EN BANC
[x] Bugler/Drummer
G.R. No. 225973, November 08, 2016
DECISION
PERALTA, J.:
In law, as much as in life, there is need to find closure. Issues that have lingered and festered for so
long and which unnecessarily divide the people and slow the path to the future have to be interred. To
move on is not to forget the past. It is to focus on the present and the future, leaving behind what is
better left for history to ultimately decide. The Court finds guidance from the Constitution and the
applicable laws, and in the absence of clear prohibition against the exercise of discretion entrusted to
the political branches of the Government, the Court must not overextend its readings of what may only
be seen as providing tenuous connection to the issue before it.
Facts
During the campaign period for the 2016 Presidential Election, then candidate Rodrigo R. Duterte (Duterte)
publicly announced that he would allow the burial of former President Ferdinand E. Marcos (Marcos) at
the Libingan Ng Mga Bayani (LNMB). He won the May 9, 2016 election, garnering 16,601,997 votes. At noon
of June 30, 2016, he formally assumed his office at the Rizal Hall in the Malacaan Palace.
On August 7, 2016, public respondent Secretary of National Defense Delfin N. Lorenzana issued a
Memorandum to the public respondent Chief of Staff of the Armed Forces of the Philippines (AFP), General
Ricardo R. Visaya, regarding the interment of Marcos at the LNMB, to wit:
Subject: Interment of the late Former President Ferdinand Marcos at LNMB
Reference: Verbal Order of President Rodrigo Duterte on July 11, 2016.
In compliance to (sic) the verbal order of the President to implement his election campaign promise to have the
remains of the late former President Ferdinand E. Marcos be interred at the Libingan ng mga Bayani, kindly
undertake all the necessary planning and preparations to facilitate the coordination of all agencies concerned
specially the provisions for ceremonial and security requirements. Coordinate closely with the Marcos family
regarding the date of interment and the transport of the late former President's remains from Ilocos Norte to
the LNMB.
The overall OPR for this activity will [be] the PVAO since the LNMB is under its supervision and administration.
PVAO shall designate the focal person for this activity who shall be the overall overseer of the event.
Submit your Implementing Plan to my office as soon as possible. 1 chanr obl es virtuall awlibrar y
On August 9, 2016, respondent AFP Rear Admiral Ernesto C. Enriquez issued the following directives to the
Philippine Army (PA) Commanding General: ChanR obl es Virtualawli brar y
SUBJECT: Funeral Honors and Service
TO: Commanding General, Philippine Army
Headquarters, Philippine Army
Fort Bonifacio, Taguig City
Attn: Assistant Chief of Staff for RRA, G9
1. Pursuant to paragraph 2b, SOP Number 8, GHQ, AFP dated 14 July 1992, provide services, honors
and other courtesies for the late Former President Ferdinand E. Marcos as indicated:
[x] Vigil - Provide vigil
[x] Firing Party
[x] Military Host/Pallbearers
[x] Escort and Transportation
[x] Arrival/Departure Honors
2. His remains lie in state at Ilocos Norte
3. Interment will take place at the Libingan ng mga Bayani, Ft. Bonifacio, Taguig City. Date:
TBAL.
4. Provide all necessary military honors accorded for a President
5. POC: Administrator, PVAO BY COMMAND OF GENERAL VISAYA2
Dissatisfied with the foregoing issuance, the following were filed by petitioners:
1. Petition for Certiorari and Prohibition3 filed by Saturnino Ocampo and several others, 4 in their capacities
chanR obl es virtual Lawlibrar y
as human rights advocates or human rights violations victims as defined under Section 3 (c) of Republic Act
(R.A.) No. 10368 (Human Rights Victims Reparation and Recognition Act of 2013).
2. Petition for Certiorari-in-Intervention5 filed by Rene A.V. Saguisag, Sr. and his son, 6 as members of the Bar
and human rights lawyers, and his grandchild.7 chanr obl esl aw
3. Petition for Prohibition8 filed by Representative Edcel C. Lagman, in his personal capacity, as member of the
ChanRoblesVirtual awlibr ary
House of Representatives and as Honorary Chairperson of Families of Victims of Involuntary Disappearance
(FIND), a duly-registered corporation and organization of victims and families of enforced disappearance,
mostly during the martial law regime of the former President Marcos, and several others, 9 in their official
capacities as duly-elected Congressmen of the House of Representatives of the Philippines.
4. Petition for Prohibition10 filed by Loretta Ann Pargas-Rosales, former Chairperson of the Commission on
Human Rights, and several others,11 suing as victims of State-sanctioned human rights violations during the
martial law regime of Marcos.
5. Petition for Mandamus and Prohibition12 filed by Heherson T. Alvarez, former Senator of the Republic of the
Philippines, who fought to oust the dictatorship of Marcos, and several others, 13 as concerned Filipino citizens
and taxpayers.
6. Petition for Certiorari and Prohibition14 filed by Zaira Patricia B. Baniaga and several others, 15 as concerned
Filipino citizens and taxpayers.
7. Petition for Certiorari and Prohibition16 filed by Algamar A. Latiph, former Chairperson of the Regional
Human Rights Commission, Autonomous Region in Muslim Mindanao, by himself and on behalf of
the Moro17 who are victims of human rights during the martial law regime of Marcos.
8. Petition for Certiorari and Prohibition18 filed by Leila M. De Lima as member of the Senate of the Republic of
the Philippines, public official and concerned citizen.
Issues
Procedural
1. Whether President Duterte's determination to have the remains of Marcos interred at the LNMB poses a
justiciable controversy.
2. Whether petitioners have locus standi to file the instant petitions.
3. Whether petitioners violated the doctrines of exhaustion of administrative remedies and hierarchy of courts.
Substantive
1. Whether the respondents Secretary of National Defense and AFP Rear Admiral committed grave abuse of
discretion, amounting to lack or excess of jurisdiction, when they issued the assailed memorandum and
directive in compliance with the verbal order of President Duterte to implement his election campaign promise
to have the remains of Marcos interred at the LNMB.
2. Whether the Issuance and implementation of the assailed memorandum and directive violate the
Constitution, domestic and international laws, particularly:
(a) Sections 2, 11, 13, 23, 26, 27 and 28 of Article II, Section 1 of Article III, Section 17 of Article VII,
chanR obl es virtual Lawlibrar y
Section 1 of Article XI, Section 3(2) of Article XIV, and Section 26 of Article XVIII of the 1987 Constitution;
(b) R.A. No. 289;
(c) R.A. No. 10368;
(d) AFP Regulation G 161-375 dated September 11, 2000;
(e) The International Covenant on Civil and Political Rights;
(f) The "Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross
Violations of International Human Rights Law and Serious Violations of International Humanitarian Law" of the
United Nations (U.N.) General Assembly; and cralawl awlibrar y
(g) The "Updated Set of Principles for Protection and Promotion of Human Rights through Action to Combat
Impunity" of the U.N. Economic and Social Council;
3. Whether historical facts, laws enacted to recover ill-gotten wealth from the Marcoses and their cronies, and
the pronouncements of the Court on the Marcos regime have nullified his entitlement as a soldier and former
President to interment at the LNMB.
4. Whether the Marcos family is deemed to have waived the burial of the remains of former President Marcos
at the LNMB after they entered into an agreement with the Government of the Republic of the Philippines as to
the conditions and procedures by which his remains shall be brought back to and interred in the Philippines.
Opinion
The petitions must be dismissed.
Procedural Grounds
Justiciable controversy
It is well settled that no question involving the constitutionality or validity of a law or governmental act may be
heard and decided by the Court unless the following requisites for judicial inquiry are present: (a) there must
be an actual case or controversy calling for the exercise of judicial power; (b) the person challenging the act
must have the standing to question the validity of the subject act or issuance; (c) the question of
constitutionality must be raised at the earliest opportunity; and (d) the issue of constitutionality must be the
very lis mota of the case.19 In this case, the absence of the first two requisites, which are the most essential,
renders the discussion of the last two superfluous. 20 chanr obl eslaw
An "actual case or controversy" is one which involves a conflict of legal rights, an assertion of opposite legal
claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or
dispute.21 There must be a contrariety of legal rights that can be interpreted and enforced on the basis of
existing law and jurisprudence.22 Related to the requisite of an actual case or controversy is the requisite of
"ripeness," which means that something had then been accomplished or performed by either branch before a
court may come into the picture, and the petitioner must allege the existence of an immediate or threatened
injury to itself as a result of the challenged action. 23 Moreover, the limitation on the power of judicial review to
actual cases and controversies carries the assurance that the courts will not intrude into areas committed to
the other branches of government.24 Those areas pertain to questions which, under the Constitution, are to be
decided by the people in their sovereign capacity, or in regard to which full discretionary authority has been
delegated to the legislative or executive branch of the government. 25 As they are concerned with questions of
cralawred
policy and issues dependent upon the wisdom, not legality of a particular measure, 26 political questions used
to be beyond the ambit of judicial review. However, the scope of the political question doctrine has been
limited by Section 1 of Article VIII of the 1987 Constitution when it vested in the judiciary the power 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.
The Court agrees with the OSG that President Duterte's decision to have the remains of Marcos interred at the
LNMB involves a political question that is not a justiciable controversy. In the exercise of his powers under the
Constitution and the Executive Order (E.O.) No. 292 (otherwise known as the Administrative Code of 1987) to
allow the interment of Marcos at the LNMB, which is a land of the public domain devoted for national military
cemetery and military shrine purposes, President Duterte decided a question of policy based on his wisdom
that it shall promote national healing and forgiveness. There being no taint of grave abuse in the exercise of
such discretion, as discussed below, President Duterte's decision on that political question is outside the ambit
of judicial review.
Locus standi
Defined as a right of appearance in a court of justice on a given question, 27locus standi requires that a party
alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional
questions.28 Unless a person has sustained or is in imminent danger of sustaining an injury as a result of an
act complained of, such proper party has no standing. 29 Petitioners, who filed their respective petitions
for certiorari, prohibition and mandamus, in their capacities as citizens, human rights violations victims,
legislators, members of the Bar and taxpayers, have no legal standing to file such petitions because they failed
to show that they have suffered or will suffer direct and personal injury as a result of the interment of Marcos at
the LNMB.
Taxpayers have been allowed to sue where there is a claim that public funds are illegally disbursed or that
public money is being deflected to any improper purpose, or that public funds are wasted through the
enforcement of an invalid or unconstitutional law.30 In this case, what is essentially being assailed is the
wisdom behind the decision of the President to proceed with the interment of Marcos at the LNMB. As
taxpayers, petitioners merely claim illegal disbursement of public funds, without showing that Marcos is
disqualified to be interred at the LNMB by either express or implied provision of the Constitution, the laws or
jurisprudence.
Petitioners Saguisag, et al.,31 as members of the Bar, are required to allege any direct or potential injury which
the Integrated Bar of the Philippines, as an institution, or its members may suffer as a consequence of the act
complained of.32 Suffice it to state that the averments in their petition-in-intervention failed to disclose such
injury, and that their interest in this case is too general and shared by other groups, such that their duty to
uphold the rule of law, without more, is inadequate to clothe them with requisite legal standing. 33 chanrobl eslaw
As concerned citizens, petitioners are also required to substantiate that the issues raised are of transcendental
importance, of overreaching significance to society, or of paramount public interest. 34 In cases involving such cannot simply brush aside the doctrine of hierarchy of courts that requires such petitions to be filed first with
issues, the imminence and clarity of the threat to fundamental constitutional rights outweigh the necessity for the proper Regional Trial Court (RTC). The RTC is not just a trier of facts, but can also resolve questions of
prudence.35 In Marcos v. Manglapus,36 the majority opinion observed that the subject controversy was of grave law in the exercise of its original and concurrent jurisdiction over petitions for certiorari, prohibition and
national importance, and that the Court's decision would have a profound effect on the political, economic, and mandamus, and has the power to issue restraining order and injunction when proven necessary.
other aspects of national life. The ponencia explained that the case was in a class by itself, unique and could
not create precedent because it involved a dictator forced out of office and into exile after causing twenty years In fine, the petitions at bar should be dismissed on procedural grounds alone. Even if We decide the case
of political, economic and social havoc in the country and who, within the short space of three years (from based on the merits, the petitions should still be denied.
1986), sought to return to the Philippines to die.
Substantive Grounds
At this point in time, the interment of Marcos at a cemetery originally established as a national military
cemetery and declared a national shrine would have no profound effect on the political, economic, and other There is grave abuse of discretion when an act is (1) done contrary to the Constitution, the law or
aspects of our national life considering that more than twenty-seven (27) years since his death and thirty (30) jurisprudence or (2) executed whimsically, capriciously or arbitrarily, out of malice, ill will or personal
years after his ouster have already passed. Significantly, petitioners failed to demonstrate a clear and bias.46 None is present in this case.
imminent threat to their fundamental constitutional rights.
I
As human rights violations victims during the Martial Law regime, some of petitioners decry re-traumatization,
The President's decision to bury Marcos at the LNMB is in accordance with the Constitution, the law or
historical revisionism, and disregard of their state recognition as heroes. Petitioners' argument is founded on
jurisprudence
the wrong premise that the LNMB is the National Pantheon intended by law to perpetuate the memory of all
Presidents, national heroes and patriots. The history of the LNMB, as will be discussed further, reveals its
Petitioners argue that the burial of Marcos at the LNMB should not be allowed because it has the effect of not
nature and purpose as a national military cemetery and national shrine, under the administration of the AFP.
just rewriting history as to the Filipino people's act of revolting against an authoritarian ruler but also condoning
the abuses committed during the Martial Law, thereby violating the letter and spirit of the 1987 Constitution,
Apart from being concerned citizens and taxpayers, petitioners Senator De Lima, and Congressman
which is a "post-dictatorship charter" and a "human rights constitution." For them, the ratification of the
Lagman, et al.37 come before the Court as legislators suing to defend the Constitution and to protect
Constitution serves as a clear condemnation of Marcos' alleged "heroism." To support their case, petitioners
appropriated public funds from being used unlawfully. In the absence of a clear showing of any direct injury to
invoke Sections 2,47 11,48 13,49 23,50 26,51 2752 and 2853 of Article II, Sec. 17 of Art. VII,54 Sec. 3(2) of Art.
their person or the institution to which they belong, their standing as members of the Congress cannot be
XIV,55 Sec. 1 of Art. XI,56 and Sec. 26 of Art. XVIII57 of the Constitution.
upheld.38 They do not specifically claim that the official actions complained of, i.e., the memorandum of the
Secretary of National Defense and the directive of the AFP Chief of Staff regarding the interment of Marcos at
There is no merit to the contention.
the LNMB, encroach on their prerogatives as legislators.39 chanroblesl aw

As the Office of the Solicitor General (OSG) logically reasoned out, while the Constitution is a product of our
Exhaustion of Administrative Remedies
collective history as a people, its entirety should not be interpreted as providing guiding principles to just about
anything remotely related to the Martial Law period such as the proposed Marcos burial at the LNMB.
Petitioners violated the doctrines of exhaustion of administrative remedies and hierarchy of courts. Under the
doctrine of exhaustion of administrative remedies, before a party is allowed to seek the intervention of the
Taada v. Angara58 already ruled that the provisions in Article II of the Constitution are not self-executing.
court, one should have availed first of all the means of administrative processes available. 40 If resort to a
Thus:
remedy within the administrative machinery can still be made by giving the administrative officer concerned
ChanR obl es Virtualawli brar y

By its very title, Article II of the Constitution is a "declaration of principles and state policies." The counterpart
every opportunity to decide on a matter that comes within his jurisdiction, then such remedy should be
of this article in the 1935 Constitution is called the "basic political creed of the nation" by Dean Vicente Sinco.
exhausted first before the court's judicial power can be sought. 41 For reasons of comity and convenience,
These principles in Article II are not intended to be self executing principles ready for enforcement through the
courts of justice shy away from a dispute until the system of administrative redress has been completed and
courts. They are used by the judiciary as aids or as guides in the exercise of its power of judicial review, and
complied with, so as to give the administrative agency concerned every opportunity to correct its error and
by the legislature in its enactment of laws. As held in the leading case of Kilosbayan, Incorporated vs. Morato,
dispose of the case.42 While there are exceptions43 to the doctrine of exhaustion of administrative remedies,
the principles and state policies enumerated in Article II x x x are not "self-executing provisions, the disregard
petitioners failed to prove the presence of any of those exceptions.
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."
Contrary to their claim of lack of plain, speedy, adequate remedy in the ordinary course of law, petitioners
should be faulted for failing to seek reconsideration of the assailed memorandum and directive before the
In the same light, we held in Basco vs. Pagcor that broad constitutional principles need legislative enactments
Secretary of National Defense. The Secretary of National Defense should be given opportunity to correct
to implement them x x x.
himself, if warranted, considering that AFP Regulations G 161-375 was issued upon his order. Questions on
the implementation and interpretation thereof demand the exercise of sound administrative discretion,
xxx
requiring the special knowledge, experience and services of his office to determine technical and intricate
matters of fact. If petitioners would still be dissatisfied with the decision of the Secretary, they could elevate the
The reasons for denying a cause of action to an alleged infringement of broad constitutional principles are
matter before the Office of the President which has control and supervision over the Department of National
sourced from basic considerations of due process and the lack of judicial authority to wade "into the uncharted
Defense (DND).44
ocean of social and economic policy making."59
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chanrobles virtuallawlibr ar y

In the same vein, Sec. 1 of Art. XI of the Constitution is not a self-executing provision considering that a law
Hierarchy of Courts
should be passed by the Congress to clearly define and effectuate the principle embodied therein. As a matter
of fact, pursuant thereto, Congress enacted R.A. No. 6713 ("Code of Conduct and Ethical Standards for Public
In the same vein, while direct resort to the Court through petitions for the extraordinary writs of certiorari,
Officials and Employees"), R.A. No. 6770 ("The Ombudsman Act of 1989"), R.A. No. 7080 (An Act Defining
prohibition and mandamus are allowed under exceptional cases, 45 which are lacking in this case, petitioners
and Penalizing the Crime of Plunder), and Republic Act No. 9485 ("Anti-Red Tape Act of 2007"). To
complement these statutes, the Executive Branch has issued various orders, memoranda, and instructions
relative to the norms of behavior/code of conduct/ethical standards of officials and employees; workflow
charts/public transactions; rules and policies on gifts and benefits; whistle blowing and reporting; and client
feedback program.
Petitioners' reliance on Sec. 3(2) of Art. XIV and Sec. 26 of Art. XVIII of the Constitution is also misplaced.
Sec. 3(2) of Art. XIV refers to the constitutional duty of educational institutions in teaching the values of
patriotism and nationalism and respect for human rights, while Sec. 26 of Art. XVIII is a transitory provision on
sequestration or freeze orders in relation to the recovery of Marcos' ill-gotten wealth. Clearly, with respect to
these provisions, there is no direct or indirect prohibition to Marcos' interment at the LNMB.
The second sentence of Sec. 17 of Art. VII pertaining to the duty of the President to "ensure that the laws be
faithfully executed," which is identical to Sec. 1, Title I, Book III of the Administrative Code of 1987, 60 is
likewise not violated by public respondents. Being the Chief Executive, the President represents the
government as a whole and sees to it that all laws are enforced by the officials and employees of his or her
department.61 Under the Faithful Execution Clause, the President has the power to take "necessary and proper
steps" to carry into execution the law.62 The mandate is self-executory by virtue of its being inherently
executive in nature and is intimately related to the other executive functions. 63 It is best construed as an
imposed obligation, not a separate grant of power. 64 The provision simply underscores the rule of law and,
corollarily, the cardinal principle that the President is not above the laws but is obliged to obey and execute
them.65chanr obl eslaw
Consistent with President Duterte's mandate under Sec. 17, Art. VII of the Constitution, the burial of Marcos at
the LNMB does not contravene R.A. No. 289, R.A. No. 10368, and the international human rights laws cited by
petitioners.
A. On R.A. No. 28966 chanrobl eslaw
For the perpetuation of their memory and for the inspiration and emulation of this generation and of
generations still unborn, R.A. No. 289 authorized the construction of a National Pantheon as the burial place of
the mortal remains of all the Presidents of the Philippines, national heroes and patriots.67 It also provided for
the creation of a Board on National Pantheon to implement the law. 68 chanr obl eslaw
On May 12, 1953, President Elpidio R. Quirino approved the site of the National Pantheon at East Avenue,
Quezon City.69 On December 23, 1953, he issued Proclamation No. 431 to formally "withdraw from sale or
settlement and reserve as a site for the construction of the National Pantheon a certain parcel of land located
in Quezon City." However, on July 5, 1954, President Magsaysay issued Proclamation No. 42 revoking
Proclamation Nos. 422 and 431, both series of 1953, and reserving the parcels of land embraced therein for
national park purposes to be known as Quezon Memorial Park.
It is asserted that Sec. 1 of R.A. No 289 provides for the legal standard by which a person's mortal remains
may be interred at the LNMB, and that AFP Regulations G 161-375 merely implements the law and should not
violate its spirit and intent. Petitioners claim that it is known, both here and abroad, that Marcos' acts and deed
- the gross human rights violations, the massive corruption and plunder of government coffers, and his military
record that is fraught with myths, factual inconsistencies, and lies - are neither worthy of perpetuation in our
memory nor serve as a source of inspiration and emulation of the present and future generations. They
maintain that public respondents are not members of the Board on National Pantheon, which is authorized by
the law to cause the burial at the LNMB of the deceased Presidents of the Philippines, national heroes, and
patriots.
Petitioners are mistaken. Both in their pleadings and during the oral arguments, they miserably failed to
provide legal and historical bases as to their supposition that the LNMB and the National Pantheon are one
and the same. This is not at all unexpected because the LNMB is distinct and separate from the burial place
envisioned in R.A. No 289. The parcel of land subject matter of President Quirino's Proclamation No. 431,
which was later on revoked by President Magsaysay's Proclamation No. 42, is different from that covered by
Marcos' Proclamation No. 208. The National Pantheon does not exist at present. To date, the Congress has
deemed it wise not to appropriate any funds for its construction or the creation of the Board on National
Pantheon. This is indicative of the legislative will not to pursue, at the moment, the establishment of a singular
interment place for the mortal remains of all Presidents of the Philippines, national heroes, and patriots.
Perhaps, the Manila North Cemetery, the Manila South Cemetery, and other equally distinguished private
cemeteries already serve the noble purpose but without cost to the limited funds of the government.
Even if the Court treats R.A. No. 289 as relevant to the issue, still, petitioners' allegations must fail. To apply
the standard that the LNMB is reserved only for the "decent and the brave" or "hero" would be violative of
public policy as it will put into question the validity of the burial of each and every mortal remains resting
therein, and infringe upon the principle of separation of powers since the allocation of plots at the LNMB is
based on the grant of authority to the President under existing laws and regulations. Also, the Court shares the
view of the OSG that the proposed interment is not equivalent to the consecration of Marcos' mortal remains.
The act in itself does not confer upon him the status of a "hero." Despite its name, which is actually a
misnomer, the purpose of the LNMB, both from legal and historical perspectives, has neither been to confer to
the people buried there the title of "hero" nor to require that only those interred therein should be treated as a
"hero." Lastly, petitioners' repeated reference to a "hero's burial" and "state honors," without showing proof as
to what kind of burial or honors that will be accorded to the remains of Marcos, is speculative until the specifics
of the interment have been finalized by public respondents.
B. On R.A. No. 1036870 chanroblesl aw
For petitioners, R.A. No. 10368 modified AFP Regulations G 161-375 by implicitly disqualifying Marcos' burial
at the LNMB because the legislature, which is a co-equal branch of the government, has statutorily declared
his tyranny as a deposed dictator and has recognized the heroism and sacrifices of the Human Rights
Violations Victims (HRVVs)71 under his regime. They insist that the intended act of public respondents
damages and makes mockery of the mandatory teaching of Martial Law atrocities and of the lives and
sacrifices of its victims. They contend that "reparation" under R.A. No. 10368 is non-judicial in nature but
a political action of the State through the Legislative and Executive branches by providing administrative relief
for the compensation, recognition, and memorialization of human rights victims.
We beg to disagree.
Certainly, R.A. No. 10368 recognizes the heroism and sacrifices of all Filipinos who were victims of summary
execution, torture, enforced or involuntary disappearance, and other gross human rights violations committed
from September 21, 1972 to February 25, 1986. To restore their honor and dignity, the State acknowledges its
moral and legal obligation72 to provide reparation to said victims and/or their families for the deaths, injuries,
sufferings, deprivations and damages they experienced.
In restoring the rights and upholding the dignity of HRVVs, which is part of the right to an effective remedy,
R.A. No. 10368 entitles them to monetary and non-monetary reparation. Any HRVV qualified under the
law73 shall receive a monetary reparation, which is tax-free and without prejudice to the receipt of any other
sum from any other person or entity in any case involving human rights violations. 74 Anent the non-monetary
reparation, the Department of Health (DOH), the Department of Social Welfare and Development (DSWD), the
Department of Education (DepEd), the Commission on Higher Education (CHED), the Technical Education
and Skills Development Authority (TESDA), and such other government agencies are required to render the
necessary services for the HRVVs and/or their families, as may be determined by the Human Rights Victims'
Claims Board (Board) pursuant to the provisions of the law. 75 chanroblesl aw
Additionally, R.A. No. 10368 requires the recognition of the violations committed against the HRVVs,
regardless of whether they opt to seek reparation or not. This is manifested by enshrining their names in the
Roll of Human Rights Violations Victims (Roll) prepared by the Board.76 The Roll may be displayed in
government agencies designated by the HRVV Memorial Commission (Commission).77 Also, a
Memorial/Museum/Library shall be established and a compendium of their sacrifices shall be prepared and
may be readily viewed and accessed in the internet.78 The Commission is created primarily for the
establishment, restoration, preservation and conservation of the Memorial/Museum/ Library/Compendium. 79 chanr oblesl aw

