Republic of the Philippines

SUPREME COURT
Manila

Article II, Section 15(c) of R.A. No. 7653 provides:

Section 15. Exercise of Authority - In the exercise of its
authority, the Monetary Board shall:

EN BANC
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G.R. No. 148208

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December 15, 2004

CENTRAL BANK (now Bangko Sentral ng Pilipinas)

EMPLOYEES ASSOCIATION, INC., petitioner,
vs.
BANGKO SENTRAL NG PILIPINAS and the EXECUTIVE
SECRETARY, respondents.
DECISION
PUNO, J.:
Can a provision of law, initially valid,
become subsequently unconstitutional, on the ground that
its continuedoperation would violate the equal protection of
the law? We hold that with the passage of the subsequent
laws amending the charter of seven (7) other governmental
financial institutions (GFIs), the continued operation of the
last proviso of Section 15(c), Article II of Republic Act (R.A.)
No. 7653, constitutes invidious discrimination on the2,994
rank-and-file employees of the Bangko Sentral ng
Pilipinas (BSP).
I.
The Case
First the facts.
On July 3, 1993, R.A. No. 7653 (the New Central Bank Act)
took effect. It abolished the old Central Bank of the
Philippines, and created a new BSP.
On June 8, 2001, almost eight years after the effectivity of
R.A. No. 7653, petitioner Central Bank (now BSP)
Employees Association, Inc., filed a petition for prohibition
against BSP and the Executive Secretary of the Office of the
President, to restrain respondents from further implementing
the last proviso in Section 15(c), Article II of R.A. No. 7653,
on the ground that it is unconstitutional.

(c) establish a human resource management system

which shall govern the selection, hiring, appointment,
transfer, promotion, or dismissal of all personnel. Such
system shall aim to establish professionalism and
excellence at all levels of the Bangko Sentral in
accordance with sound principles of management.
A compensation structure, based on job evaluation
studies and wage surveys and subject to the Board's
approval, shall be instituted as an integral component of
the Bangko Sentral's human resource development
program: Provided, That the Monetary Board shall
make its own system conform as closely as possible
with the principles provided for under Republic Act No.
6758 [Salary Standardization Act].Provided, however,
That compensation and wage structure of
employees whose positions fall under salary grade
19 and below shall be in accordance with the rates
prescribed under Republic Act No. 6758. [emphasis
supplied]
The thrust of petitioner's challenge is that the
above proviso makes an unconstitutional cut between two
classes of employees in the BSP, viz: (1) the BSP officers or
those exempted from the coverage of the Salary
Standardization Law (SSL) (exempt class); and (2) the rankand-file (Salary Grade [SG] 19 and below), or those not
exempted from the coverage of the SSL (non-exempt class). It
is contended that this classification is "a classic case of class
legislation," allegedly not based on substantial distinctions
which make real differences, but solely on the SG of the BSP
personnel's position. Petitioner also claims that it is not germane
to the purposes of Section 15(c), Article II of R.A. No. 7653, the
most important of which is to establish professionalism and
excellence at all levels in the BSP.1 Petitioner offers the
following sub-set of arguments:

amended versions of House Bill No. 7037, nor in the original

version of Senate Bill No. 1235; 2
b. subjecting the compensation of the BSP rank-and-file
employees to the rate prescribed by the SSL actually defeats
the purpose of the law3 of establishing professionalism and
excellence at all levels in the BSP; 4 (emphasis supplied)
c. the assailed proviso was the product of amendments
introduced during the deliberation of Senate Bill No. 1235,
without showing its relevance to the objectives of the law, and
even admitted by one senator as discriminatory against lowsalaried employees of the BSP;5
d. GSIS, LBP, DBP and SSS personnel are all exempted from
the coverage of the SSL; thus within the class of rank-and-file
personnel of government financial institutions (GFIs), the BSP
rank-and-file are also discriminated upon;6 and
e. the assailed proviso has caused the demoralization among
the BSP rank-and-file and resulted in the gross disparity
between their compensation and that of the BSP officers'. 7
In sum, petitioner posits that the classification is not reasonable but
arbitrary and capricious, and violates the equal protection clause of the
Constitution.8 Petitioner also stresses: (a) that R.A. No. 7653 has a
separability clause, which will allow the declaration of the
unconstitutionality of the proviso in question without affecting the other
provisions; and (b) the urgency and propriety of the petition, as
some 2,994 BSP rank-and-file employeeshave been prejudiced
since 1994 when the proviso was implemented. Petitioner concludes
that: (1) since the inequitable proviso has no force and effect of law,
respondents' implementation of such amounts to lack of jurisdiction;
and (2) it has no appeal nor any other plain, speedy and adequate
remedy in the ordinary course except through this petition for
prohibition, which this Court should take cognizance of, considering
the transcendental importance of the legal issue involved. 9

Respondent BSP, in its comment,10 contends that the provision does

not violate the equal protection clause and can stand the constitutional
test, provided it is construed in harmony with other provisions of the
same law, such as "fiscal and administrative autonomy of BSP," and
the mandate of the Monetary Board to "establish professionalism and
excellence at all levels in accordance with sound principles of
a. the legislative history of R.A. No. 7653 shows that the management."
questioned proviso does not appear in the original and

The Solicitor General, on behalf of respondent Executive

Secretary, also defends the validity of the provision. Quite
simplistically, he argues that the classification is based on
actual and real differentiation, even as it adheres to the
enunciated policy of R.A. No. 7653 to establish
professionalism and excellence within the BSP subject to
prevailing laws and policies of the national government. 11
II.
Issue
Thus, the sole - albeit significant - issue to be resolved in
this case is whether the last paragraph of Section 15(c),
Article II of R.A. No. 7653, runs afoul of the constitutional
mandate that "No person shall be. . . denied the equal
protection of the laws."12
III.
Ruling
A. UNDER THE PRESENT STANDARDS OF EQUAL
PROTECTION,
SECTION 15(c), ARTICLE II OF R.A. NO. 7653 IS VALID.
Jurisprudential standards for equal protection challenges
indubitably show that the classification created by the
questioned proviso, on its face and in its operation, bears no
constitutional infirmities.
It is settled in constitutional law that the "equal protection"
clause does not prevent the Legislature from establishing
classes of individuals or objects upon which different rules
shall operate - so long as the classification is not
unreasonable. As held in Victoriano v. Elizalde Rope
Workers' Union,13 and reiterated in a long line of cases:14

such, but on persons according to the circumstances

surrounding them. It guarantees equality, not identity of
rights. The Constitution does not require that things
which are different in fact be treated in law as though
they were the same. The equal protection clause does
not forbid discrimination as to things that are different. It
does not prohibit legislation which is limited either in the
object to which it is directed or by the territory within
which it is to operate.
The equal protection of the laws clause of the
Constitution allows classification. Classification in law,
as in the other departments of knowledge or practice, is
the grouping of things in speculation or practice
because they agree with one another in certain
particulars. A law is not invalid because of simple
inequality. The very idea of classification is that of
inequality, so that it goes without saying that the mere
fact of inequality in no manner determines the matter of
constitutionality. All that is required of a valid
classification is that it be reasonable, which means that
the classification should be based on substantial
distinctions which make for real differences, that it must
be germane to the purpose of the law; that it must not
be limited to existing conditions only; and that it must
apply equally to each member of the class. This Court
has held that the standard is satisfied if the
classification or distinction is based on a reasonable
foundation or rational basis and is not palpably arbitrary.
In the exercise of its power to make classifications for
the purpose of enacting laws over matters within its
jurisdiction, the state is recognized as enjoying a wide
range of discretion. It is not necessary that the
classification be based on scientific or marked
differences of things or in their relation. Neither is it
necessary that the classification be made with
mathematical nicety. Hence, legislative classification
may in many cases properly rest on narrow distinctions,
for the equal protection guaranty does not preclude the
legislature from recognizing degrees of evil or harm,
and legislation is addressed to evils as they may
appear. (citations omitted)

The guaranty of equal protection of the laws is not a

guaranty of equality in the application of the laws
upon all citizens of the state. It is not, therefore, a
requirement, in order to avoid the constitutional
prohibition against inequality, that every man,
Congress is allowed a wide leeway in providing for a valid
woman and child should be affected alike by a
classification.15 The equal protection clause is not infringed by
statute. Equality of operation of statutes does not
mean indiscriminate operation on persons merely as legislation which applies only to those persons falling within a

specified class.16 If the groupings are characterized by substantial

distinctions that make real differences, one class may be treated and
regulated differently from another.17 The classification must also be
germane to the purpose of the law and must apply to all those
belonging to the same class.18
In the case at bar, it is clear in the legislative deliberations that the
exemption of officers (SG 20 and above) from the SSL was intended to
address the BSP's lack of competitiveness in terms of attracting
competent officers and executives. It was not intended to discriminate
against the rank-and-file. If the end-result did in fact lead to a disparity
of treatment between the officers and the rank-and-file in terms of
salaries and benefits, the discrimination or distinction has a rational
basis and is not palpably, purely, and entirely arbitrary in the legislative
sense. 19
That the provision was a product of amendments introduced during the
deliberation of the Senate Bill does not detract from its validity. As
early as 1947 and reiterated in subsequent cases,20 this Court has
subscribed to the conclusiveness of an enrolled bill to refuse
invalidating a provision of law, on the ground that the bill from which it
originated contained no such provision and was merely inserted by the
bicameral conference committee of both Houses.
Moreover, it is a fundamental and familiar teaching that all reasonable
doubts should be resolved in favor of the constitutionality of a
statute.21 An act of the legislature, approved by the executive, is
presumed to be within constitutional limitations.22 To justify the
nullification of a law, there must be a clear and unequivocal breach of
the Constitution, not a doubtful and equivocal breach. 23
B. THE ENACTMENT, HOWEVER, OF SUBSEQUENT LAWS EXEMPTING ALL OTHER RANK-AND-FILE EMPLOYEES
OF GFIs FROM THE SSL - RENDERS THE CONTINUED
APPLICATION OF THE CHALLENGED PROVISION
A VIOLATION OF THE EQUAL PROTECTION CLAUSE.
While R.A. No. 7653 started as a valid measure well within the
legislature's power, we hold that the enactment of subsequent laws
exempting all rank-and-file employees of other GFIs leeched all
validity out of the challenged proviso.
1. The concept of relative constitutionality.
The constitutionality of a statute cannot, in every instance, be
determined by a mere comparison of its provisions with applicable

provisions of the Constitution, since the statute may be

that the continued enforcement of the otherwise valid law
constitutionally valid as applied to one set of facts and invalid would be unreasonable and oppressive. It noted
in its application to another.24
the subsequent changes in the country's business, industry
and agriculture. Thus, the law was set aside because its
A statute valid at one time may become void at another time continued operation would be grossly discriminatory and lead to
31
because of altered circumstances.25 Thus, if a statute in its the oppression of the creditors. The landmark ruling states:
practical operation becomes arbitrary or confiscatory, its
validity, even though affirmed by a former adjudication, is
The question now to be determined is, is the period
open to inquiry and investigation in the light of changed
of eight (8) years which Republic Act No. 342 grants to
conditions.26
debtors of a monetary obligation contracted before the
last global war and who is a war sufferer with a claim
duly approved by the Philippine War Damage
Demonstrative of this doctrine is Vernon Park Realty v. City
Commission reasonable under the present
of Mount Vernon,27 where the Court of Appeals of New York
circumstances?
declared as unreasonable and arbitrary a zoning ordinance
which placed the plaintiff's property in a residential district,
although it was located in the center of a business area.
It should be noted that Republic Act No. 342 only
Later amendments to the ordinance then prohibited the use
extends relief to debtors of prewar obligations who
of the property except for parking and storage of
suffered from the ravages of the last war and who filed
automobiles, and service station within a parking area. The
a claim for their losses with the Philippine War Damage
Court found the ordinance to constitute an invasion of
Commission. It is therein provided that said obligation
property rights which was contrary to constitutional due
shall not be due and demandable for a period of eight
process. It ruled:
(8) years from and after settlement of the claim filed by
the debtor with said Commission. The purpose of the
law is to afford to prewar debtors an opportunity to
While the common council has the unquestioned
rehabilitate themselves by giving them a reasonable
right to enact zoning laws respecting the use of
time within which to pay their prewar debts so as to
property in accordance with a well-considered and
prevent them from being victimized by their creditors.
comprehensive plan designed to promote public
While it is admitted in said law that since liberation
health, safety and general welfare, such power is
conditions have gradually returned to normal, this is not
subject to the constitutional limitation that it may not
so with regard to those who have suffered the ravages
be exerted arbitrarily or unreasonably and this is so
of war and so it was therein declared as a policy that as
whenever the zoning ordinance precludes the use of
to them the debt moratorium should be continued in
the property for any purpose for which it is
force (Section 1).
reasonably adapted. By the same token, an
ordinance valid when adopted will nevertheless
be stricken down as invalid when, at a later time,
But we should not lose sight of the fact that these
its operation under changed conditions proves
obligations had been pending since 1945 as a result of
confiscatory such, for instance, as when the
the issuance of Executive Orders Nos. 25 and 32 and at
greater part of its value is destroyed, for which the
present their enforcement is still inhibited because of
courts will afford relief in an appropriate
the enactment of Republic Act No. 342 and would
case.28 (citations omitted, emphasis supplied)
continue to be unenforceable during the eight-year
period granted to prewar debtors to afford them an
opportunity to rehabilitate themselves, which in plain
In the Philippine setting, this Court declared the continued
language means that the creditors would have to
enforcement of a valid law as unconstitutional as a
observe a vigil of at least twelve (12) years before they
consequence of significant changes in circumstances.
29
could effect a liquidation of their investment dating as
Rutter v. Esteban upheld the constitutionality of the
far back as 1941. his period seems to us unreasonable,
moratorium law - its enactment and operation being a valid
if not oppressive. While the purpose of Congress is
exercise by the State of its police power30 - but also ruled

plausible, and should be commended, the relief accorded

works injustice to creditors who are practically left at the mercy
of the debtors. Their hope to effect collection becomes
extremely remote, more so if the credits are unsecured. And
the injustice is more patent when, under the law, the debtor is
not even required to pay interest during the operation of the
relief, unlike similar statutes in the United States.
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In the face of the foregoing observations, and consistent with

what we believe to be as the only course dictated by justice,
fairness and righteousness, we feel that the only way open to
us under the present circumstances is to declare that the
continued operation and enforcement of Republic Act No.
342 at the present time is unreasonable and oppressive,
and should not be prolonged a minute longer, and,
therefore, the same should be declared null and void and
without effect. (emphasis supplied, citations omitted)
2. Applicability of the equal protection clause.
In the realm of equal protection, the U.S. case of Atlantic Coast
Line R. Co. v. Ivey32 is illuminating. The Supreme Court of Florida
ruled against the continued application of statutes authorizing the
recovery of double damages plus attorney's fees against railroad
companies, for animals killed on unfenced railroad right of way without
proof of negligence. Competitive motor carriers, though creating
greater hazards, were not subjected to similar liability because they
were not yet in existence when the statutes were enacted. The Court
ruled that the statutes became invalid as denying "equal protection of
the law," in view of changed conditions since their enactment.
In another U.S. case, Louisville & N.R. Co. v. Faulkner,33 the Court of
Appeals of Kentucky declared unconstitutional a provision of a statute
which imposed a duty upon a railroad company of proving that it was
free from negligence in the killing or injury of cattle by its engine or
cars. This, notwithstanding that the constitutionality of the
statute, enacted in 1893, had been previously sustained. Ruled the
Court:
The constitutionality of such legislation was sustained
because it applied to all similar corporations and had for its
object the safety of persons on a train and the protection of
property. Of course, there were no automobiles in those
days. The subsequent inauguration and development of
transportation by motor vehicles on the public highways by

common carriers of freight and passengers created

even greater risks to the safety of occupants of the
vehicles and of danger of injury and death of
domestic animals. Yet, under the law the operators
of that mode of competitive transportation are not
subject to the same extraordinary legal responsibility
for killing such animals on the public roads as are
railroad companies for killing them on their private
rights of way.
The Supreme Court, speaking through Justice
Brandeis in Nashville, C. & St. L. Ry. Co. v. Walters,
294 U.S. 405, 55 S.Ct. 486, 488, 79 L.Ed. 949,
stated, "A statute valid when enacted may
become invalid by change in the conditions to
which it is applied. The police power is subject to
the constitutional limitation that it may not be exerted
arbitrarily or unreasonably." A number of prior
opinions of that court are cited in support of the
statement. The State of Florida for many years had a
statute, F.S.A. 356.01 et seq. imposing
extraordinary and special duties upon railroad
companies, among which was that a railroad
company was liable for double damages and an
attorney's fee for killing livestock by a train without
the owner having to prove any act of negligence on
the part of the carrier in the operation of its train. In
Atlantic Coast Line Railroad Co. v. Ivey, it was held
that the changed conditions brought about by motor
vehicle transportation rendered the statute
unconstitutional since if a common carrier by motor
vehicle had killed the same animal, the owner would
have been required to prove negligence in the
operation of its equipment. Said the court, "This
certainly is not equal protection of the
law."34 (emphasis supplied)
Echoes of these rulings resonate in our case law, viz:
[C]ourts are not confined to the language of the
statute under challenge in determining whether that
statute has any discriminatory effect. A statute
nondiscriminatory on its face may be grossly
discriminatory in its operation. Though the law
itself be fair on its face and impartial in appearance,
yet, if it is applied and administered by public
authority with an evil eye and unequal hand, so as

practically to make unjust and illegal discriminations

between persons in similar circumstances, material to
their rights, the denial of equal justice is still within the
prohibition of the Constitution.35 (emphasis supplied,
citations omitted)

5. R.A. No. 8523 (1998) for Development Bank of the

Philippines (DBP);

[W]e see no difference between a law which denies

equal protection and a law which permits of such
denial. A law may appear to be fair on its face and
impartial in appearance, yet, if it permits of unjust and
illegal discrimination, it is within the constitutional
prohibition.. In other words, statutes may be adjudged
unconstitutional because of their effect in operation. If
a law has the effect of denying the equal protection of
the law it is unconstitutional. .36 (emphasis supplied,
citations omitted

7. R.A. No. 9302 (2004) for Philippine Deposit Insurance

Corporation (PDIC).

3. Enactment of R.A. Nos. 7907 + 8282 + 8289 + 8291 + 8523

+ 8763
+ 9302 = consequential unconstitutionality of
challenged proviso.
According to petitioner, the last proviso of Section 15(c), Article
II of R.A. No. 7653 is also violative of the equal protection
clause because after it was enacted, the charters of the GSIS,
LBP, DBP and SSS were also amended, but the personnel of
the latter GFIs were all exempted from the coverage of the
SSL.37 Thus, within the class of rank-and-file personnel of GFIs,
the BSP rank-and-file are also discriminated upon.
Indeed, we take judicial notice that after the new BSP charter
was enacted in 1993, Congress also undertook the amendment
of the charters of the GSIS, LBP, DBP and SSS, and three other
GFIs, from 1995 to 2004, viz:
1. R.A. No. 7907 (1995) for Land Bank of the
Philippines (LBP);
2. R.A. No. 8282 (1997) for Social Security System
(SSS);
3. R.A. No. 8289 (1997) for Small Business Guarantee
and Finance Corporation, (SBGFC);
4. R.A. No. 8291 (1997) for Government Service
Insurance System (GSIS);

6. R.A. No. 8763 (2000) for Home Guaranty Corporation

(HGC);38 and

It is noteworthy, as petitioner points out, that the subsequent

charters of the seven other GFIs share this common proviso: a
blanket exemption of all their employees from the coverage of the
SSL, expressly or impliedly, as illustrated below:
1. LBP (R.A. No. 7907)
Section 10. Section 90 of [R.A. No. 3844] is hereby amended
to read as follows:
Section 90. Personnel. xxx

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xxx

All positions in the Bank shall be governed by a

compensation, position classification system and qualification
standards approved by the Bank's Board of Directors based
on a comprehensive job analysis and audit of actual duties
and responsibilities. The compensation plan shall be
comparable with the prevailing compensation plans in the
private sector and shall be subject to periodic review by the
Board no more than once every two (2) years without
prejudice to yearly merit reviews or increases based on
productivity and profitability. The Bank shall therefore be
exempt from existing laws, rules and regulations on
compensation, position classification and qualification
standards. It shall however endeavor to make its system
conform as closely as possible with the principles under
Republic Act No. 6758. (emphasis supplied)
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2. SSS (R.A. No. 8282)

Section 1. [Amending R.A. No. 1161, Section 3(c)]:

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(c)The Commission, upon the recommendation of

the SSS President, shall appoint an actuary and
such other personnel as may [be] deemed
necessary; fix their reasonable compensation,
allowances and other benefits; prescribe their duties
and establish such methods and procedures as may
be necessary to insure the efficient, honest and
economical administration of the provisions and
purposes of this Act: Provided, however, That the
personnel of the SSS below the rank of Vice
President shall be appointed by the SSS
President: Provided, further, That the personnel
appointed by the SSS President, except those below
the rank of assistant manager, shall be subject to the
confirmation by the Commission; Provided further,
That the personnel of the SSS shall be selected only
from civil service eligibles and be subject to civil
service rules and regulations: Provided, finally, That
the SSS shall be exempt from the provisions of
Republic Act No. 6758 and Republic Act No.
7430. (emphasis supplied)
3. SBGFC (R.A. No. 8289)

4. GSIS (R.A. No. 8291)

Section 1. [Amending Section 43(d)].
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xxx

The Small Business Guarantee and Finance

Corporation shall:
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xxx

(e) notwithstanding the provisions of Republic

Act No. 6758, and Compensation Circular No. 10,
series of 1989 issued by the Department of Budget
and Management, the Board of Directors of
SBGFC shall have the authority to extend to the
employees and personnel thereof the allowance
and fringe benefits similar to those extended to
and currently enjoyed by the employees and
personnel of other government financial
institutions. (emphases supplied)

xxx

Sec. 43. Powers and Functions of the Board of

Trustees. - The Board of Trustees shall have the
following powers and functions:
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xxx

(d) upon the recommendation of the President and

General Manager, to approve the GSIS' organizational
and administrative structures and staffing pattern, and
to establish, fix, review, revise and adjust the
appropriate compensation package for the officers and
employees of the GSIS with reasonable allowances,
incentives, bonuses, privileges and other benefits as
may be necessary or proper for the effective
management, operation and administration of the GSIS,
which shall be exempt from Republic Act No. 6758,
otherwise known as the Salary Standardization Law
and Republic Act No. 7430, otherwise known as the
Attrition Law. (emphasis supplied)

Section 8. [Amending R.A. No. 6977, Section 11]:

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5. DBP (R.A. No. 8523)

Section 6. [Amending E.O. No. 81, Section 13]:

based on the Bank's productivity and profitability. The Bank

shall, therefore, be exempt from existing laws, rules, and
regulations on compensation, position classification and
qualification standards. The Bank shall however,
endeavor to make its system conform as closely as
possible with the principles under Compensation and
Position Classification Act of 1989 (Republic Act No. 6758,
as amended). (emphasis supplied)
6. HGC (R.A. No. 8763)
Section 9. Powers, Functions and Duties of the Board of Directors. The Board shall have the following powers, functions and duties:
xxx

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(e) To create offices or positions necessary for the efficient

management, operation and administration of the
Corporation: Provided, That all positions in the Home
Guaranty Corporation (HGC) shall be governed by a
compensation and position classification system and
qualifications standards approved by the Corporation's Board
of Directors based on a comprehensive job analysis and audit
of actual duties and responsibilities: Provided, further, That
the compensation plan shall be comparable with the
prevailing compensation plans in the private sector and
which shall be exempt from Republic Act No. 6758,
otherwise known as the Salary Standardization Law, and
from other laws, rules and regulations on salaries and
compensations; and to establish a Provident Fund and
determine the Corporation's and the employee's contributions
to the Fund; (emphasis supplied)

Section 13. Other Officers and Employees. - The Board

xxx
xxx
xxx
of Directors shall provide for an organization and staff of
officers and employees of the Bank and upon
7. PDIC (R.A. No. 9302)
recommendation of the President of the Bank, fix their
remunerations and other emoluments. All positions in
Section 2. Section 2 of [Republic Act No. 3591, as amended] is hereby
the Bank shall be governed by the compensation,
further amended to read:
position classification system and qualification
standards approved by the Board of Directors based on
xxx
xxx
xxx
a comprehensive job analysis of actual duties and
responsibilities. The compensation plan shall be
comparable with the prevailing compensation plans in
3.
the private sector and shall be subject to periodic
review by the Board of Directors once every two (2)
xxx
xxx
xxx
years, without prejudice to yearly merit or increases

A compensation structure, based on job evaluation

studies and wage surveys and subject to the Board's
approval, shall be instituted as an integral
component of the Corporation's human resource
development program: Provided, That all positions in
the Corporation shall be governed by a
compensation, position classification system and
qualification standards approved by the Board based
on a comprehensive job analysis and audit of actual
duties and responsibilities. The compensation plan
shall be comparable with the prevailing
compensation plans of other government
financial institutions and shall be subject to review
by the Board no more than once every two (2) years
without prejudice to yearly merit reviews or
increases based on productivity and profitability. The
Corporation shall therefore be exempt from
existing laws, rules and regulations on
compensation, position classification and
qualification standards. It shall however endeavor
to make its system conform as closely as possible
with the principles under Republic Act No. 6758, as
amended. (emphases supplied)

the passage of eight other laws - between the rank-and-file of

the BSP and the seven other GFIs. The classification must not
only be reasonable, but must also apply equally to all
members of the class. Theproviso may be fair on its face and
impartial in appearance but it cannot be grossly
discriminatory in its operation, so as practically to make
unjust distinctions between persons who are without
differences.40

similarly situated. It fails to appreciate that what is at issue in

the second level of scrutiny is not thedeclared policy of each
law per se, but the oppressive results of Congress' inconsistent
and unequal policy towards the BSP rank-and-file and those of the
seven other GFIs. At bottom, the second challenge to the
constitutionality of Section 15(c), Article II of Republic Act No. 7653 is
premised precisely on the irrational discriminatory policy
adopted by Congress in its treatment of persons similarly
situated. In the field of equal protection, the guarantee that "no person
shall be denied the equal protection of the laws" includes the
Stated differently, the second level of inquiry deals with the
following questions: Given that Congress chose to exempt other prohibition against enacting laws that allow invidious
discrimination, directly or indirectly. If a law has the effect of denying
GFIs (aside the BSP) from the coverage of the SSL, can the
the equal protection of the law, or permits such denial, it is
exclusion of the rank-and-file employees of the BSP stand
unconstitutional.41
constitutional scrutiny in the light of the fact that Congress did
not exclude the rank-and-file employees of the other GFIs? Is
Congress' power to classify so unbridled as to sanction unequal It is against this standard that the disparate treatment of the BSP rankand discriminatory treatment, simply because the inequity
and-file from the other GFIs cannot stand judicial scrutiny. For as
manifested itself, not instantly through a single overt act, but
regards the exemption from the coverage of the SSL, there exist no
gradually and progressively, through seven separate acts of
substantial distinctions so as to differentiate, the BSP rank-and-file
Congress? Is the right to equal protection of the law bounded in from the other rank-and-file of the seven GFIs. On the contrary, our
time and space that: (a) the right can only be invoked against a legal history shows that GFIs have long been recognized as
classification made directly and deliberately, as opposed to a
comprising one distinct class, separate from other governmental
discrimination that arises indirectly, or as a consequence of
entities.
several other acts; and (b) is the legal analysis confined to
Thus, eleven years after the amendment of the BSP
determining the validity within the parameters of the statute or
Before the SSL, Presidential Decree (P.D.) No. 985 (1976) declared it
charter, the rank-and-file of seven other GFIs were
ordinance (where the inclusion or exclusion is articulated),
as a State policy (1) to provide equal pay for substantially equal work,
granted the exemption that was specifically denied to
thereby proscribing any evaluation vis--vis the grouping, or the and (2) to base differences in pay upon substantive differences in
the rank-and-file of the BSP. And as if to add insult to
lack thereof, among several similar enactments made over a
duties and responsibilities, and qualification requirements of the
petitioner's injury, even the Securities and Exchange
period of time?
positions. P.D. No. 985 was passed to address disparities in pay
Commission (SEC) was granted the same blanket
among similar or comparable positions which had given rise to
exemption from the SSL in 2000!39
In this second level of scrutiny, the inequality of treatment
dissension among government employees. But even then, GFIs and
cannot be justified on the mere assertion that each exemption
government-owned and/or controlled corporations (GOCCs) were
The prior view on the constitutionality of R.A. No. 7653
(granted to the seven other GFIs) rests "on a policy
already identified as a distinct class among government
was confined to an evaluation of its classification
determination by the legislature." All legislative enactments
employees. Thus, Section 2 also provided, "[t]hat notwithstanding a
between the rank-and-file and the officers of the
necessarily rest on a policy determination - even those that standardized salary system established for all employees, additional
BSP, found reasonable because there were substantial
have been declared to contravene the Constitution. Verily, if this financial incentives may be established by government corporation
distinctions that made real differences between the two
could serve as a magic wand to sustain the validity of a statute, and financial institutions for their employees to be supported fully from
classes.
then no due process and equal protection challenges would
their corporate funds and for such technical positions as may be
ever prosper. There is nothing inherently sacrosanct in a policy approved by the President in critical government agencies." 42
determination made by Congress or by the Executive; it cannot
The above-mentioned subsequent enactments,
run riot and overrun the ramparts of protection of the
however, constitute significant changes in
The same favored treatment is made for the GFIs and the GOCCs
circumstance that considerably alter the reasonability of Constitution.
under the SSL. Section 3(b) provides that one of the principles
the continued operation of the last proviso of Section
governing the Compensation and Position Classification System of the
15(c), Article II of Republic Act No. 7653, thereby
In fine, the "policy determination" argument may support the
Government is that: "[b]asic compensation for all personnel in the
exposing the proviso to more serious scrutiny.This time, inequality of treatment between the rank-and-file and the
government and government-owned or controlled corporations and
the scrutiny relates to the constitutionality of the
officers of the BSP, but it cannot justify the inequality of
financial institutions shall generally be comparable with those in the
classification - albeit made indirectly as a consequence of
treatment between BSP rank-and-file and other GFIs' who are

private sector doing comparable work, and must be in

accordance with prevailing laws on minimum wages."

The Benchmark Position Schedule enumerates the position

titles that fall within Salary Grades 1 to 20.

the importance of their institution's mandate cannot stand any more

than an empty sack can stand.

Thus, the BSP and all other GFIs and GOCCs were under
the unified Compensation and Position Classification System
of the SSL,43 but rates of pay under the SSL were
determined on the basis of, among others, prevailing rates in
the private sector for comparable work. Notably, the
Compensation and Position Classification System was to be
governed by the following principles: (a) just and equitable
wages, with the ratio of compensation between pay
distinctions maintained at equitable levels; 44 and (b) basic
compensation generally comparable with the private sector,
in accordance with prevailing laws on minimum
wages.45 Also, the Department of Budget and Management
was directed to use, as guide for preparing the Index of
Occupational Services, the Benchmark Position Schedule,
and the following factors:46

Clearly, under R.A. No. 6758, the rank-and-file of all GFIs were
similarly situated in all aspects pertaining to compensation and
position classification, in consonance with Section 5, Article IX-B
of the 1997 Constitution.47

Second, it is certainly misleading to say that "the need for the scope of
exemption necessarily varies with the particular circumstances of each
institution." Nowhere in the deliberations is there a cogent basis for the
exclusion of the BSP rank-and-file from the exemption which was
granted to the rank-and-file of the other GFIs and the SEC. As point in
fact, the BSP and the seven GFIs are similarly situated in so far as
Congress deemed it necessary for these institutions to be exempted
from the SSL. True, the SSL-exemption of the BSP and the seven
GFIs was granted in the amended charters of each GFI, enacted
separately and over a period of time. But it bears emphasis that, while
each GFI has a mandate different and distinct from that of another, the
deliberations show that theraison d'tre of the SSL-exemption
was inextricably linked to and for the most part based on factors
common to the eight GFIs, i.e., (1) the pivotal role they play in the
economy; (2) the necessity of hiring and retaining qualified and
effective personnel to carry out the GFI's mandate; and (3) the
recognition that the compensation package of these GFIs is not
competitive, and fall substantially below industry standards.
Considering further that (a) the BSP was the first GFI granted SSL
exemption; and (b) the subsequent exemptions of other GFIs did not
distinguish between the officers and the rank-and-file; it is patent
that the classification made between the BSP rank-and-file and
those of the other seven GFIs was inadvertent, and NOT
intended, i.e., it was not based on any substantial distinction vis--vis
the particular circumstances of each GFI. Moreover, the exemption
granted to two GFIs makes express reference to allowance and fringe
benefits similar to those extended to and currently enjoyed by the
employees and personnel of other GFIs,52 underscoring that GFIs are
a particular class within the realm of government entities.

(1) the education and experience required to

perform the duties and responsibilities of the
positions;
(2) the nature and complexity of the work to be
performed;
(3) the kind of supervision received;
(4) mental and/or physical strain required in the
completion of the work;
(5) nature and extent of internal and external
relationships;

Then came the enactment of the amended charter of the

BSP, implicitly exempting the Monetary Board from the SSL by
giving it express authority to determine and institute its own
compensation and wage structure. However, employees whose
positions fall under SG 19 and below were specifically limited to
the rates prescribed under the SSL.
Subsequent amendments to the charters of other GFIs
followed. Significantly, each government financial institution
(GFI) was not only expressly authorized to determine and
institute its own compensation and wage structure, but also
explicitly exempted - without distinction as to salary grade
or position - all employees of the GFI from the SSL.
It has been proffered that legislative deliberations justify the
grant or withdrawal of exemption from the SSL, based on the
perceived need "to fulfill the mandate of the institution
concerned considering, among others, that: (1) the GOCC or
GFI is essentially proprietary in character; (2) the GOCC or GFI
is in direct competition with their [sic]counterparts in the private
sector, not only in terms of the provisions of goods or services,
but also in terms of hiring and retaining competent personnel;
and (3) the GOCC or GFI are or were [sic] experiencing
difficulties filling up plantilla positions with competent personnel
and/or retaining these personnel. The need for the scope of
exemption necessarily varies with the particular circumstances
of each institution, and the corresponding variance in the
benefits received by the employees is merely incidental."

It is precisely this unpremeditated discrepancy in treatment of the

rank-and-file of the BSP - made manifest and glaring with each and
every consequential grant of blanket exemption from the SSL to the
(6) kind of supervision exercised;
other GFIs - that cannot be rationalized or justified. Even more so,
when the SEC - which is not a GFI - was given leave to have a
(7) decision-making responsibility;
The fragility of this argument is manifest. First, the BSP is
compensation plan that "shall be comparable with the prevailing
the central monetary authority,48 and the banker of the
compensation plan in the [BSP] and other [GFIs]," 53 then granted a
(8) responsibility for accuracy of records and reports; government and all its political subdivisions.49 It has the sole
blanket exemption from the SSL, and its rank-and-file endowed a more
power and authority to issue currency;50provide policy directions preferred treatment than the rank-and-file of the BSP.
in the areas of money, banking, and credit; and supervise banks
(9) accountability for funds, properties and
and regulate finance companies and non-bank financial
equipment; and
The violation to the equal protection clause becomes even more
institutions performing quasi-banking functions, including
pronounced when we are faced with this undeniable truth: that if
51
the exempted GFIs. Hence, the argument that the rank-and(10) hardship, hazard and personal risk involved in
Congress had enacted a law for the sole purpose of exempting the
file employees of the seven GFIs were exempted because of
the job.
eight GFIs from the coverage of the SSL, the exclusion of the BSP

rank-and-file employees would have been devoid of any

Congress was acutely aware of the peculiar disabilities
substantial or material basis. It bears no moment, therefore,
caused by military service, in consequence of which
that the unlawful discrimination was not a direct result arising
military servicemen have a special need for
from one law. "Nemo potest facere per alium quod non
readjustment benefits55 (citations omitted)
potest facere per directum." No one is allowed to do
indirectly what he is prohibited to do directly.
In the case at bar, it is precisely the fact that as regards the
exemption from the SSL, there are no characteristics
It has also been proffered that "similarities alone are not
peculiar only to the seven GFIs or their rank-and-file so as
sufficient to support the conclusion that rank-and-file
to justify the exemption which BSP rank-and-file employees
employees of the BSP may be lumped together with similar
were denied (not to mention the anomaly of the SEC getting
employees of the other GOCCs for purposes of
one). The distinction made by the law is not only
compensation, position classification and qualification
superficial,56 but also arbitrary. It is not based on substantial
standards. The fact that certain persons have some
distinctions that make real differences between the BSP rankattributes in common does not automatically make them
and-file and the seven other GFIs.
members of the same class with respect to a legislative
classification." Cited is the ruling in Johnson v.
Moreover, the issue in this case is not - as the dissenting
Robinson:54 "this finding of similarity ignores that a common opinion of Mme. Justice Carpio-Morales would put it - whether
characteristic shared by beneficiaries and nonbeneficiaries
"being an employee of a GOCC or GFI is reasonable and
alike, is not sufficient to invalidate a statute when other
sufficient basis for exemption" from R.A. No. 6758. It is
characteristics peculiar to only one group rationally explain
Congress itself that distinguished the GFIs from other
the statute's different treatment of the two groups."
government agencies, not once but eight times, through the
enactment of R.A. Nos. 7653, 7907, 8282, 8289, 8291, 8523,
The reference to Johnson is inapropos. In Johnson, the US
8763, and 9302. These laws may have created a "preferred
Court sustained the validity of the classification as there
sub-class within government employees," but the present
were quantitative and qualitative distinctions, expressly challenge is not directed at the wisdom of these laws. Rather, it
recognized by Congress, which formed a rational basis is a legal conundrum involving the exercise of legislative power,
for the classification limiting educational benefits to military the validity of which must be measured not only by looking at
service veterans as a means of helping them readjust to
the specific exercise in and by itself (R.A. No. 7653), but also as
civilian life. The Court listed the peculiar characteristics as
to the legal effects brought about by seven separate exercises follows:
albeit indirectly and without intent.
First, the disruption caused by military service is
quantitatively greater than that caused by alternative
civilian service. A conscientious objector performing
alternative service is obligated to work for two years.
Service in the Armed Forces, on the other hand,
involves a six-year commitment

Thus, even if petitioner had not alleged "a comparable change

in the factual milieu as regards the compensation, position
classification and qualification standards of the employees of
the BSP (whether of the executive level or of the rank-and-file)
since the enactment of the new Central Bank Act" is of no
moment. In GSIS v. Montesclaros,57this Court resolved the issue
of constitutionality notwithstanding that claimant had manifested
that she was no longer interested in pursuing the case, and
xxx
xxx
xxx
even when the constitutionality of the said provision was not
Second, the disruptions suffered by military veterans squarely raised as an issue, because the issue involved not
only the claimant but also others similarly situated and whose
and alternative service performers are qualitatively
different. Military veterans suffer a far greater loss of claims GSIS would also deny based on the challenged proviso.
The Court held that social justice and public interest demanded
personal freedom during their service careers.
the resolution of the constitutionality of the proviso. And so it is
Uprooted from civilian life, the military veteran
with the challenged proviso in the case at bar.
becomes part of the military establishment, subject
to its discipline and potentially hazardous duty.

It bears stressing that the exemption from the SSL is

a "privilege" fully within the legislative prerogative to give or deny.
However, its subsequent grant to the rank-and-file of the seven other
GFIs and continued denial to the BSP rank-and-file employees
breached the latter's right to equal protection. In other words, while the
granting of a privilege per se is a matter of policy exclusively within the
domain and prerogative of Congress, the validity or legality of the
exercise of this prerogative is subject to judicial review.58 So when the
distinction made is superficial, and not based on substantial
distinctions that make real differences between those included and
excluded, it becomes a matter of arbitrariness that this Court has the
duty and the power to correct.59 As held in the United Kingdom case
of Hooper v. Secretary of State for Work and Pensions,60 once the
State has chosen to confer benefits, "discrimination" contrary to law
may occur where favorable treatment already afforded to one group is
refused to another, even though the State is under no obligation to
provide that favorable treatment. 61
The disparity of treatment between BSP rank-and-file and the rankand-file of the other seven GFIs definitely bears the unmistakable
badge of invidious discrimination - no one can, with candor and
fairness, deny the discriminatory character of the subsequent blanket
and total exemption of the seven other GFIs from the SSL when such
was withheld from the BSP. Alikes are being treated as unalikes
without any rational basis.
Again, it must be emphasized that the equal protection clause does
not demand absolute equality but it requires that all persons shall
be treated alike, under like circumstances and conditions both as
to privileges conferred and liabilities enforced. Favoritism and
undue preference cannot be allowed. For the principle is that equal
protection and security shall be given to every person under
circumstances which, if not identical, are analogous. If law be looked
upon in terms of burden or charges, those that fall within a class
should be treated in the same fashion; whatever restrictions cast on
some in the group is equally binding on the rest. 62
In light of the lack of real and substantial distinctions that would justify
the unequal treatment between the rank-and-file of BSP from the
seven other GFIs, it is clear that the enactment of the seven
subsequent charters has rendered the continued application of the
challenged proviso anathema to the equal protection of the law, and
the same should be declared as an outlaw.
IV.
Equal Protection Under International Lens

In our jurisdiction, the standard and analysis of equal

protection challenges in the main have followed the"rational
basis" test, coupled with a deferential attitude to legislative
classifications63 and a reluctance to invalidate a law unless
there is a showing of a clear and unequivocal breach of the
Constitution. 64
A. Equal Protection in the United States
In contrast, jurisprudence in the U.S. has gone beyond
the static "rational basis" test. Professor Gunther
highlights the development in equal protection jurisprudential
analysis, to wit: 65
Traditionally, equal protection supported only
minimal judicial intervention in most contexts.
Ordinarily, the command of equal protection was
only that government must not impose differences in
treatment "except upon some reasonable
differentiation fairly related to the object of
regulation." The old variety of equal protection
scrutiny focused solely on the means used by the
legislature: it insisted merely that the classification in
the statute reasonably relates to the legislative
purpose. Unlike substantive due process, equal
protection scrutiny was not typically concerned with
identifying "fundamental values" and restraining
legislative ends. And usually the rational
classification requirement was readily satisfied: the
courts did not demand a tight fit between
classification and purpose; perfect congruence
between means and ends was not required.
xxx

xxx

xxx

[From marginal intervention to major cutting

edge: The Warren Court's "new equal protection"
and the two-tier approach.]
From its traditional modest role, equal
protection burgeoned into a major intervention
tool during the Warren era, especially in the
1960s. The Warren Court did not abandon the
deferential ingredients of the old equal protection: in
most areas of economic and social legislation, the
demands imposed by equal protection remained as
minimal as everBut the Court launched an equal

protection revolution by finding large new areas for strict

rather than deferential scrutiny. A sharply
differentiated two-tier approachevolved by the late
1960s: in addition to the deferential "old" equal
protection, a "new" equal protection, connoting strict
scrutiny, arose. The intensive review associated with
the new equal protection imposed two demands - a
demand not only as to means but also one as to
ends. Legislation qualifying for strict scrutiny required a
far closer fit between classification and statutory
purpose than the rough and ready flexibility traditionally
tolerated by the old equal protection: means had to be
shown "necessary" to achieve statutory ends, not
merely "reasonably related" ones. Moreover, equal
protection became a source of ends scrutiny as well:
legislation in the areas of the new equal protection had
to be justified by "compelling" state interests, not merely
the wide spectrum of "legitimate" state ends.
The Warren Court identified the areas appropriate for
strict scrutiny by searching for two characteristics:
the presence of a "suspect" classification; or an impact
on "fundamental" rights or interests. In the category of
"suspect classifications," the Warren Court's major
contribution was to intensify the strict scrutiny in the
traditionally interventionist area of racial classifications.
But other cases also suggested that there might be
more other suspect categories as well: illegitimacy and
wealth for example. But it was the 'fundamental
interests" ingredient of the new equal protection that
proved particularly dynamic, open-ended, and
amorphous.. [Other fundamental interests included
voting, criminal appeals, and the right of interstate travel
.]
xxx

xxx

xxx

The Burger Court and Equal Protection.

The Burger Court was reluctant to expand the scope
of the new equal protection, although its best
established ingredient retains vitality. There was
also mounting discontent with the rigid two-tier
formulations of the Warren Court's equal protection
doctrine. It was prepared to use the clause as an
interventionist tool without resorting to the strict
language of the new equal protection. [Among the

fundamental interests identified during this time were voting

and access to the ballot, while "suspect" classifications
included sex, alienage and illegitimacy.]
xxx

xxx

xxx

Even while the two-tier scheme has often been adhered to in

form, there has also been an increasingly noticeable
resistance to the sharp difference between deferential "old"
and interventionist "new" equal protection. A number of
justices sought formulations that would blur the sharp
distinctions of the two-tiered approach or that would narrow
the gap between strict scrutiny and deferential review. The
most elaborate attack came from Justice Marshall, whose
frequently stated position was developed most elaborately in
his dissent in the Rodriguez case: 66
The Court apparently seeks to establish [that] equal protection
cases fall into one of two neat categories which dictate the
appropriate standard of review - strict scrutiny or mere
rationality. But this (sic) Court's [decisions] defy such easy
categorization. A principled reading of what this Court has
done reveals that it has applied a spectrum of standards in
reviewing discrimination allegedly violative of the equal
protection clause. This spectrum clearly comprehends
variations in the degree of care with which Court will scrutinize
particular classification, depending, I believe, on the
constitutional and societal importance of the interests
adversely affected and the recognized invidiousness of the
basis upon which the particular classification is drawn.
Justice Marshall's "sliding scale" approach describes many
of the modern decisions, although it is a formulation that the
majority refused to embrace. But the Burger Court's results
indicate at least two significant changes in equal
protection law: First, invocation of the "old" equal protection
formula no longer signals, as it did with the Warren Court, an
extreme deference to legislative classifications and a virtually
automatic validation of challenged statutes. Instead, several
cases, even while voicing the minimal "rationality" "hands-off"
standards of the old equal protection, proceed to find the
statute unconstitutional.Second, in some areas the modern
Court has put forth standards for equal protection review that,
while clearly more intensive than the deference of the "old"
equal protection, are less demanding than the strictness of the
"new" equal protection. Sex discrimination is the best
established example of an"intermediate" level of

review. Thus, in one case, the Court said that

"classifications by gender must
serve important governmental objectives and must
be substantially related to achievement of those
objectives." That standard is "intermediate" with
respect to both ends and means: where ends must
be "compelling" to survive strict scrutiny and merely
"legitimate" under the "old" mode, "important"
objectives are required here; and where means must
be "necessary" under the "new" equal protection,
and merely "rationally related" under the "old" equal
protection, they must be "substantially related" to
survive the "intermediate" level of review. (emphasis
supplied, citations omitted)
B. Equal Protection in Europe
The United Kingdom and other members of the
European Community have also gone forward in
discriminatory legislation and jurisprudence. Within the
United Kingdom domestic law, the most extensive list of
protected grounds can be found in Article 14 of the
European Convention on Human Rights (ECHR). It
prohibits discrimination on grounds such as "sex, race,
colour, language, religion, political or other opinion, national
or social origin, association with a national minority, property,
birth or other status." This list is illustrative and not
exhaustive. Discrimination on the basis of race, sex and
religion is regarded as grounds that require strict
scrutiny. A further indication that certain forms of
discrimination are regarded as particularly suspect under
the Covenant can be gleaned from Article 4, which, while
allowing states to derogate from certain Covenant articles in
times of national emergency, prohibits derogation by
measures that discriminate solely on the grounds of "race,
colour, language, religion or social origin."67
Moreover, the European Court of Human Rights has
developed a test of justification which varies with the ground
of discrimination. In the Belgian Linguistics case68 the
European Court set the standard of justification at a low
level: discrimination would contravene the Convention only if
it had no legitimate aim, or there was no reasonable
relationship of proportionality between the means employed
and the aim sought to be realised.69 But over the years, the
European Court has developed a hierarchy of grounds
covered by Article 14 of the ECHR, a much higher level

of justification being required in respect of those regarded

as "suspect" (sex, race, nationality, illegitimacy, or sexual
orientation) than of others. Thus, in Abdulaziz, 70 the European
Court declared that:
. . . [t]he advancement of the equality of the sexes is
today a major goal in the member States of the Council
of Europe. This means that very weighty reasons would
have to be advanced before a difference of treatment
on the ground of sex could be regarded as compatible
with the Convention.
And in Gaygusuz v. Austria,71 the European Court held
that "very weighty reasons would have to be put forward
before the Court could regard a difference of treatment based
exclusively on the ground of nationality as compatible with the
Convention."72 The European Court will then permit States
a very much narrower margin of appreciation in relation to
discrimination on grounds of sex, race, etc., in the application of
the Convention rights than it will in relation to distinctions drawn
by states between, for example, large and small land-owners. 73
C. Equality under International Law
The principle of equality has long been recognized under
international law. Article 1 of the Universal Declaration of
Human Rights proclaims that all human beings are born free
and equal in dignity and rights. Non-discrimination, together
with equality before the law and equal protection of the law
without any discrimination, constitutes basic principles in the
protection of human rights. 74

Rights;79 the European Convention on Human Rights;80 the European

Social Charter of 1961 and revised Social Charter of 1996; and the
European Union Charter of Rights (of particular importance to
European states). Even the Council of the League of Arab States has
adopted the Arab Charter on Human Rights in 1994, although it has
yet to be ratified by the Member States of the League. 81
The equality provisions in these instruments do not merely
function as traditional "first generation" rights, commonly viewed
as concerned only with constraining rather than requiring State
action. Article 26 of the ICCPR requires "guarantee[s]" of "equal and
effective protection against discrimination" while Articles 1 and 14 of
the American and European Conventions oblige States Parties "to
ensure ... the full and free exercise of [the rights guaranteed] ... without
any discrimination" and to "secure without discrimination" the
enjoyment of the rights guaranteed.82 These provisions impose a
measure of positive obligation on States Parties to take steps to
eradicate discrimination.
In the employment field, basic detailed minimum standards ensuring
equality and prevention of discrimination, are laid down in the
ICESCR83 and in a very large number of Conventions administered by
the International Labour Organisation, a United Nations
body. 84 Additionally, many of the other international and regional
human rights instruments have specific provisions relating to
employment.85

The United Nations Human Rights Committee has also gone

beyond the earlier tendency to view the prohibition against
discrimination (Article 26) as confined to the ICCPR
rights.86 In Broeks87 and Zwaan-de Vries,88 the issue before the
Committee was whether discriminatory provisions in the Dutch
Unemployment Benefits Act (WWV) fell within the scope of Article 26.
Most, if not all, international human rights
instruments include some prohibition on discrimination and/or The Dutch government submitted that discrimination in social security
provisions about equality.75 The general international provisions benefit provision was not within the scope of Article 26, as the right
was contained in the ICESCR and not the ICCPR. They accepted that
pertinent to discrimination and/or equality are the International
Article 26 could go beyond the rights contained in the Covenant to
76
Covenant on Civil and Political Rights (ICCPR); the
International Covenant on Economic, Social and Cultural Rights other civil and political rights, such as discrimination in the field of
(ICESCR); the International Convention on the Elimination of all taxation, but contended that Article 26 did not extend to the social,
Forms of Racial Discrimination (CERD);77 the Convention on the economic, and cultural rights contained in ICESCR. The Committee
rejected this argument. In its view, Article 26 applied to rights beyond
Elimination of all Forms of Discrimination against Women
the Covenant including the rights in other international treaties such as
(CEDAW); and the Convention on the Rights of the Child
the right to social security found in ICESCR:
(CRC).
In the broader international context, equality is also enshrined
in regional instruments such as the American Convention on
Human Rights;78 the African Charter on Human and People's

Although Article 26 requires that legislation should prohibit

discrimination, it does not of itself contain any obligation with
respect to the matters that may be provided for by legislation.

Thus it does not, for example, require any state to

enact legislation to provide for social security.
However, when such legislation is adopted in the
exercise of a State's sovereign power, then such
legislation must comply with Article 26 of the
Covenant.89
Breaches of the right to equal protection occur directly or
indirectly. A classification may be struck down if it has
the purpose or effect of violating the right to equal
protection. International law recognizes that discrimination
may occur indirectly, as the Human Rights
Committee90 took into account the definitions of
discrimination adopted by CERD and CEDAW in declaring
that:
. . . "discrimination" as used in the [ICCPR] should
be understood to imply any distinction, exclusion,
restriction or preference which is based on any
ground such as race, colour, sex, language,
religion, political or other opinion, national or social
origin, property, birth or other status, and which has
thepurpose or effect of nullifying or impairing the
recognition, enjoyment or exercise by all persons,
on an equal footing, of all rights and
freedoms. 91 (emphasis supplied)
Thus, the two-tier analysis made in the case at bar of the
challenged provision, and its conclusion of
unconstitutionality by subsequent operation, are in
cadence and in consonance with the progressive trend
of other jurisdictions and in international law. There
should be no hesitation in using the equal protection clause
as a major cutting edge to eliminate every conceivable
irrational discrimination in our society. Indeed, the social
justice imperatives in the Constitution, coupled with the
special status and protection afforded to labor, compel this
approach.92
Apropos the special protection afforded to labor under our
Constitution and international law, we held in International
School Alliance of Educators v. Quisumbing: 93
That public policy abhors inequality and
discrimination is beyond contention. Our Constitution
and laws reflect the policy against these evils. The
Constitution in the Article on Social Justice and

Human Rights exhorts Congress to "give highest priority

to the enactment of measures that protect and enhance
the right of all people to human dignity, reduce social,
economic, and political inequalities." The very broad
Article 19 of the Civil Code requires every person, "in
the exercise of his rights and in the performance of his
duties, [to] act with justice, give everyone his due, and
observe honesty and good faith."
International law, which springs from general principles
of law, likewise proscribes discrimination. General
principles of law include principles of equity, i.e., the
general principles of fairness and justice, based on the
test of what is reasonable. The Universal Declaration of
Human Rights, the International Covenant on
Economic, Social, and Cultural Rights, the International
Convention on the Elimination of All Forms of Racial
Discrimination, the Convention against Discrimination in
Education, the Convention (No. 111) Concerning
Discrimination in Respect of Employment and
Occupation - all embody the general principle against
discrimination, the very antithesis of fairness and
justice. The Philippines, through its Constitution, has
incorporated this principle as part of its national laws.

