Abakada Guro Party List, et al vs Exec. Sec.

Ermita

Facts: On May 24, 2005, the President signed into law Republic Act 9337 or the VAT Reform
Act. Before the law took effect on July 1, 2005, the Court issued a TRO enjoining government
from implementing the law in response to a slew of petitions for certiorari and prohibition
questioning the constitutionality of the new law.

The challenged section of R.A. No. 9337 is the common proviso in Sections 4, 5 and 6: That
the President, upon the recommendation of the Secretary of Finance, shall, effective January
1, 2006, raise the rate of value-added tax to 12%, after any of the following conditions has
been satisfied:

(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous
year exceeds two and four-fifth percent (2 4/5%);

or (ii) National government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1%)

Petitioners allege that the grant of stand-by authority to the President to increase the VAT rate
is an abdication by Congress of its exclusive power to tax because such delegation is not
covered by Section 28 (2), Article VI Consti. They argue that VAT is a tax levied on the sale or
exchange of goods and services which cant be included within the purview of tariffs under the
exemption delegation since this refers to customs duties, tolls or tribute payable upon
merchandise to the government and usually imposed on imported/exported goods. They also
said that the President has powers to cause, influence or create the conditions provided by law
to bring about the conditions precedent. Moreover, they allege that no guiding standards are
made by law as to how the Secretary of Finance will make the recommendation.

Issue: Whether or not the RA 9337's stand-by authority to the Executive to increase the VAT
rate, especially on account of the recommendatory power granted to the Secretary of Finance,
constitutes undue delegation of legislative power? NO

Held: The powers which Congress is prohibited from delegating are those which are strictly, or
inherently and exclusively, legislative. Purely legislative power which can never be delegated
is the authority to make a complete law- complete as to the time when it shall take effect and
as to whom it shall be applicable, and to determine the expediency of its enactment. It is the
nature of the power and not the liability of its use or the manner of its exercise which
determines the validity of its delegation.

The exceptions are:

(a) delegation of tariff powers to President under Constitution

(b) delegation of emergency powers to President under Constitution

(c) delegation to the people at large

(d) delegation to local governments

(e) delegation to administrative bodies

For the delegation to be valid, it must be complete and it must fix a standard. A sufficient
standard is one which defines legislative policy, marks its limits, maps out its boundaries and
specifies the public agency to apply it.
In this case, it is not a delegation of legislative power BUT a delegation of ascertainment of
facts upon which enforcement and administration of the increased rate under the law is
contingent. The legislature has made the operation of the 12% rate effective January 1, 2006,
contingent upon a specified fact or condition. It leaves the entire operation or non-operation of
the 12% rate upon factual matters outside of the control of the executive. No discretion would
be exercised by the President. Highlighting the absence of discretion is the fact that the word
SHALL is used in the common proviso. The use of the word SHALL connotes a mandatory
order. Its use in a statute denotes an imperative obligation and is inconsistent with the idea of
discretion.

Thus, it is the ministerial duty of the President to immediately impose the 12% rate upon the
existence of any of the conditions specified by Congress. This is a duty, which cannot be
evaded by the President. It is a clear directive to impose the 12% VAT rate when the specified
conditions are present.

Congress just granted the Secretary of Finance the authority to ascertain the existence of a
fact--- whether by December 31, 2005, the VAT collection as a percentage of GDP of the
previous year exceeds 2 4/5 % or the national government deficit as a percentage of GDP of
the previous year exceeds one and 1%. If either of these two instances has occurred, the
Secretary of Finance, by legislative mandate, must submit such information to the President.

In making his recommendation to the President on the existence of either of the two
conditions, the Secretary of Finance is not acting as the alter ego of the President or even her
subordinate. He is acting as the agent of the legislative department, to determine and declare
the event upon which its expressed will is to take effect. The Secretary of Finance becomes
the means or tool by which legislative policy is determined and implemented, considering that
he possesses all the facilities to gather data and information and has a much broader
perspective to properly evaluate them. His function is to gather and collate statistical data
and other pertinent information and verify if any of the two conditions laid out by Congress is
present.

Congress does not abdicate its functions or unduly delegate power when it describes what job
must be done, who must do it, and what is the scope of his authority; in our complex economy
that is frequently the only way in which the legislative process can go forward.

There is no undue delegation of legislative power but only of the discretion as to the execution
of a law. This is constitutionally permissible. Congress did not delegate the power to tax but
the mere implementation of the law.

Facts:

Motions for Reconsideration filed by petitioners, ABAKADA Guro party List Officer and et al.,
insist that the bicameral conference committee should not even have acted on the no pass-on
provisions since there is no disagreement between House Bill Nos. 3705 and 3555 on the one
hand, and Senate Bill No. 1950 on the other, with regard to the no pass-on provision for the
sale of service for power generation because both the Senate and the House were in
agreement that the VAT burden for the sale of such service shall not be passed on to the end-
consumer. As to the no pass-on provision for sale of petroleum products, petitioners argue
that the fact that the presence of such a no pass-on provision in the House version and the
absence thereof in the Senate Bill means there is no conflict because a House provision
cannot be in conflict with something that does not exist.

Escudero, et. al., also contend that Republic Act No. 9337 grossly violates the constitutional
imperative on exclusive origination of revenue bills under Section 24 of Article VI of the
Constitution when the Senate introduced amendments not connected with VAT.
Petitioners Escudero, et al., also reiterate that R.A. No. 9337s stand- by authority to the
Executive to increase the VAT rate, especially on account of the recommendatory power
granted to the Secretary of Finance, constitutes undue delegation of legislative power. They
submit that the recommendatory power given to the Secretary of Finance in regard to the
occurrence of either of two events using the Gross Domestic Product (GDP) as a benchmark
necessarily and inherently required extended analysis and evaluation, as well as policy
making.

Petitioners also reiterate their argument that the input tax is a property or a property right.
Petitioners also contend that even if the right to credit the input VAT is merely a statutory
privilege, it has already evolved into a vested right that the State cannot remove.

Issue:

Whether or not the R.A. No. 9337 or the Vat Reform Act is constitutional?

Held:

The Court is not persuaded. Article VI, Section 24 of the Constitution provides that All
appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the House of Representatives, but
the Senate may propose or concur with amendments.

The Court reiterates that in making his recommendation to the President on the existence of
either of the two conditions, the Secretary of Finance is not acting as the alter ego of the
President or even her subordinate. He is acting as the agent of the legislative department, to
determine and declare the event upon which its expressed will is to take effect. The Secretary
of Finance becomes the means or tool by which legislative policy is determined and
implemented, considering that he possesses all the facilities to gather data and information
and has a much broader perspective to properly evaluate them. His function is to gather and
collate statistical data and other pertinent information and verify if any of the two conditions
laid out by Congress is present.

In the same breath, the Court reiterates its finding that it is not a property or a property right,
and a VAT-registered persons entitlement to the creditable input tax is a mere statutory
privilege. As the Court stated in its Decision, the right to credit the input tax is a mere creation
of law. More importantly, the assailed provisions of R.A. No. 9337 already involve legislative
policy and wisdom. So long as there is a public end for which R.A. No. 9337 was passed, the
means through which such end shall be accomplished is for the legislature to choose so long
as it is within constitutional bounds.

The Motions for Reconsideration are hereby DENIED WITH FINALITY. The temporary restraining
order issued by the Court is LIFTED.

SM LAND INC. v. BASES CONVERSION AND DEVELOPMENT

AUTHORITY (BCDA) & ARNEL PACIANO D. CASANOVA

To increase government prospects, participation in joint ventures has been incentivized by

granting rights and advantages to the Original Proponent in the Competitive Challenge phase
of a Swiss Challenge. Faithful observance of these provisions of law that grant the aforesaid
rights, may it be sourced from a bilateral contract or executive edict, aids in improving
government reliability. Allowing government agencies to retract their commitments to the
project proponents will essentially render inutile the incentives offered to and have accrued in
favor of the private sector entity. Without securing these rights, the business community will
be wary when it comes to forging contracts with the government.

Pursuant to Republic Act (RA)No. 7227 (Bases Conversion and Development Act of 1992), the
BCDA opened for disposition and development its Bonifacio South Property. Jumping on the
opportunity, SM Land, Inc. (SMLI) submitted to the BCDA an unsolicited proposal for the
development of the lot
through a Public-Private Joint Venture Agreement which was accepted by the BCDA. However,
the BCDA clarified that its act should not be construed to bind the agency to enter into a joint
venture agreement with SMLI but only constitutes an authorization to conduct detailed
negotiations with SMLI and iron out the terms and conditions of the agreement. Afterwards,
upon arriving at mutually acceptable terms and conditions, a Certification of Successful
Negotiations (Certification) was issued by the BCDA and signed by both parties with the
provisions that the BCDA undertook to subject SMLIs Original Proposal to Competitive
Challenge and committed itself to commence the activities for the solicitation for
comparative proposals.

Then, instead of proceeding with the Competitive Challenge, the BCDA corresponded with
SMLI stating that it will welcome any voluntary and unconditional proposal to improve the
original offer, with the assurance that the BCDA will nonetheless respect any right which may
have accrued in favor of SMLI.

In turn, SMLI increased the total secured payments with an upfront payment. Without
responding to SMLIs new proposal, the BCDA sent a memorandum to the Office of the
President (OP) categorically recommending the termination of the Competitive Challenge.
Alarmed by this development, SMLI urged the BCDA to proceed with the Competitive
Challenge as agreed upon. However, the BCDA, via
the assailed Supplemental Notice No. 5, terminated the Competitive Challenge altogether.

