinion in Oposa vs. Factoran, Jr.,[26]explained these
reasons as follows:

My suggestion is simply that petitioners must, before the trial court, show a more specific legal right -- a right cast in language of a significantly lower order of generality than Article II (15)
of the Constitution -- that is or may be violated by the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can validly render judgment granting
all or part of the relief prayed for. To my mind, the court should be understood as simply saying that such a more specific legal right or rights may well exist in our corpus of law,
considering the general policy principles found in the Constitution and the existence of the Philippine Environment Code, and that the trial court should have given petitioners an effective
opportunity so to demonstrate, instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal right, rather than a constitutional or statutory policy, for at
least two (2) reasons. One is that unless the legal right claimed to have been violated or disregarded is given specification in operational terms, defendants may well be unable to defend
themselves intelligently and effectively; in other words, there are due process dimensions to this matter.

The second is a broader-gauge consideration -- where a specific violation of law or applicable regulation is not alleged or proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution which reads:

Section 1. x x x

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. (Emphases supplied)

When substantive standards as general as the right to a balanced and healthy ecology and the right to health are combined with remedial standards as broad ranging as a grave abuse of
discretion amounting to lack or excess of jurisdiction, the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and economic policy making. At least
in respect of the vast area of environmental protection and management, our courts have no claim to special technical competence and experience and professional qualification. Where no
specific, operable norms and standards are shown to exist, then the policy making departments -- the legislative and executive departments -- must be given a real and effective
opportunity to fashion and promulgate those norms and standards, and to implement them before the courts should intervene.

Economic Nationalism Should Be Read with Other Constitutional Mandates to Attain Balanced Development of Economy

On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down general principles relating to the national economy and patrimony, should be read and understood in
relation to the other sections in said article, especially Secs. 1 and 13 thereof which read:

Section 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by
the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.

The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human
and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade
practices.

In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. x x x

xxxxxxxxx

Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.

As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the nation for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all especially the underprivileged.
With these goals in context, the Constitution then ordains the ideals of economic nationalism (1) by expressing preference in favor of qualified Filipinos in the grant of rights, privileges
and concessions covering the national economy and patrimony[27] and in the use of Filipino labor, domestic materials and locally-produced goods; (2) by mandating the State to adopt
measures that help make them competitive; [28] and (3) by requiring the State to develop a self-reliant and independent national economy effectively controlled by Filipinos.[29] In similar
language, the Constitution takes into account the realities of the outside world as it requires the pursuit of a trade policy that serves the general welfare and utilizes all forms and arrangements
of exchange on the basis of equality and reciprocity; [30] and speaks of industries which are competitive in both domestic and foreign markets as well as of the protection of Filipino enterprises
against unfair foreign competition and trade practices.
It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System, et al.,[31] this Court held that Sec. 10, second par., Art. XII of the 1987 Constitution is a
mandatory, positive command which is complete in itself and which needs no further guidelines or implementing laws or rules for its enforcement. From its very words the provision does
not require any legislation to put it in operation. It is per se judicially enforceable. However, as the constitutional provision itself states, it is enforceable only in regard to the grants of rights,
privileges and concessions covering national economy and patrimony and not to every aspect of trade and commerce. It refers to exceptions rather than the rule. The issue here is not whether
this paragraph of Sec. 10 of Art. XII is self-executing or not. Rather, the issue is whether, as a rule, there are enough balancing provisions in the Constitution to allow the Senate to ratify the
Philippine concurrence in the WTO Agreement. And we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the same time, it recognizes the need for business exchange with the
rest of the world on the bases of equality and reciprocity and limits protection of Filipino enterprises only against foreign competition and trade practices that are unfair. [32] In other words,
the Constitution did not intend to pursue an isolationist policy. It did not shut out foreign investments, goods and services in the development of the Philippine economy. While the
Constitution does not encourage the unlimited entry of foreign goods, services and investments into the country, it does not prohibit them either. In fact, it allows an exchange on the basis
of equality and reciprocity, frowning only on foreign competition that is unfair.

WTO Recognizes Need to Protect Weak Economies

Upon the other hand, respondents maintain that the WTO itself has some built-in advantages to protect weak and developing economies, which comprise the vast majority of its
members. Unlike in the UN where major states have permanent seats and veto powers in the Security Council, in the WTO, decisions are made on the basis of sovereign equality, with each
members vote equal in weight to that of any other. There is no WTO equivalent of the UN Security Council.

WTO decides by consensus whenever possible, otherwise, decisions of the Ministerial Conference and the General Council shall be taken by the majority of the votes cast, except in cases of
interpretation of the Agreement or waiver of the obligation of a member which would require three fourths vote. Amendments would require two thirds vote in general. Amendments to
MFN provisions and the Amendments provision will require assent of all members. Any member may withdraw from the Agreement upon the expiration of six months from the date of
notice of withdrawals.[33]

Hence, poor countries can protect their common interests more effectively through the WTO than through one-on-one negotiations with developed countries. Within the WTO,
developing countries can form powerful blocs to push their economic agenda more decisively than outside the Organization. This is not merely a matter of practical alliances but a negotiating
strategy rooted in law. Thus, the basic principles underlying the WTO Agreement recognize the need of developing countries like the Philippines to share in the growth in international
trade commensurate with the needs of their economic development. These basic principles are found in the preamble [34] of the WTO Agreement as follows:

The Parties to this Agreement,

Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and
steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the worlds resources
in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with
their respective needs and concerns at different levels of economic development,

Recognizing further that there is need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in
international trade commensurate with the needs of their economic development,

Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to
trade and to the elimination of discriminatory treatment in international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system encompassing the General Agreement on Tariffs and Trade, the results of past trade
liberalization efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations,

Determined to preserve the basic principles and to further the objectives underlying this multilateral trading system, x x x.(underscoring supplied.)

Specific WTO Provisos Protect Developing Countries

So too, the Solicitor General points out that pursuant to and consistent with the foregoing basic principles, the WTO Agreement grants developing countries a more lenient treatment,
giving their domestic industries some protection from the rush of foreign competition. Thus, with respect to tariffs in general, preferential treatment is given to developing countries in terms
of the amount of tariff reduction and the period within which the reduction is to be spread out. Specifically, GATT requires an average tariff reduction rate of 36% for developed countries to
be effected within a period of six (6) years while developing countries -- including the Philippines -- are required to effect an average tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to agricultural products by 20% over six (6) years, as compared to only 13% for
developing countries to be effected within ten (10) years.
In regard to export subsidy for agricultural products, GATT requires developed countries to reduce their budgetary outlays for export subsidy by 36% and export volumes receiving
export subsidy by 21% within a period of six (6) years.For developing countries, however, the reduction rate is only two-thirds of that prescribed for developed countries and a longer period
of ten (10) years within which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign competition and trade practices including anti-dumping measures, countervailing measures and safeguards
against import surges. Where local businesses are jeopardized by unfair foreign competition, the Philippines can avail of these measures. There is hardly therefore any basis for the statement
that under the WTO, local industries and enterprises will all be wiped out and that Filipinos will be deprived of control of the economy. Quite the contrary, the weaker situations of developing
nations like the Philippines have been taken into account; thus, there would be no basis to say that in joining the WTO, the respondents have gravely abused their discretion. True, they have
made a bold decision to steer the ship of state into the yet uncharted sea of economic liberalization. But such decision cannot be set aside on the ground of grave abuse of discretion, simply
because we disagree with it or simply because we believe only in other economic policies. As earlier stated, the Court in taking jurisdiction of this case will not pass upon the advantages and
disadvantages of trade liberalization as an economic policy. It will only perform its constitutional duty of determining whether the Senate committed grave abuse of discretion.