Notably, the International Covenant on Economic, Social, and

Cultural Rights, in Article 7 thereof, provides:
The States Parties to the present Covenant recognize the right
of everyone to the enjoyment of just and [favorable] conditions
of work, which ensure, in particular:
a. Remuneration which provides all workers, as a
minimum, with:
i. Fair wages and equal remuneration for work
of equal value without distinction of any kind,
in particular women being guaranteed
conditions of work not inferior to those
enjoyed by men, with equal pay for equal
work;
xxx

xxx

xxx

The foregoing provisions impregnably institutionalize in this

jurisdiction the long honored legal truism of "equal pay for
equal work." Persons who work with substantially equal
qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries. (citations omitted)

In the workplace, where the relations between capital

and labor are often skewed in favor of capital, inequality Congress retains its wide discretion in providing for a valid
classification, and its policies should be accorded recognition and
and discrimination by the employer are all the more
respect by the courts of justice except when they run afoul of the
reprehensible.
Constitution.94 The deference stops where the classification
violates a fundamental right, or prejudices persons accorded
The Constitution specifically provides that labor is
special protection by the Constitution. When these violations arise,
entitled to "humane conditions of work." These
conditions are not restricted to the physical workplace - this Court must discharge its primary role as the vanguard of
constitutional guaranties, and require a stricter and more exacting
the factory, the office or the field - but include as well
adherence to constitutional limitations. Rational basis should not
the manner by which employers treat their employees.
suffice.
The Constitution also directs the State to promote
"equality of employment opportunities for all." Similarly,
the Labor Code provides that the State shall "ensure
equal work opportunities regardless of sex, race or
creed." It would be an affront to both the spirit and letter
of these provisions if the State, in spite of its primordial
obligation to promote and ensure equal employment
opportunities, closes its eyes to unequal and
discriminatory terms and conditions of employment.
xxx

xxx

xxx

Admittedly, the view that prejudice to persons accorded special

protection by the Constitution requires a stricter judicial scrutiny finds
no support in American or English jurisprudence. Nevertheless, these
foreign decisions and authorities are not per se controlling in this
jurisdiction. At best, they are persuasive and have been used to
support many of our decisions.95 We should not place undue and
fawning reliance upon them and regard them as indispensable mental
crutches without which we cannot come to our own decisions through
the employment of our own endowments. We live in a different
ambience and must decide our own problems in the light of our own

interests and needs, and of our qualities and even

idiosyncrasies as a people, and always with our own concept
of law and justice.96 Our laws must be construed in
accordance with the intention of our own lawmakers and
such intent may be deduced from the language of each law
and the context of other local legislation related thereto.
More importantly, they must be construed to serve our own
public interest which is the be-all and the end-all of all our
laws. And it need not be stressed that our public interest is
distinct and different from others.97
In the 2003 case of Francisco v. House of Representatives,
this Court has stated that: "[A]merican jurisprudence and
authorities, much less the American Constitution, are of
dubious application for these are no longer controlling within
our jurisdiction and have only limited persuasive merit
insofar as Philippine constitutional law is concerned....[I]n
resolving constitutional disputes, [this Court] should not be
beguiled by foreign jurisprudence some of which are hardly
applicable because they have been dictated by different
constitutional settings and needs."98 Indeed, although the
Philippine Constitution can trace its origins to that of the
United States, their paths of development have long since
diverged. 99
Further, the quest for a better and more "equal" world calls
for the use of equal protection as a tool of effective judicial
intervention.

of the working class on the humane justification that those with

less privilege in life should have more in law.102 And the
obligation to afford protection to labor is incumbent not only on
the legislative and executive branches but also on the judiciary
to translate this pledge into a living reality.103 Social justice calls
for the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated. 104
V.
A Final Word
Finally, concerns have been raised as to the propriety of a ruling
voiding the challenged provision. It has been proffered that the
remedy of petitioner is not with this Court, but with Congress,
which alone has the power to erase any inequity perpetrated by
R.A. No. 7653. Indeed, a bill proposing the exemption of the
BSP rank-and-file from the SSL has supposedly been filed.
Under most circumstances, the Court will exercise judicial
restraint in deciding questions of constitutionality, recognizing
the broad discretion given to Congress in exercising its
legislative power. Judicial scrutiny would be based on the
"rational basis" test, and the legislative discretion would be
given deferential treatment. 105

But if the challenge to the statute is premised on the denial

of a fundamental right, or the perpetuation of prejudice
Equality is one ideal which cries out for bold
against persons favored by the Constitution with special
attention and action in the Constitution. The
protection, judicial scrutiny ought to be more strict. A weak
Preamble proclaims "equality" as an ideal precisely
and watered down view would call for the abdication of this
in protest against crushing inequities in Philippine
Court's solemn duty to strike down any law repugnant to the
society. The command to promote social justice in
Constitution and the rights it enshrines. This is true whether the
Article II, Section 10, in "all phases of national
actor committing the unconstitutional act is a private person or
development," further explicitated in Article XIII, are the government itself or one of its instrumentalities. Oppressive
clear commands to the State to take affirmative
acts will be struck down regardless of the character or nature of
action in the direction of greater equality. [T]here is the actor. 106
thus in the Philippine Constitution no lack of
doctrinal support for a more vigorous state effort
Accordingly, when the grant of power is qualified,
towards achieving a reasonable measure of
conditional or subject to limitations, the issue on
equality.100
whether or not the prescribed qualifications or
conditions have been met, or the limitations respected,
Our present Constitution has gone further in guaranteeing
is justiciable or non-political, the crux of the problem
vital social and economic rights to marginalized groups of
being one of legality or validity of the contested act, not
society, including labor.101 Under the policy of social justice,
its wisdom. Otherwise, said qualifications, conditions or
the law bends over backward to accommodate the interests
limitations - particularly those prescribed or imposed by

the Constitution - would be set at naught. What is more, the

judicial inquiry into such issue and the settlement thereof are
the main functions of courts of justice under the Presidential
form of government adopted in our 1935 Constitution, and the
system of checks and balances, one of its basic predicates. As
a consequence,We have neither the authority nor the
discretion to decline passing upon said issue, but are
under the ineluctable obligation - made particularly more
exacting and peremptory by our oath, as members of the
highest Court of the land, to support and defend the
Constitution - to settle it.This explains why, in Miller v.
Johnson, it was held that courts have a "duty, rather than a
power", to determine whether another branch of the
government has "kept within constitutional limits." Not satisfied
with this postulate, the court went farther and stressed that, if
the Constitution provides how it may be amended - as it is in
our 1935 Constitution - "then, unless the manner is followed,
the judiciary as the interpreter of that constitution, will declare
the amendment invalid." In fact, this very Court - speaking
through Justice Laurel, an outstanding authority on Philippine
Constitutional Law, as well as one of the highly respected and
foremost leaders of the Convention that drafted the 1935
Constitution - declared, as early as July 15, 1936, that "(i)n
times of social disquietude or political excitement, the great
landmarks of the Constitution are apt to be forgotten or
marred, if not entirely obliterated. In cases of conflict, the
judicial department is the only constitutional organ which can
be called upon to determine the proper allocation of powers
between the several departments" of the
government.107 (citations omitted; emphasis supplied)
In the case at bar, the challenged proviso operates on the basis of the
salary grade or officer-employee status. It is akin to a distinction
based on economic class and status, with the higher grades as
recipients of a benefit specifically withheld from the lower grades.
Officers of the BSP now receive higher compensation packages that
are competitive with the industry, while the poorer, low-salaried
employees are limited to the rates prescribed by the SSL. The
implications are quite disturbing: BSP rank-and-file employees are
paid the strictly regimented rates of the SSL while employees higher in
rank - possessing higher and better education and opportunities for
career advancement - are given higher compensation packages to
entice them to stay. Considering that majority, if not all, the rankand-file employees consist of people whose status and rank in
life are less and limited, especially in terms of job marketability, it
is they - and not the officers - who have the real economic and
financial need for the adjustment This is in accord with the policy of
the Constitution "to free the people from poverty, provide adequate

social services, extend to them a decent standard of living,

and improve the quality of life for all."108 Any act of
Congress that runs counter to this
constitutionaldesideratum deserves strict scrutiny by
this Court before it can pass muster.
To be sure, the BSP rank-and-file employees merit
greater concern from this Court. They represent the more
impotent rank-and-file government employees who, unlike
employees in the private sector, have no specific right to
organize as a collective bargaining unit and negotiate for
better terms and conditions of employment, nor the power to
hold a strike to protest unfair labor practices. Not only are
they impotent as a labor unit, but their efficacy to lobby in
Congress is almost nil as R.A. No. 7653 effectively isolated
them from the other GFI rank-and-file in
compensation. These BSP rank-and-file employees
represent the politically powerless and they should not
be compelled to seek a political solution to their unequal
and iniquitous treatment. Indeed, they have waited for
many years for the legislature to act. They cannot be asked
to wait some more for discrimination cannot be given any
waiting time. Unless the equal protection clause of the
Constitution is a mere platitude, it is the Court's duty to save
them from reasonless discrimination.
IN VIEW WHEREOF, we hold that the continued operation
and implementation of the last proviso of Section 15(c),
Article II of Republic Act No. 7653 is unconstitutional.
Davide, Jr., C.J., Quisumbing, Ynares-Santiago, SandovalGutierrez, Austria-Martinez, Azcuna, Tinga, and ChicoNazario, JJ., concur.
Panganiban, Carpio, Carpio-Morales, and Garcia, JJ., see
dissenting.
Corona, and Callejo, Sr., JJ., on leave.

CONCURRING OPINION
CHICO-NAZARIO, J.:
Does Sec. 15(c), Article II, Republic Act No. 6753,1 which
allows the exemption of BSP employees occupying salary
grade (SG) 20 and above from the coverage of Rep. Act No.

67582 result in a denial of petitioner's constitutional right to

equal protection of the law?
I submit that it does and said provision should therefore be
declared unconstitutional on the ground that the division
between BSP employees covered from SG 19 down and from
SG 20 up is purely arbitrary. Even given the wide discretion
vested in Congress to make classifications, it is nonetheless
clear that the lawmaking body abused its discretion in making
such classification.
It is not disputed that all that is required for a valid classification
is that it must be reasonable, i.e., that it must be based on
substantial distinctions which make for real differences; it must
be germane to the purpose of the law; it must not be limited to
existing conditions and it must apply equally to each member of
the class.3

SG 33 is assigned to the President of the Philippines; SG 32 is for the

Vice-President, Senate President, Speaker of the House and Chief
Justice of this Court. SG 31 is for senators, associate justices of this
Court, chairpersons of the constitutional commissions, department
secretaries and other positions of equivalent rank while SG 30 is
assigned to the constitutional commissioners and other positions of
equivalent rank.6
Economists, accountants, lawyers and other highly technical and
professional personnel are covered under SG 9 to 29 as already
adverted to.

Classification in law is the grouping of persons/objects because they

agree with one another in certain particulars and differ from others in
those same particulars. In the instant case, however, SG 20 and up do
not differ from SG 19 and down in terms of technical and professional
expertise needed as the entire range of positions all "require intense
and thorough knowledge of a specialized field usually acquired from
In the instant case, the classification was justified on the need of completion of a bachelor's degree or higher courses."
the BSP to compete in the labor market for economists,
accountants, lawyers, experts in security, printing, commercial
Consequently, if BSP needs an exemption from Rep. Act No. 6758 for
and rural banking, financial intermediation fund management,
key positions in order that it may hire the best and brightest
and other highly technical and professional personnel, 4 which it economists, accountants, lawyers and other technical and professional
could not do unless personnel occupying top positions are
people, the exemption must not begin only in SG 20.
exempted from the coverage of Rep. Act No. 6758, the Salary
Standardization Law.
Under the circumstances, the cut-off point, the great divide,
between SG 19 and 20 is entirely arbitrary as it does not have a
Under Rep. Act No. 6758, however, professional supervisory
reasonable or rational foundation. This conclusion finds support in no
positions are covered by SG 9 to SG 33 which includes:
less than the records of the congressional deliberations, the bicameral
conference committee having pegged the cut-off period at SG 20
despite previous discussions in the Senate that the "executive group"
(R)esponsible positions of a managerial character
7
involving the exercise of management functions such as is "probably" SG 23 and above.
planning, organizing, directing, coordinating, controlling
and overseeing within delegated authority the activities Moreover, even assuming that the classification is reasonable,
of an organization, a unit thereof or of a group, requiring nonetheless, its continued operation will result in hostile discrimination
some degree of professional, technical or scientific
against those occupying grades 19 and below.
knowledge and experience, application of managerial or
supervisory skills required to carry out their basic duties As pointed out by Mr. Justice Puno, some other government
and responsibilities involving functional guidance and
corporations, by law, now exempt all their employees from the
control, leadership, as well as line supervision. These
coverage of Rep. Act No. 6758. BSP employees occupying SG 19 and
positions require intense and thorough knowledge of a
below, however, shall remain under Rep. Act No. 6758 considering the
specialized field usually acquired from completion of a
rule that the subject classification, to be valid, must not be limited only
bachelor's degree or higher degree courses.
to conditions existing as of the time the law was passed. Thus, while
BSP employees from SG 19 down will continue to be covered under
The positions in this category are assigned Salary
Rep. Act No. 6758, other government employees of the same class
Grade 9 to Salary Grade 33.5 (Underscoring supplied)
and occupying the same positions in government corporations will be
exempt.

I therefore concur with Justice Puno in that respect and,

considering his thorough discussion, I have nothing more to
add thereto.

be merely compared with those applicable under the

Constitution.

From the manner in which it has been utilized in American and

DISSENTING OPINION
Philippine jurisprudence, however, this novel theory finds
relevance only when the factual situation covered by an
assailed law changes, not when another law is passed
PANGANIBAN, J.:
pertaining to subjects not directly covered by the former. Thus,
the theory applies only when circumstances that were
With all due respect, I dissent. I believe that it would
be uncalled for, untimely and imprudent for this Court to void specifically addressed upon the passage of the law change. It
does not apply to changes or alterations extraneous to those
the last proviso of the second paragraph of Section 15(c) of
specifically addressed. To prove my point, allow me then to
Chapter 1 of Article II of Republic Act (RA) 7653. In the first
1
place, the assailed provision is not unconstitutional, either on tackle seriatim the cases relied upon in the ponencia.
its face or as applied, and the theory
ofrelative constitutionality finds no application to the case at Cited American Cases
Not Applicable to and
bar. In the second place, a becoming respect on the part of
this Court for Congress as a coequal and coordinate branch Not in Pari Materia with
of government dictates that Congress should be given ample Present Facts
opportunity to study the situation, weigh its options and
exercise its constitutional prerogative to enact whatever
Medill.2 The constitutionality issue in Medill v. State was raised
legislation it may deem appropriate to address the alleged
by a bankruptcy trustee in regard to a statute exempting
inequity pointed out by petitioner.
damages that were awarded to the claimants who suffered as a
result of an automobile accident.3Specifically, the contested
provision exempted from "attachment, garnishment, or sale on
For the record, I am not against the exemption from the
any final process issued from any court" (1) general damages
Salary Standardization Law of the Bangko Sentral ng
and (2) future special damages awarded in rights of action filed
Pilipinas (BSP) rank and file employees (with Salary Grade
19 and below). Neither am I against increases in their pay. I for injuries that were caused to the person of a debtor or of a
4
simply submit that (1) the factual milieu of this case does not relative.
show a denial of equal protection, (2) the theory of relative
constitutionality does not come into play, and (3) petitioner
The Supreme Court of Minnesota said that the general
should have addressed its plaint, not to this Court, but to
damages portion of the right of action filed by claimants for
Congress in the first instance. I am confident that given
personal injuries sustained in fact represented the monetary
sufficient opportunity, the legislature will perform its
restoration of the physically and mentally damaged person;
constitutional duty accordingly. Hence, there is no need hence, claims for such damages could never constitute
or warrant for this Court to intervene in legislative work. unreasonable amounts for exemption purposes.5Such claims
were thus fully exempt. It added that the legislature had
assigned the role of determining the amounts that were
Theory of Relative Constitutionality
reasonable to the state's judicial process.6
Not Applicable to Extraneous Circumstances
The ponencia advocates the application of the theory
of relative constitutionality to the present case. The theory
says that a statute valid at one time may become
unconstitutional at another, because of altered
circumstances orchanged conditions that make the practical
operation of such a statute arbitrary or confiscatory. Thus,
the provisions of that statute, which may be valid as applied
to one set of facts but invalid as applied to another, cannot

While a statute may be constitutional and valid as applied to

one set of facts and invalid in its application to another, the said
Court limited its discussion only to the set of facts as presented
before it7 and held that the statute was "not
unconstitutional."8 Distinguishing the facts of that case from
those found in its earlier rulings,9 it concluded that -- by limiting
the assets that were available for distribution to creditors 10 -- the
contested provision therein was a bankruptcy relief for

protecting not only human capital,11 but also the debtor's fundamental
needs.
Cook.12 The bankruptcy trustee in In re Cook also objected to the
same statutory exemption, inter alia, asserted by the debtors in
another personal injury claim.
The US Bankruptcy Court, following Medill, held that such exemption
was "violative of x x x the Minnesota Constitution,"13 as applied to prepetition special damages,14 but not as applied to general
damages.15 The statute did not provide for any limitation on the
amount of exemption as to the former type of damages. 16 Neither did it
set any objective criteria by which the bankruptcy court may limit its
size.17
Nashville.18 The plaintiff in Nashville v. Walters questioned the
constitutionality of a Tennessee statute imposing upon railroad
companies one half of the total cost of grade separation in every
instance that the state's Highway Commission issued an order for the
elimination of a grade crossing. The plaintiff rested its contention not
on the exercise of police power that promoted the safety of travel, but
on the arbitrariness and unreasonableness of the imposition that
deprived it of property without due process of law.19
Reversing the judgment that the Supreme Court of Tennessee had
rendered against the plaintiff, the US Supreme Court however did not
declare the statute unconstitutional.20 Instead, it remanded the case,
because the determination of facts showing arbitrariness and
unreasonableness should have been made by the Tennessee
Supreme Court in the first place.21 It enumerated the revolutionary
changes incident to transportation wrought in the 1930s by the
widespread introduction of motor vehicles; the assumption by the
federal government of the functions of a road builder; the resulting
depletion of rail revenues; the change in the character, construction
and use of highways; the change in the occasion for the elimination of
grade crossings, and in the purpose and beneficiaries of such
elimination; and the change in the relative responsibility of railroads
and vehicles moving on the highways. 22 In addition, it held that the
promotion of public convenience did not justify requiring a railroad
company -- any more than others -- to spend money, unless it was
shown that the duty to provide such convenience rested upon that
company.23 Providing an underpass at one's own expense for private
convenience, and not primarily as a safety measure, was a denial of
due process.24
Atlantic.25 In Atlantic v. Ivey, the plaintiff filed an action for damages
against the railroad company for the killing of a cow on an unfenced

right of way of the railway. The defendant pointed out that

the original Florida Act of 1889 and its later amendments in
the 1940s had required railroad companies to fence their
tracks for the protection and safety of the traveling public
and their property against livestock roaming at large. Thus,
the defendant averred that -- without imposing a similar
fencing requirement on the owners of automobiles, trucks
and buses that carry passengers upon unfenced public
highways of the state where such vehicles operated -- the
equal protection guarantees of the state and federal
constitutions would be violated.26
Reversing the lower court's judgment for the plaintiff, the
Supreme Court of Florida held that the application of the
contested statutes under then existing conditions was
violative of the equal protection clause.27 Citing Nashville,
that Court took judicial notice of the fact that there were no
motor carriers on public roads when the statutes were
originally enacted. It also reasoned that the statutes were
enacted in the exercise of the state's police power 28 and
were intended for the protection of everyone against
accidents involving public transportation. Although motordriven vehicles and railroad carriers were under a similar
obligation to protect everyone against accidents to life and
property when conducting their respective businesses, the
hazard of accidents by reason of cattle straying onto the line
of traffic of motor-driven vehicles was greater than that which
arose when cattle strayed onto the line of traffic of railroad
carriers.29 Yet the burden of expenses and penalties that
were rendered in favor of individuals who were neither
shippers nor passengers was imposed only on railroad
carriers.30
In addition, the railroad carriers would be held liable for
attorney's fees and double the value of the animals killed in
their railways, without even requiring the plaintiffs who had
sued them to prove the negligence of such carriers in
operating their equipment.31 Although it was argued that
motor-driven vehicles had no authority to fence on state and
county highways over which they operated, the legislature
could nevertheless authorize and require them to provide
similar protection; or, in default thereof, to suffer similar
penalties that were incidental to using such public roads for
generating profit and serving the public.32
Louisville.33 The plaintiff in Louisville v. Faulkner also filed an
action against defendant-railroad company to recover the

value of her mule that had strayed from her premises and got
struck and killed by the company's train.34 The judgment of the
lower court for the plaintiff was based on the fact that the
defendant did not offer any evidence to rebut the prima facie
presumption of the latter's negligence under Kentucky
statutes.35
The Court of Appeals of Kentucky held the contested provision
unconstitutional and reversed the said judgment. 36Citing
both Nashville and Atlantic, the appellate court said that
because such legislation applied to all similar corporations and
was aimed at the safety of all persons on a train and the
protection of their property, it was sustained from its inception in
1893; however, under changed conditions, it could no longer be
so. The court recognized the fact that, in the 1950s, the
inauguration and development of transportation by motor
vehicles on public highways created even greater risks, not only
to the occupants of such vehicles but also to domestic
animals.37 Yet, the operators of these vehicles were not
subjected to the same extraordinary legal responsibility of
proving that for the killing of those animals on public roads, they
were free from negligence, unlike railroad companies that struck
and killed such animals on private rights of way.38
Vernon.39 The plaintiff in Vernon v. City of Mount Vernon sought
to declare unconstitutional a city zoning ordinance which had
limited the business use of its realty, locally known as the
"Plaza," only to the parking of automobiles and its incidental
services.40
The Court of Appeals of New York ruled that the ordinance was
unconstitutional.41 That ruling also affirmed the unanimous
judgment earlier rendered in favor of the plaintiff. Again
citing Nashville, the New York court ruled in the main that, no
matter how compelling and acute the community traffic problem
might be as to reach a strangulation point, the solution did not
lie in placing an undue and uncompensated burden on a
landowner in the guise of a regulation issued for a public
purpose.42 Although for a long time the plaintiff's land had
already been devoted to parking, the ordinance that prohibited
any other use for it was not "a reasonable exercise of the police
power."43
While the city's common council had the right to pass
ordinances respecting the use of property according to wellconsidered and comprehensive plans designed to promote
public health, safety and general welfare, the exercise of such

right was still subject to the constitutional limitation that it may not be
exerted arbitrarily or unreasonably. Thus, the zoning ordinance could
not preclude the use of property for any purpose for which it was
reasonably adapted.44 Although valid when adopted in 1927, the
ordinance was stricken down, because its operation under changed
conditions in the 1950s proved confiscatory, especially when the value
of the greater part of the land -- to be used, for instance, in the
erection of a retail shopping center -- was destroyed. 45
Finally, Murphy v. Edmonds.46 An automobile driver and her husband
brought action against a tractor-trailer driver and his employer and
sought damages for the severe injuries she had sustained in a
collision. Raised in issue mainly was the constitutionality of the
statutory cap on noneconomic damages in personal injury actions. 47
Affirming the judgment of the Court of Special Appeals rejecting all
challenges to the validity of the law, the Court of Appeals of Maryland
held that there was no irrationality, arbitrariness, or violation of equal
protection in the legislative classification drawn between (1) the less
seriously injured tort claimants whose noneconomic damages were
less than the statutory cap; and (2) the more seriously injured tort
claimants whose noneconomic damages were greater than, and thus
subject to, the statutory cap.48 Although no express equal protection
clause could be found in Maryland's Constitution, the due process
clause therein nevertheless embodied equal protection to the same
extent as that found in the Fourteenth Amendment 49 of the federal
Constitution.50
Indeed, the right to recover full damages for a noneconomic injury was
recognized by common law even before the adoption of the state's
Constitution, but the said court declared that there was no vested
interest in any rule ordained by common law.51 Concluding that only
the traditional "rational basis test" should be used, the appellate court
also rejected the lower court's view of the right to press a claim for
pain and suffering as an "important right" requiring a "heightened
scrutiny test" of the legislative classification.52 Under the "rational basis
test," such legislative classification enjoyed a strong presumption of
constitutionality and, not being clearly arbitrary, could not therefore be
invalidated.53
Moreover, the law was an economic response to a legislatively
perceived crisis concerning not only the availability, but also the cost of
liability insurance in the state.54 Putting a statutory cap on
noneconomic damages was "reasonably related to a legitimate
legislative objective,"55 for it led to a greater ease in the calculation of
insurance premiums, thus making the market more attractive to
insurers. Also, it ultimately reduced the cost of such premiums and

made insurance more affordable to individuals and

organizations that perform needed medical services. 56

unconstitutional, but the statute itself was not inherently

unconstitutional to begin with.

From the foregoing discussion, it is immediately evident Equally important, Nashville skirted the issue on
that not one of the above-cited cases is either applicable constitutionality. The "changed conditions" referred to in that
to or in pari materia with the present case.
case, as well as in Atlantic and Louisville, were the revolutionary
changes in the mode of transportation that were specifically
covered by the statutes respectively imposing additional costs
Medill not only upheld the constitutionality of the contested
upon railroad companies only, requiring the fencing of their
provision therein, but also categorically stated that the
tracks, or solely compelling them to present evidence to rebut
peculiar facts of the case prompted such declaration.
the presumption of their negligence. In Vernon, these "changed
General damages were declared exempt; the law allowing
conditions" were deemed to be the economic changes in the
their exemption was constitutional. Cook simply
1950s, through which the normal business use of the land was
affirmed Medill when the same contested provision was
unduly limited by the zoning ordinance that was intended to
applied to an issue similar to that which was raised in the
latter case, but then declared that provision unconstitutional address the acute traffic problem in the community.
when applied to another issue. Thus, while general damages
were also declared exempt, the claims for special damages Nashville simply took judicial notice of the change in conditions
filed prior to the filing of a petition for relief were not, and the which, together with the continued imposition of statutory
law allowing the latter's exemption was unconstitutional.
charges and fees, caused deprivation of property without due
process of law. Atlantic, Louisville andVernon all relied
The court's action was to be expected, because the issue on upon Nashville, but then went further by rendering their
respective contested provisions unconstitutional, because -- in
special damages in Cook was not at all raised inMedill, and
the application of such provisions under "changed conditions" -there was no precedent on the matter in Minnesota, other
than the obiter dictum -- if it can be called one -- in the latter those similarly situated were no longer treated alike.
case.57 Had that issue been raised in Medill, a similar
conclusion would inevitably have been reached. In fact, that Finally, Murphy -- obviously misplaced because it made no
case already stated that while the court "need not decide
reference at all to the quoted sentence in the ponencia-- even
whether special damages incurred prior to judgment x x x
upheld the validity of its contested provision. There was no
[were] to be exempt in order to decide the question" 58 on
trace, either, of any "changed conditions." If at all, the legislative
general damages raised therein, it felt that exempting special classification therein was declared constitutional, because it
damages appeared reasonable and likely to be applied,
was in fact a valid economic response to a legislatively
following an earlier ruling in another case.59
perceived crisis concerning the availability and cost of liability
insurance.
Moreover, the facts of both Medill and Cook are not at all
akin to so-called "changed conditions" prompting the
In the present case, no "altered circumstances" or "changed
declarations of constitutionality in the former and
conditions" in the application of the assailed provision can be
unconstitutionality in the latter. Such "altered circumstances" found. It verily pertains to only one subject matter, not separable
or "changed conditions" in these two cases refer to the non- subject matters as earlier pointed out in
exemption of special damages -- a subject matter distinct
both Medill and Cook. Hence, its application remains and will
and separable, although covered by the same assailed
remain consistent. Not inherently unconstitutional to begin with,
statute. In fact, Cook precisely emphasized that "where a
it cannot now be declared unconstitutional. Moreover, herein
statute is not inherently unconstitutional, it may be found
petitioner miserably fails to demonstrate -- unlike
constitutional as applied to some separable subject matters, in Nashville, Atlantic, Louisville, and Vernon -- how those
and unconstitutional as applied to others."60 In other words, it similarly situated have not been treated alike in the application
was the application of the contested provision therein to an
of the assailed provision.
entirely different and separable subject matter -- not the
contested provision itself -- that was declared

Ponencia's Reference to
"Changed Conditions" Misplaced
From Nashville to Murphy, it can be seen that all the contested
statutes were passed in the exercise of police power -- the inherent
power of the State to regulate liberty and property for the promotion of
the general welfare.61 The police measure may be struck down when
an activity or property that ought to be regulated does not affect the
public welfare; or when the means employed are not reasonably
necessary for the accomplishment of the statute's purpose, and they
become unduly oppressive upon individuals.62 As Justice Brandeis
stresses inNashville, "it may not be exerted arbitrarily or
unreasonably."63
In the case before us today, the assailed provision can be considered
a police measure that regulates the income of BSP employees.
Indisputably, the regulation of such income affects the public welfare,
because it concerns not only these employees, but also the public in
general -- from whose various credits the banks earn their income, the
CB generates its revenues, and eventually these employees get their
salaries and other emoluments.
Additionally, with the passage of RAs 6758 and 7653, the means
employed by the State to accomplish its objectives are not unduly
oppressive. They are in fact reasonably necessary, not only to
attract the best and brightest bank regulatory personnel, but also
to establish professionalism and excellence within the BSP in
accordance with sound principles of management. Nothing,
therefore, is arbitrary in the assailed provision; it cannot be
stricken down.
With due respect, the ponencia's reference to "changed conditions" is
totally misplaced. In the above-cited US cases, this phrase never
referred to subsequent laws or executive pronouncements, but rather
to the facts and circumstances that the law or ordinance specifically
addressed upon its passage or adoption. A statute that is declared
invalid because of a change in circumstances affecting its validity
belongs only to a class of emergency laws. 64 Being a manifestation of
the State's exercise of its police power, it is valid at the time of its
enactment.
In contrast thereto, RA 7653 cannot be regarded as an emergency
measure that is merely temporary in operation. It is not even a
statute limited to the exigency that brought it about. The facts
and circumstances it specifically addressed upon its passage
have not been shown to have changed at all. Hence, the assailed
provision of such a declaratory statute cannot be invalidated.

Unlike congested traffic or motor-driven vehicles on public

roads, the payment of salaries at differing scales in various
GFIs vis--vis in the BSP, is not such a change in conditions
as would cause deprivation of property without due process
of law. Petitioner's members have not been deprived of their
right to income as mandated by law. They have not received
less than what they were entitled to ever since RA 7653 was
passed eleven years ago.
To repeat, the factual situation that the assailed
provision specifically addressed upon passage of this
law has not changed. The same substantive rights to a
competitive and structured human resource
development program existing then still exist now. Only
the laws external to and not amendatory of this law did.
Even if these new laws were to be considered as
"changed conditions," those who have been affected in
the BSP (as will be shown later) are not at all similarly
situated as those in the GFIs to compel their like
treatment in application.

fall x x x not upon assumptions" the court may make,

the ponencia is still dauntless in relying thereon to support its
arguments.

subsequent laws or executive pronouncements. The eight-year

moratorium period having lapsed, the debtors' concerns had been
adequately addressed. It was now the turn of the creditors to be
protected for the pre-war loans they granted.

Rutter Does Not Even Apply

Again with due respect, the ponencia's citation of a local
case, Rutter,76 is also inappropriate. In the said case, appellant
instituted an action to recover the balance, and interest thereon,
of a contract of sale entered into barely four months prior to the
outbreak of the Second World War.77 The lower court, however,
rendered judgment78 for appellee who set up as defense79 the
moratorium clause embodied in RA 342.80 The lower court
reasoned further that the obligation sought to be enforced was
not yet demandable under that law.81

In stark contrast, the contested proviso in the instant case is not a

remedial measure. It is not subject to a period within which a right of
action or a remedy is suspended. Since the reason for the law still
subsists, the law itself including the challenged proviso must continue
in existence and operation.
Relative Constitutionality
Not Based on Positive Law

Applying the concept of relative constitutionality strongly advocated in

the ponencia, therefore, not only goes beyond the parameters of
Reversing the judgment, this Court invalidated82 the moratorium traditional constitutionalism, but also finds no express basis in positive
clause,83 not because the law was unconstitutional, but because law.87 While it has been asserted that "a statute valid when enacted
both its continued operation and enforcement had become
may become invalid by change in conditions to which it is
unreasonable and oppressive under postwar circumstances of
applied,"88 the present case has shown no such change in conditions
observable reconstruction, rehabilitation and recovery of the
that would warrant the invalidation of theassailed provision if applied
In addition, the rulings in all the above-cited American cases country's general financial condition.84 The forced vigil suffered
under such conditions. Hence, no semblance of constitutional
-- although entitled to great weight 65 -- are merely of
by prewar creditors was not only unwittingly extended from eight impuissance, other than its conjured possibility, can be seen. In a
persuasive effect in our jurisdiction66 and cannot be stare
to twelve years, but was also imposed without providing for the constitutional order that commands respect for coequal branches of
decisis.67 These are not direct rulings of our Supreme
payment of the corresponding interest in the interim. 85
government, speculation by the judiciary becomes incendiary and
Court68 that form part of the Philippine legal system.69
deserves no respectable place in our judicial chronicles.
Thus, the success of their collection efforts, especially when
Granting gratia argumenti that the cited cases are to be
their credits were unsecured, was extremely
The ponencia further contends that the principles of international law
considered binding precedents in our jurisdiction,Nashville -- remote.86 Moreover, the settlement of claims filed with the
can operate to render a valid law unconstitutional. The generally
the only one federal in character -- does not even make a
United States-Philippine War Damage Commission was not only accepted definition states that international law is a body of legal rules
categorical declaration on constitutionality.
uncertain but was also practically futile, for it depended entirely that apply between sovereign states and such other entities as have
Furthermore, Murphy maintains that "[s]imply because a
on the appropriations to be made by the US Congress.
been granted international personality.89 Government employees at the
legal principle is part of the common law x x x does not give
BSP with salary grades 19 and below are not such entities vested with
it any greater degree of insulation from legislative
international personality; any possible discrimination as to them, in the
The contested clause in Rutter was definitely a remedial
change."70 Common law, after all, is "a growing and everlight of the principles and application of international law would be too
measure passed to accord prewar debtors who suffered the
changing system of legal principles and theories x x x."71
far-fetched.
ravages of war an opportunity to rehabilitate themselves within
a reasonable time and to pay their prewar debts thereafter, thus
Every statute is presumed constitutional.72 This axiom
preventing them from being victimized in the interim by their
The dangerous consequences of the majority's Decision in the present
reflects the respect that must be accorded to the wisdom,
prewar creditors. The purpose having been achieved during the case cannot and should not be ignored. Will there now be an
integrity and patriotism of the legislature that passed it and to eight-year period, there was therefore no more reason for the
automatic SSL exemption for employees of other GFIs and financial
the executive who approved it.73 Understandably, therefore,
law. Cessante ratione legis cessat et ipsa lex. When the reason regulatory agencies? Will such exemption not infringe on Congress'
the judiciary should be reluctant to invalidate
for the law ceases, the law itself ceases. But it does not
prerogative? The ponencia overlooks the fact that the Bangko Sentral
laws.74 Medill precisely emphasizes that the "court's power to become unconstitutional.
is not a GFI, but a regulatory body of GFIs and other financial/banking
declare a statute unconstitutional should be exercised with
institutions. Therefore, it should not be compared with them. There is
extreme caution and only when absolutely
The altered circumstances or changed conditions in Rutter were no parity. The Bangko Sentral is more akin to the Insurance
necessary."75 Although that case continues by saying that
specifically the very circumstances that the law addressed at its Commission, the National Telecommunications Commission, and the
unless it is inherently unconstitutional, a law "must stand or
Energy Regulatory Commission. Should not more appropriate
passage; they were not at all extraneous circumstances like

comparisons be made with such regulatory bodies and their

employees?
Respect for
Coequal Branch
The trust reposed in this Court is "not to formulate policy but
to determine its legality as tested by the Constitution." 90 "It
does not extend to an unwarranted intrusion into that broad
and legitimate sphere of discretion enjoyed by the political
branches to determine the policies to be pursued. This Court
should ever be on the alert lest, without design or intent, it
oversteps the boundary of judicial competence." 91 Judicial
activism should not be allowed to become judicial
exuberance. "As was so well put by Justice Malcolm: 'Just
as the Supreme Court, as the guardian of constitutional
rights, should not sanction usurpations by any other
department of the government, so should it as strictly
confine its own sphere of influence to the powers expressly
or by implication conferred on it by the Organic Act.'" 92
Since Congress itself did not commit any constitutional
violation or gravely abusive conduct when it enacted RA
7653, it should not be summarily blamed for what
the ponencia calls "altered circumstances."93 Congress
should be given the opportunity to correct the problem, if
any. I repeat, I am not against exemption from the SSL of
Bangko Sentral employees with salary grades 19 and below.
Neither am I against increases in their pay. However, it is
Congress, not this Court, that should provide a solution to
their predicament, at least in the first instance.

attacked on the ground that it is not the best solution, or that it is

unwise or inefficacious.98 A law that advances a legitimate
governmental interest will be sustained, even if it "works to the
disadvantage of a particular group, or x x x the rationale for it
seems tenuous."99 To compel this Court to make a more
decisive but unnecessary action in advance of what Congress
will do is a downright derogation of the Constitution itself, for it
converts the judiciary into a super-legislature and invests it with
a power that to it has never belonged.100
In the words of the great Sir William Blackstone, "there is no
court that has power to defeat the intent of the Legislature,
when couched in such evident and express words, as leave no
doubt whether it was the intent of the Legislature, or no[t]." 101 As
Rousseau further puts it, "according to the fundamental
compact, only the general will can bind the individuals, and
there can be no assurance that a particular will is in conformity
with the general will, until it has been put to the free vote of the
people."102 Thus, instead of this Court invalidating a sovereign
act, Congress should be given the opportunity to enact the
appropriate measure to address the so-called "changed
conditions."

We cannot second-guess the mind of the legislature as the

repository of the sovereign will. For all we know, amidst the
fiscal crisis and financial morass we are experiencing,
Congress may altogether remove the blanket exemption,
put a salary cap on the highest echelons,103 lower the salary
grade scales subject to SSL exemption, adopt
performance-based compensation structures, or even
amend or repeal the SSL itself, but within the constitutional
mandate that "at the earliest possible time, the Government
and
The remedy against any perceived legislative failure to enact shall increase the salary scales of x x x officials
104
employees
of
the
National
Government."
Legislative
corrective legislation is a resort, not to this Court, but to the
reforms of whatever nature or scope may be taken one step
bar of public opinion. The electorate can refuse to return to
at a time, addressing phases of problems that seem to the
Congress members who, in their view, have been remiss in
105
94
the discharge of their constitutional duties. Our Constitution legislative mind most acute. Rightly so, our legislators
must
have
"flexibility
and
freedom
from judicial oversight
presumes that, absent any inference of antipathy,
in
shaping
and
limiting
their
remedial
efforts."106 Where
improvident legislative decisions "will eventually be rectified
for their action, the Court's
by the democratic processes;"95 and that judicial intervention there are plausible reasons
107
"inquiry
is
at
an
end."
is unwarranted, no matter how unwisely a political branch
may have acted.96
Under the doctrine of separation of powers and the concomitant
respect for coequal and coordinate branches of government, the
It is only the legislature, not the courts, that "must be
97
appealed to for the change." If, however, Congress decides exercise of prudent restraint by this Court would still be
best under the present circumstances.
to act, the choice of appropriate measure lies within its
discretion. Once determined, the measure chosen cannot be

Not Grossly Discriminatory

There is no question that Congress neither violated the Constitution
nor gravely abused its discretion when it enacted "The New Central
Bank Act" to establish and organize the BSP in 1993.108 Indeed, RA
7653 is a valid legislative measure. Even the majority concedes that in
enacting that law, Congress was well within its legislative powers.
However, the ponencia argues that the subsequent enactment of laws
granting "blanket exemption" from the coverage of the SSL
of all employees in seven GFIs109 has made the contested proviso
"grossly discriminatory in its operation"110 and therefore
unconstitutional.
This conclusion, to my mind, is a non sequitur. The mere possible
effect of related or unrelated laws on another law does not ipso
facto make the latter unconstitutional. Besides, as already discussed,
the theory of relative constitutionality is plainly inapplicable to the
present facts. Moreover, the ponencia has assumed without proof that
the BSP rank and file employees are factually and actually similarly
situated as the rank and filers of Land Bank, SSS, GSIS, etc., and it is
clear from the discussion in Mme. Justice Carpio Morales' Dissenting
Opinion that that is not really the case. In fact, there exist some
substantial differences in scope of work, job responsibilities and so
forth that would negate the ponencia's assumption
No Indicium of Urgency
Other than its bare assertion that the continued implementation of the
assailed provision111 would cause "irreparable damage and
prejudice"112 to its members, petitioner also fails to show a minimum
indicium of such extreme urgency as would impel this Court to secondguess Congress.
Briefly, petitioner contends that (1) the creation of two classes of
employees within the BSP based on the salary grade corresponding to
their positions113 is unreasonable, arbitrary and capricious class
legislation;114 and (2) the law itself discriminates against rank and file
employees of the BSP vis--vis those of GFIs.115
These contentions are utterly unsubstantiated. They find no support in
law for granting the relief prayed for.
While it is true that all employees of the BSP are appointed under the
authority of the Monetary Board, observe the same set of office rules
and regulations, and perform their work in practically the same
offices,116 it is equally true that the levels of difficulty and responsibility

for BSP employees with salary grades 19 and below are

different from those of other BSP employees with salary
grades 20 and above. All those classes of position belonging
to the Professional Supervisory Category 117 of the Position
Classification System118 under RA 6758, for instance, are
obviously not subjected to the same levels of difficulty,
responsibility, and qualification requirements as those
belonging to the Professional Non-Supervisory
Category,119 although to both categories are assigned
positions that include salary grades 19 and 20.120 To assert,
as petitioner does, that the statutory classification is just an
"artifice based on arbitrariness,"121 without more, is nothing
more than throwing a few jabs at an imaginary foe.
In like manner, petitioner's denunciation of the proviso for
allegedly discriminating against its members vis--vis the
rank and filers of other GFIs ignores the fact that the BSP
and the GFIs cited in the ponencia do not belong to
the same category of government institutions, although it
may be said that both are, broadly speaking, "involved" in
banking and finance.122 While the former performs primarily
governmental or regulatory functions, the latter execute
purely proprietary ones.

must "not anticipate a question of constitutional law in advance

of the necessity of deciding it x x x. It is not the habit of the
Court to decide questions of a constitutional nature unless
absolutely necessary to a decision of the case."127 In addition,
the Court must not "pass upon a constitutional question
although properly presented by the record, if there is also
present some other ground upon which the case may be
disposed of."128
Applying to this case the contours of constitutional avoidance
Brandeis brilliantly summarized, this Court may choose to
ignore the constitutional question presented by petitioner, since
there is indeed some other ground upon which this case can be
disposed of -- its clear lack of urgency, by reason of which
Congress should be allowed to do its primary task of reviewing
and possibly amending the law.

Moreover, the extent of damage or prejudice inflicted upon

the BSP rank and file employees as a result of the proviso is
not shown by any evidence on record. Indeed, neither the
petitioner nor the ponencia demonstrate the injuries
sustained.123

Taking cognizance of this case and disposing of, or altogether

ignoring, the constitutional question leads us to the same
inevitable conclusion: the assailed provision should not be
declared "unconstitutional, unless it is clearly so."129 Whichever
path is chosen by this Court, I am of the firm belief that such
provision cannot and should not be declared unconstitutional.
Since the authority to declare a legal provision void is of a
"delicate and awful nature,"130 the Court should "never resort to
that authority, but in a clear and urgent case."131 If ever there is
doubt -- and clearly there is, as manifested herein by a sharply
divided Court -- "the expressed will of the legislature should be
sustained."132

There is no indication whatsoever of the precise nature and

extent of damages caused or to be caused to petitioner's
members by the continued implementation of such provision.
Surely, with no leg to stand on, the allegation of petitioner
that there is great disparity in compensation, allowances or
benefits, cannot be considered to be stigmatizing and
wounding to the psyche of thousands of its members.124 In
fact, BSP employees, in general, also share the same
tribulations of workers and employees in other regulatory
government offices.125 Not even petitioner's broad and bare
claim of "transcendental importance"126 can ipso
facto generate alacrity on the part of this Court.

Indeed, this Court is of the unanimous opinion that the assailed

provision was at the outset constitutional; however, with recent
amendments to related laws,133 the majority now feels that said
provision could no longer pass constitutional muster. To nail my
colors to the mast, such proclivity to declare it immediately
unconstitutional not only imprudently creeps into the legislative
sphere, but also sorely clings to the strands of obscurantism.
Future changes in both legislation and its executive
implementation should certainly not be the benchmark for a
preemptive declaration of unconstitutionality, especially when
the said provision is not even constitutionally infirm to begin
with.

In the United States more than sixty years ago, Justice

Brandeis delineated the famous canons of avoidance under
which their Supreme Court had refrained from passing upon
constitutional questions. One such canon is that the Court

Moreover, the congressional enactment into law of pending

bills134 on the compensation of BSP employees -- or even those
related thereto -- will certainly affect the assailed provision. This

Court should bide its time, for it has neither the authority nor the
competence to contemplate laws, much less to create or amend them.
Given the current status of these pending bills, the arguments raised
by petitioner against the assailed provision become all the more
tenuous and amorphous. I feel we should leave that provision
untouched, and instead just accord proper courtesy to our legislators
to determine at the proper time and in the manner they deem best the
appropriate content of any modifications to it. Besides, there is an
omnipresent presumption of constitutionality in every legislative
enactment.135 No confutation of the proviso was ever shown before;
none should be considered now.
Congress Willing
to Perform Duty
Far from being remiss in its duty, Congress is in fact presently
deliberating upon HB 00123, which precisely seeks to amend RA 7653
by, inter alia, exempting from the SSL136 all positions in the
BSP.137 Accordingly, this Court should not preempt Congress,
especially when the latter has already shown its willingness and
ability to perform its constitutional duty.138 After all, petitioner has
not proven any extreme urgency for this Court to shove Congress
aside in terms of providing the proper solution. Lawmaking is not a
pool this Court should wade into.
The Monetary Board has enough leeway to devise its own human
resource management system, subject to the standards of
professionalism and excellence that are in accordance with sound
principles of management.139 This system must also be in close
conformity to the principles provided for, as well as with the rates
prescribed, under RA 6758.
More specifically, there should be "equal pay for substantially equal
work" and any differences in pay should be based "upon substantive
differences in duties and responsibilities, and qualification
requirements of the positions."140 In determining the basic
compensation of all government personnel, due regard should be
given by the said Board to the prevailing rates for comparable work in
the private sector.141 Furthermore, the reasonableness of such
compensation should be in proportion to the national budget 142 and to
the possible erosion in purchasing power as a result of inflation and
other factors.143 It should also abide by the Index of Occupational
Services prepared by the Department of Budget and Management in
accordance with the Benchmark Position Schedule and other factors
prescribed thereunder.144

This Court has not been apprised as to how precisely the

human resource management system of the BSP has been
misused. In the absence of any evidence to the contrary, it is
therefore presumed that the law has been obeyed,145 and
that official duty has been regularly performed146 in
implementing the said law. Where additional implementing
rules would still be necessary to put the assailed provision
into continued effect, any "attack on their constitutionality
would be premature."147
Surely, it would be wise "not to anticipate the serious
constitutional law problems that would arise under situations
where only a tentative judgment is dictated by
prudence."148 Attempts "at abstraction could only lead to
dialectics and barren legal questions and to sterile
conclusions unrelated to actualities."149 A judicial
determination is fallow when inspired by purely cerebral
casuistry or emotional puffery, especially during rowelling
times.

Whatever doubts there may be as to the validity of any provision provisions of the [US] Constitution which prohibit Congress from
therein must necessarily be resolved in its favor.
passing laws in their contravention under any circumstances x x
x."170 Being one such limitation in favor of personal rights enshrined in
the Fourteenth Amendment, equal protection is thus deemed extended
Brief Background of the
to our jurisdiction.
Equal Protection Clause
Despite the egalitarian commitment in the Declaration of
Independence that "all men are created equal," the framers of
the original Constitution of the United States omitted any
constitutional rule of equal protection. Not until 1868, when the
Fourteenth Amendment thereto was ratified by the legislatures
of the several states of the Union,158 did the concept of equal
protection have a constitutional basis;159 and not until the
modern era did the United States Supreme Court give it
enduring constitutional significance.