In the meantime, the BCDA issued in favor of SMLI a check without explanation attached to it
but its value corresponds to the proposal security posted by SMLI, with interest. SMLI
attempted to return the check but to no avail. The BCDA caused the publication of an
Invitation to Bid for the development of the subject property. This impelled SMLI to file an
Urgent Manifestation with Reiterative Motion to Resolve SMLIs Application for Temporary
Restraining Order UST Law Review, Vol. LIX, No. 1, May 2015 (TRO) and Preliminary Injunction.
The Court issued the TRO prayed for by SMLI and enjoined BCDA from proceeding with the
new selection process for the development of the property.

For its part, SMLI alleged in its petition that the Certification issued by the BCDA and signed by
the parties constituted a contract and that under the said contract, BCDA cannot renege on its
obligation to conduct and complete the Competitive Challenge. The BCDA relies chiefly on the
reservation clause in the Terms of Reference (TOR),which mapped out the procedure to be
followed in the Competitive Challenge, which allegedly authorized the agency to unilaterally
cancel the Competitive Challenge. BCDA add that the terms and conditions agreed upon are
disadvantageous to the government, and that it cannot legally be barred by estoppel in
correcting a mistake committed by its agents.

ISSUE:
Was the BCDA correct in issuing Supplemental Notice No. 5, which unilaterally aborted the
Competitive Challenge, and in subjecting the development of the project to public bidding?

RULING:
No.SMLI has the right to a completed Competitive Challenge pursuant to the Detailed
Guidelines for Competitive Challenge Procedure for Public-Private Joint Ventures (NEDA JV
Guidelines) and the Certification issued by the BCDA.
The reservation clause adverted to by the BCDA cannot, in any way, prejudice said right.

NEDA promulgated the NEDA Joint Venture Guidelines, which detailed two (2) modes of
selecting a private sector Joint Venture partner: by competitive selection or through
negotiated agreements. Competitive selection involves a selection process based on
transparent criteria, which should not constrain or limit competition, and is open to
participation, by any interested and qualified private entity. Furthermore, it is well to point out
that after BCDA accepted the unsolicited proposal of SMLI and after both parties herein
successfully concluded the detailed negotiations on the terms and conditions of the project,
SMLI acquired the status of an Original Proponent. An Original Proponent, per the TOR,
pertains to the party whose unsolicited proposal for the development and privatization of the
subject property through Joint Venture with BCDA has been accepted by the latter, subject to
certain conditions, and is now being subjected to a Competitive Challenge. In this regard, SMLI
insists that as an Original Proponent, it obtained the right to a completed Competitive
Challenge.

A scrutiny of the NEDA JV Guidelines reveals that certain rights are conferred to an Original
Proponent. As correctly pointed out by SMLI, these rights include the right to the conduct and
completion of a competitive challenge.

By their mutual consent and in signing the Certification, both parties, in effect, entered into a
binding agreement to subject the unsolicited proposal to the Competitive Challenge.
Evidently, the Certification partakes of a contract wherein BCDA committed itself to proceed
with the Third Stage of the process and simultaneously grants SMLI the right to expect that
the BCDA will fulfill its obligations under the same. The preconditions to the conduct of the
Competitive Challenge having been met, what is left, therefore, is to subject the terms agreed
upon to a Competitive Challenge.

Pangasinan Transport Co. vs. Public Service Commission

GR NO. 47065, June 26, 1940

FACTS:

This is a case on the certificate of public convenience of petitioner Pangasinan Transportation

Co. Inc (Pantranco). The petitioner has been engaged for the past twenty years in the
business of transporting passengers in the province of Pangasinan and Tarlac, Nueva Ecija and
Zambales. On August 26, 1939, Pantranco filed with the Public Service Commission (PSC) an
application to operate 10 additional buses. PSC granted the application with 2 additional
conditions which was made to apply also on their existing business. Pantranco filed a motion
for reconsideration with the Public Service Commission. Since it was denied, Pantranco then
filed a petition/ writ of certiorari.

ISSUES:

Whether the legislative power granted to Public Service Commission:

- is unconstitutional and void because it is without limitation
- constitutes undue delegation of powers

HELD:

The challenged provisions of Commonwealth Act No. 454 are valid and constitutional because
it is a proper delegation of legislative power, so called Subordinate Legislation. It is a valid
delegation because of the growing complexities of modern government, the complexities or
multiplication of the subjects of governmental regulation and the increased difficulty of
administering the laws. All that has been delegated to the Commission is the administrative
function, involving the use of discretion to carry out the will of the National Assembly having in
view, in addition, the promotion of public interests in a proper and suitable manner.

The Certificate of Public Convenience is neither a franchise nor contract, confers no property
rights and is a mere license or privilege, subject to governmental control for the good of the
public. PSC has the power, upon notice and hearing, to amend, modify, or revoked at any
time any certificate issued, whenever the facts and circumstances so warranted. The
limitation of 25 years was never heard, so the case was remanded to PSC for further
proceedings.

In addition, the Court ruled that, the liberty and property of the citizens should be protected
by the rudimentary requirements of fair play. Not only must the party be given an opportunity
to present his case and to adduce evidence tending to establish the rights that he asserts but
the tribunal must consider the evidence presented. When private property is affected with a
public interest, it ceased to be juris privati or private use only.

EASTERN SHIPPING LINES, INC., vs. PHILIPPINE OVERSEAS EMPLOYMENT

ADMINISTRATION (POEA)

Petitioner: Eastern Shipping Lines, Inc.

Respondents:
1. Philippine Overseas Employment Administration (POEA)
2. Minister of Labor and Employment
3. Abdul Basar (Hearing Officer)
4. Kathleen D. Saco
Ponente: Cruz, J.

Facts:
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in
Tokyo, Japan on March 15, 1985.

His widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2
of the POEA.

The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the
POEA but by the Social Security System and should have been filed against the State Fund
Insurance.

The POEA nevertheless assumed jurisdiction and after considering the position papers of the
parties ruled in favour of the complainant.

The petition is DISMISSED, with costs against the petitioner. The temporary restraining order
dated December 10, 1986 is hereby LIFTED. It is so ordered.

Issue:
1. Whether or not the POEA had jurisdiction over the case as the husband was not an overseas
worker.
2. Whether or not the validity of Memorandum Circular No. 2 itself as violative of the principle
of non-delegation of legislative power.

Held:
1. Yes. The Philippine Overseas Employment Administration was created under Executive
Order No. 797, promulgated on May 1, 1982, to promote and monitor the overseas
employment of Filipinos and to protect their rights. It replaced the National Seamen Board
created earlier under Article 20 of the Labor Code in 1974. Under Section 4(a) of the said
executive order, the POEA is vested with "original and exclusive jurisdiction over all cases,
including money claims, involving employee-employer relations arising out of or by virtue of
any law or contract involving Filipino contract workers, including seamen." These cases,
according to the 1985 Rules and Regulations on Overseas Employment issued by the POEA,
include, claims for death, disability and other benefits arising out of such employment.

The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by
the POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1,
1984. This circular prescribed a standard contract to be adopted by both foreign and domestic
shipping companies in the hiring of Filipino seamen for overseas employment.

2. No. Memorandum Circular No. 2 is an administrative regulation. The model contract

prescribed thereby has been applied in a significant number of the cases without challenge by
the employer. The power of the POEA (and before it the National Seamen Board) in requiring
the model contract is not unlimited as there is a sufficient standard guiding the delegate in
the exercise of the said authority. That standard is discoverable in the executive order itself
which, in creating the Philippine Overseas Employment Administration, mandated it to protect
the rights of overseas Filipino workers to "fair and equitable employment practices."

GENERAL RULE: Non-delegation of powers; exception

It is true that legislative discretion as to the substantive contents of the law cannot be
delegated. What can be delegated is the discretion to determine how the law may be
enforced, not what the law shall be. The ascertainment of the latter subject is a prerogative of
the legislature. This prerogative cannot be abdicated or surrendered by the legislature to the
delegate.

Two Tests of Valid Delegation of Legislative Power

There are two accepted tests to determine whether or not there is a valid delegation of
legislative power, viz, the completeness test and the sufficient standard test. Under the first
test, the law must be complete in all its terms and conditions when it leaves the legislature
such that when it reaches the delegate the only thing he will have to do is to enforce it. Under
the sufficient standard test, there must be adequate guidelines or stations in the law to map
out the boundaries of the delegates authority and prevent the delegation from running riot.

Both tests are intended to prevent a total transference of legislative authority to the delegate,
who is not allowed to step into the shoes of the legislature and exercise a power essentially
legislative. The delegation of legislative power has become the rule and its non-delegation the
exception. Rationale for Delegation of Legislative Power The reason is the increasing
complexity of the task of government and the growing inability of the legislature to cope
directly with the myriad problems demanding its attention. The growth of society has ramified
its activities and created peculiar and sophisticated problems that the legislature cannot be
expected to reasonably comprehend. Specialization even in legislation has become necessary.
Too many of the problems attendant upon present-day undertakings, the legislature may not
have the competence to provide the required direct and efficacious, not to say, specific
solutions. These solutions may, however, be expected from its delegates, who are supposed to
be experts in the particular fields.

Power of Subordinate Legislation

The reasons given above for the delegation of legislative powers in general are particularly
applicable to administrative bodies. With the proliferation of specialized activities and their
attendant peculiar problems, the national legislature has found it more and more necessary to
entrust to administrative agencies the authority to issue rules to carry out the general
provisions of the statute. This is called the power of subordinate legislation.