Constitution Does Not Rule Out Foreign Competition

Furthermore, the constitutional policy of a self-reliant and independent national economy[35] does not necessarily rule out the entry of foreign investments, goods and services. It
contemplates neither economic seclusion nor mendicancy in the international community. As explained by Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional
policy:

Economic self-reliance is a primary objective of a developing country that is keenly aware of overdependence on external assistance for even its most basic needs. It does not mean autarky or
economic seclusion; rather, it means avoiding mendicancy in the international community. Independence refers to the freedom from undue foreign control of the national economy,
especially in such strategic industries as in the development of natural resources and public utilities. [36]

The WTO reliance on most favored nation, national treatment, and trade without discrimination cannot be struck down as unconstitutional as in fact they are rules of equality and
reciprocity that apply to all WTO members. Aside from envisioning a trade policy based on equality and reciprocity,[37] the fundamental law encourages industries that are competitive in
both domestic and foreign markets, thereby demonstrating a clear policy against a sheltered domestic trade environment, but one in favor of the gradual development of robust industries
that can compete with the best in the foreign markets. Indeed, Filipino managers and Filipino enterprises have shown capability and tenacity to compete internationally. And given a free
trade environment, Filipino entrepreneurs and managers in Hongkong havedemonstrated the Filipino capacity to grow and to prosper against the best offered under a policy of laissez faire.
Constitution Favors Consumers, Not Industries or Enterprises

The Constitution has not really shown any unbalanced bias in favor of any business or enterprise, nor does it contain any specific pronouncement that Filipino companies should be
pampered with a total proscription of foreigncompetition. On the other hand, respondents claim that WTO/GATT aims to make available to the Filipino consumer the best goods and services
obtainable anywhere in the world at the most reasonable prices. Consequently, the question boils down to whether WTO/GATT will favor the general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos general welfare because it will -- as promised by its promoters -- expand the countrys exports and generate more employment?
Will it bring more prosperity, employment, purchasing power and quality products at the most reasonable rates to the Filipino public?
The responses to these questions involve judgment calls by our policy makers, for which they are answerable to our people during appropriate electoral exercises. Such questions and
the answers thereto are not subject to judicial pronouncements based on grave abuse of discretion.

Constitution Designed to Meet Future Events and Contingencies

No doubt, the WTO Agreement was not yet in existence when the Constitution was drafted and ratified in 1987.That does not mean however that the Charter is necessarily flawed in
the sense that its framers might not have anticipated the advent of a borderless world of business. By the same token, the United Nations was not yet in existence when the 1935 Constitution
became effective. Did that necessarily mean that the then Constitution might not have contemplated a diminution of the absoluteness of sovereignty when the Philippines signed the UN
Charter, thereby effectively surrendering part of its control over its foreign relations to the decisions of various UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are designed to meet not only the vagaries of contemporary events. They should be interpreted to cover even future and unknown
circumstances. It is to the credit of its drafters that a Constitution can withstand the assaults of bigots and infidels but at the same time bend with the refreshing winds of change necessitated
by unfolding events. As one eminent political law writer and respected jurist[38] explains:

The Constitution must be quintessential rather than superficial, the root and not the blossom, the base and framework only of the edifice that is yet to rise. It is but the core of the dream
that must take shape, not in a twinkling by mandate of our delegates, but slowly in the crucible of Filipino minds and hearts, where it will in time develop its sinews and gradually gather its
strength and finally achieve its substance. In fine, the Constitution cannot, like the goddess Athena, rise full-grown from the brow of the Constitutional Convention, nor can it conjure by
mere fiat an instant Utopia. It must grow with the society it seeks to re-structure and march apace with the progress of the race, drawing from the vicissitudes of history the dynamism and
vitality that will keep it, far from becoming a petrified rule, a pulsing, living law attuned to the heartbeat of the nation.

Third Issue: The WTO Agreement and Legislative Power

The WTO Agreement provides that (e)ach Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed
Agreements.[39] Petitioners maintain that this undertaking unduly limits, restricts and impairs Philippine sovereignty, specifically the legislative power which under Sec. 2, Article VI of the
1987 Philippine Constitution is vested in the Congress of the Philippines. It is an assault on the sovereign powers of the Philippines because this means that Congress could not pass legislation
that will be good for our national interest and general welfare if such legislation will not conform with the WTO Agreement, which not only relates to the trade in goods x x x but also to the
flow of investments and money x x x as well as to a whole slew of agreements on socio-cultural matters x x x.[40]
More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in the Congress.[41] And while the Constitution allows Congress to authorize
the President to fix tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts, such authority is subject to specified limits and x x x such limitations and
restrictions as Congress may provide,[42] as in fact it did under Sec. 401 of the Tariff and Customs Code.
Sovereignty Limited by International Law and Treaties

This Court notes and appreciates the ferocity and passion by which petitioners stressed their arguments on this issue. However, while sovereignty has traditionally been deemed
absolute and all-encompassing on the domestic level, it is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the
family of nations. Unquestionably, the Constitution did not envision a hermit-type isolation of the country from the rest of the world. In its Declaration of Principles and State Policies, the
Constitution adopts the generally accepted principles of international law as part of the law of the land, and adheres to the policy of peace, equality, justice, freedom, cooperation and amity,
with all nations."[43] By the doctrine of incorporation, the country is bound by generally accepted principles of international law, which are considered to be automatically part of our own
laws.[44] One of the oldest and most fundamental rules in international law is pacta sunt servanda -- international agreements must be performed in good faith. A treaty engagement is not a
mere moral obligation but creates a legally binding obligation on the parties x x x. A state which has contracted valid international obligations is bound to make in its legislations such
modifications as may be necessary to ensure the fulfillment of the obligations undertaken.[45]
By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some aspects of their state power in exchange
for greater benefits granted by or derived from a convention or pact. After all, states, like individuals, live with coequals, and in pursuit of mutually covenanted objectives and benefits, they
also commonly agree to limit the exercise of their otherwise absolute rights. Thus, treaties have been used to record agreements between States concerning such widely diverse matters as,
for example, the lease of naval bases, the sale or cession of territory, the termination of war, the regulation of conduct of hostilities, the formation of alliances, the regulation of commercial
relations, the settling of claims, the laying down of rules governing conduct in peace and the establishment of international organizations.[46] The sovereignty of a state therefore cannot in
fact and in reality be considered absolute. Certain restrictions enter into the picture: (1) limitations imposed by the very nature of membership in the family of nations and (2) limitations
imposed by treaty stipulations. As aptly put by John F. Kennedy, Today, no nation can build its destiny alone. The age of self-sufficient nationalism is over. The age of interdependence is
here.[47]