From its inception, therefore, the equal protection clause in "the

broad and benign provisions of the Fourteenth
Amendment"160 already sought "to place all persons similarly
situated upon a plane of equality and to render it impossible for
No Denial of Equal Protection
any class to obtain preferred treatment."161 Its original
understanding was the proscription only of certain
Even if the matter of urgency is set aside for the nonce, and discriminatory acts based on race,162 although its proper
the Court exercises its power of judicial review 150over acts of construction, when called to the attention of the US Supreme
the legislature,151 I respectfully submit that the Petition should Court in the Slaughter-House Cases, first involved exclusive
still be dismissed because the assailed provision's continued privileges.163 Eventually, other disfavored bases of governmental
operation will not result in a denial of equal protection.
action were identified. Labeled as morally irrelevant
traits, gender, illegitimacyand alienage were included in this list.
Neither the passage of RA 7653 nor its implementation has
been "committed with grave abuse of discretion amounting
Today, this clause is "the single most important concept x x x for
to lack or excess of jurisdiction."152 Every statute is intended the protection of individual rights."164 It does not, however, create
by the legislature to operate "no further than may be
substantive rights.165 Its guaranty is merely "a pledge of the
153
necessary to effectuate" its specific purpose. In the
protection of equal laws."166 Its "promise that no person shall be
absence of a clear finding as to its arbitrary, whimsical or
denied the equal protection of the laws must coexist with the
capricious application, the assailed provision cannot be
practical necessity that most legislation classifies for one
struck down as violative of the fundamental law.
purpose or another, with resulting disadvantage to various
groups or persons."167
154
Moreover, "[u]nder the 'enrolled bill doctrine,' the signing of
a bill by the Speaker of the House and the Senate President As mirrored in our Constitution,168 this clause enjoys the
and the certification of the [s]ecretaries of both Houses of
interpretation given by its American framers169 and magistrates.
155
Congress that it was passed, are conclusive" "not only of
In fact, a century ago, this Court already enunciated that "the
its provisions but also of its due enactment."156 It is therefore mere act of cession of the Philippines to the United States did
futile to welter in the thought that the original and amended
not extend the [US] Constitution here, except such parts as fall
versions of the corresponding bill have no reference to the
within the general principles of fundamental limitations in favor
proviso in question.157 Floor deliberations are either
of personal rights formulated in the [US] Constitution and its
expansive or restrictive. Bills filed cannot be expected to
amendments, and which exist rather by inference and the
remain static; they transmute in form and substance.
general spirit of the [US] Constitution, and except those express

Notably, Justice Malcolm himself said that the constitutional law of

Spain, then in effect, was "entirely abrogated by the change of
sovereignty."171 As a result, it was the constitutional law of the United
States that was transposed to our fledgling political and legal system.
To be precise, the principal organic acts of the Philippines included
President McKinley's Instructions to the Second Philippine
Commission of April 7, 1900, to which this Court recognized the United
States Constitution as a limitation172 upon the powers of the military
governor then in charge of the Philippine Islands. 173
In a catena of constitutional cases decided after the change in
sovereignty, this Court consistently held that the equal protection
clause requires all persons or things similarly situated to "be treated
alike, both as to rights conferred and responsibilities imposed. Similar
subjects x x x should not be treated differently, so as to give undue
favor to some and unjustly discriminate against others."174
Being a constitutional limitation first recognized 175 in Rubi176 -citing Yick Wo177 -- as one "derived from the Fourteenth Amendment to
the United States Constitution,"178 this clause prescribes certain
requirements for validity: the challenged statute must be applicable to
all members of a class, reasonable, and enforced by the regular
methods of procedure prescribed, rather than by purely arbitrary
means.179 Its reasonableness must meet the requirements enumerated
in Vera180 and later summarized in Cayat.181
Three Tests
Passed by Assailed Provision
I respectfully submit that the assailed provision passes the three-tiered
standard of review for equal protection that has been developed by the
courts through all these years.
The Rational Basis Test
Under the first tier or the rational relationship or rational basis test,
courts will uphold a classification if it bears a rational relationship to an
accepted governmental end.182 In other words, it must be "rationally
related to a legitimate state interest."183 To be reasonable, such
classification must be (1) based on substantial distinction that makes

for real differences; (2) germane to the purposes of the law;

(3) not limited to existing conditions only; and (4) equally
applicable to all members of the same class.184
Murphy states that when a governmental classification is
attacked on equal protection grounds, such classification is
in most instances reviewed under the standard rational basis
test.185 Accordingly, courts will not overturn that classification,
unless the varying treatments of different groups are so
unrelated to the achievement of any legitimate purpose that
the courts can only conclude that the governmental actions
are irrational.186 A classification must "be reasonable, not
arbitrary, and x x x rest upon some ground of difference
having a fair and substantial relation to the object of the
legislation, so that all persons similarly circumstanced shall
be treated alike."187
All these conditions are met in the present case. The
retention of the best and the brightest officials in an
independent central monetary authority188 is a valid
governmental objective that can be reasonably met by a
corresponding exemption from a salary standardization
scheme that is based on graduated salary levels. The
legislature in fact enjoys a wide berth in continually
classifying whenever it enacts a law,189 provided that no
persons similarly situated within a given class are treated
differently. To contend otherwise is to be presumptuous
about the legislative intent or lack of it.
Whether it would have been a better policy to make a more
comprehensive classification "is not our province to
decide."190 The absence of legislative facts supporting a
classification chosen has no significance in the rational basis
test.191 In fact, "a legislative choice is not subject to
courtroom fact-finding and may be based on rational
speculation unsupported by evidence or empirical
data."192 Requiring Congress to justify its efforts may even
"lead it to refrain from acting at all."193 In
addition, Murphy holds that the statutory classification
"enjoys a strong presumption of constitutionality, and a
reasonable doubt as to its constitutionality is sufficient to
sustain it."194
Respectfully, therefore, I again differ from
the ponencia's contention that the amendments of the
charters of the seven GFIs from 1995 to 2004195 have
already "unconstitutionalized" the continued implementation

of the BSP proviso. Be it remembered that the first six GFIs

mentioned by Mr. Justice Puno -- namely the LBP, SSS,
SBGFC, GSIS, DBP and HGC -- do not stand in the same class
and category as the BSP.196
While the BSP, as mentioned earlier, is a regulatory agency
performing governmental functions, the six aforementioned
GFIs perform proprietary functions that chiefly compete with
private banks and other non-bank financial institutions. Thus,
the so-called concept of relative constitutionality again finds no
application. Under therational relationship test, there can be no
unequal protection of the law between employees of the BSP
and those of the GFIs. Further, the equal protection clause
"guarantees equality, not identity of rights."197 A law remains
valid even if it is limited "in the object to which it is directed."198
"Defining the class of persons subject to a regulatory
requirement x x x inevitably requires that some persons who
have an almost equally strong claim to favored treatment be
placed on different sides of the line, and the fact that the line
might have been drawn differently at some points is a matter for
legislative, rather than judicial, consideration."199 In fact, as long
as "the basic classification is rationally based, uneven effects
upon particular groups within a class are ordinarily of no
constitutional concern."200 "It is not the province of this Court to
create substantive constitutional rights in the name of
guaranteeing equal protection of the laws."201
On the other hand, the Philippine Deposit Insurance
Corporation (PDIC) is also a government regulatory agency
almost on the same level of importance as the BSP. However,
its charter was only amended very recently -- to be more
precise, on July 27, 2004.202 Consequently, it would be most
unfair to implicitly accuse Congress of inaction, discrimination
and unequal treatment. Comity with and courtesy to a coequal
branch dictate that our lawmakers be given sufficient time and
leeway to address the alleged problem of differing pay
scales. "Only by faithful adherence to this guiding principle of
judicial review of legislation is it possible to preserve to the
legislative branch its rightful independence and its ability to
function."203 Besides, it is a cardinal rule that courts first
ascertain whether construction of a statute is fairly possible by
which any constitutional question therein may be avoided. 204
To explain further, while the possible changes contemplated by
Congress in HB 00123 are similar, if not identical, to those
found in the amended charters of the seven other GFIs already

mentioned, the governmental objectives as explicitly stated in the

explanatory note remain -- to ascertain BSP's effectiveness and to
strengthen its supervisory capability in promoting a more stable
banking system. This fact merely confirms that the present
classification and distinction under the assailed provision still bear a
rational relationship to the same legitimate governmental objectives
and should, therefore, not be invalidated.
The validity of a law is to be determined not by its effects on a
particular case or by an incidental result arising therefrom, but by
the purpose and efficacy of the law in accomplishing that effect or
result.205 This point confirms my earlier position that the enactment of a
law is not the same as its operation. Unlike Vera in which the Court
invalidated the law on probation because of the unequal effect in the
operation of such law,206 the assailed provision in the present case
suffers from no such invidious discrimination. It very well achieves its
purpose, and it applies equally to all government employees within the
BSP. Furthermore, the application of this provision is not made subject
to any discretion, uneven appropriation of funds, or time limitation.
Consequently, such a law neither denies equal protection nor permits
of such denial.
The Strict Scrutiny Test
Under the second tier or the strict scrutiny test, the Court will require
the government to show a compelling or overriding end to justify (1)
the limitation on fundamental rights or (2) the implication of suspect
classes.207 Where a statutory classification impinges upon a
fundamental right or burdens a suspect class, such classification is
subjected to strict scrutiny.208 It will be upheld only if it is shown to be
"suitably tailored to serve a compelling state interest."209
Therefore, all legal restrictions that curtail the civil rights of a suspect
class, like a single racial or ethnic group, are immediately suspect.
"That is not to say that all such restrictions are unconstitutional. It is to
say that courts must subject them to the most rigid
scrutiny."210 Pressing public necessity, for instance, may justify the
existence of those restrictions, but antagonism toward such suspect
classes never can.
To date, no American case -- federal or state -- has yet been
decided involving equal pay schemes as applied either to
government employees vis--vis private ones, or within the
governmental ranks. Salary grade or class of position is not a
fundamental right like
marriage,211 procreation,212 voting,213speech214 and interstate

travel.215 American courts have in fact even refused to

declare government employment a fundamental right. 216

Since employment in the government is not a fundamental right

and government employees below salary grade 20 are not a
suspect class, the government is not required to present a
compelling objective to justify a possible infringement under the
As to suspect classes, non-exempt government employees
(those with salary grades below 20) are not a group "saddled strict scrutiny test. The assailed provision thus cannot be
invalidated via the strict scrutiny gauntlet. "In areas of social and
with such disabilities, or subjected to such a history of
purposeful unequal treatment, or relegated to such a position economic policy, a statutory classification that neither proceeds
along suspect lines nor infringes fundamental constitutional
of political powerlessness, as to command extraordinary
protection from the majoritarian political process." 217 They are rights must be upheld against equal protection challenge if there
is any reasonably conceivable state of facts that could provide a
a group so much unlike race,218 nationality,219 alienage220 or
rational basis for the classification."231
denominational preference221 -- factors that are "seldom
relevant to the achievement of any legitimate state interest
that laws grounded in such considerations are deemed to
The Intensified Means Test
reflect prejudice and antipathy x x x."222
Under the third tier or the intensified means test, the Court
Again, with due respect, the ponencia's223 reference to Yick
should accept the legislative end, but should closely scrutinize
Wo,224 therefore, is unbefitting. Indeed that case held that
its relationship to the classification made.232 There exist
"[t]hough the law itself be fair on its face and impartial in
classifications that are subjected to a higher or intermediate
appearance, yet, if it is applied and administered by public
degree of scrutiny than the deferential or traditional rational
authority with an evil eye and an unequal hand, so as
basis test. These classifications, however, have not been
practically to make unjust and illegal discriminations between deemed to involve suspect classes or fundamental rights; thus,
persons in similar circumstances, material to their rights, the they have not been subjected to the strict scrutiny test. In other
denial of equal justice is still within the prohibition of the
words, such classifications must be "substantially related to a
[C]onstitution."225 The facts in Yick Wo clearly point out that
sufficiently important governmental interest."233 Examples of
the questioned ordinances therein -- regulating the use of
these so-called "quasi-suspect" classifications are those based
wooden buildings in the business of keeping and conducting on gender,234 legitimacy under certain circumstances,235 legal
laundries -- operated in hostility to the race and nationality to residency with regard to availment of free public education, civil
which plaintiffs belonged, being aliens and subjects of the
service employment preference for armed forces veterans who
Emperor of China.226 To a board of supervisors was given the are state residents upon entry to military service, and the right
arbitrary power to withhold permits to carry on a harmless
to practice for compensation the profession for which certain
and useful occupation on which the plaintiffs depended for
persons have been qualified and licensed.236
227
livelihood.
Non-exempt government employees may be a sensitive but not
In contrast, no such arbitrariness is found in the case at bar. a suspect class, and their employment status may
Neither is there any allegation of abuse of discretion in the
be important although not fundamental. Yet, the enactment of
implementation of a human resource development program. the assailed provision is a reasonable means by which the State
There is also no allegation of hostility shown toward
seeks to advance its interest.237 Since such provision sufficiently
employees receiving salaries below grade 20.
serves important governmental interests and is substantially
related to the achievement thereof, then, again it stands.
In fact, for purposes of equal protection analysis, financial
need alone does not identify a suspect class.228 And even if it "In the area of economics and social welfare, a State does not
were to consider government pay to be akin to wealth, it has violate the Equal Protection Clause merely because the
already been held that "where wealth is involved, the Equal
classifications made by its laws are imperfect. If the
Protection Clause does not require absolute equality or
classification has some 'reasonable basis,' it does not offend
precisely equal advantages."229 After all, a law does not
the Constitution simply because the classification 'is not made
become invalid "because of simple inequality," 230 financial or with mathematical nicety or because in practice it results in
otherwise.
some inequality.'"238 "The very idea of classification is that of

inequality, so that x x x the fact of inequality in no manner determines

the matter of constitutionality."239
A statute, therefore, "is not invalid under the Constitution because it
might have gone farther than it did, or because it may not succeed in
bringing about the result that it tends to produce."240 Congress does
not have to "strike at all evils at the same time."241 Quoting Justice
Holmes, a law "aimed at what is deemed an evil, and hitting it
presumably where experience shows it to be most felt, is not to be
upset by thinking up and enumerating other instances to which [the
law] might have been applied equally well, so far as the court can see.
That is for the legislature to judge[,] unless the case is very
clear."242 This Court is without power to disturb a legislative judgment,
unless "there is no fair reason for the law that would not require with
equal force its extension to others whom it leaves untouched."243 To
find fault with a legislative policy "is not to establish the invalidity of the
law based upon it."244
Epilogue
After that rather lengthy discourse, permit me to summarize. I
respectfully submit that the assailed provision is not unconstitutional
either on its face or as applied.
First, the theory of relative constitutionality is inapplicable to and not in
pari materia with the present facts. It pertains only to the
circumstances that an assailed law specifically addressed upon its
passage, and not to extraneous circumstances.
The American cases cited in the ponencia prove my point. The laws
therein that have been declared invalid because of "altered
circumstances" or "changed conditions" are of the emergency type
passed in the exercise of the State's police power, unlike the law
involved in the present case. Moreover, our ruling in Rutter does not
apply, because the assailed provision in the present case is not a
remedial measure subject to a period within which a right of action or a
remedy is suspended. Since the reason for the passage of the law still
continues, the law itself must continue.
Second, this Court should respect Congress as a coequal branch of
government. No urgency has been shown as to require the
peremptory striking down of the assailed provision, and no injuries
have been demonstrated to have been sustained as to require
immediate action on the judiciary's part.

The legislative classification of BSP employees into exempt

and non-exempt, based on the salary grade of their
positions, and their further distinction (albeit perhaps not by
design) from the employees of various GFIs are
nevertheless valid and reasonable in achieving the
standards of professionalism and excellence within the BSP
-- standards that are in accordance with sound principles of
management and the other principles provided for under RA
6758. They are employees not subjected to the same levels
of difficulty, responsibility, and qualification requirements.
Besides, the BSP performs primarily governmental or
regulatory functions, while the GFIs cited in
the ponencia execute purely proprietary ones.
Congress is in fact presently deliberating upon possible
amendments to the assailed provision. Since there is no
question that it validly exercised its power and did not
gravely abuse its discretion when it enacted the law, its will
must be sustained. Under the doctrine of separation of
powers with concomitant respect for coequal and coordinate
branches of government, this Court has neither the authority
nor the competence to create or amend laws.
Third, the assailed provision passes the three-tiered
standard of review for equal protection. It is both a social and
an economic measure rationally related to a governmental
end that is not prohibited. Since salary grade, class of
position, and government employment are not fundamental
or constitutional rights, and non-exempt government
employees or their financial need are not suspect classes,
the government is not at all required to show a compelling
state interest to justify the classification made. The provision
is also substantially related to the achievement of sufficiently
important governmental objectives. A law does not become
invalid because of simple inequality, or because it did not
strike at all evils at the same time.
At bottom, whichever constitutional test is used, the
assailed provision is not unconstitutional. Moreover, a
thorough scrutiny of the Petition reveals that the issue
of equal protection has been raised only in regard to the
unconstitutionality of the proviso at its inception,245 and
not by reason of the alleged "changed conditions"
propounded by the ponencia. With greater reason then
that the Petition should be denied.

In our jurisdiction, relative constitutionality is a rarely utilized

theory having radical consequences; hence, I believe it should
not be imposed by the Court unilaterally. Even in the US, it
applies only when there is a change in factual
circumstances covered by the law, not when there is an
enactment of another law pertaining to subjects not directly
covered by the assailed law. Whether factual conditions have so
changed as to call for a partial or even a total abrogation of the
law is a matter that rests primarily within the constitutional
prerogative of Congress to determine.246 To justify a judicial
nullification, the constitutional breach of a legal provision must
be very clear and unequivocal, not doubtful or argumentative. 247
In short, this Court can go no further than to inquire whether
Congress had the power to enact a law; it cannot delve into the
wisdom of policies it adopts or into the adequacy under existing
conditions of measures it enacts.248The equal protection clause
is not a license for the courts "to judge the wisdom, fairness, or
logic of legislative choices."249 Since relative constitutionality
was not discussed by the parties in any of their
pleadings,fundamental fairness and evenhandedness still
dictate that Congress be heard on this concept before the
Court imposes it in a definitive ruling.

employed in a GFI, they are automatically entitled to the same

benefits, privileges, increases and the like enjoyed by any other rank
and file employee of a GFI, seeing as they are all working for one and
the same government anyway.
It could also have something to do with the fact that Central Bank
employees were quite well paid in the past. They may have
overlooked the fact that the different GFIs are regulated by their
respective charters, and are mandated to perform different functions
(governmental or proprietary). Consequently, their requirements and
priorities are likewise different, and differ in importance in the overall
scheme of things, thus necessitating some degree of differentiation
and calibration in respect of resource allocation, budgets and
appropriations, and the like.
The long and short of it is that there can be no such thing as an
automatic entitlement to increases in compensation, benefits and so
forth, whether we consider the BSP rank and filers similarly situated
along with other rank and filers of GFIs, or as being in a class by
themselves. This is because the BSP is, strictly speaking, not a GFI
but rather, the regulatory agency of GFIs.

The foregoing becomes even more starkly clear when mention is

again made of the fiscal/budget deficit hobbling the national
Just a final observation at this juncture. It seems to me that
government, which has, not surprisingly, triggered waves of belt
when RA 7653 was enacted, the real focus of the second
tightening measures throughout every part of the bureaucracy. This
paragraph of Section 15(c) of Chapter 1 of Article II of the
particular scenario puts Congress somewhat at odds with itself. On the
statute was to enable the officers and executives of the BSP to one hand, it is studying HB 00123 with the end in view of precisely
enjoy a wider scope of exemption from the Compensation
addressing the principal concern of the petitioner. On the other hand, it
Classification System than that stated in the last part of Section is also looking into how the various exemptions from the Salary
9 of the Salary Standardization Law. As can be gleaned from
Standardization Law can be rationalized or done away with, in the
the deliberations on the bill, the mention of BSP employees with hope of ultimately reducing the gargantuan deficit.
salary grade 19 and below seems to have been purely
incidental in the process of defining who were part of the
Thankfully, the Court is not the one having to grapple with such a
executive and officer corps. It appears that the "classification" (if conundrum. It behooves us to give Congress, in the exercise of its
we can call it that) of the rank and filers with salary grade 19
constitutional mandate and prerogative, as much elbow room and
and below, via the challenged proviso, came about not by
breathing space as it needs in order to tackle and perhaps vanquish
design. And it was only after the later pieces of legislation were the many headed monster.
promulgated affecting the charters of the LBP, GSIS, SSS, DBP,
etc. that the proviso came to be considered as "discriminatory."
And while we all watch from the sidelines, we can all console
ourselves and one another that after all, whether we find ourselves
In these trying times, I cannot but sympathize with the BSP rank classified-out as BSP rank and filers, or officers and executives, or
and filers on account of the situation they have found
employees and members of the judiciary, we are -- all of us -- in the
themselves in, and I do not mean to begrudge them the
same boat, for we have all chosen to be in "public service," as the
opportunity to receive a higher compensation package than
term is correctly understood. And what is public service if it does not
what they are receiving now. However, they are operating on
entail a certain amount of personal sacrifice on the part of each one of
the simplistic assumption that, being rank and file employees
us, all for the greater good of our society and country. We each make

our respective sacrifices, sharing in the burden today, in the

hope of a better tomorrow for our children and loved ones,
and our society as a whole. It makes us strong. For this we
can be thankful as well.
WHEREFORE, I vote to DISMISS the Petition. I maintain
that the last proviso of the second paragraph of Section
15(c) of Chapter 1 of Article II of Republic Act No. 7653 is
constitutional. Congress should be given adequate
opportunity to enact the appropriate legislation that will
address the issue raised by petitioner and clear the proviso
of any possible or perceived infringement of the equal
protection clause. At the very least, Congress and herein
respondents should be given notice and opportunity to
respond to the possible application of the theory of
relative constitutionality before it is, if at all, imposed by
this Court.
DISSENTING OPINION
CARPIO, J.:
I dissent from the majority opinion.
First, the majority opinion does not annul a law but enacts a
pending bill in Congress into law. The majority opinion
invades the legislative domain by enacting into law a bill that
the 13th Congress is now considering for approval. The
majority opinion does this in the guise of annulling a proviso
in Section 15(c), Article II of Republic Act No. 7653 ("RA
7653").

the Salary Standardization Law ("SSL"). A similar bill was filed in

the 12th Congress together with the bill exempting from the SSL
all officials and employees of Philippine Deposit Insurance
Corporation ("PDIC"). The bill exempting PDIC employees from
SSL was approved on 27 July 2004 in the dying days of the
12th Congress. However, due to lack of time, the bill exempting
BSP rank-and-file employees did not reach third reading.
What the majority opinion wants is to preempt Congress by
declaring through a judicial decision that BSP rank-and-file
employees are now exempt from the SSL. The majority opinion
seeks to legislate the exemption from SSL by declaring void the
proviso in Section 15(c), Article II of RA 7653 ("proviso"), which
states:
A compensation structure, based on job evaluation
studies and wage surveys and subject to the Board's
approval, shall be instituted as an integral component of
the Bangko Sentral's human resource development
program: Provided, That the Monetary Board shall
make its own system conform as closely as possible
with the principles provided for under Republic Act No.
6758. Provided, however, That compensation and
wage structure of employees whose positions fall
under salary grade 19 and below shall be in
accordance with the rates prescribed under
Republic Act No. 6758. (Emphasis supplied)

The majority opinion justifies its action by saying that while the
proviso was valid when first enacted, it is now
invalid because its continued operation is discriminatory
against BSP rank-and-file employees. All officials and
employees of other government financial institutions ("GFIs")
Second, the majority opinion erroneously classifies
like GSIS, LBP, DBP, SSS, SBGFC, HGC and PDIC are now
the Bangko Sentral ng Pilipinas ("BSP"), a regulatory agency exempt from the SSL. Congress granted the exemptions over
exercising sovereign functions, in the same category as non- the years, for LBP in 1995, SSS in 1997, GSIS in 1997, SBGFC
regulatory corporations exercising purely commercial
in 1997, DBP in 1998, HGC in 2000, and PDIC in 2004.
functions like Land Bank of the Philippines ("LBP"), Social
Security System ("SSS"), Government Service Insurance
Among the GFIs granted exemption from SSL, only PDIC is a
System ("GSIS"), Development Bank of the Philippines
regulatory agency. PDIC received its SSL exemption only
("DBP"), Small Borrowers Guarantee Fund Corporation
this year - 2004. PDIC is the first regulatory GFI whose
("SBGFC"), and Home Guarantee Corporation ("HGC").
rank-and-file employees are exempt from the SSL. Rankand-file employees of BSP, a GFI exercising regulatory
Usurpation of Legislative Power
functions, cannot at this time claim any unreasonable or
oppressive delay in securing legislative exemption from SSL,
There is a bill now pending in Congress, House Bill No. 123, assuming Congress is disposed to grant an exemption.
seeking to exempt the rank-and-file employees of BSP from

At this time, this Court cannot say that the continued validity of the
proviso in Section 15(c) of RA 7653 is unreasonable and oppressive
on BSP rank-and-file employees. This Court cannot say that Congress
gravely abused its jurisdiction in not exempting BSP rank-and-file
employees from the SSL at the same time as PDIC. Congress is now
considering BSP's exemption, and this Court cannot imperiously
conclude that Congress had more than enough time to act on BSP's
exemption.
Even if Congress does not act on BSP's exemption for more than one
year, it does not follow that this Court should then exempt BSP rankand-file employees from the SSL. As the law now stands, PDIC is
the only regulatory GFI whose rank-and-file employees are exempt
from SSL. All other GFIs exercising regulatory functions are not
exempt from the SSL, including BSP whose rank-and file employees
are subject to the SSL.
The grant of exemption to PDIC is the legislative act that is
questionable for being discriminatory against all other self-sustaining
government agencies exercising regulatory functions. Such grant to
one regulatory agency, without a similar grant to other regulatory
agencies whose incomes exceed their expenses, creates a class of
exemption that has dubious basis. In short, the singular exemption of
PDIC from the SSL discriminates against all other self-sustaining
government agencies that exercise regulatory functions.
The grant of SSL exemption to GFIs has ramifications on the
deepening budget deficit of the government. Under Republic Act No.
76561, all GFIs are required to remit to the National Treasury at least
50% of their annual net earnings. This remittance forms part of the
government revenues that fund the annual appropriations act. If the
remittances from GFIs decrease, the national revenues funding the
annual appropriations act correspondingly decrease. This results in
widening even more the budget deficit.
A bigger budget deficit means there are no revenues to fund salary
increases of all government employeeswho are paid out of the
annual appropriations act. The exemption of GFIs from SSL may delay
or even prevent a general increase in the salary of all government
employees, including rank-and-file employees in the judiciary. This
Court cannot simply ordain an exemption from SSL without
considering serious ramifications on fiscal policies of the government.
This is a matter better left to the Executive and Legislative
Departments. This Court cannot intrude into fiscal policies that are the
province of the Executive and Legislative Departments.

Indeed, Congress should pass a law rationalizing the

exemptions of all government agencies from the SSL. The
piecemeal grant of exemptions is creating distortions in the
salary structure of government employees similarly situated.
Such rationalization, however, is not the function of the
Court. Even as a practical matter, this Court does not have
the necessary data to rationalize the exemptions of all
government agencies from the SSL.

legislative act but an enactment of legislation exempting one

Non-regulatory GFIs derive their income solely from commercial
agency from the SSL without exempting the remaining agencies transactions. They compete head on with private financial institutions.
similarly situated.
Their operating expenses, including employees' salaries, come from
their own self-generated income from commercial
2
activities. However, regulatory GFIs like BSP and PDIC derive their
The majority opinion cites Rutter v. Esteban as precedent for
income from fees, charges and other impositions that all banks
declaring the proviso in Section 15(c) of RA 7653
are by law required to pay. Regulatory GFIs have no competitors in
unconstitutional. Rutter is not applicable to the present case.
the private sector. Obviously, BSP and PDIC do not belong to the
In Rutter, the Court declared on 18 May 1953 that while the
Debt Moratorium Law was valid when enacted on 26 July 1948, same class of GFIs as LBP, SSS, GSIS, SBGFC, DBP and HGC.
The power of judicial review of legislative acts presumes that its "continued operation and enforcement x x x is unreasonable
Congress has enacted a law that may violate the
and oppressive, and should not be prolonged a minute longer." Exempting non-regulatory GFIs from the SSL is justified because
Constitution. This Court cannot exercise its power of judicial With the discontinuance of the effectivity of the Debt Moratorium these GFIs operate just like private commercial entities. Their
review before Congress has enacted the questioned law. In
Law, the debtors who benefited from the law were returned to
revenues, from which they pay the salaries of their employees, come
this case, Congress is still considering the bill exempting
their original situation prior to the enactment of the law. This
solely from commercial operations. None of their revenues comes
BSP rank-and-file employees from the SSL. There is still no meant that the creditors could resume collecting from the
from mandatory government exactions. This is not the case of GFIs
opportunity for this Court to exercise its review power
debtors the debts the payment of which was suspended by the
like BSP and PDIC which impose regulatory fees and charges.
because there is nothing to review.
Debt Moratorium Law. The creditors and debtors were
restored to their original situation before the enactment of
Conclusion
the Debt Moratorium Law. No debtor or creditor was placed
The majority opinion, however, claims that because of the
in a new situation that required the enactment of a new law. Under the Constitution, Congress is an independent department that is
failure of Congress to enact the bill exempting BSP rankand-file employees from the SSL, this Court should now
a co-equal of the Supreme Court. This Court has always accorded
annul the proviso in Section 15(c) of RA 7653 to totally
In the present case, declaring the proviso in Section 15(c) of RA Congress the great respect that it deserves under the Constitution.
exempt BSP from the SSL. This is no longer an exercise of
7653 no longer legally effective does not restore the BSP
The power to legislate belongs to Congress. The power to review
the power of judicial review but an exercise of the power of
rank-and-file employees to their original situation, which
enacted legislation belongs to the Supreme Court. The Supreme Court
legislation - a power that this Court does not possess. The
subjected them to the SSL. Instead, the discontinuance of the
has no power to declare a pending bill in Congress as deemed
power to exempt a government agency from the SSL is a
validity of the proviso brings the BSP rank-and-file employees to enacted into law. That is not the power to review legislation but the
legislative power, not a judicial power. By annulling a prior
a new situation that they are not entitled without the
power to usurp a legislative function.
valid law that has the effect of exempting BSP from the SSL, enactment of a new law. The effect of the majority decision is
this Court is exercising a legislative power.
to legislate a new law that brings the BSP rank-andfile
The majority opinion is leading this Court into usurping the primary
employees to a new situation. Clearly, the Rutterdoctrine does jurisdiction of Congress to enact laws. The majority opinion brings this
not apply to the present case.
The power of judicial review is the power to strike down an
Court and Congress into a needless clash of powers - whether the
unconstitutional act of a department or agency of
power of judicial review of legislative acts includes the power to initiate
government, not the power to initiate or perform an act that
Erroneous Classification of BSP as GFI
legislative acts if this Court becomes impatient with the pace of
is lodged in another department or agency of government. If Similar to LBP, DBP and Others
legislative process. Clearly, this Court does not have the power to
this Court strikes down the law exempting PDIC from the
legislate. Congress has a right to guard zealously its primary power to
SSL because it is discriminatory against other government
The majority opinion classifies BSP as a GFI just like GSIS,
enact laws as much as this Court has a right to guard zealously its
agencies similarly situated, this Court is exercising its judicial LBP, DBP, SSS, SBGFC, HGC and PDIC. Here lies the basic
power to review enacted legislations.
review power. The effect is torevert PDIC to its previous
error of the majority opinion. GSIS, LBP, DBP, SSS, SBGFC
situation of being subject to the SSL, the same situation
and HGC are GFIs but are not regulatory agencies. BSP and Accordingly, I vote to dismiss the petition.
governing BSP and other agencies similarly situated.
PDIC are GFIs but are also regulatory agencies just like
other governmental regulatory agencies. The majority
DISSENTING OPINION
However, by annulling the proviso in Section 15(c) of RA
opinion is comparing apples with oranges. GFIs that do not
7653, BSP is not reverted to its previous situation but
exercise regulatory functions operate just like commercial
CARPIO MORALES, J.:
brought to a new situation that BSP cannot attain
financial institutions. However, GFIs that exercise regulatory
without a new legislation. Other government agencies
functions, like BSP and PDIC, are unlike commercial financial
Is being an employee of a Government Owned or Controlled
similarly situated as BSP remain in their old situation still
institutions. BSP and PDIC exercise sovereign functions unlike
Corporation (GOCC) or a Government Financial Institution (GFI) a
being subject to the SSL. This is not an annulment of a
the other non-regulatory GFIs.

reasonable and sufficient basis for exemption from the

compensation and position classification system for all
government personnel provided in Republic Act No.
6758,1 entitled Compensation and Position Classification Act
of 1989, also known as the Salary Standardization Law?
The main opinion, by simultaneously applying two different
standards for determining compliance with the constitutional
requirement of equal protection - the "rational basis test" and
the "strict scrutiny test" - under the rubric of "relative
constitutionality," holds that it is.
Upon studied reflection, however, I find that such conclusion
is contrary to the weight of the applicable legal authorities;
involves an evaluation of the wisdom of the law and a preemption of the congressional power of appropriation, which
are both beyond the scope of judicial review; and results in
increased, rather than reduced, inequality within the
government service - creating, as it does, a preferred subclass of government employees,i.e. employees of GFIs,
devoid of either a rational factual basis or a discernable
public purpose for such classification.
Consequently, I am constrained to respectfully register my
dissent.

government employees employed in proprietary corporations

and those strictly performing governmental functions, the
disparity, having been brought about by the increasing number
of exemptions of proprietary corporations through special
legislation from the coverage of the then Integrated
Reorganization Plan of 1972.3Part III, Chapter II, Article II of the
latter stated:
Article II - Reexamination of the WAPCO4 Plans
After thirteen years in operation, the WAPCO Plans
have been undermined by the increasing number of
exemptions from its coverage through special
legislation. Moreover, through court decisions and the
opinions of the Secretary of Justice, the so-called
proprietary corporations are no longer subject to the
Plans Through collective bargaining, employees of
government corporations have been able to secure not
only higher salaries but liberal fringe benefits as well. As
revealed by the 1970 Presidential Committee to Study
Corporate Salary Scales, the average compensation in
some of these corporations, using the average
compensation of positions covered by the WAPCO
Plans as base (100%), is as follows: DBP - 203%, CB 196%, GSIS -147%, SSS - 150%, and NWSA - 111%.5

as amended, that shall be applied for all government entities,

as mandated by the Constitution.
xxx (Emphasis supplied)
The Salary Standardization Law applies to all positions, whether
elective or appointive within the entire length and breadth of the Civil
Service including those in the GOCCs and GFIs:
Sec. 4. Coverage. The Compensation and Position
Classification System herein provided shall apply to all
positions, appointive or elective, on full or part-time
basis, now existing or hereafter created in the
government, including government-owned or controlled
corporations and government financial institutions.
The term "government" refers to the Executive, the Legislative
and the Judicial Branches and the Constitutional Commissions
and shall include all, but shall not be limited to, departments,
bureaus, offices, boards, commissions, courts, tribunals,
councils, authorities, administrations, centers, institutes, state
colleges and universities, local government units, and the
armed forces. The term "government-owned or controlled
corporations and financial institutions" shall include all
corporations and financial institutions owned or controlled by
the National Government, whether such corporations and
financial institutions perform governmental or proprietary
functions. (Emphasis and underscoring supplied)

Thus, the stated policy behind the Salary Standardization Law is

to provide equal pay for substantially equal work and to base
differences in pay upon substantive differences in duties and
On August 21, 1989, R.A. No. 6758 (the Salary
responsibilities, and qualification requirements of the positions, Nota bene, Section 21 of the Salary Standardization Law provides that
Standardization Law), amending Presidential Decree No.
while giving due regard to, among others, prevailing rates in the "[a]ll provisions of Presidential Decree No. 985, as amended by
2
985 (the Old Salary Standardization Law), was enacted in
private sector for comparable work:
response to the mandate to provide for a standardized
Presidential Decree No. 1597, which are not inconsistent with this Act
compensation scale for all government employees, including
and are not expressly modified, revoked or repealed in this Act shall
SECTION 2. Statement of Policy. It is hereby
those employed in GOCCs, under Section 5, Article IX-B, of
continue to be in full force and effect." Thus, the definition of terms
declared the policy of the State to provide equal pay found in Section 3 of P.D. No. 985 continues to be applicable to the
the Constitution:
for substantially equal work and to base differences Salary Standardization Law, including:
in pay upon substantive differences in duties and
Sec. 5. The Congress shall provide for the
responsibilities, and qualification requirements of
standardization of compensation of government
SECTION 3. Definition of Terms. As used in this Decree,
the positions. In determining rates of pay, due
officials and employees, including those in
the following shall mean:
regard shall be given to, among others, prevailing
government-owned or controlled corporations with
rates in the private sector for comparable work. For
original charters, taking into account the nature of
xxx
this purpose, the Department of Budget and
the responsibilities pertaining to, and the
Managements (DBM) is hereby directed to establish
qualifications required for their positions.
c. Class (of position) The basic unit of the Position
and administer a unified Compensation and Position
Classification System. A class consists of all those positions in
Classification System, hereinafter referred to as the
This provision was taken from the 1973 Constitution in order
the system which are sufficiently similar as to (1) kind or
System, as provided for in Presidential Decree No. 985,
to address the wide disparity of compensation between
subject matter of work, (2) level of difficulty and responsibility,
The relevant antecedents of this case are as follows:

and (3) the qualification requirements of the work, to

warrant similar treatment in personnel and pay
administration.
d. Class Specification or Standards A written
description of a class of position(s). It distinguishes
the duties, responsibilities and qualification
requirements of positions in a given class from those
of other classes in the Position Classification
System.
e. Classification The act of arranging positions
according to broad occupational groupings and
determining differences of classes within each
group.
xxx
g. Compensation or Pay System A system for
determining rates of pay for positions and
employees based on equitable principles to be
applied uniformly to similar cases. It consists, among
others, of the Salary and Wage Schedules for all
positions, and the rules and regulations for its
administration.
h. Grade Includes all classes of positions which,
although different with respect to kind or subject
matter of work, are sufficiently equivalent as to level
of difficulty and responsibility and level of
qualification requirements of the work to warrant the
inclusion of such classes of positions within one
range of basic compensation.
xxx

o. Position Classification System A system for

exempted government agencies, including GOCCs and GFIs from the
classifying positions by occupational groups, series and coverage of the new Compensation and Position Classification
classes, according to similarities or differences in duties System:
and responsibilities, and qualification requirements. It
consists of (1) classes and class specifications and (2)
Sec. 16. Repeal of Special Salary Laws and Regulations.
the rules and regulations for its installation and
All laws, decrees, executive orders, corporate charters, and
maintenance and for the interpretation, amendment and
other issuances or parts thereof, that exempt agencies from
alternation of the classes and class specifications to
the coverage of the System, or that authorize and fix position
keep pace with the changes in the service and the
classification, salaries, pay rates or allowances of specified
positions therein.
positions, or groups of officials and employees or of agencies,
which are inconsistent with the System, including the proviso
xxx
under Section 2, and Section 16 of Presidential Decree No.
985 are hereby repealed.
q. Reclassification or Reallocation A change in the
classification of a position either as a result of a change Thus, all exemptions from the integrated Compensation Classification
in its duties and responsibilities sufficient to warrant
System granted prior to the effectivity of the Salary Standardization
placing the position in a different class, or as result of a Law, including those under Sections 26 and 167 of Presidential Decree
reevaluation of a position without a significant change in No. 985 (the Old Salary Standardization Law) as well as under the
duties and responsibilities.
respective GOCC and GFI charters, were repealed8, subject to the
non-diminution provision of Section 12.9 As a result, the general rule is
that all government employees, including employees of GOCCs and
r. Salary or Wage Adjustment A salary or wage
GFIs, are covered by the Compensation Classification System
increase towards the minimum of the grade, or an
increase from a non-prescribed rate to a prescribed rate provided for by the Salary Standardization Law.
within the grade.
Nonetheless, Congress acknowledged the need of GOCCs and GFIs
s. Salary or Wage Grade The numerical place on the performing proprietary functions to maintain competitive salaries
salary or Wage Schedule representing multiple steps or comparable to the private sector with respect to key top-level
positions in order not to lose these personnel to the private sector.
rates which is assigned to a class.
Thus, Section 9 of the Salary Standardization Law empowers the
t. Salary or Wage Schedule A numerical structure in President,in truly exceptional cases, to approve higher compensation,
the Compensation System consisting of several grades, exceeding Salary Grade 30, to the chairman, president, general
manager, and the board of directors of government-owned or
each grade with multiple steps with a percentage
controlled corporations and financial institutions:
differential throughout the pay table. A classified
position is assigned a corresponding grade in the
Schedule.

m. Position A set of duties and responsibilities,

assigned or delegated by competent authority and
performed by an individual either on full-time or parttime basis. A position may be filled or vacant.

u. Salary or Wage Step Increment An increase in

salary or wage from one step to another step within the
grade from the minimum to maximum. Also known as
within grade increase.

n. Position Classification The grouping of

positions into classes on the basis of similarity of
kind and level of work, and the determination of the
relative worth of those classes of positions.

xxx
At the same time, Section 16 of the Salary Standardization
Law expressly repealed all laws, decrees, executive orders,
corporate charters, and other issuances or parts thereof that

SECTION 9. Salary Grade Assignments for Other Positions.

For positions below the Officials mentioned under Section 8
hereof and their equivalent, whether in the National
Government, local government units, government-owned or
controlled corporations or financial institutions, the Department
of Budget and Management is hereby directed to prepare the
Index of Occupational Services to be guided by the
Benchmark Position Schedule prescribed hereunder and the
following factors: (1) the education and experience required to
perform the duties and responsibilities of the positions; (2) the
nature and complexity of the work to be performed; (3) the
kind of supervision received; (4) mental and/or physical strain
required in the completion of the work; (5) nature and extent of

internal and external relationships; (6) kind of

supervision exercised; (7) decision-making
responsibility; (8) responsibility for accuracy of
records and reports; (9) accountability for funds,
properties and equipment; and (10) hardship, hazard
and personal risk involved in the job.
xxx
In no case shall the salary of the chairman,
president, general manager or administrator, and
the board of directors of government-owned or
controlled corporations and financial institutions
exceed Salary Grade 30: Provided, That the
President may, in truly exceptional cases,
approve higher compensation for the aforesaid
officials. (Emphasis and underscoring supplied)

Bangko Sentral's human resource development

program: Provided, That the Monetary Board shall
make its own system conform as closely as possible
with the principles provided for under Republic Act No.
6758. Provided, however,That compensation and
wage structure of employees whose positions fall
under salary grade 19 and below shall be in
accordance with the rates prescribed under
Republic Act No. 6758.(Emphasis supplied; italics in
the original)
However, the last proviso of Section 15 (c) expressly provides
that the compensation and wage structure of employees whose
positions fall under Salary Grade (SG) 19 and below shall, like
all other government employees, be in accordance with the
rates prescribed under the Salary Standardization Law.

based on substantial distinctions which make real differences. For, so

petitioner contends, all BSP personnel are similarly situated since,
regardless of the salary grade, they are appointed by the Monetary
Board and required to possess civil service eligibilities, observe the
same office rules and regulations, and work at the same national or
regional offices, and, even if their individual duties differ, directly or
indirectly their work would still pertain to the operation and functions of
the BSP.12 More specifically, it argues that there is "nothing between
SGs 19 and 20 that should warrant the parting of the BSP 'Red Sea' of
civil servants into two distinct camps of the privileged and the less
privileged."13

Petitioner further submits that the personnel of the Government

Service Insurance System (GSIS), Land Bank of the Philippines (LBP),
Development Bank of the Philippines (DBP) and the Social Security
System (SSS) are all exempted from the coverage of the Salary
Standardization Law. Thus, within the class of rank and file personnel
Thus, on account of the above-quoted provision, BSP rank and of government financial institutions, the BSP rank and file personnel
14
file employees with (SG) 19 and below, like their counterparts in are also discriminated upon.
On July 3, 1993, Republic Act. No. 7653, The New Central
the other branches of the civil service, are paid in accordance
Bank Act, took effect. Section 15 (c) thereof authorizes the
The Case for Respondent Executive Secretary
Monetary Board of the Bangko Sentral ng Pilipinas (BSP) to with the rates prescribed in the New Salary Scale under the
Salary
Standardization
Law,
while
officers
with
SG
20
and
institute a compensation structure based on job evaluation
above are exempt from the coverage of said law, they being
studies and wage surveys as an integral component of the
On the other hand, respondent Executive Secretary, through the
paid pursuant to the New Salary Scale containing Salary
BSP's human resource development program, thereby
Solicitor General, contends that the assailed proviso does not violate
Grades A to J10 issued by the Monetary Board which took effect the equal protection clause. He submits that the classification of BSP
implicitly providing for a wider scope of exemption from the
on January 1, 2000.
Compensation Classification System than that found in the
employees relative to compensation structure is based on actual and
last paragraph of Section 9 of the Salary Standardization
real differentiation between employees exercising managerial
Law, to wit:
The Case for the Petitioner
functions and the rank and file,15 even as it strictly adheres to the
enunciated policy in The New Central Bank Act to establish
SEC. 15. Exercise of Authority. - In the exercise of
The Central Bank (now Bangko Sentral ng Pilipinas) Employees professionalism and excellence within the BSP subject to prevailing
laws and policies of the national government.16
its authority, the Monetary Board shall:
Association, Inc., via the instant petition for prohibition filed on
June 8, 2001, seeks to prohibit herein respondents BSP and the
Executive Secretary of the Office of the President from further
In addition, he notes that Article II, Section 15 (c) serves as an
xxx
implementing the last proviso of Chapter I, Article II, Section 15 exemption to the Salary Standardization Law which, for all intents and
purposes is a general law applicable to all government employees. As
(c) establish a human resource management system (c) of The New Central Bank Act, which it assails as
unconstitutional
for
violating
the
equal
protection
such, the provision exempting certain BSP employees from its
which shall govern the selection, hiring,
11
clause,
hence,
null
and
void.
coverage must be strictly construed.17
appointment, transfer, promotion, or dismissal of all
personnel. Such system shall aim to establish
It is petitioner's allegation that the application of the
The Case for Respondent Bangko Sentral
professionalism and excellence at all levels of
Compensation
Classification
System
under
the
Salary
the Bangko Sentral in accordance with sound
Standardization Law to the rank and file employees, but not the Likewise advancing the view that the assailed proviso is constitutional,
principles of management.
BSP's officers, would violate the equal protection clause as the respondent BSP argues that Congress, in passing the New Central
former are placed in a less favorable position compared to the
Bank Act, has in fact determined that there are substantial reasons for
A compensation structure, based on job
latter.
classifying BSP employees into those covered by the Salary
evaluation studies and wage surveys and
Standardization Law and those not covered by the Salary
subject to the Board's approval, shall be
Petitioner asserts that the classification of BSP employees into
Standardization Law.18
instituted as an integral component of the
two classes based solely on the SG of their positions is not

However, BSP additionally claims that while the assailed

proviso is constitutional, the manner by which it is
implemented may give rise to the question of constitutional
infirmity.19 It thus proffers that the assailed provision should
be interpreted together with the other provisions of The New
Central Bank Act, such as that vesting it with "fiscal and
administrative autonomy" and that directing the Monetary
Board to "establish professionalism and excellence in all
levels in accordance with sound principles of
management."20 It concludes that the assailed provision does
not adopt provisions of the Salary Standardization Law in
their entirety, but refers only to the basic pay of the
employees and does not cover other benefits which it (the
BSP) may deem necessary to grant its employees.21
Admittedly, the BSP Monetary Board has endeavored to
grant additional allowances to the "rank and file" so that they
may be given substantially similar benefits being enjoyed by
the officers. The Commission on Audit (COA), however,
disallowed these additional allowances on the ground that
the grant of the same violates the provisions of the Salary
Standardization Law and The New Central Bank Act.22
Issues for Resolution
In essence, petitioner asserts that its members are similarly
situated to both the executive/officer corps of the BSP and
the rank and file employees of the LBP, DBP, SSS and GSIS
such that the operation of the equal protection guaranty in
either case would entitle them to be placed under a
compensation and position classification system outside of
that mandated by the Salary Standardization Law.
Clearly, the resolution of the instant petition hinges on a
determination of whether the right of petitioner's members to
the equal protection of the laws has been violated by (a) the
classification in The New Central Bank Act between the
executive personnel (those with SG 20 and above), who are
exempt from the Compensation Classification System
mandated under the Salary Standardization Law, and the
rank and file employees (those with SG 19 and below) who
are covered by the latter; and/or (b) the disparity in treatment
between the rank and file employees of the BSP and the
rank and file employees of the LBP, DBP, SSS and GSIS,
who were subsequently exempted from said Compensation
Classification System by their amended charters.

Put differently, the instant Petition presents two principal issues

for resolution: (1) whether the distinction between managerial
and rank and file employees in The New Central Bank Act
partakes of an invidious discrimination proscribed by the equal
protection clause; and (2) whether, by operation of the equal
protection clause, the rank and file employees of the BSP are
entitled to exemption from the Compensation Classification
System mandated under the Salary Standardization Law as a
consequence of the exemption of the rank and file employees of
the LBP, DBP, SSS and GSIS.
Standards for Equal Protection Analysis
Before proceeding to resolve these issues, it may serve the
ends of clarity to first review the basic framework by which the
courts analyze challenges to the constitutionality of statutes as
well as the standards by which compliance with the equal
protection clause may be determined.
Presumption of Constitutionality
It is a basic axiom of constitutional law that all presumptions are
indulged in favor of constitutionality and a liberal interpretation
of the constitution in favor of the constitutionality of legislation
should be adopted. Thus, if any reasonable basis may be
conceived which supports the statute, the same should be
upheld. Consequently, the burden is squarely on the shoulders
of the one alleging unconstitutionality to prove invalidity beyond
a reasonable doubt by negating all possible bases for the
constitutionality of a statute.23 Verily, to doubt is to sustain.24
The rationale for this presumption in favor of constitutionality
and the corresponding restraint on the part of the judicial branch
was expounded upon by Justice Laurel in the case of People v.
Vera,25 viz:
This court is not unmindful of the fundamental criteria in
cases of this nature that all reasonable doubts should
be resolved in favor of the constitutionality of a
statute. An act of the legislature approved by the
executive, is presumed to be within constitutional
limitations. The responsibility of upholding the
Constitution rests not on the courts alone but on the
legislature as well. "The question of the validity of every
statute is first determined by the legislative department
of the government itself." (U. S. vs. Ten Yu [1912], 24
Phil., 1, 10; Case vs. Board of Health and Heiser

[1913], 24 Phil., 250, 276; U. S. vs. Joson [1913], 26 Phil., 1.)

And a statute finally comes before the courts sustained by the
sanction of the executive.The members of the Legislature
and the Chief Executive have taken an oath to support the
Constitution and it must be presumed that they have been
true to this oath and that in enacting and sanctioning a
particular law they did not intend to violate the
Constitution. The courts cannot but cautiously exercise
its power to overturn the solemn declarations of two of
the three grand departments of the government. (6 R. C.
L., p. 101.) Then, there is that peculiar political philosophy
which bids the judiciary to reflect the wisdom of the
people as expressed through an elective Legislature and
an elective Chief Executive. It follows, therefore, that the
courts will not set aside a law as violative of the
Constitution except in a clear case. This is a proposition too
plain to require a citation of authorities.26 (Emphasis and
underscoring supplied)
Indeed, it has been observed that classification is the essence of
legislation.27 On this point, the observation of the United States
Supreme Court in the recent case of Personnel Administrator of
Massachusetts v. Feeney28 is illuminating:
The equal protection guarantee of the Fourteenth Amendment
does not take from the States all power of classification. Most
laws classify, and many affect certain groups unevenly,
even though the law itself treats them no differently from
all other members of the class described by the law. When
the basic classification is rationally based, uneven effects
upon particular groups within a class are ordinarily of no
constitutional concern. The calculus of effects, the manner
in which a particular law reverberates in a society is a
legislative and not a judicial responsibility. In assessing an
equal protection challenge, a court is called upon only to
measure the basic validity of the legislative
classification.When some other independent right is not at
stake and when there is no "reason to infer antipathy," it
is presumed that "even improvident decisions will
eventually be rectified by the democratic
process ...."29 (Emphasis supplied; citations omitted)
Hence, in enacting laws, the legislature is accorded the widest scope
of discretion within the bounds of the Constitution; and the courts, in
exercising their power of judicial review, do not inquire into the wisdom
of the law. On this point, this Court in Ichong, etc., et al. v. Hernandez,
etc., and Sarmiento,30 stated:

e. Legislative discretion not subject to judicial review.

It is an established principle of constitutional law that

the guaranty of the equal protection of the laws is not
violated by a legislation based on reasonable
classification. And the classification, to be
reasonable, (1) must rest on substantial
distinctions; (2) must be germane to the purposes
of the law; (3) must not be limited to existing
conditions only; and (4) must apply equally to all
members of the same class.34 (Emphasis supplied;
citations omitted)

Now, in this matter of equitable balancing, what is

the proper place and role of the courts? It must not
be overlooked, in the first place, that the
legislature, which is the constitutional repository
of police power and exercises the prerogative of
determining the policy of the State, is by force of
circumstances primarily the judge of necessity,
adequacy or reasonableness and wisdom, of any
law promulgated in the exercise of the police
To the foregoing may be added the following observations of the
power, or of the measures adopted to implement Court in Philippine Judges Association, v. Prado,35 to wit:
the public policy or to achieve public interest.
On the other hand, courts, although zealous
The equal protection of the laws is embraced in the
guardians of individual liberty and right, have
concept of due process, as every unfair discrimination
nevertheless evinced a reluctance to interfere
offends the requirements of justice and fair play. It has
with the exercise of the legislative prerogative.
nonetheless been embodied in a separate clause in
They have done so early where there has been a
Article III Sec. 1, of the Constitution to provide for a
clear, patent or palpable arbitrary and
more specific guaranty against any form of undue
unreasonable abuse of the legislative
favoritism or hostility from the government. Arbitrariness
prerogative. Moreover, courts are not supposed
in general may be challenged on the basis of the due
to override legitimate policy, and courts never
process clause. But if the particular act assailed
inquire into the wisdom of the law.31 (Emphasis
partakes of an unwarranted partiality or prejudice, the
supplied)
sharper weapon to cut it down is the equal protection
clause.
Only by faithful adherence to this principle of judicial review
is it possible to preserve to the legislature its prerogatives
According to a long line of decisions, equal protection
under the Constitution and its ability to function.32
simply requires that all persons or things similarly
situated should be treated alike, both as to rights
The presumption of constitutionality notwithstanding, the
conferred and responsibilities imposed. Similar
courts are nevertheless duty bound to strike down any
subjects, in other words, should not be treated
statute which transcends the bounds of the Constitution
differently, so as to give undue favor to some and
including any classification which is proven to be
unjustly discriminate against others.
unreasonable, arbitrary, capricious or oppressive.
The equal protection clause does not require the
The question that arises then is by what standard(s) should
universal application of the laws on all persons or
the reasonableness, and therefore the validity, of a
things without distinction. This might in fact
legislative classification be measured?
sometimes result in unequal protection, as where,
for example, a law prohibiting mature books to all
persons, regardless of age, would benefit the morals of
The Rational Basis Test
the youth but violate the liberty of adults. What the
clause requires is equality among equals as
It may be observed that, in the Philippines, the traditional
determined according to a valid classification. By
and oft-applied standard is the so-called "rational basis test,"
classification is meant the grouping of persons or
the requisites of which were first summarized by Justice
things similar to each other in certain particulars
33
(later Chief Justice) Moran in the case of People v. Cayat to
wit:

and different from all others in these same

particulars.36 (Emphasis supplied; footnotes omitted)
The Rational Basis Test has been described as adopting a
"deferential" attitude towards legislative classifications. As previously
discussed, this "deference" comes from the recognition that
classification is often an unavoidable element of the task of legislation
which, under the separation of powers embodied in our Constitution, is
primarily the prerogative of Congress.
Indeed, in the United States, from where the equal protection provision
of our Constitution has its roots, the Rational Basis Test remains a
primary standard for evaluating the constitutionality of a statute.
Thus, in Lying v. International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America, UAW,37 where a
statute providing that no household may become eligible to participate
in the food stamp program while any of its members are on strike, or
receive an increase in the allotment of food stamps already being
received because the income of the striking member has decreased,
the U.S. Supreme Court held:
Because the statute challenged here has no substantial
impact on any fundamental interest and does not "affect
with particularity any protected class," we confine our
consideration to whether the statutory classification is
"rationally related to a legitimate governmental
interest." We have stressed that this standard of review is
typically quite deferential; legislative classifications are
"presumed to be valid," largely for the reason that "the
drawing of lines that create distinctions is peculiarly a
legislative task and unavoidable one."
xxx
We have little trouble in concluding that 109 is rationally
related to the legitimate governmental objective of avoiding
undue favoritism to one side or the other in private labor
disputes. The Senate Report declared: "Public policy demands
an end to the food stamp subsidization of all strikers who
become eligible for the program solely through the temporary
loss of income during a strike. Union strike funds should be
responsible for providing support and benefits to strikers
during labor-management disputes." It was not part of the
purposes of the Food Stamp Act to establish a program that
would serve as a weapon in labor disputes; the Act was
passed to alleviate hunger and malnutrition and to strengthen

the agricultural economy. The Senate Report stated

that "allowing strikers to be eligible for food stamps
has damaged the program's public integrity" and
thus endangers these other goals served by the
program. Congress acted in response to these
problems.
xxx
It is true that in terms of the scope and extent of their
ineligibility for food stamps, 109 is harder on
strikers than on "voluntary quitters." But the concern
about neutrality in labor disputes does not arise with
respect to those who, for one reason or another,
simply quit their jobs. As we have stated in a related
context, even if the statute "provides only 'rough
justice,' its treatment ... is far from
irrational." Congress need not draw a statutory
classification to the satisfaction of the most
sharp-eyed observers in order to meet the
limitations that the Constitution imposes in this
setting. And we are not authorized to ignore
Congress' considered efforts to avoid favoritism
in labor disputes, which are evidenced also by
the two significant provisos contained in the
statute. The first proviso preserves eligibility for the
program of any household that was eligible to
receive stamps "immediately prior to such strike."
The second proviso makes clear that the statutory
ineligibility for food stamps does not apply "to any
household that does not contain a member on strike,
if any of its members refuses to accept employment
at a plant or site because of a strike or lockout." In
light of all this, the statute is rationally related to the
stated objective of maintaining neutrality in private
labor disputes.38 (Emphasis and underscoring
supplied; citations and footnotes omitted)
More recently, the American Court summarized the
principles behind the application of the Rational Basis Test in
its jurisdiction in Federal Communications Commission v.
Beach Communications, Inc.,39 as follows:
Whether embodied in the Fourteenth Amendment or
inferred from the Fifth, equal protection is not a
license for courts to judge the wisdom, fairness,
or logic of legislative choices. In areas of social

and economic policy, a statutory classification that

neither proceeds along suspect lines nor infringes
fundamental constitutional rights must be upheld
against equal protection challenge if there is any
reasonably conceivable state of facts that could
provide a rational basis for the
classification. See Sullivan v. Stroop, 496 U.S. 478,
485, 110 S.Ct. 2499, 2504, 110 L.Ed.2d 438
(1990);Bowen v. Gilliard, 483 U.S. 587, 600-603, 107
S.Ct. 3008, 3016- 3018, 97 L.Ed.2d 485 (1987); United
States Railroad Retirement Bd. v. Fritz, 449 U.S. 166,
174-179, 101 S.Ct. 453, 459-462, 66 L.Ed.2d 368
(1980); Dandridge v, Williams, 397 U.S. 471, 484-485,
90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970). Where
there are "plausible reasons" for Congress' action,
"our inquiry is at an end." United States Railroad
Retirement Bd. v. Fritz, supra, 449 U.S., at 179, 101
S.Ct. at 461. This standard of review is a paradigm
of judicial restraint. "The Constitution presumes
that, absent some reason to infer antipathy, even
improvident decisions will eventually be rectified by
the democratic process and that judicial
intervention is generally unwarranted no matter
how unwisely we may think a political branch has
acted." Vance v. Bradley, 440 U.S. 93, 97, 99 S.Ct.
939, 942-943, 59 L.Ed.2d 171 (1979).
On rational-basis review, a classification in a statute
such as the Cable Act comes to us bearing a strong
presumption of validity, see Lyng v. Automobile
Workers, 485 U.S. 360, 370, 108 S.Ct. 1184, 1192, 99
L.Ed.2d 380 (1988),and those attacking the
rationality of the legislative classification have the
burden "to negative every conceivable basis which
might support it." Lehnhausen v. Lake Shore Auto
Parts Co., 410 U.S. 356, 364, 93 S.Ct. 1001. 1006, 35
L.Ed.2d 351 (1973) (internal quotation marks omitted).
See also Hodel v. Indiana, 452 U.S. 314, 331-332, 101
S.Ct. 2376, 2387, 69 L.Ed.2d 40 (1981). Moreover,
because we never require a legislature to articulate its
reasons for enacting a statute, it is entirely irrelevant for
constitutional purposes whether the conceived reason
for the challenged distinction actually motivated the
legislature. United States Railroad Retirement Bd. v.
Fritz, supra, 449 U.S., at 179, 101 S.Ct., at
461. See Flemming v. Nestor, 363 U.S. 603, 612, 80
S.Ct. 1367, 1373, 4 L.Ed.2d 1435 (1960). Thus, the
absence of "'legislative facts' " explaining the distinction

"[o]n the record," 294 U.S.App.D.C., at 389, 959 F.2d, at 987,

has no significance in rational-basis analysis. See Nordlinger
v. Hahn, 505 U.S. 1, 15, 112 S.Ct. 2326, 2334, 120 L.Ed.2d 1
(1992) In other words, a legislative choice is not subject to
courtroom fact-finding and may be based on rational
speculation unsupported by evidence or empirical data.
See Vance v. Bradley, supra, 440 U.S., at 111, 99 S.Ct., at
949. See also Minnesota v. Clover Leaf Creamery Co., 449
U.S. 456, 464, 101 S.Ct. 715, 723, 66 L.Ed.2d 659
(1981). "'Only by faithful adherence to this guiding
principle of judicial review of legislation is it possible to
preserve to the legislative branch its rightful
independence and its ability to
function.'"Lehnhausen, supra, 410 U.S., at 365, 93 S.Ct., at
1006 (quoting Carmichael v. Southern Coal & Coke Co.,301
U.S. 495, 510, 57 S.Ct. 868, 872, 81 L.Ed. 1245 (1937)).
These restraints on judicial review have added force
"where the legislature must necessarily engage in a
process of line-drawing." United States Railroad Retirement
Bd. v. Fritz, 449 U.S., at 179, 101 S.Ct., at 461. Defining the
class of persons subject to a regulatory requirement-much like classifying governmental
beneficiaries--"inevitably requires that some persons who
have an almost equally strong claim to favored treatment
be placed on different sides of the line, and the fact [that]
the line might have been drawn differently at some Points
is a matter for legislative, rather than judicial,
consideration." Ibid. (internal quotation marks and citation
omitted). The distinction at issue here represents such a line:
By excluding from the definition of "cable system" those
facilities that serve commonly owned or managed buildings
without using public rights-of-way, 602(7)(B) delineates the
bounds of the regulatory field. Such scope-of-coverage
provisions are unavoidable components of most economic or
social legislation. In establishing the franchise requirement,
Congress had to draw the line somewhere; it had to choose
which facilities to franchise. This necessity renders the
precise coordinates of the resulting legislative judgment
virtually unreviewable, since the legislature must be
allowed leeway to approach a perceived problem
incrementally. See, e.g., Williamson v. Lee Optical of Okla.,
Inc., 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563 (1955):
"The problem of legislative classification is a
perennial one, admitting of no doctrinaire
definition. Evils in the same field may be of
different dimensions and proportions, requiring

different remedies. Or so the legislature

may think. Or the reform may take one
step at a time, addressing itself to the
phase of the problem which seems most
acute to the legislative mind. The
legislature may select one phase of one
field and apply a remedy there,
neglecting the others. The prohibition of
the Equal Protection Clause goes no
further than the invidious
discrimination."40 (Emphasis and
underscoring supplied; footnotes omitted)
Deferential or not, in the Philippines, the Rational Basis Test
has proven to be an effective tool for curbing invidious
discrimination.
Thus, in People v. Vera,41 this Court held as unconstitutional
Section 11 of Act No. 4221, which provided that the
Probation Law "shall apply only in those provinces in which
the respective provincial boards have provided for the salary
of a probation officer at rates not lower than those now
provided for provincial fiscals."42 The Court held that the
challenged provision was an undue delegation of legislative
power since it left the operation or non-operation of the law
entirely up to the absolute and unlimited (and therefore
completely arbitrary) discretion of the provincial
boards.43 The Court went on to demonstrate that this
unwarranted delegation of legislative power created "a
situation in which discrimination and inequality [were]
permitted or allowed"44 since "a person otherwise coming
within the purview of the law would be liable to enjoy the
benefits of probation in one province while another person
similarly situated in another province would be denied those
same benefits,"45 despite the absence of substantial
differences germane to the purpose of the law. For this
reason the questioned provision was also held
unconstitutional and void for being repugnant to the equal
protection clause.46
In Viray v. City of Caloocan,47 the Court invalidated on equal
protection grounds, among others, an Ordinance providing
for the collection of "entrance fees" for cadavers coming
from outside Caloocan City for burial in private cemeteries
within the city. The city government had sought to justify the
fees as an exercise of police power claiming that policemen
using the city's motorcycles or cars had to be assigned to

escort funeral processions and reroute traffic to minimize public

inconvenience.48 This Court, through Justice J.B.L. Reyes held
that:
While undeniably the above-described activity of city
officers is called for by every funeral procession, yet we
are left without explanation why the Ordinance should
collect the prescribed fees solely in the case of
cadavers coming from places outside the territory of
Caloocan City for burial in private cemeteries within the
City. Surely, whether the corpse comes from without or
within the City limits, and whether interment is to be
made in private or public cemeteries, the City police
must regulate traffic, and must use their City cars or
motorcycles to maintain order; and the City streets must
suffer some degree of erosion. Clearly, then, the
ordinance in question does unjustifiably discriminate
against private cemeteries, in violation of the equal
protection clause of the Constitution, a defect adequate
to invalidate the questioned portion of the
measure.49 (Italics in the original)

xxx
In lumping the Judiciary with the other offices from which the
franking privilege has been withdrawn, Section 35 has placed
the courts of justice in a category to which it does not belong.
If it recognizes the need of the President of the Philippines
and the members of Congress for the franking privilege, there
is no reason why it should not recognize a similar and in fact
greater need on the part of the Judiciary for such privilege.
While we may appreciate the withdrawal of the franking
privilege from the Armed Forces of the Philippines Ladies
Steering Committee, we fail to understand why the Supreme
Court should be similarly treated as that Committee. And while
we may concede the need of the National Census and
Statistics Office for the franking privilege, we are intrigued that
a similar if not greater need is not recognized in the courts of
justice.
xxx
We are unable to agree with the respondents that Section 35
of R.A. No. 7354 represents a valid exercise of discretion by
the Legislature under the police power. On the contrary, we
find its repealing clause to be a discriminatory provision that
denies the Judiciary the equal protection of the laws
guaranteed for all persons or things similarly situated. The
distinction made by the law is superficial. It is not based on
substantial distinctions that make real differences between the
Judiciary and the grantees of the franking privilege.