To memorialize80 the HRVVs, the Implementing Rules and Regulations of R.A. No. 10368 further mandates
that: (1) the database prepared by the Board derived from the processing of claims shall be turned over to the
Commission for archival purposes, and made accessible for the promotion of human rights to all government
agencies and instrumentalities in order to prevent recurrence of similar abuses, encourage continuing reforms
and contribute to ending impunity;81 (2) the lessons learned from Martial Law atrocities and the lives and
sacrifices of HRVVs shall be included in the basic and higher education curricula, as well as in continuing adult
learning, prioritizing those most prone to commit human rights violations; 82 and (3) the Commission shall
publish only those stories of HRVVs who have given prior informed consent. 83 chanr obl esl aw
This Court cannot subscribe to petitioners' logic that the beneficial provisions of R.A. No. 10368 are not
exclusive as it includes the prohibition on Marcos' burial at the LNMB. It would be undue to extend the law
beyond what it actually contemplates. With its victim-oriented perspective, our legislators could have easily
inserted a provision specifically proscribing Marcos' interment at the LNMB as a "reparation" for the HRVVs,
but they did not. As it is, the law is silent and should remain to be so. This Court cannot read into the law what
is simply not there. It is irregular, if not unconstitutional, for Us to presume the legislative will by supplying
material details into the law. That would be tantamount to judicial legislation.
Considering the foregoing, the enforcement of the HRVVs' rights under R.A. No 10368 will surely not be
impaired by the interment of Marcos at the LNMB. As opined by the OSG, the assailed act has no causal
connection and legal relation to the law. The subject memorandum and directive of public respondents do not
and cannot interfere with the statutory powers and functions of the Board and the Commission. More
importantly, the HRVVs' entitlements to the benefits provided for by R.A. No 10368 and other domestic laws
are not curtailed. It must be emphasized that R.A. No. 10368 does not amend or repeal, whether express or
implied, the provisions of the Administrative Code or AFP Regulations G 161-375:
It is a well-settled rule of statutory construction that repeals by implication are not favored. In order to effect a
repeal by implication, the later statute must be so irreconcilably inconsistent and repugnant with the existing
law that they cannot be made to reconcile and stand together. The clearest case possible must be made
before the inference of implied repeal may be drawn, for inconsistency is never presumed. There must be a
showing of repugnance clear and convincing in character. The language used in the later statute must be such
as to render it irreconcilable with what had been formerly enacted. An inconsistency that falls short of that
standard does not suffice. x x x84 chanrobles virtuallawlibr ar y
C. On International Human Rights Laws
Petitioners argue that the burial of Marcos at the LNMB will violate the rights of the HRVVs to "full" and
"effective" reparation, which is provided under the International Covenant on Civil and Political
Rights (ICCPR),85 the Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of
Gross Violations of International Human Rights Law and Serious Violations of International Humanitarian
Law86 adopted by the U.N. General Assembly on December 16, 2005, and the Updated Set of Principles for
the Protection and Promotion of Human Rights Through Action to Combat Impunity87 dated February 8, 2005
by the U.N. Economic and Social Council.
88
We do not think so. The ICCPR, as well as the U.N. principles on reparation and to combat impunity, call for
the enactment of legislative measures, establishment of national programmes, and provision for administrative
and judicial recourse, in accordance with the country's constitutional processes, that are necessary to give
effect to human rights embodied in treaties, covenants and other international laws. The U.N. principles on
reparation expressly states: ChanR obl es Virtualawli brar y
Emphasizing that the Basic Principles and Guidelines contained herein do not entail new international or
domestic legal obligations but identify mechanisms, modalities, procedures and methods for the
implementation of existing legal obligations under international human rights law and international
humanitarian law which are complementary though different as to their norms[.][Emphasis supplied]
The Philippines is more than compliant with its international obligations. When the Filipinos regained their
democratic institutions after the successful People Power Revolution that culminated on February 25, 1986,
the three branches of the government have done their fair share to respect, protect and fulfill the country's
human rights obligations, to wit:
The 1987 Constitution contains provisions that promote and protect human rights and social justice.
chanR obl es virtual Lawlibrar y
As to judicial remedies, aside from the writs of habeas corpus, amparo,89 and habeas data,90 the Supreme
Court promulgated on March 1, 2007 Administrative Order No. 25-2007,91 which provides rules on cases
involving extra-judicial killings of political ideologists and members of the media. The provision of the Basic
Principles and Guidelines on the prevention of the victim's re-traumatization applies in the course of legal and
administrative procedures designed to provide justice and reparation. 92 chanr obl esl aw
On the part of the Executive Branch, it issued a number of administrative and executive orders. Notable of
which are the following:
1. A.O. No. 370 dated December 10, 1997 (Creating the Inter-Agency Coordinating Committee on
Human Rights)
2. E.O. No. 118 dated July 5, 1999 (Providing for the Creation of a National Committee on the Culture
of Peace)
3. E.O. No. 134 dated July 31, 1999 (Declaring August 12, 1999 and Every 12th Day of August
Thereafter as International Humanitarian Law Day)
4. E.O. No. 404 dated January 24, 2005 (Creating the Government of the Republic of the Philippines
Monitoring Committee [GRPMC] on Human Rights and International Humanitarian Law)
C hanR obl es Virtualawli brar y
5. A.O. No. 157 dated August 21, 2006 (Creating an Independent Commission to Address Media and
Activist Killings)
6. A.O. No. 163 dated December 8, 2006 (Strengthening and Increasing the Membership of the
Presidential Human Rights Committee, and Expanding Further the Functions of Said Committee)93 chanroblesl aw
7. A.O. No. 181 dated July 3, 2007 (Directing the Cooperation and Coordination Between the National
Prosecution Service and Other Concerned Agencies of Government for the Successful Investigation
and Prosecution of Political and Media Killings)
8. A.O. No. 197 dated September 25, 2007 (DND and AFP Coordination with PHRC Sub-committee on
Killings and Disappearances)
9. A.O. No. 211 dated November 26, 2007 (Creating a Task Force Against Political Violence)
10. A.O. No. 249 dated December 10, 2008 (Further Strengthening Government Policies, Plans, and
Programs for the Effective Promotion and Protection of Human Rights on the Occasion of the 60th
Anniversary of the Universal Declaration of Human Rights)
11. E.O. No. 847 dated November 23, 2009 (Creating the Church-Police-Military-Liaison Committee to
Formulate and Implement a Comprehensive Program to Establish Strong Partnership Between the
State and the Church on Matters Concerning Peace and Order and Human Rights)
12. A.O. No. 35 dated November 22, 2012 (Creating the Inter-Agency Committee on Extra-Legal Killings,
Enforced Disappearances, Torture and Other Grave Violations of the Right to Life, Liberty and
Security of Persons)
13. A.O. No. 1 dated October 11, 2016 (Creating the Presidential Task Force on Violations of the Right
to Life, Liberty and Security of the Members of the Media)
Finally, the Congress passed the following laws affecting human rights:
1. Republic Act No. 7438 (An Act Defining Certain Rights of Person Arrested, Detained or Under
Custodia/Investigation as well as the Duties of the Arresting, Detaining and Investigating Officers and
Providing Penalties for Violations Thereof)
2. Republic Act No. 8371 (The Indigenous Peoples' Rights Act of 1997)
3. Republic Act No. 9201 (National Human Rights Consciousness Week Act of 2002)
4. Republic Act No. 9208 (Anti-Trafficking in Persons Act of 2003)
5. Republic Act No. 9262 (Anti-Violence Against Women and Their Children Act of 2004)
6. Republic Act No. 9344 (Juvenile Justice and Welfare Act of 2006)
7. Republic Act No. 9372 (Human Security Act of 2007)
8. Republic Act No. 9710 (The Magna Carta of Women)
9. Republic Act No. 9745 (Anti-Torture Act of 2009)
10. Republic Act No. 9851 (Philippine Act on Crimes Against International Humanitarian Law, Genocide,
and Other Crimes Against Humanity)
11. Republic Act No. 10121 (Philippine Disaster Risk Reduction and Management Act of 2010)
12. Republic Act No. 10168 (The Terrorism Financing Prevention and Suppression Act of 2012)
13. Republic Act No. 10353 (Anti-Enforced or Involuntary Disappearance Act of 2012)
14. Republic Act No. 10364 (Expanded Anti-Trafficking In Persons Act of 2012)
15. Republic Act No. 10368 (Human Rights Victims Reparation And Recognition Act of 2013)
16. Republic Act No. 10530 (The Red Cross and Other Emblems Act of 2013)
Contrary to petitioners' postulation, our nation's history will not be instantly revised by a single resolve of
President Duterte, acting through the public respondents, to bury Marcos at the LNMB. Whether petitioners
admit it or not, the lessons of Martial Law are already engraved, albeit in varying degrees, in the hearts and
minds of the present generation of Filipinos. As to the unborn, it must be said that the preservation and
popularization of our history is not the sole responsibility of the Chief Executive; it is a joint and collective
endeavor of every freedom-loving citizen of this country.
Notably, complementing the statutory powers and functions of the Human Rights Victims' Claims Board and
the HRVV Memorial Commission in the memorialization of HRVVs, the National Historical Commission of the
Philippines (NHCP), formerly known as the National Historical Institute (NHI),94 is mandated to act as the
primary government agency responsible for history and is authorized to determine all factual matters relating to
official Philippine history.95 Among others, it is tasked to: (a) conduct and support all kinds of research relating
to Philippine national and local history; (b) develop educational materials in various media, implement historical
educational activities for the popularization of Philippine history, and disseminate, information regarding
Philippine historical events, dates, places and personages; and (c) actively engage in the settlement or
resolution of controversies or issues relative to historical personages, places, dates and events. 96 Under R.A.
Nos. 10066 (National Cultural Heritage Act of 2009)97 and 10086 (Strengthening Peoples' Nationalism
Through Philippine History Act),98the declared State policy is to conserve, develop, promote, and popularize
the nation's historical and cultural heritage and resources. 99 Towards this end, means shall be provided to
strengthen people's nationalism, love of country, respect for its heroes and pride for the people's
accomplishments by reinforcing the importance of Philippine national and local history in daily life with the end
in view of raising social consciousness.100 Utmost priority shall be given not only with the research on history
but also its popularization.101
chanroblesl aw
II.
The President's decision to bury Marcos at the LNMB is not done whimsically, capriciously or
arbitrarily, out of malice, ill will or personal bias
Petitioners contend that the interment of Marcos at the LNMB will desecrate it as a sacred and hallowed place
and a revered national shrine where the mortal remains of our country's great men and women are interred for
the inspiration and emulation of the present generation and generations to come. They erred.
A. National Shrines
As one of the cultural properties of the Philippines, national historical shrines (or historical shrines) refer to
sites or structures hallowed and revered for their history or association as declared by the NHCP. 102 The
national shrines created by law and presidential issuance include, among others: Fort Santiago (Dambana ng
Kalayaan) in Manila;103 all battlefield areas in Corregidor and Bataan; 104 the site of First Mass in the Philippines
in Magallanes, Limasawa, Leyte;105 Aguinaldo Shrine or Freedom Shrine in Kawit, Cavite; 106 Fort San Antonio
Abad National Shrine in Malate, Manila;107 Tirad Pass National Shrine in Ilocos Sur;108 Ricarte Shrine109 and
Aglipay Shrine110 in Batac, Ilocos Norte; Liberty Shrine in Lapu-Lapu, Cebu;111 "Red Beach" or the landing
point of General Douglas MacArthur and the liberating forces in Baras, Palo, Leyte; 112 Dapitan City as a
National Shrine City in Zamboanga Del Norte; 113 General Leandro Locsin Fullon National Shrine in Hamtic,
Antique;114 and Mabini Shrine in Polytechnic University of the Philippines - Mabini Campus, Sta. Mesa,
Manila.115 As sites of the birth, exile, imprisonment, detention or death of great and eminent leaders of the
nation, it is the policy of the Government to hold and keep the national shrines as sacred and hallowed
place.116 P.O. No. 105117 strictly prohibits and punishes by imprisonment and/or fine the desecration of national
shrines by disturbing their peace and serenity through digging, excavating, defacing, causing unnecessary
noise, and committing unbecoming acts within their premises. R.A. No. 10066 also makes it punishable to
intentionally modify, alter, or destroy the original features of, or undertake construction or real estate
development in any national shrine, monument, landmark and other historic edifices and structures, declared,
classified, and marked by the NHCP as such, without the prior written permission from the National
Commission for Culture and the Arts (NCAA). 118 chanrobleslaw
As one of the cultural agencies attached to the NCAA, 119 the NHCP manages, maintains and administers
national shrines, monuments, historical sites, edifices and landmarks of significant historico-cultural value.120 In
particular, the NHCP Board has the power to approve the declaration of historic structures and sites, such as
national shrines, monuments, landmarks and heritage houses and to determine the manner of their
identification, maintenance, restoration, conservation, preservation and protection.121 chanroblesl aw
Excluded, however, from the jurisdiction of the NHCP are the military memorials and battle monuments
declared as national shrines, which have been under the administration, maintenance and development of the
Philippine Veterans Affairs Office (PVAO) of the DND. Among the military shrines are: Mt. Samat National
Shrine in Pilar, Bataan;122 Kiangan War Memorial Shrine in Linda, Kiangan, Ifugao; 123 Capas National Shrine in
Capas, Tarlac;124 Ricarte National Shrine in Malasin, Batac, Ilocos Norte;125 Balantang Memorial Cemetery
National Shrine in Jaro, Iloilo;126 Balete Pass National Shrine in Sta. Fe, Nueva Vizcaya; 127 USAFIP, NL
Military Shrine and Park in Bessang Pass, Cervantes, Ilocos Sur; 128 and the LNMB in Taguig City, Metro
Manila.129chanrobleslaw
B. The Libingan Ng Mga Bayani
At the end of World War II, the entire nation was left mourning for the death of thousands of Filipinos. Several
places served as grounds for the war dead, such as the Republic Memorial Cemetery, the Bataan Memorial
Cemetery, and other places throughout the country. The Republic Memorial Cemetery, in particular, was
established in May 1947 as a fitting tribute and final resting place of Filipino military personnel who died in
World War II.
On October 23, 1954, President Ramon D. Magsaysay, Sr. issued E.O. No. 77, which ordered "the remains of
the war dead interred at the Bataan Memorial Cemetery, Bataan Province, and at other places in the
Philippines, be transferred to, and reinterred at, the Republic Memorial Cemetery at Fort Wm Mckinley, Rizal
Province" so as to minimize the expenses for the maintenance and upkeep, and to make the remains
accessible to the widows, parents, children, relatives, and friends.
On October 27, 1954, President Magsaysay issued Proclamation No. 86, which changed the name of Republic
Memorial Cemetery to Libingan Ng Mga Bayani to symbolize "the cause for which our soldiers have died" and
to "truly express the nations esteem and reverence for her war dead."130 chanrobleslaw
On July 12, 1957, President Carlos P. Garcia issued Proclamation No. 423, which reserved for military
purposes, under the administration of the AFP Chief of Staff, the land where LNMB is located. The LNMB was
part of a military reservation site then known as Fort Wm McKinley (now known as Fort Andres Bonifacio).
On May 28, 1967, Marcos issued Proclamation No. 208, which excluded the LNMB from the Fort Bonifacio
military reservation and reserved the LNMB for national shrine purposes under the administration of the
National Shrines Commission (NSC) under the DND.
On September 24, 1972, Marcos, in the exercise of his powers as the AFP Commander-in-Chief, and pursuant
to Proclamation No. 1081 dated September 21, 1972, and General Order No. 1 dated September 22, 1972, as
amended, issued Presidential Decree (P.D.) No. 1 which reorganized the Executive Branch of the National
Government through the adoption of the Integrated Reorganization Plan (IRP). Section 7, Article XV, Chapter
I, Part XII thereof abolished the NSC and its functions together with applicable appropriations, records,
equipment, property and such personnel as may be necessary were transferred to the NHI under the
Department of Education (DEC). The NHI was responsible for promoting and preserving the Philippine cultural
heritage by undertaking, inter alia, studies on Philippine history and national heroes and maintaining national
shrines and monuments.131 chanr obl eslaw
Pending the organization of the DEC, the functions relative to the administration, maintenance and
development of national shrines tentatively integrated into the PVAO in July 1973.
On January 26, 1977, President Marcos issued P.D. No. 1076. Section 7, Article XV, Chapter I, Part XII of the
IRP was repealed on the grounds that "the administration, maintenance and development of national shrines
consisting of military memorials or battle monuments can be more effectively accomplished if they are
removed from the [DEC] and transferred to the [DND] by reason of the latter s greater capabilities and
resources" and that "the functions of the [DND] are more closely related and relevant to the charter or
significance of said national shrines." Henceforth, the PVAO through the Military Shrines Service (MSS), which
was created to perform the functions of the abolished NSC - would administer, maintain and develop military
memorials and battle monuments proclaimed as national shrines.
On July 25, 1987, President Corazon C. Aquino issued the Administrative Code. The Code retains PVAO
under the supervision and control of the Secretary of National Defense. 132 Among others, PVAO shall
administer, develop and maintain military shrines. 133 With the approval of PVAO Rationalization Plan on June
29, 2010, pursuant to E.O. No. 366 dated October 4, 2004, MSS was renamed to Veterans Memorial and
Historical Division, under the supervision and control of PVAO, which is presently tasked with the management
and development of military shrines and the perpetuation of the heroic deeds of our nation's veterans.
As a national military shrine, the main features, structures, and facilities of the LNMB are as follows:
1. Tomb of the Unknown Soldiers - The main structure constructed at the center of the cemetery
where wreath laying ceremonies are held when Philippine government officials and foreign
dignitaries visit the LNMB. The following inscription is found on the tomb: "Here lies a Filipino soldier
whose name is known only to God." Behind the tomb are three marble pillars representing the three
main island groups of the Philippines - Luzon, Visayas and Mindanao. Buried here were the remains
of 39,000 Filipino soldiers who were originally buried in Camp O'Donnell Concentration Camp and
Fort Santiago, Intramuros, Manila.
2. Heroes Memorial Gate - A structure shaped in the form of a large concrete tripod with a stairway
leading to an upper view deck and a metal sculpture at the center. This is the first imposing structure
one sees upon entering the grounds of the cemetery complex.
3. Black Stone Walls - Erected on opposite sides of the main entrance road leading to the Tomb of the
Unknown Soldiers and just near the Heroes Memorial are two 12-foot high black stone walls which
bear the words, "I do not know the dignity of his birth, but I do know the glory of his death." that
General Douglas MacArthur made during his sentimental journey to the Philippines in 1961.
4. Defenders of Bataan and Corregidor Memorial Pylon - Inaugurated on April 5, 1977 by Secretary
Renato S. De Villa in memory of the defenders of Bataan and Corregidor during World War II. This
monument is dedicated as an eternal acknowledgment of their valor and sacrifice in defense of the
Philippines.
5. Korean Memorial Pylon - A towering monument honoring the 112 Filipino officers and men who, as
members of the Philippine Expeditionary Forces to Korea (PEFTOK), perished during the Korean
War.
6. Vietnam Veterans Memorial Pylon - Dedicated to the members of the Philippine contingents and
Philippine civic action groups to Vietnam (PHILCON-V and PHILCAG-V) who served as medical,
dental, engineering construction, community and psychological workers, and security complement.
They offered tremendous sacrifices as they alleviated human suffering in war-ravaged Vietnam from
1964-1971. Inscribed on the memorial pylon are the words: "To build and not to destroy, to bring the
Vietnamese people happiness and not sorrow, to develop goodwill and not hatred."
7. Philippine World War II Guerillas Pylon - Erected by the Veterans Federation of the Philippines as
a testimony to the indomitable spirit and bravery of the Filipino guerillas of World War II who refused
to be cowed into submission and carried on the fight for freedom against an enemy with vastly
superior arms and under almost insurmountable odds. Their hardship and sufferings, as well as their
defeats and victories, are enshrined in this memorial. 134
Contrary to the dissent, P.D. No. 105135 does not apply to the LNMB. Despite the fact that P.D. No. 208
predated P.D. No. 105,136 the LNMB was not expressly included in the national shrines enumerated in the
latter.137 The proposition that the LNMB is implicitly covered in the catchall phrase "and others which may be
proclaimed in the future as National Shrines" is erroneous because:
(1) As stated, Marcos issued P.D. No. 208 prior to P.D. No. 105.
chanR obl es virtual Lawlibrar y
(2) Following the canon of statutory construction known as ejusdem generis,138 the LNMB is not a site "of the
birth, exile, imprisonment, detention or death of great and eminent leaders of the nation." What P.D. No. 105
contemplates are the following national shrines: Fort Santiago ("Dambana ng Kalayaan"), all battlefield areas
in Corregidor and Bataan, the site of First Mass in the Philippines, Aguinaldo Shrine or Freedom Shrine, Fort
San Antonio Abad National Shrine, Tirad Pass National Shrine, Ricarte Shrine, Aglipay Shrine, Liberty Shrine,
"Red Beach" or the landing point of General Douglas MacArthur and the liberating forces, Dapitan City,
General Leandro Locsin Fullon National Shrine, and Mabini Shrine. Excluded are the military memorials and
battle monuments declared as national shrines under the PVAO, such as: Mt. Samat National Shrine, Kiangan
War Memorial Shrine, Capas National Shrine, Ricarte National Shrine, Balantang Memorial Cemetery National
Shrine, Balete Pass National Shrine; USAFIP, NL Military Shrine and Park, and the LNMB.
(3) Since its establishment, the LNMB has been a military shrine under the jurisdiction of the PVAO. While
P.D. No. 1 dated September 24, 1972 transferred the administration, maintenance and development of
national shrines to the NHI under the DEC, it never actually materialized. Pending the organization of the DEC,
its functions relative to national shrines were tentatively integrated into the PVAO in July 1973. Eventually, on
January 26, 1977, Marcos issued P.D. No. 1076. The PVAO, through the MSS, was tasked to administer,
maintain, and develop military memorials and battle monuments proclaimed as national shrines. The reasons
being that "the administration, maintenance and development of national shrines consisting of military
memorials or battle monuments can be more effectively accomplished if they are removed from the [DEC] and
transferred to the [DND] by reason of the latter's greater capabilities and resources" and that "the functions of
the [DND] are more closely related and relevant to the charter or significance of said national shrines."
The foregoing interpretation is neither narrow and myopic nor downright error. Instead, it is consistent with the
letter and intent of P.D. No. 105.
Assuming that P.D. No. 105 is applicable, the descriptive words "sacred and hallowed" refer to the LNMB as a
place and not to each and every mortal remains interred therein. Hence, the burial of Marcos at the LNMB
does not diminish said cemetery as a revered and respected ground. Neither does it negate the presumed
individual or collective "heroism" of the men and women buried or will be buried therein. The "nations esteem
and reverence for her war dead," as originally contemplated by President Magsaysay in issuing Proclamation
No. 86, still stands unaffected. That being said, the interment of Marcos, therefore, does not constitute a
violation of the physical, historical, and cultural integrity of the LNMB as a national military shrine.
At this juncture, reference should be made to Arlington National Cemetery (Arlington), which is identical to the
LNMB in terms of its prominence in the U.S. It is not amiss to point that our armed forces have been patterned
after the U.S. and that its military code produced a salutary effect in the Philippines' military justice
system.139 Hence, relevant military rules, regulations, and practices of the U.S. have persuasive, if not the
same, effect in this jurisdiction.
As one of the U.S. Army national military cemeteries,140 the Arlington is under the jurisdiction of the
Department of the Army.141 The Secretary of the U.S. Army has the responsibility to develop, operate,
manage, administer, oversee, and fund the Army national military cemeteries in a manner and to standards
that fully honor the service and sacrifices of the deceased members of the armed forces buried or inurned
therein, and shall prescribe such regulations and policies as may be necessary to administer the
cemeteries.142 In addition, the Secretary of the U.S. Army is empowered to appoint an advisory committee,
which shall make periodic reports and recommendations as well as advise the Secretary with respect to the
administration of the cemetery, the erection of memorials at the cemetery, and master planning for the
cemetery.143chanroblesl aw
Similar to the Philippines, the U.S. national cemeteries are established as national shrines in tribute to the
gallant dead who have served in the U.S. Armed Forces.144 The areas are protected, managed and
administered as suitable and dignified burial grounds and as significant cultural resources. 145 As such, the
authorization of activities that take place therein is limited to those that are consistent with applicable
legislation and that are compatible with maintaining their solemn commemorative and historic character.146 chanr obl eslaw
The LNMB is considered as a national shrine for military memorials. The PVAO, which is empowered to
administer, develop, and maintain military shrines, is under the supervision and control of the DND. The DND,
in turn, is under the Office of the President.
The presidential power of control over the Executive Branch of Government is a self-executing provision of the
Constitution and does not require statutory implementation, nor may its exercise be limited, much less
withdrawn, by the legislature.147 This is why President Duterte is not bound by the alleged 1992
Agreement148 between former President Ramos and the Marcos family to have the remains of Marcos interred
in Batac, Ilocos Norte. As the incumbent President, he is free to amend, revoke or rescind political agreements
entered into by his predecessors, and to determine policies which he considers, based on informed judgment
and presumed wisdom, will be most effective in carrying out his mandate.
Moreover, under the Administrative Code, the President has the power to reserve for public use and for
specific public purposes any of the lands of the public domain and that the reserved land shall remain subject
to the specific public purpose indicated until otherwise provided by law or proclamation. 149 At present, there is
no law or executive issuance specifically excluding the land in which the LNMB is located from the use it was
originally intended by the past Presidents. The allotment of a cemetery plot at the LNMB for Marcos as a
former President and Commander-in-Chief,150 a legislator,151 a Secretary of National Defense,152 a military
personnel,153 a veteran,154 and a Medal of Valor awardee,155 whether recognizing his contributions or simply
his status as such, satisfies the public use requirement. The disbursement of public funds to cover the
expenses incidental to the burial is granted to compensate him for valuable public services
rendered.156 Likewise, President Duterte's determination to have Marcos' remains interred at the LNMB was
inspired by his desire for national healing and reconciliation. Presumption of regularity in the performance of
official duty prevails over petitioners' highly disputed factual allegation that, in the guise of exercising a
presidential prerogative, the Chief Executive is actually motivated by utang na loob (debt of gratitude)
and bayad utang (payback) to the Marcoses. As the purpose is not self-evident, petitioners have the burden of
proof to establish the factual basis of their claim. They failed. Even so, this Court cannot take cognizance of
factual issues since We are not a trier of facts.
C. AFP Regulations on the LNMB
A review of the regulations issued by the AFP Chief of Staff as to who may and may not be interred at the
LNMB underscores the nature and purpose of the LNMB as an active military cemetery/grave site.
On May 13, 1947, the Chief of Staff of the Philippine Army, by the direction of the President and by order of
the Secretary of National Defense, issued General Orders No. 111, which constituted and activated, as of said
date, the Graves Registration Platoon as a unit of the Philippine Army.
On February 2, 1960, the AFP Chief of Staff, by order of the Secretary of National Defense, issued AFP
Regulations G 161-371 (Administrative and Special Staff Services, Grave Registration Service), which
provided that the following may be interred in the LNMB: (a) World War II dead of the AFP and recognized
guerillas; (b) Current dead of the AFP; (c) Retired military personnel of the AFP; (d) Remains of former
members of the AFP who died while in the active service and in the Retired List of the AFP now interred at
different cemeteries and other places throughout the Philippines or the Secretary of National Defense; and (e)
Others upon approval of the Congress of the Philippines, the President of the Philippines or the Secretary of
National Defense. The regulation also stated that the AFP Quartermaster General will be responsible for,
among other matters, the efficient operation of the Graves Registration Service; the interment, disinterment
and reinterment of the dead mentioned above; and preservation of military cemeteries, national cemeteries,
and memorials.
On July 31, 1973, the AFP Chief of Staff, by order of the Secretary of National Defense, issued AFP
Regulations G 161-372 (Administration and Operation of AFP Graves Registration Installations), which
superseded AFP Regulations G 161-371. It provided that the following may be interred in the LNMB: (a)
Deceased Veterans of the Philippine Revolution of 1896/World War I; (b) Deceased World War II members of
the AFP and recognized guerillas; (c) Deceased military personnel of the AFP who died while in the active
duty; (d) Deceased retired military personnel of the AFP; (e) Deceased military personnel of the AFP interred
at different cemeteries and other places outside the LNMB; and (f) Such remains of persons as the
Commander-in-Chief of the AFP may direct. The remains of the following were not allowed to be interred in the
LNMB: (a) The spouse of an active, or retired, deceased military personnel, recognized guerillas who
himself/herself is not a military personnel; and (b) AFP personnel who were retireable but
separated/reverted/discharged for cause, or joined and aided the enemy of the Republic of the Philippines, or
were convicted of capital or other criminal offenses, involving moral turpitude. The regulation also stated that
the Quartermaster General shall be responsible for, among other matters, the efficient operation of the AFP
graves registration installations; the interment, disinterment and reinterment of deceased military personnel
mentioned above; and the preservation of military cemeteries, proper marking and official recording of graves
therein.
On April 9, 1986, AFP Chief of Staff Fidel V. Ramos, by order of National Defense Minister, issued AFP
Regulations G 161-373 (Allocation of Cemetery Plots at the Libingan Ng Mga Bayani), which superseded AFP
Regulations G 161-372. It enumerated a list of deceased person who may be interred at the LNMB, namely:
(a) Medal of Valor Awardees; (b) Presidents or Commanders-in-Chief, AFP; (c) Ministers of National Defense;
(d) Chiefs of Staff, AFP; (e) General/Flag Officers of the AFP; (f) Active and retired military personnel of the
AFP; (g) Veterans of Philippine Revolution of 1896, WWI, WWII and recognized guerillas; and (h) Government
Dignitaries, Statesmen, National Artist and other deceased persons whose interment or reinterment has been
approved by the Commander-in-Chief, Batasang Pambansa or the Minister of National Defense. The
regulation also stated that the Quartermaster General shall be responsible for the allocation of specific
section/areas for the said deceased persons, while the Commanding Officer of the Quartermaster Graves
Registration Company shall be charged with the preparation of grave sites, supervision of burials at LNMB and
the registration of graves.
On March 27, 1998, the AFP Chief of Staff, by order of the Secretary of National Defense, issued AFP
Regulations G 161-374 (Allocation of Cemetery Plots at the Libingan Ng Mga Bayani), which superseded AFP
Regulations G 161-373. It provided that the following may be interred in the LNMB: (a) Medal of Valor
Awardees; (b) Presidents or Commanders-inChief, AFP; (c) Secretaries of National Defense; (d) Chiefs of
Staff, AFP; (e) General/Flag Officers of the AFP; (f) Active and retired military personnel of the AFP; (g)
Veterans of Philippine Revolution of 1890, WWI, WWII and recognized guerillas; (h) Government Dignitaries,
Statesmen, National Artists and other deceased persons whose interment or reinterment has been approved
by the Commander-in-Chief, Congress or Secretary of National Defense; and (i) Former Presidents,
Secretaries of Defense, CSAFP, Generals/Flag Officers, Dignitaries, Statesmen, National Artists, widows of
former Presidents, Secretaries of National Defense and Chief of Staff. The remains of the following were not
allowed to be interred in the LNMB: (a) Personnel who were dishonorably separated/reverted/discharged from
the service; and (b) Authorized personnel who were convicted by final judgment of an offense involving moral
turpitude. Like AFP Regulations G 161-373, it stated that the Quartermaster General shall be responsible for
the allocation of specific section/areas for the deceased persons, whereas the Commanding Officer of the
Quartermaster Graves Registration Unit shall be charged with the preparation of grave sites, supervision of
burials, and the registration of graves.
Finally, on September 11, 2000, the AFP Chief of Staff, by the order of the Secretary of National Defense,
issued AFP Regulations G 161-375 (Allocation of Cemetery Plots at the Libingan Ng Mga Bayani), which
superseded AFP Regulations G 161-374. The regulation stated that the Chief of Staff shall be responsible for
the issuance of interment directive for all active military personnel for interment, authorized personnel (such as
those former members of the AFP who laterally entered or joined the Philippine Coast Guard [PCG] and the
Philippine National Police [PNP]), and retirees, veterans and reservists enumerated therein. The
Quartermaster General is tasked to exercise over-all supervision in the implementation of the regulation and
the Commander ASCOM, PA through the Commanding Officer of Grave Services Unit is charged with the
registration of the deceased/graves, the allocation of specific section/area at the LNMB for interment of
deceased, the preparation of grave sites, and the supervision of burials.
Under AFP Regulations G 161-375, the following are eligible for interment at the LNMB: (a) Medal of Valor
Awardees; (b) Presidents or Commanders-in-Chief, AFP; (c) Secretaries of National Defense; (d) Chiefs of
Staff, AFP; (e) General/Flag Officers of the AFP; (f) Active and retired military personnel of the AFP to include
active draftees and trainees who died in line of duty, active reservists and CAFGU Active Auxiliary (CAA) who
died in combat operations or combat related activities; (g) Former members of the AFP who laterally entered
or joined the PCG and the PNP; (h) Veterans of Philippine Revolution of 1890, WWI, WWII and recognized
guerillas; (i) Government Dignitaries, Statesmen, National Artists and other deceased persons whose
interment or reinterment has been approved by the Commander-in-Chief, Congress or the Secretary of
National Defense; and G) Former Presidents, Secretaries of Defense, Dignitaries, Statesmen, National Artists,
widows of Former Presidents, Secretaries of National Defense and Chief of Staff. Similar to AFP Regulations
G 161-374, the following are not qualified to be interred in the LNMB: (a) Personnel who were dishonorably
separated/reverted/discharged from the service; and (b) Authorized personnel who were convicted by final
judgment of an offense involving moral turpitude.
In the absence of any executive issuance or law to the contrary, the AFP Regulations G 161-375 remains to
be the sole authority in determining who are entitled and disqualified to be interred at the LNMB. Interestingly,
even if they were empowered to do so, former Presidents Corazon C. Aquino and Benigno Simeon C. Aquino
III, who were themselves aggrieved at the Martial Law, did not revise the rules by expressly prohibiting the
burial of Marcos at the LNMB. The validity of AFP Regulations G 161-375 must, therefor, be sustained for
having been issued by the AFP Chief of Staff acting under the direction of the Secretary of National Defense,
who is the alter ego of the President.
x x x In Joson v. Torres, we explained the concept of the alter ego principle or the doctrine of qualified political
agency and its limit in this wise:
Under this doctrine, which recognizes the establishment of a single executive, all executive and
chanR obl es virtual Lawlibrar y
administrative organizations are adjuncts of the Executive Department, the heads of the various executive
departments are assistants and agents of the Chief Executive, and, except in cases where the Chief
Executive is required by the Constitution or law to act in person or the exigencies of the situation
demand that he act personally, the multifarious executive and administrative functions of the Chief Executive
are performed by and through the executive departments, and the acts of the Secretaries of such
departments, performed and promulgated in the regular course of business, are, unless disapproved or
reprobated by the Chief Executive presumptively the acts of the Chief Executive. (Emphasis ours, citation
omitted.)157 chanr obl es virtuall awlibrar y
It has been held that an administrative regulation adopted pursuant to law has the force and effect of law and,
until set aside, is binding upon executive and administrative agencies, including the President as the chief
executor of laws.158 chanrobl eslaw
1. Qualification under the AFP Regulations
AFP Regulations G 161-375 should not be stricken down in the absence of clear and unmistakable showing
that it has been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. Neither could
it be considered ultra vires for purportedly providing incomplete, whimsical, and capricious standards for
qualification for burial at the LNMB.
To compare, We again refer to the U.S. Army regulations on Arlington. In the U.S., the Secretary of the Army,
with the approval of the Secretary of Defense, determines eligibility for interment or inurnment in the Army
national military cemeteries.159 Effective October 26, 2016, the rule160 is as follows:ChanRobl esVirtual awlibr ar y
Only those who qualify as a primarily eligible person or a derivatively eligible person are eligible for interment
in Arlington National Cemetery, unless otherwise prohibited as provided for in 553.19 161-553.20,162 provided
that the last period of active duty of the service member or veteran ended with an honorable discharge.
(a) Primarily eligible persons. The following are primarily eligible persons for purposes of interment:
(1) Any service member who dies on active duty in the U.S. Armed Forces (except those service members
chanR obl es virtual Lawlibrar y
serving on active duty for training only), if the General Courts Martial Convening Authority grants a certificate
of honorable service.
(2) Any veteran retired from a Reserve component who served a period of active duty (other than for training),
is carried on the official retired list, and is entitled to receive military retired pay.
(3) Any veteran retired from active military service and entitled to receive military retired pay.
(4) Any veteran who received an honorable discharge from the Armed Forces prior to October 1, 1949, who
was discharged for a permanent physical disability, who served on active duty (other than for training), and
who would have been eligible for retirement under the provisions of 10 U.S.C. 1201 had the statute been in
effect on the date of separation.
(5) Any veteran awarded one of the following decorations:
chanRoblesvirtual Lawlibrar y (i) Medal of Honor;163 chanrobleslaw
(ii) Distinguished Service Cross, Air Force Cross, or Navy Cross;
(iii) Distinguished Service Medal;
(iv) Silver Star; or
(v) Purple Heart.
(6) Any veteran who served on active duty (other than active duty for training) and who held any of the
following positions:
chanR obl es virtual Lawlibrar y(i) President or Vice President of the United States;
(ii) Elected member of the U.S. Congress;
(iii) Chief Justice of the Supreme Court of the United States or Associate Justice of the Supreme Court of the
United States;
(iv) A position listed, at the time the person held the position, in 5 U.S.C. 5312 164 or 5313165 (Levels I and II of
the Executive Schedule); or
(v) Chief of Mission of a Category 4, 5, or post if the Department of State classified that post as a Category 4,
5, or 5+ post during the person's tenure as Chief of Mission.
(7) Any former prisoner of war who, while a prisoner of war, served honorably in the active military service, and
who died on or after November 30, 1993.
(b) Derivatively eligible persons. The following individuals are derivatively eligible persons for purposes of
interment who may be interred if space is available in the gravesite of the primarily eligible person:
(1) The spouse of a primarily eligible person who is or will be interred in Arlington National Cemetery. A
chanR obl es virtual Lawlibrar y
former spouse of a primarily eligible person is not eligible for interment in Arlington National Cemetery under
this paragraph.
(2) The spouse of an active duty service member or an eligible veteran, who was:
(i) Lost or buried at sea, temporarily interred overseas due to action by the Government, or officially
chanR obl es virtual Lawlibrar y
determined to be missing in action;
(ii) Buried in a U.S. military cemetery maintained by the American Battle Monuments Commission; or
(iii) Interred in Arlington National Cemetery as part of a group burial (the derivatively eligible spouse may not
be buried in the group burial gravesite).
(3) The parents of a minor child or a permanently dependent adult child, whose remains were interred in
Arlington National Cemetery based on the eligibility of a parent at the time of the child's death, unless eligibility
of the non-service connected parent is lost through divorce from the primarily eligible parent.
(4) An honorably discharged veteran who does not qualify as a primarily eligible person, if the veteran will be
buried in the same gravesite as an already interred primarily eligible person who is a close relative, where the
interment meets the following conditions:
chanR obl es virtual Lawlibrar y(i) The veteran is without minor or unmarried adult dependent children;
(ii) The veteran will not occupy space reserved for the spouse, a minor child, or a permanently dependent
adult child;
(iii) All other close relatives of the primarily eligible person concur with the interment of the veteran with the
primarily eligible person by signing a notarized statement;
(iv) The veteran's spouse waives any entitlement to interment in Arlington National Cemetery, where such
entitlement might be based on the veteran's interment in Arlington National Cemetery. The Executive Director
may set aside the spouse's waiver, provided space is available in the same gravesite, and all close relatives of
the primarily eligible person concur;
(v) Any cost of moving, recasketing, or revaulting the remains will be paid from private funds.
There is a separate list of eligible with respect to the inurnment of cremated remains in the
Columbarium,166 interment of cremated remains in the Unmarked Area,167 and group burial.168As a national
military cemetery, eligibility standards for interment, inurnment, or memorialization in Arlington are based
on honorable military service.169 Exceptions to the eligibility standards for new graves, which are rarely
granted, are for those persons who have made significant contributions that directly and substantially
benefited the U.S. military.170 chanr obl eslaw
Judging from the foregoing, it is glaring that the U.S. Army regulations on Arlington and the AFP Regulations G
161-375 on the LNMB, as a general rule, recognize and reward the military services or military related
activities of the deceased. Compared with the latter, however, the former is actually less generous in granting
the privilege of interment since only the spouse or parent, under certain conditions, may be allowed "if space is
available in the gravesite of the primarily eligible person."
It is not contrary to the "well-established custom," as the dissent described it, to argue that the word "bayani" in
the LNMB has become a misnomer since while a symbolism of heroism may attach to the LNMB as a national
shrine for military memorial, the same does not automatically attach to its feature as a military cemetery and to
those who were already laid or will be laid therein. As stated, the purpose of the LNMB, both from the legal
and historical perspectives, has neither been to confer to the people buried there the title of "hero" nor to
require that only those interred therein should be treated as a "hero." In fact, the privilege of internment at the
LNMB has been loosen up through the years. Since 1986, the list of eligible includes not only those who
rendered active military service or military-related activities but also non-military personnel who were
recognized for their significant contributions to the Philippine society (such as government dignitaries,
statesmen, national artists, and other deceased persons whose interment or reinterment has been approved
by the Commander-in-Chief, Congress or Secretary of National Defense). In 1998, the widows of former
Presidents, Secretaries of National Defense and Chief of Staff were added to the list. Whether or not the
extension of burial privilege to civilians is unwarranted and should be restricted in order to be consistent with
the original purpose of the LNMB is immaterial and irrelevant to the issue at bar since it is indubitable that
Marcos had rendered significant active military service and military-related activities.
Petitioners did not dispute that Marcos was a former President and Commander-in-Chief, a legislator, a
Secretary of National Defense, a military personnel, a veteran, and a Medal of Valor awardee. For his alleged
human rights abuses and corrupt practices, we may disregard Marcos as a President and Commander-in-
Chief, but we cannot deny him the right to be acknowledged based on the other positions he held or the
awards he received. In this sense, We agree with the proposition that Marcos should be viewed and judged in
his totality as a person. While he was not all good, he was not pure evil either. Certainly, just a human who
erred like us.
Our laws give high regard to Marcos as a Medal of Valor awardee and a veteran. R.A. No. 9049 171 declares
the policy of the State "to consistently honor its military heroes in order to strengthen the patriotic spirit and
nationalist consciousness of the military."172 For the "supreme self-sacrifice and distinctive acts of heroism and
gallantry,"173 a Medal of Valor awardee or his/her dependents/heirs/beneficiaries are entitled to the following
social services and financial rewards:
 1. Tax-exempt lifetime monthly gratuity of Twenty Thousand Pesos (P20,000.00), which is separate
and distinct from any salary or pension that the awardee currently receives or will receive from the
government of the Philippines;174 chanroblesl aw
2. Precedence in employment in government agencies or government-owned or controlled corporation,
if the job qualifications or requirements are met;
3. Priority in the approval of the awardee's housing application under existing housing programs of the
government;
4. Priority in the acquisition of public lands under the Public Land Act and preferential right in the lease
of pasture lands and exploitation of natural resources;
5. Privilege of obtaining loans in an aggregate amount not exceeding Five Hundred Thousand Pesos
(P500,000.00) from governmentowned or controlled financial institutions without having to put up any
collateral or constitute any pledge or mortgage to secure the payment of the loan;
6. Twenty (20%) percent discount from all establishments relative to utilization of transportation
services, hotels and similar lodging establishments, restaurants, recreation and sport centers and
purchase of medicine anywhere in the country;
7. Twenty (20%) percent discount on admission fees charged by theaters, cinema houses and concert
halls, circuses, carnivals and other similar places of culture, leisure and amusement;
8. Free medical and dental services and consultation in hospital and clinics anywhere in the country;
9. Exemption from the payment of tuition and matriculation fees in public or private schools,
universities, colleges and other educational institutions in any pre-school, baccalaureate or post
graduate courses such as or including course leading to the degree of Doctor of Medicine (MD),
Bachelor of Laws (LLB), and Bachelor of Science in Nursing (BSN) or allied and similar courses;
and cral awlawli brar y
10. If interested and qualified, a quota is given to join the cadet corps of the Philippine Military Academy
or otherwise priority for direct commission, call to active duty (CAD) and/or enlistment in regular force
of the AFP.
On the other hand, in recognizing their patriotic services in times of war and peace for the cause of freedom
and democracy; for the attainment of national unity, independence, and socioeconomic advancement; and for
the maintenance of peace and order,175 R.A. No. 6948, as amended,176 grants our veterans177 and their
dependents or survivors with pension (old age, disability, total administrative disability, and death) and non-
pension (burial, education, hospitalization, and medical care and treatment) benefits as well as provisions from
the local governments. Under the law, the benefits may be withheld if the Commission on Human Rights
certifies to the AFP General Headquarters that the veteran has been found guilty by final judgment of a
gross human rights violation while in the service, but this factor shall not be considered taken against his
next of kin.178
chanr obl eslaw
2. Disqualification under the AFP Regulations
Aside from being eligible for burial at the LNMB, Marcos possessed none of the disqualifications stated in AFP
Regulations G 161-375. He was neither convicted by final judgment of the offense involving moral turpitude
nor dishonorably separated/reverted/discharged from active military service.
Petitioners, however, protest that a narrow interpretation of the AFP regulations disregards historical context
and the rule on statutory construction. They urge the Court to construe statutes not literally but according to
their spirit and reason.
It is argued that Marcos committed offenses involving moral turpitude for his gross human rights violations,
massive graft and corruption, and dubious military records, as found by foreign and local courts as well as
administrative agencies. By going into exile, he deliberately evaded liability for his actions. And by allowing
death to overtake him, he inevitably escaped the prospect of facing accountability for his crimes. They also
contend that his removal in the 1986 popular uprising is a clear sign of his discharge from the AFP. The
People Power Revolution was the direct exercise of the Filipinos' power to overthrow an illegitimate and
oppressive regime. As a sovereign act, it necessarily includes the power to adjudge him as dishonorably
discharged from the AFP.
Furthermore, according to petitioners, to limit the application of the disqualifying provisions of AFP Regulations
G 161-375 only to soldiers would be unfair (since, unlike Presidents, soldiers have an additional cause for
disqualification) and lead to absurd results (because soldiers who were dishonorably discharged would be
disqualified for acts that are less atrocious than that committed by Marcos). Also, the AFP regulations would
place Marcos in the same class as the other Philippine Presidents when in fact he is a class of his own, sui
generis. The other Presidents were never removed by People Power Revolution and were never subject of
laws declaring them to have committed human rights violations. Thus, the intended burial would be an act of
similarly treating persons who are differently situated.
Despite all these ostensibly persuasive arguments, the fact remains that Marcos was not convicted by final
judgment of any offense involving moral turpitude. No less than the 1987 Constitution mandates that a person
shall not be held to answer for a criminal offense without due process of law and that, "[i]n all criminal
prosecutions, the accused shall be presum innocent until the contrary is proved, and shall enjoy the right to be
heard by himself and counsel, to be informed of the nature and cause of the accusation against him, to have a
speedy, impartial, and public trial, to meet the witnesses face to face, and to have compulsory process to
secure the attendance of witnesses and the production of evidence in his behalf."179 Even the U.N. principles
on reparation and to combat impunity cited by petitioners unequivocally guarantee the rights of the accused,
providing that: ChanR obl esVirtualawlibr ar y
XIII. Rights of others
27. Nothing in this document is to be construed as derogating from internationally or nationally protected rights
of others, in particular the right of an accused person to benefit from applicable standards of due process.
xxx
PRINCIPLE 9. GUARANTEES FOR PERSONS IMPLICATED
Before a commission identifies perpetrators in its report, the individuals concerned shall be entitled to the
following guarantees:
(a) The commission must try to corroborate information implicating individuals before they are named
chanR obl es virtual Lawlibrar y
publicly;
(b) The individuals implicated shall be afforded an opportunity to provide a statement setting forth their version
of the facts either at a hearing convened by the commission while conducting its investigation or through
submission of a document equivalent to a right of reply for inclusion in the commission's file.
To note, in the U.S., a person found to have committed a Federal or State capital crime (i.e., a crime which a
sentence of imprisonment for life or death penalty may be imposed) but who has not been convicted by reason
of not being available for trial due to death or flight to avoid prosecution, may be ineligible for interment,
inurnment, or memorialization in an Army national military cemetery. Nevertheless, such ineligibility must still
observe the procedures specified in 553.21. 180 chanrobleslaw
The various cases cited by petitiOners, which were decided with finality by courts here and abroad, have no
bearing in this case since they are merely civil in nature; hence, cannot and do not establish moral turpitude.
Also, the equal protection clause is not violated. Generally, there is no property right to safeguard because
even if one is eligible to be buried at the LNMB, such fact would only give him or her the privilege to be
interred therein. Unless there is a favorable recommendation from the Commander-in-Chief, the Congress or
the Secretary of National Defense, no right can be said to have ripen. Until then, such inchoate right is not
legally demandable and enforceable.
Assuming that there is a property right to protect, the requisites of equal protection clause are not met. 181 In
this case, there is a real and substantial distinction between a military personnel and a former President. The
conditions of dishonorable discharge under the Articles of War 182 attach only to the members of the military.
There is also no substantial distinction between Marcos and the three Philippine Presidents buried at the
LNMB (Presidents Quirino, Garcia, and Macapagal). All of them were not convicted of a crime involving moral
turpitude. In addition, the classification between a military personnel and a former President is germane to the
purposes of Proclamation No. 208 and P.D. No. 1076. While the LNMB is a national shrine
for military memorials, it is also an active military cemetery that recognizes the status or position held by
the persons interred therein.
Likewise, Marcos was honorably discharged from military service. PVAO expressly recognized him as a retired
veteran pursuant to R.A. No. 6948, as amended. Petitioners have not shown that he was dishonorably
discharged from military service under AFP Circular 17, Series of 1987 (Administrative Discharge Prior to
Expiration of Term of Enlistment) for violating Articles 94, 95 and 97 of the Articles of War. 183 The NHCP
study184 is incomplete with respect to his entire military career as it failed to cite and include the official records
of the AFP.
With respect to the phrase "[p]ersonnel who were dishonorably separated/reverted/discharged from the
service," the same should be viewed in light of the definition provided by AFP Regulations G 161-375 to the
term "active service" which is "[s]ervice rendered by a military person as a Commissioned Officer, enlisted
man/woman, probationary officer, trainee or draftee in the Armed Forces of the Philippines and service
rendered by him/her as a civilian official or employee in the Philippine Government prior to the date of his/her
separation or retirement from the Armed Forces of the Philippines, for which military and/or civilian service
he/she shall have received pay from the Philippine Government, and/or such others as may be hereafter be
prescribed by law as active service (PD 1638, as amended)."185 To my mind, the word "service" should be
construed as that rendered by a military person in the AFP, including civil service, from the time of his/her
commission, enlistment, probation, training or drafting, up to the date of his/her separation or retirement from
the AFP. Civil service after honorable separation and retirement from the AFP is outside the context of