With this power, administrative bodies may implement the broad policies laid down in statute
by filling in the details which the Congress may not have the opportunity or competence to
provide. Memorandum Circular No. 2 is one such administrative regulation.

Administrative agencies are vested with two basic powers, the quasi-legislative and
quasijudicial. The first enables them to promulgate implementing rules and regulations, and
the second enables them to interpret and apply such regulations.

KMU v. GARCIA
239 SCRA 386

FACTS:
The Department of Transportation and Communication (DOTC) and the Land Transportation
Franchising and Regulatory Board (LTFRB) released memoranda allowing provincial bus
operators to charge passengers rates within 15% above and below the official LTFRB rate for a
period of one year. Provincial Bus Operators Association of the Philippines applied for fare rate
increase. This was opposed by the Philippine Consumer Foundation, Inc. and Perla Bautista as
they were exorbitant and unreasonable.

ISSUE:
Whether or not the provincial bus operators have authority to reduce and increase fare rates
based on the order of the LTFRB

HELD:
The Legislature delegated to the defunct Public Service Commission the power of fixing rates
of public services and the LTFRB is likewise vested with the same. Such delegation is
permitted in order to adapt to the increasing complexity of modern life. The authority given by
the LTFRB to the provincial bus operators to set a fare range is illegal and invalid as it is
tantamount to an undue delegation of legislative authority. Potestas delegata non delegari
protest. What has been delegated cannot be delegated. A further delegation of power would
constitute a negation of the duty in violation of the trust reposed in the delegate mandated to
discharge it directly. The policy of allowing the provincial bus operators to change their fares
would lead to a chaotic situation and would leave the riding public at the mercy of transport
operators.

Kilusang Mayo Uno Labor Center v. Jesus Garcia, Jr., LTFRB, Provincial Bus Operators
Association of the Philippines (PBOAP)
G.R. No. 115381 December 23, 1994
Kapunan, J.

FACTS:
public utilities privately owned and operated businesses whose service are essential
to the general public; enterprises which specially cater to the needs of the public and
conducive to their comfort and convenience
DOTC Sec. issued Memorandum Circular No. 90-395 to then LTFRB Chairman allowing
provincial bus operators to charge passengers rates within a range of 15% above and 15%
below the LTFRB official rate for a period of 1 year
 PBOAP pursuant to Memo. Cir. it filed an application for fare rate increase. An across-
the-board increase of eight and a half centavos (P0.085) per kilometer for all types of
provincial buses with a minimum-maximum fare range of fifteen (15%) percent over and
below the proposed basic per kilometer fare rate, with the said minimum-maximum fare range
applying only to ordinary, first class and premium class buses and a fifty-centavo (P0.50)
minimum per kilometer fare for aircon buses, was sought
respondent LTFRB rendered a decision granting the fare rate increase in accordance
with a specified schedule of fares on a straight computation method
DOTC Sec. issued Department Order No. 92-587 defining the policy framework on the
regulation of transport services. It provides inter alia that Passenger fares shall also be
deregulated, except for the lowest class of passenger service (normally third class passenger
transport) for which the government will fix indicative or reference fares. Operators of
particular services may fix their own fares within a range 15% above and below the indicative
or reference rate.
LTFRB issued Memorandum Circular No. 92-009 promulgating the guidelines for the
implementation of DOTC Department Order No. 92-587, which provides, among others, that:
The issuance of a Certificate of Public Convenience is determined by public need. The
presumption of public need for a service shall be deemed in favor of the applicant, while
burden of proving that there is no need for the proposed service shall be the oppositors.

The existing authorized fare range system of plus or minus 15 per cent for provincial buses
and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized fare to be
replaced by an indicative or reference rate as the basis for the expanded fare range
PBOAP - availing itself of the deregulation policy of the DOTC allowing provincial bus
operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a
petition for the purpose and without the benefit of a public hearing, announced a fare increase
of twenty (20%) percent of the existing fares
KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares.

ISSUE: WON the above memoranda, circulars and/or orders of the DOTC and the LTFRB which,
among others, (a) authorize provincial bus and jeepney operators to increase or decrease the
prescribed transportation fares without application therefor with the LTFRB and without
hearing and approval thereof by said agency is in violation of Sec. 16(c) of CA 146, and in
derogation of LTFRBs duty to fix and determine just and reasonable fares by delegating that
function to bus operators, and (b) establish a presumption of public need in favor of applicants
for certificates of public convenience and place on the oppositor the burden of proving that
there is no need for the proposed service, in patent violation not only of Sec. 16(c) of CA 146,
as amended, but also of Sec. 20(a) of the same Act mandating that fares should be just and
reasonable

HELD: Yes.
Section 16(c) of the Public Service Act, as amended, reads:
Sec. 16. Proceedings of the Commission, upon notice and hearing. The Commission shall
have power, upon proper notice and hearing in accordance with the rules and provisions of
this Act, subject to the limitations and exceptions mentioned and saving provisions to the
contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules
thereof, as well as commutation, mileage kilometrage, and other special rates which shall be
imposed, observed, and followed thereafter by any public service: Provided, That the
Commission may, in its discretion, approve rates proposed by public services provisionally and
without necessity of any hearing; but it shall call a hearing thereon within thirty days
thereafter, upon publication and notice to the concerns operating in the territory affected:
Provided, further, That in case the public service equipment of an operator is used principally
or secondarily for the promotion of a private business, the net profits of said private business
shall be considered in relation with the public service of such operator for the purpose of fixing
the rates.
LTFRB is authorized under EO 202, s. 1987 to determine, prescribe, approve and
periodically review and adjust, reasonable fares, rates and other related charges, relative to
the operation of public land transportation services provided by motorized vehicles
LTFRB not authorized to delegate that power to a common carrier, a transport
operator, or other public service
authority given by the LTFRB to the provincial bus operators to set a fare range over
and above the authorized existing fare, is illegal and invalid as it is tantamount to an undue
delegation of legislative authority
rate should not be confiscatory as would place an operator in a situation where he will
continue to operate at a loss; rate should enable public utilities to generate revenues
sufficient to cover operational costs and provide reasonable return on the investments
CPC - authorization granted by the LTFRB for the operation of land transportation
services for public use as required by law. Pursuant to Section 16(a) of the Public Service Act,
as amended, the following requirements must be met before a CPC may be granted, to wit: (i)
the applicant must be a citizen of the Philippines, or a corporation or co-partnership,
association or joint-stock company constituted and organized under the laws of the
Philippines, at least 60 per centum of its stock or paid-up capital must belong entirely to
citizens of the Philippines; (ii) the applicant must be financially capable of undertaking the
proposed service and meeting the responsibilities incident to its operation; and (iii) the
applicant must prove that the operation of the public service proposed and the authorization
to do business will promote the public interest in a proper and suitable manner; there must be
proper notice and hearing before the PSC can exercise its power to issue a CPC
LTFRB Memorandum Circular No. 92-009, Part IV is incompatible and inconsistent with
Section 16(c)(iii) of the Public Service Act which requires that before a CPC will be issued, the
applicant must prove by proper notice and hearing that the operation of the public service
proposed will promote public interest in a proper and suitable manner. On the contrary, the
policy guideline states that the presumption of public need for a public service shall be
deemed in favor of the applicant.

PEOPLE VS. MACEREN

Administrative regulations adopted under legislative authority by a particular department
must be in harmony with the provisions of the law, and should be for the sole purpose of
carrying into effect its general provisions. By such regulations, the law itself cannot be
extended. An administrative agency cannot amend an act of Congress.
FACTS:
The respondents were charged with violating Fisheries Administrative Order No. 84-1 which
penalizes electro fishing in fresh water fisheries. This was promulgated by the Secretary of
Agriculture and Natural Resources and the Commissioner of Fisheries under the old Fisheries
Law and the law creating the Fisheries Commission. The municipal court quashed the
complaint and held that the law does not clearly prohibit electro fishing, hence the executive
and judicial departments cannot consider the same. On appeal, the CFI affirmed the dismissal.
Hence, this appeal to the SC.
ISSUE: Whether the administrative order penalizing electro fishing is valid?
HELD:
NO. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries
exceeded their authority in issuing the administrative order. The old Fisheries Law does not
expressly prohibit electro fishing. As electro fishing is not banned under that law, the
Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are
powerless to penalize it. Had the lawmaking body intended to punish electro fishing, a penal
provision to that effect could have been easily embodied in the old Fisheries Law. The
lawmaking body cannot delegate to an executive official the power to declare what acts
should constitute an offense. It can authorize the issuance of regulations and the imposition of
the penalty provided for in the law itself. Where the legislature has delegated to executive or
administrative officers and boards authority to promulgate rules to carry out an express
legislative purpose, the rules of administrative officers and boards, which have the effect of
extending, or which conflict with the authority granting statute, do not represent a valid
precise of the rule-making power.

PEOPLE v MACEREN

FACTS
- Section 11 of the Fisheries Law prohibits "the use of any obnoxious or poisonous substance"
in fishing.
- The Secretary of Agriculture and Natural Resources, upon the recommendation of the
Commissioner of Fisheries, promulgated Fisheries Administrative Order No. 84 (62 O.G. 1224),
prohibiting electro fishing in all Philippine waters.
- Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario Aquino and Carlito del
Rosario were charged with having violated Fisheries Administrative Order No. 84-1. It was
alleged that they engaged in electro fishing.
- Upon motion of the accused, the municipal court dismissed the case. CFI affirmed. The lower
court held that electro fishing cannot be penalized because electric current is not an
obnoxious or poisonous substance as contemplated in section II of the Fisheries Law. The
lower court further held that, since the law does not clearly prohibit electro fishing, the
executive and judicial departments cannot consider it unlawful.