UN Charter and Other Treaties Limit Sovereignty

Thus, when the Philippines joined the United Nations as one of its 51 charter members, it consented to restrict its sovereign rights under the concept of sovereignty as auto-limitation.47-
A Under Article 2 of the UN Charter, (a)ll members shall give the United Nations every assistance in any action it takes in accordance with the present Charter, and shall refrain from giving
assistance to any state against which the United Nations is taking preventive or enforcement action. Such assistance includes payment of its corresponding share not merely in administrative
expenses but also in expenditures for the peace-keeping operations of the organization. In its advisory opinion of July 20, 1961, the International Court of Justice held that money used by the
United Nations Emergency Force in the Middle East and in the Congo were expenses of the United Nations under Article 17, paragraph 2, of the UN Charter.Hence, all its members must bear
their corresponding share in such expenses. In this sense, the Philippine Congress is restricted in its power to appropriate. It is compelled to appropriate funds whether it agrees with such
peace-keeping expenses or not. So too, under Article 105 of the said Charter, the UN and its representatives enjoy diplomatic privileges and immunities, thereby limiting again the exercise
of sovereignty of members within their own territory.Another example: although sovereign equality and domestic jurisdiction of all members are set forth as underlying principles in the UN
Charter, such provisos are however subject to enforcement measures decided by the Security Council for the maintenance of international peace and security under Chapter VII of the
Charter. A final example: under Article 103, (i)n the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under
any other international agreement, their obligation under the present charter shall prevail, thus unquestionably denying the Philippines -- as a member -- the sovereign power to make a
choice as to which of conflicting obligations, if any, to honor.
Apart from the UN Treaty, the Philippines has entered into many other international pacts -- both bilateral and multilateral -- that involve limitations on Philippine sovereignty. These
are enumerated by the Solicitor General in his Compliance dated October 24, 1996, as follows:

(a) Bilateral convention with the United States regarding taxes on income, where the Philippines agreed, among others, to exempt from tax, income received in the Philippines by,
among others, the Federal Reserve Bank of the United States, the Export/Import Bank of the United States, the Overseas Private Investment Corporation of the United
States. Likewise, in said convention, wages, salaries and similar remunerations paid by the United States to its citizens for labor and personal services performed by them as
employees or officials of the United States are exempt from income tax by the Philippines.

(b) Bilateral agreement with Belgium, providing, among others, for the avoidance of double taxation with respect to taxes on income.

(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation.
 (d) Bilateral convention with the French Republic for the avoidance of double taxation.

(e) Bilateral air transport agreement with Korea where the Philippines agreed to exempt from all customs duties, inspection fees and other duties or taxes aircrafts of South Korea
and the regular equipment, spare parts and supplies arriving with said aircrafts.

(f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt from customs duties, excise taxes, inspection fees and other similar duties, taxes or charges
fuel, lubricating oils, spare parts, regular equipment, stores on board Japanese aircrafts while on Philippine soil.

(g) Bilateral air service agreement with Belgium where the Philippines granted Belgian air carriers the same privileges as those granted to Japanese and Korean air carriers under
separate air service agreements.

(h) Bilateral notes with Israel for the abolition of transit and visitor visas where the Philippines exempted Israeli nationals from the requirement of obtaining transit or visitor visas
for a sojourn in the Philippines not exceeding 59 days.

(I) Bilateral agreement with France exempting French nationals from the requirement of obtaining transit and visitor visa for a sojourn not exceeding 59 days.

(j) Multilateral Convention on Special Missions, where the Philippines agreed that premises of Special Missions in the Philippines are inviolable and its agents can not enter said
premises without consent of the Head of Mission concerned.Special Missions are also exempted from customs duties, taxes and related charges.

(k) Multilateral Convention on the Law of Treaties. In this convention, the Philippines agreed to be governed by the Vienna Convention on the Law of Treaties.

(l) Declaration of the President of the Philippines accepting compulsory jurisdiction of the International Court of Justice. The International Court of Justice has jurisdiction in all legal
disputes concerning the interpretation of a treaty, any question of international law, the existence of any fact which, if established, would constitute a breach of international
obligation.

In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and police power. The underlying consideration
in this partial surrender of sovereignty is the reciprocal commitment of the other contracting states in granting the same privilege and immunities to the Philippines, its officials and its
citizens. The same reciprocity characterizes the Philippine commitments under WTO-GATT.

International treaties, whether relating to nuclear disarmament, human rights, the environment, the law of the sea, or trade, constrain domestic political sovereignty through the
assumption of external obligations. But unless anarchy in international relations is preferred as an alternative, in most cases we accept that the benefits of the reciprocal obligations
involved outweigh the costs associated with any loss of political sovereignty. (T)rade treaties that structure relations by reference to durable, well-defined substantive norms and objective
dispute resolution procedures reduce the risks of larger countries exploiting raw economic power to bully smaller countries, by subjecting power relations to some form of legal ordering.
In addition, smaller countries typically stand to gain disproportionately from trade liberalization. This is due to the simple fact that liberalization will provide access to a larger set of
potential new trading relationship than in case of the larger country gaining enhanced success to the smaller countrys market.[48]

The point is that, as shown by the foregoing treaties, a portion of sovereignty may be waived without violating the Constitution, based on the rationale that the Philippines adopts the
generally accepted principles of international law as part of the law of the land and adheres to the policy of x x x cooperation and amity with all nations.

Fourth Issue: The WTO Agreement and Judicial Power

Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic Principles of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) [49] intrudes
on the power of the Supreme Court to promulgate rules concerning pleading, practice and procedures.[50]
To understand the scope and meaning of Article 34, TRIPS,[51] it will be fruitful to restate its full text as follows:
 Article 34

Process Patents: Burden of Proof

1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner referred to in paragraph 1(b) of Article 28, if the subject matter of a patent is a
process for obtaining a product, the judicial authorities shall have the authority to order the defendant to prove that the process to obtain an identical product is different from the
patented process.Therefore, Members shall provide, in at least one of the following circumstances, that any identical product when produced without the consent of the patent owner
shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented process:

(a) if the product obtained by the patented process is new;

(b) if there is a substantial likelihood that the identical product was made by the process and the owner of the patent has been unable through reasonable efforts to determine
the process actually used.

2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be on the alleged infringer only if the condition referred to in subparagraph (a) is
fulfilled or only if the condition referred to in subparagraph (b) is fulfilled.

3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their manufacturing and business secrets shall be taken into account.