In Philippine Judges Association. v. Prado,50 this Court ruled that

Section 35 of R.A. No. 7354,51 withdrawing the franking
privileges of the Judiciary52 but retaining the same for the
President, the Vice-President, Senators and Members of the
House of Representatives, and others,53 violated the equal
protection clause. In analyzing the questioned legislative
classification, the Court concluded that the only reasonable
criteria for classification vis--vis the grant of the franking
privilege was "the perceived need of the grantee for the
This is not a question of wisdom or power into which the Judiciary may
accommodation, which would justify a waiver of substantial
not intrude. It is a matter of arbitrariness that this Court has the duty
revenue by the Corporation in the interest of providing for a
and power to correct.55
smoother flow of communication between the government and
the people."54 The Court then went on to state that:
More recently, in Government Service Insurance System v.
Montesclaros,56 this Court ruled that the proviso in Section 18 of P.D.
Assuming that basis, we cannot understand why, of all
No.1146,57 which prohibited a dependent spouse from receiving
the departments of the government, it is the Judiciary
survivorship pension if such dependent spouse married the pensioner
that has been denied the franking privilege. There is no within three years before the pensioner qualified for the pension, was
question that if there is any major branch of the
unconstitutional for, among others, violating the equal protection
government that needs the privilege, it is the Judicial
clause. Said the Court:
Department, as the respondents themselves point out.
Curiously, the respondents would justify the distinction
The surviving spouse of a government employee is entitled to
on the basis precisely of this need and, oh this basis,
receive survivor's benefits under a pension system. However,
deny the Judiciary the franking privilege while extending
statutes sometimes require that the spouse should have
it to others less deserving.
married the employee for a certain period before the
employee's death to prevent sham marriages contracted for

monetary gain. One example is the Illinois Pension

Code which restricts survivor's annuity benefits to a
surviving spouse who was married to a state
employee for at least one year before the
employee's death. The Illinois pension system
classifies spouses into those married less than one
year before a member's death and those married
one year or more. The classification seeks to
prevent conscious adverse risk selection of
deathbed marriages where a terminally ill member of
the pension system marries another so that person
becomes eligible for benefits. In Sneddon v. The
State Employee's Retirement System of Illinois, the
Appellate Court of Illinois held that such
classification was based on difference in situation
and circumstance, bore a rational relation to the
purpose of the statute, and was therefore not in
violation of constitutional guarantees of due process
and equal protection.

why the proviso reckons the three-year prohibition from

the date the pensioner qualified for pension and not
from the date the pensioner died. The classification
does not rest on substantial distinctions. Worse, the
classification lumps all those marriages contracted
within three years before the pensioner qualified for
pension as having been contracted primarily for
financial convenience to avail of pension benefits.
(Footnotes omitted)

characteristic or (2) infringes fundamental constitutional rights. 62 With

respect to such classifications, the usual presumption of
constitutionality is reversed, and it is incumbent upon the government
to demonstrate that its classification has been narrowly tailored to
further compelling governmental interests,63otherwise the law shall be
declared unconstitutional for being violative of the Equal Protection
Clause.

The central purpose of the Equal Protection Clause was to eliminate

racial discrimination emanating from official sources in the
Even in the American context, the application of the "deferential" States.64 Like other rights guaranteed by the post-Civil War
Rational Basis Test has not automatically resulted in the
Amendments, the Equal Protection Clause (also known as the
affirmation of the challenged legislation.
Fourteenth Amendment) was motivated in large part by a desire to
protect the civil rights of African-Americans recently freed from slavery.
Thus, initially, the U.S. Supreme Court attempted to limit the scope of
Thus, in City of Cleburne Texas v. Cleburne Living Center,58 a
the Equal Protection Clause to discrimination claims brought by
city's zoning ordinance requiring a special permit for the
African-Americans.65 In Strauder v. West Virginia,66 the American
operation of a group home for the mentally retarded was
Supreme Court in striking down a West Virginia statute which
challenged on equal protection grounds. The American Court,
prohibited a "colored man" from serving in a jury, traced the roots of
ruling that the Rational Basis Test was applicable and limiting
the Equal Protection Clause:
itself to the facts of the particular case, held that there was no
A statute based on reasonable classification does
rational basis for believing that the mentally retarded condition
not violate the constitutional guaranty of the equal
of those living in the affected group home posed any special
This is one of a series of constitutional provisions having a
protection of the law. The requirements for a valid
threat to the city's legitimate interests any more than those living
common purpose; namely, securing to a race recently
and reasonable classification are: (1) it must rest on in boarding houses, nursing homes and hospitals, for which no
emancipated, a race that through many generations had been
substantial distinctions; (2) it must be germane to
special permit was required. Thus, it concluded, the permit
held in slavery, all the civil rights that the superior race enjoy.
the purpose of the law; (3) it must not be limited to
requirement violated the respondent's right to equal protection. 59
The true spirit and meaning of the amendments, as we said in
existing conditions only; and (4) it must apply equally
the Slaughter-House Cases (16 Wall. 36), cannot be
to all members of the same class. Thus, the law may And, in Romer v. Evans,60 the U.S. Supreme Court invalidated
understood without keeping in view the history of the times
treat and regulate one class differently from another Amendment 2 of the Colorado State Constitution which
when they were adopted, and the general objects they plainly
class provided there are real and substantial
sought to accomplish. At the time when they were
precluded all legislative, executive, or judicial action at any level
differences to distinguish one class from another.
incorporated into the Constitution, it required little knowledge
of state or local government designed to protect the status of
of human nature to anticipate that those who had long been
persons based on their homosexual orientation, conduct,
61
The proviso in question does not satisfy these
regarded as an inferior and subject race would, when
practices or relationships.
requirements. The proviso discriminates against the
suddenly raised to the rank of citizenship, be looked upon with
dependent spouse who contracts marriage to the
jealousy and positive dislike, and that State laws might be
Strict Scrutiny
pensioner within three years before the pensioner
enacted or enforced to perpetuate the distinctions that had
qualified for the pension. Under the proviso, even if
before existed, xxx To quote the language used by us in
While in the Philippines the Rational Basis Test has, so far,
the dependent spouse married the pensioner more
theSlaughter-House Cases, "No one can fail to be impressed
served as a sufficient standard for evaluating governmental
than three years before the pensioner's death, the
with the one pervading purpose found in all the amendments,
actions against the Constitutional guaranty of equal protection,
dependent spouse would still not receive
lying at the foundation of each, and without which none of
the American Federal Supreme Court, as pointed out in the
survivorship pension if the marriage took place
them would have been suggested,--we mean the freedom of
within three years before the pensioner qualified for main opinion, has developed a more demanding standard as a
the slave race, the security and firm establishment of that
complement to the traditional deferential test, which it applies in
pension. The object of the prohibition is vague.
freedom, and the protection of the newly made freeman and
certain well-defined circumstances. This more demanding
There is no reasonable connection between the
citizen from the oppressions of those who had formerly
means employed and the purpose intended. The law standard is often referred to as Strict Scrutiny.
exercised unlimited dominion over them." So again: "The
itself does not provide any reason or purpose for
existence of laws in the States where the newly emancipated
such a prohibition. If the purpose of the proviso is to Briefly stated, Strict Scrutiny is applied when the challenged
negroes resided, which discriminated with gross injustice and
statute either (1) classifies on the basis of an inherently suspect
prevent "deathbed marriages," then we do not see
hardship against them as a class, was the evil to be remedied,

and by it [the Fourteenth Amendment] such laws

were forbidden. If, however, the States did not
conform their laws to its requirements, then, by the
fifth section of the article of amendment, Congress
was authorized to enforce it by suitable legislation."
And it was added, "We doubt very much whether
any action of a State, not directed by way of
discrimination against the negroes, as a class, will
ever be held to come within the purview of this
provision."
x x x It ordains that no State shall deprive any
person of life, liberty, or property, without due
process of law, or deny to any person within its
jurisdiction the equal protection of the laws. What is
this but declaring that the law in the States shall be
the same for the black as for the white; that all
persons, whether colored or white, shall stand equal
before the laws of the States, and, in regard to the
colored race, for whose protection the amendment
was primarily designed, that no discrimination shall
be made against them by law because of their
color? The words of the amendment, it is true, are
prohibitory, but they contain a necessary implication
of a positive immunity, or right, most valuable to the
colored race,--the right to exemption from unfriendly
legislation against them distinctively as colored,-exemption from legal discriminations, implying
inferiority in civil society, lessening the security of
their enjoyment of the rights which others enjoy, and
discriminations which are steps towards reducing
them to the condition of a subject race.
That the West Virginia statute respecting juries--the
statute that controlled the selection of the grand and
petit jury in the case of the plaintiff in error--is such a
discrimination ought not to be doubted. Nor would it
be if the persons excluded by it were white men. If in
those States where the colored people constitute a
majority of the entire population a law should be
enacted excluding all white men from jury service,
thus denying to them the privilege of participating
equally with the blacks in the administration of
justice, we apprehend no one would be heard to
claim that it would not be a denial to white men of
the equal protection of the laws. Nor if a law should
be passed excluding all naturalized Celtic Irishmen,
would there by any doubt of its inconsistency with

the spirit of the amendment. The very fact that colored

people are singled out and expressly denied by a
statute all right to participate in the administration of the
law, as jurors, because of their color, though they are
citizens, and may be in other respects fully qualified, is
practically a brand upon them, affixed by the law, an
assertion of their inferiority, and a stimulant to that race
prejudice which is an impediment to securing to
individuals of the race that equal justice which the law
aims to secure to all others.67
Over the years however, the Equal Protection Clause has been
applied against unreasonable governmental discrimination
directed at any identifiable group.68 In what Laurence H. Tribe
and Michael C. Dorf call the most famous footnote in American
constitutional law,69 Justice Stone in U.S. v. Carolene Products
Co.70 maintained that state-sanctioned discriminatory practices
against discrete and insular minorities are entitled to a
diminished presumption of constitutionality:
xxx the existence of facts supporting the legislative
judgment is to be presumed, for regulatory legislation
affecting ordinary commercial transactions is not to be
pronounced unconstitutional unless in the light of the
facts made known or generally assumed it is of such a
character as to preclude the assumption that it rests
upon some rational basis within the knowledge and
experience of the legislators. [FN4] xxx
FN4 There may be narrower scope for
operation of the presumption of
constitutionality when legislation appears
on its face to be within a specific prohibition
of the Constitution, such as those of the
first ten Amendments, which are deemed
equally specific when held to be embraced
within the Fourteenth. See Stromberg v.
California, 283 U.S. 359, 369, 370, 51 S.Ct.
532, 535, 536, 75 L.Ed. 1117, 73 A.L.R. 1484;
Lovell v. Griffin, 303 U.S. 444, 58 S.Ct. 666, 82
L.Ed. 949, decided March 28, 1938.
It is unnecessary to consider now whether
legislation which restricts those political
processes which can ordinarily be expected to
bring about repeal of undesirable legislation, is
to be subjected to more exacting judicial

scrutiny under the general prohibitions of the

Fourteenth Amendment than are most other types of
legislation. On restrictions upon the right to vote,
see Nixon v. Herndon, 273 U.S. 536, 47 S.Ct. 446, 71
L.Ed. 759; Nixon v. Condon, 286 U.S. 73, 52 S.Ct.
484, 76 L.Ed. 984, 88 A.L.R. 458; on restraints upon
the dissemination of information, see Near v.
Minnesota, 283 U.S. 697, 713 -- 714, 718--720, 722,
51 S.Ct. 625, 630, 632, 633, 75 L.Ed. 1357; Grosjean
v. American Press Co., 297 U.S. 233, 56 S.Ct. 444, 80
L.Ed. 660; Lovell v. Griffin, supra; on interferences
with political organizations, see Stromberg v.
California, supra. 283 U.S. 359, 369, 51 S.Ct. 532,
535, 75 L.Ed. 1117, 73 A.L.R. 1484; Fiske v. Kansas.
274 U.S. 380, 47 S.Ct. 655, 71 L.Ed. 1108; Whitney v.
California, 274 U.S. 357, 373-- 378, 47 S.Ct. 641, 647.
649, 71 L.Ed. 1095; Herndon v. Lowry. 301 U.S. 242,
57 S.Ct. 732, 81 L.Ed. 1066; and see Holmes, J.,
in Gitlow v. New York, 268 U.S. 652, 673, 45 S.Ct.
625, 69 L.Ed. 1138; as to prohibition of peaceable
assembly, see De Jonge v. Oregon, 299 U.S. 353,
365, 57 S.Ct. 255, 260, 81 L.Ed. 278.
Nor need we enquire whether similar considerations
enter into the review of statutes directed at particular
religious, Pierce v. Society of Sisters. 268 U.S. 510,
45 S.Ct. 571, 69 L.Ed. 1070, 39. A.L.R. 468, or
national, Meyer v. Nebraska, 262 U.S. 390, 43 S.Ct.
625, 67 L.Ed. 1042, 29 A.L.R. 1446; Bartels v. Iowa,
262 U.S. 404, 43 S.Ct. 628, 67 L.Ed. 1047; Farrington
v. Tokushige, 273 U.S. 284, 47 S.Ct. 406, 71 L.Ed.
646, or racial minorities. Nixon v. Herndon, supra;
Nixon v. Condon, supra;whether prejudice against
discrete and insular minorities may be a special
condition, which tends seriously to curtail the
operation of those political processes ordinarily to
be relied upon to protect minorities, and which
may call for a correspondingly more searching
judicial inquiry. Compare McCulloch v. Maryland, 4
Wheat. 316, 428, 4 L.Ed. 579; South Carolina State
Highway Department v, Barnwell Bros., 303 U.S. 177,
58 S.Ct. 510, 82 L.Ed. 734, decided February 14,
1938, note 2, and cases cited.71 (Emphasis and
underscoring supplied)
The use of the term "suspect" originated in the case of Korematsu v.
U.S.72 In Korematsu,73 the American Supreme Court upheld the
constitutionality of Civilian Exclusion Order No. 34 of the Commanding

General of the Western Command, U.S. Army, which

directed that all persons of Japanese ancestry should be
excluded from San Leandro California, a military area,
beginning May 9, 1942. However, in reviewing the validity of
laws which employ race as a means of classification, the
Court held:

suspect classifications deserving of Strict Scrutiny include those

equal protection had to be justified by "compelling" state
based on race or national origin82, alienage83 and religion84 while
interests, not merely the wide spectrum of "legitimate" state
classifications based on gender85, illegitimacy86, financial need87,
ends.98
conscientious objection88 and age89 have been held not to
constitute suspect classifications.
Furthermore, the legislature must adopt the least burdensome or least
drastic means available for achieving the governmental objective. 99
As priorly mentioned, the application of Strict Scrutiny has not
It should be noted, to begin with, that all legal
been limited to statutes which proceed along suspect lines but
While Strict Scrutiny has, as yet, not found widespread application in
restrictions which curtail the civil rights of a single
has been utilized on statutes infringing upon fundamental
this jurisdiction, the tenet that legislative classifications involving
racial group are immediately suspect. That is not constitutionally protected rights. Most fundamental rights cases fundamental rights require a more rigorous justification under more
to say that all such restrictions are
decided in the United States require equal protection analysis
stringent standards of analysis has been acknowledged in a number of
unconstitutional. It is to say that courts must
because these cases would involve a review of statutes which
Philippine cases.100 Since the United States' conception of the Equal
subject them to the most rigid scrutiny. Pressing classify persons and impose differing restrictions on the ability
Protection Clause was largely influenced by its history of
public necessity may sometimes justify the existence of a certain class of persons to exercise a fundamental
systematically discriminating along racial lines, it is perhaps no
of such restrictions; racial antagonism never
right.90 Fundamental rights include only those basic liberties
surprise that the Philippines which does not have any comparable
can.74 (Emphasis and underscoring supplied)
explicitly or implicitly guaranteed by the U.S. Constitution. 91 And experience has not found a similar occasion to apply this particular
precisely because these statutes affect fundamental liberties,
American approach of Equal Protection.
any experiment involving basic freedoms which the legislature
Racial classifications are generally thought to be "suspect"
conducts must be critically examined under the lens of Strict
because throughout the United States' history these have
Intermediate Scrutiny
generally been used to discriminate officially against groups Scrutiny.
which are politically subordinate and subject to private
The Rational Basis Test and Strict Scrutiny form what Gerald Gunther
prejudice and discrimination.75 Thus, the U.S. Supreme
Fundamental rights which give rise to Strict Scrutiny include the termed as the two-tier approach to equal protection analysis - the first
92
93
Court has "consistently repudiated distinctions between
right of procreation, the right to marry, the right to exercise
tier consisting of the Rational Basis Test (also called by Gunther as the
citizens solely because of their ancestry as being odious to a First Amendment freedoms such as free speech, political
old equal protection) while the second tier consisting of Strict Scrutiny
free people whose institutions are founded upon the doctrine expression, press, assembly, and so forth,94 the right to
(also called by Gunther as the new equal protection). 101 Gunther
of equality."76 The underlying rationale of the suspect
travel,95 and the right to vote.96
however described the two-tier approach employed by the U.S.
classification theory is that where legislation affects discrete
Supreme Court as being rigid, criticizing the aggressive new equal
and insular minorities, the presumption of constitutionality
Because Strict Scrutiny involves statutes which either classifies protection for being "strict in theory and fatal in fact" 102 and the
fades because traditional political processes may have
on the basis of an inherently suspect characteristic or infringes
deferential old equal protection as "minimal scrutiny in theory and
broken down.77 Moreover, classifications based on race,
fundamental constitutional rights, the presumption of
virtually none in fact."103
alienage or national origin are so seldom relevant to the
constitutionality is reversed; that is, such legislation is assumed
achievement of any legitimate state interest that laws
to be unconstitutional until the government demonstrates
Gunther's sentiments were also shared by certain members of the
grounded on such considerations are deemed to reflect
otherwise. The government must show that the statute is
Burger Court, most notably Justice Marshall who advocated a Sliding
prejudice and antipathy - a view that those in the burdened
supported by a compelling governmental interest and the
Scale Approach which he elaborated on in his dissenting opinion
78
class are not as worthy or deserving as others.
means chosen to accomplish that interest are narrowly
in San Antonio Independent School District v. Rodriguez:104
97
tailored. Gerald Gunther explains as follows:
Almost three decades after Korematsu, in the landmark case
To begin, I must once more voice my disagreement with the
of San Antonio Independent School District v.
... The intensive review associated with the new equal
Court's rigidified approach to equal protection analysis.
79
Rodriguez, the U.S. Supreme Court in identifying a
protection imposed two demands a demand not only as
See Dandridge v. Williams, 397 U.S. 471, 519--521, 90 S.Ct.
"suspect class" as a class saddled with such disabilities, or
to means but also as to ends. Legislation qualifying for
1153, 1178--1180, 25 L.Ed.2d 491 (1970) (dissenting
subjected to such a history of purposeful unequal treatment,
strict scrutiny required a far closer fit between
opinion); Richardson v. Belcher, 404 U.S. 78, 90, 92 S.Ct. 254,
or relegated to such a position of political powerlessness as
classification and statutory purpose than the rough and
261, 30 L.Ed.2d 231 (1971) (dissenting opinion). The Court
to command extraordinary protection from the majoritarian
ready flexibility traditionally tolerated by the old equal
apparently seeks to establish today that equal protection
80
political process, articulated that suspect classifications
protection: means had to be shown "necessary" to
cases fall into one of two neat categories which dictate the
were not limited to classifications based on race, alienage or
achieve statutory ends, not merely "reasonably related."
appropriate standard of review--strict scrutiny or mere
national origin but could also be applied to other criteria such
Moreover, equal protection became a source of ends
rationality. But this Court's decisions in the field of equal
81
as religion. Thus, the U.S. Supreme Court has ruled that
scrutiny as well: legislation in the areas of the new
protection defy such easy categorization. A principled reading

of what this Court has done reveals that it has

applied a spectrum of standards in reviewing
discrimination allegedly violative of the Equal
Protection Clause. This spectrum clearly
comprehends variations in the degree of care with
which the Court will scrutinize particular
classifications, depending, I believe, on the
constitutional and societal importance of the interest
adversely affected and the recognized invidiousness
of the basis upon which the particular classification
is drawn. I find in fact that many of the Court's recent
decisions embody the very sort of reasoned
approach to equal protection analysis for which I
previously argued--that is, an approach in which
'concentration (is) placed upon the character of the
classification in question, the relative importance to
individuals in the class discriminated against of the
governmental benefits that they do not receive, and
the asserted state interests in support of the
classification.' Dandridge v. Williams, supra, 397
U.S., at 520--521, 90 S.Ct., at 1180 (dissenting
opinion).105

Gender-based classifications are presumed unconstitutional as

such classifications generally provide no sensible ground for
differential treatment. In City of Cleburne, Texas v. Cleburne
Living Center,109 the United States Supreme Court said:
"[W]hat differentiates sex from such nonsuspect
statuses as intelligence or physical disability ... is that
the sex characteristic frequently bears no relation to
ability to perform or contribute to society." Frontiero v.
Richardson, 411 U.S. 677, 686, 93 S.Ct. 1764, 1770, 36
L.Ed.2d 583 (1973) (plurality opinion). Rather than
resting on meaningful considerations, statutes
distributing benefits and burdens between the sexes in
different ways very likely reflect outmoded notions of the
relative capabilities of men and women.110

In the same manner, classifications based on illegitimacy are

also presumed unconstitutional as illegitimacy is beyond the
individual's control and bears no relation to the individual's
ability to participate in and contribute to society.111 Similar to
Strict Scrutiny, the burden of justification for the classification
rests entirely on the government.112 Thus, the government must
show at least that the statute serves an important purpose and
Shortly before his retirement in 1991, Justice Marshall
that the discriminatory means employed is substantially related
suggested to the Supreme Court that it adopt a Sliding Scale to the achievement of those objectives.113
that would embrace a spectrum of standards of review.106
Other sources of discontent in the U.S. Supreme Court are
Justice Stevens who argues for a return to the Rational
Basis Test which he believes to be adequate to invalidate all
invidious forms of discrimination and Chief Justice Rehnquist
who is disgruntled with the Court's special solicitude for the
claims of discrete and insular minorities.107
Yet, despite numerous criticisms from American legal
luminaries, the U.S. Supreme Court has not done away with
the Rational Basis Test and Strict Scrutiny as they continue
to remain viable approaches in equal protection analysis. On
the contrary, the American Court has developed yet a third
tier of equal protection review, falling between the Rational
Basis Test and Strict Scrutiny -Intermediate Scrutiny (also
known as Heightened Scrutiny).
The U.S. Supreme Court has generally applied Intermediate
or Heightened Scrutiny when the challenged statute's
classification is based on either (1) gender or (2)
illegitimacy.108

Summary of the American Supreme Court

Approach to Equal Protection
In fine, the three standards currently employed by the U.S.
Federal Supreme Court for determining the constitutional
validity of a statutory classification in the light of the equal
protection clause maybe summarized114as follows:

social
legislation,
which do not
affect
fundamental
rights or
suspect
classes; or is
not based on
gender or
illegitimacy.
Legislative
Purpose

Must
Must be compelling.
be legitimate.

Relationship Classification
of
must
Classification berationally
to Purpose related to the
legislative
purpose.

Classification must benecessary and

narrowly tailored to achieve the legisla
purpose.

Appropriate Standard for

Evaluating the Present Case
Which of the foregoing three standards should be applied in arriving at
a resolution of the instant petition?
Impropriety of a double standard for evaluating
compliance with the equal protection guaranty

As noted earlier, the main opinion, in arriving at its

conclusion, simultaneously makes use of both the Rational Basis Test
and the Strict Scrutiny Test. Thus, in assessing the validity of the
Equal Protection Standards
classification between executive and rank and file employees in
Section 15 (c) of The New Central Bank Act, the Rational Basis Test
Rational Basis Strict Scrutiny
was applied. In evaluating the distinction between the rank and file
employees of the BSP and the rank and file employees of the LBP,
DBP, SSS and GSIS, the Strict Scrutiny Test was employed.
Applicable To Legislative
Legislative
classifications classificationsaffectingfundamental
in
suspect classes.
Despite my best efforts, I fail to see the justification for the use of this
general, such
"double standard" in determining the constitutionality of the questioned
as those
proviso. Why a "deferential test" for one comparison (between the
pertaining to
executives and rank and file of the BSP) and a "strict test" for the other
economic or

(between the rank and file of the BSP and the rank and file
of the other GOCCs/GFIs)?

officers and rank and file of the BSP or between the rank and
file of the BSP and the rank and file of the other GOCCs/GFIs.

As the preceding review of the standards developed by the

U.S. Federal Supreme Court shows, the choice of the
appropriate test for evaluating a legislative classification is
dependent on the nature of the rights affected (i.e.whether
"fundamental" or not) and the character of the persons
allegedly discriminated against (i.e. whether belonging to a
"suspect class" or not). As determined by these two
parameters, the scope of application of each standard is
distinct and exclusive of the others. Indeed, to my
knowledge, the American Court has never applied more than
one standard to a given set of facts, and where one standard
was found to be appropriate, the U.S. Supreme Court has
deliberately eschewed any discussion of another.115

But certainly, the same group of BSP rank and file personnel
cannot be considered a "non-suspect class" when compared to
the BSP executive corps, but members of a "suspect class"
when compared to the rank and file employees of the other
GOCCs/GFIs. Neither could the rights they assert be
simultaneously "fundamental" and "less than fundamental."
Consequently, it would be improper to apply the Rational Basis
Test as the standard for one comparison and the Strict Scrutiny
Test for the other. To do so would be to apply the law unevenly
and, accordingly, deny the persons concerned "the equal
protection of the laws."
"Relative Constitutionality" Not A
Justification for the Double Standard

Assuming that the equal protection standards evolved by the

U.S. Supreme Court may be adopted in this jurisdiction,
It would appear that the employment of a "double standard" in
there is no reason why the exclusive manner of their
the present case is sought to be justified somehow by the
application should not be adopted also.
concept of relative constitutionality invoked by the main opinion.
Thus, the main opinion holds that the "subsequent enactments,
In the present case, the persons allegedly discriminated
however, constitute significant changes in circumstance that
against (i.e. the rank and file employees of the BSP) and the considerably alter the reasonability of the continued operation of
rights they are asserting (to be exempted from the
the last proviso of Section 15 (c), Article II of Republic Act No.
Compensation Classification System prescribed by the
7653, and exposes the proviso to more serious scrutiny."
Salary Standardization Law) remain the same, whether the
classification under review is between them and the
The ponencia likewise invites this Court to reflect on the
executive officers of the BSP or the rank and file employees following questions: "Given that Congress chose to exempt
of the LBP, DBP, SSS and GSIS.
other GFIs (aside the BSP) from the coverage of the SSL, can
the exclusion of the rank-and-file employees of the BSP stand
It therefore stands to reason that the test or standard
constitutional scrutiny in the light of the fact that Congress did
whether Rational Basis, Strict Scrutiny or Intermediate
not exclude the rank-and-file employees of the other GFIs? Is
Scrutiny - against which petitioner's claims should be
Congress' power to classify unbridled as to sanction unequal
measured should likewise be the same, regardless of
and discriminatory treatment, simply because the inequity
whether the evaluation pertains to the constitutionality of (1) manifested not instantly through a single overt act, but gradually
the classification expressly made in Section 15 (c) of The
through seven separate acts? Is the right to equal protection
New Central Bank Act or (2) the classification resulting from bounded in time and space that: (a) the right can be invoked
the amendments of the charters of the other GOCCs/GFIs.
only against classification made directly and deliberately, as
opposed to discrimination that arises indirectly as a
consequence of several other acts? and (b) is the legal analysis
To illustrate further, if petitioner's constitutional challenge is
confined to determining the validity within the parameters of the
premised on the denial of a "fundamental right" or the
statute x x x thereby proscribing any evaluation vis--vis the
perpetuation of prejudice against a "suspect class," as
groupings or the lack thereof among several similar enactments
suggested (but not fully explicated) in the closing pages of
made over a period of time?"116
the main opinion; then, following the trend in American
jurisprudence, the Strict Scrutiny Test would be applicable,
whether the classification being reviewed is that between the

To clarify, it was never suggested that judicial review should be

confined or limited to the questioned statute itself without considering
other related laws. It is well within the powers of this Court to resolve
the issue of whether the subsequent amendments of the charters of
other GOCCs and other GFIs altered the constitutionality of Section 15
(c) of the New Central Bank Act.
It is, however, what to me is the improper resort by the main opinion to
relative constitutionality, and as to be subsequently demonstrated, the
use of an inappropriate standard for equal protection analysis, that
constrained me to register my dissent.
As illustrated in the main opinion, "relative constitutionality" refers to
the principle that a statute may be constitutionally valid as" applied
to one set of facts and invalid in its application to another set of facts.
Thus, a statute valid at one time may become void at another time
because of altered factual circumstances.
This principle is really a corollary to the requirements that a valid
classification (a) must be based on real and substantial (not merely
superficial) distinctions and (b) must not be limited to existing
conditions only.
"Substantial distinctions" must necessarily be derived from the
objective factual circumstances of the classes or groups that a statute
seeks to differentiate. The classification must be real and factual and
not wholly abstract, artificial, or contrived. Thus, in Victoriano v.
Elizalde Rope Workers' Union,117 this Court stated:
We believe that Republic Act No. 3350 satisfies the
aforementioned requirements. The Act classifies employees
and workers, as to the effect and coverage of union shop
security agreements, into those who by reason of their
religious beliefs and convictions cannot sign up with a labor
union, and those whose religion does not prohibit membership
in labor unions. The classification rests on real or
substantial, not merely imaginary or whimsical,
distinctions. There is such real distinction in the beliefs,
feelings and sentiments of employees. Employees do not
believe in the same religious faith and different religions differ
in their dogmas and cannons. Religious beliefs, manifestations
and practices, though they are found in all places, and in all
times, take so many varied forms as to be almost beyond
imagination. There are many views that comprise the broad
spectrum of religious beliefs among the people. There are
diverse manners in which beliefs, equally paramount in the
lives of their possessors, may be articulated. Today the

country is far more heterogenous in religion than

before, differences in religion do exist, and these
differences are important and should not be
ignored.118 (Emphasis supplied)
In the words of Justice Jackson of the U.S. Supreme Court
in Walters v. City of St. Louis, Missouri:119
x x x Equal protection does not require identity of
treatment. It only requires that classification rest
on real and not feigned differences, that the
distinctions have some relevance to the purpose
for which the classification is made, and that the
different treatments be not so disparate, relative
to the difference in classification, as to be wholly
arbitrary, x x x120 (Emphasis and underscoring
supplied)
For this reason, in reviewing legislation challenged on equal
protection grounds - particularly when a statute otherwise
valid on its face is alleged to be discriminatory in its
application - a court must often look beyond the four corners
of the statute and carefully examine the factual
circumstances of the case before it.

invasion of personal or property rights under the guise

of police regulation."
It admits of no doubt therefore that there being a
presumption of validity, the necessity for evidence
to rebut it is unavoidable, unless the statute or
ordinance is void on its face, which is not the case
here. The principle has been nowhere better expressed
than in the leading case of O'Gorman & Young v.
Hartford Fire Insurance Co., where the American
Supreme Court through Justice Brandeis tersely and
succinctly summed up the matter thus: "The statute
here questioned deals with a subject clearly within the
scope of the police power. We are asked to declare it
void on the ground that the specific method of
regulation prescribed is unreasonable and hence
deprives the plaintiff of due process of
law. Asunderlying questions of fact may condition
the constitutionality of legislation of this character,
the presumption of constitutionality must prevail in
the absence of some factual foundation of record
for overthrowing the statute." No such factual
foundation being laid in the present case, the lower
court deciding the matter on the pleadings and the
stipulation of facts, the presumption of validity must
prevail and the judgment against the ordinance set
aside.122 (Emphasis and underscoring supplied)

Thus, in Ermita-Malate Hotel and Motel Operations

Associations, Inc. v. Hon. City Mayor of Manila,121 this Court,
in reversing a trial court decision invalidating an ordinance
123
regulating the operation of motels and hotels in Manila, held: And in Peralta v. Commission on Elections, this Court stated:
Primarily what calls for a reversal of such a decision
is the absence of any evidence to offset the
presumption of validity that attaches to a challenged
statute or ordinance. As was expressed categorically
by Justice Malcolm: "The presumption is all in favor
of validity . . . . The action of the elected
representatives of the people cannot be lightly set
aside. The councilors must, in the very nature of
things, be familiar with the necessities of their
particular municipality and with all the facts and
circumstances which surround the subject and
necessitate action. The local legislative body, by
enacting the ordinance, has in effect given notice
that the regulations are essential to the well being of
the people . . . . The Judiciary should not lightly set
aside legislative action when there is not a clear

The equal protection clause does not forbid all legal

classifications. What [it] proscribes is a classification
which is arbitrary and unreasonable. It is not violated by
a reasonable classification based upon substantial
distinctions, where the classification is germane to the
purpose of the law and applies equally to all those
belonging to the same class. The equal protection
clause is not infringed by legislation which applies only
to those persons falling within a specified class, if it
applies alike to all persons within such class, and
reasonable grounds exist for making a distinction
between those who fall within the class and those who
do not. There is, of course, no concise or easy
answer as to what an arbitrary classification is. No
definite rule has been or can be laid down on the
basis of which such question may be resolved.The
determination must be made in accordance with the

facts presented by the particular case. The general rule,

which is well-settled by the authorities, is that a
classification, to be valid, mustrest upon material
differences between the persons, activities or things
included and those excluded.' There must, in other words,
be a basis for distinction. Furthermore, such classification
must be germane and pertinent to the purpose of the law. And,
finally, the basis of classification must, in general, be so drawn
that those who stand in substantially the same position with
respect to the law are treated alike, x x x124 (Emphasis and
underscoring supplied)
A similar thought was expressed in Medill v. State of
Minnesota,125 cited in the main opinion,126 where the State Supreme
Court of Minnesota127 reversed a decision of the U.S. Bankruptcy Court
and held that a statute exempting "[r]ights of action for injuries to the
person of the debtor or of a relative" from "attachment, garnishment, or
sale on any final process, issued from any court," did not contravene
the provisions of the Minnesota Constitution limiting exemptions to a
"reasonable amount" to be determined by law. The Minnesota Court
held:
x x x we must determine here whether there is an objective
measure which limits the amount or extent of the personal
injury right of action exemption since there is no dollar limit or
"to the extent reasonably necessary" limiting language on the
face of the provision. The trustee argues that the case is
"incredibly simple" because there is no language on the face
of the statute purporting to limit the exemption. The state and
debtors argue that the judicial determination of general
damages in a personal injury action is based on objective
criteria; therefore, the amount of the exemption is reasonable
and "determined by law" under article 1, section 12. We think
that the latter interpretation is reasonable and that the trustee
has failed to meet his burden of proving beyond a reasonable
doubt that the provision is unconstitutional.
xxx
Here, the resolution of the Medills' personal injury action
involved a judicial determination of an amount that reasonably
compensated them for their injuries. The Medills' recovery was
reasonably limited by a jury's determination of damages,
which was then approved by a court. Contrary to the trustee's
argument, we believe that the limits on out-of-court
settlements are similarly reasonable. First, unless a statute
is inherently unconstitutional, "its validity must stand or

fall upon the record before the court and not

The pronouncement in Victoriano v. Elizalde Rope Workers'
upon assumptions this court might [otherwise]
Union,129 is also instructive:
make * * *." Grobe v. Oak Center Creamery Co , 262
Minn. 60, 63, 113 N.W.2d 458, 460 (1962).
In the exercise of its power to make classifications for
Moreover, even in the case of an out-of-court
the purpose of enacting laws over matters within its
settlement, the "inherent" limitation on the right of
jurisdiction, the state is recognized as enjoying a wide
action still exists; the amount of a settlement is
range of discretion. It is not necessary that the
limited to or by the extent of injury, and no party will
classification be based on scientific or marked
agree to an "unreasonable" settlement.
differences of things or in their relation. Neither is it
necessary that the classification be made with
The trustee vigorously argues that the court must go
mathematical nicety. Hence legislative classification
considerably beyond the plain language of the
may in many cases properly rest on narrow
statute and rules of statutory construction to impose
distinctions, for the equal protection guaranty does not
the required constitutional limit on the exemption
preclude the legislature from recognizing degrees of evil
provision at issue here. However, the
or harm, and legislation is addressed to evils as they
constitutionality of a statute cannot in every
may appear.130 (Emphasis supplied; citations omitted)
instance be determined by a mere comparison of
its provisions with the applicable provisions of
To be sure, this Court has adjudged as valid statutes providing
the constitution. A statute may be constitutional for differences in treatment between: inter-urban buses and
and valid as applied to one set of facts and
provincial buses;131 taxpayers receiving compensation income
invalid in its application to another. Grobe, 262
and other taxpayers;132 male overseas workers and female
Minn, at 62, 113 N.W.2d at 460. Thus, unless we
overseas workers;133 electric cooperatives and other
find the exemption unconstitutional on its face, it cooperatives;134 businesses inside the secured area of the Subic
must be unconstitutional as applied to the facts Special Economic Zone and those outside the secured
of the instant case in order to be
area;135 public officers with pending criminal cases which have
stricken.128 (Emphasis supplied)
not yet gone to trial and those with cases wherein trial has
already commenced;136 and City and Municipal Election Officers
This does not mean that the factual differences must be
of the Commission On Elections (COMELEC) and other
prominent for the distinction between two classes to be
COMELEC officials.137
substantial. Nor are fine distinctions between two classes,
otherwise sharing several common attributes, prohibited.
Nevertheless, to be substantial, these distinctions, no matter
Thus, the Court in Peralta, went on to state:
how finely drawn, must still be rooted on someobjective factual
foundation; and cannot be left to the arbitrary, whimsical or
x x x It is, however, conceded that it is almost
capricious imagination of the law maker.
impossible in some matters to foresee and provide
for every imaginable and exceptional
Thus, relative constitutionality, as I understand it, merely
case. Exactness in division is impossible and
acknowledges that the factual circumstances which form the
never looked for in applying the legal test. All
bases for the substantial and real distinctions between two
that is required is that there must be, in general, classes may change over time. Thus, it is entirely possible that
some reasonable basis on general lines for the
a legislative classification held to be valid at one time upon a
division. Classification which has some
particular state of facts may be subsequently invalidated if the
reasonable basis does not offend the equal
factual basis for the substantial distinctions that existed between
protection clause merely because it is not made the two classes has ceased to exist. Cessante ratione legis,
with mathematical nicety.(Emphasis supplied;
cessat ipsa lex.138
citations omitted)

Just such a possibility was acknowledged by the U.S. Supreme Court

in Chastleton Corporation v. Sinclair,139where the Court, speaking
through Justice Holmes, declared:
The original Act of October 22, 1919, c. 80, tit. 2, 41 Stat. 297,
considered in Block v. Hirsh, was limited to expire in two
years. Section 122. The Act of August 24, 1921, c. 91, 42 Stat.
200, purported to continue it in force, with some amendments,
until May 22, 1922. On that day a new act declared that the
emergency described in the original title 2 still existed,
reenacted with further amendments the amended Act of 1919,
and provided that it was continued until May 22, 1924. Act of
May 22, 1922, c. 197, 42 Stat. 543.
We repeat what was stated in Block v. Hirsh, as to the respect
due to a declaration of this kind by the Legislature so far as it
relates to present facts. But even as to them a Court is not at
liberty to shut its eyes to an obvious mistake, when the validity
of the law depends upon the truth of what is declared. And still
more obviously so far as this declaration looks to the future it
can be no more than prophecy and is liable to be controlled by
events. A law depending upon the existence of an
emergency or other certain state of facts to uphold it may
cease to operate if the emergency ceases or the facts
change even though valid when passed, x x x140 (Emphasis
supplied; citations omitted)
Indeed, this appears to be the thrust of the cases cited 141 by the main
opinion to illustrate relative constitutionality:
The case of Vernon Park Realty v. City of Mount Vernon142 concerned
a parcel of land adjacent to a railroad station and located in the middle
of a highly developed business district had continually been used as a
car park. In 1927 it was placed in a Residence 'B' district under a
zoning ordinance under which its use as a car park remained a valid
nonconforming use. In 1951, the area was sold to Vernon Park Realty
which applied for, but did not obtain, a permit to build a retail shopping
center (prohibited under the 1927 ordinance). In 1952, after Vernon
Park had brought suit to declare the 1927 ordinance unconstitutional,
the city's common council amended the zoning ordinance to prohibit
the use of the property for any purpose except the parking and storage
of automobiles and the continuance of prior nonconforming uses. The
Court of Appeals of New York found the 1927 zoning ordinance and
the 1952 amendment illegal and void, ruling that:
While the common council has the unquestioned right to enact
zoning laws respecting the use of property in accordance with

a well-considered and comprehensive plan designed

to promote public health, safety and general welfare,
such power is subject to the constitutional limitation
that it may not be exerted arbitrarily or unreasonably
and this is so whenever the zoning ordinance
precludes the use of the property for any purpose for
which it is reasonably adapted. By the same token,
an ordinance valid when adopted will
nevertheless be stricken down as invalid when,
at a later time, its operation under changed
conditions proves confiscatory such, for
instance, as when the greater part of its value is
destroyed for which the courts will afford relief in an
appropriate case.143 (Emphasis supplied; citations
omitted)
In Nashville, Chatanooga & St. Louise Railways v.
Walters,144 the petitioners questioned the constitutionality of a
provision of the Tennessee Public Acts of 1921, which
authorized the state highway commissioner to require the
separation of grades whenever a state highway crosses a
railroad if in its discretion "the elimination of such grade
crossing is necessary for the protection of persons traveling
on any such highway or any such railroad" and requiring the
railroad company to pay in every case, one-half of the total
cost of the separation of grades. In remanding the case to
the Supreme Court of Tennessee, the U.S. Federal Supreme
Court declared:
The Supreme Court [of Tennessee] declined to
consider the Special facts relied upon as showing
that the order, and the statute as applied, were
arbitrary and unreasonable; and did not pass upon
the question whether the evidence sustained those
findings. It held that the statute was, upon its face,
constitutional; that when it was passed the state
had, in the exercise of its police power, authority to
impose upon railroads one-half of the cost of
eliminating existing or future grade crossings; and
that the court could not "any more" consider
"whether the provisions of the act in question have
been rendered burdensome or unreasonable by
changed economic and transportation conditions,"
than it "could consider changed mental attitudes to
determine the constitutionality or enforceability of a
statute." A rule to the contrary is settled by the
decisions of this Court. A statute valid as to one
set of facts may be invalid as to another. A

statute valid when enacted may become invalid by

change in the conditions to which it is applied. The
police power is subject to the constitutional limitation
that it may not be exerted arbitrarily or unreasonably. To
this limitation, attention was specifically called in cases
which have applied most broadly the power to impose
upon railroads the cost of separation of grades.
First. Unless the evidence and the special facts relied
upon were of such a nature that they could not
conceivably establish that the action of the state in
imposing upon the railway one-half of the cost of the
underpass was arbitrary and unreasonable, the
Supreme Court [of Tennessee] obviously erred in
refusing to consider them. The charge of arbitrariness
is based primarily upon the revolutionary changes
incident to transportation wrought in recent years
by the widespread introduction of motor vehicles;
the assumption by the federal government of the
functions of road builder; the resulting depletion of
rail revenues; the change in the character, the
construction, and the use of highways; the change
in the occasion for elimination of grade crossings,
in the purpose of such elimination, and in the chief
beneficiaries thereof; and the change in the relative
responsibility of the railroads and vehicles moving
on the highways as elements of danger and causes
of accidents. x x x
xxx
Second. x x x The promotion of public convenience will
not justify requiring of a railroad, any more than of
others, the expenditure of money, unless it can be
shown that a duty to provide the particular convenience
rests upon it.145 (Emphasis supplied; citations omitted)
In Atlantic Coast Line Railroad Co. v. Ivey,146 an action for
damages was filed against the Atlantic Coast Line Railroad
Company for the killing of a cow on an unfenced right of way
under certain Florida statutes authorizing the recovery of double
damages plus attorney's fees for animals killed on unfenced
railroad right of way, without proof of negligence. The railroad
company alleged that several changes in economic,
transportation and safety conditions had occurred since these
statutes were passed in 1899147 and that, in view of these
changes, it was unfair, unjust and inequitable to require railroad

companies to fence their tracks to protect against livestock roaming at

large without making a similar requirement for the owners of
automobiles, trucks and buses carrying passengers on the unfenced
public highways. In ruling that the questioned statutes violated the
equal protection guaranty, the Supreme Court of Florida reasoned:
It stands adjudicated that the purpose of the statutes, supra, is
the protection against accidents to life and property in
conducting public transportation and that such statutes are in
the exercise of the police power. It cannot be questioned that
those transportation companies engaged as common carriers
on the public roads and those so engaged on their privately
owned roads such as railroad companies, owe like duties to
the public and are under like obligations for the protection
against accidents to life and property in conducting such
business.
It is well settled that a statute valid when enacted may
become invalid by. change in conditions to which it is
applied. The allegations of the pleas are sufficient to show,
and the demurrer admits, that compliance with the statute
places a burden of expense on the railroad company to
provide for the safety of life and property of those whom it
assumes to serve which is not required to be borne by
competitive motor carriers which subject the lives and property
of those whom they assume to serve to greater hazards of the
identical character which the railroad is required to so guard
against and it is also shown that under the statutes penalties
are imposed on the railway carrier in favor of individuals who
are neither shippers nor passengers.
Under the statutes, as shown by the record here, the railway
common carrier is not only required to carry the burden of
fencing its traffic line for the protection of the persons and
property it transports, while other-common carriers are not
required to provide the like protection, but in addition to this,
there is another gross inequality imposed by the statute,
viz: Under the statutes the plaintiff to whom the carrier, as
such, was under no obligations, was allowed to recover
double the value of the animal killed, plus $50 as
attorney's fees, and was not required to prove any act of
negligence on the part of the carrier in the operation of its
equipment, while if a common carrier bus or truck had by
the operation of its equipment killed the same animal in
the same locality, the plaintiff would have been required
to prove negligence in the operation of the equipment and
the common carrier would have been liable only for the

value of the animal. This certainly is not equal

protection of the law.148(Emphasis and
underscoring supplied; citations omitted)
Similarly, the case of Louisville & Nashville Railroad Co. v.
Faulkner149 concerned an action to recover the value of a
mule killed by the railroad company's train under a Kentucky
statute which made the killing or injury of cattle by railroad
engines or cars prima facie evidence of negligence on the
part of the railroad's agents or servants. The Kentucky
Supreme Court, following the rulings
in Nashville and Atlantic Coast, adjudged the questioned
statute to be unconstitutional, viz:
The present statute which places the duty upon a
railroad company to prove it was free from
negligence in killing an animal upon its track is an
act of 1893. The genesis of the legislation, however,
goes back to the beginning of railroad transportation
in the state. The constitutionality of such
legislation was sustained because it applied to
all similar corporations and had for its object the
safety of persons on a train and the protection of
property. Louisville & N. R. Co. v. Belcher, 89 Ky.
193, 12 S.W. 195,11 Ky.Law Rep. 393, a decision
rendered in 1889.
Of course, there were no automobiles in those
days. The subsequent inauguration and
development of transportation by motor vehicles
on the public highways by common carriers of
freight and passengers created even greater
risks to the safety of occupants of the vehicles
and of danger of injury and death of domestic
animals. Yet, under the law the operators of that
mode of competitive transportation are not
subject to the same extraordinary legal
responsibility for killing such animals on the
public roads as are railroad companies for killing
them on their private rights of way.
The Supreme Court, speaking through Justice
Brandeis in Nashville, C. & St. L. Ry. Co. v. Walters,
294 U.S. 405, 55 S.Ct. 486, 488. 79 L.Ed. 949,
stated, 'A statute valid when enacted may
become invalid by change in the conditions to
which it is applied. The police power is subject to

the limitation that it may not be exerted arbitrarily or

unreasonably.' A number of prior opinions of that court
are cited in support of the statement. See 11 Am.Jur.,
Constitutional Law, 102.
The State of Florida for many years had a
statute, F.S.A. 356.01 et seq. imposing extraordinary
and special duties upon railroad companies, among
which was that a railroad company was liable for double
damages and an attorney's fee for killing livestock by a
train without the owner having to prove any act of
negligence on the part of the carrier in the operation of
his train. In Atlantic Coast Line Railroad Co. v. Ivey, 148
Fla. 680, 5 So.2d 244, 247, 139 A.L.R. 973, it was held
that the changed conditions brought about by motor
vehicle transportation rendered the statute
unconstitutional since if a common carrier by motor
vehicle had killed the same animal, the owner would
have been required to prove negligence in the
operation of its equipment. Said the court, 'This
certainly is not equal protection of the law.'
As stated in Markendorf v. Friedman, 280 Ky. 484, 133
S.W.2d 516, 127 A.L.R. 416, appeal dismissed
Friedman v.. Markendorf, 309 U.S. 627, 60 S.Ct. 610,
84 L.Ed. 987, the purpose of the provisions of
3 and 59 of the Kentucky Constitution and of the
Fourteenth Amendment to the Federal Constitution
is to place all persons similarly situated upon a
plane of equality and to render it impossible for any
class to obtain preferred treatment. Applying this
proscription of inequality and unreasonable
discrimination, we held invalid an amendment to a
statute regulating motor transportation for hire which
exempted from the operation of the statute such
vehicles engaged in transporting farm products.Priest v.
State Tax Commission, 258 Ky. 391, 80 S.W.2d 43.
We, therefore, hold that the part of KRS 277.330 which
imposes a duty upon a railroad company of proving that
it was free from negligence in the killing or injury of
cattle by its engine or cars is invalid and
unconstitutional.150 (Emphasis supplied; underscoring in
the original)

within which a creditor could not demand payment of a monetary

obligation contracted before December 8, 1941 (counted from the
settlement of the war damage claim of the debtor) after taking judicial
notice of the significant change in the nation's economic
circumstances in 1953, thus it held:
xxx We do not need to go far to appreciate this situation. We
can see it and feel it as we gaze around to observe the wave
of reconstruction and rehabilitation that has swept the country
since liberation thanks to the aid of America and the innate
progressive spirit of our people. This aid and this spirit have
worked wonders in so short a time that it can now be safely
stated that in the main the financial condition of our country
and our people, individually and collectively, has practically
returned to normal notwithstanding occasional reverses
caused by local dissidence and the sporadic disturbance of
peace and order in our midst. Business, industry and
agriculture have picked up and developed at such stride that
we can say that we are now well on the road to recovery and
progress. This is so not only as far as our observation and
knowledge are capable to take note and comprehend but also
because of the official pronouncements made by our Chief
Executive in public addresses and in several messages he
submitted to Congress on the general state of the nation, x x x
xxx
In the face of the foregoing observations, and consistent
with what we believe to be as the only course dictated by
justice, fairness and righteousness, we feel that the only way
open to us under the present circumstances is to declare
that the continued operation and enforcement of Republic
Act No. 342 at the present time is unreasonable and
oppressive, and should not be prolonged a minute longer,
and, therefore, the same should be declared null and void and
without effect. x x x152(Emphasis supplied)
As the financial ruin and economic devastation which provided the
rationale for the enactment of R.A. No. 342 was no longer present, this
Court did not hesitate to rule that the continued enforcement of the
statute was "unreasonable and oppressive, and should not be
prolonged a minute longer."