"service" under AFP Regulations G 161-375.
Hence, it cannot be conveniently claimed that Marcos' ouster from the presidency during the EDSA Revolution
is tantamount to his dishonorable separation, reversion or discharge from the military service. The fact that the
President is the Commander-in-Chief of the AFP under the 1987 Constitution only enshrines the principle of
supremacy of civilian authority over the military. Not being a military person who may be prosecuted before the
court martial, the President can hardly be deemed "dishonorably separated/reverted/discharged from the
service" as contemplated by AFP Regulations G 161-375. Dishonorable discharge through a successful
revolution is an extra-constitutional and direct sovereign act of the people which is beyond the ambit of judicial
review, let alone a mere administrative regulation.
It is undeniable that former President Marcos was forced out of office by the people through the so-called
EDSA Revolution. Said political act of the people should not be automatically given a particular legal meaning
other than its obvious consequence- that of ousting him as president. To do otherwise would lead the Court to
the treacherous and perilous path of having to make choices from multifarious inferences or theories arising
from the various acts of the people. It is not the function of the Court, for instance, to divine the exact
implications or significance of the number of votes obtained in elections, or the message from the number of
participants in public assemblies. If the Court is not to fall into the pitfalls of getting embroiled in political and
oftentimes emotional, if not acrimonious, debates, it must remain steadfast in abiding by its recognized guiding
stars - clear constitutional and legal rules - not by the uncertain, ambiguous and confusing messages from the
actions of the people.
Conclusion
In sum, there is no clear constitutional or legal basis to hold that there was a grave abuse of discretion
amounting to lack or excess of jurisdiction which would justify the Court to interpose its authority to check and
override an act entrusted to the judgment of another branch. Truly, the President's discretion is not totally
unfettered. "Discretion is not a freespirited stallion that runs and roams wherever it pleases but is reined in to
keep it from straying. In its classic formulation, 'discretion is not unconfined and vagrant' but 'canalized within
banks that keep it from overflowing.'"186 At bar, President Duterte, through the public respondents, acted within
the bounds of the law and jurisprudence. Notwithstanding the call of human rights advocates, the Court must
uphold what is legal and just. And that is not to deny Marcos of his rightful place at the LNMB. For even the
Framers of our Constitution intend that full respect for human rights is available at any stage of a person's
development, from the time he or she becomes a person to the time he or she leaves this earth.187 chanroblesl aw
There are certain things that are better left for history - not this Court - to adjudge. The Court could only do so
much in accordance with the clearly established rules and principles. Beyond that, it is ultimately for the people
themselves, as the sovereign, to decide, a task that may require the better perspective that the passage of
time provides. In the meantime, the country must mov'e on and let this issue rest.
WHEREFORE, PREMISES CONSIDERED, the petitions are DISMISSED. Necessarily, the Status Quo Ante
Order is hereby LIFTED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 192088 October 9, 2012
INITIATIVES FOR DIALOGUE AND EMPOWERMENT THROUGH ALTERNATIVE LEGAL SERVICES, INC.
(IDEALS, INC.),
vs.
POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORP.
VILLARAMA, J.:
Before us is a petition for certiorari and prohibition seeking to permanently enjoin the sale of the Angat Hydro-Electric
Power Plant (AHEPP) to Korea Water Resources Corporation (K-Water) which won the public bidding conducted by
the Power Sector Assets and Liabilities Management Corporation (PSALM).
The Facts
Respondent PSALM is a government-owned and controlled corporation created by virtue of Republic Act No.
9136,1otherwise known as the "Electric Power Industry Reform Act of 2001" (EPIRA). The EPIRAprovided a
framework for the restructuring of the electric power industry, including the privatization of the assets of the National
Power Corporation (NPC), the transition to the desired competitive structure, and the definition of the responsibilities
of the various government agencies and private entities. Said law mandated PSALM to manage the orderly sale,
disposition, and privatization of NPC generation assets, real estate and other disposable assets, and Independent
Power Producer (IPP) contracts with the objective of liquidating all NPC financial obligations and stranded contract
costs in an optimal manner, which liquidation is to be completed within PSALMs 25-year term of existence.2
Sometime in August 2005, PSALM commenced the privatization of the 246-megawatt (MW) AHEPP located in San
Lorenzo, Norzagaray, Bulacan. AHEPPs main units built in 1967 and 1968, and 5 auxiliary units, form part of the
Angat Complex which includes the Angat Dam, Angat Reservoir and the outlying watershed area. A portion of the
AHEPP - the 10 MW Auxiliary Unit No. 4 completed on June 16, 1986 and the 18 MW Auxiliary Unit No. 5 completed
on January 14, 1993 - is owned by respondent Metropolitan Waterworks and Sewerage System (MWSS). 3 The main
units produce a total of 200 MW of power while the auxiliary units yield the remaining 46 MW of power. The Angat
Dam and AHEPP are utilized for power generation, irrigation, water supply and flood control purposes. Because of its
multi-functional design, the operation of the Angat Complex involves various government agencies, namely: (1) NPC;
(2) National Water Resources Board (NWRB); (3) MWSS; (4) respondent National Irrigation Administration (NIA); and
(5) Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAG-ASA).
On December 15, 2009, PSALMs Board of Directors approved the Bidding Procedures for the privatization of the
AHEPP. An Invitation to Bid was published on January 11, 12 and 13, 2010 in three major national newspapers.
Subject of the bid was the AHEPP consisting of 4 main units and 3 auxiliary units with an aggregate installed capacity
of 218 MW. The two auxiliary units owned by MWSS were excluded from the bid.
The following terms and conditions for the purchase of AHEPP were set forth in the Bidding Package:
IB-05 CONDITION OF THE SALE
The Asset shall be sold on an "AS IS, WHERE IS" basis.
The Angat Dam (which is part of the Non-Power Components) is a multi-purpose hydro facility which currently
supplies water for domestic use, irrigation and power generation. The four main units of the Angat Plant release water
to an underground trailrace that flows towards the Bustos Dam which is owned and operated by the National Irrigation
Administration ("NIA") and provides irrigation requirements to certain areas in Bulacan. The water from the auxiliary
units 1, 2 and 3 flows to the Ipo Dam which is owned and operated by MWSS and supplies domestic water to Metro
Manila and other surrounding cities.
The priority of water usage under Philippine Law would have to be observed by the Buyer/Operator.
The Winning Bidder/Buyer shall be requested to enter into an operations and maintenance agreement with PSALM
for the Non-Power Components in accordance with the terms and conditions of the O & M Agreement to be issued as
part of the Final Transaction Documents. The Buyer, as Operator, shall be required to operate and maintain the Non-
Power Components at its own cost and expense. PSALM is currently negotiating a water protocol agreement with
various parties which are currently the MWSS, NIA, the National Water Resources Board and NPC. If required by
PSALM, the Buyer will be required to enter into the said water protocol agreement as a condition to the award of the
Asset.
The Buyer shall be responsible for securing the necessary rights to occupy the land underlying the Asset. 4 (Emphasis
supplied.)
All participating bidders were required to comply with the following:
(a) submission of a Letter of Interest; (b) execution of Confidentiality Agreement and Undertaking; and (c) payment of
a non-refundable fee of US$ 2,500 as Participation Fee.5 After holding pre-bid conferences and forum discussions
with various stakeholders, PSALM received the following bids from six competing firms:
K-Water US$ 440,880,000.00
First Gen Northern Energy 365,000,678.00
Corporation
San Miguel Corporation 312,500,000.00
SNAboitiz Power-Pangasinan, Inc. 256,000,000.00
Trans-Asia Oil & Energy 237,000,000.00
Development Corporation
DMCI Power Corporation 188,890,000.00
On May 5, 2010, and after a post-bid evaluation, PSALMs Board of Directors approved and confirmed the issuance
of a Notice of Award to the highest bidder, K-Water.6
On May 19, 2010, the present petition with prayer for a temporary restraining order (TRO) and/or writ of preliminary
injunction was filed by the Initiatives for Dialogue and Empowerment Through Alternative Legal Services, Inc.
(IDEALS), Freedom from Debt Coalition (FDC), AKBAYAN Citizens Action Party (AKBAYAN) and Alliance of
Progressive Labor.
On May 24, 2010, this Court issued a Status QuoAnte Order directing the respondents to maintain the status quo
prevailing before the filing of the petition and to file their respective Comments on the petition. 7
Arguments of the Parties
Petitioners contend that PSALM gravely abused its discretion when, in the conduct of the bidding it disregarded and
violated the peoples right to information guaranteed under the Constitution, as follows: (1) the bidding process was
commenced by PSALM without having previously released to the public critical information such as the terms and
conditions of the sale, the parties qualified to bid and the minimum bid price, as laid down in the case of Chavez v.
Public Estates Authority8 ; (2) PSALM refused to divulge significant information requested by petitioners, matters
which are of public concern; and (3) the bidding was not conducted in an open and transparent manner, participation
was indiscriminately restricted to the private sectors in violation of the EPIRA which provides that its provisions shall
be "construed in favor of the establishment, promotion, preservation of competition and people empowerment so that
the widest participation of the people, whether directly or indirectly, is ensured." 9
Petitioners also assail the PSALM in not offering the sale of the AHEPP to MWSS which co-owned the Angat
Complex together with NPC and NIA. Being a mere co-owner, PSALM cannot sell the AHEPP without the consent of
co-owners MWSS and NIA, and being an indivisible thing, PSALM has a positive obligation to offer its undivided
interest to the other co-owners before selling the same to an outsider. Hence, PSALMs unilateral disposition of the
said hydro complex facility violates the Civil Code rules on co-ownership (Art. 498) and Sec. 47 (e) of the EPIRA
which granted PSALM the legal option of transferring possession, control and operation of NPC generating assets
like the AHEPP to another entity in order "to protect potable water, irrigation and all other requirements imbued with
public interest."
As to the participation in the bidding of and award of contract to K-Water which is a foreign corporation, petitioners
contend that PSALM clearly violated the constitutional provisions on the appropriation and utilization of water as a
natural resource, as implemented by the Water Code of the Philippines limiting water rights to Filipino citizens and
corporations which are at least 60% Filipino-owned. Further considering the importance of the Angat Dam which is
the source of 97% of Metro Manilas water supply, as well as irrigation for farmlands in 20 municipalities and towns in
Pampanga and Bulacan, petitioners assert that PSALM should prioritize such domestic and community use of water
over that of power generation.
They maintain that the Philippine Government, along with its agencies and subdivisions, have an obligation under
international law, to recognize and protect the legally enforceable human right to water of petitioners and the public in
general.
Petitioners cite the Advisory on the "Right to Water in Light of the Privatization of the Angat Hydro-Electric Power
Plant"10 dated November 9, 2009 issued by the Commission on Human Rights (CHR) urging the Government to
revisit and reassess its policy on water resources vis--vis its concurrent obligations under international law to
provide, and ensure and sustain, among others, "safe, sufficient, affordable and convenient access to drinking water."
Since investment in hydropower business is primarily driven by generation of revenues both for the government and
private sector, the CHR warns that once the AHEPP is privatized, there will be less accessible water supply,
particularly for those living in Metro Manila and the Province of Bulacan and nearby areas which are currently
benefited by the AHEPP. The CHR believes that the management of AHEPP is better left to MWSS being a
government body and considering the public interest involved. However, should the decision to privatize the AHEPP
become inevitable, the CHR strongly calls for specific and concrete safeguards to ensure the right to water of all, as
the domestic use of water is more fundamental than the need for electric power.
Petitioners thus argue that the protection of their right to water and of public interest requires that the bidding process
initiated by PSALM be declared null and void for violating such right, as defined by international law and by domestic
law establishing the States obligation to ensure water security for its people.
In its Comment With Urgent Motion to Lift Status Quo Ante Order, respondent PSALM prayed for the dismissal of the
petition on the following procedural grounds: (a) a petition for certiorari is not the proper remedy because PSALM was
not acting as a tribunal or board exercising judicial or quasi-judicial functions when it commenced the privatization of
AHEPP; (b) the present petition is rendered moot by the issuance of a Notice of Award in favor of K-Water; (c)
assuming the petition is not mooted by such contract award, this Court has no jurisdiction over the subject matter of
the controversy involving a political question, and also because if it were the intent of Congress to exclude the
AHEPP in the privatization of NPC assets, it should have clearly expressed such intent as it did with the Agus and
Pulangui power plants under Sec. 47 of the EPIRA; (d) petitioners lack of standing to question the bidding process
for failure to show any injury as a result thereof, while Rep. Walden Bello likewise does not have such legal standing
in his capacity as a duly elected member of the House of Representatives as can be gleaned from the rulings in
David v. Arroyo11 and Philippine Constitutional Association v. Enriquez.12
On the alleged violation of petitioners right to information, PSALM avers that it conducted the bidding in an open and
transparent manner, through a series of events in accordance with the governing rules on public bidding. The non-
disclosure of certain information in the invitation to bid was understandable, such as the minimum or reserve price
which are still subject to negotiation and approval of PSALMs Board of Directors. The ruling in Chavez v. Public
Estates Authority13 is inapplicable since it involved government property which has become unserviceable or was no
longer needed and thus fell under Sec. 79 of the Government Auditing Code whereas the instant case concerns a
hydroelectric power plant adjacent to a dam which still provides water supply to Metro Manila. In the bidding for the
AHEPP, PSALM claims that it relied on the Rules and Regulations Implementing the EPIRA, as well as COA Circular
No. 89-296 on the general procedures for bidding by government agencies and instrumentalities of assets that will be
divested or government property that will be disposed of. PSALM likewise avers that it was constrained to deny
petitioner IDEALS letter dated April 20, 2010 requesting documents relative to the privatization of Angat Dam due to
non-submission of a Letter of Interest, Confidentiality and Undertaking and non-payment of the Participation Fee.
With regard to IDEALS request for information about the winning bidder, as contained in its letter dated May 14,
2010, the same was already referred to respondent K-Waters counsel for appropriate action.
In any case, PSALM maintains that not all details relative to the privatization of the AHEPP can be readily disclosed;
the confidentiality of certain matters was necessary to ensure the optimum bid price for the property.
PSALM further refutes the assertion of petitioners that the Angat Complex is an indivisible system and co-owned with
MWSS and NIA. It contends that MWSSs contribution in the funds used for the construction of the AHEPP did not
give rise to a regime of co-ownership as the said funds were merely in exchange for the supply of water that MWSS
would get from the Angat Dam, while the Umiray-AngatTransbasin Rehabilitation Project the improvement and repair
of which were funded by MWSS, did not imply a co-ownership as these facilities are located in remote places.
Moreover, PSALM points out that PSALM, MWSS and NIA each was issued a water permit, and are thus holders of
separate water rights.
On the alleged violation of petitioners and the peoples right to water, PSALM contends that such is baseless and
proceeds from the mistaken assumption that the Angat Dam was sold and as a result thereof, the continuity and
availability of domestic water supply will be interrupted. PSALM stresses that only the hydroelectric facility is being
sold and not the Angat Dam which remains to be owned by PSALM, and that the NWRB still governs the water
allocation therein while the NPC-FFWSDO still retains exclusive control over the opening of spillway gates during
rainy season. The foregoing evinces the continued collective control by government agencies over the Angat Dam,
which in the meantime, is in dire need of repairs, the cost of which cannot be borne by the Government.
PSALM further debunks the nationality issue raised by petitioners, citing previous opinions rendered by the
Department of Justice (DOJ) consistently holding that the utilization of water by a hydroelectric power plant does not
constitute appropriation of water from its natural source considering that the source of water (dam) that enters the
intake gate of the power plant is an artificial structure. Moreover, PSALM is mindful of the States duty to protect the
publics right to water when it sold the AHEPP. In fact, such concern as taken into consideration by PSALM in
devising a privatization scheme for the AHEPP whereby the water allocation is continuously regulated by the NWRB
and the dam and its spillway gates remain under the ownership and control of NPC.
In its Comment,14 respondent MWSS asserts that by virtue of its various statutory powers since its creation in 1971,
which includes the construction, maintenance and operation of dams, reservoir and other waterworks within its
territorial jurisdiction, it has supervision and control over the Angat Dam given that the Angat Reservoir supplies
approximately 97% of the water requirements of Metro Manila. Over the course of its authority over the Angat Dam,
Dykes and Reservoir, MWSS has incurred expenses to maintain their upkeep, improve and upgrade their facilities.
Thus, in 1962, MWSS contributed about 20% for the construction cost of the Angat Dam and Dykes (then equivalent
to about 21 million); in 1992, MWSS contributed about 218 million for the construction of Auxiliary Unit No. 5; in
1998, MWSS contributed 73.5 million for the construction cost of the low level outlet; and subsequently, MWSS
invested 3.3 billion to build the Umiray-AngatTransbasin Tunnel to supplement the water supply available from the
Angat Dam, which tunnel contributes a minimum of about 9 cubic meters per second to the Angat Reservoir, thus
increasing power generation. MWSS argues that its powers over waterworks are vested upon it by a special law
(MWSS Charter) which prevails over the EPIRA which is a general law, as well as other special laws, issuances and
presidential edicts. And as contained in Sec. 1 of the MWSS Charter, which remains valid and effective, it is expressly
provided that the establishment, operation and maintenance of waterworks systems must always be supervised by
the State.
MWSS further alleges that after the enactment of EPIRA, it had expressed the desire to acquire ownership and
control of the AHEPP so as not to leave the operation of the Angat Reservoir to private discretion that may prejudice
the water allocation to MWSS as dictated by NWRB rules.
Representations were thereafter made with the Office of the President (OP) for the turn over of the management of
these facilities to MWSS, and joint consultation was also held with PSALM officials for the possibility of a
Management Committee to manage and control the Angat Dam Complex under the chairmanship of the water sector,
which position was supported by former Secretary HermogenesEbdane of the Department of Public Works and
Highways (DPWH). In March 2008, PSALM proposed the creation of an inter-agency technical working group (TWG)
to draft the Operations and Maintenance (O & M) Agreement for the AHEPP that will be in effect after its privatization.
PSALM likewise sought the view of the Office of the Government Corporate Counsel (OGCC) which opined that
PSALM may turn over the facility to a qualified entity such as MWSS without need of public bidding. In 2009, various
local governments supported the transfer of the control and management of the AHEPP to MWSS, while the League
of Cities and Municipalities interposed its opposition to the privatization of the AHEPP fearing that it might increase
the cost of water in Metro Manila, and also because it will be disadvantageous to the national government since the
AHEPP only contributes 246 MW of electricity to the Luzon Grid. Even the CHR has advised the Government to
reassess its privatization policy and to always consider paramount the most basic resources necessary and
indispensable for human survival, which includes water.
MWSS further avers that upon the facilitation of the OGCC and participated in by various stakeholders, including its
two concessionaires, Manila Water Company, Inc. and Maynilad Water Services, Inc., various meetings and
conferences were held relative to the drafting of the
Memorandum of Agreement on the Angat Water Protocol. On April 20, 2010, the final draft of the Angat Water
Protocol was finally complete. However, as of June 18, 2010, only MWSS and NIA signed the said final draft. MWSS
thus contends that PSALM failed to institute any safeguards as prescribed in Sec. 47 of the EPIRA when it proceeded
with the privatization of the AHEPP.
As to the issue of nationality requirement in the appropriation of water resources under the Constitution, MWSS cites
the case of Manila Prince Hotel v. Government Service Insurance System 15 which interpreted paragraph 2, Sec. 10,
Art. XII of the 1987 Constitution providing that "in the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified Filipinos" to imply "a mandatory, positive
command which is complete in itself and which needs no further guidelines or implementing laws or rules for its
enforcement x xx and is per se judicially enforceable." In this case, the AHEPP is in dire danger of being wholly-
owned by a Korean corporation which probably merely considers it as just another business opportunity, and as such
cannot be expected to observe and ensure the smooth facilitation of the more critical purposes of water supply and
irrigation.
Respondent First Gen Northern Energy Corporation (FGNEC) also filed a Comment 16 disagreeing with the
contentions of petitioners and respondent MWSS on account of the following: (1) the NPC charter vested upon it
complete jurisdiction and control over watersheds like the Angat Watershed surrounding the reservoir of the power
plants, and hence Art. 498 of the Civil Code is inapplicable; (2) NPC, MWSS and NIA are not co-owners of the
various rights over the Angat Dam as in fact each of them holds its own water rights; (3) the State through the EPIRA
expressly mandates PSALM to privatize all NPC assets, which necessarily includes the AHEPP; (4) the privatization
of the AHEPP will not affect the priority of water for domestic and municipal uses as there are sufficient safeguards to
ensure the same, and also because the Water Code specifically mandates that such use shall take precedence over
other uses, and even the EPIRA itself gives priority to use of water for domestic and municipal purposes over power
generation; (5) the Water Protocol also safeguards priority of use of water for domestic purposes; (6) the bidding
procedure for the AHEPP was valid, and the bidding was conducted by PSALM in an open and transparent manner;
and (7) the right to information of petitioners and the public in general was fully satisfied, and PSALM adopted
reasonable rules and regulations for the orderly conduct of its functions pursuant to its mandate under the EPIRA.
FGNEC nevertheless prays of this Court to declare the nationality requirements for the ownership, operation and
maintenance of the AHEPP as prescribed by the Constitution and pertinent laws. Considering the allegation of
petitioners that K-Water is owned by the Republic of South Korea, FGNEC asserts that PSALM should not have
allowed said entity to participate in the bidding because under our Constitution, the exploration, development and
utilization of natural resources are reserved to Filipino citizens or to corporations with 60% of their capital being
owned by Filipinos.
Respondent NIA filed its Comment17 stating that its interest in this case is limited only to the protection of its water
allocation drawn from the Angat Dam as determined by the NWRB. Acknowledging that it has to share the meager
water resources with other government agencies in fulfilment of their respective mandate, NIA submits that it is willing
to sit down and discuss issues relating to water allocation, as evidenced by the draft Memorandum of Agreement on
the Angat Water Protocol. Since the reliefs prayed for in the instant petition will not be applicable to NIA which was
not involved in the bidding conducted by PSALM, it will thus not be affected by the outcome of the case.
Respondents San Miguel Corporation (SMC), DMCI Power Corporation, Trans-Asia Oil and Energy Development
Corporation and SNAboitiz Power-Pangasinan, Inc. filed their respective Comments18 with common submission that
they are not real parties-in-interest and should be excluded from the case. They assert that PSALM acted pursuant to
its mandate to privatize the AHEPP when it conducted the bidding, and there exists no reason for them to take any
action to invalidate the said bidding wherein they lost to the highest bidder K-Water.
On its part, respondent K-Water filed a Manifestation In Lieu of Comment19 stating that it is not in a position to
respond to petitioners allegations, having justifiably relied on the mandate and expertise of PSALM in the conduct of
public bidding for the privatization of the AHEPP and had no reason to question the legality or constitutionality of the
privatization process, including the bidding. K-Water submits that its participation in the bidding for the AHEPP was
guided at all times by an abiding respect for the Constitution and the laws of the Philippines, and hopes for a prompt
resolution of the present petition to further strengthen and enhance the investment environment considering the
level of investment entailed, not only in financial terms by providing a definitive resolution and reliable guidance for
investors, whether Filipino or foreign, as basis for effective investment and business decisions.
In their Consolidated Reply,20 petitioners contend that the instant petition is not mooted with the issuance of a Notice
of Award to K-Water because the privatization of AHEPP is not finished until and unless the deed of absolute sale
has been executed. They cite the ruling in David v. Arroyo,21 that courts will decide cases, otherwise moot and
academic, if:
first, there is a grave violation of the Constitution; second, the exceptional character of the situation and the
paramount public interest is involved; third, when constitutional issue raised requires formulation of controlling
principles to guide the bench, the bar and the public; and fourth, the case is capable of repetition yet evading review.
Petitioners reiterate their legal standing to file the present suit in their capacity as taxpayers, or as Filipino citizens
asserting the promotion and protection of a public right, aside from being directly injured by the proceedings of
PSALM. As to the absence of Certification and Verification of Non-Forum Shopping from petitioner Bello in the file
copy of PSALM, the same was a mere inadvertence in photocopying the same.
On the matter of compliance with an open and transparent bidding, petitioners also reiterate as held in Chavez v.
Public Estates Authority,22 that the Courts interpretation of public bidding applies to any law which requires public
bidding, especially since Sec. 79 of the Government Auditing Code does not enumerate the data that must be
disclosed to the public. PSALM should have followed the minimum requirements laid down in said case instead of
adopting the "format generally used by government entities in their procurement of goods, infrastructure and
consultancy services," considering that what was involved in Chavez is an amended Joint Venture Agreement which
seeks to transfer title and ownership over government property. Petitioners point out that the requirement under COA
Circular 89-296 as regards confidentiality covers only sealed proposals and not all information relating to the AHEPP
privatization. PSALMs simple referral of IDEALS request letter to the counsel of K-Water is very telling, indicating
PSALMs limited knowledge about a company it allowed to participate in the bidding and which even won the bidding.
On the transfer of water rights to K-Water, petitioners reiterate that this violates the Water Code, and contrary to
PSALMs statements, once NPC transfers its water permit to K-Water, in accordance with the terms of the Asset
Purchase Agreement, NPC gives up its authority to extract or utilize water from the Angat River. Petitioners further
assert that the terms of the sale of AHEPP allowing the buyer the operation and management of the Non-Power
Components, constitutes a relinquishment of government control over the Angat Dam, in violation of Art. XII, Sec. 2 of
the Constitution. PSALM likewise has not stated that all stakeholders have signed the Water Protocol. Such absence
of a signed Water Protocol is alarming in the light of PSALMs pronouncement that the terms of the sale to K-Water
would still subject to negotiation. Is PSALMs refusal to sign the Water Protocol part of its strategy to negotiate the
terms of the sale with the bidders? If so, then PSALM is blithely and cavalierly bargaining away the Filipinos right to
water.
Responding to the claims of MWSS in its Comment, PSALM contends that MWSSs allegations regarding the bidding
process is belied by MWSSs own admission that it held discussions with PSALM to highlight the important points and
issues surrounding the AHEPP privatization that needed to be threshed out. Moreover, MWSS also admits having
participated, along with other agencies and stakeholders, various meetings and conferences relative to the drafting of
a Memorandum of Agreement on the Angat Water Protocol.
As regards the Angat Dam, PSALM emphasizes that MWSS never exercised jurisdiction and control over the said
facility. PSALM points out that the Angat Dam was constructed in 1967, or four years before the enactment of
Republic Act No. 6234, upon the commissioning thereof by the NPC and the consequent construction by Grogun,
Inc., a private corporation. MWSS attempt to base its claim of jurisdiction over the Angat Dam upon its
characterization of EPIRA as a general law must likewise fail. PSALM explains that EPIRA cannot be classified as a
general law as it applies to a particular portion of the State, i.e., the energy sector. The EPIRA must be deemed an
exception to the provision in the Revised MWSS Charter on MWSSs general jurisdiction over waterworks systems.
PSALM stresses that pursuant to the EPIRA, PSALM took ownership of all existing NPC generation assets, liabilities,
IPP contracts, real estate and other disposable assets, which necessarily includes the AHEPP Complex, of which the
Angat Dam is part. As to the OGCC opinion cited by MWSS to support its position that control and management of
the Angat Dam Complex should be turned over to MWSS, the OGCC had already issued a second opinion dated
August 20, 2008 which clarified the tenor of its earlier Opinion No. 107, s. 2008, stating that "the disposal of the Angat
HEPP by sale through public bidding the principal mode of disposition under EPIRA remains PSALMs primary
option." Moreover, as pointed out by the National Economic Development Authority (NEDA) in its letter dated
September 16, 2009, the ownership and operation of a hydropower plant goes beyond the mandate of MWSS. This
view is consistent with the provisions of EPIRA mandating the transfer of ownership and control of NPC generation
assets, IPP Contracts, real estate and other disposable assets to a private person or entity. Consequently, a transfer
to another government entity of the said NPC assets would be a clear violation of the EPIRA. Even assuming such is
allowed by EPIRA, it would not serve the objective of the EPIRA, i.e., that of liquidating all NPCs financial obligations
and would merely transfer NPCs debts from the hands of one government entity to another, the funds that would be
utilized by MWSS in the acquisition of the AHEPP would doubtless come from the pockets of the Filipino people.
As regards the opposition of various local government units to the sale of the AHEPP, PSALM said that a forum was
held specifically to address their concerns. After the said forum, these LGUs did not anymore raise the same
concerns; such inaction on their part could be taken as an acquiescence to, and acceptance of, the explanations
made by PSALM during the forum.
PSALM had made it clear that it is only the AHEPP and not the Angat Dam which was being privatized. The same
wrong premise underpinned the position of the CHR with its erroneous allegation that MWSS is allowed, under its
Revised Charter, to operate and maintain a power plant.
PSALM further contends that the sale of AHEPP to K-Water did not violate the Constitutions provision on the States
natural resources and neither is the ruling in Manila Prince Hotel applicable as said case was decided under different
factual circumstances. It reiterates that the AHEPP, being a generation asset, can be sold to a foreign entity, under
the EPIRA, in accordance with the policy reforms said law introduced in the power sector; the EPIRA aims to enable
open access in the electricity market and then enable the government to concentrate more fully on the supply of basic
needs to the Filipino people. Owing to the competitive and open nature of the generation sector, foreign corporation
may own generation assets.
Issues
The present controversy raised the following issues:
1) Legal standing of petitioners;
2) Mootness of the petition;
3) Violation of the right to information;
4) Ownership of the AHEPP;
5) Violation of Sec. 2, Art. XII of the Constitution;
6) Violation of the Water Code provisions on the grant of water rights; and
7) Failure of PSALM to comply with Sec. 47 (e) of EPIRA.
Mootness and Locus Standi
PSALMs contention that the present petition had already been mooted by the issuance of the Notice of Award to K-
Water is misplaced. Though petitioners had sought the immediate issuance of injunction against the bidding
commenced by PSALM -- specifically enjoining it from proceeding to the next step of issuing a notice of award to any
of the bidders -- they further prayed that PSALM be permanently enjoined from disposing of the AHEPP through
privatization. The petition was thus filed not only as a means of enforcing the States obligation to protect the citizens
"right to water" that is recognized under international law and legally enforceable under our Constitution, but also to
bar a foreign corporation from exploiting our water resources in violation of Sec. 2, Art. XII of the 1987 Constitution. If
the impending sale of the AHEPP to K-Water indeed violates the Constitution, it is the duty of the Court to annul the
contract award as well as its implementation. As this Court held in Chavez v. Philippine Estates
Authority,23 "supervening events, whether intended or accidental, cannot prevent the Court from rendering a decision
if there is a grave violation of the Constitution."
We also rule that petitioners possess the requisite legal standing in filing this suit as citizens and taxpayers.
"Legal standing" or locus standi has been defined as a personal and substantial interest in the case such that the
party has sustained or will sustain direct injury as a result of the governmental act that is being challenged, alleging
more than a generalized grievance. The gist of the question of standing is whether a party alleges "such personal
stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court depends for illumination of difficult constitutional questions." 24 This Court, however, has
adopted a liberal attitude on the locus standi of a petitioner where the petitioner is able to craft an issue of
transcendental significance to the people, as when the issues raised are of paramount importance to the
public.25Thus, when the proceeding involves the assertion of a public right, the mere fact that the petitioner is a citizen
satisfies the requirement of personal interest.26
There can be no doubt that the matter of ensuring adequate water supply for domestic use is one of paramount
importance to the public. That the continued availability of potable water in Metro Manila might be compromised if
PSALM proceeds with the privatization of the hydroelectric power plant in the Angat Dam Complex confers upon
petitioners such personal stake in the resolution of legal issues in a petition to stop its implementation.
Moreover, we have held that if the petition is anchored on the peoples right to information on matters of public
concern, any citizen can be the real party in interest. The requirement of personal interest is satisfied by the mere fact
that the petitioner is a citizen, and therefore, part of the general public which possesses the right. There is no need to
show any special interest in the result. It is sufficient that petitioners are citizens and, as such, are interested in the
faithful execution of the laws.27
Violation of Right to Information
The peoples right to information is provided in Section 7, Article III of the Constitution, which reads:
Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to official
records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may
be provided by law. (Emphasis supplied.)
The peoples constitutional right to information is intertwined with the governments constitutional duty of full public
disclosure of all transactions involving public interest.28 Section 28, Article II of the Constitution declares the State
policy of full transparency in all transactions involving public interest, to wit:
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public
disclosure of all its transactions involving public interest. (Italics supplied.)
The foregoing constitutional provisions seek to promote transparency in policy-making and in the operations of the
government, as well as provide the people sufficient information to exercise effectively other constitutional rights.
They are also essential to hold public officials "at all times x xx accountable to the people," for unless citizens have
the proper information, they cannot hold public officials accountable for anything. Armed with the right information,
citizens can participate in public discussions leading to the formulation of government policies and their effective
implementation. An informed citizenry is essential to the existence and proper functioning of any democracy. 29
Consistent with this policy, the EPIRA was enacted to provide for "an orderly and transparent privatization" of NPCs
assets and liabilities.30 Specifically, said law mandated that "all assets of NPC shall be sold in an open and
transparent manner through public bidding."31
In Chavez v. Public Estates Authority32 involving the execution of an Amended Joint Venture Agreement on the
disposition of reclaimed lands without public bidding, the Court held:
x x xBefore the consummation of the contract, PEA must, on its own and without demand from anyone, disclose to
the public matters relating to the disposition of its property. These include the size, location, technical description and
nature of the property being disposed of, the terms and conditions of the disposition, the parties qualified to bid, the
minimum price and similar information. PEA must prepare all these data and disclose them to the public at the start of
the disposition process, long before the consummation of the contract, because the Government
Auditing Code requires public bidding. If PEA fails to make this disclosure, any citizen can demand from PEA this
information at any time during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being undertaken by the bidding or
review committee is not immediately accessible under the right to information. While the evaluation or review is still
on-going, there are no "official acts, transactions, or decisions" on the bids or proposals. However, once the
committee makes its official recommendation, there arises a "definite proposition" on the part of the government.
From this moment, the publics right to information attaches, and any citizen can access all the non-proprietary
information leading to such definite proposition. In Chavez v. PCGG, the Court ruled as follows:
"Considering the intent of the framers of the Constitution, we believe that it is incumbent upon the PCGG and its
officers, as well as other government representatives, to disclose sufficient public information on any proposed
settlement they have decided to take up with the ostensible owners and holders of ill-gotten wealth. Such information,
though, must pertain to definite propositions of the government not necessarily to intra-agency or inter-agency
recommendations or communications during the stage when common assertions are still in the process of being
formulated or are in the "exploratory" stage. There is need, of course, to observe the same restrictions on disclosure
of information in general, as discussed earlier such as on matters involving national security, diplomatic or foreign
relations, intelligence and other classified information." (Emphasis supplied.)
Chavez v. Public Estates Authority thus laid down the rule that the constitutional right to information includes official
information on on-going negotiations before a final contract. The information, however, must constitute definite
propositions by the government and should not cover recognized exceptions like privileged information, military and
diplomatic secrets and similar matters affecting national security and public order. In addition, Congress has
prescribed other limitations on the right to information in several legislations. 33
In this case, petitioners first letter dated April 20, 2010 requested for documents such as Terms of Reference and
proposed bids submitted by the bidders. At that time, the bids were yet to be submitted at the bidding scheduled on
April 28, 2010. It is also to be noted that PSALMs website carried news and updates on the sale of AHEPP, providing
important information on bidding activities and clarifications regarding the terms and conditions of the Asset Purchase
Agreement (APA) to be signed by PSALM and the winning bidder (Buyer). 34
In Chavez v. National Housing Authority,35 the Court held that pending the enactment of an enabling law, the release
of information through postings in public bulletin boards and government websites satisfies the constitutional
requirement, thus:
It is unfortunate, however, that after almost twenty (20) years from birth of the 1987 Constitution, there is still no
enabling law that provides the mechanics for the compulsory duty of government agencies to disclose information on
government transactions. Hopefully, the desired enabling law will finally see the light of day if and when Congress
decides to approve the proposed "Freedom of Access to Information Act." In the meantime, it would suffice that
government agencies post on their bulletin boards the documents incorporating the information on the steps and
negotiations that produced the agreements and the agreements themselves, and if finances permit, to upload said
information on their respective websites for easy access by interested parties. Without any law or regulation
governing the right to disclose information, the NHA or any of the respondents cannot be faulted if they were not able
to disclose information relative to the SMDRP to the public in general. 36 (Emphasis supplied.)
The Court, however, distinguished the duty to disclose information from the duty to permit access to information on
matters of public concern under Sec. 7, Art. III of the Constitution. Unlike the disclosure of information which is
mandatory under the Constitution, the other aspect of the peoples right to know requires a demand or request for one
to gain access to documents and paper of the particular agency. Moreover, the duty to disclose covers only
transactions involving public interest, while the duty to allow access has a broader scope of information which
embraces not only transactions involving public interest, but any matter contained in official communications and
public documents of the government agency.37 Such relief must be granted to the party requesting access to official
records, documents and papers relating to official acts, transactions, and decisions that are relevant to a government
contract.
Here, petitioners second letter dated May 14, 2010 specifically requested for detailed information regarding the
winning bidder, such as company profile, contact person or responsible officer, office address and Philippine
registration. But before PSALM could respond to the said letter, petitioners filed the present suit on May 19, 2010.
PSALMs letter-reply dated May 21, 2010 advised petitioners that their letter-re quest was referred to the counsel of
K-Water. We find such action insufficient compliance with the constitutional requirement and inconsistent with the
policy under EPIRA to implement the privatization of NPC assets in an "open and transparent" manner. PSALMs
evasive response to the request for information was unjustified because all bidders were required to deliver
documents such as company profile, names of authorized officers/representatives, financial and technical experience.
Consequently, this relief must be granted to petitioners by directing PSALM to allow petitioners access to the papers
and documents relating to the company profile and legal capacity of the winning bidder. Based on PSALMs own
press releases, K-Water is described as a Korean firm with extensive experience in implementing and managing
water resources development projects in South Korea, and also contributed significantly to the development of that
countrys heavy and chemical industries and the modernization of its national industrial structure.
AngatHEPP is Under the Jurisdiction of
the Department of Energy Through NPC
It must be clarified that though petitioners had alleged a co-ownership by virtue of the joint supervision in the
operation of the Angat Complex by MWSS, NPC and NIA, MWSS actually recognized the ownership and jurisdiction
of NPC over the hydroelectric power plant itself. While MWSS had initially sought to acquire ownership of the AHEPP
without public bidding, it now prays that PSALM be ordered to turn over the possession and control of the said facility
to MWSS. MWSS invokes its own authority or "special powers" by virtue of its general jurisdiction over waterworks
systems, and in consideration of its substantial investments in the construction of two auxiliary units in the AHEPP, as
well as the construction of the Umiray-AngatTransbasin Tunnel to supplement the water intake at the Angat Reservoir
which resulted in increased power generation.
Records disclosed that as early as December 2005, following the decision of PSALMs Board of Directors to
commence the sale process of the AHEPP along with Magat and AmlanHEPPs in August 2005, MWSS was actively
cooperating and working with PSALM regarding the proposed Protocol for the Privatization of the AHEPP, specifically
on the terms and conditions for the management, control and operation of the Angat Dam Complex taking into
consideration the concerns of its concessionaires. A Technical Working Group (TWG) similar to that formed for the
Operation and Management Agreement of Pantabangan and Magat dams was created, consisting of representatives
from PSALM, MWSS and other concerned agencies, to formulate strategies for the effective implementation of the
privatization of AHEPP and appropriate structure for the operation and management of the Angat Dam Complex.38
In March 2008, PSALM sought legal advice from the OGCC on available alternatives to a sale structure for the
AHEPP. On May 27, 2008, then Government Corporate Counsel Alberto C. Agra issued Opinion No. 107, s.
200839stating that PSALM is not limited to "selling" as a means of fulfilling its mandate under the EPIRA, and that in
dealing with the AHEPP, PSALM has the following options:
1. Transfer the ownership, possession, control, and operation of the Angat Facility to another entity, which may or
may not be a private enterprise, as specifically provided under Section 47 (e) of RA 9136;
2. Transfer the Angat Facility, through whatever form, to another entity for the purpose of protecting the public
interest.40
The OGCC cited COA Circular No. 89-296 which provides that government property or assets that are no longer
serviceable or needed "may be transferred to other government entities/agencies without cost or at an appraised
value upon authority of the head or governing body of the agency or corporation, and upon due accomplishment of an
Invoice and Receipt of Property." Pointing out the absence of any prohibition under R.A. No. 9136 and its IRR for
PSALM to transfer the AHEPP to another government instrumentality, and considering that MWSS is allowed under
its charter to acquire the said facility, the OGCC expressed the view that PSALM may, "in the interest of stemming a
potential water crisis, turn over the ownership, operations and management of the Angat Facility to a qualified entity,
such as the MWSS, without need of public bidding as the latter is also a government entity." 41
Consequently, MWSS requested the Office of the President (OP) to exclude the AHEPP from the list of NPC assets
to be privatized under the EPIRA. Said request was endorsed to the Department of Finance (DOF) which requested
the National Economic Development Authority (NEDA) to give its comments. Meanwhile, on August 20, 2008, the
OGCC issued a Clarification42 on its Opinion No. 107, s. 2008 stating that the tenor of the latter issuance was
"permissive" and "necessarily, the disposal of the AHEPP by sale through public bidding the principal mode of
disposition under x xx R.A. 9136 remains PSALMs primary option." The OGCC further explained its position, thus:
If, in the exercise of PSALMs discretion, it determines that privatization by sale through public bidding is the best
mode to fulfill its mandate under R.A. 9136, and that this mode will not contravene the States declared policy on
water resources, then the same is legally permissible.
Finally, in OGCC Opinion No. 107 s. 2008, this Office underscored "the overriding policy of the State x xx recognizing
that water is vital to national development x xx and the crucial role which the Angat Facility plays in the uninterrupted
and adequate supply and distribution of potable water to residents of Metro Manila." This Office reiterates "the
primacy of the States interest in mitigating the possible deleterious effects of an impending "water crisis"
encompassing areas even beyond Metro Manila." Any transfer of the AHEPP to be undertaken by PSALM whether
to a private or public entity must not contravene the States declared policy of ensuring the flow of clean, potable
water under RA 6395 and 9136, and Presidential Decree 1067. Hence, said transfer and/or privatization scheme
must ensure the preservation of the AHEPP as a vital source of water for Metro Manila and the surrounding
provinces.43(Emphasis supplied.)
On September 16, 2009, NEDA Deputy Director General Rolando G. Tungpalan, by way of comment to MWSSs
position, wrote the DOF stating that MWSSs concern on ensuring an uninterrupted and adequate supply of water for
domestic use is amply protected and consistently addressed in the EPIRA. Hence, NEDA concluded that there
appears to be no basis to exclude AHEPP from the list of NPC generation assets to be privatized and no compelling
reason to transfer its management, operations and control to MWSS.44 NEDA further pointed out that:
Ownership and operation of a hydropower plant, however, goes beyond the mandate of MWSS. To operate a
power generation plant, given the sectors legislative setup would require certification and permits that has to be
secured by the operator. MWSS does not have the technical capability to undertake the operation and maintenance
of the AHEPP nor manage the contract of a contracted private party to undertake the task for MWSS. While MWSS
may tap NPC to operate and maintain the AHEPP, this, similar to contracting out a private party, may entail additional
transaction costs, and ultimately result to higher generation rates. 45 (Emphasis supplied.)
Thereafter, MWSS sought the support of the DPWH in a letter dated September 24, 2009 addressed to then
Secretary Hermogenes E. Ebdane, Jr., for the exclusion of the AHEPP from the list of NPC assets to be privatized
and instead transfer the ownership, possession and control thereof to MWSS with reasonable compensation. Acting
on the said request, Secretary Ebdane, Jr. wrote a memorandum for the President recommending that "the Angat
Dam be excluded from the list of NPC assets to be privatized, and that the ownership, management and control of the
Dam be transferred from NPC to MWSS, with reasonable compensation." 46
Based on the foregoing factual backdrop, there seems to be no dispute as to the complete jurisdiction of NPC over
the government-owned Angat Dam and AHEPP.
The Angat Reservoir and Dam were constructed from 1964 to 1967 and have become operational since 1968. They
have multiple functions:
1) To provide irrigation to about 31,000 hectares of land in 20 municipalities and towns in Pampanga and Bulacan;
2) To supply the domestic and industrial water requirements of residents in Metro Manila;
3) To generate hydroelectric power to feed the Luzon Grid; and
4) To reduce flooding to downstream towns and villages.47
The Angat Dam is a rockfill dam with a spillway equipped with three gates at a spilling level of 219 meters and has
storage capacity of about 850 million cubic meters. Water supply to the MWSS is released through five auxiliary
turbines where it is diverted to the two tunnels going to the Ipo Dam. 48 The Angat Dam is one of the dams under the
management of NPC while the La Mesa and Ipo dams are being managed by MWSS. MWSS is a government
corporation existing by virtue of R.A. No. 6234.49 NAPOCOR or NPC is also a government-owned corporation created
under Commonwealth Act (C.A.) No. 120,50 which, among others, was vested with the following powers under Sec. 2,
paragraph (g):
(g) To construct, operate and maintain power plants, auxiliary plants, dams, reservoirs, pipes, mains, transmission
lines, power stations and substations, and other works for the purpose of developing hydraulic power from any river,
creek, lake, spring and waterfall in the Philippines and supplying such power to the inhabitants thereof; to acquire,
construct, install, maintain, operate and improve gas, oil, or steam engines, and/or other prime movers, generators
and other machinery in plants and/or auxiliary plants for the production of electric power; to establish, develop,
operate, maintain and administer power and lighting system for the use of the Government and the general public; to
sell electric power and to fix the rates and provide for the collection of the charges for any service rendered: Provided,
That the rates of charges shall not be subject to revision by the Public Service Commission;
x x x x (Emphasis supplied.)
On September 10, 1971, R.A. No. 6395 was enacted which revised the charter of NPC, extending its corporate life to
the year 2036. NPC thereafter continued to exercise complete jurisdiction over dams and power plants including the
Angat Dam, Angat Reservoir and AHEPP. While the NPC was expressly granted authority to construct, operate and
maintain power plants, MWSS was not vested with similar function. Section 3 (f), (o) and (p) of R.A. No. 6234
provides that MWSSs powers and attributes include the following
(f) To construct, maintain, and operate dams, reservoirs, conduits, aqueducts, tunnels, purification plants, water
mains, pipes, fire hydrants, pumping stations, machineries and other waterworks for the purpose of supplying water to
the inhabitants of its territory, for domestic and other purposes; and to purify, regulate and control the use, as well as
prevent the wastage of water;
xxxx
(o) To assist in the establishment, operation and maintenance of waterworks and sewerage systems within its
jurisdiction under cooperative basis;
(p) To approve and regulate the establishment and construction of waterworks and sewerage systems in privately
owned subdivisions within its jurisdiction; x xx. (Emphasis supplied.)
On December 9, 1992, by virtue of R.A. No. 7638,51 NPC was placed under the Department of Energy (DOE) as one
of its attached agencies.
Aside from its ownership and control of the Angat Dam and AHEPP, NPC was likewise mandated to exercise
complete jurisdiction and control over its watershed, pursuant to Sec. 2 (n) and (o) of R.A. No. 6395 for development
and conservation purposes:
(n) To exercise complete jurisdiction and control over watersheds surrounding the reservoirs of plants and/or projects
constructed or proposed to be constructed by the Corporation. Upon determination by the Corporation of the areas
required for watersheds for a specific project, the Bureau of Forestry, the Reforestation Administration and the
Bureau of Lands shall, upon written advice by the Corporation, forthwith surrender jurisdiction to the Corporation of all
areas embraced within the watersheds, subject to existing private rights, the needs of waterworks systems, and the
requirements of domestic water supply;
(o) In the prosecution and maintenance of its projects, the Corporation shall adopt measures to prevent
environmental pollution and promote the conservation, development and maximum utilization of natural resources;
and
x x x x (Emphasis supplied.)
On December 4, 1965, Presidential Proclamation No. 505 was issued amending Proclamation No. 71 by transferring
the administration of the watersheds established in Montalban, San Juan del Monte, Norzagaray, Angat, San Rafael,
Pearanda and Infanta, Provinces of Rizal, Bulacan, Nueva Ecija and Quezon, to NPC. Subsequent executive
issuances Presidential Decree (P.D.) No. 1515 which was signed in June 1978 and amended by P.D. No. 1749 in
December 1980 led to the creation of the NPC Watershed Management Division which presently has 11 watershed
areas under its management.52
Privatization of AHEPP Mandatory Under EPIRA
With the advent of EPIRA in 2001, PSALM came into existence for the principal purpose of managing the orderly
sale, privatization and disposition of generation assets, real estate and other disposable assets of the NPC including
IPP Contracts. Accordingly, PSALM was authorized to take title to and possession of, those assets transferred to it.
EPIRA mandated that all such assets shall be sold through public bidding with the exception of Agus and Pulangui
complexes in Mindanao, the privatization of which was left to the discretion of PSALM in consultation with