From the above, a WTO Member is required to provide a rule of disputable (note the words in the absence of proof to the contrary) presumption that a product shown to be identical
to one produced with the use of a patented process shall be deemed to have been obtained by the (illegal) use of the said patented process, (1) where such product obtained by the patented
product is new, or (2) where there is substantial likelihood that the identical product was made with the use of the said patented process but the owner of the patent could not determine
the exact process used in obtaining such identical product. Hence, the burden of proof contemplated by Article 34 should actually be understood as the duty of the alleged patent infringer to
overthrow such presumption. Such burden, properly understood, actually refers to the burden of evidence (burden of going forward) placed on the producer of the identical (or fake) product
to show that his product was produced without the use of the patented process.
The foregoing notwithstanding, the patent owner still has the burden of proof since, regardless of the presumption provided under paragraph 1 of Article 34, such owner still has to
introduce evidence of the existence of the alleged identical product, the fact that it is identical to the genuine one produced by the patented process and the fact of newness of the genuine
product or the fact of substantial likelihood that the identical product was made by the patented process.
The foregoing should really present no problem in changing the rules of evidence as the present law on the subject, Republic Act No. 165, as amended, otherwise known as the Patent
Law, provides a similar presumption in cases of infringement of patented design or utility model, thus:

SEC. 60. Infringement. - Infringement of a design patent or of a patent for utility model shall consist in unauthorized copying of the patented design or utility model for the purpose of
trade or industry in the article or product and in the making, using or selling of the article or product copying the patented design or utility model. Identity or substantial identity with the
patented design or utility model shall constitute evidence of copying. (underscoring supplied)

Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption applies only if (1) the product obtained by the patented process is NEW or (2)
there is a substantial likelihood that the identical product was made by the process and the process owner has not been able through reasonable effort to determine the process used. Where
either of these two provisos does not obtain, members shall be free to determine the appropriate method of implementing the provisions of TRIPS within their own internal systems and
processes.
By and large, the arguments adduced in connection with our disposition of the third issue -- derogation of legislative power - will apply to this fourth issue also. Suffice it to say that the
reciprocity clause more than justifies such intrusion, if any actually exists. Besides, Article 34 does not contain an unreasonable burden, consistent as it is with due process and the concept
of adversarial dispute settlement inherent in our judicial system.
So too, since the Philippine is a signatory to most international conventions on patents, trademarks and copyrights, the adjustment in legislation and rules of procedure will not be
substantial.[52]
 Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other Documents Contained in the Final Act

Petitioners allege that the Senate concurrence in the WTO Agreement and its annexes -- but not in the other documents referred to in the Final Act, namely the Ministerial Declaration
and Decisions and the Understanding on Commitments in Financial Services -- is defective and insufficient and thus constitutes abuse of discretion. They submit that such concurrence in the
WTO Agreement alone is flawed because it is in effect a rejection of the Final Act, which in turn was the document signed by Secretary Navarro, in representation of the Republic upon
authority of the President. They contend that the second letter of the President to the Senate [53] which enumerated what constitutes the Final Act should have been the subject of concurrence
of the Senate.
A final act, sometimes called protocol de clture, is an instrument which records the winding up of the proceedings of a diplomatic conference and usually includes a reproduction of
the texts of treaties, conventions, recommendations and other acts agreed upon and signed by the plenipotentiaries attending the conference.[54] It is not the treaty itself. It is rather a
summary of the proceedings of a protracted conference which may have taken place over several years. The text of the Final Act Embodying the Results of the Uruguay Round of Multilateral
Trade Negotiations is contained in just one page [55] in Vol. I of the 36-volume Uruguay Round of Multilateral Trade Negotiations. By signing said Final Act, Secretary Navarro as representative
of the Republic of the Philippines undertook:

"(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities with a view to seeking approval of the Agreement in accordance
with their procedures; and

(b) to adopt the Ministerial Declarations and Decisions."

The assailed Senate Resolution No. 97 expressed concurrence in exactly what the Final Act required from its signatories, namely, concurrence of the Senate in the WTO Agreement.
The Ministerial Declarations and Decisions were deemed adopted without need for ratification. They were approved by the ministers by virtue of Article XXV: 1 of GATT which provides
that representatives of the members can meet to give effect to those provisions of this Agreement which invoke joint action, and generally with a view to facilitating the operation and
furthering the objectives of this Agreement.[56]
The Understanding on Commitments in Financial Services also approved in Marrakesh does not apply to the Philippines. It applies only to those 27 Members which have indicated in
their respective schedules of commitments on standstill, elimination of monopoly, expansion of operation of existing financial service suppliers, temporary entry of personnel, free transfer
and processing of information, and national treatment with respect to access to payment, clearing systems and refinancing available in the normal course of business.[57]
On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed included as its integral parts,[58] as follows:

Article II

Scope of the WTO

1. The WTO shall provide the common institutional framework for the conduct of trade relations among its Members in matters to the agreements and associated legal instruments
included in the Annexes to this Agreement.

2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3 (hereinafter referred to as Multilateral Agreements) are integral parts of this Agreement, binding
on all Members.

3. The Agreements and associated legal instruments included in Annex 4 (hereinafter referred to as Plurilateral Trade Agreements) are also part of this Agreement for those Members
that have accepted them, and are binding on those Members.The Plurilateral Trade Agreements do not create either obligation or rights for Members that have not accepted them.

4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter referred to as GATT 1994) is legally distinct from the General Agreement on Tariffs and
Trade, dated 30 October 1947, annexed to the Final Act adopted at the conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and
Employment, as subsequently rectified, amended or modified (hereinafter referred to as GATT 1947).
 It should be added that the Senate was well-aware of what it was concurring in as shown by the members deliberation on August 25, 1994. After reading the letter of President Ramos
dated August 11, 1994,[59] the senators of the Republic minutely dissected what the Senate was concurring in, as follows: [60]

THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in the first day hearing of this Committee yesterday. Was the observation made by Senator Taada that
what was submitted to the Senate was not the agreement on establishing the World Trade Organization by the final act of the Uruguay Round which is not the same as the agreement
establishing the World Trade Organization? And on that basis, Senator Tolentino raised a point of order which, however, he agreed to withdraw upon understanding that his suggestion for
an alternative solution at that time was acceptable. That suggestion was to treat the proceedings of the Committee as being in the nature of briefings for Senators until the question of the
submission could be clarified.

And so, Secretary Romulo, in effect, is the President submitting a new... is he making a new submission which improves on the clarity of the first submission?

MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no misunderstanding, it was his intention to clarify all matters by giving this letter.

THE CHAIRMAN: Thank you.

Can this Committee hear from Senator Taada and later on Senator Tolentino since they were the ones that raised this question yesterday?

Senator Taada, please.

SEN. TAADA: Thank you, Mr. Chairman.

Based on what Secretary Romulo has read, it would now clearly appear that what is being submitted to the Senate for ratification is not the Final Act of the Uruguay Round, but rather the
Agreement on the World Trade Organization as well as the Ministerial Declarations and Decisions, and the Understanding and Commitments in Financial Services.

I am now satisfied with the wording of the new submission of President Ramos.

SEN. TAADA. . . . of President Ramos, Mr. Chairman.

THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator Tolentino? And after him Senator Neptali Gonzales and Senator Lina.

SEN TOLENTINO, Mr. Chairman, I have not seen the new submission actually transmitted to us but I saw the draft of his earlier, and I think it now complies with the provisions of the
Constitution, and with the Final Act itself. The Constitution does not require us to ratify the Final Act. It requires us to ratify the Agreement which is now being submitted. The Final Act
itself specifies what is going to be submitted to with the governments of the participants.

In paragraph 2 of the Final Act, we read and I quote:

By signing the present Final Act, the representatives agree: (a) to submit as appropriate the WTO Agreement for the consideration of the respective competent authorities with a view to
seeking approval of the Agreement in accordance with their procedures.