In the case at bar, however, petitioner does not allege a comparable

change in the factual milieu as regards the compensation, position
Finally, in Rutter v. Esteban,151 this Court invalidated Section 2 of classification and qualifications standards of the employees of the BSP
R.A. No. 342 providing for an eight-year moratorium period
(whether of the executive level or of the rank and file) since the

enactment of The New Central Bank Act. Neither does the

main opinion identify the relevant factual changes which may
have occurred vis--vis the BSP personnel that may justify
the application of the principle of relative constitutionality as
above-discussed. Nor, to my knowledge, are there any
relevant factual changes of which this Court may take
judicial knowledge. Hence, it is difficult to see how relative
constitutionality may be applied to the instant petition.
Moreover, even if such factual changes were alleged and
proved or judicially discoverable, still there is absolutely
nothing in any of the cases above-cited which would justify
the simultaneous application of both the Rational Basis Test
and the Strict Scrutiny Test. In fact, in the case of Louisville
& Nashville Railroad Co.,153 wherein a statute previously held
to have complied with the requirements of the equal
protection clause in 1889 was subsequently ruled to have
violated the equal protection guaranty in 1957 due to
changed factual conditions, the only testapplied
in both instances was the Rational Basis Test.154
It is true that petitioner alleges that its members' claim to
exemption from the Compensation Classification System
under the Salary Standardization Law was bolstered by the
amendments to the charters of the LBP, DBP, SSS and
GSIS, which exempted all the employees of these
GOCCs/GFIs from said Compensation Classification
System. However, these subsequent amendments do
not constitute factual changes in the context of relative
constitutionality. Rather, they involve subsequent legislative
classifications which should be evaluated in accordance with
the appropriate standard.

Autonomy Act) refer to the same subject matter

enactment and effectivity of a tax ordinance. In this
respect they can be considered in pari
materia. Statutes are said to be in pari materia when
they relate to the same person or thing, or to the
same class of persons or things, or have the same
purpose or object. When statutes are in pari
materia, the rule of statutory construction dictates
that they should be construed together. This is
because enactments of the same legislature on the
same subject matter are supposed to form part of
one uniform system; that later statutes are
supplementary or complimentary to the earlier
enactments and in the passage of its acts the
legislature is supposed to have in mind the existing
legislation on the same subject and to have enacted
its new act with reference thereto. Having thus in
mind the previous statutes relating to the same
subject matter, whenever the legislature enacts a
new law, it is deemed to have enacted the new
provision in accordance with the legislative policy
embodied in those prior statutes unless there is an
express repeal of the old and they all should be
construed together.157 (Emphasis and underscoring
supplied; citations omitted)

Here, it can be said that the Salary Standardization Law, the

New Central Bank Act, and the amended charters of the other
GOCCs and GFIs are in pari materia insofar as they pertain
to compensation and position classification
system(s) covering government employees. Consequently, the
provisions of these statutes concerning compensation and
position classification, including the legislative classifications
To assess the validity of the questioned proviso in the light of made therein, should all be read and evaluated together in the
subsequent legislation, all that need be applied is the familiar light of the equal protection clause. Consequently, the relevant
question is whether these statutes, taken together as one
rule that statutes that are in pari materia155 should be read
uniform system of compensation for government employees,
together. As this Court declared in City of Naga v.
comply with the requisites of the equal protection guaranty.
156
Agna, viz:
x x x Every new statute should be construed in
connection with those already existing in
relation to the same subject matter and all
should be made to harmonize and stand
together, if they can be done by any fair and
reasonable interpretation . . . It will also be noted
that Section 2309 of the Revised Administrative
Code and Section 2 of Republic Act No. 2264 (Local

Rational Basis Test Appropriate to the Case at Bar

Turning then to the determination of the standard appropriate to
the issues presented by the instant petition, it is immediately
apparent that Intermediate Scrutiny, inasmuch as its application
has been limited only to classifications based on gender and
illegitimacy, finds no application to the case at bar.

The choice of the appropriate standard is thus narrowed between

Strict Scrutiny and the Rational Basis Test. As has been observed,
Strict Scrutiny has been applied in the American context when a
legislative classification intrudes upon a fundamental right or classifies
on the basis of an inherently suspect characteristic.
Strict Scrutiny cannot be applied in the case at bar since nowhere in
the petition does petitioner allege that Article II, Section 15 (c) of the
New Central Bank Act burdens a fundamental right of its members.
The petition merely states that "the proviso in question violates the
right to equal protection of the laws of the BSP rank and file
employees who are members of the petitioner."158 While it is true that
the Equal Protection Clause is found in the Bill of Rights of both the
American and Philippine Constitutions, for strict scrutiny to apply there
must be a violation of a Constitutional right other than the right to
equal protection of the laws. To hold otherwise would be absurd as
any invocation of a violation of the equal protection clause would
automatically result in the application of Strict Scrutiny.
In Vacco v. Quill,159 several physicians challenged a New York statute
which prohibits assistance to suicide. They argued that although it was
consistent with the standards of their medical practice to prescribe
lethal medication for mentally competent, terminally ill patients who are
suffering great pain and desire a doctor's help in taking their own lives,
they are deterred from doing so by New York's ban on assisting
suicide.160 They contend that because New York permits a competent
person to refuse life-sustaining medical treatment and because the
refusal of such treatment is "essentially the same thing" as physicianassisted suicide, the ban violates the Equal Protection Clause. 161 A
unanimous U.S. Supreme Court applied the Rational Basis Test as the
statute did not infringe fundamental rights. Moreover, the Court held
that the guarantee of equal protection is not a source of substantive
rights or liberties.
The Equal Protection Clause commands that no State shall
"deny to any person within its jurisdiction the equal protection
of the laws." This provision creates no substantive
rights. San Antonio Independent School Dist. v. Rodriguez,
411 U.S. 1, 33, 93 S.Ct. 1278. 1296-1297, 36 L.Ed.2d 16
(1973); id., at 59, 93 S.Ct., at 1310 (Stewart, J., concurring).
Instead, it embodies a general rule that States must treat like
cases alike but may treat unlike cases accordingly. Plyler v.
Doe. 457 U.S. 202, 216, 102 S.Ct. 2382, 2394, 72 L.Ed.2d
786 (1982) ("'[T]he Constitution does not require things which
are different in fact or opinion to be treated in law as though
they were the same'") (quoting Tigner v. Texas, 310 U.S. 141,
147, 60 S.Ct. 879, 882, 84 L.Ed. 1124 (1940)). If a legislative

classification or distinction "neither burdens a

fundamental right nor targets a suspect class, we
will uphold [it] so long as it bears a rational relation
to some legitimate end."Romer v. Evans, 517 U.S.
620, 631, 116 S.Ct. 1620, 1627, 134 L.Ed.2d 855
(1996).
New York's statutes outlawing assisting suicide
affect and address matters of profound
significance to all New Yorkers alike. They
neither infringe fundamental rights nor involve
suspect classifications. Washington v. Glucksberg,
at 719-728, 117 S.Ct., at 2267-2271; see 80 F.3d, at
726; San Antonio School Dist., 411 U.S., at 28, 93
S.Ct., at 1294 ("The system of alleged discrimination
and the class it defines have none of the traditional
indicia of suspectness"); id., at 33-35, 93 S.Ct., at
1296-1298 (courts must look to the Constitution, not
the "importance" of the asserted right, when
deciding whether an asserted right is
"fundamental"). These laws are therefore entitled to
a "strong presumption of validity." Heller v. Doe, 509
U.S. 312, 319, 113 S.Ct. 2637, 2642, 125 L.Ed.2d
257 (1993).162 (Emphasis and underscoring supplied)
Neither does the main opinion identify what fundamental
right the challenged proviso of the New Central Bank Act
infringes upon. Instead the ponencia cites the following
Constitutional provisions:
PREAMBLE:
We, the sovereign Filipino people, imploring the aid of
Almighty God, in order to build a just and humane society
and establish a Government that shall embody our ideals
and aspirations, promote the common good, conserve and
develop our patrimony, and secure to ourselves and our
posterity the blessings of independence and democracy
under the rule of law and a regime of truth, justice, freedom,
love, equality, and peace, do ordain and promulgate this
Constitution.
ARTICLE II: Declaration of Principles and State
Policies
SECTION 9. The State shall promote a just and
dynamic social order that will ensure the prosperity

and independence of the nation and free the people

from poverty through policies that provide adequate
social service, promote full employment, a rising
standard of living, and an improved quality of life for all.

and efficient use of human and natural resources, and which

are competitive in both domestic and foreign markets.
However, the State shall protect Filipino enterprises against
unfair foreign competition and trade practices.

SECTION 10. The State shall promote social justice in

all phases of national development.

In pursuit of these goals, all sectors of the economy and all

regions of the country shall be given optimum opportunity to
develop. Private enterprises, including corporations,
cooperatives, and similar collective organizations, shall be
encouraged to broaden the base of their ownership.

SECTION 11. The State values the dignity of every

human person and guarantees full respect for human
rights.
SECTION 18. The State affirms labor as a primary
social economic force. It shall protect the rights of
workers and promote their welfare.

SECTION 22. Acts which circumvent or negate any of the

provisions of this Article shall be considered inimical to the
national interest and subject to criminal and civil sanctions, as
may be provided by law.

ARTICLE III: Bill of Rights

ARTICLE XIII: Social Justice and Human Rights

SECTION 1. No person shall be deprived of life, liberty,

or property without due process of law, nor shall any
person be denied the equal protection of the laws.

SECTION 1. The Congress shall give highest priority to the

enactment of measures that protect and enhance the right of
all the people to human dignity, reduce social, economic, and
political inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for the common
good.

ARTICLE IX: Constitutional Commissions

B. The Civil Service Commission
SECTION 5. The Congress shall provide for the
standardization of compensation of government
officials, including those in government-owned or
controlled corporations with original charters, taking into
account the nature of the responsibilities pertaining to,
and the qualifications required for their positions.
ARTICLE XII: National Economy and Patrimony
SECTION 1. The goals of the national economy are a
more equitable distribution of opportunities, income,
and wealth; a sustained increase in the amount of
goods and services produced by the nation for the
benefit of the people; and an expanding productivity as
the key raising the quality of life for all, especially the
underprivileged.
The State shall promote industrialization and full
employment based on sound agricultural development
and agrarian reform, through industries that make full

To this end, the State shall regulate the acquisition, ownership,

use, and disposition of property and its increments.
Labor
SECTION 3. The State shall afford full protection to labor, local
and oversea, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to selforganizations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living
wage. They shall also participate in policy and decisionmaking processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared responsibility
between workers and employers and the preferential use of
voluntary modes in settling disputes, including conciliation,

and shall enforce their mutual compliance therewith

to foster industrial peace.
The State shall regulate the relations between
workers and employers, recognizing the right of
labor to its just share in the fruits of production and
the right of enterprises to reasonable returns on
investments, and to expansion and growth.
With the exception of Section 1, Article III and Section 3,
Article XIII, the foregoing Constitutional provisions do not
embody any particular right but espouse principles and
policies.163 As previously discussed, mere reliance on the
Equal Protection Clause which is in the Bill of Rights is not
sufficient to justify the application of Strict Scrutiny. While
Section 3 of Article XIII enumerates the seven basic rights of
workers - the right to organize, the right to conduct collective
bargaining or negotiation with management, the right to
engage in peaceful concerted activities including the right to
strike in accordance with law, the right to enjoy security of
tenure, the right to work under humane conditions, the right
to receive a living wage, and the right to participate in policy
and decision-processes affecting their rights and benefits as
may be provided by law - I fail to see how Article II, Section
15 (c) of the New Central Bank Act can impinge on any of
these seven rights.

The main opinion however seeks to justify the application of

Strict Scrutiny on the theory that the rank and file employees of
the BSP constitute a suspect class "considering that majority (if
not all) of the rank and file employees consist of people whose
status and rank in life are less and limited, especially in terms of
job marketability, it is they - and not the officers - who have the
real economic and financial need for the adjustment."
The ponencia concludes that since the challenged proviso
operates on the basis of the salary grade or office-employee
status a distinction based on economic class and status is
created.
With all due respect, the main opinion fails to show that financial
need is an inherently suspect trait. The claim that the rank and
file employees of the BSP are an economically disadvantaged
group is unsupported by the facts on record. Moreover, as
priorly discussed, classifications based on financial need have
been characterized by the U.S. Supreme Court as not suspect.
Instead, the American Court has resorted to the Rational Basis
Test.

The case of San Antonio Independent School District v.

Rodriguez164 is instructive. In the said case, the financing of
public elementary and secondary schools in Texas is a product
of state and local participation. Almost half of the revenues are
derived from a largely state-funded program designed to
provide a basic minimum educational offering in every school.
Each district supplements state aid through an ad valorem tax
Another reason why Strict Scrutiny is inappropriate is the
on property within its jurisdiction. A class action suit was brought
absence of a classification which is based on an inherently
suspect characteristic. There is no suspect class involved in on behalf of school children said to be members of poor families
the case at bar. By no stretch of the imagination can the rank who reside in school districts having a low property tax base.
They argue that the Texas system's reliance on local property
and file employees of the BSP be considered a suspect
class - a class saddled with such disabilities, or subjected to taxation favors the more affluent and violates the equal
such a history of purposeful unequal treatment, or relegated protection clause because of substantial inter-district disparities
to such a position of political powerlessness as to command in per pupil expenditures resulting primarily from differences in
the value of assessable property among the districts. The Court
extraordinary protection from the majoritarian political
held that wealth discrimination alone does not provide adequate
process. As examined earlier, in applying this definition of
165
suspect class, the U.S. Supreme Court has labeled very few basis for invoking strict scrutiny.
classifications as suspect. In particular, the Court has limited
the term suspect class to classifications based on race or
The wealth discrimination discovered by the District
national origin, alienage and religion. It is at once apparent
Court in this case, and by several other courts that have
that Article II, Section 15 (c) of the New Central Bank Act, in
recently struck down school-financing laws in other
exempting the BSP officers from the coverage of the Salary
States, is quite unlike any of the forms of wealth
Standardization Law and not exempting the rank and file
discrimination heretofore reviewed by this Court. Rather
employees of the BSP, does not classify based on race,
than focusing on the unique features of the alleged
national origin, alienage or religion.
discrimination, the courts in these cases have virtually
assumed their findings of a suspect classification

through a simplistic process of analysis: since, under the

traditional systems of financing public schools, some
poorer people receive less expensive educations than
other more affluent people, these systems discriminate
on the basis of wealth. This approach largely ignores the
hard threshold questions, including whether it makes a
difference for purposes of consideration under the
Constitution that the class of disadvantaged 'poor' cannot
be identified or defined in customary equal protection
terms, and whether the relative--rather than absolute-nature of the asserted deprivation is of significant
consequence. Before a State's laws and the justifications for
the classifications they create are subjected to strict judicial
scrutiny, we think these threshold considerations must be
analyzed more closely than they were in the court below.
The case comes to us with no definitive description of the
classifying facts or delineation of the disfavored
class. Examination of the District Court's opinion and of
appellees' complaint, briefs, and contentions at oral argument
suggests, however, at least three ways in which the
discrimination claimed here might be described. The Texas
system of school financing might be regarded as
discriminating (1) against 'poor' persons whose incomes
fall below some identifiable level of poverty or who might
be characterized as functionally 'indigent, or (2) against
those who are relatively poorer than others, or (3) against
all those who, irrespective of their personal incomes,
happen to reside in relatively poorer school districts. Our
task must be to ascertain whether, in fact, the Texas system
has been shown to discriminate on any of these possible
bases and, if so, whether the resulting classification may be
regarded as suspect.
The precedents of this Court provide the proper starting
point. The individuals, or groups of individuals, who
constituted the class discriminated against in our prior
cases shared two distinguishing characteristics: because
of their impecunity they were completely unable to pay for
some desired benefit, and as a consequence, they
sustained an absolute deprivation of a meaningful
opportunity to enjoy that benefit. In Griffin v. Illinois, 351
U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891 (1956), and its progeny
the Court invalidated state laws that prevented an indigent
criminal defendant from acquiring a transcript, or an adequate
substitute for a transcript, for use at several stages of the trial
and appeal process. The payment requirements in each case
were found to occasion de facto discrimination against those

who, because of their indigency, were totally unable

to pay for transcripts. And the Court in each case
emphasized that no constitutional violation would
have been shown if the State had provided some
'adequate substitute' for a full stenographic
transcript.

Minimum Foundation Program provides an 'adequate'

education for all children in the State. By providing 12
years of free public-school education, and by assuring
teachers, books, transportation, and operating funds,
the Texas Legislature has endeavored to 'guarantee, for
the welfare of the state as a whole, that all people shall
have at least an adequate program of education. xxx

xxx
Only appellees' first possible basis for describing the
class disadvantaged by the Texas school-financing
system--discrimination against a class of defineably
'poor' persons--might arguably meet the criteria
established in these prior cases. Even a cursory
examination, however, demonstrates that neither of
the two distinguishing characteristics of wealth
classifications can be found here. First, in support
of their charge that the system discriminates
against the 'poor,' appellees have made no effort
to demonstrate that it operates to the peculiar
disadvantage of any class fairly definable as
indigent, or as composed of persons whose
incomes are beneath any designated poverty
level. Indeed, there is reason to believe that the
poorest families are not necessarily clustered in the
poorest property districts. xxx
Second, neither appellees nor the District Court
addressed the fact that, unlike each of the
foregoing cases, lack of personal resources has
not occasioned an absolute deprivation of the
desired benefit. The argument here is not that the
children in districts having relatively low assessable
property values are receiving no public education;
rather, it is that they are receiving a poorer quality
education than that available to children in districts
having more assessable wealth. Apart from the
unsettled and disputed question whether the quality
of education may be determined by the amount of
money expended for it, a sufficient answer to
appellees' argument is that, at least where wealth
is involved, the Equal Protection Clause does
not require absolute equality or precisely equal
advantages. Nor indeed, in view of the infinite
variables affecting the educational process, can any
system assure equal quality of education except in
the most relative sense. Texas asserts that the

For these two reasons--the absence of any

evidence that the financing system discriminates
against any definable category of 'poor' people or
that it results in the absolute deprivation of
education--the disadvantaged class is not
susceptible of identification in traditional terms.
xxx
This brings us, then, to the third way in which the
classification scheme might be defined--district wealth
discrimination. Since the only correlation indicated by
the evidence is between district property wealth and
expenditures, it may be argued that discrimination might
be found without regard to the individual income
characteristics of district residents. Assuming a perfect
correlation between district property wealth and
expenditures from top to bottom, the disadvantaged
class might be viewed as encompassing every child in
every district except the district that has the most
assessable wealth and spends the most on education.
Alternatively, as suggested in Mr. Justice MARSHALL'S
dissenting opinion the class might be defined more
restrictively to include children in districts with
assessable property which falls below the statewide
average, or median, or below some other artificially
defined level.
However described, it is clear that appellees' suit
asks this Court to extend its most exacting scrutiny
to review a system that allegedly discriminates
against a large, diverse, and amorphous
class, unified only by the common factor of
residence in districts that happen to have less
taxable wealth than other districts. The system of
alleged discrimination and the class it defines have
none of the traditional indicia of suspectness: the
class is not saddled with such disabilities, or
subjected to such a history of purposeful unequal

treatment, or relegated to such a position of political

powerlessness as to command extraordinary protection
from the majoritarian political process.
We thus conclude that the Texas system does not operate to
the peculiar disadvantage of any suspect class. But in
recognition of the fact that this Court has never heretofore
held that wealth discrimination alone provides an
adequate basis for invoking strict scrutiny, appellees have
not relied solely on this contention. x x x166 (Emphasis and
underscoring supplied; citations and footnotes omitted)
To further bolster the theory that a classification based on financial
need is inherently suspect, the main opinion cites a number of
international conventions as well as foreign and international
jurisprudence, but to no avail.
The reliance by the main opinion on these international conventions is
misplaced. The ponencia cites the American Convention on Human
Rights, the African Charter of Human and Peoples' Rights, the
European Convention on Human Rights, the European Social Charter
of 1996 and the Arab Charter on Human Rights of 1994. It should be
noted that the Philippines is not a signatory to any of these
conventions.
The main opinion also cites the Universal Declaration of Human
Rights, the International Covenant on Civil and Political Rights, the
International Covenant on Economic, Social and Cultural Rights, the
International Convention on the Elimination of all Forms of Racial
Discrimination, the Convention on the Elimination of all Forms of
Discrimination against Women and the Convention on the Rights of
the Child. While it is true that these instruments which the Philippines
is a party to include provisions prohibiting discrimination, none of them
explicitly prohibits discrimination on the basis of financial need.
While certain conventions mention that distinctions based on "other
status" is prohibited, the scope of this term is undefined. Even Gay
Moon, on whom the main opinion relies, explains thus:
The [UN Human Rights] Committee provides little guidance on
how it decides whether a difference in treatment comes within
the rubric of "other status". Its approach to this issue lacks
consistency and transparency.167
Furthermore, the U.K. cases cited in the main opinion are not in point
since these cases do not support the thesis that classification based

on financial need is inherently suspect. In Hooper v.

file. If the end-result did in fact lead to a disparity of
Secretary of State for Work and Pension168 the discrimination
treatment between the officers and the rank-and-file in
in question was based on gender, that is, whether the
terms of salaries and benefits, the discrimination or
widowers are entitled to the pension granted by the State to
distinction has a rational basis and is not palpably,
widows. In Abdulaziz, Cabales and Balkandali v. United
purely, and entirely arbitrary in the legislative sense.
Kingdom169 the discrimination was based on sex and race;
In Wilson and Others v. United Kingdom170 the questioned
and declines to grant the petition on this ground.
law allows employers to discriminate against their
employees who were trade union members.
For her part, Justice Chico-Nazario, in her separate concurring
opinion, sides with petitioner believing that the difference in
Notably, the main opinion, after discussing lengthily the
treatment is "purely arbitrary" and thus violates the
developments in equal protection analysis in the United
Constitutional guaranty of equal protection of the laws.
States and Europe, and finding no support thereto,
incongruously concluded that "in resolving constitutional
On this point, I am in accord with the main opinion.
disputes, this Court should not be beguiled by foreign
jurisprudence some of which are hardly applicable because
For ease of reference, Section 15 (c) is reproduced hereunder:
they have been dictated by different constitutional settings
171
and needs." After an excessive dependence by the main
SEC. 15. Exercise of Authority. In the exercise of its
opinion to American jurisprudence it contradicted itself when
authority, the Monetary Board shall:
it stated that "American jurisprudence and authorities, much
less the American Constitution, are of dubious application for
these are no longer controlling within our jurisdiction and
xxx
have only limited persuasive merit."172
(c) establish a human resource management system
Intrinsic Constitutionality of Section 15(c)
which shall govern the selection, hiring, appointment,
of the New Central Bank Act
transfer, promotion, or dismissal of all personnel. Such
system shall aim to establish professionalism and
excellence at all levels of the Bangko Sentral in
Is the classification between the officers and rank and file
accordance with sound principles of management.
employees in Section 15 (c) of the New Central Bank Act in
violation of the equal protection clause?
A compensation structure, based on job evaluation
studies and wage surveys and subject to the
Petitioner, contending that there are no substantial
Board's approval, shall be instituted as an integral
distinctions between these two groups of BSP employees,
component of the Bangko Sentral's human
argues that it is.
resource development program: Provided, That the
Monetary Board shall make its own system conform as
On the other hand, the main opinion, applying the Rational
closely as possible with the principles provided for
Basis Test, finds the classification between the executive
under Republic Act No. 6758. Provided, however,That
level and the rank and file of the BSP to be based on
compensation and wage structure of employees
substantial and real differences which are germane to the
whose positions fall under salary grade 19 and
purpose of the law. Thus, it concludes:
below shall be in accordance with the rates
prescribed under Republic Act No. 6758.(Emphasis
In the case at bar, it is clear in the legislative
supplied)
deliberations that the exemption of officers (SG 20
and above) from the SSL was intended to address
It is readily apparent that Section 15 (c), by implicitly exempting
the BSP's lack of competitiveness in terms of
attracting competent officers and executives. It was the executive corps of the BSP (those with SG 20 and above)
from the Compensation Classification System under the Salary
not intended to discriminate against the rank-and-

Standardization Law, makes a classification between the officers and

the rank and file of the BSP and, who, like all other government
employees, are squarely within the ambit of the Compensation
Classification System by the Salary Standardization Law.
To be valid, therefore, the difference in treatment as to compensation
between the executive level and the rank and file of the BSP must be
based on real differences between the two groups. Moreover, this
classification must also have a rational relationship to the purpose of
the New Central Bank Act.
An examination of the legislative history of the New Central Bank Act
may thus prove useful.
Legislative History of the New Central Bank Act
An examination of the legislative deliberations of both the House of
Representatives and the Senate shows that it was never the intention
of both houses to provide all BSP personnel with a blanket exemption
from the coverage of the Salary Standardization Law.
Thus, while House Bill No. 7037 (the House of Representatives
version of the New Central Bank Act) did not expressly mention that
the Salary Standardization Law was to apply to a particular category of
BSP employees, the deliberations in the lower house show that the
position and compensation plans which the BSP was authorized to
adopt were to be in accordance with the provisions of applicable laws,
including the Salary Standardization Law:
MR. JAVIER (E.). No, Mr. Speaker, we have that phrase in
Section 14 (c). The power to organize, the power to classify
positions, the power to adopt compensation plans are subject
to the provisions of applicable laws. The bill is clear, so I do
not think we should have a quarrel on whether the Monetary
Board has absolute power over the organization and
compensation plans of the Bangko Sentral ng Pilipinas. Of
course, this power is subject to applicable laws, and one
of these laws is the Salary Standardization Law, Mr.
Speaker.
MR. ARROYO. To cut the argument short, Mr. Speaker, in
effect, he is now saying that the proposed bill will authorize the
Bangko Sentral to fix its own salary scale for its employees?
MR. JAVIER (E.). That is correct, Mr. Speaker, but in
accordance with the provisions of applicable laws.

MR. ARROYO. I am only asking if it will be able to fix

its own salary scale.
MR. JAVIER (E.). Yes, in accordance with the
provisions of applicable laws.
MR. ARROYO. May I know Mr. Speaker, what is
the applicable law that will curtail this?

Standardization Law because later on if there is any

conflict on the remuneration of employees lower than
the governor and members of the Monetary Board, we
have limits set under the Salary Standardization Law.
MR. LACSON. Under the Salary Standardization
Law.175 (Emphasis and underscoring supplied)

The application of the Salary Standardization Law to all other

MR. JAVIER (E.). The Salary Standardization Law. personnel of the BSP raised some concerns, however, on the
part of some legislators. They felt the need to reconcile the
demand for competent people to help in the management of the
MR. ARROYO. So, the Gentleman is now
economy with the provisions of the Salary Standardization
suggesting that the Standardization Law will
Law.176 The Senate thus sought to address these concerns by
apply to this?
allowing the BSP to determine a separate salary scale for the
executive level.
MR. JAVIER (E.). Yes, Mr. Speaker.173 (Emphasis
supplied)
The purpose behind the exemption of officers with SG 20 and
above from the Salary Standardization Law was to increase the
In fact, the deliberations show that, in keeping with the
BSP's competitiveness in the industry's labor market such that
recognition in Section 9174 of the Salary Standardization Law by offering attractive salary packages,top executives and
that compensation higher than SG 30 might be necessary in officials would be enticed and competent officers would be
certain exceptional cases to attract and retain competent
deterred from leaving.
top-level personnel, the initial intention of the drafters of the
House Bill was to exempt only the Governor and the
Senator Maceda. x x x
Monetary Board from the coverage of the Compensation
Classification System:
We have a salary grade range, if I am not mistaken, Mr.
President, up to Grade 32. Those executive types are
MR. LACSON. Mr. Speaker, Section 12 mentions
probably between Grade 23 to Grade 32. If we really
only the remuneration of the governor and the
want to make sure that the vice-president types of
members of the monetary board.
the banks will come in, it should be cut off at
around Grade 23 level and that the Standardization
MR. CHAVES. So, it will not cover any other
Act should still refer to those around Grade 22 and
employees of the Central Bank because the
below. But if we cut it off at Grade 9 and below, we are
limitation set forth under the Salary
just hitting only the drivers, the janitors, the filing clerks,
Standardization Law will apply to them. I just
the messengers.
want to make that sure because if it is not clear
in the law, then we can refer to the debates on
The Gentleman will only be cutting off a part of my heart
the floor.
again if he does that. My heart bleeds for this people,
Mr. President.
MR. LACSON. Mr. Speaker, Section 12 mentions
only the governor and the members of the
Senator Osmea. If that is an amendment, Mr.
monetary board. All the rest in the lower
President, I move that we reconsider the prior approval
echelons are covered by law.
of my amendment which was accepted by the Sponsor,
and I will accept the amendment of Senator Maceda
MR. CHAVES. In other words, I just want to make it
clear whether or not they are covered by the Salary

that the grade level should not be Grade 9 but Grade 22

instead.
Senator Maceda. After consulting the principal Author of
the Standardization Law, the distinguished Majority
Leader, he confirms that the executive group is really
Grade 23 and above. I think that is where the Gentleman
really wants to have some leeway to get some people in at
the executive level. So I propose the amendment to the
amendment to Grade 22 and below.177 (Underscoring
supplied; emphasis in the original)
Ultimately, the Bicameral Conference Committee on Banks, in
consultation with the BSP, determined that the BSP's executive level
began at SG 20 and resolved to exempt those at that level and above
from the Compensation Classification System under the Salary
Standardization Law, leaving the rank-and-file employees, or those
personnel with a SG of 19 and below, under the coverage of the said
compensation system. This is clear from the deliberations as
reproduced by the petitioner itself:
CHAIRMAN ROCO. x x x x x x x x x
Number 4, on compensation of personnel. We have checked.
The exemption from the Salary Standardization Law shall
apply only from Salary Grade 21 and above. The division chief
is salary grade 22.
CHAIRMAN ZAMORA. I understood, Mr. Chairman, from
the Central Bank itself that their range for rank-and-file
starts from range 19 and downward. So what we should
propose is that we subject all personnel to salary
standardization starting from range 19 going down, and
exempt them from range 20 and going up.
CHAIRMAN ROCO. That will cover also assistant division
chiefs?
CHAIRMAN ZAMORA. That includes assistant division chiefs,
division chiefs, and obviously higher personnel.
CHAIRMAN ROCO. Yes, because in terms of x x x We are
being more generous than original. So assistant division chiefs
shall be exempted already from the salary
standardization.178 (Emphasis and underscoring supplied)

The Classification is Based on Real Differences

between
the Officers and the Rank and File of the BSP, and is
Germane to the Purpose of the Law
As pointed out by the Office of the Solicitor General, 179 the
foregoing classification of BSP personnel into managerial
and rank-and-file is based on real differences as to the
scope of work and degree of responsibility between these
two classes of employees. At the same time, the exemption
of the BSP managerial personnel from the Salary
Standardization Law bears a rational relationship to the
purpose of the New Central Bank Act.180 In the words of the
Solicitor General:
x x x Article II, Section 15 (c) of RA 7653
was purposely adopted to attract highly
competent personnel, to ensure professionalism
and excellence at the BSP as well as to ensure
its independence through fiscal and
administrative autonomy in the conduct of
monetary policy. This purpose is undoubtedly
being assured by exempting the
executive/management level from the Salary
Standardization Law so that the best and the
brightest may be induced to join the BSP.After all,
the managers/executives are the ones responsible
for running the BSP and for implementing its
monetary policies.181 (Emphasis and underscoring
supplied)
In the light of the foregoing, Justice Chico-Nazario's
conclusion that the distinction is "purely arbitrary" does not
appear to hold water.
In support of her view, Justice Chico-Nazario cites Section 5
(a) of the Salary Standardization Law, which provides that
positions in the Professional Supervisory Category are
assigned SG 9 to SG 33. Thus, she argues:
x x x SG 20 and up do not differ from SG 19 and
down in terms of technical and professional
expertise needed as the entire range of positions all
'require intense and thorough knowledge of a
specialized field usually acquired from completion of
a bachelor's degree or higher courses.

Consequently, if BSP needs an exemption from R.A.

No. 6758 for key positions in order that it may hire the
best and brightest economists, accountants, lawyers
and other technical and professional people, the
exemption must not begin only in SG 20.
However, it is clear that while it is possible to group classes of
positions according to the four main categories as provided
under Section 5 of the Salary Standardization Law, viz:
SECTION 5. Position Classification System.
The Position Classification System shall consist of
classes of positions grouped into four main
categories, namely: professional supervisory,
professional non-supervisory, sub-professional
supervisory, and sub-professional non-supervisory,
and the rules and regulations for its
implementation.
Categorization of these classes of positions shall be
guided by the following considerations:
(a) Professional Supervisory Category. This
category includes responsible positions of a managerial
character involving the exercise of management
functions such as planning, organizing, directing,
coordinating, controlling and overseeing within
delegated authority the activities of an organization, a
unit thereof or of a group, requiring some degree of
professional, technical or scientific knowledge and
experience, application of managerial or supervisory
skills required to carry out their basic duties and
responsibilities involving functional guidance and
control, leadership, as well as line supervision. These
positions require intensive and thorough knowledge of a
specialized field usually acquired from completion of a
bachelor's degree or higher degree courses.
The positions in this category are assigned Salary
Grade 9 to Salary Grade 33.
(b) Professional Non-Supervisory Category. This
category includes positions performing task which
usually require the exercise of a particular profession or
application of knowledge acquired through formal
training in a particular field or just the exercise of a
natural, creative and artistic ability or talent in literature,

drama, music and other branches of arts and letters. Also

included are positions involved in research and application of
professional knowledge and methods to a variety of
technological, economic, social, industrial and governmental
functions; the performance of technical tasks auxiliary to
scientific research and development; and in the performance
of religious, educational, legal, artistic or literary functions.
These positions require thorough knowledge in the field of arts
and sciences or learning acquired through completion of at
least four (4) years of college studies.
The positions in this category are assigned Salary Grade 8 to
Salary Grade 30.
(c) Sub-Professional Supervisory Category. This
category includes positions performing supervisory functions
over a group of employees engaged in responsible work along
technical, manual or clerical lines of work which are short of
professional work, requiring training and moderate experience
or lower training but considerable experience and knowledge
of a limited subject matter or skills in arts, crafts or trades.
These positions require knowledge acquired from secondary
or vocational education or completion of up to two (2) years of
college education.
The positions in this category are assigned Salary Grade 4 to
Salary Grade 18.
(d) Sub-Professional Non-Supervisory Category. This
category includes positions involves in structured work in
support of office or fiscal operations or those engaged in
crafts, trades or manual work. These positions usually require
skills acquired through training and experience of completion
of elementary education, secondary or vocational education or
completion of up to two (2) years of college education.
The positions in this category are assigned Salary Grade 1 to
Salary Grade 10. (Emphasis supplied)
the same does not preclude classifying classes of positions, although
different with respect to kind or subject matter of work, according
to level of difficulty and responsibility and level of
qualification requirements - that is, according to grade.182

It should be borne in mind that the concept of "grade" from

the Old Salary Standardization Law is maintained in the
present one. Thus Sections 8 and 9 of the present Salary
Standardization Law provide for the general assignment of
the various salary grades to certain positions in the civil
service according to the degree of responsibility and level of
qualifications required:

organizationally equivalent to a Department, and its head to

that of a Department Secretary.

under Article IX, 1987 Constitution

Member of a Constitutional Commission
under Article IX, 1987 Constitution

SECTION 8. Salaries of Constitutional Officials

and their Equivalent. Pursuant to Section 17,
Article XVIII of the Constitution, the salary of the
following officials shall be in accordance with the
Salary Grades indicated hereunder:

30

The Department of Budget and Management is hereby

authorized to determine the officials who are of
equivalent rank to the foregoing Officials, where
applicable, and may be assigned the same Salary
Grades based on the following guidelines:
Salary
Grades

President of the Philippines

33

Vice-President of the Philippines

32

President of the Senate

32

Speaker of the House of Representatives

32

Chief Justice of the Supreme Court

32

Senator

31

Member of the House of Representatives

31

Associate Justices of the Supreme Court

31

Chairman of a Constitutional
Commission

31

GRADE 33 This Grade is assigned to the President

of the Republic of the Philippines as the highest position
in the government. No other position in the government
service is considered to be of equivalent rank.
GRADE 32 This Grade is limited to the VicePresident of the Republic of the Philippines and those
positions which head the Legislative and Judicial
Branches of the government, namely: the Senate
President, Speaker of the House of Representatives
and Chief Justice of the Supreme Court. No other
positions in the government service are considered to
be of equivalent rank.
GRADE 31 This Grade is assigned to Senators and
Members of the House of Representatives and those
with equivalent rank as follows: the Executive Secretary,
Department Secretary, Presidential Spokesman,
Ombudsman, Press Secretary, Presidential Assistant
with Cabinet Rank, Presidential Adviser, National
Economic and Development Authority Director General,
Court of Appeals Presiding Justice, Sandiganbayan
Presiding Justice, Secretary of the Senate, Secretary of
the House of Representatives, and President of the
University of the Philippines.
An entity with a broad functional scope of operations
and wide area of coverage ranging from top level policy
formulation to the provision of technical and
administrative support to the units under it, with
functions comparable to the aforesaid positions in the
preceding paragraph, can be considered

GRADE 30 Positions included are those of Department

Undersecretary, Cabinet Undersecretary, Presidential
Assistant, Solicitor General, Government Corporate Counsel,
Court Administrator of the Supreme Court, Chief of Staff of the
Office of the Vice-President, National Economic and
Development Authority Deputy Director General, Presidential
Management Staff Executive Director, Deputy Ombudsman,
Associate Justices of the Court of Appeals, Associate Justices
of the Sandiganbayan, Special Prosecutor, University of the
Philippines Executive Vice-President, Mindanao State
University President, Polytechnic University of the Philippines
President of and President of other state universities and
colleges of the same class.
Heads of councils, commissions, boards and similar entities
whose operations cut across offices or departments or are
serving a sizeable portion of the general public and whose
coverage is nationwide or whose functions are comparable to
the aforecited positions in the preceding paragraph, may be
placed at this level.
The equivalent rank of positions not mentioned herein or those
that may be created hereafter shall be determined based on
these guidelines.
The Provisions of this Act as far as they upgrade the
compensation of Constitutional Officials and their equivalent
under this section shall, however, take effect only in
accordance with the Constitution: Provided, That with respect
to the President and Vice-President of the Republic of the
Philippines, the President of the Senate, the Speaker of the
House of Representatives, the Senators, and the Members of
the House of Representatives, no increase in salary shall take
effect even beyond 1992, until this Act is amended: Provided,
further, That the implementation of this Act with respect to
Assistant Secretaries and Undersecretaries shall be deferred
for one (1) year from the effectivity of this Act and for
Secretaries, until July 1, 1992: Provided, finally, That in the
case of Assistant Secretaries, Undersecretaries and
Secretaries, the salary rates authorized herein shall be used in
the computation of the retirement benefits for those who retire
under the existing retirement laws within the aforesaid period.

SECTION 9. Salary Grade Assignments for Other

Positions. For positions below the Officials
mentioned under Section 8 hereof and their
equivalent, whether in the National Government,
local government units, government-owned or
controlled corporations or financial institutions, the
Department of Budget and Management is hereby
directed to prepare the Index of Occupational
Services to be guided by the Benchmark Position
Schedule prescribed hereunder and the following
factors: (1) the education and experience required to
perform the duties and responsibilities of the
positions; (2) the nature and complexity of the work
to be performed; (3) the kind of supervision
received; (4) mental and/or physical strain required
in the completion of the work; (5) nature and extent
of internal and external relationships; (6) kind of
supervision exercised; (7) decision-making
responsibility; (8) responsibility for accuracy of
records and reports; (9) accountability for funds,
properties and equipment; and (10) hardship, hazard
and personal risk involved in the job.

Mechanic I

Engineer I

12

Carpenter II

Veterinarian I

13

Electrician II

Legal Officer I

14

Secretary I

Administrative Officer II

15

Bookkeeper

Dentist II

16

Administrative Assistant

Postmaster IV

17

Education Research Assistant I

Forester III

18

Cashier I

10

Associate Professor I

19

Nurse I

10

Rural Health Physician

20

Teacher I

10

Agrarian Reform Program Technologist

10

Budget Officer I

11

Chemist I

11

Agriculturist I

11

Social Welfare Officer I

11

Benchmark Position Schedule

Position Title

Salary
Grades

Laborer I

Messenger

Clerk I

Driver I

Stenographer I

In no case shall the salary of the chairman, president, general

manager or administrator, and the board of directors of
government-owned or controlled corporations and financial
institutions exceed Salary Grade 30: Provided, That the
President may, in truly exceptional cases, approve higher
compensation for the aforesaid officials. (Emphasis supplied)
Thus, while the positions of Agriculturist I with SG 11 and the President
of the Philippines with SG 33 may both belong to the Professional
Supervisory Category because of the nature of their duties and
responsibilities as well as the knowledge and experience required to
discharge them, nevertheless, there can be no doubt that the level of
difficulty and responsibility of the latter is significantly greater than that
of the former.
It may be that the legislature might have chosen the four categories of
the position classification system as the basis for the classification in
Section 15 (c), as suggested by Justice Chico-Nazario, or even that no

distinction might have been made at all. But these are

matters pertaining to the wisdom of the legislative
classification and not to its constitutional validity as
measured against the requirements of the equal protection
clause. As this Court stated in Ichong v. Hernandez:183
x x x Some may disagree with the wisdom of the
legislature's classification. To this we answer,
that this is the prerogative of the law-making
power. Since the Court finds that the
classification is actual, real and reasonable, and
all persons of one class are treated alike, and as
it cannot be said that the classification is
patently unreasonable and unfounded, it is on
duty bound to declare that the legislature acted
within its legitimate prerogative and it cannot declare
that the act transcends the limit of equal protection
established by the Constitution.184 (Emphasis and
underscoring supplied)
At this juncture, it is curious to note that while the main
opinion initially states that the classification contained in
Section 15 (c) of the New Central Bank Act "has a rational
basis and is not palpably, purely, and entirely arbitrary in the
legislative sense," and is thus valid on its face; the same
opinion subsequently opines that:
In the case at bar, the
challenged proviso operates on the basis of
salary grade or officer-employee status. It is a
distinction based on economic class and
status, with the higher grades as recipients of a
benefit specifically withheld from the lower grades.
(Emphasis and underscoring supplied)

Indeed, the distinction between "officers" and "employees" in

the government service was clearly established as early as
1917 with the enactment of the Old Revised Administrative
Code and later incorporated into the language of the
Constitution:
In terms of personnel, the system includes both "officers
and employees." The distinction between these two
types of government personnel is expressed by Section
2 of the Old Revised Administrative Code (1917) thus:
Employee, when generally used in reference to
persons in the public service, includes any
person in the service of the Government or any
branch thereof of whatever grade or
class. Officer, as distinguished
from clerk or employee, refers to those
officials whose duties, not being of a clerical
or manual nature, may be considered to
involve the exercise of discretion in the
performance of the functions of
government, whether such duties are
precisely defined by law or not.
Officer, when used with reference to a person
having authority to do a particular act or
perform a particular function in the exercise of
governmental power, shall include any
Government employee, agent, or body having
authority to do the act or exercise of the
function in question.
It is in these senses that the terms "officers and
employees" are used in the Constitution and it is
this sense which should also be applied, mutatis
mutandis, to officers and employees of
government-owned and or controlled corporations
with original charter.185 (Emphasis supplied; italics in
the original)

Significantly, petitioner never advanced this argument

anywhere in its pleadings. Moreover, there is absolutely
nothing in the pleadings or records of this petition to suggest
that: (1) petitioner's members belong to a separate economic
class than those with SG 20 and above; and (2) that the
distinction between the officers and the rank and file in
Clearly, classification on the basis of salary grade or between
Section 15(c) is based on such economic status.
officers and rank and file employees within the civil service are
intended to be rationally and objectively based on merit, fitness
What is more, the foregoing statement flies in the face of a
and degree of responsibility, and not on economic status. As
basis of classification well-established in our law and
this Court summarized in Rodrigo v. Sandiganbayan:186
jurisprudence.
Section 5, Article IX-C of the Constitution provides that:

The Congress shall provide for the standardization of

compensation of government officials and employees,
including those in government-owned or controlled
corporations with original charters, taking into account
the nature of the responsibilities pertaining to, and the
qualifications required for their positions.
This provision is not unique to the 1987 Constitution. The
1973 Constitution, in Section 6, Article XII thereof, contains a
very similar provision pursuant to which then President
Marcos, in the exercise of his legislative powers, issued
Presidential Decree No. 985.
However, with the advent of the new Constitution, and in
compliance therewith, Congress enacted R.A. No. 6758.
Section 2 thereof declares it the policy of the State "to provide
equal pay for substantially equal work and to base differences
in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the
positions."
To give life to this policy, as well as the constitutional
prescription to "(take) into account the nature of the
responsibilities pertaining to, and the qualifications required"
for the positions of government officials and employees,
Congress adopted the scheme employed in P.D. No. 985 for
classifying positions with comparable responsibilities and
qualifications for the purpose of according such positions
similar salaries. This scheme is known as the "Grade," defined
in P.D. No. 985 as:
Includ[ing] all classes of positions which, although
different with respect to kind or subject matter of work,
are sufficiently equivalent as to level of difficulty and
responsibilities and level of qualification requirements
of the work to warrant the inclusion of such classes of
positions within one range of basic compensation.
The Grade is therefore a means of grouping positions
"sufficiently equivalent as to level of difficulty and
responsibilities and level of qualification requirements of the
work" so that they may be lumped together in "one range of
basic compensation."
Thus, Congress, under Section 8 of R.A. No. 6758, fixed the
Salary Grades of officials holding constitutional positions, as
follows xxx

xxx

Pursuant to such authority, the DBM drafted the 1989

Index of Occupational Services, Position Titles and
Salary Grades, later revised in 1997. x x x187 (Emphasis
supplied)

deliberations191 wherein the legislature, while acknowledging the need

to augment the salaries and emoluments of members of the judiciary
in order to attract and retain competent personnel and insulate them
x x x Congress delegated the rest of this tedious
from possible outside influence, nevertheless had to take into
task (of fixing Salary Grades) to the DBM, subject to
consideration the limited resources of the government as well as the
the standards contained in R.A. No. 6758, by
authorizing the DBM to "determine the officials who
In view of the foregoing, the statement in the latter portion of the primary aim of the law, and consequently prioritized those holding
judicial offices or with judicial rank over other court personnel.
are of equivalent rank to the foregoing officials,
main opinion to the effect that the classification between the
where applicable," and to assign them the same
officers and the rank and file of the BSP is founded on economic
Salary Grades subject to a set of guidelines found in status, and not on the level of difficulty and responsibility as well The Subsequent Amendment of the Charters of the
said section.
as the qualification requirements of the work to be performed,
other GOCCs and GFIs Did Not Alter the
must be considered extremely suspect - a conclusion without
Constitutionality of Section 15 (c)
legal
or
factual
tether
bordering
on
sophistry.
For positions below those mentioned under Section
8, Section 9 directs the DBM to prepare the "Index of
By operation of the equal protection clause, are the rank and file
Occupational Services" guided by (a) the
En passant, it may be observed that the distinction between the employees of the BSP entitled to exemption from the Compensation
Benchmark Position prescribed in Section 9, and (b) managerial personnel and the rank and file of the BSP in the
Classification System provided for under the Salary Standardization
the following factors:
New Central Bank Act is similar to the distinction between
Law as a consequence of the exemption of the rank and file
Justices, Judges and those of equivalent judicial rank on the
employees of certain other GOCCs and GFIs?
(1) the education and experience required to one hand and other court personnel on the other hand in R.A.
188
perform the duties and responsibilities of the No. 9227. In furtherance of the declared policy "to guarantee
Petitioner argues in the affirmative maintaining that:
the independence of the Judiciary x x x ensure impartial
position;
administration of justice, as well as an effective and efficient
This Honorable Court may take judicial notice of the fact
system worthy of public trust and confidence," 189 Section 2 of
(2) nature and complexity of the work to be
that the rank-and-file employees of the other government
R.A. No. 9227 provides:
performed;
financial institutions, such as the Government Service
(3) the kind of supervision received;

Sec. 2. Grant of Special Allowances. - All justices,

judges and all other positions* in the Judiciary with the
equivalent rank of justices of the Court of Appeals and
judges of the Regional Trial Court as authorized under
existing laws shall be granted special allowances
equivalent to one hundred percent (100%) of the basic
monthly salary specified for their respective salary
grades under Republic Act No. 6758, as amended,
otherwise known as the Salary Standardization Law, to
be implemented for a period of four (4) years.

(4) mental and/or physical strain required in

the completion of the work;
(5) nature and extent of internal and external
relationships;
(6) kind of supervision exercised;
(7) decision-making responsibility;
(8) responsibility for accuracy of records and
reports;
(9) accountability for funds, properties and
equipment; and
(10) hardship, hazard and personal risk
involved in the job.

The grant of special allowances shall be implemented

uniformly in such sums or amounts equivalent to
twenty-five percent (25%) of the basic salaries of the
positions covered hereof. Subsequent implementation
shall be in such sums and amounts and up to the extent
only that can be supported by the funding source
specified in Section 3 hereof.
Under the foregoing, personnel with judicial rank190 are entitled
to the grant of certain special allowances while the other
personnel of the judiciary are not. The reason for the difference
in treatment may be gleaned from the legislative

Insurance System (GSIS), Land Bank of the Philippines (LBP),

Development Bank of the Philippines (DBP), and the Social
Security System (SSS), together with the officers of such
institutions, are exempted from the coverage of the SSL
under their respective charters x x x Thus, within the
class of rank-and-file employees of the government
financial institutions, the rank-and-file employees of the
BSP are also discriminated upon.192 (Emphasis supplied)
The charters of the GOCCs/GFIs adverted to by petitioner, together
with their relevant provisions are as follows:
(1) R.A. No. 7907, which took effect on February 23, 1995 and
amended Section 90 of R.A. 3844, the Agrarian Land Reform Code,
giving the Board of Directors of the LBP authority to approve the
bank's own compensation, position classification system and
qualification standards:
SECTION 10. Section 90 of the same Act is hereby amended
to read as follows:
"Sec. 90. Personnel. The Board of Directors shall
provide for an organization and staff of officers and

employees of the Bank and upon

recommendation of the President of the
Bank, appoint and fix their remunerations
and other emoluments, and remove such
officers and employees: Provided, That the
Board shall have exclusive and final
authority to promote, transfer, assign or
reassign personnel of the Bank, any
provisions of existing law to the contrary
notwithstanding.
All positions in the Bank shall be governed by a
compensation, position classification system and
qualification standards approved by the Bank's
Board of Directors based on a comprehensive job
analysis and audit of actual duties and
responsibilities. The compensation plan shall be
comparable with the prevailing compensation plans
in the private sector and shall be subject to periodic
review by the Board no more than once every two
(2) years without prejudice to yearly merit reviews or
increases based on productivity and profitability. The
Bank shall therefore be exempt from existing
laws, rules and regulations on compensation,
position classification and qualification
standards. It shall however endeavor to make its
system conform as closely as possible with the
principles under Republic Act No. 6758.
The Bank officers and employees, including all
members of the Board, shall not engage directly or
indirectly in partisan activities or take part in any
election except to vote.
No officer or employee of the Bank subject to the
Civil Service Law and Regulations shall be removed
or suspended except for cause as provided by law."
(Emphasis supplied)
(2) R.A. No. 8282, the Social Security System Act of 1997,
approved on May 1, 1997, Section 3 (c) of which exempts all
SSS employees from the provisions of the Salary
Standardization Law:
Section 3. x x x

(c) The Commission, upon the recommendation of the

SSS President, shall appoint an actuary and such other
personnel as may be deemed necessary; fix their
reasonable compensation, allowances and other
benefits, prescribe their duties and establish such
methods and procedures as may be necessary to
insure the efficient, honest and economical
administration of the provisions and purposes of this
Act: Provided, however, That the personnel of the SSS
below the rank of Vice-President shall be appointed by
the SSS President: Provided, further, That the
personnel appointed by the SSS President, except
those below the rank of assistant manager, shall be
subject to the confirmation by the Commission:
Provided, further, That the personnel of the SSS shall
be selected only from civil service eligibles and be
subject to civil service rules and regulations: Provided,
finally, That the SSS shall be exempt from the
provisions of Republic Act No. 6758 and Republic
Act No. 7430. (Underscoring supplied)
(3) R.A. No. 8291, the Government Service Insurance System
Act of 1997, approved on May 31, 1997, which empowers its
Board of Trustees of the GSIS to approve a compensation and
position classification system and qualifications standards for its
employees:
SECTION 43. Powers and Functions of the Board of
Trustees. The Board of Trustees shall have the
following powers and functions:
xxx
(d) upon the recommendation of the President and
General Manager, to approve the GSIS' organizational
and administrative structures and staffing pattern, and
to establish, fix, review, revise and adjust the
appropriate compensation package for the officers and
the employees of the GSIS with reasonable allowances,
incentives, bonuses, privileges and other benefits as
may be necessary or proper for the effective
management, operation and administration of the
GSIS, which shall be exempt from Republic Act No.
6758, otherwise known as the Salary
Standardization Law and Republic Act No. 7430,
otherwise known as the Attrition Law;

x x x (Emphasis supplied)
(4) R.A. No. 8523, which amended the Charter of the DBP on May 31,
1997 and exempted the bank from the coverage of the existing Salary
Standardization Law:
SECTION 6. Section 13 of the same Charter is hereby
amended to read as follows:
"SEC. 13. Other Officers and Employees. The Board of
Directors shall provide for an organization and staff of officers
and employees of the Bank and upon recommendation of the
President of the Bank, fix their remunerations and other
emoluments. All positions in the Bank shall be governed by
the compensation, position classification system and
qualification standards approved by the Board of Directors
based on a comprehensive job analysis of actual duties and
responsibilities. The compensation plan shall be comparable
with the prevailing compensation plans in the private sector
and shall be subject to periodic review by the Board of
Directors once every two (2) years, without prejudice to yearly
merit or increases based on the Bank's productivity and
profitability. The Bank shall, therefore, be exempt from
existing laws, rules, and regulations on compensation,
position classification and qualification standard. The
Bank shall however, endeavor to make its system
conform as possible with the principles under
Compensation and Position Classification Act of 1989
(Republic Act No. 6758, as amended).
No officer or employee of the Bank subject to Civil Service
Law shall be dismissed except for cause as provided by law."
(Underscoring supplied)
Following this second line of argument, it appears that petitioner bases
its claim to exemption from the Compensation Classification System of
the Salary Standardization Law not only on (1) a direct challenge to
the constitutionality of the proviso in Section 15(c) of The New Central
Bank Act, which expressly places the rank and file employees of the
BSP under the coverage of the former; but also on (2) an indirect
assertion that the rank and file employees of the BSP are entitled to
benefit from the subsequent exemptions of the rank and file personnel
of certain GOCCs/GFIs from the coverage of the Salary
Standardization Law.
This second argument, that the rank and file employees of the BSP
may benefit from subsequent classifications inother statutes pertaining

to other GFI employees, on the theory that the former and

the latter are identically or analogously situated
(i.e. members of the same class), is not entirely new and is
apparently founded on the fourth requisite of the Rational
Basis Test - that is, that a reasonable classification must
apply equally to all members of the same class.
Thus, in Rubio v People's Homesite & Housing
Corporation,193 the Court applied Section 76 of B.P. Blg. 337,
the old Local Government Code, to benefit employees of the
People's Homesite & Housing Corporation who had been
illegally dismissed some 23 years earlier, even though the
latter were not local government employees. The Court,
speaking through Justice (later Chief Justice) Andres
Narvasa held:
Batas Pambansa Bilang 337, otherwise known as
the Local Government Code, was passed by the
legislature and became effective on February 10,
1983. Section 76 thereof (under Title Four:
Personnel Administration) provides as follows:
SEC. 76. Abolition of Position. When the
position of an official or employee under the
civil service is abolished by law or ordinance
the official or employee so affected shall be
reinstated in another vacant position without
diminution of salary. Should such position
not be available, the official or employee
affected shall be granted a separation pay
equivalent to one month salary for every
year of service over and above the
monetary privileges granted to officials and
employees under existing law.
To be sure, the provision on its face is
apparently intended for the benefit only of
officers and employees in the local political
subdivisions. The Court however sees no reason
why it should not be applied as well to other
personnel of the government, including those in
the People's Homesite and Housing Corporation,
which was then considered part of the Civil
Service. A contrary conclusion would make the
provision questionable under the equal
protection clause of the Constitution as there
appears to be no substantial distinction between

civil servants in the local government and those in

other branches of government to justify their
disparate treatment. Since the petitioners are
"employees under the civil service," the matter of their
reinstatement to their former positions at this time
should logically and justly be governed by the above
cited statute although enacted many years after the
abolition of their positions. And since, too, it may
reasonably be assumed that reinstatement to their
former positions is no longer possible, or feasible, or
even desired or desirable, the petitioners or their heirs
must be deemed entitled to receive the separation pay
provided by said BP Blg. 337.194 (Emphasis supplied)
Some Basic Principles of
Legislative Classification
Considering that the thrust of petitioner's second argument is
that its members belong to the same class as other GFI
employees (such that they are also entitled to exemption from
the Compensation Classification System of the Salary
Standardization Law), a brief discussion on legislative
classification is in order.
As adverted to earlier, classification has been defined as "the
grouping of persons or things similar to each other in certain
particulars and different from all other in these same
particulars."195 To this may be added the following observations
of Joseph Tussman and Jacobus tenBroek in their influential
article196 on The Equal Protection of the Laws,197 viz:

a member of a particular class, that is, whether the individual

possesses the traits which define the class. x x x
It is also elementary that membership in a class is
determined by the possession of the traits which define
that class. Individual X is a member of class A if, and only
if, X possesses the traits which define class A. Whatever the
defining characteristics of a class may be, every member of
that class will possess those characteristics
Turning now to the reasonableness of legislative
classifications, the cue is to be taken from our earlier
reference to the requirement that those similarly situated be
similarly treated. A reasonable classification is one which
includes all who are similarly situated and none who are
not. The question is, however, what does that ambiguous
and crucial phrase "similarly situated" mean? And in
answering this question we must first dispose of two
errors into which the Court has sometimes fallen.
First, "similarly situated" cannot mean simply "similar in
the possession of the classifying trait." All members of
any class are similarly situated in this respect and
consequently, any classification whatsoever would be
reasonable by this test. x x x
xxx

We begin with an elementary proposition: To define a

class is simply to designate a quality or
characteristic or trait or relation, or any
combination of these, the possession of which, by
an individual, determines his membership in or
inclusion within the class. A legislature defines a
class, or "classifies," when it enacts a law applying to
"all aliens ineligible for citizenship," or "all persons
convicted of three felonies," or "all citizens between the
ages of 19 and 25" or "foreign corporations doing
business within the state."