ISSUE/S
1. WON the Secretary of Agriculture and Natural Resources exceeded his authority in issuing
Fisheries Administrative Order No. 84

HELD
1. YES.
Ratio The rule-making power must be confined to details for regulating the mode or
proceeding to carry into effect the law as it his been enacted. The power cannot be extended
to amending or expanding the statutory requirements or to embrace matters not covered by
the statute

Reasoning The Fisheries Law does not expressly prohibit electro fishing. As electro fishing is
not banned under that law, the Secretary of Agriculture and Natural Resources and the
Commissioner of Fisheries are powerless to penalize it. Had the lawmaking body intended to
punish electro fishing, a penal provision to that effect could have been easily embodied in the
old Fisheries Law. Nowhere in the said law is electro fishing specifically punished.

Administrative agents are clothed with rule-making powers because the lawmaking body finds
it impracticable, if not impossible, to anticipate and provide for the multifarious and complex
situations that may be encountered in enforcing the law. All that is required is that the
regulation should be germane to the defects and purposes of the law and that it should
conform to the standards that the law prescribes

Disposition Decision affirmed

CERVANTES v. AUDITOR GENERAL

FACTS
This is a petition to review a decision of Auditor General denying petitioners claim for quarters
allowance as manager of the National Abaca and other Fibers Corp. (NAFCO).

Petitioner was general manager in 1949 of NAFCO with annual salary of P15,000.00

NAFCO Board of Directors granted P400/mo. Quarters allowance to petitioner amounting to

P1,650 for 1949.

This allowance was disapproved by the Central Committee of the government enterprise
council under Executive Order No. 93 upon recommendation by NAFCO auditor and concurred
in by the Auditor general on two grounds:
a) It violates the charter of NAFCO limiting managers salary to P15,000/year.
b) NAFCO is in precarious financial condition.

ISSUES: Whether or not Executive Order No. 93 exercising control over Government Owned
and Controlled Corporations (GOCC) implemented under R.A. No. 51 is valid or null and void.
Whether or not R.A. No. 51 authorizing presidential control over GOCCs is Constitutional.

DECISION: R.A. No. 51 is constitutional. It is not illegal delegation of legislative power to the
executive as argued by petitioner but a mandate for the President to streamline GOCCs
operation. Executive Order 93 is valid because it was promulgated within the 1 year period
given. Petition for review DISMISSED with costs.

CERVANTES vs AUDITOR GENERAL

91 SCRA 359
Delegation to Administrative Agencies
Sufficiency of Standards

FACTS: It appears that petitioner was in 1949 the manager of the NAFCO with a salary of
P15,000 a year.

By a resolution of the Board of Directors of this corporation approved on January 19 of that

year, he was granted quarters allowance of not exceeding P400 a month effective the first of
that month. Submitted the Control Committee of the Government Enterprises Council for
approval, the said resolution was disapproved on August 3, 1949.

The Government Enterprises Council was created by the President under Executive Order No.
93 pursuant to Republic Act No. 51, authorizing the President of the Philippines, among other
things, to effect such reforms and changes in government owned and controlled corporations
for the purpose of promoting simplicity, economy and efficiency in their operation. The
petitioner challenged the action of the Government Enteprises Council, contending that
Executive Order No. 93 was an undue delegation of power.

ISSUE: Whether or not Executive Order No. 93 is null and void because it is based on a law
that is unconstitutional as an illegal delegation of legislative power to the President

RULING: No. As to the first ground, the rule is that so long as the Legislature "lays down a
policy and a standard is established by the statute" there is no undue delegation. Republic Act
No. 51 in authorizing the President of the Philippines, among others, to make reforms and
changes in government-controlled corporations, lays down a standard and policy that the
purpose shall be to meet the exigencies attendant upon the establishment of the free and
independent government of the Philippines and to promote simplicity, economy and efficiency
in their operations. The standard was set and the policy fixed. The President had to carry the
mandate. This he did by promulgating the executive order in question which, tested by the
rule above cited, does not constitute an undue delegation of legislative power.

RATIO: Delegation to Administrative Agencies. Under the sufficient standard test, there must
be adequate guidelines or limitations in the law to map out the boundaries of the delegate
authority and prevent the delegation from running riot.

To "promote simplicity, economy and efficiency" is a sufficient standard.

Emmanuel Pelaez vs. The Auditor General

FACTS:

From September 4, 1964 to October 29, 1964 the President of the Philippines issued executive
orders to create thirty-three municipalities pursuant to Section 69 of the Revised
Administrative Code. Public funds thereby stood to be disbursed in the implementation of said
executive orders.

Suing as a private citizen and taxpayer, Vice President Emmanuel Pelaez filed a petition for
prohibition with preliminary injunction against the Auditor General. It seeks to restrain from
the respondent or any person acting in his behalf, from passing in audit any expenditure of
public funds in implementation of the executive orders aforementioned.

ISSUE:

Whether the executive orders are null and void, upon the ground that the President does not
have the authority to create municipalities as this power has been vested in the legislative
department.

RULING:

Section 10(1) of Article VII of the fundamental law ordains:

The President shall have control of all the executive departments, bureaus or offices, exercise
general supervision over all local governments as may be provided by law, and take care that
the laws be faithfully executed.
The power of control under this provision implies the right of the President to interfere in the
exercise of such discretion as may be vested by law in the officers of the executive
departments, bureaus, or offices of the national government, as well as to act in lieu of such
officers. This power is denied by the Constitution to the Executive, insofar as local
governments are concerned. Such control does not include the authority to either abolish an
executive department or bureau, or to create a new one. Section 68 of the Revised
Administrative Code does not merely fail to comply with the constitutional mandate above
quoted, it also gives the President more power than what was vested in him by the
Constitution.

The Executive Orders in question are hereby declared null and void ab initio and the
respondent permanently restrained from passing in audit any expenditure of public funds in
implementation of said Executive Orders or any disbursement by the municipalities referred
to.

15 SCRA 569 Political Law Sufficient Standard Test and Completeness Test
In 1964, President Ferdinand Marcos issued executive orders creating 33 municipalities this
was purportedly pursuant to Section 68 of the Revised Administrative Code which provides in
part:

The President may by executive order define the boundary of any municipality and may
change the seat of government within any subdivision to such place therein as the public
welfare may require

The then Vice President, Emmanuel Pelaez, as a taxpayer, filed a special civil action to
prohibit the auditor general from disbursing funds to be appropriated for the said
municipalities. Pelaez claims that the EOs were unconstitutional. He said that Section 68 of the
RAC had been impliedly repealed by Section 3 of RA 2370 which provides that barrios may
not be created or their boundaries altered nor their names changed except by Act of
Congress. Pelaez argues: If the President, under this new law, cannot even create a barrio,
how can he create a municipality which is composed of several barrios, since barrios are units
of municipalities?

The Auditor General countered that there was no repeal and that only barrios were barred
from being created by the President. Municipalities are exempt from the bar and that a
municipality can be created without creating barrios. He further maintains that through Sec.
68 of the RAC, Congress has delegated such power to create municipalities to the President.

ISSUE: Whether or not Congress has delegated the power to create barrios to the President by
virtue of Sec. 68 of the RAC.

HELD: No. There was no delegation here. Although Congress may delegate to another branch
of the government the power to fill in the details in the execution, enforcement or
administration of a law, it is essential, to forestall a violation of the principle of separation of
powers, that said law: (a) be complete in itself it must set forth therein the policy to be
executed, carried out or implemented by the delegate and (b) fix a standard the limits
of which are sufficiently determinate or determinable to which the delegate must conform
in the performance of his functions. In this case, Sec. 68 lacked any such standard. Indeed,
without a statutory declaration of policy, the delegate would, in effect, make or formulate such
policy, which is the essence of every law; and, without the aforementioned standard, there
would be no means to determine, with reasonable certainty, whether the delegate has acted
within or beyond the scope of his authority.

Further, although Sec. 68 provides the qualifying clause as the public welfare may require
which would mean that the President may exercise such power as the public welfare may
require is present, still, such will not replace the standard needed for a proper delegation of
power. In the first place, what the phrase as the public welfare may require qualifies is the
text which immediately precedes hence, the proper interpretation is the President may
change the seat of government within any subdivision to such place therein as the public
welfare may require. Only the seat of government may be changed by the President when
public welfare so requires and NOT the creation of municipality.

The Supreme Court declared that the power to create municipalities is essentially and
eminently legislative in character not administrative (not executive).

Adminstrative Law
Arellano Univeristy School of Law
aiza ebina/2015

BALBUENA vs SECRETARY OF EDUCATION

110 Phil 150
Sufficiency of Standards

FACTS: Section 1 of R.A. No. 1265 requires all educational institutions to observe daily flag
ceremony, which shall be simple and dignified and shall include the playing or singing of the
Philippine National Anthem. Section 2 thereof authorizes and directs the Secretary of
Education to issue or cause to be issued rules and regulations for the proper conduct of the
flag ceremony.

Petitioners, members of the religious sect "Jehovah's Witnesses," challenged the

constituionality of the Act by virtue of which the Secretary of Education issued Department
Order No. 8 (prescribing compulsory flag ceremony in all schools), as an undue delegation of
legislative power.