In other words, it is not the Final Act that was agreed to be submitted to the governments for ratification or acceptance as whatever their constitutional procedures may provide but it is
the World Trade Organization Agreement. And if that is the one that is being submitted now, I think it satisfies both the Constitution and the Final Act itself.

Thank you, Mr. Chairman.

THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record. And they had been adequately reflected in the journal of yesterdays session and I dont see any need
for repeating the same.

Now, I would consider the new submission as an act ex abudante cautela.

THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any comment on this?

SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of the abundance of question. Then the new submission is, I believe, stating the obvious and
therefore I have no further comment to make.

Epilogue

In praying for the nullification of the Philippine ratification of the WTO Agreement, petitioners are invoking this Courts constitutionally imposed duty to determine whether or not there
has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the Senate in giving its concurrence therein via Senate Resolution No. 97. Procedurally, a writ
of certiorari grounded on grave abuse of discretion may be issued by the Court under Rule 65 of the Rules of Court when it is amply shown that petitioners have no other plain, speedy and
adequate remedy in the ordinary course of law.
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.[61] Mere abuse of discretion is not enough. It must
be grave abuse of discretion as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount
to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.[62] Failure on the part of the petitioner to show grave abuse of
discretion will result in the dismissal of the petition.[63]
In rendering this Decision, this Court never forgets that the Senate, whose act is under review, is one of two sovereign houses of Congress and is thus entitled to great respect in its
actions. It is itself a constitutional body independent and coordinate, and thus its actions are presumed regular and done in good faith. Unless convincing proof and persuasive arguments
are presented to overthrow such presumptions, this Court will resolve every doubt in its favor. Using the foregoing well-accepted definition of grave abuse of discretion and the presumption
of regularity in the Senates processes, this Court cannot find any cogent reason to impute grave abuse of discretion to the Senates exercise of its power of concurrence in the WTO Agreement
granted it by Sec. 21 of Article VII of the Constitution. [64]
It is true, as alleged by petitioners, that broad constitutional principles require the State to develop an independent national economy effectively controlled by Filipinos; and to protect
and/or prefer Filipino labor, products, domestic materials and locally produced goods. But it is equally true that such principles -- while serving as judicial and legislative guides -- are not in
themselves sources of causes of action. Moreover, there are other equally fundamental constitutional principles relied upon by the Senate which mandate the pursuit of a trade policy that
serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity and the promotion of industries which are competitive in both domestic
and foreign markets, thereby justifying its acceptance of said treaty. So too, the alleged impairment of sovereignty in the exercise of legislative and judicial powers is balanced by the adoption
of the generally accepted principles of international law as part of the law of the land and the adherence of the Constitution to the policy of cooperation and amity with all nations.
That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent to the WTO Agreement thereby making it a part of the law of the land is a legitimate
exercise of its sovereign duty and power. We find no patent and gross arbitrariness or despotism by reason of passion or personal hostility in such exercise. It is not impossible to surmise
that this Court, or at least some of its members, may even agree with petitioners that it is more advantageous to the national interest to strike down Senate Resolution No. 97. But that is not
a legal reason to attribute grave abuse of discretion to the Senate and to nullify its decision. To do so would constitute grave abuse in the exercise of our own judicial power and
duty. Ineludably, what the Senate did was a valid exercise of its authority. As to whether such exercise was wise, beneficial or viable is outside the realm of judicial inquiry and review. That
is a matter between the elected policy makers and the people. As to whether the nation should join the worldwide march toward trade liberalization and economic globalization is a matter
that our people should determine in electing their policy makers. After all, the WTO Agreement allows withdrawal of membership, should this be the political desire of a member.
The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian Renaissance[65] where the East will become the dominant region of the world economically,
politically and culturally in the next century. He refers to the free market espoused by WTO as the catalyst in this coming Asian ascendancy. There are at present about 31 countries including
China, Russia and Saudi Arabia negotiating for membership in the WTO. Notwithstanding objections against possible limitations on national sovereignty, the WTO remains as the only viable
structure for multilateral trading and the veritable forum for the development of international trade law. The alternative to WTO is isolation, stagnation, if not economic self-destruction. Duly
enriched with original membership, keenly aware of the advantages and disadvantages of globalization with its on-line experience, and endowed with a vision of the future, the Philippines
now straddles the crossroads of an international strategy for economic prosperity and stability in the new millennium. Let the people, through their duly authorized elected officers, make
their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-25024 March 30, 1970

TEODORO C. SANTIAGO, JR. Minor, Represented by his Mother, Mrs. Angelita C. Santiago, petitioner-appellant,
vs.
MISS JUANITA BAUTISTA, ROSALINDA ALPAS, REBECCA MATUGAS, MILKITA INAMAC, ROMEO AGUSTIN, AIDA CAMINO, LUNA SARMAGO, AURORA LORENA, SOLEDAD
FRANCISCO and MR. FLOR MARCELO, respondents-appellees.

Teodoro M. Santiago for petitioner-appellant.

Ramon C. Carag for respondent-apellees.

BARREDO, J.:

Appeal from the order of the Court of First Instance of Cotabato dismissing, on a motion to dismiss, its Civil Case No. 2012 for certiorari, injunction and damages on the ground that
the complaint therein states no cause of action, and from the subsequent order of the court a quo denying the motion for the reconsideration of the said order of dismissal.

The record shows that at the time Civil Case No. 2012 was commenced in the court below, appellant Teodoro Santiago, Jr. was a pupil in Grade Six at the public school named Sero
Elementary School in Cotabato City. As the school year 1964-1965 was then about to end, the "Committee On The Rating Of Students For Honor" was constituted by the teachers concerned
at said school for the purpose of selecting the "honor students" of its graduating class. With the school Principal, Mrs. Aurora Lorena, as chairman, and Juanita Bautista, Rosalinda Alpas,
Rebecca Matugas, Milkita Inamac, Romeo Agustin, Aida Camino and Luna Sarmago, as members, the above-named committee deliberated and finally adjudged Socorro Medina, Patricia
Ligat and Teodoro C. Santiago, Jr. as first, second and third honors, respectively. The school's graduation exercises were thereafter set for May 21, 1965; but three days before that date,
the "third placer" Teodoro Santiago, Jr., represented by his mother, and with his father as counsel, sought the invalidation of the "ranking of honor students" thus made, by instituting the
above-mentioned civil case in the Court of First Instance of Cotabato, against the above-named committee members along with the District Supervisor and the Academic Supervisor of the
place.