The second error in the interpretation of the meaning of

similarly situated arises out of the notion that some
classes are unnatural or artificial. That is, a classification
is sometimes held to be unreasonable if it includes
individuals who do not belong to the same "natural"
class. We call this an error without pausing to fight the ancient
controversy about the natural status of classes. All legislative
classifications are artificial in the sense that they are artifacts,
no matter what the defining traits may be. And they are all real
enough for the purposes of law, whether they be the class of
American citizens of Japanese ancestry, or the class of
makers of margarine, or the class of stockyards receiving
more than one hundred head of cattle per day, or the class of
feeble-minded confined to institutions.

This sense of "classify" (i.e., "to define a class") must be

distinguished from the sense in which "to classify"
refers to the act of determining whether an individual is

The issue is not whether, in defining a class, the legislature

has carved the universe at a natural joint. If we want to know if
such classifications are reasonable, it is fruitless to consider

whether or not they correspond to some "natural"

grouping or separate those who naturally belong
together.
But if we avoid these two errors, where are we to
look for the test of similarity of situation which
determines the reasonableness of a
classification? The inescapable answer is that we
must look beyond the classification to the
purpose of the law. A reasonable classification is
one which includes all persons who are similarly
situated with respect to the purpose of the
law.198 (Emphasis and underscoring supplied; italics
in the original)
Moreover, Tussman and tenBroek go on to describe the task
of the courts in evaluating the reasonableness of a
legislative classification:

assertion that any particular relation holds between

the [classifying trait and the purpose] is an
empirical statement. The mere assertion that a
particular relation exists does not establish the truth of
the assertion. A legislature may assert that all "threetime felons" are "hereditary criminals" and that all
"hereditary criminals" are "three-time felons." But
whether this is the case is a question of fact, not fiat.
Consequently, the Court, in determining the actual
relation between the classes [i.e. the classifying trait
and the purpose of the law] is engaged in fact-finding
or in criticism of legislative fact finding. Thus the
Court is confronted with a number of alternative
formulations of the question: 1) what is the legislative
belief about the relation between the classes? and, 2) is
this belief reasonable? or simply, 3) what relation exists
between the two classes?199

Since it is impossible to judge the

reasonableness of a classification without
relating it to the purpose of the law, the first
phase of the judicial task is the identification of
the law's purpose. x x x

With the foregoing in mind, the relevant question then (as

regards petitioner's second line of argument) is whether in fact
petitioner's members and the other GFI employees are so
similarly situated as to members of a single class for purposes
of compensation and position classification.

xxx

There is no Basis for the Classification of

GFI Employees as a Discrete Class, entitled
to "Special Treatment" with respect to
Compensation Classification

It is thus evident that the attempt to identify the

purpose of a law - an attempt made mandatory by
the equal protection requirement - involves the Court
in the thornier aspects of judicial review. At best, the
Court must uncritically and often unrealistically
accept a legislative avowal at its face value. Wt
worst, it must challenge legislative integrity and push
beyond the express statement into unconfined
realms of inference. Having accepted or discovered
the elusive "purpose" the Court must then, under the
discriminatory legislation doctrine, make a judgment
as to the purity of legislative motive and, under
substantive equal protection, determine the
legitimacy of the end. Only after the purpose of the
law has thus been discovered and subjected to this
scrutiny can the Court proceed with the classification
problem.
x x x Except when the class in the law is itself
defined by the mischief [to be eliminated], the

Without identifying the legislative purpose for exemption from

the coverage of the Compensation Classification System
mandated by the Salary Standardization Law, the main opinion
concludes that the classifying trait among those exempted from
the coverage is their status as GFI employees. On this basis, it
would grant the instant petition upon the assumption that "there
exist no substantial distinctions so as to differentiate the BSP
rank and file from the other rank and file of the [other] GFIs."
The foregoing tacitly rests on the assumptions that, with respect
to their compensation, position classification and qualifications
standards, (1) the rank-and-file employees of the BSP together
with the rank-and-file employees of the LBP, SSS, GSIS and
DBP belong to a single class; and (2) there are no reasonable
distinctions between the rank-and-file employees of the BSP
and the exempted employees of the other GOCCs/GFIs.

However, these assumptions are unfounded, and the assertion that

"GFIs have long been recognized as one distinct class, separate from
other governmental entities" is demonstrably false.
As previously discussed, Section 2 of P.D. 985200 cited in support of the
foregoing proposition has been expressly repealed by Section 16 of
Salary Standardization Law.
Sec. 16. Repeal of Special Salary Laws and Regulations.
All laws, decrees, executive orders, corporate charters,
and other issuances or parts thereof, that exempt
agencies from the coverage of the System, or that
authorize and fix position classification, salaries, pay rates or
allowances of specified positions, or groups of officials and
employees or of agencies, which are inconsistent with the
System, including the proviso under Section 2, and Section
16 of Presidential Decree No. 985 are hereby
repealed. (Emphasis supplied)
Moreover, neither the text nor the legislative record of the Salary
Standardization Law manifests the intent to provide "favored
treatment" for GOCCs and GFIs. Thus, Section 3 (b), erroneously
cited by the main opinion, provides for the general principle that
compensation for all government personnel, whether employed in a
GOCC/GFI or not, should generally be comparable with that in the
private sector, to wit:
SECTION 3. General Provisions. The following principles
shall govern the Compensation and Position Classification
System of the Government:
(a) All government personnel shall be paid just and equitable
wages; and while pay distinctions must necessarily exist in
keeping with work distinctions, the ratio of compensation for
those occupying higher ranks to those at lower ranks should
be maintained at equitable levels, giving due consideration to
higher percentage of increases to lower level positions and
lower percentage increases to higher level positions;
(b) Basic compensation for all personnel in the
government and government-owned or controlled
corporations and financial institutions shall generally be
comparable with those in the private sector doing
comparable work, and must be in accordance with
prevailing laws on minimum wages;

(c) The total compensation provided for government

personnel must be maintained at a reasonable level
in proportion to the national budget;
(d) A review of government compensation rates,
taking into account possible erosion in purchasing
power due to inflation and other factors, shall be
conducted periodically. (Emphasis and underscoring
supplied)
Indeed, Section 4 of the Salary Standardization Law
expressly provides the general rule that GFIs, like other
GOCCs and all other members of the civil service, are within
the coverage of the law:
SECTION 4. Coverage. The Compensation and
Position Classification System herein provided
shall apply to all positions, appointive or
elective, on full or part-time basis, now existing
or hereafter created in the government, including
government-owned or controlled corporations
and government financial institutions.
The term "government" refers to the Executive, the
Legislative and the Judicial Branches and the
Constitutional Commissions and shall include all, but
shall not be limited to, departments, bureaus, offices,
boards, commissions, courts, tribunals, councils,
authorities, administrations, centers, institutes, state
colleges and universities, local government units,
and the armed forces. The term "governmentowned or controlled corporations and financial
institutions" shall include all corporations and
financial institutions owned or controlled by the
National Government, whether such
corporations and financial institutions perform
governmental or proprietary
functions. (Emphasis and underscoring supplied)
Furthermore, a reading of the deliberations on what
eventually became the Salary Standardization Law leaves
no doubt that one of its goals was to provide for a common
compensation system for all so that the stark disparities in
pay between employees of the GOCCs and GFIs and other
government employees would be minimized if not
eliminated, as the following excerpt plainly shows:

Senator Guingona. Mrs. President, the PNB and DBP

transferred nonperforming assets and liabilities to the
National Government in the sum of over P120 billion in
1986. They are reportedly having profits of, I think over
P1 billion. They have not declared dividends so that the
National Government is the one that absorbed the
indebtedness. The financial institutions are enjoying
clean books and increased profits. Yet, employees of
these institutions are receiving far more, whereas, the
employees of the National Government which absorbed
the nonperforming assets are receiving less. And the
Central Bank is dumping into the National Government
liabilities of more than P5 billion...

corporations that are engaged in very obviously proprietary

type of function. For example, transportation companies of the
government; banking institution; insurance functions. I feel
that they have to be competitive with the private sector,
not with respect to all positions. Like, for example, janitor
or messenger, because there is no danger of losing this
out to the private sector; you can always get this. But
there are certain key position - even the key men of the
government corporations performing proprietary
functions, sometimes they got - the market analyst,
commodities analyst and so on - they have certain
functions that are not normal in government, and it is very
difficult to get this specialists.

Senator Romulo. Eventually P34 billion.

So, I was wondering if we could provide a provision that

government corporations engaged in proprietary activities, that
positions that are peculiar to them should be allowed a
different compensation structure.

Senator Guingona. And, yet, the janitor in the Central

Bank is receiving a higher rate of salary than the clerk
or even the minor executives in some National
Government agencies and bureaus. This does not
seem just and violates the equal pay for equal work
principle which the distinguished Sponsor has nobly
established in the policy statement.201

THE CHAIRMAN (Rep. Andaya). But that can be solved,

when implemented, you just assign him a higher
rate.203 (Underscoring supplied)
xxx

Thus, during the Bicameral Conference Committee

deliberations, the sentiment was that exemptions from the
general Compensation Classification System applicable to all
government employees would be limited only to key positions in
order not to lose these personnel to the private sector. A
provision was moreover inserted empowering the President
to, in truly exceptional cases, approve higher compensation,
exceeding Salary Grade 30, to the chairman, president, general
manger, and the board of directors of government-owned or
controlled corporations and financial institutions:202
SEC. CARAGUE. Actually, we are requesting that
government corporations that are performing
proprietary functions and therefore competing with
the private sector should evolve a salary
structure in respect to key positions. There are
some positions in banking, for example, that are not
present in the ordinary government offices.
I can understand for example, if the government
corporation, like NIA, it is performing a governmental
function. I believe it is not strictly a proprietary function NIA and NAWASA. But there are government

THE CHAIRMAN (Sen. Rasul). Mr. Chairman, I am just

wondering if perhaps we should also include "financial
institutions," not just "government-owned or controlled
corporation."
SEC. CARAGUE. I think it is broad enough, Madam Senator.
THE CHAIRMAN (Sen. Rasul). Broad enough?
SEC. CARAGUE. Yes.
THE CHAIRMAN (Rep. Andaya). It covers everybody.
Everybody is covered that way.
REP. LAGUDA. Mr. Chairman, if we go back to the
amendment of Senator Rasul, I think what she has put there is
that it is the President's discretion, because in the House
version, it is an across-the-board-thing. There is no mention of
the President's discretion here. So maybe we should accept
the amendment of Senator Rasul that "it is the President who
shall decide." In other words, when she said "the President

may," it is the discretion of the President rather than

automatic.
SEC.CARAGUE. Yes. Like for example, there are, I
think, quite a number of Vice Presidents that really
are also important because it is very difficult if the
President will have a salary that is so way, way
above the Vice Presidents. And usually the Vice
Presidents are the ones that support, that provided
teamwork for the President.

main opinion holds to be the defining characteristic of the class

to which petitioner's members belong - that is, employment in
a GFI, the two groups of employees would obviously not be
comparable?
Mere Employment in a GOCC or GFI is not
Determinative of Exemption from the Salary
Standardization Law

More importantly, an examination of the legislative proceedings

leading up to the amendment of the charters of the GOCCs and
Sometimes there are certain key people, like money GFIs exempted from the coverage of the Compensation
market specialists that are difficult to keep because
Classification System discloses that mereemployment in a
they easily transfer to another company.
GFI was not the decisive characteristic which prompted the
legislature to provide for such exemption.
xxx
Thus, Republic Act No. 3844 (R.A. No. 3844) otherwise known
SEC. CARAGUE. In the end, Your Honor, it may be as the "Agrarian Reform Code" created the Land Bank which is
more expensive to limit the salaries of these kind of mandated to be the financing arm of the Agrarian Reform
Program of the government. More specifically, the Land Bank is
people because if you don't get good people, the
tasked to be the primary government agency in the mobilization
viability of the corporation, the profitability goes
and the provision of credit to the small farmers and fisher folk
down. So you actually, in the end, lose more. You
don't see it because it is just loss of revenue, in lack sector in their various economic activities such as production,
processing, storage, transport and the marketing of farm
of profitability, but actually it costs you more. And
that is the problem of this kind of...204 (Emphasis and produce. Since its inception, the Land Bank has transformed
into a universal bank, seeking to continually fortify the
underscoring supplied)
agricultural sector by delivering countryside credit and support
services.
What is more, the exemption of the personnel of the
Securities and Exchange Commission (SEC)" from the
coverage of the Compensation Classification System, as
pointed out in the main opinion,205 only underscores the error
in maintaining employment in a GFI as the defining trait of
employees exempted from said System.
In actual fact, the employees of a number of GFIs
remain within the coverage of the Compensation
Classification System,206 while employees of several
other GOCCs207 and government agencies208 have
been exempted from the same. Hence, GFI employment, as
advocated by the main opinion, cannot be reasonably
considered to be the basis for exemption for the
Compensation Classification System of the Salary
Standardization Law.
Curiously, how could the exemption of the SEC personnel
"add insult to petitioner's injury" when, going by what the

In order to continue performing its mandate of providing nontraditional banking services and developmental assistance to
farmers and fishermen, Congress saw the need to strengthen
the bank by introducing amendments to R.A. No. 3844.
Republic Act No. 7907 (R.A. No. 7907) amended R.A. No. 3844
by strengthening the Land Bank not only for the purpose of
implementing agrarian reform, but also to make it more
competitive with foreign banks.209

exempt the Land Bank from the Salary Standardization Law. The
Committee likewise recognized the* role of the rank and file
employees in fulfilling its unique task of providing credit to support the
agricultural sector.
MR. GOLEZ. Madam Speaker, the points of the distinguished
sponsor are very well taken. But what I would like to
emphasize is that the Land Bank as already stated, is not just
almost unique, it is unique. It cannot be likened to a
conventional commercial bank even in the case of the
Philippine National Bank where its employees can very easily
move from one bank to another. An employee, an average
employee in the Philippine National Bank can easily transfer to
a private commercial bank and vice-versa. So in fact we are
witnessing almost on a daily basis these periodic
transfers, piracy of executives, employees from one
commercial bank to another. However, in the case of the
Land Bank precisely because of its very unique
operations, the very life of the viability of the Land Bank
of the Philippines depends decisively and critically on its
core group, which in this particular case would be the
rank and file, the technical employee below the level of
managers. They are not substitutable at all. They are very
critical. And as such, the position of this Representation,
Madam Speaker, Your Honor, is that that critical role gives
them the importance as well as the inherent right to be
represented in the highest policy making body of the
bank.210 (Emphasis supplied)
xxx
MR. APOSTOL. Now, may I know why the employees of Land
Bank should be exempted from the compensation and position
classification?
MR. FUENTEBELLA. Are we now in Section 87, your Honor?
MR. APOSTOL. Yes.

One of the salient points of R.A. No. 7907 is the exemption of all
of the Land Bank's personnel from the Salary Standardization
Law, authorizing at the same time its board of directors to
provide compensation, position classification system and
qualification standards.
The discussion of the House of Representatives' Committee on
Banks and Financial Intermediaries reveals the surrounding
circumstances then prevailing, which prompted Congress to

MR. FUENTEBELLA. The present compensation package

of the employees of the bank are no longer competitive
with the banking industry. In fact, the turnover of bank
personnel is concerned, I think they had a turnover of
more than 127 rank and file and more than 43 or 50 officer
level. For the reason that the present compensation through
bank officers and personnel are no longer competitive with the
other banks despite the fact that there is a provision in our

Constitution and this is sanctioned by existing

provisions of the Civil Service, that we ma enact
laws to make the position classification of certain
sectors in the government comparable with the
same industry. That is the reason why...
MR. APOSTOL. Is it not that the compensation of
officials and employees of the Land Bank must be
similar or comparable to the salaries and
compensation of government banks or financial
institutions?
MR. FUENTEBELLA. Yes. In fact, the Philippine
National Bank has a better financial compensation
package compared to the Land Bank.
MR. APOSTOL. Yes, it should and it must because
PNB is already privatized, Land Bank is not yet.
MR. FUENTEBELLA. Not yet, your Honor.
MR. APOSTOL. If the compensation package of the
employees of Land Bank should be similar to PNB,
then why not privatize so that Land Bank will be
exempted from this...
MR. FUENTEBELLA. Well, as I said, your Honor, in
due time, we can go into that aspect of privatization.
We are not closing our eyes to that possibility. But
for the moment that the bank is still tasked with
numerous problems, particularly on agrarian reform,
and for as long as the bank has not been able to
perform its major task in helping the government
provide the necessary mechanisms to solve and
address the problems of agrarian reform, then we
cannot talk about privatization yet. Because the
function of the bank is not purely for profit
orientation, your Honor. Whatever profits are
generated under the commercial banking
transactions are channeled to the agrarian sector,
which is a losing proposition actually.211 (Emphasis
supplied)
Like the Land Bank, the Development Bank of the
Philippines (DBP), the country's premier development bank,
was also exempt from the Salary Standardization Law.

Republic Act No. 8523 (RA 8523) amended Executive Order No.
81 otherwise known as the "1986 Revised Charter of the
Development Bank of the Philippines" to enable DBP to
effectively contribute to the nation's attainment of its socioeconomic objectives and fill the gaps left by the private sector
which might be unwilling or unprepared to take on critical
projects and programs.

The exemption from the Salary Standardization Law does not only
involve banks but government entities that manage pension funds
such as the SSS and the GSIS.

Republic Act No. 1161 (R.A. No. 1161) established the SSS pursuant
to a state policy of providing meaningful protection to members and
their beneficiaries against the hazards of disability, sickness, maternity,
old age, death, and other contingencies, resulting in loss of income or
The bottom line of this bill which seeks to amend the
financial burden. Republic Act No. 8282 amended R.A. No. 1161 by
existing charter of the Development Bank of the
providing for better benefit packages, expansion of coverage, flexibility
Philippines is to enable the DBP as the country's
in investments, stiffer penalties for violators of the law, condonation of
premier development bank to effectively contribute to
penalties of delinquent employers and the establishment of a voluntary
the nation's attainment of its socio-economic objectives, provident fund for members.
such as the alleviation of poverty, creation of
employment opportunities, and provision of basic needs The fund that the SSS administers comes from the compulsory
such as food, shelter, health and education.
remittances of the employer on behalf of his employees. The House of
Representatives noted that the fund in 1996 amounted 5.5 billion
Given the present state of financial intermediation and
dollars, the sheer enormity of which necessitated that it be exempt
capital markets in the Philippines, economic activities
from the Salary Standardization Law in order for it to attract quality
and projects still remain which private financial
personnel to ensure that the funds will not be mismanaged, abused or
institutions may not be willing to finance because of the dissipated due to the negligence of its personnel. Moreover, the SSS,
risks involves. And even if some of these private
like the Land Bank and the DBP, was facing a massive exodus of its
institutions are willing to do so, they may not have the
personnel who were migrating to greener pastures.
capability to assist such projects and activities.
Development lending is much more than simply
MR. VALENCIA. x x x Now, the other law refers to the law on
providing medium to long-term funds to economically
salary standardization. Again, we are in a situation where
viable projects.
we are competing for personnel with the private sector,
especially the financial institutions. We compete with
The proposed DBP charter amendment will help
banks, we compete with insurance companies for people.
remodel DBP in the financial community as a
So what happens invariably is we lost our people after we
predominantly development bank that works closely
have trained them, after they have proven themselves
with individuals, institutions and associations which can
with a track record, with the very low pay that is being
provide resources and other types of assistance to
given to our people. We believe that with the magnitude of
projects with clearly-defined development impact. 212
the accountability that we have, (We are accountable for
5.5 billion dollars, some 132 million pesos) ah, we think
that we deserve the quality of people to ensure that these
In order to achieve DBP's vision as the country's premier
funds...and the pay out by the billions of pesos in terms
development bank in a rapidly growing economic environment,
of benefits and we collect by the billions of pesos, we
the legislature sought to (1) increase the authorized capital of
believe that the magnitude of money and accountability
DBP from P5 billion to P10 billion; and (2) restructure DBP's
we have is even higher than that of the local financial
organization into one which is market-responsive, product
institutions. And the pay, for example, of the Administrator is
focused, horizontally aligned, and with a lean, highly motivated
similar to a small branch in a bank. So, I don't think our pay
work force by removing the DBP from the coverage of the
will be very competitive but certainly it's too low considering
Salary Standardization Law. The DBP's exemption from the
the accountability that is on the shoulder of the employees. If
Salary Standardization Law was justified by the fact that it is an
we end up with poor quality of personnel, what would happen
institution engaged in development activities which should be
is these funds could be mismanaged, abused or just out of
given the same opportunities as the private sector to
pure negligence could be dissipated.
compete.213

HON. PADILLA. Mr. Chairman.

THE CHAIRMAN. Congressman Padilla.
HON. PADILLA. With the Standardization Law, how
can we resolve that problem just mentioned by the
Administrator?
MR. VALENCIA. What will happen, Sir, is that we
will ask outside assistance to work out a salary
structure that would be modest but at the same time
at least make it more difficult (sic) that will attract
new people, new blood to the System - quality
personnel, and will also help make it a bit more
difficult for private sector to pirate from the
institution.214 (Emphasis supplied)
As the SSS exercises the same functions as the GSIS - the
handling of sensitive and important funds - the GSIS'
exemption from the Salary Standardization Law was easily
justifiable, viz:
HON. TUAZON. xxx Now, the GSIS and the SSS,
they are more or less performing the same
functions. So I am asking whether in the proposed
amendments on the charter of the GSIS they also
have similar proposal, because if I still recall, there
was a time when the GSIS employees were the
envy - not the SSS because the SSS has never
been the envy of government employees because
they really never have been paid very good salaries.
There was a time when the GSIS was the envy of
other government employees because they had fat
bonuses, they had quarterly bonus, they had midyear bonus, they had 3 months bonus, Christmas
bonus and their salaries were very much higher than
their counterparts in the government and they are
saying, "By golly, the GSIS, they are only using the
funds of the government employees and yet they are
receiving fat salaries from the contributions of the
government employees. That was one of the
complaints I was hearing at that time - I was still
First Year College -, so the next time I realized, all
these fat salaries of the Central Bank... Central Bank
was also the envy of the other government
employees, PNB, but SSS has never been noted to
be paying fat salaries that will be sufficient to attract

well qualified employees from the other sectors. So, the

reason for my question is that, if we grant SSS, we
have also to grant GSIS on the rationale that they are
both performing the same functions.215 (Emphasis
supplied)
In sum, the basis for the exemption of certain employees of
GOCCs or GFIs from the coverage of the Salary
Standardization Law rests not on the mere fact that they are
employees of GOCCs or GFIs, but on a policy determination by
the legislature that such exemption is needed to fulfill the
mandate of the institution concerned considering, among
others, that: (1) the GOCC or GFI is essentially proprietary in
character; (2) the GOCC or GFI is in direct competition with
their counterparts in the private sector, not only in terms of the
provision of goods or services, but also in terms of hiring and
retaining competent personnel; and (3) the GOCC or GFI are or
were experiencing difficulties filling up plantilla positions with
competent personnel and/or retaining these personnel. The
need for and the scope of exemption necessarily varies with the
particular circumstances of each institution, and the
corresponding variance in the benefits received by the
employees is merely incidental.
There are real differences between the Rank &
File of the BSP and the Exempted Rank & File
Employees of the other GOCCs/GFIs
There can be no doubt that the employees of the BSP share a
common attribute with the employees of the LBP, SSS, GSIS
and DBP in that all are employees of GOCCs performing
fiduciary functions. It may also be reasonable to assume that
BSP employees with SG 19 and below perform functions
analogous to those carried out by employees of the other
GOCCs with the corresponding salary grades.
Nonetheless, these similarities alone are not sufficient to
support the conclusion that rank-and-file employees of the BSP
may be lumped together with similar employees of the other
GOCCs for purposes of compensation, position classification
and qualifications standards. The fact that certain persons have
some attributes in common does not automatically make them
members of the same class with respect to a legislative
classification. Thus, inJohnson, et al. v. Robison, et
al,.,216 involving the alleged violation of a conscientious
objector's right to equal protection, the U.S. Supreme Court had
occasion to observe:

Of course, merely labeling the class of beneficiaries under the

Act as those having served on active duty in the Armed
Services cannot rationalize a statutory discrimination against
conscientious objectors who have performed alternative
civilian service, if, in fact, the lives of the latter were equally
disrupted and equally in need of readjustment. The District
Court found that military veterans and alternative service
performers share the characteristic during their respective
service careers of "inability to pursue the educational and
economic objectives that persons not subject to the draft law
could pursue." But this finding of similarity ignores that a
common characteristic shared by beneficiaries and
nonbeneficiaries alike, is not sufficient to invalidate a
statute when other characteristics peculiar to only one
group rationally explain the statute's different treatment
of the two groups. Congress expressly recognized that
significant differences exist between military service veterans
and alternative service performers, particularly in respect of
the Act's purpose to provide benefits to assist in readjusting to
civilian life. These differences "afford the basis for a different
treatment within a constitutional framework."217 (Underscoring
and emphasis supplied; citations omitted)
Indeed, from the foregoing examination of the legislative records of the
amended charters of the exempt GOCCs and GFIs, the following real
and material differences are readily manifest:
First, unlike the LBP, DBP, SSS and GSIS, the BSP, in particular the
Central Monetary Authority,218 performs a primarily government
function, not a proprietary or business function. In this respect it is
more similar to the other government agencies involved in the
management of the economy, such as the National Economic
Development Authority (NEDA), than a commercial bank.
Second, while the importance of its functions is undoubted, the BSP,
unlike the LBP, DBP, SSS and GSIS, is not subject to cut throat
competition or the pressures of either the financial or job markets.
Third, there is no indication in the record that the BSP, unlike the LBP,
DBP, SSS and GSIS, is experiencing difficulty in filling up or
maintaining competent personnel in the positions with SG 19 and
below.
The Questioned Proviso Cannot be
Considered Oppressive or Discriminatory
in Its Implementation

Given the factual basis for the classification between exempt

and non-exempt employees (i.e. real distinctions as to the
proprietary or governmental character of the GOCC/GFI,
competition with the private sector, and difficulty in attracting
and maintaining competent personnel) and the reasonable
relationship of this classification to the attainment of the
objectives of the laws involved, the
questioned proviso cannot be considered oppressive or
discriminatory in its implementation.

Considering, however, that the record fails to show (1) that the
statutory provision in question affects either a fundamental right
or a suspect class, and, more importantly, (2) that the
classification contained therein was completely bereft of any
possible rational and real basis, it would appear that judicial
restraint is not merely preferred but is in fact mandatory, lest this
Court stray from its function of adjudication and trespass into
the realm of legislation.

Thus, it would seem that the petitioner and its members are not
without any support from within that legislative body.
Moreover, in view of the tight fiscal and budgetary situation confronting
the national government, both the executive and legislative branches
of the government are actively reassessing the statutes which have
exempted certain GOCCs and GFIs from the Salary Standardization
Law, as reported in a number of newspapers of general circulation. 224

To be sure, inasmuch as exemption from the Salary

Standardization Law requires a factually grounded policy
determination by the legislature that such exemption is
necessary and desirable for a government agency or GOCC to
accomplish its purpose, the appropriate remedy of petitioner is
with Congress and not with the courts. As the branch of
government entrusted with the plenary power to make and
amend laws,220 it is well within the powers of Congress to grant
exceptions to, or to amend where necessary, the Salary
Standardization Law, where the public good so requires. At the
same time, in line with its duty to determine the proper
allocation of powers between the several departments, 221 this
Moreover, Congressional records show that House Bill 123
Court is naturally hesitant to intrude too readily into the domain
has been filed with the present Thirteenth
Congress219 seeking to amend The New Central Bank Act by, of another co-equal branch of government where the absence
among other things, exempting all positions in the BSP from of reason and the vice of arbitrariness are not clearly and
the Salary Standardization Law. Thus, it cannot be said that unmistakably established.
Congress has closed its mind to all possibility of amending
the New Central Bank Act to provide for the exemption of the The contention in the main opinion that herein petitioner
BSP rank and file from the Compensation Classification
represents the "politically powerless," and therefore should not
System of the Salary Standardization Law.
be compelled to seek a political solution, rings hollow.

Thus, in line with the austerity program set under Administrative Order
130 issued by the President on August 31, 2004, the Department of
Budget and Management is reviewing the pay packages of 1,126
GOCCs and their subsidiaries,225 particularly those which have been
exempted from the Compensation Classification System of the Salary
Standardization Law,226 to bring their salaries at par with national
agencies.227 Additionally, the Department of Budget has moved for the
removal of all the exemptions of the GOCCs from the Salary
Standardization law and the slashing of salaries of some GOCC
officials to help ease the government's financial problems. 228

In fine, judged under the Rational Basis Test, the

classification in Section 15 (c) of the New Central Bank Act
complies with the requirements of the equal protection
clause, even taken together with the subsequent
amendments of the charters of the other GOCCs and GFIs.

Together with these developments, House Majority Leader Prospero

Nograles has called on Congress to step in and institute amendments
to existing charters of GFI's and GOCCs232 which have been exempted
from the Compensation Classification System of the Salary
Standardization Law; and, thereafter, pass a law standardizing the
salaries of GOCC and GFI employees and executives. 233 Other
members of the House of Representatives, particularly the party-list
lawmakers, have suggested a cut on the salary schemes of GOCC
executives, with the funds saved to be channeled to a "special fund"
for giving lowly paid government employees a salary increase. 234

Significantly, neither the petitioner nor the main opinion

demonstrates what injuries petitioner's members have
sustained as a result of the proviso in Section 15 (c) of The
New Central Bank Act, whether or not the same is read
together with subsequent legislative enactments. This is
unsurprising for how could a provision which places the BSP
rank and file at par with all other government employees in
terms of compensation and position classification be
considered oppressive or discriminatory?

Petitioner's Members' Remedy is with Congress and

Not With The Courts
While the main opinion acknowledges the propriety of
judicial restraint "under most circumstances" when deciding
questions of constitutionality, in recognition of the "broad
discretion given to Congress in exercising its legislative
power," it nevertheless advocates active intervention with
respect to the exemption of the BSP rank and file employees
from the Compensation Classification System of the Salary
Standardization Law.

First, as pointed out by the U.S. Supreme Court in City of

Cleburne Texas v. Cleburne Living Center,222 "[a]ny minority can
be said to be powerless to assert direct control over the
legislature, but if that were a criterion for higher level scrutiny by
the courts, much economic and social legislation would now be
suspect."223
Second, there is nothing of record which would explain why the
rank and file employees of the BSP in particular should be
considered more "powerless" than the rank and file employees
of the other GOCCs and GFIs, particularly those to whom
Congress has granted exemption.
Third, as already mentioned, House Bill 123, providing for,
among others, the exemption of all BSP employees from the
coverage of the Compensation Classification System of the
Salary Standardization Law is already pending in Congress.

There have also been suggestions to shift to a performance-based

compensation structure,229 or to amend the charters of the GOCCs
exempted from the Salary Standardization Law to allow the President
to set limits on the compensation230 received by their personnel.
Budget Secretary Emilia Boncodin has also disclosed that the
President had mandated "a cut in pay of members of the board and
officers of GOCCs that are not competing with the private sector,"
adding that those who "d[o] not compete with the private sector would
have to observe the Salary Standardization Law." 231

Whether any of the foregoing measures will actually be implemented

by the Congress still remains to be seen. However, what is important
is that Congress is actively reviewing the policies concerning GOCCs
and GFIs with respect to the Salary Standardization Law.

Hence, for this Court to intervene now, when no intervention

is called for, would be to prematurely curtail the public
debate on the issue of compensation of the employees of
the GOCCs and GFIs, and effectively substitute this Court's
policy judgments for those of the legislature, with whom the
"power of the purse" is constitutionally lodged. Such would
not only constitute an improper exercise of the Court's power
of judicial review, but may also effectively stunt the growth
and maturity of the nation as a political body as well.
In this regard, it may be worthwhile to reflect upon the words
of Mr. Chief Justice Berger of the American Court in his
dissenting opinion in Plyler v. Doe,235 to wit:
The Court makes no attempt to disguise that it is
acting to make up for Congress' lack of
"effective leadership" in dealing with the serious
national problems caused by the influx of
uncountable millions of illegal aliens across our
borders. The failure of enforcement of the
immigration laws over more than a decade and the
inherent difficulty and expense of sealing our vast
borders have combined to create a grave
socioeconomic dilemma. It is a dilemma that has not
yet been fully assessed, let alone
addressed.However, it is not the function of the
Judiciary to provide "effective leadership"
simply because the political branches of
government fail to do so.
The Court's holding today manifests the justly
criticized judicial tendency to attempt speedy
and wholesale formulation of "remedies" for the
failures - or simply the laggard pace - of the
political processes of our system of
government. The Court employs, and in my view
abuses, the Fourteenth Amendment in an effort
to become an omnipotent and omniscient
problem solver. That the motives for doing so
are noble and compassionate does not alter the
fact that the Court distorts our constitutional
function to make amends for the defaults of
others.
xxx

The Constitution does not provide a cure for every

social ill, nor does it vest judges with a mandate to
try to remedy every social problem. Moreover, when
this Court rushes to remedy what it perceives to be
the failing of the political processes, it deprives
those processes of an opportunity to
function. When the political institutions are not
forced to exercise constitutionally allocated powers
and responsibilities, those powers, like muscles not
used, tend to atrophy. Today's cases, I regret to say,
present yet another example of unwarranted judicial
action which in the long run tends to contribute to
the weakening of our political
processes.236(Emphasis supplied; citations and
footnotes omitted)
The Social Justice Provisions of the Constitution do
not Justify the Grant of the Instant Petition

In this regard, the citation of International School Alliance of Educators

v. Quisumbing239 is doubly ironic. For to demonstrate the
institutionalization of the principle of "equal pay for equal work" in our
legal system, footnote 22 of the decision refers specifically to the
Salary Standardization Law as embodying said principle:
Indeed, the government employs this rule "equal pay for equal
work" in fixing the compensation of government employees.
Thus, Republic Act No. 6758 (An Act Prescribing a Revised
Compensation and Position Classification System in
Government and for Other Purposes) declares it "the policy of
the State to provide equal pay for substantially equal work and
to base differences in pay upon substantive differences in
duties and responsibilities, and qualification requirements of
the positions. See also the Preamble of Presidential Decree
No. 985 (A Decree Revising the Position Classification and
Compensation Systems in the National Government, and
Integrating the same)240

May this Court depart from established rules in equal protection At the same time, the General Provisions of the Salary Standardization
analysis to grant a group of government employees, the Bangko Law clearly incorporate the spirit and intent of the social justice
Sentral ng Pilipinas' rank and file, adjustments in their salaries
provisions cited in the main opinion, to wit:
and wages? Can the exemption from a law mandating the
salary standardization of all government employees be justified
SECTION 3. General Provisions. The following principles
based on the economic and financial needs of the employees,
shall govern the Compensation and Position Classification
and on the assertion that those who have less in life should
System of the Government:
have more in law? Can the social justice provisions in the
Constitution override the strong presumption of constitutionality
(a) All government personnel shall be paid just and equitable
of the law and place the burden, under the test of "strict
wages; and while pay distinctions must necessarily exist in
scrutiny", upon the government to demonstrate that its
keeping with work distinctions, the ratio of compensation for
classification has been narrowly tailored to further compelling
those occupying higher ranks to those at lower ranks should
governmental interests?
be maintained at equitable levels, giving due consideration to
Notwithstanding the lack of support from both local and foreign
jurisprudence to justify the grant of the instant petition, the main
opinion maintains that the policy of social justice and the special
protection afforded to labor237require the use of equal protection
as a tool of effective intervention, and the adoption of a less
deferential attitude by this Court to legislative classification. 238
The citation of the social justice provisions of the Constitution
are non sequitur. As previously discussed, neither the petitioner
nor the main opinion has clearly explained how a provision
placing the rank and file of the BSP on equal footing with all
other government employees in terms of compensation and
position classification can be considered oppressive or
discriminatory.

higher percentage of increases to lower level positions and

lower percentage increases to higher level positions;
(b) Basic compensation for all personnel in the government
and government-owned or controlled corporations and
financial institutions shall generally be comparable with those
in the private sector doing comparable work, and must be in
accordance with prevailing laws on minimum wages;
(c) The total compensation provided for government personnel
must be maintained at a reasonable level in proportion to the
national budget;

(d) A review of government compensation rates,

taking into account possible erosion in purchasing
power due to inflation and other factors, shall be
conducted periodically.
How then are the aims of social justice served by removing
the BSP rank and file personnel from the ambit of the Salary
Standardization Law? In the alternative, what other public
purpose would be served by ordering such an exemption?
Surely to grant the rank and file of the BSP exemption solely
for the reason that other GOCC or GFI employees have
been exempted, without regard for the reasons which
impelled the legislature to provide for those exemptions,
would be to crystallize into our law what Justice Holmes
sardonically described as "merely idealizing envy." 241
Similarly, the justification that petitioner and its members
represent "the more impotent rank and file government
employees who, unlike employees in the private sector, have
no specific rights to organize as a collective bargaining unit
and negotiate for better terms and conditions for
employment, nor the power to hold a strike to protest unfair
labor practices" is unconvincing. This Court's discussion of
the differences between employment in the GOCCs/GFIs
and the private sector, to my mind, is more insightful:
The general rule in the past and up to the present is
that "the terms and conditions of employment in the
Government, including any political subdivision or
instrumentality thereof are governed by law"
(Section 11, the Industrial Peace Act, R.A. No. 875,
as amended and Article 277, the Labor Code, P.D.
No. 442, as amended). Since the terms and
conditions of government employment are fixed
by law, government workers cannot use the
same weapons employed by workers in the
private sector to secure concessions from their
employers. The principle behind labor unionism
in private industry is that industrial peace cannot
be secured through compulsion by law.
Relations between private employers and their
employees rest on an essentially voluntary
basis. Subject to the minimum requirements of
wage laws and other labor and welfare
legislation, the terms and conditions of
employment in the unionized private sector are
settled through the process of collective

bargaining. In government employment, however, it

is the legislature and, where properly given
delegated power, the administrative heads of
government which fix the terms and conditions of
employment. And this is effected through statutes
or administrative circulars, rules, and regulations,
not through collective bargaining agreements.
xxx
Personnel of government-owned or controlled
corporations are now part of the civil service. It
would not be fair to allow them to engage in
concerted activities to wring higher salaries or
fringe benefits from Government even as other civil
service personnel such as the hundreds of
thousands of public school teachers, soldiers,
policemen, health personnel, and other government
workers are denied the right to engage in similar
activities.
To say that the words "all employers" in P.D. No. 851
includes the Government and all its agencies,
instrumentalities, and government-owned or controlled
corporations would also result in nightmarish budgetary
problems.
For instance, the Supreme Court is trying its best to
alleviate the financial difficulties of courts, judges, and
court personnel in the entire country but it can do so
only within the limits of budgetary appropriations. Public
school teachers have been resorting to what was
formerly unthinkable, to mass leaves and
demonstrations, to get not a 13th-month pay but
promised increases in basic salaries and small
allowances for school uniforms. The budget of the
Ministry of Education, Culture and Sports has to be
supplemented every now and then for this purpose. The
point is, salaries and fringe benefits of those embraced
by the civil service are fixed by law. Any increases must
come from law, from appropriations or savings under
the law, and not from concerted activity.
The Government Corporate Counsel, Justice Manuel
Lazaro, in his consolidated comment for respondents
GSIS, MWSS, and PVTA gives the background of the

amendment which includes every government-owned or

controlled corporation in the embrace of the civil service:
xxx
'"Moreover, determination of employment conditions
as well as supervision of the management of the
public service is in the hands of legislative bodies. It is
further emphasized that government agencies in the
performance of their duties have a right to demand
undivided allegiance from their workers and must
always maintain a pronounced esprit de corps or firm
discipline among their staff members. It would be
highly incompatible with these requirements of the
public service, if personnel took orders from union
leaders or put solidarity with members of the working
class above solidarity with the Government. This
would be inimical to the public interest.
xxx
"Similarly, Delegate Leandro P. Garcia, expressing support for
the inclusion of government-owned or controlled corporations
in the Civil Service, argued:
"'It is meretricious to contend that because
Government-owned or controlled corporations
yield profits, their employees are entitled to better
wages and fringe benefits than employees of
Government other than Government-owned and
controlled corporations which are not making
profits. There is no gainsaying the fact that the
capital they use is the people's money.' (see:
Records of the 1971 Constitutional Convention).
"Summarizing the deliberations of the 1971 Constitutional
Convention on the inclusion of Government-owned or
controlled corporations, Dean Joaquin G. Bernas, SJ., of the
Ateneo de Manila University Professional School of Law,
stated that government-owned corporations came under
attack as milking cows of a privileged few enjoying
salaries far higher than their counterparts in the various
branches of government, while the capital of these
corporations belongs to the Government and government
money is pumped into them whenever on the brink of
disaster, and they should therefore come under the
stric[t] surveillance of the Civil Service System.(Bernas,

The 1973 Philippine Constitution, Notes and Cases,

1974 ed., p. 524)."
xxx
Section 6, Article XII-B of the Constitution gives
added reasons why the government employees
represented by the petitioners cannot expect
treatment in matters of salaries different from
that extended to all others government
personnel. The provision states:
"SEC. 6. The National Assembly shall provide for the
standardization of compensation of government
officials and employees, including those in
government-owned or controlled corporations, taking
into account the nature of the responsibilities
pertaining to, and the qualifications required for the
positions concerned."
It is the legislature or, in proper cases, the
administrative heads of government and not the
collective bargaining process nor the
concessions wrung by labor unions from
management that determine how much the
workers in government-owned or controlled
corporations may receive in terms of salaries,
13th month pay, and other conditions or terms of
employment. There are government institutions
which can afford to pay two weeks, three weeks, or
even 13th-month salaries to their personnel from
their budgetary appropriations. However, these
payments must be pursuant to law or
regulation.242 (Emphasis supplied)
Certainly, social justice is more than picking and choosing
lines from Philippine and foreign instruments, statutes and
jurisprudence, like ripe cherries, in an effort to justify
preferential treatment of a favored group. In the immortal
words of Justice Laurel in Calalang v. Williams:243
The petitioner finally avers that the rules and
regulations complained of infringe upon the
constitutional precept regarding the promotion of
social justice to insure the well-being and economic
security of all the people. The promotion of social
justice, however, is to be achieved not through a

mistaken sympathy towards any given group.

nature of the responsibilities pertaining to, and the qualifications
Social justice is "neither communism, nor
required for their positions."
despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social WHEREFORE, I vote to deny the instant petition.
and economic forces by the State so that justice in
its rational and objectively secular conception may
at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption
by the Government of measures calculated to insure
economic stability of all the competent elements of
society, through the maintenance of a proper economic
and social equilibrium in the interrelations of the
members of the community, constitutionally, through the
adoption of measures legally justifiable, or extraconstitutionally, through the exercise of powers
underlying the existence of all governments on the timehonored principle ofsalus populi est suprema
lex244 (Emphasis and underscoring supplied)
Postscript
I agree wholeheartedly with the main opinion's statement that
"[t]here should be no hesitation in using the equal protection
clause as a major cutting edge to eliminate every conceivable
irrational discrimination in our society."
However, because I find that the classification contained in the
questioned proviso is based on real differences between the
executive level and the rank and file of the BSP; is rationally
related to the attainment of the objectives of the new Central
Bank Act; and, further, that the subsequent amendments to the
charters of certain other GOCCs and GFIs did not materially
affect the rational basis for this classification, I do not believe
that the classification in the case at bar is impressed with the
vice of irrationality.
The mere fact that petitioner's members are employees of
the Bangko Sentral ng Pilipinas, admittedly perhaps the biggest
among the GFIs, does not, to my mind, automatically justify
their exemption from the Compensation Classification System
provided for by the Salary Standardization Law. In my humble
view, the equal protection clause ought not to be used as a
means of "reserving greener pastures to sacred cows" in
contravention of the Constitutional mandate to "provide for the
standardization of compensation of government officials and
employees, including those in government-owned or controlled
corporations with original charters, taking into account the

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 152154

previously held by the following five account groups, using

various foreign foundations in certain Swiss banks:
(1) Azio-Verso-Vibur Foundation accounts;
(2) Xandy-Wintrop: Charis-Scolari-Valamo-SpinusAvertina Foundation accounts;

July 15, 2003

(3) Trinidad-Rayby-Palmy Foundation accounts;

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
(4) Rosalys-Aguamina Foundation accounts and
HONORABLE SANDIGANBAYAN (SPECIAL FIRST
DIVISION), FERDINAND E. MARCOS (REPRESENTED BY
(5) Maler Foundation accounts.
HIS ESTATE/HEIRS: IMELDA R. MARCOS, MARIA
IMELDA [IMEE] MARCOS-MANOTOC, FERDINAND R.
In addition, the petition sought the forfeiture of US$25 million
MARCOS, JR. AND IRENE MARCOS-ARANETA) AND
and US$5 million in treasury notes which exceeded the Marcos
IMELDA ROMUALDEZ MARCOS, respondents.
couple's salaries, other lawful income as well as income from
legitimately acquired property. The treasury notes are frozen at
CORONA, J.:
the Central Bank of the Philippines, now Bangko Sentral ng
Pilipinas, by virtue of the freeze order issued by the PCGG.
This is a petition for certiorari under Rule 65 of the Rules of
Court seeking to (1) set aside the Resolution dated January On October 18, 1993, respondents Imelda R. Marcos, Maria
31, 2002 issued by the Special First Division of the
Imelda M. Manotoc, Irene M. Araneta and Ferdinand R. Marcos,
Sandiganbayan in Civil Case No. 0141 entitledRepublic of
Jr. filed their answer.
the Philippines vs. Ferdinand E. Marcos, et. al., and (2)
reinstate its earlier decision dated September 19, 2000
Before the case was set for pre-trial, a General Agreement and
which forfeited in favor of petitioner Republic of the
the Supplemental Agreements6 dated December 28, 1993 were
Philippines (Republic) the amount held in escrow in the
executed by the Marcos children and then PCGG Chairman
Philippine National Bank (PNB) in the aggregate amount of
Magtanggol Gunigundo for a global settlement of the assets of
US$658,175,373.60 as of January 31, 2002.
the Marcos family. Subsequently, respondent Marcos children
BACKGROUND OF THE CASE
On December 17, 1991, petitioner Republic, through the
Presidential Commission on Good Government (PCGG),
represented by the Office of the Solicitor General (OSG),
filed a petition for forfeiture before the Sandiganbayan,
docketed as Civil Case No. 0141 entitled Republic of the
Philippines vs. Ferdinand E. Marcos, represented by his
Estate/Heirs and Imelda R. Marcos, pursuant to RA 13791 in
relation to Executive Order Nos. 1,2 2,3 144 and 14-A.5
In said case, petitioner sought the declaration of the
aggregate amount of US$356 million (now estimated to be
more than US$658 million inclusive of interest) deposited in
escrow in the PNB, as ill-gotten wealth. The funds were

name of the enumerated foundations to be of illegal provenance and

ordered that they be frozen to await the final verdict in favor of the
parties entitled to restitution.

filed a motion dated December 7, 1995 for the approval of said

agreements and for the enforcement thereof.
The General Agreement/Supplemental Agreements sought to
identify, collate, cause the inventory of and distribute all assets
presumed to be owned by the Marcos family under the
conditions contained therein. The aforementioned General
Agreement specified in one of its premises or "whereas
clauses" the fact that petitioner "obtained a judgment from the
Swiss Federal Tribunal on December 21, 1990, that the Three
Hundred Fifty-six Million U.S. dollars (US$356 million) belongs
in principle to the Republic of the Philippines provided certain
conditionalities are met x x x." The said decision of the Swiss
Federal Supreme Court affirmed the decision of Zurich District
Attorney Peter Consandey, granting petitioner's request for legal
assistance.7 Consandey declared the various deposits in the

Hearings were conducted by the Sandiganbayan on the motion to

approve the General/Supplemental Agreements. Respondent
Ferdinand, Jr. was presented as witness for the purpose of
establishing the partial implementation of said agreements.
On October 18, 1996, petitioner filed a motion for summary judgment
and/or judgment on the pleadings. Respondent Mrs. Marcos filed her
opposition thereto which was later adopted by respondents Mrs.
Manotoc, Mrs. Araneta and Ferdinand, Jr.
In its resolution dated November 20, 1997, the Sandiganbayan denied
petitioner's motion for summary judgment and/or judgment on the
pleadings on the ground that the motion to approve the compromise
agreement "(took) precedence over the motion for summary
judgment."
Respondent Mrs. Marcos filed a manifestation on May 26, 1998
claiming she was not a party to the motion for approval of the
Compromise Agreement and that she owned 90% of the funds with the
remaining 10% belonging to the Marcos estate.
Meanwhile, on August 10, 1995, petitioner filed with the District
Attorney in Zurich, Switzerland, an additional request for the
immediate transfer of the deposits to an escrow account in the PNB.
The request was granted. On appeal by the Marcoses, the Swiss
Federal Supreme Court, in a decision dated December 10, 1997,
upheld the ruling of the District Attorney of Zurich granting the request
for the transfer of the funds. In 1998, the funds were remitted to the
Philippines in escrow. Subsequently, respondent Marcos children
moved that the funds be placed in custodia legis because the deposit
in escrow in the PNB was allegedly in danger of dissipation by
petitioner. The Sandiganbayan, in its resolution dated September 8,
1998, granted the motion.
After the pre-trial and the issuance of the pre-trial order and
supplemental pre-trial order dated October 28, 1999 and January 21,
2000, respectively, the case was set for trial. After several resettings,
petitioner, on March 10, 2000, filed another motion for summary
judgment pertaining to the forfeiture of the US$356 million, based on
the following grounds:
I

THE ESSENTIAL FACTS WHICH WARRANT THE

FORFEITURE OF THE FUNDS SUBJECT OF THE
PETITION UNDER R.A. NO. 1379 ARE ADMITTED
BY RESPONDENTS IN THEIR PLEADINGS AND
OTHER SUBMISSIONS MADE IN THE COURSE
OF THE PROCEEDING.
II
RESPONDENTS' ADMISSION MADE DURING THE
PRE-TRIAL THAT THEY DO NOT HAVE ANY
INTEREST OR OWNERSHIP OVER THE FUNDS
SUBJECT OF THE ACTION FOR FORFEITURE
TENDERS NO GENUINE ISSUE OR
CONTROVERSY AS TO ANY MATERIAL FACT IN
THE PRESENT ACTION, THUS WARRANTING
THE RENDITION OF SUMMARY JUDGMENT.8
Petitioner contended that, after the pre-trial conference,
certain facts were established, warranting a summary
judgment on the funds sought to be forfeited.
Respondent Mrs. Marcos filed her opposition to the
petitioner's motion for summary judgment, which opposition
was later adopted by her co-respondents Mrs. Manotoc, Mrs.
Araneta and Ferdinand, Jr.
On March 24, 2000, a hearing on the motion for summary
judgment was conducted.
In a decision9 dated September 19, 2000, the
Sandiganbayan granted petitioner's motion for summary
judgment:
CONCLUSION
There is no issue of fact which calls for the
presentation of evidence.
The Motion for Summary Judgment is hereby
granted.
The Swiss deposits which were transmitted to and
now held in escrow at the PNB are deemed
unlawfully acquired as ill-gotten wealth.