Congress,53 thus:
Sec. 47. NPC Privatization. Except for the assets of SPUG, the generation assets, real estate, and other disposable
assets as well as IPP contracts of NPC shall be privatized in accordance with this Act. Within six (6) months from the
effectivity of this Act, the PSALM Corp. shall submit a plan for the endorsement by the Joint Congressional Power
Commission and the approval of the President of the Philippines, on the total privatization of the generation assets, x
xx of NPC and thereafter, implement the same, in accordance with the following guidelines, except as provided for in
paragraph (f) herein:
x xxx
(d) All assets of NPC shall be sold in an open and transparent manner through public bidding, x xx;
x xxx
(f) The Agus and the Pulangui complexes in Mindanao shall be excluded from among the generation companies that
will be initially privatized. Their ownership shall be transferred to the PSALM Corp. and both shall continue to be
operated by the NPC. Said complexes may be privatized not earlier than ten (10) years from the effectivity of this Act,
x xx.The privatization of Agus and Pulangui complexes shall be left to the discretion of PSALM Corp. in consultation
with Congress;
x xxx (Emphasis supplied.)
The intent of Congress not to exclude the AHEPP from the privatization of NPC generation assets is evident from the
express provision exempting only the aforesaid two power plants in Mindanao. Had the legislature intended that
PSALM should likewise be allowed discretion in case of NPC generation assets other than those mentioned in Sec.
47, it could have explicitly provided for the same. But the EPIRA exempted from privatization only those two plants in
Mindanao and the Small Power Utilities Group (SPUG).54 Expressiouniusestexclusioalterius, the express inclusion of
one implies the exclusion of all others.55
It is a settled rule of statutory construction that the express mention of one person, thing, or consequence implies the
exclusion of all others. The rule is expressed in the familiar maxim, expressiouniusestexclusioalterius.
The rule of expressiouniusestexclusioalterius is formulated in a number of ways. One variation of the rule is principle
that what is expressed puts an end to that which is implied. Expressiumfacitcessaretacitum. Thus, where a statute, by
its terms, is expressly limited to certain matters, it may not, by interpretation or construction, be extended to other
matters.
x xxx
The rule of expressiouniusestexclusioalterius and its variations are canons of restrictive interpretation. They are
based on the rules of logic and the natural workings of the human mind. They are predicated upon ones own
voluntary act and not upon that of others. They proceed from the premise that the legislature would not have made
specified enumeration in a statute had the intention been not to restrict its meaning and confine its terms to those
expressly mentioned.56
The Court therefore cannot sustain the position of petitioners, adopted by respondent MWSS, that PSALM should
have exercised the discretion not to proceed with the privatization of AHEPP, or at least the availability of the option
to transfer the said facility to another government entity such as MWSS. Having no such discretion in the first place,
PSALM committed no grave abuse of discretion when it commenced the sale process of AHEPP pursuant to the
EPIRA.
In any case, the Court finds that the operation and maintenance of a hydroelectric power plant is not among the
statutorily granted powers of MWSS. Although MWSS was granted authority to construct and operate dams and
reservoirs, such was for the specific purpose of supplying water for domestic and other uses, and the treatment,
regulation and control of water usage, and not power generation. 57 Moreover, since the sale of AHEPP by PSALM
merely implements the legislated reforms for the electric power industry through schemes that aim "to enhance the
inflow of private capital and broaden the ownership base of the power generation, transmission and distribution
sectors,"58 the proposed transfer to MWSS which is another government entity contravenes that State policy. COA
Circular No. 89-296 likewise has no application to NPC generating assets which are still serviceable and definitely
needed by the Government for the purpose of liquidating NPCs accumulated debts amounting to billions in US
Dollars. Said administrative circular cannot prevail over the EPIRA, a special law governing the disposition of
government properties under the jurisdiction of the DOE through NPC.
Sale of Government-Owned AHEPP
to a Foreign Corporation Not Prohibited
But Only Filipino Citizens and Corporations
60% of whose capital is owned by Filipinos
May be Granted Water Rights
The core issue concerns the legal implications of the acquisition by K-Water of the AHEPP in relation to the
constitutional policy on our natural resources.
Sec. 2, Art. XII of the 1987 Constitution provides in part:
SEC.2. All 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 other natural resources are owned by the State. With
the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development,
and utilization of natural resources shall be under the full control and supervision of the State. The State may directly
undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens.
Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five
years, and under such terms and conditions as may be provided by law. In case of water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of water power, beneficial use may be the measure
and limit of the grant.
x xxx (Emphasis supplied.)
The States policy on the management of water resources is implemented through the regulation of water rights.
Presidential Decree No. 1067, otherwise known as "The Water Code of the Philippines" is the basic law governing the
ownership, appropriation utilization, exploitation, development, conservation and protection of water resources and
rights to land related thereto. The National Water Resources Council (NWRC) was created in 1974 under P.D. No.
424 and was subsequently renamed as National Water Resources Board (NWRB) pursuant to Executive Order No.
124-A.59 The NWRB is the chief coordinating and regulating agency for all water resources management development
activities which is tasked with the formulation and development of policies on water utilization and appropriation, the
control and supervision of water utilities and franchises, and the regulation and rationalization of water rates. 60
The pertinent provisions of Art. 3, P.D. No. 1067 provide:
Art. 3. The underlying principles of this code are:
a. All waters belong to the State.
b. All waters that belong to the State can not be the subject to acquisitive prescription.
c. The State may allow the use or development of waters by administrative concession.
d. The utilization, exploitation, development, conservation and protection of water resources shall
be subject to the control and regulation of the government through the National Water Resources
Council x xx
e. Preference in the use and development of waters shall consider current usages and be
responsive to the changing needs of the country.
x xxx
Art. 9. Waters may be appropriated and used in accordance with the provisions of this Code.
Appropriation of water, as used in this Code, is the acquisition of rights over the use of waters or the taking or
diverting of waters from a natural source in the manner and for any purpose allowed by law.
Art. 10. Water may be appropriated for the following purposes:
x xxx
(d) Power generation
x xxx
Art. 13. Except as otherwise herein provided, no person including government instrumentalities or government-owned
or controlled corporations, shall appropriate water without a water right, which shall be evidenced by a document
known as a water permit.
Water right is the privilege granted by the government to appropriate and use water.
x xxx
Art. 15. Only citizens of the Philippines, of legal age, as well as juridical persons, who are duly qualified by law to
exploit and develop water resources, may apply for water permits. (Emphasis supplied.)
It is clear that the law limits the grant of water rights only to Filipino citizens and juridical entities duly qualified by law
to exploit and develop water resources, including private corporations with sixty percent of their capital owned by
Filipinos. In the case of Angat River, the NWRB has issued separate water permits to MWSS, NPC and NIA. 61
Under the EPIRA, the generation of electric power, a business affected with public interest, was opened to private
sector and any new generation company is required to secure a certificate of compliance from the Energy Regulatory
Commission (ERC), as well as health, safety and environmental clearances from the concerned government
agencies. Power generation shall not be considered a public utility operation, 62 and hence no franchise is necessary.
Foreign investors are likewise allowed entry into the electric power industry. However, there is no mention of water
rights in the privatization of multi-purpose hydropower facilities. Section 47 (e) addressed the issue of water security,
as follows:
(e) In cases of transfer of possession, control, operation or privatization of multi-purpose hydro facilities, safeguards
shall be prescribed to ensure that the national government may direct water usage in cases of shortage to protect
potable water, irrigation, and all other requirements imbued with public interest;
x xxx (Emphasis supplied.)
This provision is consistent with the priority accorded to domestic and municipal uses of water 63 under the Water
Code, thus:
Art. 22. Between two or more appropriators of water from the same sources of supply, priority in time of appropriation
shall give the better right, except that in times of emergency the use of water for domestic and municipal purposes
shall have a better right over all other uses; Provided, That, where water shortage is recurrent and the appropriator
for municipal use has a lower priority in time of appropriation, then it shall be his duty to find an alternative source of
supply in accordance with conditions prescribed by the Board. (Emphasis supplied.)
Rule 23, Section 6 of the Implementing Rules and Regulations (IRR) of the EPIRA provided for the structure of
appropriation of water resources in multi-purpose hydropower plants which will undergo privatization, as follows:
Section 6. Privatization of Hydroelectric Generation Plants.
(a) Consistent with Section 47(e) of the Act and Section 4(f) of this Rule, the Privatization of hydro facilities of NPC
shall cover the power component including assignable long-term water rights agreements for the use of water, which
shall be passed onto and respected by the buyers of the hydroelectric power plants.
(b) The National Water Resources Board (NWRB) shall ensure that the allocation for irrigation, as indicated by the
NIA and requirements for domestic water supply as provided for by the appropriate Local Water District(s) are
recognized and provided for in the water rights agreements. NPC or PSALM may also impose additional conditions in
the shareholding agreement with the winning bidders to ensure national security, including, but not limited to, the use
of water during drought or calamity.
(c) Consistent with Section 34(d) of the Act, the NPC shall continue to be responsible for watershed rehabilitation and
management and shall be entitled to the environmental charge equivalent to one-fourth of one centavo per kilowatt-
hour sales (P0.0025/kWh), which shall form part of the Universal Charge. This environmental fund shall be used
solely for watershed rehabilitation and management and shall bemanaged by NPC under existing arrangements.
NPC shall submit an annual report to the DOE detailing the progress of the water shed rehabilitation program.
(d) The NPC and PSALM or NIA, as the case may be, shall continue to be responsible for the dam structure and all
other appurtenant structures necessary for the safe and reliable operation of the hydropower plants. The NPC and
PSALM or NIA, as the case may be, shall enter into an operations and maintenance agreement with the private
operator of the power plant to cover the dam structure and all other appurtenant facilities. (Emphasis supplied.)
In accordance with the foregoing implementing regulations, and in furtherance of the Asset Purchase
Agreement64(APA), PSALM, NPC and K-Water executed on April 28, 2010 an Operations and Maintenance
Agreement65 (O & M Agreement) for the administration, rehabilitation, operation, preservation and maintenance, by K-
Water as the eventual owner of the AHEPP, of the Non-Power Components meaning the Angat Dam, non-power
equipment, facilities, installations, and appurtenant devices and structures, including the water sourced from the
Angat Reservoir.
It is the position of PSALM that as the new owner only of the hydroelectric power plant, K-Water will be a mere
operator of the Angat Dam. In the power generation activity, K-Water will have to utilize the waters already extracted
from the river and impounded on the dam. This process of generating electric power from the dam water entering the
power plant thus does not constitute appropriation within the meaning of natural resource utilization in the
Constitution and the Water Code.
The operation of a typical hydroelectric power plant has been described as follows:
Hydroelectric energy is produced by the force of falling water. The capacity to produce this energy is dependent on
both the available flow and the height from which it falls. Building up behind a high dam, water accumulates potential
energy. This is transformed into mechanical energy when the water rushes down the sluice and strikes the rotary
blades of turbine. The turbine's rotation spins electromagnets which generate current in stationary coils of wire.
Finally, the current is put through a transformer where the voltage is increased for long distance transmission over
power lines.66
Foreign ownership of a hydropower facility is not prohibited under existing laws. The construction, rehabilitation and
development of hydropower plants are among those infrastructure projects which even wholly-owned foreign
corporations are allowed to undertake under the Amended Build-Operate-Transfer (Amended BOT) Law (R.A. No.
7718).67
Beginning 1987, the policy has been openness to foreign investments as evident in the fiscal incentives provided for
the restructuring and privatization of the power industry in the Philippines, under the Power Sector Restructuring
Program (PSRP) of the Asian Development Bank.
The establishment of institutional and legal framework for the entry of private sector in the power industry began with
the issuance by President Corazon C. Aquino of Executive Order No. 215 in 1987. Said order allowed the entry of
private sector the IPPs to participate in the power generation activities in the country. The entry of IPPs was
facilitated and made attractive through the first BOT Law in 1990 (R.A. No. 6957) which aimed to "minimize the
burden of infrastructure projects on the national government budget, minimize external borrowing for infrastructure
projects, and use the efficiency of the private sector in delivering a public good." In 1993, the Electric Power Crisis Act
was passed giving the President emergency powers to urgently address the power crisis in the country.68 The full
implementation of the restructuring and privatization of the power industry was achieved when Congress passed the
EPIRA in 2001.
With respect to foreign investors, the nationality issue had been framed in terms of the character or nature of the
power generation process itself, i.e., whether the activity amounts to utilization of natural resources within the
meaning of Sec. 2, Art. XII of the Constitution. If so, then foreign companies cannot engage in hydropower generation
business; but if not, then government may legally allow even foreign-owned companies to operate hydropower
facilities.
The DOJ has consistently regarded hydropower generation by foreign entities as not constitutionally proscribed
based on the definition of water appropriation under the Water Code, thus:
Opinion No. 173, 1984
This refers to your request for opinion on the possibility of granting water permits to foreign corporations authorized to
do business in the Philippines x xx
x xxx
x xx while the Water Code imposes a nationality requirement for the grant of water permits, the same refers to the
privilege "to appropriate and use water." This should be interpreted to mean the extraction of water from its natural
source (Art. 9, P.D. No. 1067). Once removed therefrom, they cease to be a part of the natural resources of the
country and are the subject of ordinary commerce and may be acquired by foreigners (Op. No. 55, series of 1939). x
xx in case of a contract of lease, the water permit shall be secured by the lessor and included in the lease as an
improvement. The water so removed from the natural source may be appropriated/used by the foreign corporation
leasing the property.
Opinion No. 14, S. 1995
The nationality requirement imposed by the Water Code refers to the privilege "to appropriate and use water." This,
we have consistently interpreted to mean the extraction of water directly from its natural source. Once removed from
its natural source the water ceases to be a part of the natural resources of the country and may be subject of ordinary
commerce and may even be acquired by foreigners. (Secretary of Justice Op. No. 173, s. 1984; No. 24, s. 1989; No.
100 s. 1994)
In fine, we reiterate our earlier view that a foreign entity may legally process or treat water after its removal from a
natural source by a qualified person, natural or juridical.
Opinion No. 122, s. 1998
The crucial issue at hand is the determination of whether the utilization of water by the power plant to be owned and
operated by a foreign-owned corporation (SRPC) will violate the provisions of the Water Code.
As proposed, the participation of SRPC to the arrangement commences upon construction of the power station,
consisting of a dam and a power plant. After the completion of the said station, its ownership and control shall be
turned over to NPC. However, SRPC shall remain the owner of the power plant and shall operate it for a period of
twenty-five (25) years.
It appears that the dam, which will be owned and controlled by NPC, will block the natural flow of the river. The power
plant, which is situated next to it, will entirely depend upon the dam for its water supply which will pass through an
intake gate situated one hundred (100) meters above the riverbed. Due to the distance from the riverbed, water could
not enter the power plant absent the dam that traps the flow of the river. It appears further that no water shall enter
the power tunnel without specific dispatch instructions from NPC, and such supplied water shall be used only by
SRPC for power generation and not for any other purpose. When electricity is generated therein, the same shall be
supplied to NPC for distribution to the public. These facts x xx viewed in relation to the Water Code, specifically
Article 9 thereof, x xx clearly show that there is no circumvention of the law.
This Department has declared that the nationality requirement imposed by the Water Code refers to the privilege "to
appropriate and use water" and has interpreted this phrase to mean the extraction of water directly from its natural
source (Secretary of Justice Opinion No. 14, s. 1995). "Natural" is defined as that which is produced without aid of
stop, valves, slides, or other supplementary means (see Websters New International Dictionary, Second Edition, p.
1630). The water that is used by the power plant could not enter the intake gate without the dam, which is a man-
made structure. Such being the case, the source of the water that enters the power plant is of artificial character
rather than natural. This Department is consistent in ruling, that once water is removed from its natural source, it
ceases to be a part of the natural resources of the country and may be the subject of ordinary commerce and may
even be acquired by foreigners. (Ibid., No. 173, s. 1984; No. 24, s. 1989; No. 100, s. 1994).
It is also significant to note that NPC, a government-owned and controlled corporation, has the effective control over
all elements of the extraction process, including the amount and timing thereof considering that x xx the water will
flow out of the power tunnel and through the power plant, to be used for the generation of electricity, only when the
Downstream Gates are opened, which occur only upon the specific water release instructions given by NPC to
SRPC. This specific feature of the agreement, taken together with the above-stated analysis of the source of water
that enters the plant, support the view that the nationality requirement embodied in Article XII, Section 2 of the
present Constitution and in Article 15 of the Water Code, is not violated. 69
(Emphasis supplied.)
The latest executive interpretation is stated in DOJ Opinion No. 52, s. 2005 which was rendered upon the request of
PSALM in connection with the proposed sale structure for the privatization of hydroelectric and geothermal generation
assets (Gencos) of NPC. PSALM sought a ruling on the legality of its proposed privatization scheme whereby the
non-power components (dam, reservoir and appurtenant structures and watershed area) shall be owned by the State
through government entities like NPC or NIA which shall exercise control over the release of water, while the
ownership of the power components (power plant and related facilities) is open to both Filipino citizens/corporations
and 100% foreign-owned corporations.
Sustaining the position of PSALM, then Secretary Raul M. Gonzalez opined:
Premised on the condition that only the power components shall be transferred to the foreign bidders while the non-
power components/structures shall be retained by state agencies concerned, we find that both PSALMs proposal
and position are tenable.
x xxx
x xx as ruled in one case by a U.S. court:
Where the State of New York took its natural resources consisting of Saratoga Spring and, through a bottling process,
put those resources into preserved condition where they could be sold to the public in competition with private
waters, the state agencies were not immune from federal taxes imposed upon bottled waters on the theory that state
was engaged in the sale of "natural resources."
Applied to the instant case, and construed in relation to the earlier-mentioned constitutional inhibition, it would appear
clear that while both waters and geothermal steam are, undoubtedly "natural resources", within the meaning of
Section 2 Article XII of the present Constitution, hence, their exploitation, development and utilization should be
limited to Filipino citizens or corporations or associations at least sixty per centum of the capital of which is owned by
Filipino citizens, the utilization thereof can be opened even to foreign nationals, after the same have been extracted
from the source by qualified persons or entities. The rationale is because, since they no longer form part of the
natural resources of the country, they become subject to ordinary commerce.
A contrary interpretation, i.e., that the removed or extracted natural resources would remain inalienable especially to
foreign nationals, can lead to absurd consequences, e.g. that said waters and geothermal steam, and any other
extracted natural resources, cannot be acquired by foreign nationals for sale within or outside the country, which
could not have been intended by the framers of the Constitution.
The fact that under the proposal, the non-power components and structures shall be retained and maintained by the
government entities concerned is, to us, not only a sufficient compliance of constitutional requirement of "full control
and supervision of the State" in the exploitation, development and utilization of natural resources. It is also an enough
safeguard against the evil sought to be avoided by the constitutional reservation x xx. 70 (Italics in the original,
emphasis supplied.)
Appropriation of water, as used in the Water Code refers to the "acquisition of rights over the use of waters or the
taking or diverting of waters from a natural source in the manner and for any purpose allowed by law." 71 This definition
is not as broad as the concept of appropriation of water in American jurisprudence:
An appropriation of water flowing on the public domain consists in the capture, impounding, or diversion of it from its
natural course or channel and its actual application to some beneficial use private or personal to the appropriator, to
the entire exclusion (or exclusion to the extent of the water appropriated) of all other persons. x xx72
On the other hand, "water right" is defined in the Water Code as the privilege granted by the government to
appropriate and use water.73 Blacks Law Dictionary defined "water rights" as "a legal right, in the nature of a
corporeal hereditament, to use the water of a natural stream or water furnished through a ditch or canal, for general
or specific purposes, such as irrigation, mining, power, or domestic use, either to its full capacity or to a measured
extent or during a defined portion of the time," or "the right to have the water flow so that some portion of it may be
reduced to possession and be made private property of individual, and it is therefore the right to divert water from
natural stream by artificial means and apply the same to beneficial use." 74
Under the Water Code concept of appropriation, a foreign company may not be said to be "appropriating" our natural
resources if it utilizes the waters collected in the dam and converts the same into electricity through artificial devices.
Since the NPC remains in control of the operation of the dam by virtue of water rights granted to it, as determined
under DOJ Opinion No. 122, s. 1998, there is no legal impediment to foreign-owned companies undertaking the
generation of electric power using waters already appropriated by NPC, the holder of water permit. Such was the
situation of hydropower projects under the BOT contractual arrangements whereby foreign investors are allowed to
finance or undertake construction and rehabilitation of infrastructure projects and/or own and operate the facility
constructed. However, in case the facility requires a public utility franchise, the facility operator must be a Filipino
corporation or at least 60% owned by Filipino.75
With the advent of privatization of the electric power industry which resulted in its segregation into four sectors --
generation, transmission, distribution and supply NPCs generation and transmission functions were unbundled.
Power generation and transmission were treated as separate sectors governed by distinct rules under the new
regulatory framework introduced by EPIRA. The National Transmission Corporation (TRANSCO) was created to own
and operate the transmission assets and perform the transmission functions previously under NPC. While the NPC
continues to undertake missionary electrification programs through the SPUG, PSALM was also created to liquidate
the assets and liabilities of NPC.
Under the EPIRA, NPCs generation function was restricted as it was allowed to "generate and sell electricity only
from the undisposed generating assets and IPP contracts of PSALM" and was prohibited from incurring "any new
obligations to purchase power through bilateral contracts with generation companies or other suppliers." 76 PSALM, on
the other hand, was tasked "to structure the sale, privatization or disposition of NPC assets and IPP contracts and/or
their energy output based on such terms and conditions which shall optimize the value and sale prices of said
assets."77 In the case of multi-purpose hydropower plants, the IRR of R.A. No. 9136 provided that their privatization
would extend to water rights which shall be transferred or assigned to the buyers thereof, subject to safeguards
mandated by Sec. 47(e) to enable the national government to direct water usage in cases of shortage to protect water
requirements imbued with public interest.
Accordingly, the Asset Purchase Agreement executed between PSALM and K-Water stipulated:
2.04 Matters Relating to the Non-Power Component
x xxx
Matters relating to Water Rights
NPC has issued a certification (the "Water Certification") wherein NPC consents, subject to Philippine Law, to the (i)
transfer of the Water Permit to the BUYER or its Affiliate, and (ii) use by the BUYER or its Affiliate of the water
covered by the Water Permit from Closing Date up to a maximum period of one (1) year thereafter to enable the
BUYER to appropriate and use water sourced from Angat reservoir for purposes of power generation; provided, that
should the consent or approval of any Governmental Body be required for either (i) or (ii), the BUYER must secure
such consent or approval. The BUYER agrees and shall fully comply with the Water Permit and the Water
Certification. x xx
x xxx
Multi-Purpose Facility
The BUYER is fully aware that the Non-Power Components is a multi-purpose hydro-facility and the water is currently
being appropriated for domestic use, municipal use, irrigation and power generation. Anything in this Agreement
notwithstanding, the BUYER shall, at all times even after the Payment Date, fully and faithfully comply with Philippine
Law, including the Instructions, the Rule Curve and Operating Guidelines and the Water Protocol.78 (Emphasis
supplied.)
Lease or transfer of water rights is allowed under the Water Code, subject to the approval of NWRB after due notice
and hearing.79 However, lessees or transferees of such water rights must comply with the citizenship requirement
imposed by the Water Code and its IRR. But regardless of such qualification of water permit holders/transferees, it is
to be noted that there is no provision in the EPIRA itself authorizing the NPC to assign or transfer its water rights in
case of transfer of operation and possession of multi-purpose hydropower facilities. Since only the power plant is to
be sold and privatized, the operation of the non-power components such as the dam and reservoir, including the
maintenance of the surrounding watershed, should remain under the jurisdiction and control of NPC which continue to
be a government corporation. There is therefore no necessity for NPC to transfer its permit over the water rights to K-
Water. Pursuant to its purchase and operation/management contracts with K-Water, NPC may authorize the latter to
use water in the dam to generate electricity.
NPCs water rights remain an integral aspect of its jurisdiction and control over the dam and reservoir. That the
EPIRAitselfdid not ordain any transfer of water rights leads us to infer that Congress intended NPC to continue
exercising full supervision over the dam, reservoir and, more importantly, to remain in complete control of the
extraction or diversion of water from the Angat River. Indeed, there can be no debate that the best means of ensuring
that PSALM/NPC can fulfill the duty to prescribe "safeguards to enable the national government to direct water usage
to protect potable water, irrigation, and all other requirements imbued with public interest" is for it to retain the water
rights over those water resources from where the dam waters are extracted. In this way, the States full supervision
and control over the countrys water resources is also assured notwithstanding the privatized power generation
business.
Section 6 (a) of the IRR of R.A. No. 9136 insofar as it directs the transfer of water rights in the privatization of multi-
purpose hydropower facilities, is thus merely directory.
It is worth mentioning that the Water Code explicitly provides that Filipino citizens and juridical persons who may
apply for water permits should be "duly qualified by law to exploit and develop water resources."
Thus, aside from the grant of authority to construct and operate dams and power plants, NPCs Revised Charter
specifically authorized it
(f) To take water from any public stream, river, creek, lake, spring or waterfall in the Philippines, for the purposes
specified in this Act; to intercept and divert the flow of waters from lands of riparian owners and from persons owning
or interested in waters which are or may be necessary for said purposes, upon payment of just compensation
therefor; to alter, straighten, obstruct or increase the flow of water in streams or water channels intersecting or
connecting therewith or contiguous to its works or any part thereof: Provided, That just compensation shall be paid to
any person or persons whose property is, directly or indirectly, adversely affected or damaged thereby. 80
The MWSS is likewise vested with the power to construct, maintain and operate dams and reservoirs for the purpose
of supplying water for domestic and other purposes, as well to construct, develop, maintain and operate such artesian
wells and springs as may be needed in its operation within its territory.81 On the other hand, NIA, also a water permit
holder in Angat River, is vested with similar authority to utilize water resources, as follows:
(b) To investigate all available and possible water resources in the country for the purpose of utilizing the same for
irrigation, and to plan, design and construct the necessary projects to make the ten to twenty-year period following the
approval of this Act as the Irrigation Age of the Republic of the Philippines; 82
(c) To construct multiple-purpose water resources projects designed primarily for irrigation, and secondarily for
hydraulic power development and/or other uses such as flood control, drainage, land reclamation, domestic water
supply, roads and highway construction and reforestation, among others, provided, that the plans, designs and the
construction thereof, shall be undertaken in coordination with the agencies concerned; 83
To reiterate, there is nothing in the EPIRAwhich declares that it is mandatory for PSALM or NPC to transfer or assign
NPCs water rights to buyers of its multi-purpose hydropower facilities as part of the privatization process. While
PSALM was mandated to transfer the ownership of all hydropower plants except those mentioned in Sec. 47 (f), any
transfer of possession, operation and control of the multi-purpose hydropower facilities, the intent to preserve water
resources under the full supervision and control of the State is evident when PSALM was obligated to prescribe
safeguards to enable the national government to direct water usage to domestic and other requirements "imbued with
public interest." There is no express requirement for the transfer of water rights in all cases where the operation of
hydropower facilities in a multi-purpose dam complex is turned over to the private sector.
As the new owner of the AHEPP, K-Water will have to utilize the waters in the Angat Dam for hydropower generation.
Consistent with the goals of the EPIRA, private entities are allowed to undertake power generation activities and
acquire NPCs generation assets. But since only the hydroelectric power plants and appurtenances are being sold,
the privatization scheme should enable the buyer of a hydroelectric power plant in NPCs multi-purpose dam complex
to have beneficialuse of the waters diverted or collected in the Angat Dam for its hydropower generation activities,
and at the same time ensure that the NPC retains full supervision and control over the extraction and diversion of
waters from the Angat River.
In fine, the Court rules that while the sale of AHEPP to a foreign corporation pursuant to the privatization mandated
by the EPIRA did not violate Sec. 2, Art. XII of the 1987 Constitution which limits the exploration, development and
utilization of natural resources under the full supervision and control of the State or the States undertaking the same
through joint venture, co-production or production sharing agreements with Filipino corporations 60% of the capital of
which is owned by Filipino citizens, the stipulation in the Asset Purchase Agreement and Operations and
Maintenance Agreement whereby NPC consents to the transfer of water rights to the foreign buyer, K-Water,
contravenes the aforesaid constitutional provision and the Water Code.1wphi1
Section 6, Rule 23 of the IRR of EPIRA, insofar as it ordered NPCs water rights in multi-purpose hydropower facilities
to be included in the sale thereof, is declared as merely directoryand not an absolute condition in the privatization
scheme. In this case, we hold that NPC shall continue to be the holder of the water permit even as the operational
control and day-to-day management of the AHEPP is turned over to K-Water under the terms and conditions of their
APA and O & M Agreement, whereby NPC grants authority to K-Water to utilize the waters diverted or collected in the
Angat Dam for hydropower generation. Further, NPC and K-Water shall faithfully comply with the terms and
conditions of the Memorandum of Agreement on Water Protocol, as well as with such other regulations and
issuances of the NWRB governing water rights and water usage.
WHEREFORE, the present petition for certiorari and prohibition with prayer for injunctive relief/s is PARTLY
GRANTED.
The following DISPOSITIONS are in ORDER:
1) The bidding conducted and the Notice of Award issued by PSALM in favor of the winning bidder, KOREA
WATER RESOURCES CORPORATION (K-WATER), are declared VALID and LEGAL;
2) PSALM is directed to FURNISH the petitioners with copies of all documents and records in its files
pertaining to K-Water;
3) Section 6 (a), Rule 23, IRR of the EPIRA, is hereby declared as merely DIRECTORY, and not an
absolute condition in all cases where NPC-owned hydropower generation facilities are privatized;
4) NPC shall CONTINUE to be the HOLDER of Water Permit No. 6512 issued by the National Water
Resources Board. NPC shall authorize K-Water to utilize the waters in the Angat Dam for hydropower
generation, subject to the NWRBs rules and regulations governing water right and usage. The Asset
Purchase Agreement and Operation & Management Agreement between NPC/PSALM and K- Water are
thus amended accordingly.
Except for the requirement of securing a water permit, K-Water remains BOUND by its undertakings and
warranties under the APA and O & M Agreement;
5) NPC shall be a CO-PARTY with K-Water in the Water Protocol Agreement with MWSS and NIA, and not
merely as a conforming authority or agency; and
6) The Status Quo Ante Order issued by this Court on May 24, 2010 is hereby LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 202242 July 17, 2012
FRANCISCO I. CHAVEZ, Petitioner,
vs.
JUDICIAL AND BAR COUNCIL, SEN. FRANCIS JOSEPH G. ESCUDERO and REP. NIEL C. TUPAS,
JR., Respondents.
Facts:
The case is in relation to the process of selecting the nominees for the vacant seat of Supreme Court Chief Justice following
Renato Coronas departure. Originally, the members of the Constitutional Commission saw the need to create a separate,
competent and independent body to recommend nominees to the President. Thus, it conceived of a body representative of all
the stakeholders in the judicial appointment process and called it the Judicial and Bar Council (JBC).
In particular, Paragraph 1 Section 8, Article VIII of the Constitution states that (1) A Judicial and Bar Council is hereby created
under the supervision of the Supreme Court composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a
representative of the Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, a retired
Member of the Supreme Court, and a representative of the private sector. In compliance therewith, Congress, from the
moment of the creation of the JBC, designated one representative from the Congress to sit in the JBC to act as one of the ex
officio members.
In 1994 however, the composition of the JBC was substantially altered. Instead of having only seven (7) members, an eighth
(8th) member was added to the JBC as two (2) representatives from Congress began sitting in the JBC one from the House of
Representatives and one from the Senate, with each having one-half (1/2) of a vote. During the existence of the case, Senator
Francis Joseph G. Escudero and Congressman Niel C. Tupas, Jr. (respondents) simultaneously sat in JBC as representatives of the
legislature.
It is this practice that petitioner has questioned in this petition.
The respondents claimed that when the JBC was established, the framers originally envisioned a unicameral legislative body,
thereby allocating a representative of the National Assembly to the JBC. The phrase, however, was not modified to aptly jive
with the change to bicameralism which was adopted by the Constitutional Commission on July 21, 1986. The respondents also
contend that if the Commissioners were made aware of the consequence of having a bicameral legislature instead of a
unicameral one, they would have made the corresponding adjustment in the representation of Congress in the JBC; that if only
one house of Congress gets to be a member of JBC would deprive the other house of representation, defeating the principle of
balance.
The respondents further argue that the allowance of two (2) representatives of Congress to be members of the JBC does not
render JBCs purpose of providing balance nugatory; that the presence of two (2) members from Congress will most likely
provide balance as against the other six (6) members who are undeniably presidential appointees
Supreme Court held that it has the power of review the case herein as it is an object of concern, not just for a nominee to a
judicial post, but for all the citizens who have the right to seek judicial intervention for rectification of legal blunders.
Issue:
Whether the practice of the JBC to perform its functions with eight (8) members, two (2) of whom are members of Congress,
defeats the letter and spirit of the 1987 Constitution.
Held:
No. The current practice of JBC in admitting two members of the Congress to perform the functions of the JBC is violative of the
1987 Constitution. As such, it is unconstitutional.
One of the primary and basic rules in statutory construction is that where the words of a statute are clear, plain, and free from
ambiguity, it must be given its literal meaning and applied without attempted interpretation. It is a well-settled principle of
constitutional construction that the language employed in the Constitution must be given their ordinary meaning except where
technical terms are employed. As such, it can be clearly and unambiguously discerned from Paragraph 1, Section 8, Article VIII
of the 1987 Constitution that in the phrase, a representative of Congress, the use of the singular letter a preceding
representative of Congress is unequivocal and leaves no room for any other construction. It is indicative of what the members
of the Constitutional Commission had in mind, that is, Congress may designate only one (1) representative to the JBC. Had it
been the intention that more than one (1) representative from the legislature would sit in the JBC, the Framers could have, in
no uncertain terms, so provided.
Moreover, under the maxim noscitur a sociis, where a particular word or phrase is ambiguous in itself or is equally susceptible
of various meanings, its correct construction may be made clear and specific by considering the company of words in which it is
founded or with which it is associated. Every meaning to be given to each word or phrase must be ascertained from the context
of the body of the statute since a word or phrase in a statute is always used in association with other words or phrases and its
meaning may be modified or restricted by the latter. Applying the foregoing principle to this case, it becomes apparent that the
word Congress used in Article VIII, Section 8(1) of the Constitution is used in its generic sense. No particular allusion
whatsoever is made on whether the Senate or the House of Representatives is being referred to, but that, in either case, only a
singular representative may be allowed to sit in the JBC
Considering that the language of the subject constitutional provision is plain and unambiguous, there is no need to resort
extrinsic aids such as records of the Constitutional Commission. Nevertheless, even if the Court should proceed to look into the
minds of the members of the Constitutional Commission, it is undeniable from the records thereof that it was intended that the
JBC be composed of seven (7) members only. The underlying reason leads the Court to conclude that a single vote may not be
divided into half (1/2), between two representatives of Congress, or among any of the sitting members of the JBC for that
matter.
With the respondents contention that each representative should be admitted from the Congress and House of
Representatives, the Supreme Court, after the perusal of the records of Constitutional Commission, held that Congress, in the
context of JBC representation, should be considered as one body. While it is true that there are still differences between the
two houses and that an inter-play between the two houses is necessary in the realization of the legislative powers conferred to
them by the Constitution, the same cannot be applied in the case of JBC representation because no liaison between the two
houses exists in the workings of the JBC. No mechanism is required between the Senate and the House of Representatives in
the screening and nomination of judicial officers. Hence, the term Congress must be taken to mean the entire legislative
department.
The framers of Constitution, in creating JBC, hoped that the private sector and the three branches of government would have
an active role and equal voice in the selection of the members of the Judiciary. Therefore, to allow the Legislature to have more
quantitative influence in the JBC by having more than one voice speak, whether with one full vote or one-half (1/2) a vote each,
would negate the principle of equality among the three branches of government which is enshrined in the Constitution.
It is clear, therefore, that the Constitution mandates that the JBC be composed of seven (7) members only. Thus, any inclusion
of another member, whether with one whole vote or half (1/2) of it, goes against that mandate. Section 8(1), Article VIII of the
Constitution, providing Congress with an equal voice with other members of the JBC in recommending appointees to the
Judiciary is explicit. Any circumvention of the constitutional mandate should not be countenanced for the Constitution is the
supreme law of the land. The Constitution is the basic and paramount law to which all other laws must conform and to which all
persons, including the highest officials of the land, must defer. Constitutional doctrines must remain steadfast no matter what
may be the tides of time. It cannot be simply made to sway and accommodate the call of situations and much more tailor itself
to the whims and caprices of the government and the people who run it.
Notwithstanding its finding of unconstitutionality in the current composition of the JBC, all its prior official actions are
nonetheless valid. In the interest of fair play under the doctrine of operative facts, actions previous to the declaration of
unconstitutionality are legally recognized. They are not nullified.
WHEREFORE, the petition is GRANTED. The current numerical composition of the Judicial and Bar Council IS declared
UNCONSTITUTIONAL. The Judicial and Bar Council is hereby enjoined to reconstitute itself so that only one ( 1) member of
Congress will sit as a representative in its proceedings, in accordance with Section 8( 1 ), Article VIII of the 1987 Constitution.
This disposition is immediately executory.
SECOND DIVISION
G.R. No. 78585 July 5, 1989
JOSE ANTONIO MAPA, petitioner,
vs.
HON. JOKER ARROYO, in his Capacity as Executive Secretary, and LABRADOR DEVELOPMENT
CORPORATION, respondents.
REGALADO, J.:
We are called upon once again, in this special civil action for certiorari, for a pronouncement as to whether or not
there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the executive
branch of Government, particularly in the adjudication of a controversy originally commenced in one of its regulatory
agencies.
Petitioner herein seeks the reversal of the decision of the Office of the President, rendered by the Deputy Executive
Secretary on April 24,1987, 1 which dismissed his appeal from the resolution of the Commission Proper, Human
Settlements Regulatory Commission (HSRC, for short), promulgated on January 10, 1986 and affirming the decision
of July 3, 1985 of the Office of Adjudication and Legal Affairs (OAALA, for brevity) of HSRC. Petitioner avers that
public respondent "gravely transcended the sphere of his discretion" in finding that Presidential Decree No. 957 is
inapplicable to the contracts to sell involved in this case and in consequently dismissing the same. 2
The established facts on which the assailed decision is based are set out therein as follows:
Records disclose that, on September 18, 1975, appellant Jose Antonio Mapa and appellee
Labrador Development Corporation (Labrador, for short), owner/developer of the Barangay Hills
Subdivision in Antipolo, Rizal, entered into two contracts to sell over lots 12 and 13 of said
subdivision. On different months in 1976, they again entered into two similar contracts involving
lots 15 and 16 in the same subdivision. Under said contracts, Mapa undertook to make a total
monthly installment of P2,137.54 over a period of ten (10) years. Mapa, however, defaulted in the
payment thereof starting December 1976, prompting Labrador to send to the former a demand
letter, dated May 5, 1977, giving him until May 18, 1977, within which to settle his unpaid
installments for the 4 lots amounting to P15,411.66, with a warning that non-payment thereof will
result in the cancellation of the four (4) contracts. Despite receipt of said letter on May 6,1977,
Mapa failed to take any action thereon. Labrador subsequently wrote Mapa another letter, dated
June 15, 1982, which the latter received on June 21, 1982, reminding him of his total arrears
amounting to P180,065.27 and demanding payment within 5 days from receipt thereof, but which
letter Mapa likewise ignored. Thus, on August 16, 1982, Labrador sent Mapa a notarial
cancellation of the four (4) contracts to sell, which Mapa received on August 20, 1982. On
September 10, 1982, however, Mapa's counsel sent Labrador a letter calling Labrador's attention
to, and demanding its compliance with, Clause 20 of the four (4) contracts to sell which relates to
Labrador's obligation to provide, among others, lighting/water facilities to subdivision lot buyers.
On September 10, 1982, Labrador issued a certification holding the implementation of the letter
dated August 16, 1982 (re notarial cancellation) pending the complete development of road lot
cul de sac within the properties of Mapa at Barangay Hills Subdivision.' Thereafter on October
25,1982, Labrador sent Mapa a letter informing him 'that the construction of road, sidewalk, curbs
and gutters adjacent to Block 11 Barangay Hills Subdivision are already completed' and further
requesting Mapa to 'come to our office within five (5) days upon receipt of this letter to settle your
account.'
On December 10, 1982, Mapa tendered payment by means of a check in the amount of P
2,137.54, but Labrador refused to accept payment for the reason that it was agreed 'that after the
development of the cul de sac, he (complainant) will pay in full the total amount due,' which
Labrador computed at P 260,138.61. On December 14, 1982, Mapa wrote Labrador claiming that
'you have not complied with the requirements for water and light facilities in lots 12, 13, 15 & 16
Block 2 of Barangay Hills Subdivision.' The following day, Mapa filed a complaint against
Labrador for the latter's neglect to put 1) a water system that meets the minimum standard as
specified by HSRC, and 2) electrical power supply. By way of relief, Mapa requested the HSRC
to direct Labrador to provide the facilities aforementioned, and to issue a cease and desist order
enjoining Labrador from cancelling the contracts to sell.
After due hearing/investigation, which included an on-site inspection of the subdivision, OAALA,
issued its decision of July 3, 1985, dismissing the complaint and declaring that after the lapse of
5 years from complainant's default respondent had every right to rescind the contract pursuant to
Clause 7 thereof. . .
Per its resolution of January 10, 1986, the Commission Proper, HSRC, affirmed the aforesaid
OAALA decision.3
It was petitioner's adamant submission in the administrative proceedings that the provisions of Presidential Decree
No. 957 4 and implementing rules form part of the contracts to sell executed by him and respondent corporation,
hence the obligations imposed therein had to be complied with by Labrador within the period provided. Since,
according to petitioner, Labrador failed to perform the aforementioned obligations, it is precluded from rescinding the
subject contracts to sell since petitioner consequently did not incur in delay on his part.
Such intransigent position of petitioner has not changed in the petition at bar and unyielding reliance is placed on the
provisions of Presidential Decree No. 957 and its implementing rules. The specific provisions of the Decree which are
persistently relied upon read:
SEC. 20. Time of Completion. Every owner or developer shall construct and provide the
facilities, improvements, infrastructures and other forms of development, including water supply
and lighting facilities, which are offered and indicated in the approved subdivision or
condominium plans, brochures, prospectus, printed matters letters or in any form of
advertisements, within one year from the date of the issuance of the license for the subdivision or
condominium project or such other period of time as may be fixed by the Authority.
SEC. 21. Sales Prior to Decree. In cases of subdivision lots or condominium units sold or
disposed of prior to the effectivity of this Decree, it shall be incumbent upon the owner or
developer of the subdivision or condominium project to complete compliance with his or its
obligations as provided in the preceding section within two years from the date of this Decree
unless otherwise extended by the Authority or unless an adequate performance bond is filed in
accordance with Section 6 hereof.
Failure of the owner or developer to comply with the obligations under this and the preceding
provisions shall constitute a violation punishable under Sections 38 and 39 of this Decree.
Rule V of the implementing rules, on the other hand, requires two (2) sources of electric power, two (2) deep-well and
pump sets with a specified capacity and two standard fire hose flows with a capacity of 175 gallons per minute. 5
The provision, in said contracts to sell which, according to petitioner, includes and incorporates the aforequoted
statutory provisions, is Clause 20 of said contracts which provides:
Clause 20. SUBDIVISION DEVELOPMENT To insure the physical development of the
subdivision, the SELLER hereby obliges itself to provide the individual lot buyer with the
following:
a) PAVED ROADS
b) UNDERGROUND DRAINAGE
c) CONCRETE CURBS AND GUTTERS
d) WATER SYSTEM
e) PARK AND OPEN SPACE
These improvements shall apply only to the portions of the subdivision which are for sale or have
been sold. All improvements except those requiring the services of a public utility company or the
government shall be completed within a period of three (3) years from date of this contract.
Failure by the SELLER to reasonably comply with the above schedule shall permit the BUYER/ S
to suspend his monthly installments without any penalties or interest charges until such time that
these improvements shall have been made as scheduled.6
As recently reiterated, it is jurisprudentially settled that absent a clear, manifest and grave abuse of discretion
amounting to want of jurisdiction, the findings of the administrative agency on matters falling within its competence
will not be disturbed by the courts. 7 Specifically with respect to factual findings, they are accorded respect, if not
finality, because of the special knowledge and expertise gained by these tribunals from handling the specific matters
falling under their jurisdiction. Such factual findings may be disregarded only if they "are not supported by evidence;
where the findings are vitiated by fraud, imposition or collusion; where the procedure which led to the factual findings
is irregular; when palpable errors are committed; or when grave abuse of discretion, arbitrariness or capriciousness is
manifest." 8
A careful scrutiny of the records of the instant case reveals that the circumstances thereof do not fag under the
aforesaid excepted cases, with the findings duly supported by the evidence.
Petitioner's insistence on the applicability of Presidential Decree No. 957 must be rejected. Said decree was issued
on July 12, 1976 long after the execution of the contracts involved. Obviously and necessarily, what subsequently
were statutorily provided therein as obligations of the owner or developer could not have been intended by the parties
to be a part of their contracts. No intention to give restrospective application to the provisions of said decree can be
gathered from the language thereof. Section 20, in relation to Section 21, of the decree merely requires the owner or
developer to construct the facilities, improvements, infrastructures and other forms of development but only such as
are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters,
letters or in any form of advertisements. Other than what are provided in Clause 20 of the contract, no further written
commitment was made by the developer in this respect. To read into the contract the matters desired by petitioner
would have the law impose additional obligations on the parties to a contract executed before that very law existed or
was contemplated.
We further reject petitioner's strained and tenuous application of the so-called doctrine of last antecedent in the
interpretation of Section 20 and, correlatively, of Section 21. He would thereby have the enumeration of "facilities,
improvements, infrastructures and other forms of development" interpreted to mean that the demonstrative phrase
"which are offered and indicated in the approved subdivision plans, etc." refer only to "other forms of development"
and not to "facilities, improvements and infrastructures." While this subserves his purpose, such bifurcation whereby
the supposed adjectival phrase is set apart from the antecedent words, is illogical and erroneous. The complete and
applicable rule is ad proximum antecedens fiat relatio nisi impediatur sentencia. 9 Relative words refer to the nearest
antecedent, unless it be prevented by the context. In the present case, the employment of the word "and" between
"facilities, improvements, infrastructures" and "other forms of development," far from supporting petitioner's theory,
enervates it instead since it is basic in legal hermeneutics that "and" is not meant to separate words but is a
conjunction used to denote a joinder or union.
Thus, if ever there is any valid ground to suspend the monthly installments due from petitioner, it would only be based
on non-performance of the obligations provided in Clause 20 of the contract, particularly the alleged non-construction
of the cul-de-sac. But, even this is unavailing and is obviously being used only to justify petitioner's default. The on-
site inspection of the subdivision conducted by the OAALA and its subsequent report reveal that Labrador
substantially complied with its obligation. 10
Furthermore, the initial non-construction of the cul-de-sac, as private respondent Labrador explained, was because
petitioner Mapa requested the suspension of its construction since his intention was to purchase the adjoining lots
and thereafter enclose the same. 11 If these were not true, petitioner would have invoked that supposed default in the
first instance. As the OAALA noted, petitioner "stopped payments of his monthly obligations as early as December,
1976, which is a mere five months after the effectivity of P.D. No. 957 or about a year after the execution of the
contracts. This means that respondent still has 1 and 1/2 years to comply with its legal obligation to develop the
subdivision under said P.D. and two years to do so under the agreement, hence, it was improper for complainant to
have suspended payments in December, 1976 on the ground of non-development since the period allowed for
respondent's obligation to undertake such development has not yet expired." 12
ON THE FOREGOING CONSIDERATIONS, the petition should be, as it is hereby DISMISSED.
SO ORDERED.