ISSUE: Whether or not the requirements of simplicity and dignity of the flag ceremony and the
singing of th national anthem constitute an adequate standard

RULING: Yes. the requirements above-quoted constitute an adequate standard, to wit,

simplicity and dignity of the flag ceremony and the singing of the National Anthem specially
when contrasted with other standards heretofore upheld by the Courts: "public interest",
"public welfare", interest of law and order, "justice and equity" and the substantial merits of
the case", or "adequate and efficient instruction." That the Legislature did not specify the
details of the flag ceremony is no objection to the validity of the statute, for all that is required
of it is the laying down of standards and policy that will limit the discretion of the regulatory
agency. To require the statute to establish in detail the manner of exercise of the delegated
power would be to destroy the administrative flexibility that the delegation is intended to
achieve.

RATIO: "Simplicity and dignity" is a suficient standard.

BUREAU OF CUSTOMS EMPLOYEES ASSOCIATION (BOCEA), represented by its National

President (BOCEA National Executive Council) Mr. Romulo A. Pagulayan, Petitioner, vs.HON.
MARGARITO B. TEVES, in his capacity as Secretary of the Department of Finance, HON.
NAPOLEON L. MORALES, in his capacity as Commissioner of the Bureau of Customs, HON.
LILIAN B. HEFTI, in her capacity as Commissioner of the Bureau of Internal Revenue,
Respondents.
NOTE: This case is long so it's a two page digests. There were three issues that were raised as
to constitutionality.
FACTS:
1. On January 25, 2005, former President Gloria Macapagal-Arroyo signed into law R.A. No.
9335.
2. RA [No.] 9335 was enacted to optimize the revenue-generation capability and collection
of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).
3. The law intends to encourage BIR and BOC officials and employees to exceed their
revenue targets by providing a system of rewards and sanctions through the creation of a
Rewards and Incentives Fund (Fund) and a Revenue Performance Evaluation Board (Board). It
covers all officials and employees of the BIR and the BOC with at least six months of service,
regardless of employment status.
4. The Fund is sourced from the collection of the BIR and the BOC in excess of their
revenue targets for the year, as determined by the Development Budget and Coordinating
Committee (DBCC). Any incentive or reward is taken from the fund and allocated to the BIR
and the BOC in proportion to their contribution in the excess collection of the targeted amount
of tax revenue.
5. Contending that the enactment and implementation of R.A. No. 9335 are tainted with
constitutional infirmities in violation of the fundamental rights of its members, petitioners,
directly filed the present petition against respondents Margarito B. Teves, in his capacity as
Secretary of the Department of Finance (DOF), Commissioner Napoleon L. Morales
(Commissioner Morales), in his capacity as BOC Commissioner, and Lilian B. Hefti, in her
capacity as Commissioner of the Bureau of Internal Revenue (BIR).
6. In 2008, high-ranking officials of the BOC pursuant to the mandate of R.A. No. 9335 and
its IRR, and in order to comply with the stringent deadlines thereof, started to disseminate
Collection District Performance Contracts7 (Performance Contracts) for the lower ranking
officials and rank-and-file employees to sign.
7. BOCEA opined that the revenue target was impossible to meet due to the Governments
own policies on reduced tariff rates and tax breaks to big businesses, the occurrence of
natural calamities and because of other economic factors.
8. BOCEA claimed that some BOC employees were coerced and forced to sign the
Performance Contract. They also alleged they were threatened that if they do not sign their
respective Performance Contracts, they would face possible reassignment, reshuffling, or
worse, be placed on floating status.
9. This petition was filed directly with this Court on March 3, 2008. BOCEA asserted that in
view of the unconstitutionality of R.A. No. 9335 and its IRR, and their adverse effects on the
constitutional rights of BOC officials and employees, direct resort to this Court is justified. The
Issues
ISSUE/S: (1) Whether there is undue delegation of legislative power to the Board
(2) Whether R.A. No. 9335 and its IRR violate the rights of BOCEAs members to:
(a) equal protection of laws,
(b) security of tenure and
(c) due process; and
(3) Whether R.A. No. 9335 is a bill of attainder.

HELD:
1. No. In the face of the increasing complexity of modern life, delegation of legislative power
to various specialized administrative agencies is allowed as an exception to this principle.
Given the volume and variety of interactions in todays society, it is doubtful if the legislature
can promulgate laws that will deal adequately with and respond promptly to the minutiae of
everyday life. Hence, the need to delegate to administrative bodies the principal agencies
tasked to execute laws in their specialized fields the authority to promulgate rules and
regulations to implement a given statute and effectuate its policies. All that is required for the
valid exercise of this power of subordinate legislation is that the regulation be germane to the
objects and purposes of the law and that the regulation be not in contradiction to, but in
conformity with, the standards prescribed by the law. These requirements are denominated as
the completeness test and the sufficient standard test.32
Two tests determine the validity of delegation of legislative power: (1) the completeness test
and (2) the sufficient standard test. A law is complete when it sets forth therein the policy to
be executed, carried out or implemented by the delegate. It lays down a sufficient standard
when it provides adequate guidelines or limitations in the law to map out the boundaries of
the delegates authority and prevent the delegation from running riot. To be sufficient, the
standard must specify the limits of the delegates authority, announce the legislative policy
and identify the conditions under which it is to be implemented. At any rate, this Court has
recognized the following as sufficient standards: "public interest", "justice and equity", "public
convenience and welfare" and "simplicity, economy and welfare". In this case, the declared
policy of optimization of the revenue-generation capability and collection of the BIR and the
BOC is infused with public interest.33 The Court finds that R.A. No. 9335, read and appreciated
in its entirety, is complete in all its essential terms and conditions, and that it contains
sufficient standards as to negate BOCEAs supposition of undue delegation of legislative power
to the Board.
2. No. a. On Equal Protection The equal protection clause recognizes a valid classification, that
is, a classification that has a reasonable foundation or rational basis and not arbitrary. With
respect to RA [No.] 9335, its expressed public policy is the optimization of the revenue-
generation capability and collection of the BIR and the BOC. Since the subject of the law is the
revenue-generation capability and collection of the BIR and the BOC, the incentives and/or
sanctions provided in the law should logically pertain to the said agencies. Moreover, the law
concerns only the BIR and the BOC because they have the common distinct primary function
of generating revenues for the national government through the collection of taxes, customs
duties, fees and charges.
Both the BIR and the BOC are bureaus under the DOF. They principally perform the special
function of being the instrumentalities through which the State exercises one of its great
inherent functions taxation. Indubitably, such substantial distinction is germane and
intimately related to the purpose of the law. Hence, the classification and treatment accorded
to the BIR and the BOC under RA [No.] 9335 fully satisfy the demands of equal protection.37

b. Security of Tenure
RA [No.] 9335 in no way violates the security of tenure of officials and employees of the BIR
and the BOC. The guarantee of security of tenure only means that an employee cannot be
dismissed from the service for causes other than those provided by law and only after due
process is accorded the employee. In the case of RA [No.] 9335, it lays down a reasonable
yardstick for removal (when the revenue collection falls short of the target by at least 7.5%)
with due consideration of all relevant factors affecting the level of collection. This standard is
analogous to inefficiency and incompetence in the performance of official duties, a ground for
disciplinary action under civil service laws. The action for removal is also subject to civil
service laws, rules and regulations and compliance with substantive and procedural due
process.38

c. Due Process
BOCEAs apprehension of deprivation of due process finds its answer in Section 7 (b) and (c) of
R.A. No. 9335.40 The concerned BIR or BOC official or employee is not simply given a target
revenue collection and capriciously left without any quarter. R.A. No. 9335 and its IRR clearly
give due consideration to all relevant factors41 that may affect the level of collection. In the
same manner, exemptions42 were set, contravening BOCEAs claim that its members may be
removed for unattained target collection even due to causes which are beyond their control.
Moreover, an employees right to be heard is not at all prevented and his right to appeal is not
deprived of him.43 In fine, a BIR or BOC official or employee in this case cannot be arbitrarily
removed from the service without according him his constitutional right to due process.

3. No. R.A. No. 9335 is not a bill of attainder. A bill of attainder is a legislative act which inflicts
punishment on individuals or members of a particular group without a judicial trial. Essential
to a bill of attainder are a specification of certain individuals or a group of individuals, the
imposition of a punishment, penal or otherwise, and the lack of judicial trial.451avvphi1

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

Adminstrative Law
Arellano Univeristy School of Law
aiza ebina/2015

US vs ANG TANG HO
43 Phil 1
Doctrine of Separation of Powers
FACTS: At its special session of 1919, the Philippine Legislature passed Act No. 2868, entitled
"An Act penalizing the monopoly and holding of, and speculation in, palay, rice, and corn
under extraordinary circumstances, regulating the distribution and sale thereof, and
authorizing the Governor-General, with the consent of the Council of State, to issue the
necessary rules and regulations therefor, and making an appropriation for this purpose," the
material provisions of which are as follows:

Section 1. The Governor-General is hereby authorized, whenever, for any cause, conditions
arise resulting in an extraordinary rise in the price of palay, rice or corn, to issue and
promulgate, with the consent of the Council of State, temporary rules and emergency
measures for carrying out the purpose of this Act.

Section 4. The violations of any of the provisions of this Act or of the regulations, orders and
decrees promulgated in accordance therewith shall be punished by a fine of not more than
five thousands pesos, or by imprisonment for not more than two years, or both, in the
discretion of the court.

Pursuant thereto, on August 1, 1919, the Governor-General issued a proclamation fixing the
price at which rice should be sold and penalizing the violation thereof.

On August 8, 1919, a complaint was filed against the defendant, Ang Tang Ho, charging him
with the sale of rice at an excessive price. Upon this charge, he was tried, found guilty and
sentenced to five months' imprisonment and to pay a fine of P500, from which he appealed to
this court, claiming that the lower court erred in finding Executive Order No. 53 of 1919, to be
of any force and effect, in finding the accused guilty of the offense charged, and in imposing
the sentence.