DISPOSITION
WHEREFORE, judgment is hereby rendered in favor of
the Republic of the Philippines and against the
respondents, declaring the Swiss deposits which were
transferred to and now deposited in escrow at the
Philippine National Bank in the total aggregate value
equivalent to US$627,608,544.95 as of August 31, 2000
together with the increments thereof forfeited in favor of
the State.10
Respondent Mrs. Marcos filed a motion for reconsideration
dated September 26, 2000. Likewise, Mrs. Manotoc and
Ferdinand, Jr. filed their own motion for reconsideration dated
October 5, 2000. Mrs. Araneta filed a manifestation dated
October 4, 2000 adopting the motion for reconsideration of Mrs.
Marcos, Mrs. Manotoc and Ferdinand, Jr.
Subsequently, petitioner filed its opposition thereto.
In a resolution11 dated January 31, 2002, the Sandiganbayan
reversed its September 19, 2000 decision, thus denying
petitioner's motion for summary judgment:
CONCLUSION
In sum, the evidence offered for summary judgment of
the case did not prove that the money in the Swiss
Banks belonged to the Marcos spouses because no
legal proof exists in the record as to the ownership by
the Marcoses of the funds in escrow from the Swiss
Banks.
The basis for the forfeiture in favor of the government
cannot be deemed to have been established and our
judgment thereon, perforce, must also have been
without basis.
WHEREFORE, the decision of this Court dated
September 19, 2000 is reconsidered and set aside, and
this case is now being set for further proceedings.12
Hence, the instant petition. In filing the same, petitioner argues
that the Sandiganbayan, in reversing its September 19, 2000
decision, committed grave abuse of discretion amounting to lack
or excess of jurisdiction considering that --

I
PETITIONER WAS ABLE TO PROVE ITS CASE IN
ACCORDANCE WITH THE REQUISITES OF SECTIONS 2
AND 3 OF R.A. NO. 1379:
A. PRIVATE RESPONDENTS CATEGORICALLY
ADMITTED NOT ONLY THE PERSONAL
CIRCUMSTANCES OF FERDINAND E. MARCOS
AND IMELDA R. MARCOS AS PUBLIC OFFICIALS
BUT ALSO THE EXTENT OF THEIR SALARIES AS
SUCH PUBLIC OFFICIALS, WHO UNDER THE
CONSTITUTION, WERE PROHIBITED FROM
ENGAGING IN THE MANAGEMENT OF
FOUNDATIONS.
B. PRIVATE RESPONDENTS ALSO ADMITTED THE
EXISTENCE OF THE SWISS DEPOSITS AND THEIR
OWNERSHIP THEREOF:
1. ADMISSIONS IN PRIVATE
RESPONDENTS' ANSWER;
2. ADMISSION IN THE GENERAL /
SUPPLEMENTAL AGREEMENTS THEY
SIGNED AND SOUGHT TO IMPLEMENT;
3. ADMISSION IN A MANIFESTATION OF
PRIVATE RESPONDENT IMELDA R.
MARCOS AND IN THE MOTION TO PLACE
THE RES IN CUSTODIA LEGIS; AND
4. ADMISSION IN THE UNDERTAKING TO
PAY THE HUMAN RIGHTS VICTIMS.
C. PETITIONER HAS PROVED THE EXTENT OF
THE LEGITIMATE INCOME OF FERDINAND E.
MARCOS AND IMELDA R. MARCOS AS PUBLIC
OFFICIALS.
D. PETITIONER HAS ESTABLISHED A PRIMA
FACIE PRESUMPTION OF UNLAWFULLY
ACQUIRED WEALTH.
II

SUMMARY JUDGMENT IS PROPER SINCE

PRIVATE RESPONDENTS HAVE NOT RAISED
ANY GENUINE ISSUE OF FACT CONSIDERING
THAT:
A. PRIVATE RESPONDENTS' DEFENSE
THAT SWISS DEPOSITS WERE
LAWFULLY ACQUIRED DOES NOT ONLY
FAIL TO TENDER AN ISSUE BUT IS
CLEARLY A SHAM; AND
B. IN SUBSEQUENTLY DISCLAIMING
OWNERSHIP OF THE SWISS DEPOSITS,
PRIVATE RESPONDENTS ABANDONED
THEIR SHAM DEFENSE OF LEGITIMATE
ACQUISITION, AND THIS FURTHER
JUSTIFIED THE RENDITION OF A
SUMMARY JUDGMENT.
III
THE FOREIGN FOUNDATIONS NEED NOT BE
IMPLEADED.
IV
THE HONORABLE PRESIDING JUSTICE
COMMITTED GRAVE ABUSE OF DISCRETION IN
REVERSING HIMSELF ON THE GROUND THAT
ORIGINAL COPIES OF THE AUTHENTICATED
SWISS DECISIONS AND THEIR
"AUTHENTICATED TRANSLATIONS" HAVE NOT
BEEN SUBMITTED TO THE COURT, WHEN
EARLIER THE SANDIGANBAYAN HAS QUOTED
EXTENSIVELY A PORTION OF THE
TRANSLATION OF ONE OF THESE SWISS
DECISIONS IN HIS "PONENCIA" DATED JULY 29,
1999 WHEN IT DENIED THE MOTION TO
RELEASE ONE HUNDRED FIFTY MILLION US
DOLLARS ($150,000,000.00) TO THE HUMAN
RIGHTS VICTIMS.

AUTHENTICITY OF THE SWISS FEDERAL SUPREME Mrs. Marcos contends that petitioner has a plain, speedy and
COURT DECISIONS.13
adequate remedy in the ordinary course of law in view of the resolution
of the Sandiganbayan dated January 31, 2000 directing petitioner to
Petitioner, in the main, asserts that nowhere in the respondents' submit the authenticated translations of the Swiss decisions. Instead
of availing of said remedy, petitioner now elevates the matter to this
motions for reconsideration and supplemental motion for
reconsideration were the authenticity, accuracy and admissibility Court. According to Mrs. Marcos, a petition for certiorari which does
of the Swiss decisions ever challenged. Otherwise stated, it was not comply with the requirements of the rules may be dismissed. Since
petitioner has a plain, speedy and adequate remedy, that is, to
incorrect for the Sandiganbayan to use the issue of lack of
authenticated translations of the decisions of the Swiss Federal proceed to trial and submit authenticated translations of the Swiss
decisions, its petition before this Court must be dismissed. Corollarily,
Supreme Court as the basis for reversing itself because
respondents themselves never raised this issue in their motions the Sandiganbayan's ruling to set the case for further proceedings
cannot and should not be considered a capricious and whimsical
for reconsideration and supplemental motion for
reconsideration. Furthermore, this particular issue relating to the exercise of judgment.
translation of the Swiss court decisions could not be resurrected
anymore because said decisions had been previously utilized
Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment, prayed
by the Sandiganbayan itself in resolving a "decisive issue"
for the dismissal of the petition on the grounds that:
before it.
(A)
Petitioner faults the Sandiganbayan for questioning the nonproduction of the authenticated translations of the Swiss
BY THE TIME PETITIONER FILED ITS MOTION FOR
Federal Supreme Court decisions as this was a marginal and
SUMMARY JUDGMENT ON 10 MARCH 2000, IT WAS
technical matter that did not diminish by any measure the
ALREADY BARRED FROM DOING SO.
conclusiveness and strength of what had been proven and
admitted before the Sandiganbayan, that is, that the funds
(1) The Motion for Summary Judgment was based on private
deposited by the Marcoses constituted ill-gotten wealth and thus
respondents' Answer and other documents that had long been
belonged to the Filipino people.
in the records of the case. Thus, by the time the Motion was
In compliance with the order of this Court, Mrs. Marcos filed her
comment to the petition on May 22, 2002. After several motions
for extension which were all granted, the comment of Mrs.
Manotoc and Ferdinand, Jr. and the separate comment of Mrs.
Araneta were filed on May 27, 2002.
Mrs. Marcos asserts that the petition should be denied on the
following grounds:
A.
PETITIONER HAS A PLAIN, SPEEDY, AND
ADEQUATE REMEDY AT THE SANDIGANBAYAN.
B.

V
PRIVATE RESPONDENTS ARE DEEMED TO
HAVE WAIVED THEIR OBJECTION TO THE

THE SANDIGANBAYAN DID NOT ABUSE ITS

DISCRETION IN SETTING THE CASE FOR FURTHER
PROCEEDINGS.14

filed on 10 March 2000, estoppel by laches had already set in

against petitioner.
(2) By its positive acts and express admissions prior to filing
the Motion for Summary Judgment on 10 March 1990,
petitioner had legally bound itself to go to trial on the basis of
existing issues. Thus, it clearly waived whatever right it had to
move for summary judgment.
(B)
EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY
BARRED FROM FILING THE MOTION FOR SUMMARY
JUDGMENT, THE SANDIGANBAYAN IS CORRECT IN
RULING THAT PETITIONER HAS NOT YET ESTABLISHED A
PRIMA FACIE CASE FOR THE FORFEITURE OF THE
SWISS FUNDS.
(1) Republic Act No. 1379, the applicable law, is a penal
statute. As such, its provisions, particularly the essential

elements stated in section 3 thereof, are mandatory

in nature. These should be strictly construed against
petitioner and liberally in favor of private
respondents.
(2) Petitioner has failed to establish the third and
fourth essential elements in Section 3 of R.A. 1379
with respect to the identification, ownership, and
approximate amount of the property which the
Marcos couple allegedly "acquired during their
incumbency".
(a) Petitioner has failed to prove that the
Marcos couple "acquired" or own the Swiss
funds.
(b) Even assuming, for the sake of
argument, that the fact of acquisition has
been proven, petitioner has categorically
admitted that it has no evidence showing
how much of the Swiss funds was acquired
"during the incumbency" of the Marcos
couple from 31 December 1965 to 25
February 1986.
(3) In contravention of the essential element
stated in Section 3 (e) of R.A. 1379,
petitioner has failed to establish the other
proper earnings and income from
legitimately acquired property of the Marcos
couple over and above their government
salaries.
(4) Since petitioner failed to prove the three
essential elements provided in paragraphs
(c)15 (d),16 and (e)17 of Section 3, R.A. 1379, the
inescapable conclusion is that the prima facie
presumption of unlawful acquisition of the Swiss
funds has not yet attached. There can, therefore, be
no premature forfeiture of the funds.
(C)
IT WAS ONLY BY ARBITRARILY ISOLATING AND
THEN TAKING CERTAIN STATEMENTS MADE BY
PRIVATE RESPONDENTS OUT OF CONTEXT

THAT PETITIONER WAS ABLE TO TREAT THESE AS

"JUDICIAL ADMISSIONS" SUFFICIENT TO
ESTABLISH A PRIMA FACIE AND THEREAFTER A
CONCLUSIVE CASE TO JUSTIFY THE FORFEITURE
OF THE SWISS FUNDS.

respondent Mrs. Araneta prays that the petition be denied for lack of
merit and for raising matters which, in elaborated fashion, are
impertinent and improper before this Court.

(1) Under Section 27, Rule 130 of the Rules of Court,

the General and Supplemental Agreements, as well as
the other written and testimonial statements submitted
in relation thereto, are expressly barred from being
admissible in evidence against private respondents.

But before this Court discusses the more relevant issues, the question
regarding the propriety of petitioner Republic's action for certiorari
under Rule 6519 of the 1997 Rules of Civil Procedure assailing the
Sandiganbayan Resolution dated January 21, 2002 should be
threshed out.

(2) Had petitioner bothered to weigh the alleged

admissions together with the other statements on
record, there would be a demonstrable showing that no
such "judicial admissions" were made by private
respondents.

At the outset, we would like to stress that we are treating this case as
an exception to the general rule governing petitions for certiorari.
Normally, decisions of the Sandiganbayan are brought before this
Court under Rule 45, not Rule 65.20 But where the case is undeniably
ingrained with immense public interest, public policy and deep
historical repercussions, certiorari is allowed notwithstanding the
existence and availability of the remedy of appeal. 21

(D)
SINCE PETITIONER HAS NOT (YET) PROVEN ALL
THE ESSENTIAL ELEMENTS TO ESTABLISH A
PRIMA FACIE CASE FOR FORFEITURE, AND
PRIVATE RESPONDENTS HAVE NOT MADE ANY
JUDICIAL ADMISSION THAT WOULD HAVE FREED IT
FROM ITS BURDEN OF PROOF, THE
SANDIGANBAYAN DID NOT COMMIT GRAVE ABUSE
OF DISCRETION IN DENYING THE MOTION FOR
SUMMARY JUDGMENT. CERTIORARI, THEREFORE,
DOES NOT LIE, ESPECIALLY AS THIS COURT IS
NOT A TRIER OF FACTS.18
For her part, Mrs. Araneta, in her comment to the petition,
claims that obviously petitioner is unable to comply with a very
plain requirement of respondent Sandiganbayan. The instant
petition is allegedly an attempt to elevate to this Court matters,
issues and incidents which should be properly threshed out at
the Sandiganbayan. To respondent Mrs. Araneta, all other
matters, save that pertaining to the authentication of the
translated Swiss Court decisions, are irrelevant and impertinent
as far as this Court is concerned. Respondent Mrs. Araneta
manifests that she is as eager as respondent Sandiganbayan or
any interested person to have the Swiss Court decisions
officially translated in our known language. She says the
authenticated official English version of the Swiss Court
decisions should be presented. This should stop all
speculations on what indeed is contained therein. Thus,

PROPRIETY OF PETITIONER'S ACTION FOR CERTIORARI

One of the foremost concerns of the Aquino Government in February

1986 was the recovery of the unexplained or ill-gotten wealth reputedly
amassed by former President and Mrs. Ferdinand E. Marcos, their
relatives, friends and business associates. Thus, the very first
Executive Order (EO) issued by then President Corazon Aquino upon
her assumption to office after the ouster of the Marcoses was EO No.
1, issued on February 28, 1986. It created the Presidential
Commission on Good Government (PCGG) and charged it with the
task of assisting the President in the "recovery of all ill-gotten wealth
accumulated by former President Ferdinand E. Marcos, his immediate
family, relatives, subordinates and close associates, whether located
in the Philippines or abroad, including the takeover or sequestration of
all business enterprises and entities owned or controlled by them
during his administration, directly or through nominees, by taking
undue advantage of their public office and/or using their powers,
authority, influence, connections or relationship." The urgency of this
undertaking was tersely described by this Court inRepublic vs.
Lobregat22:
surely x x x an enterprise "of great pith and moment"; it was
attended by "great expectations"; it was initiated not only out
of considerations of simple justice but also out of sheer
necessity - the national coffers were empty, or nearly so.
In all the alleged ill-gotten wealth cases filed by the PCGG,
this Court has seen fit to set aside technicalities and
formalities that merely serve to delay or impede judicious

resolution. This Court prefers to have such cases

resolved on the merits at the Sandiganbayan. But
substantial justice to the Filipino people and to all
parties concerned, not mere legalisms or perfection
of form, should now be relentlessly and firmly
pursued. Almost two decades have passed since the
government initiated its search for and reversion of
such ill-gotten wealth. The definitive resolution of
such cases on the merits is thus long overdue. If
there is proof of illegal acquisition, accumulation,
misappropriation, fraud or illicit conduct, let it be
brought out now. Let the ownership of these funds
and other assets be finally determined and resolved
with dispatch, free from all the delaying technicalities
and annoying procedural sidetracks.23
We thus take cognizance of this case and settle with finality
all the issues therein.

SECTION 1. Summary judgment for claimant.- A party

seeking to recover upon a claim, counterclaim, or crossclaim or to obtain a declaratory relief may, at any time
after the pleading in answer thereto has been served,
move with supporting affidavits, depositions or
admissions for a summary judgment in his favor upon
all or any part thereof.25
Summary judgment is proper when there is clearly no genuine
issue as to any material fact in the action.26 The theory of
summary judgment is that, although an answer may on its face
appear to tender issues requiring trial, if it is demonstrated by
affidavits, depositions or admissions that those issues are not
genuine but sham or fictitious, the Court is justified in
dispensing with the trial and rendering summary judgment for
petitioner Republic.
The Solicitor General made a very thorough presentation of its
case for forfeiture:

ISSUES BEFORE THIS COURT

(1) THE PROPRIETY OF SUMMARY JUDGMENT

We hold that respondent Marcoses failed to raise any
genuine issue of fact in their pleadings. Thus, on motion of
petitioner Republic, summary judgment should take place as
a matter of right.
In the early case of Auman vs. Estenzo24, summary judgment
was described as a judgment which a court may render
before trial but after both parties have pleaded. It is ordered
by the court upon application by one party, supported by
affidavits, depositions or other documents, with notice upon
the adverse party who may in turn file an opposition
supported also by affidavits, depositions or other documents.
This is after the court summarily hears both parties with their
respective proofs and finds that there is no genuine issue
between them. Summary judgment is sanctioned in this
jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil
Procedure:

4. Respondent Ferdinand E. Marcos (now deceased

and represented by his Estate/Heirs) was a public
officer for several decades continuously and without
interruption as Congressman, Senator, Senate
President and President of the Republic of the
Philippines from December 31, 1965 up to his ouster by
direct action of the people of EDSA on February 22-25,
1986.
5. Respondent Imelda Romualdez Marcos (Imelda, for
short) the former First Lady who ruled with FM during
the 14-year martial law regime, occupied the position of
Minister of Human Settlements from June 1976 up to
the peaceful revolution in February 22-25, 1986. She
likewise served once as a member of the Interim
Batasang Pambansa during the early years of martial
law from 1978 to 1984 and as Metro Manila Governor in
concurrent capacity as Minister of Human Settlements.
xxx
xxx

ANALYSIS OF RESPONDENTS LEGITIMATE INCOME

xxx
12. Based on available documents, the ITRs of the Marcoses
for the years 1965-1975 were filed under Tax Identification No.
1365-055-1. For the years 1976 until 1984, the returns were
filed under Tax Identification No. M 6221-J 1117-A-9.
13. The data contained in the ITRs and Balance Sheet filed by
the "Marcoses are summarized and attached to the reports in
the following schedules:
Schedule A:

xxx
The crucial issues which this Court must resolve are: (1)
whether or not respondents raised any genuine issue of fact
which would either justify or negate summary judgment; and
(2) whether or not petitioner Republic was able to prove its
case for forfeiture in accordance with Sections 2 and 3 of RA
1379.

the total salaries of former President Marcos as President

form 1966 to 1976 was P60,000 a year and from 1977 to
1985, P100,000 a year; while that of the former First Lady,
Imelda R. Marcos, as Minister of Human Settlements from
June 1976 to February 22-25, 1986 was P75,000 a year xxx.

xxx

Schedule of Income (Annex "T" hereof);

Schedule B:
Schedule of Income Tax Paid (Annex "T-1" hereof);
Schedule C:
Schedule of Net Disposable Income (Annex "T-2"
hereof);
Schedule D:
Schedule of Networth Analysis (Annex "T-3" hereof).
14. As summarized in Schedule A (Annex "T" hereof), the
Marcoses reported P16,408,442.00 or US$2,414,484.91 in
total income over a period of 20 years from 1965 to 1984. The
sources of income are as follows:

xxx

11. At the outset, however, it must be pointed out that

based on the Official Report of the Minister of Budget,

Official Salaries

P 2,627,581.00 -

16.01%

Legal Practice

11,109,836.00 -

67.71%

Farm Income

149,700.00 -

.91%

Others

2,521,325.00 -

15.37%

Total

December, 1965. The joint income tax returns of FM

and Imelda cannot, therefore, conceal the skeletons of
their kleptocracy.
18. FM reported a total of P2,521,325.00 as Other
Income for the years 1972 up to 1976 which he referred
to in his return as "Miscellaneous Items" and "Various
Corporations." There is no indication of any payor of the
dividends or earnings.

P16,408,442.00 - 100.00%

15. FM's official salary pertains to his compensation

as Senate President in 1965 in the amount of
P15,935.00 and P1,420,000.00 as President of the
Philippines during the period 1966 until 1984. On the
other hand, Imelda reported salaries and allowances
only for the years 1979 to 1984 in the amount of
P1,191,646.00. The records indicate that the
reported income came from her salary from the
Ministry of Human Settlements and allowances from
Food Terminal, Inc., National Home Mortgage
Finance Corporation, National Food Authority
Council, Light Rail Transit Authority and Home
Development Mutual Fund.
16. Of the P11,109,836.00 in reported income from
legal practice, the amount of P10,649,836.00 or 96%
represents "receivables from prior years" during the
period 1967 up to 1984.
17. In the guise of reporting income using the cash
method under Section 38 of the National Internal
Revenue Code, FM made it appear that he had an
extremely profitable legal practice before he became
a President (FM being barred by law from practicing
his law profession during his entire presidency) and
that, incredibly, he was still receiving payments
almost 20 years after. The only problem is that in his
Balance Sheet attached to his 1965 ITR immediately
preceeding his ascendancy to the presidency he did
not show any Receivables from client at all, much
less the P10,65-M that he decided to later recognize
as income. There are no documents showing any
withholding tax certificates. Likewise, there is
nothing on record that will show any known Marcos
client as he has no known law office. As previously
stated, his networth was a mere P120,000.00 in

19. Spouses Ferdinand and Imelda did not declare any

income from any deposits and placements which are
subject to a 5% withholding tax. The Bureau of Internal
Revenue attested that after a diligent search of
pertinent records on file with the Records Division, they
did not find any records involving the tax transactions of
spouses Ferdinand and Imelda in Revenue Region No.
1, Baguio City, Revenue Region No.4A, Manila,
Revenue Region No. 4B1, Quezon City and Revenue
No. 8, Tacloban, Leyte. Likewise, the Office of the
Revenue Collector of Batac. Further, BIR attested that
no records were found on any filing of capital gains tax
return involving spouses FM and Imelda covering the
years 1960 to 1965.
20. In Schedule B, the taxable reported income over the
twenty-year period was P14,463,595.00 which
represents 88% of the gross income. The Marcoses
paid income taxes totaling P8,233,296.00 or
US$1,220,667.59. The business expenses in the
amount of P861,748.00 represent expenses incurred for
subscription, postage, stationeries and contributions
while the other deductions in the amount of
P567,097.00 represents interest charges, medicare
fees, taxes and licenses. The total deductions in the
amount of P1,994,845.00 represents 12% of the total
gross income.
21. In Schedule C, the net cumulative disposable
income amounts to P6,756,301.00 or US$980,709.77.
This is the amount that represents that portion of the
Marcoses income that is free for consumption, savings
and investments. The amount is arrived at by adding
back to the net income after tax the personal and
additional exemptions for the years 1965-1984, as well
as the tax-exempt salary of the President for the years
1966 until 1972.

22. Finally, the networth analysis in Schedule D, represents

the total accumulated networth of spouses, Ferdinand and
Imelda. Respondent's Balance Sheet attached to their 1965
ITR, covering the year immediately preceding their
ascendancy to the presidency, indicates an ending networth of
P120,000.00 which FM declared as Library and Miscellaneous
assets. In computing for the networth, the income approach
was utilized. Under this approach, the beginning capital is
increased or decreased, as the case may be, depending upon
the income earned or loss incurred. Computations establish
the total networth of spouses Ferdinand and Imelda, for the
years 1965 until 1984 in the total amount of US$957,487.75,
assuming the income from legal practice is real and valid x x
x.
G. THE SECRET MARCOS DEPOSITS IN SWISS BANKS
23. The following presentation very clearly and
overwhelmingly show in detail how both respondents
clandestinely stashed away the country's wealth to
Switzerland and hid the same under layers upon layers of
foundations and other corporate entities to prevent its
detection. Through their dummies/nominees, fronts or agents
who formed those foundations or corporate entities, they
opened and maintained numerous bank accounts. But due to
the difficulty if not the impossibility of detecting and
documenting all those secret accounts as well as the enormity
of the deposits therein hidden, the following presentation is
confined to five identified accounts groups, with balances
amounting to about $356-M with a reservation for the filing of
a supplemental or separate forfeiture complaint should the
need arise.
H. THE AZIO-VERSO-VIBUR FOUNDATION ACCOUNTS
24. On June 11, 1971, Ferdinand Marcos issued a written
order to Dr. Theo Bertheau, legal counsel of Schweizeresche
Kreditanstalt or SKA, also known as Swiss Credit Bank, for
him to establish the AZIO Foundation. On the same date,
Marcos executed a power of attorney in favor of Roberto S.
Benedicto empowering him to transact business in behalf of
the said foundation. Pursuant to the said Marcos mandate,
AZIO Foundation was formed on June 21, 1971 in Vaduz.
Walter Fessler and Ernst Scheller, also of SKA Legal Service,
and Dr. Helmuth Merling from Schaan were designated as
members of the Board of Trustees of the said foundation.
Ferdinand Marcos was named first beneficiary and the Marcos

Foundation, Inc. was second beneficiary. On

November 12, 1971, FM again issued another
written order naming Austrahil PTY Ltd. In Sydney,
Australia, as the foundation's first and sole
beneficiary. This was recorded on December 14,
1971.
25. In an undated instrument, Marcos changed the
first and sole beneficiary to CHARIS FOUNDATION.
This change was recorded on December 4, 1972.
26. On August 29, 1978, the AZIO FOUNDATION
was renamed to VERSO FOUNDATION. The Board
of Trustees remained the same. On March 11, 1981,
Marcos issued a written directive to liquidated
VERSO FOUNDATION and to transfer all its assets
to account of FIDES TRUST COMPANY at Bank
Hofman in Zurich under the account "Reference
OSER." The Board of Trustees decided to dissolve
the foundation on June 25, 1981.
27. In an apparent maneuver to bury further the
secret deposits beneath the thick layers of corporate
entities, FM effected the establishment of VIBUR
FOUNDATION on May 13, 1981 in Vaduz. Atty. Ivo
Beck and Limag Management, a wholly-owned
subsidiary of Fides Trust, were designated as
members of the Board of Trustees. The account was
officially opened with SKA on September 10, 1981.
The beneficial owner was not made known to the
bank since Fides Trust Company acted as fiduciary.
However, comparison of the listing of the securities
in the safe deposit register of the VERSO
FOUNDATION as of February 27, 1981 with that of
VIBUR FOUNDATION as of December 31, 1981
readily reveals that exactly the same securities were
listed.
28. Under the foregoing circumstances, it is certain
that the VIBUR FOUNDATION is the beneficial
successor of VERSO FOUNDATION.
29. On March 18, 1986, the Marcos-designated
Board of Trustees decided to liquidate VIBUR
FOUNDATION. A notice of such liquidation was sent
to the Office of the Public Register on March 21,
1986. However, the bank accounts and respective

balances of the said VIBUR FOUNDATION remained

with SKA. Apparently, the liquidation was an attempt by
the Marcoses to transfer the foundation's funds to
another account or bank but this was prevented by the
timely freeze order issued by the Swiss authorities. One
of the latest documents obtained by the PCGG from the
Swiss authorities is a declaration signed by Dr. Ivo Beck
(the trustee) stating that the beneficial owner of VIBUR
FOUNDATION is Ferdinand E. Marcos. Another
document signed by G. Raber of SKA shows that
VIBUR FOUNDATION is owned by the "Marcos
Familie"
30. As of December 31, 1989, the balance of the bank
accounts of VIBUR FOUNDATION with SKA, Zurich,
under the General Account No. 469857 totaled
$3,597,544.00
I. XANDY-WINTROP: CHARIS-SCOLARIVALAMO-SPINUS-AVERTINA FOUNDATION
ACCOUNTS
31. This is the most intricate and complicated account
group. As the Flow Chart hereof shows, two (2) groups
under the foundation organized by Marcos
dummies/nominees for FM's benefit, eventually joined
together and became one (1) account group under the
AVERTINA FOUNDATION for the benefit of both FM
and Imelda. This is the biggest group from where the
$50-M investment fund of the Marcoses was drawn
when they bought the Central Bank's dollardenominated treasury notes with high-yielding interests.
32. On March 20, 1968, after his second year in the
presidency, Marcos opened bank accounts with SKA
using an alias or pseudonym WILLIAM SAUNDERS,
apparently to hide his true identity. The next day, March
21, 1968, his First Lady, Mrs. Imelda Marcos also
opened her own bank accounts with the same bank
using an American-sounding alias, JANE RYAN. Found
among the voluminous documents in Malacaang
shortly after they fled to Hawaii in haste that fateful
night of February 25, 1986, were accomplished forms
for "Declaration/Specimen Signatures" submitted by the
Marcos couple. Under the caption "signature(s)"
Ferdinand and Imelda signed their real names as well
as their respective aliases underneath. These accounts

were actively operated and maintained by the Marcoses for

about two (2) years until their closure sometime in February,
1970 and the balances transferred to XANDY FOUNDATION.
33. The XANDY FOUNDATION was established on March 3,
1970 in Vaduz. C.W. Fessler, C. Souviron and E. Scheller
were named as members of the Board of Trustees.
34. FM and Imelda issued the written mandate to establish the
foundation to Markus Geel of SKA on March 3, 1970. In the
handwritten Regulations signed by the Marcos couple as well
as in the type-written Regulations signed by Markus Geel both
dated February 13, 1970, the Marcos spouses were named
the first beneficiaries, the surviving spouse as the second
beneficiary and the Marcos children Imee, Ferdinand, Jr.
(Bongbong) and Irene as equal third beneficiaries.
35. The XANDY FOUNDATION was renamed WINTROP
FOUNDATION on August 29, 1978. The Board of Trustees
remained the same at the outset. However, on March 27,
1980, Souviron was replaced by Dr. Peter Ritter. On March 10.
1981, Ferdinand and Imelda Marcos issued a written order to
the Board of Wintrop to liquidate the foundation and transfer
all its assets to Bank Hofmann in Zurich in favor of FIDES
TRUST COMPANY. Later, WINTROP FOUNDATION was
dissolved.
36. The AVERTINA FOUNDATION was established on May
13, 1981 in Vaduz with Atty. Ivo Beck and Limag Management,
a wholly-owned subsidiary of FIDES TRUST CO., as members
of the Board of Trustees. Two (2) account categories, namely:
CAR and NES, were opened on September 10, 1981. The
beneficial owner of AVERTINA was not made known to the
bank since the FIDES TRUST CO. acted as fiduciary.
However, the securities listed in the safe deposit register of
WINTROP FOUNDATION Category R as of December 31,
1980 were the same as those listed in the register of
AVERTINA FOUNDATION Category CAR as of December 31,
1981. Likewise, the securities listed in the safe deposit register
of WINTROP FOUNDATION Category S as of December 31,
1980 were the same as those listed in the register of Avertina
Category NES as of December 31, 1981.Under the
circumstances, it is certain that the beneficial successor of
WINTROP FOUNDATION is AVERTINA FOUNDATION. The
balance of Category CAR as of December 31, 1989 amounted
to US$231,366,894.00 while that of Category NES as of 1231-83 was US$8,647,190.00. Latest documents received from

Swiss authorities included a declaration signed by

IVO Beck stating that the beneficial owners of
AVERTINA FOUNDATION are FM and Imelda.
Another document signed by G. Raber of SKA
indicates that Avertina Foundation is owned by the
"Marcos Families."
37. The other groups of foundations that eventually
joined AVERTINA were also established by FM
through his dummies, which started with the
CHARIS FOUNDATION.
38. The CHARIS FOUNDATION was established in
VADUZ on December 27, 1971. Walter Fessler and
Ernst Scheller of SKA and Dr. Peter Ritter were
named as directors. Dr. Theo Bertheau, SKA legal
counsel, acted as founding director in behalf of FM
by virtue of the mandate and agreement dated
November 12, 1971. FM himself was named the first
beneficiary and Xandy Foundation as second
beneficiary in accordance with the handwritten
instructions of FM on November 12, 1971 and the
Regulations. FM gave a power of attorney to
Roberto S. Benedicto on February 15, 1972 to act in
his behalf with regard to Charis Foundation.
39. On December 13, 1974, Charis Foundation was
renamed Scolari Foundation but the directors
remained the same. On March 11, 1981 FM ordered
in writing that the Valamo Foundation be liquidated
and all its assets be transferred to Bank Hofmann,
AG in favor of Fides Trust Company under the
account "Reference OMAL". The Board of Directors
decided on the immediate dissolution of Valamo
Foundation on June 25, 1981.
40 The SPINUS FOUNDATION was established on
May 13, 1981 in Vaduz with Atty. Ivo Beck and
Limag Management, a wholly-owned subsidiary of
Fides Trust Co., as members of the Foundation's
Board of Directors. The account was officially
opened with SKA on September 10, 1981. The
beneficial owner of the foundation was not made
known to the bank since Fides Trust Co. acted as
fiduciary. However, the list of securities in the safe
deposit register of Valamo Foundation as of
December 31, 1980 are practically the same with

those listed in the safe deposit register of Spinus

Foundation as of December 31, 1981. Under the
circumstances, it is certain that the Spinus Foundation
is the beneficial successor of the Valamo Foundation.
41. On September 6, 1982, there was a written
instruction from Spinus Foundation to SKA to close its
Swiss Franc account and transfer the balance to
Avertina Foundation. In July/August, 1982, several
transfers from the foundation's German marks and US
dollar accounts were made to Avertina Category CAR
totaling DM 29.5-M and $58-M, respectively. Moreover,
a comparison of the list of securities of the Spinus
Foundation as of February 3, 1982 with the safe deposit
slips of the Avertina Foundation Category CAR as of
August 19, 1982 shows that all the securities of Spinus
were transferred to Avertina.
J. TRINIDAD-RAYBY-PALMY FOUNDATION
ACCOUNTS
42. The Trinidad Foundation was organized on August
26, 1970 in Vaduz with C.W. Fessler and E. Scheller of
SKA and Dr. Otto Tondury as the foundation's directors.
Imelda issued a written mandate to establish the
foundation to Markus Geel on August 26, 1970. The
regulations as well as the agreement, both dated
August 28, 1970 were likewise signed by Imelda.
Imelda was named the first beneficiary and her children
Imelda (Imee), Ferdinand, Jr. (Bongbong) and, Irene
were named as equal second beneficiaries.

Foundation to Trinidad Foundation and to subsequently

liquidate Rayby. On the same date, she issued a written order
to the board of Trinidad to dissolve the foundation and transfer
all its assets to Bank Hofmann in favor of Fides Trust Co.
Under the account "Reference Dido," Rayby was dissolved on
April 6, 1981 and Trinidad was liquidated on August 3, 1981.
44. The PALMY FOUNDATION was established on May 13,
1981 in Vaduz with Dr. Ivo Beck and Limag Management, a
wholly-owned subsidiary of Fides Trust Co, as members of the
Foundation's Board of Directors. The account was officially
opened with the SKA on September 10, 1981. The beneficial
owner was not made known to the bank since Fides Trust Co.
acted as fiduciary. However, when one compares the listing of
securities in the safe deposit register of Trinidad Foundation
as of December 31,1980 with that of the Palmy Foundation as
of December 31, 1980, one can clearly see that practically the
same securities were listed. Under the circumstances, it is
certain that the Palmy Foundation is the beneficial successor
of the Trinidad Foundation.
45. As of December 31, 1989, the ending balance of the bank
accounts of Palmy Foundation under General Account No.
391528 is $17,214,432.00.
46. Latest documents received from Swiss Authorities
included a declaration signed by Dr. Ivo Beck stating that the
beneficial owner of Palmy Foundation is Imelda. Another
document signed by Raber shows that the said Palmy
Foundation is owned by "Marcos Familie".
K. ROSALYS-AGUAMINA FOUNDATION ACCOUNTS

43. Rayby Foundation was established on June 22,

1973 in Vaduz with Fessler, Scheller and Ritter as
members of the board of directors. Imelda issued a
written mandate to Dr. Theo Bertheau to establish the
foundation with a note that the foundation's
capitalization as well as the cost of establishing it be
debited against the account of Trinidad Foundation.
Imelda was named the first and only beneficiary of
Rayby foundation. According to written information from
SKA dated November 28, 1988, Imelda apparently had
the intention in 1973 to transfer part of the assets of
Trinidad Foundation to another foundation, thus the
establishment of Rayby Foundation. However, transfer
of assets never took place. On March 10, 1981, Imelda
issued a written order to transfer all the assets of Rayby

47. Rosalys Foundation was established in 1971 with FM as

the beneficiary. Its Articles of Incorporation was executed on
September 24, 1971 and its By-Laws on October 3, 1971. This
foundation maintained several accounts with Swiss Bank
Corporation (SBC) under the general account 51960 where
most of the bribe monies from Japanese suppliers were
hidden.
48. On December 19, 1985, Rosalys Foundation was
liquidated and all its assets were transferred to Aguamina
Corporation's (Panama) Account No. 53300 with SBC. The
ownership by Aguamina Corporation of Account No. 53300 is
evidenced by an opening account documents from the bank.
J. Christinaz and R.L. Rossier, First Vice-President and Senior

Vice President, respectively, of SBC, Geneva issued

a declaration dated September 3, 1991 stating that
the by-laws dated October 3, 1971 governing
Rosalys Foundation was the same by-law applied to
Aguamina Corporation Account No. 53300. They
further confirmed that no change of beneficial owner
was involved while transferring the assets of
Rosalys to Aguamina. Hence, FM remains the
beneficiary of Aguamina Corporation Account No.
53300.
As of August 30, 1991, the ending balance of
Account No. 53300 amounted to $80,566,483.00.
L. MALER FOUNDATION ACCOUNTS
49. Maler was first created as an establishment. A
statement of its rules and regulations was found
among Malacaang documents. It stated, among
others, that 50% of the Company's assets will be for
sole and full right disposal of FM and Imelda during
their lifetime, which the remaining 50% will be
divided in equal parts among their children. Another
Malacaang document dated October 19,1968 and
signed by Ferdinand and Imelda pertains to the
appointment of Dr. Andre Barbey and Jean Louis
Sunier as attorneys of the company and as
administrator and manager of all assets held by the
company. The Marcos couple, also mentioned in the
said document that they bought the Maler
Establishment from SBC, Geneva. On the same
date, FM and Imelda issued a letter addressed to
Maler Establishment, stating that all instructions to
be transmitted with regard to Maler will be signed
with the word "JOHN LEWIS". This word will have
the same value as the couple's own personal
signature. The letter was signed by FM and Imelda
in their signatures and as John Lewis.
50. Maler Establishment opened and maintained
bank accounts with SBC, Geneva. The opening
bank documents were signed by Dr. Barbey and Mr.
Sunnier as authorized signatories.
51. On November 17, 1981, it became necessary to
transform Maler Establishment into a foundation.
Likewise, the attorneys were changed to Michael

Amaudruz, et. al. However, administration of the assets

was left to SBC. The articles of incorporation of Maler
Foundation registered on November 17, 1981 appear to
be the same articles applied to Maler Establishment. On
February 28, 1984, Maler Foundation cancelled the
power of attorney for the management of its assets in
favor of SBC and transferred such power to Sustrust
Investment Co., S.A.
52. As of June 6, 1991, the ending balance of Maler
Foundation's Account Nos. 254,508 BT and 98,929 NY
amount SF 9,083,567 and SG 16,195,258, respectively,
for a total of SF 25,278,825.00. GM only until December
31, 1980. This account was opened by Maler when it
was still an establishment which was subsequently
transformed into a foundation.
53. All the five (5) group accounts in the over-all flow
chart have a total balance of about Three Hundred Fifty
Six Million Dollars ($356,000,000.00) as shown by
Annex "R-5" hereto attached as integral part hereof.
xxx

x x x.27

Respondents Imelda R. Marcos, Maria Imelda M. Manotoc,

Irene M. Araneta and Ferdinand Marcos, Jr., in their answer,
stated the following:
xxx

xxx

xxx

4. Respondents ADMIT paragraphs 3 and 4 of the

Petition.
5. Respondents specifically deny paragraph 5 of the
Petition in so far as it states that summons and other
court processes may be served on Respondent Imelda
R. Marcos at the stated address the truth of the matter
being that Respondent Imelda R. Marcos may be
served with summons and other processes at No. 10-B
Bel Air Condominium 5022 P. Burgos Street, Makati,
Metro Manila, and ADMIT the rest.
xxx

xxx

xxx

10. Respondents ADMIT paragraph 11 of the Petition.

11. Respondents specifically DENY paragraph 12 of the

Petition for lack of knowledge sufficient to form a belief as to
the truth of the allegation since Respondents were not privy to
the transactions and that they cannot remember exactly the
truth as to the matters alleged.
12. Respondents specifically DENY paragraph 13 of the
Petition for lack of knowledge or information sufficient to form
a belief as to the truth of the allegation since Respondents
cannot remember with exactitude the contents of the alleged
ITRs and Balance Sheet.
13. Respondents specifically DENY paragraph 14 of the
Petition for lack of knowledge or information sufficient to form
a belief as to the truth of the allegation since Respondents
cannot remember with exactitude the contents of the alleged
ITRs.
14. Respondents specifically DENY paragraph 15 of the
Petition for lack of knowledge or information sufficient to form
a belief as to the truth of the allegation since Respondents
cannot remember with exactitude the contents of the alleged
ITRs.
15. Respondents specifically DENY paragraph 16 of the
Petition for lack of knowledge or information sufficient to form
a belief as to the truth of the allegation since Respondents
cannot remember with exactitude the contents of the alleged
ITRs.
16. Respondents specifically DENY paragraph 17 of the
Petition insofar as it attributes willful duplicity on the part of the
late President Marcos, for being false, the same being pure
conclusions based on pure assumption and not allegations of
fact; and specifically DENY the rest for lack of knowledge or
information sufficient to form a belief as to the truth of the
allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs or the attachments
thereto.
17. Respondents specifically DENY paragraph 18 of the
Petition for lack of knowledge or information sufficient to form
a belief as to the truth of the allegation since Respondents
cannot remember with exactitude the contents of the alleged
ITRs.

18. Respondents specifically DENY paragraph 19 of

the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the
allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs and that
they are not privy to the activities of the BIR.
19. Respondents specifically DENY paragraph 20 of
the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the
allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
20. Respondents specifically DENY paragraph 21 of
the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the
allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
21. Respondents specifically DENY paragraph 22 of
the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the
allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
22. Respondents specifically DENY paragraph 23
insofar as it alleges that Respondents clandestinely
stashed the country's wealth in Switzerland and hid
the same under layers and layers of foundation and
corporate entities for being false, the truth being that
Respondents aforesaid properties were lawfully
acquired.
23. Respondents specifically DENY paragraphs 24,
25, 26, 27, 28, 29 and 30 of the Petition for lack of
knowledge or information sufficient to form a belief
as to the truth of the allegation since Respondents
were not privy to the transactions regarding the
alleged Azio-Verso-Vibur Foundation accounts,
except that as to Respondent Imelda R. Marcos she
specifically remembers that the funds involved were
lawfully acquired.
24. Respondents specifically DENY paragraphs 31,
32, 33, 34, 35, 36,37, 38, 39, 40, and 41 of the
Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the

allegations since Respondents are not privy to the

transactions and as to such transaction they were privy
to they cannot remember with exactitude the same
having occurred a long time ago, except that as to
Respondent Imelda R. Marcos she specifically
remembers that the funds involved were lawfully
acquired.
25. Respondents specifically DENY paragraphs 42, 43,
44, 45, and 46, of the Petition for lack of knowledge or
information sufficient to form a belief as to the truth of
the allegations since Respondents were not privy to the
transactions and as to such transaction they were privy
to they cannot remember with exactitude the same
having occurred a long time ago, except that as to
Respondent Imelda R. Marcos she specifically
remembers that the funds involved were lawfully
acquired.
26. Respondents specifically DENY paragraphs 49, 50,
51 and 52, of the Petition for lack of knowledge or
information sufficient to form a belief as to the truth of
the allegations since Respondents were not privy to the
transactions and as to such transaction they were privy
to they cannot remember with exactitude the same
having occurred a long time ago, except that as to
Respondent Imelda R. Marcos she specifically
remembers that the funds involved were lawfully
acquired.
Upon careful perusal of the foregoing, the Court finds that
respondent Mrs. Marcos and the Marcos children indubitably
failed to tender genuine issues in their answer to the petition for
forfeiture. A genuine issue is an issue of fact which calls for the
presentation of evidence as distinguished from an issue which
is fictitious and contrived, set up in bad faith or patently lacking
in substance so as not to constitute a genuine issue for trial.
Respondents' defenses of "lack of knowledge for lack of privity"
or "(inability to) recall because it happened a long time ago" or,
on the part of Mrs. Marcos, that "the funds were lawfully
acquired" are fully insufficient to tender genuine issues.
Respondent Marcoses' defenses were a sham and evidently
calibrated to compound and confuse the issues.
The following pleadings filed by respondent Marcoses are
replete with indications of a spurious defense:

(a) Respondents' Answer dated October 18, 1993;

(b) Pre-trial Brief dated October 4, 1999 of Mrs. Marcos,
Supplemental Pre-trial Brief dated October 19, 1999 of
Ferdinand, Jr. and Mrs. Imee Marcos-Manotoc adopting the
pre-trial brief of Mrs. Marcos, and Manifestation dated October
19, 1999 of Irene Marcos-Araneta adopting the pre-trial briefs
of her co- respondents;
(c) Opposition to Motion for Summary Judgment dated March
21, 2000, filed by Mrs. Marcos which the other respondents
(Marcos children) adopted;
(d) Demurrer to Evidence dated May 2, 2000 filed by Mrs.
Marcos and adopted by the Marcos children;
(e) Motion for Reconsideration dated September 26, 2000 filed
by Mrs. Marcos; Motion for Reconsideration dated October 5,
2000 jointly filed by Mrs. Manotoc and Ferdinand, Jr., and
Supplemental Motion for Reconsideration dated October 9,
2000 likewise jointly filed by Mrs. Manotoc and Ferdinand, Jr.;
(f) Memorandum dated December 12, 2000 of Mrs. Marcos
and Memorandum dated December 17, 2000 of the Marcos
children;
(g) Manifestation dated May 26, 1998; and
(h) General/Supplemental Agreement dated December 23,
1993.
An examination of the foregoing pleadings is in order.

Respondents' Answer dated October 18, 1993.

In their answer, respondents failed to specifically deny each and every

allegation contained in the petition for forfeiture in the manner required
by the rules. All they gave were stock answers like "they have no
sufficient knowledge" or "they could not recall because it happened a
long time ago," and, as to Mrs. Marcos, "the funds were lawfully
acquired," without stating the basis of such assertions.
Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:

A defendant must specify each material allegation of

fact the truth of which he does not admit and,
whenever practicable, shall set forth the substance
of the matters upon which he relies to support his
denial. Where a defendant desires to deny only a
part of an averment, he shall specify so much of it as
is true and material and shall deny the remainder.
Where a defendant is without knowledge or
information sufficient to form a belief as to the truth
of a material averment made in the complaint, he
shall so state, and this shall have the effect of a
denial.28
The purpose of requiring respondents to make a specific
denial is to make them disclose facts which will disprove the
allegations of petitioner at the trial, together with the matters
they rely upon in support of such denial. Our jurisdiction
adheres to this rule to avoid and prevent unnecessary
expenses and waste of time by compelling both parties to lay
their cards on the table, thus reducing the controversy to its
true terms. As explained in Alonso vs. Villamor,29

Respondents' denials in their answer at the Sandiganbayan

were based on their alleged lack of knowledge or information
sufficient to form a belief as to the truth of the allegations of the
petition.
It is true that one of the modes of specific denial under the rules
is a denial through a statement that the defendant is without
knowledge or information sufficient to form a belief as to the
truth of the material averment in the complaint. The question,
however, is whether the kind of denial in respondents' answer
qualifies as the specific denial called for by the rules. We do not
think so. In Morales vs. Court of Appeals,30 this Court ruled that
if an allegation directly and specifically charges a party with
having done, performed or committed a particular act which the
latter did not in fact do, perform or commit, a categorical and
express denial must be made.
Here, despite the serious and specific allegations against them,
the Marcoses responded by simply saying that they had no
knowledge or information sufficient to form a belief as to the
truth of such allegations. Such a general, self-serving claim of
ignorance of the facts alleged in the petition for forfeiture was
insufficient to raise an issue. Respondent Marcoses should
have positively stated how it was that they were supposedly
ignorant of the facts alleged.31

A litigation is not a game of technicalities in which

one, more deeply schooled and skilled in the subtle
art of movement and position, entraps and destroys
the other. It is rather a contest in which each
contending party fully and fairly lays before the court To elucidate, the allegation of petitioner Republic in paragraph
the facts in issue and then, brushing aside as wholly 23 of the petition for forfeiture stated:
trivial and indecisive all imperfections of form and
technicalities of procedure, asks that justice be done
23. The following presentation very clearly and
upon the merits. Lawsuits, unlike duels, are not to be
overwhelmingly show in detail how both respondents
won by a rapier's thrust.
clandestinely stashed away the country's wealth to
On the part of Mrs. Marcos, she claimed that the funds were
lawfully acquired. However, she failed to particularly state
the ultimate facts surrounding the lawful manner or mode of
acquisition of the subject funds. Simply put, she merely
stated in her answer with the other respondents that the
funds were "lawfully acquired" without detailing how exactly
these funds were supposedly acquired legally by them. Even
in this case before us, her assertion that the funds were
lawfully acquired remains bare and unaccompanied by any
factual support which can prove, by the presentation of
evidence at a hearing, that indeed the funds were acquired
legitimately by the Marcos family.

Switzerland and hid the same under layers upon layers

of foundations and other corporate entities to prevent its
detection. Through their dummies/nominees, fronts or
agents who formed those foundations or corporate
entities, they opened and maintained numerous bank
accounts. But due to the difficulty if not the impossibility
of detecting and documenting all those secret accounts
as well as the enormity of the deposits therein hidden,
the following presentation is confined to five identified
accounts groups, with balances amounting to about
$356-M with a reservation for the filing of a
supplemental or separate forfeiture complaint should
the need arise.32
Respondents' lame denial of the aforesaid allegation was:

22. Respondents specifically DENY paragraph 23 insofar as it

alleges that Respondents clandestinely stashed the country's
wealth in Switzerland and hid the same under layers and
layers of foundations and corporate entities for being false, the
truth being that Respondents' aforesaid properties were
lawfully acquired.33
Evidently, this particular denial had the earmark of what is called in the
law on pleadings as a negative pregnant, that is, a denial pregnant
with the admission of the substantial facts in the pleading responded
to which are not squarely denied. It was in effect an admission of the
averments it was directed at.34 Stated otherwise, a negative pregnant
is a form of negative expression which carries with it an affirmation or
at least an implication of some kind favorable to the adverse party. It is
a denial pregnant with an admission of the substantial facts alleged in
the pleading. Where a fact is alleged with qualifying or modifying
language and the words of the allegation as so qualified or modified
are literally denied, has been held that the qualifying circumstances
alone are denied while the fact itself is admitted. 35
In the instant case, the material allegations in paragraph 23 of the said
petition were not specifically denied by respondents in paragraph 22 of
their answer. The denial contained in paragraph 22 of the answer was
focused on the averment in paragraph 23 of the petition for forfeiture
that "Respondents clandestinely stashed the country's wealth in
Switzerland and hid the same under layers and layers of foundations
and corporate entities." Paragraph 22 of the respondents' answer was
thus a denial pregnant with admissions of the following substantial
facts:
(1) the Swiss bank deposits existed and
(2) that the estimated sum thereof was US$356 million as of
December, 1990.
Therefore, the allegations in the petition for forfeiture on the existence
of the Swiss bank deposits in the sum of about US$356 million, not
having been specifically denied by respondents in their answer, were
deemed admitted by them pursuant to Section 11, Rule 8 of the 1997
Revised Rules on Civil Procedure:
Material averment in the complaint, xxx shall be deemed
admitted when not specifically denied. xxx. 36

By the same token, the following unsupported denials of

respondents in their answer were pregnant with admissions
of the substantial facts alleged in the Republic's petition for
forfeiture:

The matters referred to in paragraphs 23 to 26 of the

respondents' answer pertained to the creation of five groups of
accounts as well as their respective ending balances and
attached documents alleged in paragraphs 24 to 52 of the
Republic's petition for forfeiture. Respondent Imelda R. Marcos
never specifically denied the existence of the Swiss funds. Her
claim that "the funds involved were lawfully acquired" was an
acknowledgment on her part of the existence of said deposits.
This only reinforced her earlier admission of the allegation in
paragraph 23 of the petition for forfeiture regarding the
existence of the US$356 million Swiss bank deposits.