G.R. No. 140230 December 15, 2005
COMMISSIONER OF INTERNAL REVENUE, Petitioner,
vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Respondent.
DECISION
GARCIA, J.:
In this petition for review on certiorari, the Commissioner of Internal Revenue (Commissioner) seeks the review and
reversal of the September 17, 1999 Decision1 of the Court of Appeals (CA) in CA-G.R. No. SP 47895, affirming, in
effect, the February 18, 1998 decision2 of the Court of Tax Appeals (CTA) in C.T.A. Case No. 5178, a claim for tax
refund/credit instituted by respondent Philippine Long Distance Company (PLDT) against petitioner for taxes it paid to
the Bureau of Internal Revenue (BIR) in connection with its importation in 1992 to 1994 of equipment, machineries
and spare parts.
The facts:
PLDT is a grantee of a franchise under Republic Act (R.A.) No. 7082 to install, operate and maintain a
telecommunications system throughout the Philippines.
For equipment, machineries and spare parts it imported for its business on different dates from October 1, 1992 to
May 31, 1994, PLDT paid the BIR the amount of 164,510,953.00, broken down as follows: (a) compensating tax of
126,713,037.00; advance sales tax of 12,460,219.00 and other internal revenue taxes of 25,337,697.00. For
similar importations made between March 1994 to May 31, 1994, PLDT paid 116,041,333.00 value-added tax
(VAT).
On March 15, 1994, PLDT addressed a letter to the BIR seeking a confirmatory ruling on its tax exemption privilege
under Section 12 of R.A. 7082, which reads:
Sec. 12. The grantee shall be liable to pay the same taxes on their real estate, buildings, and personal property,
exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. In
addition thereto, the grantee, shall pay a franchise tax equivalent to three percent (3%) of all gross receipts of the
telephone or other telecommunications businesses transacted under this franchise by the grantee, its successors or
assigns, and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof: Provided,
That the grantee shall continue to be liable for income taxes payable under Title II of the National Internal Revenue
Code pursuant to Sec. 2 of Executive Order No. 72 unless the latter enactment is amended or repealed, in which
case the amendment or repeal shall be applicable thereto. (Emphasis supplied).
Responding, the BIR issued on April 19, 1994 Ruling No. UN-140-94,3 pertinently reading, as follows:
PLDT shall be subject only to the following taxes, to wit:
xxx xxx xxx
7. The 3% franchise tax on gross receipts which shall be in lieu of all taxes on its franchise or earnings thereof.
xxx xxx xxx
The "in lieu of all taxes" provision under Section 12 of RA 7082 clearly exempts PLDT from all taxes including the
10% value-added tax (VAT) prescribed by Section 101 (a) of the same Code on its importations of equipment,
machineries and spare parts necessary in the conduct of its business covered by the franchise, except the
aforementioned enumerated taxes for which PLDT is expressly made liable.
xxx xxx xxx
In view thereof, this Office hereby holds that PLDT, is exempt from VAT on its importation of equipment,
machineries and spare parts needed in its franchise operations.
Armed with the foregoing BIR ruling, PLDT filed on December 2, 1994 a claim4 for tax credit/refund of the VAT,
compensating taxes, advance sales taxes and other taxes it had been paying "in connection with its importation of
various equipment, machineries and spare parts needed for its operations". With its claim not having been acted
upon by the BIR, and obviously to forestall the running of the prescriptive period therefor, PLDT filed with the CTA a
petition for review,5 therein seeking a refund of, or the issuance of a tax credit certificate in, the amount of
280,552,286.00, representing compensating taxes, advance sales taxes, VAT and other internal revenue taxes
alleged to have been erroneously paid on its importations from October 1992 to May 1994. The petition was docketed
in said court as CTA Case No. 5178.
On February 18, 1998, the CTA rendered a decision6 granting PLDTs petition, pertinently saying:
This Court has noted that petitioner has included in its claim receipts covering the period prior to December 16, 1992,
thus, prescribed and barred from recovery. In conclusion, We find that the petitioner is entitled to the reduced amount
of 223,265,276.00 after excluding from the final computation those taxes that were paid prior to December 16, 1992
as they fall outside the two-year prescriptive period for claiming for a refund as provided by law. The computation of
the refundable amount is summarized as follows:
COMPENSATING TAX
Total amount claimed 126,713.037.00
Less:
a) Amount already prescribed: xxx
Total P 38,015,132.00
b) Waived by petitioner
(Exh. B-216) 1,440,874.00 39,456,006.00
Amount refundable 87,257,031.00
ADVANCE SALES TAX
Total amount claimed 12,460.219.00
Less amount already prescribed: 5,043,828.00
Amount refundable 7,416,391.00
OTHER BIR TAXES
Total amount claimed 25,337,697.00
Less amount already prescribed: 11,187,740.00
Amount refundable 14,149,957.00
VALUE ADDED TAX
Total amount claimed 116.041,333.00
Less amount waived by petitioner
(unaccounted receipts) 1,599,436.00
Amount refundable 114,441,897.00
TOTAL AMOUNT REFUNDABLE 223,265,276.00,
============
(Breakdown omitted)
and accordingly disposed, as follows:
WHEREFORE, in view of all the foregoing, this Court finds the instant petition meritorious and in accordance with law.
Accordingly, respondent is hereby ordered to REFUND or to ISSUE in favor of petitioner a Tax Credit Certificate in
the reduced amount of 223,265,276.00 representing erroneously paid value-added taxes, compensating taxes,
advance sales taxes and other BIR taxes on its importation of equipments (sic), machineries and spare parts for the
period covering the taxable years 1992 to 1994.
Noticeably, the CTA decision, penned by then Associate Justice Ramon O. de Veyra, with then CTA Presiding Judge
Ernesto D. Acosta, concurring, is punctuated by a dissenting opinion7 of Associate Judge Amancio Q. Saga who
maintained that the phrase "in lieu of all taxes" found in Section 12 of R.A. No. 7082, supra, refers to exemption from
"direct taxes only" and does not cover "indirect taxes", such as VAT, compensating tax and advance sales tax.
In time, the BIR Commissioner moved for a reconsideration but the CTA, in its Resolution8 of May 7, 1998, denied the
motion, with Judge Amancio Q. Saga reiterating his dissent.9
Unable to accept the CTA decision, the BIR Commissioner elevated the matter to the Court of Appeals (CA) by way
of petition for review, thereat docketed as CA-G.R. No. 47895.
10
As stated at the outset hereof, the appellate court, in the herein challenged Decision dated September 17, 1999,
dismissed the BIRs petition, thereby effectively affirming the CTAs judgment.
Relying on its ruling in an earlier case between the same parties and involving the same issue CA-G.R. SP No.
40811, decided 16 February 1998 the appellate court partly wrote in its assailed decision:
This Court has already spoken on the issue of what taxes are referred to in the phrase "in lieu of all taxes" found in
Section 12 of R.A. 7082. There are no reasons to deviate from the ruling and the same must be followed pursuant to
the doctrine of stare decisis. xxx. "Stare decisis et non quieta movere. Stand by the decision and disturb not what is
settled."
Hence, this recourse by the BIR Commissioner on the lone assigned error that:
THE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT IS EXEMPT FROM THE PAYMENT OF
VALUE-ADDED TAXES, COMPENSATING TAXES, ADVANCE SALES TAXES AND OTHER BIR TAXES ON ITS
IMPORTATIONS, BY VIRTUE OF THE PROVISION IN ITS FRANCHISE THAT THE 3% FRANCHISE TAX ON ITS
GROSS RECEIPTS SHALL BE IN LIEU OF ALL TAXES ON ITS FRANCHISE OR EARNINGS THEREOF.
There is no doubt that, insofar as the Court of Appeals is concerned, the issue petitioner presently raises had been
resolved by that court in CA-G.R. SP No. 40811, entitled Commissioner of Internal Revenue vs. Philippine Long
Distance Company. There, the Sixteenth Division of the appellate court declared that under the express provision of
Section 12 of R.A. 7082, supra, "the payment [by PLDT] of the 3% franchise tax of [its] gross receipts shall be in lieu
of all taxes" exempts PLDT from payment of compensating tax, advance sales tax, VAT and other internal revenue
taxes on its importation of various equipment, machinery and spare parts for the use of its telecommunications
system.
Dissatisfied with the CA decision in that case, the BIR Commissioner initially filed with this Court a motion for time to
file a petition for review, docketed in this Court as G.R. No. 134386. However, on the last day for the filing of the
intended petition, the then BIR Commissioner had a change of heart and instead manifested11 that he will no longer
pursue G.R. No. 134386, there being no compelling grounds to disagree with the Court of Appeals decision in CA-
G.R. 40811. Consequently, on September 28, 1998, the Court issued a Resolution12 in G.R. No. 134386 notifying the
parties that "no petition" was filed in said case and that the CA judgment sought to be reviewed therein "has now
become final and executory". Pursuant to said Resolution, an Entry of Judgment13 was issued by the Court of Appeals
in CA-G.R. SP No. 40811. Hence, the CAs dismissal of CA-G.R. No. 47895 on the additional ground of stare decisis.
Under the doctrine of stare decisis et non quieta movere, a point of law already established will, generally, be
followed by the same determining court and by all courts of lower rank in subsequent cases where the same legal
issue is raised.14 For reasons needing no belaboring, however, the Court is not at all concluded by the ruling of the
Court of Appeals in its earlier CA-G.R. SP No. 47895.
The Court has time and again stated that the rule on stare decisis promotes stability in the law and should, therefore,
be accorded respect. However, blind adherence to precedents, simply as precedent, no longer rules. More important
than anything else is that the court is right,15 thus its duty to abandon any doctrine found to be in violation of the law in
force.16
As it were, the former BIR Commissioners decision not to pursue his petition in G.R. No. 134386 denied the BIR, at
least as early as in that case, the opportunity to obtain from the Court an authoritative interpretation of Section 12 of
R.A. 7082. All is, however, not lost. For, the government is not estopped by acts or errors of its agents, particularly on
matters involving taxes. Corollarily, the erroneous application of tax laws by public officers does not preclude the
subsequent correct application thereof.17 Withal, the errors of certain administrative officers, if that be the case, should
never be allowed to jeopardize the governments financial position.18
Hence, the need to address the main issue tendered herein.
According to the Court of Appeals, the "in lieu of all taxes" clause found in Section 12 of PLDTs franchise (R.A. 7082)
covers all taxes, whether direct or indirect; and that said section states, in no uncertain terms, that PLDTs payment of
the 3% franchise tax on all its gross receipts from businesses transacted by it under its franchise is in lieu of all taxes
on the franchise or earnings thereof. In fine, the appellate court, agreeing with PLDT, posits the view that the word
"all" encompasses any and all taxes collectible under the National Internal Revenue Code (NIRC), save those
specifically mentioned in PLDTs franchise, such as income and real property taxes.
The BIR Commissioner excepts. He submits that the exempting "in lieu of all taxes" clause covers direct taxes only,
adding that for indirect taxes to be included in the exemption, the intention to include must be specific and
unmistakable. He thus faults the Court of Appeals for erroneously declaring PLDT exempt from payment of VAT and
other indirect taxes on its importations. To the Commissioner, PLDTs claimed entitlement to tax refund/credit is
without basis inasmuch as the 3% franchise tax being imposed on PLDT is not a substitute for or in lieu of indirect
taxes.
The sole issue at hand is whether or not PLDT, given the tax component of its franchise, is exempt from paying VAT,
compensating taxes, advance sales taxes and internal revenue taxes on its importations.
Based on the possibility of shifting the incidence of taxation, or as to who shall bear the burden of taxation, taxes may
be classified into either direct tax or indirect tax.
In context, direct taxes are those that are exacted from the very person who, it is intended or desired, should pay
them;19 they are impositions for which a taxpayer is directly liable on the transaction or business he is engaged in. 20
On the other hand, indirect taxes are those that are demanded, in the first instance, from, or are paid by, one person
in the expectation and intention that he can shift the burden to someone else. 21 Stated elsewise, indirect taxes are
taxes wherein the liability for the payment of the tax falls on one person but the burden thereof can be shifted or
passed on to another person, such as when the tax is imposed upon goods before reaching the consumer who
ultimately pays for it. When the seller passes on the tax to his buyer, he, in effect, shifts the tax burden, not the
liability to pay it, to the purchaser as part of the price of goods sold or services rendered.
To put the situation in graphic terms, by tacking the VAT due to the selling price, the seller remains the person
primarily and legally liable for the payment of the tax. What is shifted only to the intermediate buyer and ultimately to
the final purchaser is the burden of the tax.22 Stated differently, a seller who is directly and legally liable for payment of
an indirect tax, such as the VAT on goods or services, is not necessarily the person who ultimately bears the burden
of the same tax. It is the final purchaser or end-user of such goods or services who, although not directly and legally
liable for the payment thereof, ultimately bears the burden of the tax.23
There can be no serious argument that PLDT, vis--vis its payment of internal revenue taxes on its importations in
question, is effectively claiming exemption from taxes not falling under the category of direct taxes. The claim covers
VAT, advance sales tax and compensating tax.
The NIRC classifies VAT as "an indirect tax the amount of [which] may be shifted or passed on to the buyer,
transferee or lessee of the goods".24 As aptly pointed out by Judge Amancio Q. Saga in his dissent in C.T.A. Case No.
5178, the 10% VAT on importation of goods partakes of an excise tax levied on the privilege of importing articles. It is
not a tax on the franchise of a business enterprise or on its earnings. It is imposed on all taxpayers who import goods
(unless such importation falls under the category of an exempt transaction under Sec. 109 of the Revenue Code)
whether or not the goods will eventually be sold, bartered, exchanged or utilized for personal consumption. The VAT
on importation replaces the advance sales tax payable by regular importers who import articles for sale or as raw
materials in the manufacture of finished articles for sale.25
Advance sales tax has the attributes of an indirect tax because the tax-paying importer of goods for sale or of raw
materials to be processed into merchandise can shift the tax or, to borrow from Philippine Acetylene Co, Inc. vs.
Commissioner of Internal Revenue,26 lay the "economic burden of the tax", on the purchaser, by subsequently adding
the tax to the selling price of the imported article or finished product.
Compensating tax also partakes of the nature of an excise tax payable by all persons who import articles, whether in
the course of business or not.27 The rationale for compensating tax is to place, for tax purposes, persons purchasing
from merchants in the Philippines on a more or less equal basis with those who buy directly from foreign countries. 28
It bears to stress that the liability for the payment of the indirect taxes lies only with the seller of the goods or services,
not in the buyer thereof. Thus, one cannot invoke ones exemption privilege to avoid the passing on or the shifting of
the VAT to him by the manufacturers/suppliers of the goods he purchased.29 Hence, it is important to determine if the
tax exemption granted to a taxpayer specifically includes the indirect tax which is shifted to him as part of the
purchase price, otherwise it is presumed that the tax exemption embraces only those taxes for which the buyer is
directly liable.30
Time and again, the Court has stated that taxation is the rule, exemption is the exception. Accordingly, statutes
granting tax exemptions must be construed in strictissimi juris against the taxpayer and liberally in favor of the taxing
authority.31 To him, therefore, who claims a refund or exemption from tax payments rests the burden of justifying the
exemption by words too plain to be mistaken and too categorical to be misinterpreted.32
As may be noted, the clause "in lieu of all taxes" in Section 12 of RA 7082 is immediately followed by the limiting or
qualifying clause "on this franchise or earnings thereof", suggesting that the exemption is limited to taxes imposed
directly on PLDT since taxes pertaining to PLDTs franchise or earnings are its direct liability. Accordingly, indirect
taxes, not being taxes on PLDTs franchise or earnings, are outside the purview of the "in lieu" provision.
If we were to adhere to the appellate courts interpretation of the law that the "in lieu of all taxes" clauseencompasses
the totality of all taxes collectible under the Revenue Code, then, the immediately following limiting clause "on this
franchise and its earnings" would be nothing more than a pure jargon bereft of effect and meaning whatsoever.
Needless to stress, this kind of interpretation cannot be accorded a governing sway following the familiar legal
maxim redendo singula singulis meaning, take the words distributively and apply the reference. Under this principle,
each word or phrase must be given its proper connection in order to give it proper force and effect, rendering none of
them useless or superfluous. 33
Significantly, in Manila Electric Company [Meralco] vs. Vera,34 the Court declared the relatively broader exempting
clause "shall be in lieu of all taxes and assessments of whatsoever nature upon the privileges earnings, income
franchise ... of the grantee" written in par. # 9 of Meralcos franchise as not so all encompassing as to embrace
indirect tax, like compensating tax. There, the Court said:
It is a well-settled rule or principle in taxation that a compensating tax is an excise tax one that is imposed on
the performance of an act, the engaging in an occupation, or the enjoyment of a privilege. A tax levied upon property
because of its ownership is a direct tax, whereas one levied upon property because of its use is an excise duty. .
The compensating tax being imposed upon MERALCO, is an impost on its use of imported articles and is not in
the nature of a direct tax on the articles themselves, the latter tax falling within the exemption. Thus, in International
Business Machine Corporation vs. Collector of Internal Revenue, which involved the collection of a compensating
tax from the plaintiff-petitioner on business machines imported by it, this Court stated in unequivocal terms that "it is
not the act of importation that is taxed under section 190 but the uses of imported goods not subjected to a sales tax"
because the "compensating tax was expressly designated as a substitute to make up or compensate for the revenue
lost to the government through the avoidance of sales taxes by means of direct purchases abroad.
xxx xxx xxx
xxx If it had been the legislative intent to exempt MERALCO from paying a tax on the use of imported equipments,
the legislative body could have easily done so by expanding the provision of paragraph 9 and adding to the
exemption such words as "compensating tax" or "purchases from abroad for use in its business," and the like.
It may be so that in Maceda vs. Macaraig, Jr.35 the Court held that an exemption from "all taxes" granted to the
National Power Corporation (NPC) under its charter36 includes both direct and indirect taxes. But far from providing
PLDT comfort, Maceda in fact supports the case of herein petitioner, the correct lesson of Maceda being that an
exemption from "all taxes" excludes indirect taxes, unless the exempting statute, like NPCs charter, is so couched as
to include indirect tax from the exemption. Wrote the Court:
xxx However, the amendment under Republic Act No. 6395 enumerated the details covered by the exemption.
Subsequently, P.D. 380, made even more specific the details of the exemption of NPC to cover, among others, both
direct and indirect taxes on all petroleum products used in its operation. Presidential Decree No. 938 [NPCs
amended charter) amended the tax exemption by simplifying the same law in general terms. It succinctly exempts
NPC from "all forms of taxes, duties fees ."
The use of the phrase "all forms" of taxes demonstrate the intention of the law to give NPC all the tax exemptions it
has been enjoying before. .
xxx xxx xxx
It is evident from the provisions of P.D. No. 938 that its purpose is to maintain the tax exemption of NPC from all
forms of taxes including indirect taxes as provided under R.A. No. 6395 and P.D. 380 if it is to attain its goals. (Italics
in the original; words in bracket added)
Of similar import is what we said in Borja vs. Collector of Internal Revenue.37 There, the Court upheld the decision of
the CTA denying a claim for refund of the compensating taxes paid on the importation of materials and equipment by
a grantee of a heat and power legislative franchise containing an "in lieu" provision, rationalizing as follows:
xxx Moreover, the petitioners alleged exemption from the payment of compensating tax in the present case is not
clear or expressed; unlike the exemption from the payment of income tax which was clear and expressed in the
Carcar case. Unless it appears clearly and manifestly that an exemption is intended, the provision is to be construed
strictly against the party claiming exemption. xxx.
Jurisprudence thus teaches that imparting the "in lieu of all taxes" clause a literal meaning, as did the Court of
Appeals and the CTA before it, is fallacious. It is basic that in construing a statute, it is the duty of courts to seek the
real intent of the legislature, even if, by so doing, they may limit the literal meaning of the broad language. 38
It cannot be over-emphasized that tax exemption represents a loss of revenue to the government and must,
therefore, not rest on vague inference. When claimed, it must be strictly construed against the taxpayer who must
prove that he falls under the exception. And, if an exemption is found to exist, it must not be enlarged by construction,
since the reasonable presumption is that the state has granted in express terms all it intended to grant at all, and that,
unless the privilege is limited to the very terms of the statute the favor would be extended beyond dispute in ordinary
cases.39
All told, we fail to see how Section 12 of RA 7082 operates as granting PLDT blanket exemption from payment of
indirect taxes, which, in the ultimate analysis, are not taxes on its franchise or earnings. PLDT has not shown its
eligibility for the desired exemption. None should be granted.
As a final consideration, the Court takes particular stock, as the CTA earlier did, of PLDTs allegation that the Bureau
of Customs assessed the company for advance sales tax and compensating tax for importations entered between
October 1, 1992 and May 31, 1994 when the value-added tax system already replaced, if not totally eliminated,
advance sales and compensating taxes.40 Indeed, pursuant to Executive Order No. 27341 which took effect on
January 1, 1988, a multi-stage value-added tax was put into place to replace the tax on original and subsequent sales
tax.42 It stands to reason then, as urged by PLDT, that compensating tax and advance sales tax were no longer
collectible internal revenue taxes under the NILRC when the Bureau of Customs made the assessments in question
and collected the corresponding tax. Stated a bit differently, PLDT was no longer under legal obligation to pay
compensating tax and advance sales tax on its importation from 1992 to 1994.
Parenthetically, petitioner has not made an issue about PLDTs allegations concerning the abolition of the provisions
of the Tax Code imposing the payment of compensating and advance sales tax on importations and the non-
existence of these taxes during the period under review. On the contrary, petitioner admits that the VAT on
importation of goods has "replace[d] the compensating tax and advance sales tax under the old Tax Code".43
Given the above perspective, the amount PLDT paid in the concept of advance sales tax and compensating tax on
the 1992 to 1994 importations were, in context, erroneous tax payments and would theoretically be refundable. It
should be emphasized, however, that, such importations were, when made, already subject to VAT.
Factoring in the fact that a portion of the claim was barred by prescription, the CTA had determined that PLDT is
entitled to a total refundable amount of 94,673,422.00 (87,257,031.00 of compensating tax + 7,416,391.00 =
94,673,422.00). Accordingly, it behooves the BIR to grant a refund of the advance sales tax and compensating tax
in the total amount of 94,673,422.00, subject to the condition that PLDT present proof of payment of the
corresponding VAT on said transactions.
WHEREFORE, the petition is partially GRANTED. The Decision of the Court of Appeals in CA-G.R. No. 47895 dated
September 17, 1999 is MODIFIED. The Commissioner of Internal Revenue is ORDERED to issue a Tax Credit
Certificate or to refund to PLDT only the of 94,673,422.00 advance sales tax and compensating tax erroneously
collected by the Bureau of Customs from October 1, 1992 to May 31, 1994, less the VAT which may have been due
on the importations in question, but have otherwise remained uncollected.
SO ORDERED.
G.R. No. L-4712 July 11, 1952
RAMON DIOKNO, plaintiff-appellant,
vs.
REHABILITATION FINANCE CORPORATION, defendant-appellee.
LABRADOR, J.:
Plaintiff is the holder of a backpay certificate of indebtedness issued by the Treasurer of the Philippines under the
provisions of Republic Act No. 304 of a face value of P75,857.14 dated August 30, 1948. On or about November 10,
1050, when the action was brought, he had an outstanding loan with the Rehabilitation Finance Corporation,
contracted therewith on January 27, 1950, in the total sum of P50,000, covered by a mortgage on his property
situated at 44 Alhambra, Ermita, Manila, with interest at 4 per cent per annum, of which P47,355.28 was still unpaid.
In this action he seeks to compel the defendant corporation to accept payment of the balance of his indebted with his
backpay certificate. The defendant resists the suit on the ground that plaintiffs' demand is not only not authorized by
section 2 of Republic Act No. 304 but contrary to the provisions thereof, and furthermore because plaintiff's loan was
obtain on January 27, 1950, much after the passage of Republic Act No. 304, and because the law permits only
"acceptance or discount of backpay certificates," not the repayment of loans. The court a quo held that section 2 of
Republic Act No. 304 is permissive merely, and that even if where mandatory, plaintiff's case can not fall thereunder
because he is not acquiring property for a home or construing a residential house, but compelling the acceptance of
his backpay certificate to pay a debt he contracted after the enactment of Republic Act No. 304. It, therefore,
dismissed the complaint with costs.
The appeal involves the interpretation of section 2 of Republic Act No. 302, which provides:
. . . And provided, also, That investment funds or banks or other financial institutions owned or controlled by
the Government shall, subject to the availability of loanable funds, and any provision of the their charters,
articles of incorporation's, by-laws, or rules and regulations to the contrary notwithstanding, accept or
discount at not more than two per centum per annum for ten years such certificate for the following
purposes only: (1) the acquisition of real property for use as the applicant's home, or (2) the building or
construction of the residential house of the payee of said certificate: . . .
It is first contended by the appellant that the above provision is mandatory, not only because it employs the word
"shall", which in its ordinary signification is mandatory, not permissive, but also because the provision is applicable to
institutions of credit under the control of the Government, and because otherwise the phrases "subject to availability
of loanable funds" and "any provisions of this charter, . . . and regulations to the contrary notwithstanding" would be
superfluous.
It is true that its ordinary signification the word "shall" is imperative.
In common or ordinary parlance, and in its ordinary signification, the term "shall" is a word of command,
and one which has always or which must be given compulsory meaning; as denoting obligation. It has a
preemptory meaning, and it is generally imperative or mandatory. It has the invariable significance of
operating to impose a duty which may be enforced, particularly if public policy is in favor of this meaning or
when addressed to public officials, or where a public interest is involved, or where the public or persons
have rights which ought to be exercised or enforced, unless a contrary intent appears.
People vs. O'Rourke, 13 P. 2d. 989, 992, 124 Cal. App. 752. (39 Words and Phrases, Permanent Ed., p.
90.)
The presumption is that the word "shall" in a statute is used is an imperative, and not in a directory, sense.
If a different interpretation is sought, it must rest upon something in the character of the legislation or in the
context which will justify a different meaning. Haythorn vs. Van Keuren & Son, 74 A. 502, 504, 79 N. J. L.
101; Board of Finance of School City of Aurora vs. People's Nat. Bank of Lawrenceburg, 89 N. E. 904, 905
44 Ind. App. 578. (39 Words and Phrases, Permanent Ed., p. 93.)
However, the rule is not absolute; it may be construed as "many", when so required by the context or by the intention
of the statute.
In the ordinary signification, "shall" is imperative, and not permissive, though it may have the latter meaning
when required by the context. Town of Milton vs. Cook, 138 N.E. 589, 590, 244 Mass. 93. (39 Words and
Phrases, Permanent Ed., p. 89.)
"Must" or "shall" in a statute is not always imperative, but may be consistent with an exercise of discretion.
In re O'Hara, 82 N.Y.S. 293, 296, 40 Misc. 355, citing In re Thurber's Estate, 162 N.Y. 244, 252, 56 N.E.
638, 639. (Ibid. p. 92.)
The word "shall" is generally regarded as imperative, but in some context it is given a permissive meaning,
the intended meaning being determined by what is intended by the statute. National Transit Corporation
Co. vs. Boardman, 197 A. 239, 241, 328, Pa. 450.
The word "shall" is to be construed as merely permissive, where no public benefit or private right requires it
to be given an imperative meaning Sheldon vs. Sheldon, 134 A. 904, 905, 100 N.J. Ex. 24.
Presumption is that word "shall" in ordinance, is mandatory; but, where it is necessary to give effect to
legislative intent, the word will be construed as "may." City of Colorado Springs vs. Street, 254 p. 440, 441,
81 Colo. 181.
The word "shall" does not necessarily indicate a mandatory behest. Grimsrud vs. Johnson, 202 N. W. 72,
73, 162 Minn. 98.
Words like "may," "must," "shall" etc., are constantly used in statutes without intending that they shall be
taken literally, and in their construction the object evidently designed to be reached limits and controls the
literal import of the terms and phrases employed. Fields vs. United States, 27 App. D. C. 433, 440. (39
Words and Phrases, Permanent Ed., 89, 92).
In this jurisdiction the tendency has been to interpret the word "shall" as the context or a reasonable construction of
the statute in which it is used demands or requires. Thus the provision of section 11 of Rule 4 of the Rules requiring a
municipal judge or a justice of the peace to render judgment of the conclusion of the trial has been held in the
directory. (Alejandro vs. Judge of First Instance1 40 Off. Gaz., 9th Supp., 261). In like manner section 178 of the
Election Law, in so far a it requires that appeals shall be decided in three months, has been to the directory for the
Court of Appeals. (Querubin vs. The Court of Appeals,2 46 Off. Gaz., 155).
In the provision subject controversy, it is to be noted that the verb-phrase "shall accept or discount" has two modifiers,
namely, "subject to availability of loanable funds" and "at not more that two per centum per annum for ten years." As
to the second modifier, the interest to be charged, there seems to be no question that the verb phrase is mandatory,
because not only does the law use "at not more" but the legislative purpose and intent, to conserve the value of the
backpay certificate for the benefit of the holders, for whose benefit the same have been issued, can be carried out by
fixing a maximum limit for discounts. But as to when the discounting or acceptance shall be made, the context and
the sense demand a contrary interpretation. The phrase "subject" means "being under the contingency of" (Webster's
Int. Dict.) a condition. If the acceptance or discount of the certificates to be "subject" to the condition of the availability
of a loanable funds, it is evident that the Legislature intended that the acceptance shall be allowed on the condition
that there are "available loanable funds." In other words, acceptance or discount is to be permitted only if there are
loanable funds.
Let us now consider the meaning of the condition imposed for accepting or discounting certificates, the "availability of
loanable funds." On this issue the appellant contends that the mere fact that P50,000 was loaned to him and that the
Rehabilitation Finance Corporation has been granting loans up to the time plaintiff offered to pay the loan with his
certificate these prove that there are "available loanable funds". As the court a quo did not pass on such
availability, he also contends that this is a question of fact to be determined by the courts. The defendant denies the
existence of "available loanable funds." The gist of plaintiffs' contention is that any and all funds of the Rehabilitation
Finance Corporation are subject to the provision of the discount or acceptance of the certificates; that of defendant-
appellee is that only funds made available for the purpose of discounting backpay certificates may be used for such
purpose and that at the time the action was filed there was no such funds.
The Rehabilitation Finance Corporation was created by Republic Act No. 85, which was approved on October 29,
1946. The corporation was created "to provide credit facilities for the rehabilitation and development of agriculture,
commerce, and industry, the reconstruction of property damaged by war, and the broadening and diversification of
the national economy" (section 1), and to achieve the above aims it was granted the following powers:
SEC. 2. Corporate powers. The Rehabilitation Finance Corporation shall have the power:
(a) To grant loans for home building and for the rehabilitation, establishment or development of any
agricultural, commercial or industrial enterprise, including public utilities;
(b) To grant loans to provincial, city and municipal governments for the rehabilitation, construction or
reconstruction of public markets, waterworks, toll bridges, slaughterhouses, and other self-liquidating or
income-producing services;
(c) To grant loans to agencies and corporations owned or controlled by the Government of the Republic of
the Philippines for the production and distribution of electrical power, for the purchase and subdivision of
rural and urban estates, for housing projects, for irrigation and waterworks systems, and for other essential
industrial and agricultural enterprises;
(d) To grant loans to cooperative associations to facilitate production, the marketing of crops, and the
acquisition of essential commodities;
(e) To underwrite, purchase, own, sell, mortgage or otherwise dispose of stocks, bonds, debentures,
securities and other evidences of indebtedness issued for or in connection with any project or enterprise
referred to in the proceeding paragraphs;
 (f) To issue bonds, debentures, securities, collaterals, and other obligations with the approval of the
President, but in no case to exceed at any one time an aggregate amount equivalent to one hundred per
centum of its subscribed capital and surplus. . . .
If the Rehabilitation Finance Corporation is to carry out the aims and purposes for which it was created, It must evolve
a definite plan of the industries or activities which it should be rehabilitate, establish, or develop, and apportion its
available funds and resources among these, consistent with the policies outlined in its charter.
As of May 31, 1948, immediately prior to the passage of the Backpay Law, it had granted the following classes of
loans:
Agricultural loans ........................................................ P23,610,350.74
Industrial loans ............................................................ 22,717,565.87
Real Estate Loans ........................................................ 34,601,258.29
Loans for purchase, Subdivision and Resale of Landed
Estates ......................................................... 7,271,258.78
Loans to Provinces, Cities, and Municipalities for Self-
liquidating Projects .............................................. 1,889,763.00
Total Loans .................................................. P90,090,77.68
(Exhibit 2)
As of February 2, 1951, the corporation had accepted in payment of loans granted before June 18, 1948, the total
amount of P8,225,229.96, as required by section 2 of the Backpay Law. (See Exhibit 11, p.4.).
The third anniversary report of the Rehabilitation Finance Corporation dated January 2, 1950 (Exhibit 1,), shows that
the funds originally available to the corporation came from the following sources:
Funds made available:
Initial cash capital ................................................................ P50,000,000,00
Cash Transferred from Financial Rehabilitation Funds .... 2,423,079.94
Cash received from Surplus Property Commission ....... 26,350,000.00
Cash received from Phil. Shipping Adm. ........................... 3,700,000.00
Cash payment of capital .................................................. 82,473,079.74
Proceeds of bond issues .................................................. 58,909,148.18
Advances from the Central Bank ....................................... 10,000,000.00
There was also collectible from the loans the total amount of P28,659,442.12, so that the total cash available to the
corporation from January 2, 1947, to November 30, 1949, was P180,041,670.04. But the Total amount of loans
already approved as of the last date was P203,667,403.78 and the total of approved loans pending release was
P25,342,020.78, and the only cash balance available in November, 1949, to meet these approved loans was
P1,716,286.71.
It may readily be seen from the above data that were we to follow appellant's theory and contention that the law is
mandatory, the loan he had applied for, as well as that of any holder of a backpay certificate, would have to be paid
out of this available cash, pursuant to the alleged mandate of section 2 of the Backpay Law. The compulsory
acceptance and discount of certificates will bring about, as a direct and necessary consequence, the suspension of
all, if not of most, of the activities of the Rehabilitation Finance Corporation; and no agricultural or industrial loans, or
loans to financial institutions and local governments for their markets, waterworks, etc., would be granted until all the
backpay certificates (amounting to some hundred millions of pesos) shall heave been accepted or discounted. And as
the defendant-appellant forcefully argues, even funds obtained by the Rehabilitation Finance Corporation by the issue
of the bonds, at rates of interest of more than 2 per cent, the rate fixed for the discount of the backpay certificates, will
have to be loaned to holders of backpay certificates at a loss, to the prejudice of the corporation. There would be
loans for holders of backpay certificates, but none for rehabilitation or reconstruction, or development of industries, or
of the national economy; there would be funds for employees' loans, but none for the improvements of public
services, etc., as all Rehabilitation Finance Corporation funds will be necessary to meet the demands of holders of
backpay certificates. And if it be remembered that the provision is intended for all financial institutions controlled by
the Government, the consequences would be felt by all industries and activities, and the whole scheme of national
financial organization and development disrupted. It seems evident that the legislature never could have intended
such absurd consequences, even with all the sympathy that it is showing for holders of backpay certificates.
But while we agree with the appellee that it could not have been the intention of Congress to disrupt the whole
scheme of rehabilitation, reconstruction, and development envisioned in the Rehabilitation Act, by its passage of
section 2 of the Backpay Law, neither we are prepared to follow appellee's insinuation that the section is
impracticable or impossible of execution by the Rehabilitation Finance Corporation in the situation in which its funds
and resources were at the time of the trial. In our opinion, what the Legislature intended by the provision in dispute is
that the Rehabilitation Finance Corporation, through its Board of Directors, should from time to time set aside some
reasonable amount for the discount of backpay certificates, when this can be done without unduly taxing its
resources, or unduly prejudicing the plan of rehabilitation and development that it has mapped out, or that which the
corresponding authority has laid down as a policy. This legislative intention can be inferred from the fact that
Congress itself expressly ordered that all financial institutions accept or discount backpay certificates in payment of
those loans, evidently laying down an example to be followed by financial institutions under its control. The loans
granted under section 2 of the law by the Rehabilitation Finance Corporation amounted to P8,225,229.96. It is shown
or even presented that the payment of this considerable amount has impaired or disrupted the activities of the
Rehabilitation Finance Corporation. It is not claimed, either, that at the time of the filing of appellant's action the
Rehabilitation Finance Corporation was in no position to set aside a modest sum, in a manner similar to the creation
of a sinking fund, for the discount of backpay certificates to help the Government comply with its financial
commitments. We are convinced that the Rehabilitation Finance Corporation may, without impairment of its activities,
set aside from time to time, say, half a million pesos or a considerable part thereof, for the payment of backpay
certificates. But these circumstances notwithstanding, we are of the opinion that the law in question (section 2 of the
Backpay Law), in so far as the discount and acceptance of backpay certificates are concerned, should be interpreted
to be directory merely, not mandatory, as claimed by plaintiff-appellant, the same to be construed as a directive for
the Rehabilitation Finance Corporation to invest a reasonable portion of its funds for the discount of backpay
certificates, from time to time and in its sound discretion, as circumstances and its resources may warrant.
Having come to the conclusion that section 2 of the Backpay Law is directly merely, we now address ourselves to the
propriety of the action, which the plaintiff and appellant labels specific performance. As the action is not based on any
contractual relation between the plaintiff and appellant and the defendant and appellee, it may be one for specific
performance; it is in effect predicated on a supposed legal duty imposed by law and is properly the designated as a
special civil action of mandamus because the appellant seeks to compel the appellee to accept his backpay
certificate in payment of his outstanding obligation. We are not impressed by the defense technical in a sense, that
the Rehabilitation Finance Corporation is not expressly authorized to accept certificates in payment of outstanding
loans. There is no provision expressly authorizing this procedure or system; but neither is there one prohibiting it. The
legislature has once ordered it; the Rehabilitation Finance Corporation has once authorized it. We believe the
legislature could not have intended to discriminate against those who have already built their houses, who have
contracted obligations in so doing. We prefer to predicate court ruling that this special action does not lie on the
ground that the duty imposed by the Backpay Law upon the appellee as to the acceptance or discount of backpay
certificates is neither clear nor ministerial, but discretionary merely and that mandamus does not issue to control the
exercise of discretion of public officer. (Viuda e hijos de Crispulo Zamora vs. Wright and Segado, 53 Phil., 613, 621;
Blanco vs. Board of Medical Examiners, 46 Phil., 190 192, citing Lamb vs. Phipps, 22 Phil., 456; Gonzales vs. Board
of Pharmacy, 20 Phil., 367, etc.) It is, however, argued on behalf of the appellant that inasmuch as the Board of
Directors of the Rehabilitation Finance Corporation has seen fit to approve a resolution accepting backpay certificates
amounting to P151,000 (Exhibit H), law and equity demand that the same privilege should be accorded him. The trial
court held that the above resolution was illegal and that its unauthorized enactment (which he called a "wrong") does
not justify its repetition for the benefit of appellant. As we have indicated above, we believe that its approval (not any
supposed discrimination on behalf of some special holders) can be defended under the law, but that the passage of a
similar resolution can not be enjoined by an action of mandamus.
We must admit, however, that appellant's case is not entirely without any merit or justification; similar situations have Petitioners filed a motion for reconsideration but it was denied by the Appellate Court in a Resolution dated July 7,
already been favorably acted upon by the Congress, when it ordered that certificates be accepted in payment of 1999, thus:
outstanding obligations, and by the Rehabilitation Finance Corporation in its above-mentioned resolution. But we feel
we are powerless to enforce his claim, as the acceptance and discount to backpay certificates has been placed within
"Per copy of the official receipt attached to appellants motion for reconsideration, the docket fee was paid on
the sound discretion of the rehabilitation Finance Corporation, and subject to the availability of loanable funds, and
November 4, 1998 or 4 months after the notice of appeal was filed on July 3, 1998.
said discretion may not be reviewed or controlled by us. It is clear that this remedy must be available in other
quarters, not in the courts of justice.
Consequently, appellants motion for reconsideration is hereby denied."
For all the foregoing considerations, we are constrained to dismiss the appeal, with coasts against the
In the instant petition for review, petitioners raise the following errors allegedly committed by the Appellate Court:
appellant.
"I. The respondent Court of Appeals seriously erred in considering petitioners appeal as deemed abandoned and
G.R. No. 139303 August 25, 2005 dismissed for alleged failure of petitioners to pay docket fee.