The defendant questions the validity of the proclamation by the Governor-General pursuant to
Act No. 2868, in so far as it authorizes the Governor-General to fix the price at which rice
should be sold.

ISSUE: Whether or not the proclamation fixing the price at which rice should be sold confers
an unconstitutional delegation of powers

RULING: Yes. By its very terms, the promulgation of temporary rules and emergency measures
is left to the discretion of the Governor-General.

The Legislature does not undertake to specify or define under what conditions or for what
reasons the Governor-General shall issue the proclamation, but says that it may be issued "for
any cause," and leaves the question as to what is "any cause" to the discretion of the
Governor-General.

The Legislature does not specify or define what is "an extraordinary rise in the price of palay,
rice or corn." That is also left to the discretion of the Governor-General. It does not specify or
define what is a temporary rule or an emergency measure, or how long such temporary rules
or emergency measures shall remain in force and effect, or when they shall take effect.

All these are left to the sole judgment and discretion of the Governor-General. The law is thus
incomplete as a legislation.

It is the violation of the proclamation of the Governor-General which constitutes the crime.
Before any rules and regulations were promulgated by the Governor-General, a dealer in rice
could sell it at any price, even at a peso per "ganta," and that he would not commit a crime,
because there would be no law fixing the price of rice, and the sale of it at any price would not
be a crime.
That is to say, in the absence of a proclamation, it was not a crime to sell rice at any price.
Hence, it must follow that, if the defendant committed a crime, it was because the Governor-
General issued the proclamation. There was no act of the Legislature making it a crime to sell
rice at any price, and without the proclamation, the sale of it at any price was not a crime.

The Governor-General cannot, by proclamation, determine what act shall constitute a crime or
not. That is essentially a legislative task.

RATIO: Allocation of governmental powers. - The doctrine declares that governmental powers
are divided among the three (3) departments of government, the legislative, executive, and
judicial, and broadly operates to confine legislative powers to the legislature, executive
powers to the executive department, and judicial powers to the judiciary, precluding one
branch of the government from exercising or invading the powers of another.

---

Tatad v. Executive Secretary, G.R. No. 124360, November 5, 1997

DECISION
(En Banc)

PUNO, J.:

I. THE FACTS

Petitioners assailed 5(b) and 15 of R.A. No. 8180, the Downstream Oil Industry Deregulation
Act of 1996.

5(b) of the law provided that tariff duty shall be imposed . . . on imported crude oil at the
rate of three percent (3%) and imported refined petroleum products at the rate of seven
percent (7%) . . . On the other hand, 15 provided that [t]he DOE shall, upon approval of the
President, implement the full deregulation of the downstream oil industry not later than March
1997. As far as practicable, the DOE shall time the full deregulation when the prices of crude
oil and petroleum products in the world market are declining and when the exchange rate of
the peso in relation to the US dollar is stable . . .

Petitioners argued that 5(b) on tariff differential violates the provision of the Constitution
requiring every law to have only one subject which should be expressed in its title.

They also contended that the phrases as far as practicable, decline of crude oil prices in
the world market and stability of the peso exchange rate to the US dollar are ambivalent,
unclear and inconcrete since they do not provide determinate or determinable standards that
can guide the President in his decision to fully deregulate the downstream oil industry.

Petitioners also assailed the Presidents E.O. No. 392, which proclaimed the full deregulation of
the downstream oil industry in February 1997. They argued that the Executive misapplied
R.A. No. 8180 when it considered the depletion of the OPSF fund as a factor in the
implementation of full deregulation.

Finally, they asserted that the law violated 19, Article XII of the Constitution prohibiting
monopolies, combinations in restraint of trade and unfair competition

II. THE ISSUES

1. Did 5(b) violate the one title-one subject requirement of the Constitution?
2. Did 15 violate the constitutional prohibition on undue delegation of power?
3. Was E.O. No. 392 arbitrary and unreasonable?
4. Did R.A. No. 8180 violate 19, Article XII of the Constitution prohibiting monopolies,
combinations in restraint of trade and unfair competition?

III. THE RULING

[The Court GRANTED the petition. It DECLARED R.A. No. 8180 unconstitutional and E.O. No.
372 void.]

1. NO, 5(b) DID NOT violate the one title-one subject requirement of the Constitution.

As a policy, this Court has adopted a liberal construction of the one title-one subject rule.
[T]he title need not mirror, fully index or catalogue all contents and minute details of a law. A
law having a single general subject indicated in the title may contain any number of
provisions, no matter how diverse they may be, so long as they are not inconsistent with or
foreign to the general subject, and may be considered in furtherance of such subject by
providing for the method and means of carrying out the general subject. [S]ection 5(b)
providing for tariff differential is germane to the subject of R.A. No. 8180 which is the
deregulation of the downstream oil industry. The section is supposed to sway prospective
investors to put up refineries in our country and make them rely less on imported petroleum.

2. NO, 15 DID NOT violate the constitutional prohibition on undue delegation of power.

Two tests have been developed to determine whether the delegation of the power to execute
laws does not involve the abdication of the power to make law itself. We delineated the metes
and bounds of these tests in Eastern Shipping Lines, Inc. VS. POEA, thus:
There are two accepted tests to determine whether or not there is a valid delegation of
legislative power, viz: the completeness test and the sufficient standard test. Under the first
test, the law must be complete in all its terms and conditions when it leaves the legislative
such that when it reaches the delegate the only thing he will have to do is to enforce it. Under
the sufficient standard test, there must be adequate guidelines or limitations in the law to
map out the boundaries of the delegate's authority and prevent the delegation from running
riot. Both tests are intended to prevent a total transference of legislative authority to the
delegate, who is not allowed to step into the shoes of the legislature and exercise a power
essentially legislative.

xxx xxx xxx

Section 15 can hurdle both the completeness test and the sufficient standard test. It will be
noted that Congress expressly provided in R.A. No. 8180 that full deregulation will start at the
end of March 1997, regardless of the occurrence of any event. Full deregulation at the end of
March 1997 is mandatory and the Executive has no discretion to postpone it for any purported
reason. Thus, the law is complete on the question of the final date of full deregulation. The
discretion given to the President is to advance the date of full deregulation before the end of
March 1997. Section 15 lays down the standard to guide the judgment of the President --- he
is to time it as far as practicable when the prices of crude oil and petroleum products in the
world market are declining and when the exchange rate of the peso in relation to the US dollar
is stable.

Petitioners contend that the words as far as practicable, declining and stable should
have been defined in R.A. No. 8180 as they do not set determinate or determinable
standards. The stubborn submission deserves scant consideration. The dictionary meanings
of these words are well settled and cannot confuse men of reasonable intelligence. Webster
defines practicable as meaning possible to practice or perform, decline as meaning to
take a downward direction, and stable as meaning firmly established. The fear of petitioners
that these words will result in the exercise of executive discretion that will run riot is thus
groundless. To be sure, the Court has sustained the validity of similar, if not more general
standards in other cases.

3. YES, E.O. No. 392 was arbitrary and unreasonable.

A perusal of section 15 of R.A. No. 8180 will readily reveal that it only enumerated two factors
to be considered by the Department of Energy and the Office of the President, viz.: (1) the
time when the prices of crude oil and petroleum products in the world market are declining,
and (2) the time when the exchange rate of the peso in relation to the US dollar is stable.
Section 15 did not mention the depletion of the OPSF as a factor to be given weight by the
Executive before ordering full deregulation. On the contrary, the debates in Congress will
show that some of our legislators wanted to impose as a pre-condition to deregulation a
showing that the OPSF fund must not be in deficit. We therefore hold that the Executive
department failed to follow faithfully the standards set by R.A. No. 8180 when it considered
the extraneous factor of depletion of the OPSF fund. The misappreciation of this extra factor
cannot be justified on the ground that the Executive department considered anyway the
stability of the prices of crude oil in the world market and the stability of the exchange rate of
the peso to the dollar. By considering another factor to hasten full deregulation, the
Executive department rewrote the standards set forth in R.A. 8180. The Executive is bereft of
any right to alter either by subtraction or addition the standards set in R.A. No. 8180 for it has
no power to make laws. To cede to the Executive the power to make law is to invite tyranny,
indeed, to transgress the principle of separation of powers. The exercise of delegated power
is given a strict scrutiny by courts for the delegate is a mere agent whose action cannot
infringe the terms of agency. In the cases at bar, the Executive co-mingled the factor of
depletion of the OPSF fund with the factors of decline of the price of crude oil in the world
market and the stability of the peso to the US dollar. On the basis of the text of E.O. No. 392,
it is impossible to determine the weight given by the Executive department to the depletion of
the OPSF fund. It could well be the principal consideration for the early deregulation. It
could have been accorded an equal significance. Or its importance could be nil. In light of
this uncertainty, we rule that the early deregulation under E.O. No. 392 constitutes a
misapplication of R.A. No. 8180.

4. YES, R.A. No. 8180 violated 19, Article XII of the Constitution prohibiting monopolies,
combinations in restraint of trade and unfair competition.