The corresponding complaint filed alleged, inter alia: that plaintiff-petitioner Teodoro C. Santiago, Jr. is a sixth grader at the Sero Elementary School in Cotabato City scheduled to be
graduated on May 21st, 1965 with the honor rank of third place, which is disputed; that the teachers of the school had been made respondents as they compose the "Committee on the
Rating of Student for Honor", whose grave abuse of official discretion is the subject of suit, while the other defendants were included as Principal, District Supervisor and Academic
Supervisor of the school; that Teodoro Santiago, Jr. had been a consistent honor pupil from Grade I to Grade V of the Sero Elementary School, while Patricia Ligat (second placer in the
disputed ranking in Grade VI) had never been a close rival of petitioner before, except in Grade V wherein she ranked third; that Santiago, Jr. had been prejudiced, while his closest rival had
been so much benefited, by the circumstance that the latter, Socorro Medina, was coached and tutored during the summer vacation of 1964 by Mrs. Alpas who became the teacher of both
pupils in English in Grade VI, resulting in the far lead Medina obtained over the other pupil; that the committee referred to in this case had been illegally constituted as the same was
composed of all the Grade VI teachers only, in violation of the Service Manual for Teachers of the Bureau of Public Schools which provides that the committee to select the honor students
should be composed of all teachers in Grades V and VI; that there are direct and circumstantial matters, which shall be proven during the trial, wherein respondents have exercised grave
abuse of discretion and irregularities, such as the changing of the final ratings on the grading sheets of Socorro Medina and Patricia Ligat from 80% to 85%, and some teachers giving
petitioner a starting grade of 75% in Grade VI, which proves that there has already an intention to pull him to a much lower rank at the end of the school year; that several district
examinations outside of teachers' daily units and other than periodical tests were given, ratings in which were heavily considered in the determination of periodical ratings, whereas
according to the Academic Supervisor and Acting Division Superintendent of schools of the place such district examinations were not advisable; that there was a unanimous agreement and
understanding among the respondent teachers to insult and prejudice the second and third honors by rating Socorro Medina with a perfect score, which is very unnatural; that the words
"first place" in petitioner's certificate in Grade I was erased and replaced with the words "second place", which is an instance of the unjust and discriminating abuses committed by the
respondent teachers in the disputed selection of honor pupils they made; that petitioner personally appealed the matter to the School Principal, to the District Supervisor, and to the
Academic Supervisor, but said officials "passed the buck to each other" to delay his grievances, and as to appeal to higher authorities will be too late, there is no other speedy and adequate
remedy under the circumstances; and, that petitioner and his parents suffered mental and moral damages in the amount of P10,000.00. They prayed the court, among others, to set aside
the final list of honor students in Grade VI of the Sero Elementary School for that school year 1964-1965, and, during the pendency of the suit, to enjoin the respondent teachers from
officially and formally publishing and proclaiming the said honor pupils in Grade VI in the graduation exercises the school was scheduled to hold on the 21st of May of that year 1965. The
injunction prayed for was denied by the lower court in its order of May 20, 1965, the said court reasoning out that the graduation exercises were then already set on the following day, May
21, 1965, and the restraining of the same would be shocking to the school authorities, parents, and the community who had eagerly looked forward to the coming of that yearly happy
event. As scheduled, the graduation exercises of the Sero Elementary School for the school year 1964-1965 was held on May 21, with the same protested list of honor students.

Having been required by the above-mentioned order to answer the petition within ten (10) days, respondents moved for the dismissal of the case instead. Under date of May 24, 1965, they
filed a motion to dismiss, on the grounds (1) that the action for certiorari was improper, and (2) that even assuming the propriety of the action, the question brought before the court had
already become academic. This was opposed by petitioner.

In an order dated June 4, 1965, the motion to dismiss of respondents was granted, the court reasoning thus:

The respondents now move to dismiss the petition for being improper and for being academic. In order to resolve the motion to dismiss, the Court has carefully
examined the petition to determine the sufficiency of the alleged cause of action constituting the special civil action of certiorari.

The pertinent portions of the petition alleging 'grave abuse of discretion' are found in paragraphs 3, 4, 5, 6, 7, 8, 9 and 10. These allegations may be substantially
summarized as follows: Paragraph 3 alleges that since grades one to six, the students closely contending for class honors were Socorro Medina, Teodoro Santiago, Jr.,
Dolores Dalican and Patricia Ligat.

Socorro Medina obtained first honor thrice (grades I, V and VI); once second honor (grade IV), and twice third place (grades II and III).

Teodoro Santiago, Jr. obtained first place once (grade IV); four times second place (grades I, II, III, and V) and once third place (grade VI).

Dolores Dalican obtained twice first place (grades II, III); once third place (grade I).

Patricia Ligat once third place (grade V); and once second place (grade VI).

That as now ranked in the graduation Ligat is given second place while Teodoro Santiago, Jr., is given the third place only. This is the ranking now disputed by
petitioner, Teodoro Santiago, Jr.

Paragraph 4 alleges that Socorro Medina was tutored in the summer of 1964 by Mrs. Rosalinda Alpas who became her English teacher in the sixth grade; that as such,
Mrs. Alpas unjustly favored Socorro against her rivals.

Paragraph 5 alleges that the teachers who composed the committee on honor students are all grade six teachers while the Service Manual For Teachers provides that the
committee shall be composed of the teachers from the fifth and sixth grades.

Paragraph 6 alleges that there are direct and circumstantial evidence showing the change of ratings of Socorro Medina and Patricia Ligat from 80% to 85% and the
intention to junk petitioner to a lower rank.

Paragraph 7 alleges that the giving of district examinations upon which ratings were partly based were not advisable.
 Paragraph 8 alleges that the teachers rated Socorro Medina a perfect pupil which is unnatural.

Paragraph 9 alleges that on the first grade certificate of the petitioner the word "First Place" was erased and changed to "Second Place".

Paragraph 10 alleges that petitioner personally appealed to the school authorities but they only 'passed the buck to each other.'

SECOND PARAGRAPH VIOLATED

Rule 65, Section 1 of the Rules of Court provides:

'Section 1. Petition for certiorari. When any tribunal, board, or officer exercising judicial functions, has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered
annulling or modifying the proceedings, as the law requires, of such tribunal, board or officer.'

'The petition shall be accompanied by a certified true copy of the judgment or order subject thereof, together with copies of all pleadings and
documents relevant and pertinent thereto.'

It is striking, indeed, that this petition has not been accompanied by a certified true copy of the judgment or order complained of, together with all pleadings and
documents which are relevant thereto, as required by the second, paragraph of the aforequoted rule. This violation renders the petition extremely indefinite and
uncertain. There is no written formal judgment or order of respondents that is submitted for revision or correction of this Court. This violation is fatal to the petition.

ADMINISTRATIVE REMEDIES NEGLECTED

All that the petition alleges is that the petitioner personally appealed to the school authorities who only 'passed the buck to each other.' This allegation does not show
that petitioner formally availed of and exhausted the administrative remedies of the Department of Education. The petition implies that this is the first formal complaint
of petitioner against his teachers. The administrative agencies of the Department of Education could have investigated the grievances of the petitioner with dispatch and
give effective remedies, but petitioner negligently abandoned them. Petitioner cannot now claim that he lacked any plain, speedy and adequate remedy.

NO GRAVE ABUSE OF DISCRETION

Allegations relating to the alleged 'grave abuse of discretion' on the part of teachers refer to errors, mistakes, or irregularities rather than to real grave abuse of
discretion that would amount to lack of jurisdiction. Mere commission of errors in the exercise of jurisdiction may not be corrected by means of certiorari.

In view of the foregoing, the Court is of the opinion, and so holds, that the petition states no cause of action and should be, as it is hereby dismissed.

Upon receipt of a copy of the above-quoted order, the petitioner moved for the reconsideration thereof, but the same proved to be futile, hence, this appeal.