Cipriano Enriquez, Raymundo Enriquez, Concepcion Enriquez, assisted by her husband Matias Quitanes, II. the respondent Court of Appeals gravely erred in denying petitioners motion for reconsideration of the resolution
Tomas Enriquez, Luis Diaz, Cesar Diaz, Manuel Diaz, Domingo Enriquez, Elpidio Enriquez, Filipina Enriquez, considering petitioners appeal as deemed abandoned and dismissed on the ground that the docket fee was paid on
Casimira Dizon, Saturnino Dizon, Jose Ramos, Amado Mislang, Antonio Quitaneg, Villamor Quitaneg, Jimmy November 4, 1998, or four (4) months after the notice of appeal was filed on July 3, 1998.
Clavo, Oscar Laborce, Sevilla Pizarro, Angelita Pizzaro, Isidro Rico, Pio Famisan, Pantaleon Abille,
Beinvenido Corum, Martina Hisole, Erna D. Enriquez, assisted by her husband Ritchie Flauta, and Ignacio
Enriquez, Jr., Petitioners, III. the respondent Court of Appeals in issuing the aforesaid resolutions gave premium on technicalities rather on
vs. substance and substantial justice and disregarded the merits of petitioners case."
MAXIMO ENRIQUEZ (now deceased), substituted by CARMEN AGANA, IGMIDIO ENRIQUEZ, CONCEPCION
ENRIQUEZ, CIPRIANO ENRIQUEZ, DIONISIONENRIQUEZ, MAXIMO ENRIQUEZ, CLEOFE ENRIQUEZ, TOMAS
In sum, the issue is whether the Court of Appeals correctly dismissed the petition for failure of the petitioners to pay
ENRIQUEZ, RAYMUNDO ENRIQUEZ and NICOLAS ENRIQUEZ, Respondents.
appellate court docket fee.