[I]t cannot be denied that our downstream oil industry is operated and controlled by an
oligopoly, a foreign oligopoly at that. Petron, Shell and Caltex stand as the only major league
players in the oil market. All other players belong to the lilliputian league. As the dominant
players, Petron, Shell and Caltex boast of existing refineries of various capacities. The tariff
differential of 4% therefore works to their immense benefit. Yet, this is only one edge of the
tariff differential. The other edge cuts and cuts deep in the heart of their competitors. It erects
a high barrier to the entry of new players. New players that intend to equalize the market
power of Petron, Shell and Caltex by building refineries of their own will have to spend billions
of pesos. Those who will not build refineries but compete with them will suffer the huge
disadvantage of increasing their product cost by 4%. They will be competing on an uneven
field. The argument that the 4% tariff differential is desirable because it will induce
prospective players to invest in refineries puts the cart before the horse. The first need is to
attract new players and they cannot be attracted by burdening them with heavy disincentives.
Without new players belonging to the league of Petron, Shell and Caltex, competition in our
downstream oil industry is an idle dream.
The provision on inventory widens the balance of advantage of Petron, Shell and Caltex
against prospective new players. Petron, Shell and Caltex can easily comply with the inventory
requirement of R.A. No. 8180 in view of their existing storage facilities. Prospective
competitors again will find compliance with this requirement difficult as it will entail a
prohibitive cost. The construction cost of storage facilities and the cost of inventory can thus
scare prospective players. Their net effect is to further occlude the entry points of new
players, dampen competition and enhance the control of the market by the three (3) existing
oil companies.

Finally, we come to the provision on predatory pricing which is defined as . . . selling or

offering to sell any product at a price unreasonably below the industry average cost so as to
attract customers to the detriment of competitors. Respondents contend that this provision
works against Petron, Shell and Caltex and protects new entrants. The ban on predatory
pricing cannot be analyzed in isolation. Its validity is interlocked with the barriers imposed by
R.A. No. 8180 on the entry of new players. The inquiry should be to determine whether
predatory pricing on the part of the dominant oil companies is encouraged by the provisions in
the law blocking the entry of new players. Text-writer Hovenkamp gives the authoritative
answer and we quote:
xxx xxx xxx
The rationale for predatory pricing is the sustaining of losses today that will give a firm
monopoly profits in the future. The monopoly profits will never materialize, however, if the
market is flooded with new entrants as soon as the successful predator attempts to raise its
price. Predatory pricing will be profitable only if the market contains significant barriers to new
entry.

As aforediscussed, the 4% tariff differential and the inventory requirement are significant
barriers which discourage new players to enter the market. Considering these significant
barriers established by R.A. No. 8180 and the lack of players with the comparable clout of
PETRON, SHELL and CALTEX, the temptation for a dominant player to engage in predatory
pricing and succeed is a chilling reality. Petitioners charge that this provision on predatory
pricing is anti-competitive is not without reason.

[R.A. No. 8180 contained a separability clause, but the High Tribunal held that the offending
provisions of the law so permeated its essence that it had to be struck down entirely. The
provisions on tariff differential, inventory and predatory pricing were among the principal
props of R.A. No. 8180. Congress could not have deregulated the downstream oil industry
without these provisions.]

CASE: International Service for the Acquisition of Agri-Biotech Applications, Inc., et.al. v.
Greenpeace Southeast Asia (Philippines), et.al. (G.R. Nos. 209271, 209276, 209301 and
209430)
DATE: 8 December 2015
PONENTE: J. Villarama, Jr.

BACKGROUND

In 1990, President Corazon Aquino signed Executive Order (EO) No. 430 creating the
National Committee on Biosafety of the Philippines (NCBP) which was tasked to identify and
evaluate potential hazards involved in initiating genetic engineering experiments and
introducing new species and genetically engineered organisms and recommend measures to
minimize risks.
In 1991, NCBP formulated the Philippine Biosafety Guidelines which governs the
regulation of the importation or introduction, movement and field release of potentially
hazardous biological materials in the Philippines. The same was followed by the Guidelines on
Planned Release of Genetically Manipulated Organisms (GMOs) and Potentially Harmful Exotic
Species (PHES).
On 29 December 1993, the Convention on Biological Diversity (CBD) came into force.
This is a multilateral treaty recognizing the great potential of modern biotechnology for human
well-being if developed and used with adequate safety measures for the environment and
human health.
In January 2000, an agreement was reached on the Cartagena Protocol on Biosafety
(Cartagena Protocol), a supplement to the CBD, which aims to ensure an adequate level of
safe transfer, handling and use of living modified organisms resulting from modern
biotechnology. The Philippines signed the same on May 24 of the same year.
In April 2002, the Department of Agriculture (DA) issued DA Administrative Order No. 08
which provides rules and regulations for the importation and release into the environment of
plants and plant products derived from the use of modern biotechnology.
On 17 March 2006, EO No. 514 (EO 514) entitled, Establishing the National Biosafety
Framework (NBF), Prescribing Guidelines for its Implementation, and Strengthening the NCBP
was issued. It expressly provides that DAO 2002-08, NCBP Guidelines on the Contained Use of
GMOs, except for provisions on potentially harmful exotic species which were repealed, and all
issuances of the Bureau of Food and Drugs Authority (FDA) on products of modern
biotechnology, shall continue to be in force and effect unless amended by the issuing
departments or agencies.

FACTS

On 24 September 2010, a Memorandum of Undertaking was executed between

International Service for the Acquisition of Agri-Biotech Applications, Inc. (ISAAA), University of
the Philippines Los Baos Foundation, Inc. (UPLBFI) and UP Mindanao Foundation, Inc. (UPMFI),
in pursuance of a collaborative research and development project on eggplants that are
resistant to the fruit and shoot borer. Other partner agencies involved were UPLB through its
Institute of Plant Breeding, Maharastra Hybrid Seed Company (MAHYCO) of India, Cornell
University and the Agricultural Biotechnology Support Project II (ABSPII) of USAID.
The UPLB Field Trial Proposal states that the pest-resistant crop subject of the field trial
was described as a bio-engineered eggplant. The crystal toxin genes from the soil bacterium
Bacillus thuringiensis (Bt) were incorporated into the eggplant genome to produce the protein
CrylAc which is toxic to target insect pests. The latter is said to be highly specific to
lepidopteran larvae such as fruit and shoot borer (FSB), the most destructive insect pest of
eggplant.
NCBP issued a Certificate of Completion of Contained Experiment which was conducted
from 2007 to 3 March 2009 stating that during the conduct of experiment, all the biosafety
measures have been complied with and no untoward incident has occurred.
On 16 March 2010 and 28 June 2010, the Bureau of Plant Industry (BPI) issued biosafety
permits to UPLB.
Field testing commenced on various dates in the following approved trial sites:
Kabacan, North Cotabato; Sta. Maria, Pangasinan; Pili, Camarines Sur; Bago Oshiro, Davao
City; and Bay, Laguna.
On 26 April 2012, Greenpeace, MASIPAG and individual respondents (Greenpeace,
et.al.) filed a petition for writ of kalikasan and writ of continuing mandamus with prayer for the
issuance of Temporary Environmental Protection Order (TEPO) alleging that the Bt talong field
trials violate their constitutional right to health and a balanced ecology considering that:
- The required Environmental Compliance Certificate (ECC) under PD 1151 was not
secured prior to the project implementation
- There is no independent, peer-reviewed study on the safety of Bt talong for human
consumption and the environment
- There was a study conducted showing adverse effects on rats who were fed Bt corn,
local scientists likewise attested to the harmful effects of GMOs to human and animal health
- Bt crops can be directly toxic to non-target species
- There is a failure to comply with the required public consultation under Sections 26 and
27 of the Local Government Code
- The case calls for the application of the precautionary principle, it being a classic
environmental case where scientific evidence as to the health, environmental and socio-
economic safety is insufficient or uncertain and preliminary scientific evaluation indicates
reasonable grounds for concern that there are potentially dangerous effects on human health
and the environment
The following reliefs are prayed for by Greenpeace, et.al., to wit:
- Issuance of a TEPO enjoining BPI and Fertilizer and Pesticide Authority (FPA) of the
Department of Agriculture (DA) from processing for field testing and registering as herbicidal
product Bt talong in the Philippines, stopping all pending field testing, and ordering the
uprooting of planted Bt talong; and
- Issuance of a writ of continuing mandamus commanding the ISAAAI, et.al.: (1) to submit
to an environmental impact statement system under the Environmental Management Bureau
of the Department of Environment and Natural Resources (DENR-EMB); (2) to submit an
independent, comprehensive, and rigid risk assessment, field tests report, and regulatory
compliance reports; (3) to submit all issued certifications on public information, public
consultation, public participation and consent from the LGUs affected by the field testing; (4)
to submit an acceptable draft of an amendment of the NBF and DAO 2002-08; and (5) for BPI
of DA to conduct balanced nationwide public information on the nature of Bt talong and Bt
talong field trial, and a survey of its social acceptability.
On 2 May 2012, the SC issued the writ of kalikasan against ISAAA, EMB, BPI, FPA and
UPLB, ordering them to file a verified return.
The contentions of the respondents are as follows:
- All environmental laws were complied with, including public consultations in the
affected communities
- The Bt talong project is not covered by the Philippine Environmental Impact Statement
Law
- There is a plethora of scientific works and literature, peer-reviewed, on the safety of Bt
talong for human consumption
- Allegations regarding the safety of Bt talong are irrelevant in the field trial stage as
none of the eggplants will be consumed by humans or animals
- There is a non-observance of the rule on hierarchy of courts
- Greenpeace, et.al. have no legal standing as they do not stand to suffer any direct
injury as a result of the Bt talong field tests
- The precautionary principle does not apply since the field testing is only a part of a
continuing study to ensure that the field trials have no significant and negative impact on the
environment
SC, in a Resolution dated 10 July 2012, referred the case to the Court of Appeals.
On 12 September 2012, the parties submitted the following procedural issues before
the CA: (1) whether Greenpeace, et.al. has legal standing to file the petition for writ of
kalikasan; (2) whether the petition has been rendered moot and academic by the alleged
termination of the Bt talong field testing; and (3) whether the case presented a justiciable
controversy
CA, in a Resolution dated 12 October 2012, resolved that: (1) the Greenpeace, et.al.
possess legal standing; (2) the case is not yet moot since it is capable of repetition yet
evading review; and (3) the alleged non-compliance with environmental and local government
laws present justiciable controversies for resolution by the court.
On 17 May 2013, CA rendered a decision in favor of the Greenpeace, et.al. finding that
the precautionary principle set forth in Section 1, Rule 20 of the Rules of Procedure for
Environmental Cases (the Rules) finds relevance in the case.
CA rejected the Motions for Reconsideration filed by ISAAA, EMB/BPI/FPA, UPLB and
UPLBFI rejecting the argument that CA violated UPLBs right to academic freedom. The writ
stops the field trials of Bt talong as a procedure, it does not stop Bt talong research. Thus,
there is no assault on academic freedom.
 CA further justified its ruling by expounding on the theory that introducing a genetically
modified plant into our ecosystem is an ecologically imbalancing act.
Before the SC is a consolidated petition of ISAAAI, EMB/BPI/FPA, UPLB and UPLBFI to
reverse the CA decision permanently enjoining the conduct of field trials for Genetically
Modified eggplants.