Appellant here assails the holding of the lower court that his petition states no cause of action on the grounds discussed by the court a quo in the appealed order above-quoted (1)
that the petition does not comply with the second paragraph of Sec. 1 of Rule 65 because it has not been accompanied by a certified true copy of the judgment or order subject thereof,
together with copies of all pleadings and documents relevant and pertinent thereto; (2) that administrative remedies were not first exhausted; and (3) that there was no grave abuse of
discretion on the part of the teachers who constituted the committee referred to. On the other hand, appellees maintain that the court below did not err in dismissing the case on said
grounds. Further, they argue in favor of the questioned order of dismissal upon the additional ground that the "committee on the ratings of students for honor" whose actions are here
condemned by appellant is not the "tribunal, board or officer exercising judicial functions" against which an action for certiorari may lie under Section 1 of Rule 65.
The last point raised by appellees deserves first consideration, for if really the said committee of teachers does not fall within the category of the tribunal, board, or officer exercising judicial
functions contemplated by Rule 65, further discussion of the issues raised by appellant may no longer be necessary. To resolve this problem the following tests may be employed:

In this jurisdiction certiorari is a special civil action instituted against 'any tribunal, board, or officer exercising judicial functions.' (Section 1, Rule 67.) A judicial function
is an act performed by virtue of judicial powers; the exercise of a judicial function is the doing of something in the nature of the action of the court (34 C.J. 1182). In order
that a special civil action of certiorari may be invoked in this jurisdiction the following circumstances must exist: (1) that there must be a specific controversy involving
rights of persons or property and said controversy is brought before a tribunal, board or officer for hearing and determination of their respective rights and obligations.

'Judicial action is an adjudication upon the rights of parties who in general appear or are brought before the tribunal by notice or process, and upon
whose claims some decision or judgment is rendered. It implies impartiality, disinterestedness, a weighing of adverse claims, and is inconsistent with
discretion on the one hand for the tribunal must decide according to law and the rights of the parties or with dictation on the other; for in the
first instance it must exercise its own judgment under the law, and not act under a mandate from another power. ... The character of its action in a
given case must decide whether that action is judicial, ministerial, or legislative, or whether it be simply that of a public agent of the country or State,
as in its varied jurisdictions it may by turns be each.' (In Re Saline County Subscription, 100 Am. Dec. 337, 338, cited in Southeastern Greyhound Lines
v. Georgia Public Service Commission, 181 S. E. 836-837.)

'It may be said generally that the exercise of judicial function is to determine what the law is, and what the legal rights of parties are, with respect to a
matter in controversy; and whenever an officer is clothed with that authority, and undertakes to determine those questions, he acts judicially.' (State
ex rel. Board of Commissioners of St. Louis County, et al. v. Dunn, 90 N. W. 772-773.)

(2) the tribunal, board or officer before whom the controversy is brought must have the power and authority to pronounce judgment and render a decision on the
controversy construing and applying the laws to that end.

'The phrase "judicial power" is not capable of a precise definition which would be applicable to all cases. The term has been variously defined as the
authority to determine the rights of persons or property by arbitrating between adversaries in specific controversies at the instance of a party
thereto; the authority exercised by that department of government which is charged with the declaration of what the law is and its construction so far
as it is written law; the authority or power vested in the judges or in the courts; the authority vested in some court, officer, or persons to hear and
determine when the rights of persons or property or the propriety of doing an act is the subject matter of adjudication; the power belonging to or
emanating from a judge as such; the power conferred upon a public officer, involving the exercise of judgment and discretion in the determination of
questions of right in specific cases affecting the interest of persons or property, as distinguished from ministerial power or authority to carry out the
mandates of judicial power or the law; the power exercised by courts in hearing and determining cases before them, or some matter incidental
thereto, and of which they have jurisdiction; the power of a court to decide and pronounce a judgment; the power which adjudicates upon and
protects the rights and interests of individual citizens, and to that end construes and applies the law. "Judicial power" implies the construction of laws
and the adjudication of legal rights. It includes the power to hear and determine but not everyone who may hear and determine has judicial power.
The term "judicial power" does not necessarily include the power to hear and determine a matter that is not in the nature of a suit or action between
the parties.' (34 C.J. 1183-1184.) .

(3) the tribunal, board or officer must pertain to that branch of the sovereign power which belongs to the judiciary, or at least, which does not belong to the legislative or
executive department.

... the distinction between legislative or ministerial functions and judicial functions is difficult to point out. What is a judicial function does not depend
solely upon the mental operation by which it is performed or the importance of the act. In solving this question, due regard must be had to the organic
law of the state and the division of power of government. In the discharge of executive and legislative duties, the exercise of discretion and judgment
of the highest order is necessary, and matters of the greatest weight and importance are dealt with. It is not enough to make a function judicial that it
requires discretion, deliberation, thought, and judgment. It must be the exercise of discretion and judgment within that subdivision of the sovereign
power which belongs to the judiciary, or, at least, which does not belong to the legislative or executive department. If the matter, in respect to which it is
exercised, belongs to either of the two last-named departments of government, it is not judicial. As to what is judicial and what is not seems to be
 better indicated by the nature of a thing, than its definition.' (Whealing & Elm Grove Railroad Co. Appt. v. Town of Triadelphia, et al., 4 L.R.A. (N. S.) pp.
321, 328-329.) [Emphasis supplied]1

'WHAT ARE JUDICIAL OR QUASI JUDICIAL ACTS. It is difficult, if not impossible, precisely to define what are judicial or quasi judicial acts, and there is
considerable conflict in the decisions in regard thereto, in connection with the law as to the right to the writ of certiorari. It is clear, however, that it is
the nature of the act to be performed, rather than of the office, board, or body which performs it, that determines whether or not it is the discharge of a
judicial or quasi-judicial function. It is not essential that the proceedings should be strictly and technically judicial, in the sense in which that word is
used when applied to the courts of justice, but it is sufficient if they are quasi judicial. It is enough if the officers act judicially in making their decision,
whatever may be their public character. ...' "In State ex rel. Board of Commrs. vs. Dunn (86 Minn. 301, 304), the following statements were made:

'The precise line of demarkation between what are judicial and what are administrative or ministerial functions is often difficult to determine. The
exercise of judicial functions may involve the performance of legislative or administrative duties, and the performance of administrative or ministerial
duties, may, in a measure, involve the exercise of judicial functions. It may be said generally that the exercise of judicial functions is to determine what
the law is, and what the legal rights of parties are, with respect to a matter in controversy; and whenever an officer is clothed with that authority, and
undertakes to determine those questions, he acts judicially.' 2

It is evident, upon the foregoing authorities, that the so called committee on the rating of students for honor whose actions are questioned in this case exercised neither judicial nor quasi
judicial functions in the performance of its assigned task. From the above-quoted portions of the decision cited, it will be gleaned that before tribunal board, or officer may exercise judicial
or quasi judicial acts, it is necessary that there be a law that give rise to some specific rights of persons or property under which adverse claims to such rights are made, and the
controversy ensuing therefrom is brought, in turn, before the tribunal, board or officer clothed with power and authority to determine what that law is and thereupon adjudicate the
respective rights of the contending parties. As pointed out by appellees,3however, there is nothing on record about any rule of law that provides that when teachers sit down to assess the
individual merits of their pupils for purposes of rating them for honors, such function involves the determination of what the law is and that they are therefore automatically vested with
judicial or quasi judicial functions. Worse still, this Court has not even been appraised by appellant of the pertinent provisions of the Service Manual of Teachers for Public Schools
appellees allegedly violated in the composition of the committee they constituted thereunder, and, in the performance of that committee's duties.