SANDOVAL-GUTIERREZ, J.:
In dismissing petitioners appeal, the Court of Appeals cited Section 1(c), Rule 50 of the Revised Rules of Court which
provides:
Assailed in the instant petition for review on certiorari are the Resolutions dated February 3, 1999 and July 7, 1999
issued by the Court of Appeals in CA-G.R. CV UDK-7011 dismissing the appeal of petitioners for their failure to pay
"Section 1. Grounds for dismissal of appeal. An appeal may be dismissed by the Court of Appeals, on its own
the appellate court docket fee.
motion or on that of the appellee, on the following grounds:

On November 17, 1988, Maximo Enriquez, later substituted by his heirs (now respondents), filed with the Regional
xxx
Trial Court (RTC), Branch 71 of Iba, Zambales a complaint for partition against petitioners, docketed as Civil Case
No. RTC-568-1. The complaint involves a parcel of land situated at Amungan, Iba, same province, covered by TCT
No. T-28593, with an area of 44,984 square meters. He alleged that he owns 10/18 undivided portion of the property, (c) Failure of the appellant to pay the docket and other lawful fees as provided in Section 4 of Rule 41."
9/18 by purchase and 1/18 by inheritance; and that petitioners have been residing in the premises without his
knowledge and consent, thereby depriving him of his undivided share of the property.
Petitioners admit that the governing Rule on their payment of appellate court docket fee is Section 4, Rule 41 of the
1997 Rules of Civil Procedure, as amended, which provides:
Petitioners, in their answer, averred that Cipriano Enriquez, one of the petitioners, owns of the property, while the
others are in possession of the other areas with his knowledge and consent.
"Section 4. Appellate court docket and other lawful fees. Within the period for taking an appeal, the
appellant shall pay to the clerk of the court which rendered the judgment or final order appealed from, the full amount
On June 4, 1998, the RTC rendered a Decision ordering the petitioners to vacate the property and to surrender of the appellate court docket and other lawful fees. Proof of payment of said fees shall be transmitted to the appellate
possession thereof to respondents. court together with the original record of the record or the record on appeal."