ISSUES

1. WON Greenpeace, et.al. has a legal standing

2. WON the case is moot and academic
3. WON there is a violation of the doctrines of primary jurisdiction and exhaustion of
administrative remedies
4. WON the law on environmental impact statement/assessment applies on projects
involving the introduction and propagation of GMOs in the country
5. WON there is neglect or unlawful omission committed by the public respondents in the
processing and evaluation of the applications for Bt talong field testing
6. WON the Precautionary Principle applies

RULING

1. Yes. The liberalized rule on standing is now enshrined in the Rules of Procedure for
Environmental Cases which allows the filing of a citizen suit in environmental cases. The
provision on citizen suits in the Rules collapses the tradional rule on personal and direct
interest, on the principle that humans are stewards of nature, and aims to further encourage
the protection of the environment.

2. No. The case falls under the capable of repetition yet evading review exception to the
mootness principle, the human and environmental health hazards posed by the introduction of
a genetically modified plant which is a very popular staple vegetable among Filipinos is an
issue of paramount public interest.

3. No. The provisions of DAO 2002-08 do not provide a speedy or adequate remedy for the
respondents to determine the questions of unique national and local importance raised in this
case that pertain to laws and rules for environmental protection, thus Greenpeace, et.al. is
justified in coming to the Supreme Court.

4. Yes. EO 514 mandates that concerned departments and agencies, most particularly
petitioners DENR-EMB, BPI and FPA, to make a determination whether the EIS system should
apply to the release of GMOs into the environment and issue joint guidelines on the matter.

The Philippine EIS System (PEISS) is concerned primarily with assessing the direct and indirect
impacts of a project on the biophysical and human environment and ensuring that these
impacts are addressed by appropriate environmental protection and enhancement measures.
It aids proponents in incorporating environmental considerations in planning their projects as
well as in determining the environments impact on their project. There are six stages in the
regular EIA process. The proponent initiates the first three stages while EMB takes the lead in
the last three stages. Public participation is enlisted in most stages.

Even without the issuance of EO 514, GMO field testing should have at least been considered
for EIA under existing regulations of EMB on new and emerging technologies, to wit:
g) Group V (Unclassified Projects): These are the projects not listed in any of the groups,
e.g. projects using new processes/technologies with uncertain impacts. This is an interim
category unclassified projects will eventually be classified into their appropriate groups after
EMB evaluation. (Emphasis supplied)

All government agencies as well as private corporations, firms and entities who intend to
undertake activities or projects which will affect the quality of environment are required to
prepare a detailed Environmental Impact Statement (EIS) prior to undertaking such
development activity.

An environmentally critical project (ECP) is considered by the EMB as likely to have significant
adverse impact that may be sensitive, irreversible and diverse and which include activities
that have significant environmental consequences.

In this context, and given the overwhelming scientific attention worldwide on the potential
hazards of GMOs to human health and the environment, their release into the environment
through field testing would definitely fall under the category of ECP.

5. Yes. It must be stressed that DAO 2002-08 and related DA order are not the only legal
bases for regulating field trials of GM plants and plant products. EO 514 clearly provides that
the NBF applies to the development, adoption and implementation of all biosafety policies,
measures and guidelines and in making biosafety decisions concerning the research,
development, handling and use, transboundary movement, release into the environment and
management of regulated articles.

The NBF requires the use of precaution, as provided in Section 2.6 which reads:

2.6. Using Precaution. In accordance with Principle 15 of the Rio Declaration of 1992 and the
relevant provisions of the Cartagena Protocol on Biosafety, in particular Article 1, 10 (par. 6)
and 11 (par. 8), the precautionary approach shall guide biosafety decisions. The principles and
elements of this approach are hereby implemented through the decision-making system in the
NBF.

It likewise contains general principles and minimum guidelines that the concerned agencies
are expected to follow and which their respective rules and regulations must conform with. In
cases of conflict in applying the principles, the principle of protecting the public interest and
welfare shall always prevail, and no provision of the NBF shall be construed as to limit the
legal authority and mandate of heads of departments and agencies to consider the national
interest and public welfare in making biosafety decisions.

Notably, Section 7 of NBF mandates a more transparent, meaningful and participatory public
consultation on the conduct of field trials beyond the posting and publication of notices and
information sheets, consultations with some residents and government officials, and
submission of written comments, provided in DAO 2002-08.
The Supreme Court found that ISAAAI, et.al. simply adhered to the procedures laid down by
DAO 2002-08 and no real effort was made to operationalize the principles of NBF in the
conduct of field testing of Bt talong. Said failure means that the DA lacks mechanisms to
mandate applicants to comply with international biosafety protocols. For these reasons, the
DAO 2002-08 should be declared invalid.

Parenthetically, during the hearing at the CA, Atty. Segui of the EMB was evasive in answering
the questions on whether his office undertook the necessary evaluation on the possible
environmental impact of Bt talong field trials and the release of GMOs into the environment in
general. While he initially cited lack of budget and competence as reasons for their inaction,
he later said that an amendment of the law should be made since projects involving GMOS are
not covered by Proclamation No. 2146, entitled Proclaiming Certain Areas and Types of
Projects as Environmentally Critical and Within the Scope of the Environmental Impact
Statement System Established Under Presidential Decree No. 1586.

The Supreme Court took the above as an indication of the DENR-EMBs lack of serious
attention to their mandate under EO 514 to ensure that environmental assessments are done
and impacts identified in biosafety decisions.

Section 6 of EO 514 likewise directed the DOST, DENR, DA and DOH to ensure the allocation of
funds for the implementation of the NBF as it was intended to be a multi-disciplinary effort
involving the different government departments and agencies.

The petitioners government agencies clearly failed to fulfil their mandates in the
implementation of the NBF.

6. Yes. The precautionary principle originated in Germany in the 1960s, expressing the
normative idea that governments are obliged to foresee and forestall harm to the
environment. The Rules incorporated the principle in Part V, Rule 20, which states:

SEC.1. Applicability. When there is a lack of full scientific certainty in establishing a causal
link between human activity and environmental effect, the court shall apply the precautionary
principle in resolving the case before it.

The constitutional right of the people to a balanced and healthful ecology shall be given the
benefit of the doubt.

SEC 2. Standards for application. In applying the precautionary principle, the following
factors, among others, may be considered: (1) threats to human life or health; (2) inequity to
present or future generations; or (3) prejudice to the environment without legal consideration
of the environmental rights of those affected.

When the features of uncertainty, possibility of irreversible harm, and possibility of serious
harm coincide, the case for the precautionary principle is strongest. The Supreme Court found
all three (3) conditions present.

While the goal of increasing crop yields to raise farm incomes is laudable, independent
scientific studies revealed uncertainties due to unfulfilled economic benefits from Bt crops and
plants, adverse effects on the environment associated with the use of GE technology in
agriculture, and serious health hazards from consumption of GM foods. For a biodiversity-rich
country like the Philippines, the natural and unforeseen consequences of contamination and
genetic pollution would be disastrous and irreversible.

Alongside the aforesaid uncertainties, the non-implementation of the NBF in the crucial stages
of risk assessment and public consultation, including the determination of the applicability of
the EIS requirements to the GMO field testing, are compelling reasons for the application of
the precautionary principle.

There exists a preponderance of evidence that the release of the GMOs into the environment
threatens to damage our ecosystems and not just the field trial sites, and eventually the
health of our people once the Bt eggplants are consumed as food.

Adopting the precautionary approach, the Supreme Court ruled that the principles of the NBF
need to be operationalized first by the coordinated actions of the concerned departments and
agencies before allowing the release into the environment of genetically modified eggplant.
Further, the precautionary approach entailed inputs from stakeholders, including marginalized
famers, not just the scientific community. This proceeds from the realization that acceptance
of uncertainty is not only a scientific issue, but is related to public policy and involves an
ethical dimension.

DISPOSITIVE PORTION

1. The conduct of Bt talong field testing is permanently enjoined.

2. DAO 2002-08 is declared null and void.
3. Any application for contained use, field testing, propagation and commercialization, and
importation of GMOs is temporarily enjoined until a new administrative order is promulgated
in accordance with law.

---