At any rate, the situation brought before Us in this case, the seemingly one of first impression, is not without substantial parallel. In the case of Felipe vs. Leuterio, etc., et al.,4 the issue
presented for determination was whether or not the courts have the authority to reverse the award of the board of judges of an oratorical contest, and this Court declared that the judiciary
has no power to reverse the award of the board of judges of that contest and, for that matter, it would not interfere in literary contests, beauty contests and similar competitions. It was
reasoned out thus:

For more than thirty years oratorical tilts have been held periodically by schools and colleges in this islands. Inter-collegiate oratorical competitions are of more recent
origin. Members of this court have taken part in them either as contestants in their school days (In the College of Law, U.P. annual oratorical contest, first prize was
awarded to Justice Montemayor in 1914 and to Justice Labrador in 1916), or as members of the board of judges afterwards. They know some few verdicts did not reflect
the audience's preference and that errors have sometimes been ascribed to the award of the judges. Yet no party ever presumed to invoke judicial intervention; for it is
unwritten law in such contests that the board's decision is final and unappealable.

Like the ancient tournaments of the Sword, these tournaments of the Word apply the highest tenets of sportsmanship: finality of referee's verdict. No alibis, no murmurs
of protest. The participants are supposed to join the competition to contribute to its success by striving their utmost: the prizes are secondary.

No rights to the prizes may be asserted by the contestants, because theirs was merely the privilege to compete for the prize, and that privilege did not ripen into a
demandable right unless and until they were proclaimed winners of the competition by the appointed arbiters or referees or judges.

Incidentally, these school activities have been imported from the United States. We found in American jurisprudence no litigation questioning the determination of the
board of judges.

Now, the fact that a particular action has had no precedent during a long period affords some reason for doubting the existence of the right sought to be enforced,
especially where occasion for its assertion must have often arisen; and courts are cautious before allowing it, being loath to establish a new legal principle not in
harmony with the generally accepted views thereon. (See C.J.S. Vol. 1, p. 1012.)
 We observe that in assuming jurisdiction over the matter, the respondent judge reasoned out that where there is a wrong there is a remedy and that courts of first
instance are courts of general jurisdiction.

The flaw in his reasoning lies in the assumption that Imperial suffered some wrong at the hands of the board of judges. If at all, there was error on the part of one judge,
at most. Error and wrong do not mean the same thing. 'Wrong' as used in the aforesaid principle is the deprivation or violation of a right. As stated before, a
contestant has no right to the prize unless and until he or she is declared winner by the board of referees or judges.

Granting that Imperial suffered some loss or injury, yet in law there are instances of 'damnum absque injuria'. This is one of them. If fraud or malice had been proven, it
would be a different proposition. But then her action should be directed against the individual judge or judges who fraudulently or maliciously injured her. Not against
the other judges.

But even were We to assume for the moment, as the court below apparently did, that judicial intervention might be sought in cases of this nature, still, We are inclined to sustain the order
of dismissal appealed from for failure on the part of appellant to comply with the requirements of Section 1 of Rule 65. To be sure, the lower court's holding that appellant's failure to
accompany his petition with a copy of the judgment or order subject thereof together with copies of all pleadings and documents relevant and pertinent thereto "is fatal to his cause" is
supported not only by the provision of that Rule but by precedents as well. In the case of Alajar, et al. vs. Court of Industrial Relations,5where it was claimed by therein petitioners that the
respondent court had acted with grave abuse of discretion in estimating certain rice harvests involved in the case in terms of cavans instead of cans, allegedly in complete disregard of the
decision of the Court of First Instance of Batangas in Expropriation Proceedings No. 84 and of this Court in G.R. No.
L-6191,6 and in ordering thereafter the division of the said rice harvests on the ratio of 70-30 in favor of the tenants, this Court denied the petition for certiorari on the ground, among
others, of failure on the part of said petitioners to attach to their petition copies of the decisions allegedly violated. Speaking thru Mr. Justice J.B.L. Reyes then, this Court held:

The petition is patently without merit. In the first place, it is not even sufficient in form and substance to justify the issuance of the writ of certiorari prayed for. It charges
that the Court of Industrial Relations abused its discretion in disregarding the decision of the Court of First Instance of Batangas in Expropriation Proceedings No. 84 and
of this Court in G.R. No. L-6191; yet it does not attach to the petition the decisions allegedly violated by the Court below and point out which particular portion or
portions thereof have been disregarded by the respondent Court.

The same principle was applied in the more recent case of NAWASA vs. Municipality of Libmanan, et al.,7 wherein this Court dismissed (by Resolution) the petition for certiorari and
mandamus filed by the National Waterworks and Sewerage Authority against the Court of First Instance of Camarines Sur, and the municipality of Libmanan. In the following language, this
Court emphasized the importance of complying with the said requirement of Rule 65:

While paragraph 3 of the petition speaks of the complaint filed by the respondent municipality with the respondent court for recovery of property with damages (Civil
Case No. L-161) no copy thereof is attached to the petition.

Similarly, paragraph 4 of the petition mentions the decision rendered by the respondent court on December 10, 1965, but no copy thereof is attached to the petition.

Again, paragraph 5 of the petition speaks of the order of default entered by the respondent court and of the motion for reconsideration filed by petitioner in the case
above-mentioned, but no copy of the order of default is attached to its petition.

Bearing in mind that the petition under consideration was filed for the purpose of enjoining the respondent court from executing the decision rendered in Civil Case No.
L-161, the importance of the missing pleadings is obvious.

Moreover, the petition is also for the purpose of securing an order commanding the respondent court to approve either the original or the amended record on appeal
filed petition, but no copy of either is attached to its petition.

In view of the foregoing, the petition under consideration is dismissed.

It might be true, as pointed out by appellant, that he received a copy of the programme of the graduation exercises held by the Sero Elementary School in the morning of the very day of that
graduation exercises, implying that he could not have attached then a copy thereof (to show the decision of the committee of teachers in the ranking of students complained of) to his
petition. The stubborn fact remains, however, that appellant had known of such decision of the said committee of teachers much earlier, as shown by the circumstance that according to
him, even before the filing of his petition with the lower court on the 19th of May, 1965, he had personally appealed the said committee's decision with various higher authorities of the
above-named school, who merely passed the buck to each other. Moreover, appellant mentions in his petition various other documents or papers as the Service Manual for Teachers
allegedly violated by appellees in the constitution of their committee; altered grading sheets; and erasures in his Grade I certificate which appellant never bothered to attach to his
petition. There could be no doubt then that he miserably failed to comply with the requirement of Rule 65 above-mentioned. With this conclusion, it is no longer necessary to pass upon the
other two errors assigned by appellant.

FOR THE FOREGOING CONSIDERATIONS, the judgment appealed from is affirmed, with costs against appellant.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee and Villamor, JJ., concur.