A copy of the Decision was received by counsel for petitioners on June 22, 1998. On July 3, 1998, they filed a Notice
of Appeal with the RTC. It was approved on July 7, 1998.
On February 3, 1999, the Court of Appeals dismissed the appeal of petitioners for their failure to pay the appellate
court docket fee, thus:
Underscoring the sentence "Proof of payment of said fees shall be transmitted to the appellate court together with the
original record or the record on appeal," petitioners maintain that the trial court must first send them a notice to pay
the appellate court docket fee and other lawful fees within the period for taking an appeal. Hence, they waited for the
notice for them to pay the appellate court docket fee. When they did not receive any, they paid the docket fee to the
trial court. Consequently, they cannot be faulted if they paid the appellate court docket fee four (4) months after their
Notice of Appeal was approved on July 7, 1998.

"For failure to pay docket fee, the appeal is deemed ABANDONED and DISMISSED, pursuant to Section 1(c), Rule
Prior to the effectivity of the 1997 Rules of Civil Procedure, as amended, payment of appellate court docket fee is not
50, Revised Rules of Court."
a prerequisite for the perfection of an appeal. In Santos vs. Court of Appeals,1 this Court held that although an appeal
fee is required to be paid in case of an appeal taken from the Municipal Trial Court to the Regional Trial Court, it is not
a prerequisite for the perfection of an appeal under Sections 202 and 233 of the Interim Rules and Guidelines issued
by this Court on January 11, 1983 implementing the Judiciary Reorganization Act of 1981 (B.P. Blg. 129). Under
these sections, there are only two requirements for the perfection of an appeal, to wit: (a) the filing with the trial court
of a notice of appeal within the reglementary period; and (b) the expiration of the last day to appeal by any party.
However, the 1997 Rules of Civil Procedure, as amended, which took effect on July 1, 1997, now require that
appellate docket and other lawful fees must be paid within the same period for taking an appeal. This is clear from the
opening sentence of Section 4, Rule 41 of the same Rules that, "(W)ithin the period for taking an appeal, the
appellant shall pay to the clerk of the court which rendered the judgment or final order appealed from, the full amount
of the appellate court docket and other lawful fees."
In the present case, petitioners failed to establish any sufficient and satisfactory reason to warrant a relaxation of the
mandatory rule on the payment of appellate court docket fee. Actually, the payment of the required docket fee was
late because of the erroneous interpretation of the Rule by petitioners counsel. Verily, to grant their petition would be
putting a premium on his ignorance or lack of knowledge of existing Rules. He should be reminded that it is his duty
to keep abreast of legal developments and prevailing laws, rules and legal principles,12 otherwise his clients will be
prejudiced, as in this case.
In fine, the Court of Appeals did not err in dismissing petitioners appeal.
WHEREFORE, the instant petition for review on certiorari is DENIED. Costs against petitioners.

The use of the word "shall" underscores the mandatory character of the Rule. The term "shall" is a word of command,
SO ORDERED.
and one which has always or which must be given a compulsory meaning, and it is generally imperative or
mandatory.4 Petitioners cannot give a different interpretation to the Rule and insist that payment of docket fee shall be
made only upon their receipt of a notice from the trial court to pay. For it is a rule in statutory construction that every
part of the statute must be interpreted with reference to the context, i.e., that every part of the statute must be
interpreted together with the other parts, and kept subservient to the general intent of the whole enactment. 5 Indeed,
petitioners cannot deviate from the Rule.

Also under Rule 41 of the same Rules, an appeal to the Court of Appeals from a case decided by the RTC in the
exercise of the latters original jurisdiction, shall be taken within fifteen (15) days from the notice of judgment or final
order appealed from. Such appeal is made by filing a notice thereof with the court that rendered the judgment or final
order and by serving a copy of that notice upon the adverse party. Furthermore, within this same period, appellant
shall pay to the clerk of court which rendered the judgment or final order appealed from, the full amount of the
appellate court docket and other lawful fees. The payment of docket fee within this period is mandatory for the
perfection of appeal. Otherwise, the appellate court would not be able to act on the subject matter of the action, and
the decision sought to be appealed from becomes final and executory. 6

Time and again, this Court has consistently held that payment of docket fee within the prescribed period is mandatory
for the perfection of an appeal. Without such payment, the appellate court does not acquire jurisdiction over the
subject matter of the action and the decision sought to be appealed from becomes final and executory. 7

Petitioners argue that the Appellate Court, in issuing the assailed Resolutions, gave premium to technicalities rather
than substance and disregarded the merits of the petition. They ask for a liberal construction of the Rules.

Appeal is not a right but a statutory privilege, thus, appeal must be made strictly in accordance with the provision set
by law.
The requirement of the law under Section 4, Rule 41 is clear. The payment of appellate docket fee is not a mere
technicality of law or procedure but an essential requirement for the perfection of an appeal. 8

The payment of the docket fee within the period is a condition sine qua non for the perfection of an appeal. Contrary
to petitioners submission, the payment of the appellate court docket and other lawful fees is not a mere technicality of
law or procedure. It is an essential requirement, without which the decision or final order appealed from would
become final and executory as if no appeal was filed at all. 9

This Court has consistently ruled that litigation is not a game of technicalities and that every case must be prosecuted
in accordance with the prescribed procedure so that issues may be properly presented and justly resolved. The rules
of procedure must be faithfully followed except only when, for persuasive and weighting reasons, they may be relaxed
to relieve a litigant of an injustice commensurate with his failure to comply within the prescribed
procedure. Concomitant to a liberal interpretation of the rules of procedure should be an effort on the part of
the party invoking liberality to adequately explain his failure to abide by the rules.10 Anyone seeking exemption
from the application of the Rule has the burden of proving that exceptionally meritorious instances exist which warrant
such departure.11