23. Respondents specifically DENY paragraphs 24,

25, 26, 27, 28, 29 and 30 of the Petition for lack of
knowledge or information sufficient to form a belief
as to the truth of the allegation since respondents
were not privy to the transactions regarding the
alleged Azio-Verso-Vibur Foundation accounts,
except that, as to respondent Imelda R. Marcos, she
specifically remembers that the funds involved were The allegations in paragraphs 4737 and 4838 of the petition for
lawfully acquired.
forfeiture referring to the creation and amount of the deposits of
the Rosalys-Aguamina Foundation as well as the averment in
39
24. Respondents specifically DENY paragraphs 31, paragraph 52-a of the said petition with respect to the sum of
the
Swiss
bank
deposits estimated to be US$356 million were
32, 33, 34, 35, 36, 37, 38, 39, 40, 41 of the Petition
again
not
specifically
denied by respondents in their answer.
for lack of knowledge or information sufficient to form
The
respondents
did
not
at all respond to the issues raised in
a belief as to the truth of the allegations since
these
paragraphs
and
the
existence, nature and amount of the
respondents were not privy to the transactions and
Swiss funds were therefore deemed admitted by them. As held
as to such transactions they were privy to, they
in Galofa vs. Nee Bon Sing,40 if a defendant's denial is a
cannot remember with exactitude the same having
negative pregnant, it is equivalent to an admission.
occurred a long time ago, except as to respondent
Imelda R. Marcos, she specifically remembers that
the funds involved were lawfully acquired.
Moreover, respondents' denial of the allegations in the petition
for forfeiture "for lack of knowledge or information sufficient to
25. Respondents specifically DENY paragraphs 42, form a belief as to the truth of the allegations since respondents
were not privy to the transactions" was just a pretense. Mrs.
43, 45, and 46 of the petition for lack of knowledge
Marcos' privity to the transactions was in fact evident from her
or information sufficient to from a belief as to the
signatures on some of the vital documents41 attached to the
truth of the allegations since respondents were not
petition for forfeiture which Mrs. Marcos failed to specifically
privy to the transactions and as to such transaction
deny as required by the rules.42
they were privy to, they cannot remember with
exactitude, the same having occurred a long time
ago, except that as to respondent Imelda R. Marcos, It is worthy to note that the pertinent documents attached to the
she specifically remembers that the funds involved
petition for forfeiture were even signed personally by
were lawfully acquired.
respondent Mrs. Marcos and her late husband, Ferdinand E.
Marcos, indicating that said documents were within their
26. Respondents specifically DENY paragraphs 49, knowledge. As correctly pointed out by Sandiganbayan Justice
Francisco Villaruz, Jr. in his dissenting opinion:
50, 51 and 52 of the petition for lack of knowledge
and information sufficient to form a belief as to the
truth of the allegations since respondents were not
The pattern of: 1) creating foundations, 2) use of
privy to the transactions and as to such transaction
pseudonyms and dummies, 3) approving regulations of
they were privy to they cannot remember with
the Foundations for the distribution of capital and
exactitude the same having occurred a long time
income of the Foundations to the First and Second
ago, except that as to respondent Imelda R. Marcos,
beneficiary (who are no other than FM and his family),
she specifically remembers that the funds involved
4) opening of bank accounts for the Foundations, 5)
were lawfully acquired.
changing the names of the Foundations, 6) transferring

funds and assets of the Foundations to other Foundations or

Fides Trust, 7) liquidation of the Foundations as substantiated
by the Annexes U to U-168, Petition [for forfeiture] strongly
indicate that FM and/or Imelda were the real owners of the
assets deposited in the Swiss banks, using the Foundations
as dummies.43
How could respondents therefore claim lack of sufficient knowledge or
information regarding the existence of the Swiss bank deposits and
the creation of five groups of accounts when Mrs. Marcos and her late
husband personally masterminded and participated in the formation
and control of said foundations? This is a fact respondent Marcoses
were never able to explain.
Not only that. Respondents' answer also technically admitted the
genuineness and due execution of the Income Tax Returns (ITRs) and
the balance sheets of the late Ferdinand E. Marcos and Imelda R.
Marcos attached to the petition for forfeiture, as well as the veracity of
the contents thereof.
The answer again premised its denials of said ITRs and balance
sheets on the ground of lack of knowledge or information sufficient to
form a belief as to the truth of the contents thereof. Petitioner correctly
points out that respondents' denial was not really grounded on lack of
knowledge or information sufficient to form a belief but was based on
lack of recollection. By reviewing their own records, respondent
Marcoses could have easily determined the genuineness and due
execution of the ITRs and the balance sheets. They also had the
means and opportunity of verifying the same from the records of the
BIR and the Office of the President. They did not.
When matters regarding which respondents claim to have no
knowledge or information sufficient to form a belief are plainly and
necessarily within their knowledge, their alleged ignorance or lack of
information will not be considered a specific denial. 44 An unexplained
denial of information within the control of the pleader, or is readily
accessible to him, is evasive and is insufficient to constitute an
effective denial.45
The form of denial adopted by respondents must be availed of with
sincerity and in good faith, and certainly not for the purpose of
confusing the adverse party as to what allegations of the petition are
really being challenged; nor should it be made for the purpose of
delay.46 In the instant case, the Marcoses did not only present
unsubstantiated assertions but in truth attempted to mislead and
deceive this Court by presenting an obviously contrived defense.

Simply put, a profession of ignorance about a fact which is

patently and necessarily within the pleader's knowledge or
means of knowing is as ineffective as no denial at
all.47 Respondents' ineffective denial thus failed to properly
tender an issue and the averments contained in the petition
for forfeiture were deemed judicially admitted by them.
As held in J.P. Juan & Sons, Inc. vs. Lianga Industries, Inc.:
Its "specific denial" of the material allegation of the
petition without setting forth the substance of the
matters relied upon to support its general denial,
when such matters were plainly within its knowledge
and it could not logically pretend ignorance as to the
same, therefore, failed to properly tender on issue.48
Thus, the general denial of the Marcos children of the
allegations in the petition for forfeiture "for lack of knowledge
or information sufficient to form a belief as to the truth of the
allegations since they were not privy to the transactions"
cannot rightfully be accepted as a defense because they are
the legal heirs and successors-in-interest of Ferdinand E.
Marcos and are therefore bound by the acts of their father
vis-a-vis the Swiss funds.

xxx
(f) the number and names of the witnesses, and the
substance of their respective testimonies.49
It is unquestionably within the court's power to require the
parties to submit their pre-trial briefs and to state the number of
witnesses intended to be called to the stand, and a brief
summary of the evidence each of them is expected to give as
well as to disclose the number of documents to be submitted
with a description of the nature of each. The tenor and character
of the testimony of the witnesses and of the documents to be
deduced at the trial thus made known, in addition to the
particular issues of fact and law, it becomes apparent if genuine
issues are being put forward necessitating the holding of a trial.
Likewise, the parties are obliged not only to make a formal
identification and specification of the issues and their proofs,
and to put these matters in writing and submit them to the court
within the specified period for the prompt disposition of the
action.50
The pre-trial brief of Mrs. Marcos, as subsequently adopted by
respondent Marcos children, merely stated:
xxx

1993

PRE-TRIAL BRIEF DATED OCTOBER 18,

WITNESSES

The pre-trial brief of Mrs. Marcos was adopted by the three

Marcos children. In said brief, Mrs. Marcos stressed that the
funds involved were lawfully acquired. But, as in their
answer, they failed to state and substantiate how these
funds were acquired lawfully. They failed to present and
attach even a single document that would show and prove
the truth of their allegations. Section 6, Rule 18 of the 1997
Rules of Civil Procedure provides:

4.1 Respondent Imelda will present herself as a witness

and reserves the right to present additional witnesses
as may be necessary in the course of the trial.

The parties shall file with the court and serve on the adverse
party, x x x their respective pre-trial briefs which shall
contain, among others:

5.1 Respondent Imelda reserves the right to present

and introduce in evidence documents as may be
necessary in the course of the trial.

xxx
(d) the documents or exhibits to be presented,
stating the purpose thereof;

xxx
DOCUMENTARY EVIDENCE

Mrs. Marcos did not enumerate and describe the documents

constituting her evidence. Neither the names of witnesses nor
the nature of their testimony was stated. What alone appeared
certain was the testimony of Mrs. Marcos only who in fact had
previously claimed ignorance and lack of knowledge. And even
then, the substance of her testimony, as required by the rules,

was not made known either. Such cunning tactics of respondents are
totally unacceptable to this Court. We hold that, since no genuine
issue was raised, the case became ripe for summary judgment.

OPPOSITION TO MOTION FOR SUMMARY

JUDGMENT
DATED MARCH 21, 2000
The opposition filed by Mrs. Marcos to the motion for summary
judgment dated March 21, 2000 of petitioner Republic was merely
adopted by the Marcos children as their own opposition to the said
motion. However, it was again not accompanied by affidavits,
depositions or admissions as required by Section 3, Rule 35 of the
1997 Rules on Civil Procedure:
x x x The adverse party may serve opposing affidavits,
depositions, or admissions at least three (3) days before
hearing. After hearing, the judgment sought shall be rendered
forthwith if the pleadings, supporting affidavits, depositions,
and admissions on file, show that, except as to the amount of
damages, there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter
of law.51
The absence of opposing affidavits, depositions and admissions to
contradict the sworn declarations in the Republic's motion only
demonstrated that the averments of such opposition were not genuine
and therefore unworthy of belief.

Demurrer to Evidence dated May 2, 2000;52

Motions for Reconsideration;53 and Memoranda
of Mrs. Marcos and the Marcos children54

All these pleadings again contained no allegations of facts showing

their lawful acquisition of the funds. Once more, respondents merely
made general denials without alleging facts which would have been
admissible in evidence at the hearing, thereby failing to raise genuine
issues of fact.
Mrs. Marcos insists in her memorandum dated October 21, 2002 that,
during the pre-trial, her counsel stated that his client was just a
beneficiary of the funds, contrary to petitioner Republic's allegation
that Mrs. Marcos disclaimed ownership of or interest in the funds.

This is yet another indication that respondents presented a

fictitious defense because, during the pre-trial, Mrs. Marcos
and the Marcos children denied ownership of or interest in
the Swiss funds:
PJ Garchitorena:
Make of record that as far as Imelda Marcos
is concerned through the statement of Atty.
Armando M. Marcelo that the US$360
million more or less subject matter of the
instant lawsuit as allegedly obtained from
the various Swiss Foundations do not
belong to the estate of Marcos or to Imelda
Marcos herself. That's your statement of
facts?
Atty. MARCELO:
Yes, Your Honor.
PJ Garchitorena:
That's it. Okay. Counsel for Manotoc and
Manotoc, Jr. What is your point here? Does
the estate of Marcos own anything of the
$360 million subject of this case.
Atty. TECSON:
We joined the Manifestation of Counsel.
PJ Garchitorena:
You do not own anything?
Atty. TECSON:
Yes, Your Honor.
PJ Garchitorena:
Counsel for Irene Araneta?
Atty. SISON:

I join the position taken by my other

compaeros here, Your Honor.
xxx
Atty. SISON:
Irene Araneta as heir do (sic) not own any of
the amount, Your Honor.55
We are convinced that the strategy of respondent Marcoses
was to confuse petitioner Republic as to what facts they would
prove or what issues they intended to pose for the court's
resolution. There is no doubt in our mind that they were leading
petitioner Republic, and now this Court, to perplexity, if not
trying to drag this forfeiture case to eternity.

MRS.

Manifestation dated May 26, 1998 filed by

In the Compromise/Supplemental Agreements, respondent Marcoses

sought to implement the agreed distribution of the Marcos
assets, including the Swiss deposits. This was, to us, an unequivocal
admission of ownership by the Marcoses of the said deposits.
But, as already pointed out, during the pre-trial conference,
respondent Marcoses denied knowledge as well as ownership of the
Swiss funds.
Anyway we look at it, respondent Marcoses have put forth no real
defense. The "facts" pleaded by respondents, while ostensibly raising
important questions or issues of fact, in reality comprised mere
verbiage that was evidently wanting in substance and constituted no
genuine issues for trial.
We therefore rule that, under the circumstances, summary judgment is
proper.

In fact, it is the law itself which determines when summary judgment is

called for. Under the rules, summary judgment is appropriate when
there are no genuine issues of fact requiring the presentation of
evidence in a full-blown trial. Even if on their face the pleadings appear
to raise issue, if the affidavits, depositions and admissions show that
These pleadings of respondent Marcoses presented nothing but such issues are not genuine, then summary56judgment as prescribed
feigned defenses. In their earlier pleadings, respondents alleged by the rules must ensue as a matter of law.
either that they had no knowledge of the existence of the Swiss
In sum, mere denials, if unaccompanied by any fact which will be
deposits or that they could no longer remember anything as it
happened a long time ago. As to Mrs. Marcos, she remembered admissible in evidence at a hearing, are not sufficient to raise genuine
issues of fact and will not defeat a motion for summary judgment. 57 A
that it was lawfully acquired.
summary judgment is one granted upon motion of a party for an
expeditious settlement of the case, it appearing from the pleadings,
In her Manifestation dated May 26, 1998, Mrs. Marcos stated
depositions, admissions and affidavits that there are no important
that:
questions or issues of fact posed and, therefore, the movant is entitled
to a judgment as a matter of law. A motion for summary judgment is
COMES NOW undersigned counsel for respondent
premised on the assumption that the issues presented need not be
Imelda R. Marcos, and before this Honorable Court,
tried either because these are patently devoid of substance or that
most respectfully manifests:
there is no genuine issue as to any pertinent fact. It is a method
sanctioned by the Rules of Court for the prompt disposition of a civil
That respondent Imelda R, Marcos owns 90% of the
action where there exists no serious controversy.58 Summary judgment
subject matter of the above-entitled case, being the sole is a procedural device for the prompt disposition of actions in which
beneficiary of the dollar deposits in the name of the
the pleadings raise only a legal issue, not a genuine issue as to any
various foundations alleged in the case;
material fact. The theory of summary judgment is that, although an
answer may on its face appear to tender issues requiring trial, if it is
That in fact only 10% of the subject matter in the above- established by affidavits, depositions or admissions that those issues
entitled case belongs to the estate of the late President are not genuine but fictitious, the Court is justified in dispensing with
the trial and rendering summary judgment for petitioner.59
Ferdinand E. Marcos.
Marcos; General/Supplemental
Compromise
Agreement dated December 28, 1993

In the various annexes to the petition for forfeiture, petitioner

Republic attached sworn statements of witnesses who had
personal knowledge of the Marcoses' participation in the
illegal acquisition of funds deposited in the Swiss accounts
under the names of five groups or foundations. These sworn
statements substantiated the ill-gotten nature of the Swiss
bank deposits. In their answer and other subsequent
pleadings, however, the Marcoses merely made general
denials of the allegations against them without stating facts
admissible in evidence at the hearing, thereby failing to raise
any genuine issues of fact.
Under these circumstances, a trial would have served no
purpose at all and would have been totally unnecessary,
thus justifying a summary judgment on the petition for
forfeiture. There were no opposing affidavits to contradict the
sworn declarations of the witnesses of petitioner Republic,
leading to the inescapable conclusion that the matters raised
in the Marcoses' answer were false.

on March 10, 2000, petitioner Republic had bound itself to go to

trial on the basis of existing issues. Thus, it had legally waived
whatever right it had to move for summary judgment." 60

after service of a motion for summary judgment by the adverse party,

and that a party against whom a claim, counterclaim or cross-claim is
asserted may move for summary judgment at any time.

We do not think so. The alleged positive acts and express

admissions of the petitioner did not preclude it from filing a
motion for summary judgment.

However, some rules, particularly Rule 113 of the Rules of Civil

Practice of New York, specifically provide that a motion for summary
judgment may not be made until issues have been joined, that is, only
after an answer has been served. 62 Under said rule, after issues have
been joined, the motion for summary judgment may be made at any
stage of the litigation.63 No fixed prescriptive period is provided.

Rule 35 of the 1997 Rules of Civil Procedure provides:

Rule 35

Like Rule 113 of the Rules of Civil Practice of New York, our rules also
provide that a motion for summary judgment may not be made until
Summary Judgment
issues have been joined, meaning, the plaintiff has to wait for the
answer before he can move for summary judgment.64 And like the New
Section 1. Summary judgment for claimant. - A party
York rules, ours do not provide for a fixed reglementary period within
seeking to recover upon a claim, counterclaim, or cross- which to move for summary judgment.
claim or to obtain a declaratory relief may, at any time
after the pleading in answer thereto has been
served, move with supporting affidavits, depositions or This being so, the New York Supreme Court's interpretation of Rule
113 of the Rules of Civil Practice can be applied by analogy to the
admissions for a summary judgment in his favor upon
interpretation of Section 1, Rule 35, of our 1997 Rules of Civil
all or any part thereof.
Procedure.

Time and again, this Court has encountered cases like this
which are either only half-heartedly defended or, if the
semblance of a defense is interposed at all, it is only to delay
Section 2. Summary judgment for defending party. - A
disposition and gain time. It is certainly not in the interest of
party against whom a claim, counterclaim, or crossjustice to allow respondent Marcoses to avail of the appellate
claim is asserted or a declaratory relief is sought
remedies accorded by the Rules of Court to litigants in good
may, at any time, move with supporting affidavits,
faith, to the prejudice of the Republic and ultimately of the
depositions or admissions for a summary judgment in
Filipino people. From the beginning, a candid demonstration
his favor as to all or any part thereof. (Emphasis ours)61
of respondents' good faith should have been made to the
court below. Without the deceptive reasoning and
argumentation, this protracted litigation could have ended a Under the rule, the plaintiff can move for summary judgment "at
long time ago.
any time after the pleading in answer thereto (i.e., in answer to
the claim, counterclaim or cross-claim) has been served." No
Since 1991, when the petition for forfeiture was first filed, up fixed reglementary period is provided by the Rules. How else
does one construe the phrase "any time after the answer has
to the present, all respondents have offered are foxy
responses like "lack of sufficient knowledge or lack of privity" been served?"
or "they cannot recall because it happened a long time ago"
or, as to Mrs. Marcos, "the funds were lawfully acquired."
This issue is actually one of first impression. No local
But, whenever it suits them, they also claim ownership of
jurisprudence or authoritative work has touched upon this
90% of the funds and allege that only 10% belongs to the
matter. This being so, an examination of foreign laws and
Marcos estate. It has been an incredible charade from
jurisprudence, particularly those of the United States where
beginning to end.
many of our laws and rules were copied, is in order.
In the hope of convincing this Court to rule otherwise,
respondents Maria Imelda Marcos-Manotoc and Ferdinand
R. Marcos Jr. contend that "by its positive acts and express
admissions prior to filing the motion for summary judgment

Rule 56 of the Federal Rules of Civil Procedure provides that a

party seeking to recover upon a claim, counterclaim or crossclaim may move for summary judgment at any time after the
expiration of 20 days from the commencement of the action or

Under the New York rule, after the issues have been joined, the motion
for summary judgment may be made at any stage of the litigation. And
what exactly does the phrase "at any stage of the litigation" mean? In
Ecker vs. Muzysh,65 the New York Supreme Court ruled:
"PER CURIAM.
Plaintiff introduced her evidence and the defendants rested on
the case made by the plaintiff. The case was submitted. Owing
to the serious illness of the trial justice, a decision was not
rendered within sixty days after the final adjournment of the
term at which the case was tried. With the approval of the trial
justice, the plaintiff moved for a new trial under Section 442 of
the Civil Practice Act. The plaintiff also moved for summary
judgment under Rule 113 of the Rules of Civil Practice. The
motion was opposed mainly on the ground that, by
proceeding to trial, the plaintiff had waived her right to
summary judgment and that the answer and the opposing
affidavits raised triable issues. The amount due and unpaid
under the contract is not in dispute. The Special Term granted
both motions and the defendants have appealed.

The Special Term properly held that the answer and

the opposing affidavits raised no triable issue. Rule
113 of the Rules of Civil Practice and the Civil
Practice Act prescribe no limitation as to the
time when a motion for summary judgment must
be made. The object of Rule 113 is to empower
the court to summarily determine whether or not
a bona fide issue exists between the parties, and
there is no limitation on the power of the court to
make such a determination at any stage of the
litigation." (emphasis ours)
On the basis of the aforequoted disquisition, "any stage of
the litigation" means that "even if the plaintiff has proceeded
to trial, this does not preclude him from thereafter moving for
summary judgment."66
In the case at bar, petitioner moved for summary judgment
after pre-trial and before its scheduled date for presentation
of evidence. Respondent Marcoses argue that, by agreeing
to proceed to trial during the pre-trial conference, petitioner
"waived" its right to summary judgment.
This argument must fail in the light of the New York Supreme
Court ruling which we apply by analogy to this case.
In Ecker,67 the defendant opposed the motion for summary
judgment on a ground similar to that raised by the Marcoses,
that is, "that plaintiff had waived her right to summary
judgment" by her act of proceeding to trial. If, as correctly
ruled by the New York court, plaintiff was allowed to move for
summary judgment even after trial and submission of the
case for resolution, more so should we permit it in the
present case where petitioner moved for summary
judgment before trial.

In cases with political undertones like the one at bar, adverse

parties will often do almost anything to delay the proceedings in
the hope that a future administration sympathetic to them might
be able to influence the outcome of the case in their favor. This
is rank injustice we cannot tolerate.

respondent Marcoses through every remedy available to it, including

the motion for summary judgment.

Petitioner Republic initially filed its motion for summary judgment on

October 18, 1996. The motion was denied because of the pending
compromise agreement between the Marcoses and petitioner. But
The law looks with disfavor on long, protracted and expensive
during the pre-trial conference, the Marcoses denied ownership of the
litigation and encourages the speedy and prompt disposition of Swiss funds, prompting petitioner to file another motion for summary
cases. That is why the law and the rules provide for a number of judgment now under consideration by this Court. It was the
devices to ensure the speedy disposition of cases. Summary
subsequent events that transpired after the answer was filed,
judgment is one of them.
therefore, which prevented petitioner from filing the questioned motion.
It was definitely not because of neglect or inaction that petitioner filed
the (second) motion for summary judgment years after respondents'
Faithful therefore to the spirit of the law on summary judgment
which seeks to avoid unnecessary expense and loss of time in a answer to the petition for forfeiture.
trial, we hereby rule that petitioner Republic could validly move
for summary judgment any time after the respondents' answer
In invoking the doctrine of estoppel by laches, respondents must show
was filed or, for that matter, at any subsequent stage of the
not only unjustified inaction but also that some unfair injury to them
litigation. The fact that petitioner agreed to proceed to trial did
might result unless the action is barred.72
not in any way prevent it from moving for summary judgment, as
indeed no genuine issue of fact was ever validly raised by
This, respondents failed to bear out. In fact, during the pre-trial
respondent Marcoses.
conference, the Marcoses disclaimed ownership of the Swiss deposits.
Not being the owners, as they claimed, respondents did not have any
This interpretation conforms with the guiding principle enshrined vested right or interest which could be adversely affected by
in Section 6, Rule 1 of the 1997 Rules of Civil Procedure that
petitioner's alleged inaction.
the "[r]ules should be liberally construed in order to promote
their objective of securing a just, speedy and inexpensive
But even assuming for the sake of argument that laches had already
disposition of every action and proceeding."69
set in, the doctrine of estoppel or laches does not apply when the
government sues as a sovereign or asserts governmental rights. 73 Nor
Respondents further allege that the motion for summary
can estoppel validate an act that contravenes law or public policy.74
judgment was based on respondents' answer and other
documents that had long been in the records of the case. Thus, As a final point, it must be emphasized that laches is not a mere
by the time the motion was filed on March 10, 2000, estoppel by question of time but is principally a question of the inequity or
laches had already set in against petitioner.
unfairness of permitting a right or claim to be enforced or
asserted.75 Equity demands that petitioner Republic should not be
We disagree. Estoppel by laches is the failure or neglect for an barred from pursuing the people's case against the Marcoses.
unreasonable or unexplained length of time to do that which, by
exercising due diligence, could or should have been done
(2) The Propriety of Forfeiture
earlier, warranting a presumption that the person has
abandoned his right or declined to assert it.70 In effect, therefore, The matter of summary judgment having been thus settled, the issue
the principle of laches is one of estoppel because "it prevents
of whether or not petitioner Republic was able to prove its case for
people who have slept on their rights from prejudicing the rights forfeiture in accordance with the requisites of Sections 2 and 3 of RA
of third parties who have placed reliance on the inaction of the
1379 now takes center stage.
original parties and their successors-in-interest".71

Therefore, the phrase "anytime after the pleading in answer

thereto has been served" in Section 1, Rule 35 of our Rules
of Civil Procedure means "at any stage of the litigation."
Whenever it becomes evident at any stage of the litigation
that no triable issue exists, or that the defenses raised by the
defendant(s) are sham or frivolous, plaintiff may move for
summary judgment. A contrary interpretation would go
against the very objective of the Rule on Summary
Judgment which is to "weed out sham claims or defenses
thereby avoiding the expense and loss of time involved in a
A careful examination of the records, however, reveals that
trial."68
petitioner was in fact never remiss in pursuing its case against

The law raises the prima facie presumption that a property is

unlawfully acquired, hence subject to forfeiture, if its amount or value
is manifestly disproportionate to the official salary and other lawful

income of the public officer who owns it. Hence, Sections 2

and 6 of RA 137976 provide:
xxx

xxx

Section 2. Filing of petition. Whenever any public

officer or employee has acquired during his
incumbency an amount or property which is
manifestly out of proportion to his salary as such
public officer or employee and to his other lawful
income and the income from legitimately acquired
property, said property shall be presumed prima
facie to have been unlawfully acquired.
xxx

xxx

Sec. 6. Judgment If the respondent is unable to

show to the satisfaction of the court that he has
lawfully acquired the property in question, then the
court shall declare such property in question,
forfeited in favor of the State, and by virtue of such
judgment the property aforesaid shall become the
property of the State.Provided, That no judgment
shall be rendered within six months before any
general election or within three months before any
special election. The Court may, in addition, refer
this case to the corresponding Executive
Department for administrative or criminal action, or
both.
From the above-quoted provisions of the law, the following
facts must be established in order that forfeiture or seizure of
the Swiss deposits may be effected:
(1) ownership by the public officer of money or
property acquired during his incumbency, whether it
be in his name or otherwise, and
(2) the extent to which the amount of that money or
property exceeds, i. e., is grossly disproportionate
to, the legitimate income of the public officer.
That spouses Ferdinand and Imelda Marcos were public
officials during the time material to the instant case was
never in dispute. Paragraph 4 of respondent Marcoses'
answer categorically admitted the allegations in paragraph 4

of the petition for forfeiture as to the personal circumstances of

Ferdinand E. Marcos as a public official who served without
interruption as Congressman, Senator, Senate President and
President of the Republic of the Philippines from December 1,
1965 to February 25, 1986.77 Likewise, respondents admitted in
their answer the contents of paragraph 5 of the petition as to the
personal circumstances of Imelda R. Marcos who once served
as a member of the Interim Batasang Pambansa from 1978 to
1984 and as Metro Manila Governor, concurrently Minister of
Human Settlements, from June 1976 to February 1986. 78
Respondent Mrs. Marcos also admitted in paragraph 10 of her
answer the allegations of paragraph 11 of the petition for
forfeiture which referred to the accumulated salaries of
respondents Ferdinand E. Marcos and Imelda R. Marcos.79 The
combined accumulated salaries of the Marcos couple were
reflected in the Certification dated May 27, 1986 issued by then
Minister of Budget and Management Alberto Romulo.80 The
Certification showed that, from 1966 to 1985, Ferdinand E.
Marcos and Imelda R. Marcos had accumulated salaries in the
amount of P1,570,000 and P718,750, respectively, or a total of
P2,288,750:
Ferdinand E. Marcos, as President

1966-1976

at P60,000/year

P660,000

1977-1984

at P100,000/year

800,000

1985

at P110,000/year

110,000
P1,570,00

Imelda R. Marcos, as Minister

June 1976-1985

at P75,000/year

P718,000

In addition to their accumulated salaries from 1966 to 1985 are

the Marcos couple's combined salaries from January to
February 1986 in the amount of P30,833.33. Hence, their total
accumulated salaries amounted to P2,319,583.33. Converted to
U.S. dollars on the basis of the corresponding peso-dollar

exchange rates prevailing during the applicable period when said

salaries were received, the total amount had an equivalent value of
$304,372.43.
The dollar equivalent was arrived at by using the official annual rates
of exchange of the Philippine peso and the US dollar from 1965 to
1985 as well as the official monthly rates of exchange in January and
February 1986 issued by the Center for Statistical Information of
the Bangko Sentral ng Pilipinas.
Prescinding from the aforesaid admissions, Section 4, Rule 129 of the
Rules of Court provides that:
Section 4. Judicial admissions An admission, verbal or
written, made by a party in the course of the proceedings in
the same case does not require proof. The admission may be
contradicted only by showing that it was made through
palpable mistake or that no such admission was made. 81
It is settled that judicial admissions may be made: (a) in the pleadings
filed by the parties; (b) in the course of the trial either by verbal or
written manifestations or stipulations; or (c) in other stages of judicial
proceedings, as in the pre-trial of the case.82 Thus, facts pleaded in the
petition and answer, as in the case at bar, are deemed admissions of
petitioner and respondents, respectively, who are not permitted to
contradict them or subsequently take a position contrary to or
inconsistent with such admissions.83
The sum of $304,372.43 should be held as the only known lawful
income of respondents since they did not file any Statement of Assets
and Liabilities (SAL), as required by law, from which their net worth
could be determined. Besides, under the 1935 Constitution, Ferdinand
E. Marcos as President could not receive "any other emolument from
the Government or any of its subdivisions and
instrumentalities".84 Likewise, under the 1973 Constitution, Ferdinand
E. Marcos as President could "not receive during his tenure any other
emolument from the Government or any other source." 85 In fact, his
management of businesses, like the administration of foundations to
accumulate funds, was expressly prohibited under the 1973
Constitution:
Article VII, Sec. 4(2) The President and the Vice-President
shall not, during their tenure, hold any other office except
when otherwise provided in this Constitution, nor may they
practice any profession, participate directly or indirectly in the
management of any business, or be financially interested
directly or indirectly in any contract with, or in any franchise or

special privilege granted by the Government or any

other subdivision, agency, or instrumentality thereof,
including any government owned or controlled
corporation.
Article VII, Sec. 11 No Member of the National
Assembly shall appear as counsel before any court
inferior to a court with appellate jurisdiction, x x x.
Neither shall he, directly or indirectly, be interested
financially in any contract with, or in any franchise or
special privilege granted by the Government, or any
subdivision, agency, or instrumentality thereof
including any government owned or controlled
corporation during his term of office. He shall not
intervene in any matter before any office of the
government for his pecuniary benefit.

concerned, it was enough to specify the known lawful income of

respondents.
Section 9 of the PCGG Rules and Regulations provides that, in
determining prima facie evidence of ill-gotten wealth, the value
of the accumulated assets, properties and other material
possessions of those covered by Executive Order Nos. 1 and 2
must be out of proportion to the known lawful income of such
persons. The respondent Marcos couple did not file any
Statement of Assets and Liabilities (SAL) from which their net
worth could be determined. Their failure to file their SAL was in
itself a violation of law and to allow them to successfully assail
the Republic for not presenting their SAL would reward them for
their violation of the law.

Respondent Mrs. Marcos also admitted ownership of the Swiss bank

deposits by failing to deny under oath the genuineness and due
execution of certain actionable documents bearing her signature
attached to the petition. As discussed earlier, Section 11, Rule 8 86 of
the 1997 Rules of Civil Procedure provides that material averments in
the complaint shall be deemed admitted when not specifically denied.
The General87 and Supplemental88 Agreements executed by petitioner
and respondents on December 28, 1993 further bolstered the claim of
petitioner Republic that its case for forfeiture was proven in
accordance with the requisites of Sections 2 and 3 of RA 1379. The
whereas clause in the General Agreement declared that:
WHEREAS, the FIRST PARTY has obtained a judgment from
the Swiss Federal Tribunal on December 21, 1990, that the
$356 million belongs in principle to the Republic of the
Philippines provided certain conditionalities are met, but even
after 7 years, the FIRST PARTY has not been able to procure
a final judgment of conviction against the PRIVATE PARTY.

Further, contrary to the claim of respondents, the admissions

made by them in their various pleadings and documents were
Article IX, Sec. 7 The Prime Minister and Members valid. It is of record that respondents judicially admitted that the
of the Cabinet shall be subject to the provision of
money deposited with the Swiss banks belonged to them.
Section 11, Article VIII hereof and may not appear as
counsel before any court or administrative body, or
We agree with petitioner that respondent Marcoses made
While the Supplemental Agreement warranted, inter alia, that:
manage any business, or practice any profession,
judicial admissions of their ownership of the subject Swiss bank
and shall also be subject to such other
deposits in their answer, the General/Supplemental
In consideration of the foregoing, the parties hereby agree that
disqualification as may be provided by law.
Agreements, Mrs. Marcos' Manifestation and Constancia dated
the PRIVATE PARTY shall be entitled to the equivalent of 25%
May 5, 1999, and the Undertaking dated February 10, 1999. We
of the amount that may be eventually withdrawn from said
Their only known lawful income of $304,372.43 can
take note of the fact that the Associate Justices of the
$356 million Swiss deposits.
therefore legally and fairly serve as basis for determining the Sandiganbayan were unanimous in holding that respondents
existence of a prima facie case of forfeiture of the Swiss
had made judicial admissions of their ownership of the Swiss
The stipulations set forth in the General and Supplemental
funds.
funds.
Agreements undeniably indicated the manifest intent of respondents to
enter into a compromise with petitioner. Corollarily, respondents'
Respondents argue that petitioner was not able to establish In their answer, aside from admitting the existence of the
willingness to agree to an amicable settlement with the Republic only
a prima facie case for the forfeiture of the Swiss funds since subject funds, respondents likewise admitted ownershipthereof. affirmed their ownership of the Swiss deposits for the simple reason
it failed to prove the essential elements under Section 3,
Paragraph 22 of respondents' answer stated:
that no person would acquiesce to any concession over such huge
paragraphs (c), (d) and (e) of RA 1379. As the Act is a penal
dollar deposits if he did not in fact own them.
statute, its provisions are mandatory and should thus be
22. Respondents specifically DENY PARAGRAPH 23
construed strictly against the petitioner and liberally in favor
insofar as it alleges that respondents clandestinely
Respondents make much capital of the pronouncement by this Court
of respondent Marcoses.
stashed the country's wealth in Switzerland and hid the that the General and Supplemental Agreements were null and
same under layers and layers of foundations and
void.89 They insist that nothing in those agreements could thus be
We hold that it was not for petitioner to establish the
corporate entities for being false, the truth being
admitted in evidence against them because they stood on the same
Marcoses' other lawful income or income from legitimately
that respondents' aforesaid properties were lawfully ground as an accepted offer which, under Section 27, Rule 13090of the
acquired property for the presumption to apply because, as
acquired. (emphasis supplied)
1997 Rules of Civil Procedure, provides that "in civil cases, an offer of
between petitioner and respondents, the latter were in a
compromise is not an admission of any liability and is not admissible in
better position to know if there were such other sources of
By qualifying their acquisition of the Swiss bank deposits as
evidence against the offeror."
lawful income. And if indeed there was such other lawful
lawful, respondents unwittingly admitted their ownership thereof.
income, respondents should have specifically stated the
We find no merit in this contention. The declaration of nullity of said
same in their answer. Insofar as petitioner Republic was
agreements was premised on the following constitutional and statutory

infirmities: (1) the grant of criminal immunity to the Marcos

heirs was against the law; (2) the PCGG's commitment to
exempt from all forms of taxes the properties to be retained
by the Marcos heirs was against the Constitution; and (3) the
government's undertaking to cause the dismissal of all cases
filed against the Marcoses pending before the
Sandiganbayan and other courts encroached on the powers
of the judiciary. The reasons relied upon by the Court never
in the least bit even touched on the veracity and truthfulness
of respondents' admission with respect to their ownership of
the Swiss funds. Besides, having made certain admissions
in those agreements, respondents cannot now deny that
they voluntarily admitted owning the subject Swiss funds,
notwithstanding the fact that the agreements themselves
were later declared null and void.

Mr. Marcos, did you ever have any meetings

with PCGG Chairman Magtanggol C.
Gunigundo?
F. MARCOS, JR.:
Yes. I have had very many meetings in fact with
Chairman.

x x x The declaration of nullity of the two agreements

rendered the same without legal effects but it did not
detract from the admissions of the respondents
contained therein. Otherwise stated, the admissions
made in said agreements, as quoted above, remain
binding on the respondents.91
A written statement is nonetheless competent as an
admission even if it is contained in a document which is not
itself effective for the purpose for which it is made, either by
reason of illegality, or incompetency of a party thereto, or by
reason of not being signed, executed or delivered.
Accordingly, contracts have been held as competent
evidence of admissions, although they may be
unenforceable.92
The testimony of respondent Ferdinand Marcos, Jr. during
the hearing on the motion for the approval of the
Compromise Agreement on April 29, 1998 also lent credence
to the allegations of petitioner Republic that respondents
admitted ownership of the Swiss bank accounts. We quote
the salient portions of Ferdinand Jr.'s formal declarations in
open court:

xxx

Would you recall when the first meeting

occurred?

xxx

Basically, what were the true amounts of the assets in

the bank?
PJ GARCHITORENA:
So, we are talking about liquid assets here? Just
Cash?

In connection with what?

ATTY. FERNANDO:

F. MARCOS, JR.:

In connection with the ongoing talks to

compromise the various cases initiated by
PCGG against your family?

Well, basically, any assets. Anything that was under

the Marcos name in any of the banks in Switzerland
which may necessarily be not cash.95

F. MARCOS, JR.:

xxx

The nature of our meetings was solely

concerned with negotiations towards achieving
some kind of agreement between the Philippine
government and the Marcos family. The
discussions that led up to the compromise
agreement were initiated by our then counsel
Atty. Simeon Mesina x x x.93
xxx

xxx

ATTY. FERNANDO:

ATTY. FERNANDO:

PJ GARCHITORENA:
The following observation of Sandiganbayan Justice
Catalino Castaeda, Jr. in the decision dated September 19,
2000 could not have been better said:

very much always in search of resolution to the

problem of the family and any approach that has been
made us, we have entertained. And so my reaction
was the same as what I have always why not?
Maybe this is the one that will finally put an end to this
problem.94

xxx

xxx

ATTY. FERNANDO:
What was your reaction when Atty. Mesina
informed you of this possibility?
F. MARCOS, JR.:

ATTY. FERNANDO:
My reaction to all of these approaches is that I
am always open, we are always open, we are

xxx

xxx

PJ GARCHITORENA:
x x x What did you do in other words, after being
apprised of this contract in connection herewith?
F. MARCOS, JR.:
I assumed that we are beginning to implement the
agreement because this was forwarded through the
Philippine government lawyers through our lawyers
and then, subsequently, to me. I was a little surprised
because we hadn't really discussed the details of the
transfer of the funds, what the bank accounts, what
the mechanism would be. But nevertheless, I was
happy to see that as far as the PCGG is concerned,
that the agreement was perfected and that we were
beginning to implement it and that was a source of

satisfaction to me because I thought that

finally it will be the end.96
Ferdinand Jr.'s pronouncements, taken in context and in
their entirety, were a confirmation of respondents' recognition
of their ownership of the Swiss bank deposits. Admissions of
a party in his testimony are receivable against him. If a party,
as a witness, deliberately concedes a fact, such concession
has the force of a judicial admission.97 It is apparent from
Ferdinand Jr.'s testimony that the Marcos family agreed to
negotiate with the Philippine government in the hope of
finally putting an end to the problems besetting the Marcos
family regarding the Swiss accounts. This was doubtlessly
an acknowledgment of ownership on their part. The rule is
that the testimony on the witness stand partakes of the
nature of a formal judicial admission when a party testifies
clearly and unequivocally to a fact which is peculiarly within
his own knowledge.98
In her Manifestation99 dated May 26, 1998, respondent
Imelda Marcos furthermore revealed the following:
That respondent Imelda R. Marcos owns 90% of the
subject matter of the above-entitled case, being the
sole beneficiary of the dollar deposits in the name of
the various foundations alleged in the case;
That in fact only 10% of the subject matter in the
above-entitled case belongs to the estate of the late
President Ferdinand E. Marcos;

due execution of said instruments, in accordance with Section

8, Rule 8100 of the 1997 Rules of Civil Procedure.
Likewise, in her Constancia101 dated May 6, 1999, Imelda
Marcos prayed for the approval of the Compromise Agreement
and the subsequent release and transfer of the $150 million to
the rightful owner. She further made the following
manifestations:

dissipation or misappropriation by the petitioner looms as a

distinct possibility.
Such display of deep, personal interest can only come from someone
who believes that he has a marked and intimate right over the
considerable dollar deposits. Truly, by filing said motion, the Marcos
children revealed their ownership of the said deposits.

Lastly, the Undertaking103 entered into by the PCGG, the PNB and the
xxx
xxx
xxx
Marcos foundations on February 10, 1999, confirmed the Marcoses'
ownership of the Swiss bank deposits. The subject Undertaking
2. The Republic's cause of action over the full amount is brought to light their readiness to pay the human rights victims out of
its forfeiture in favor of the government if found to be ill- the funds held in escrow in the PNB. It stated:
gotten. On the other hand, the Marcoses defend that it
is a legitimate asset. Therefore, both parties have an
WHEREAS, the Republic of the Philippines sympathizes with
inchoate right of ownership over the account. If it turns
the plight of the human rights victims-plaintiffs in the
out that the account is of lawful origin, the Republic may
aforementioned litigation through the Second Party, desires to
yield to the Marcoses. Conversely, the Marcoses must
assist in the satisfaction of the judgment awards of said
yield to the Republic. (underscoring supplied)
human rights victims-plaintiffs, by releasing, assigning and or
waiving US$150 million of the funds held in escrow under the
Escrow Agreements dated August 14, 1995, although the
xxx
xxx
xxx
Republic is not obligated to do so under final judgments of the
Swiss courts dated December 10 and 19, 1997, and January
3. Consistent with the foregoing, and the Marcoses
8, 1998;
having committed themselves to helping the less
fortunate, in the interest of peace, reconciliation and
unity, defendant MADAM IMELDA ROMUALDEZ
MARCOS, in firm abidance thereby, hereby affirms her
agreement with the Republic for the release and
transfer of the US Dollar 150 million for proper
disposition, without prejudice to the final outcome of the
litigation respecting the ownership of the remainder.

WHEREAS, the Third Party is likewise willing to release,

assign and/or waive all its rights and interests over said
US$150 million to the aforementioned human rights victimsplaintiffs.

All told, the foregoing disquisition negates the claim of respondents

that "petitioner failed to prove that they acquired or own the Swiss
funds" and that "it was only by arbitrarily isolating and taking certain
Again, the above statements were indicative of Imelda's
Respondents' ownership of the Swiss bank accounts as
admission of the Marcoses' ownership of the Swiss deposits as statements made by private respondents out of context that petitioner
was able to treat these as judicial admissions." The Court is fully
borne out by Mrs. Marcos' manifestation is as bright as
in fact "the Marcoses defend that it (Swiss deposits) is a
aware of the relevance, materiality and implications of every pleading
sunlight. And her claim that she is merely a beneficiary of the legitimate (Marcos) asset."
and document submitted in this case. This Court carefully scrutinized
Swiss deposits is belied by her own signatures on the
appended copies of the documents substantiating her
On the other hand, respondents Maria Imelda Marcos-Manotoc, the proofs presented by the parties. We analyzed, assessed and
weighed them to ascertain if each piece of evidence rightfully qualified
ownership of the funds in the name of the foundations. As
Ferdinand Marcos, Jr. and Maria Irene Marcos-Araneta filed a
as an admission. Owing to the far-reaching historical and political
102
already mentioned, she failed to specifically deny under oath motion on May 4, 1998 asking the Sandiganbayan to place
implications of this case, we considered and examined, individually
the authenticity of such documents, especially those
the res (Swiss deposits) in custodia legis:
and totally, the evidence of the parties, even if it might have bordered
involving "William Saunders" and "Jane Ryan" which actually
on factual adjudication which, by authority of the rules and
referred to Ferdinand Marcos and Imelda Marcos,
7. Indeed, the prevailing situation is fraught with danger! jurisprudence, is not usually done by this Court. There is no doubt in
respectively. That failure of Imelda Marcos to specifically
Unless the aforesaid Swiss deposits are placed in
our mind that respondent Marcoses admitted ownership of the Swiss
deny the existence, much less the genuineness and due
custodia legis or within the Court's protective mantle, its bank deposits.
execution, of the instruments bearing her signature, was
tantamount to a judicial admission of the genuineness and
xxx

xxx

xxx

We have always adhered to the familiar doctrine that an

admission made in the pleadings cannot be controverted by
the party making such admission and becomes conclusive
on him, and that all proofs submitted by him contrary thereto
or inconsistent therewith should be ignored, whether an
objection is interposed by the adverse party or not.104 This
doctrine is embodied in Section 4, Rule 129 of the Rules of
Court:

in the subject matter of the controversy, the admission of one is

competent against all.110

The third requirement is met if it can be shown that such assets,

money or property is manifestly out of proportion to the public officer's
salary and his other lawful income. It is the proof of this third element
that is crucial in determining whether a prima facie presumption has
Respondents insist that the Sandiganbayan is correct in ruling
that petitioner Republic has failed to establish aprima facie case been established in this case.
for the forfeiture of the Swiss deposits.
Petitioner Republic presented not only a schedule indicating the lawful
income of the Marcos spouses during their incumbency but also
We disagree. The sudden turn-around of the Sandiganbayan
evidence that they had huge deposits beyond such lawful income in
was really strange, to say the least, as its findings and
SEC. 4. Judicial admissions. An admission, verbal conclusions were not borne out by the voluminous records of
Swiss banks under the names of five different foundations. We believe
or written, made by a party in the course of the
petitioner was able to establish the prima facie presumption that the
this case.
proceedings in the same case, does not require
assets and properties acquired by the Marcoses were manifestly and
proof. The admission may be contradicted only by
Section 2 of RA 1379 explicitly states that "whenever any public patently disproportionate to their aggregate salaries as public officials.
showing that it was made through palpable mistake officer or employee has acquired during his incumbency an
Otherwise stated, petitioner presented enough evidence to convince
or that no such admission was made.105
us that the Marcoses had dollar deposits amounting to US $356 million
amount of property which is manifestly out of proportion to his
salary as such public officer or employee and to his other lawful representing the balance of the Swiss accounts of the five foundations,
In the absence of a compelling reason to the contrary,
income and the income from legitimately acquired property, said an amount way, way beyond their aggregate legitimate income of only
respondents' judicial admission of ownership of the Swiss
property shall be presumed prima facie to have been unlawfully US$304,372.43 during their incumbency as government officials.
deposits is definitely binding on them.
acquired. x x x"
Considering, therefore, that the total amount of the Swiss deposits was
considerably out of proportion to the known lawful income of the
The individual and separate admissions of each respondent The elements which must concur for this prima
Marcoses, the presumption that said dollar deposits were unlawfully
bind all of them pursuant to Sections 29 and 31, Rule 130 of facie presumption to apply are:
acquired was duly established. It was sufficient for the petition for
the Rules of Court:
forfeiture to state the approximate amount of money and property
(1) the offender is a public officer or employee;
acquired by the respondents, and their total government salaries.
SEC. 29. Admission by co-partner or agent. The
Section 9 of the PCGG Rules and Regulations states:
act or declaration of a partner or agent of the party
(2) he must have acquired a considerable amount of
within the scope of his authority and during the
money or property during his incumbency; and
Prima Facie Evidence. Any accumulation of assets,
existence of the partnership or agency, may be given
properties, and other material possessions of those persons
in evidence against such party after the partnership
(3)
said
amount
is
manifestly
out
of
proportion
to
his
covered by Executive Orders No. 1 and No. 2, whose value is
or agency is shown by evidence other than such act
salary as such public officer or employee and to his
out of proportion to their known lawful income is prima facie
or declaration. The same rule applies to the act or
other lawful income and the income from legitimately
deemed ill-gotten wealth.
declaration of a joint owner, joint debtor, or other
acquired property.
person jointly interested with the party.106
Indeed, the burden of proof was on the respondents to dispute this
It
is
undisputed
that
spouses
Ferdinand
and
Imelda
Marcos
presumption and show by clear and convincing evidence that the
SEC. 31. Admission by privies. Where one derives
Swiss deposits were lawfully acquired and that they had other
title to property from another, the act, declaration, or were former public officers. Hence, the first element is clearly
extant.
legitimate sources of income. A presumption is prima facie proof of the
omission of the latter, while holding the title, in
fact presumed and, unless the fact thus prima facie established by
relation to the property, is evidence against the
legal presumption is disproved, it must stand as proved. 111
The second element deals with the amount of money or
former.107
property acquired by the public officer during his incumbency.
Respondent Mrs. Marcos argues that the foreign foundations should
The declarations of a person are admissible against a party The Marcos couple indubitably acquired and owned properties
during their term of office. In fact, the five groups of Swiss
have been impleaded as they were indispensable parties without
whenever a "privity of estate" exists between the declarant
and the party, the term "privity of estate" generally denoting a accounts were admittedly owned by them. There is proof of the whom no complete determination of the issues could be made. She
asserts that the failure of petitioner Republic to implead the
succession in rights.108 Consequently, an admission of one in existence and ownership of these assets and properties and it
suffices
to
comply
with
the
second
element.
109
foundations rendered the judgment void as the joinder of
privity with a party to the record is competent. Without
indispensable parties was a sine qua non exercise of judicial power.
doubt, privity exists among the respondents in this case. And
Furthermore, the non-inclusion of the foreign foundations violated the
where several co-parties to the record are jointly interested

conditions prescribed by the Swiss government regarding

the deposit of the funds in escrow, deprived them of their day
in court and denied them their rights under the Swiss
constitution and international law.112
The Court finds that petitioner Republic did not err in not
impleading the foreign foundations. Section 7, Rule 3 of the
1997 Rules of Civil Procedure,113 taken from Rule 19b of the
American Federal Rules of Civil Procedure, provides for the
compulsory joinder of indispensable parties. Generally, an
indispensable party must be impleaded for the complete
determination of the suit. However, failure to join an
indispensable party does not divest the court of jurisdiction
since the rule regarding indispensable parties is founded on
equitable considerations and is not jurisdictional. Thus, the
court is not divested of its power to render a decision even in
the absence of indispensable parties, though such judgment
is not binding on the non-joined party.114

The judgment ordering the return of the $356 million was neither
inimical to the foundations' interests nor inconsistent with equity
and good conscience. The admission of respondent Imelda
Marcos only confirmed what was already generally known: that
the foundations were established precisely to hide the money
stolen by the Marcos spouses from petitioner Republic. It
negated whatever illusion there was, if any, that the foreign
foundations owned even a nominal part of the assets in
question.

The rulings of the Swiss court that the foundations, as formal

owners, must be given an opportunity to participate in the
proceedings hinged on the assumption that they owned a
nominal share of the assets.118 But this was already refuted by
no less than Mrs. Marcos herself. Thus, she cannot now argue
that the ruling of the Sandiganbayan violated the conditions set
by the Swiss court. The directive given by the Swiss court for
the foundations to participate in the proceedings was for the
purpose of protecting whatever nominal interest they might have
115
had in the assets as formal owners. But inasmuch as their
An indispensable party has been defined as one:
ownership was subsequently repudiated by Imelda Marcos, they
[who] must have a direct interest in the litigation; and could no longer be considered as indispensable parties and
their participation in the proceedings became unnecessary.
if this interest is such that it cannot be separated
from that of the parties to the suit, if the court cannot
119
render justice between the parties in his absence, if In Republic vs. Sandiganbayan, this Court ruled that
impleading the firms which are the res of the action was
the decree will have an injurious effect upon his
unnecessary:
interest, or if the final determination of the
controversy in his absence will be inconsistent with
equity and good conscience.
"And as to corporations organized with ill-gotten wealth,
but are not themselves guilty of misappropriation, fraud
or other illicit conduct in other words, the companies
There are two essential tests of an indispensable party: (1)
themselves are not the object or thing involved in the
can relief be afforded the plaintiff without the presence of the
action, the res thereof there is no need to implead
other party? and (2) can the case be decided on its merits
them either. Indeed, their impleading is not proper on
without prejudicing the rights of the other party? 116 There is,
the strength alone of their having been formed with illhowever, no fixed formula for determining who is an
gotten funds, absent any other particular wrongdoing on
indispensable party; this can only be determined in the
their part
context and by the facts of the particular suit or litigation.
In the present case, there was an admission by respondent
Imelda Marcos in her May 26, 1998 Manifestation before the
Sandiganbayan that she was the sole beneficiary of 90% of
the subject matter in controversy with the remaining 10%
belonging to the estate of Ferdinand Marcos.117 Viewed
against this admission, the foreign foundations were not
indispensable parties. Their non-participation in the
proceedings did not prevent the court from deciding the case
on its merits and according full relief to petitioner Republic.

Such showing of having been formed with, or having

received ill-gotten funds, however strong or convincing,
does not, without more, warrant identifying the
corporations in question with the person who formed or
made use of them to give the color or appearance of
lawful, innocent acquisition to illegally amassed wealth
at the least, not so as place on the Government the
onus of impleading the former with the latter in actions
to recover such wealth. Distinguished in terms of

juridical personality and legal culpability from their erring

members or stockholders, said corporations are not
themselves guilty of the sins of the latter, of the
embezzlement, asportation, etc., that gave rise to the
Government's cause of action for recovery; their creation or
organization was merely the result of their members' (or
stockholders') manipulations and maneuvers to conceal the
illegal origins of the assets or monies invested therein. In this
light, they are simply the res in the actions for the recovery of
illegally acquired wealth, and there is, in principle, no cause of
action against them and no ground to implead them as
defendants in said actions."
Just like the corporations in the aforementioned case, the foreign
foundations here were set up to conceal the illegally acquired funds of
the Marcos spouses. Thus, they were simply the res in the action for
recovery of ill-gotten wealth and did not have to be impleaded for lack
of cause of action or ground to implead them.
Assuming arguendo, however, that the foundations were
indispensable parties, the failure of petitioner to implead them was a
curable error, as held in the previously cited case of Republic vs.
Sandiganbayan:120
"Even in those cases where it might reasonably be argued that
the failure of the Government to implead the sequestered
corporations as defendants is indeed a procedural abberation,
as where said firms were allegedly used, and actively
cooperated with the defendants, as instruments or conduits for
conversion of public funds and property or illicit or fraudulent
obtention of favored government contracts, etc., slight
reflection would nevertheless lead to the conclusion that the
defect is not fatal, but one correctible under applicable
adjective rules e.g., Section 10, Rule 5 of the Rules of Court
[specifying the remedy of amendment during trial to authorize
or to conform to the evidence]; Section 1, Rule 20 [governing
amendments before trial], in relation to the rule respecting
omission of so-called necessary or indispensable parties, set
out in Section 11, Rule 3 of the Rules of Court. It is relevant in
this context to advert to the old familiar doctrines that the
omission to implead such parties "is a mere technical defect
which can be cured at any stage of the proceedings even after
judgment"; and that, particularly in the case of indispensable
parties, since their presence and participation is essential to
the very life of the action, for without them no judgment may
be rendered, amendments of the complaint in order to implead
them should be freely allowed, even on appeal, in fact even

after rendition of judgment by this Court, where it

appears that the complaint otherwise indicates their
identity and character as such indispensable
parties."121
Although there are decided cases wherein the non-joinder of
indispensable parties in fact led to the dismissal of the suit or
the annulment of judgment, such cases do not jibe with the
matter at hand. The better view is that non-joinder is not a
ground to dismiss the suit or annul the judgment. The rule on
joinder of indispensable parties is founded on equity. And the
spirit of the law is reflected in Section 11, Rule 3122 of the
1997 Rules of Civil Procedure. It prohibits the dismissal of a
suit on the ground of non-joinder or misjoinder of parties and
allows the amendment of the complaint at any stage of the
proceedings, through motion or on order of the court on its
own initiative.123
Likewise, jurisprudence on the Federal Rules of Procedure,
from which our Section 7, Rule 3124 on indispensable parties
was copied, allows the joinder of indispensable parties even
after judgment has been entered if such is needed to afford
the moving party full relief.125 Mere delay in filing the joinder
motion does not necessarily result in the waiver of the right
as long as the delay is excusable.126 Thus, respondent Mrs.
Marcos cannot correctly argue that the judgment rendered
by the Sandiganbayan was void due to the non-joinder of the
foreign foundations. The court had jurisdiction to render
judgment which, even in the absence of indispensable
parties, was binding on all the parties before it though not on
the absent party.127 If she really felt that she could not be
granted full relief due to the absence of the foreign
foundations, she should have moved for their inclusion,
which was allowable at any stage of the proceedings. She
never did. Instead she assailed the judgment rendered.
In the face of undeniable circumstances and the avalanche
of documentary evidence against them, respondent
Marcoses failed to justify the lawful nature of their acquisition
of the said assets. Hence, the Swiss deposits should be
considered ill-gotten wealth and forfeited in favor of the State
in accordance with Section 6 of RA 1379:
SEC. 6. Judgment. If the respondent is unable to
show to the satisfaction of the court that he has
lawfully acquired the property in question, then the
court shall declare such property forfeited in favor of

the State, and by virtue of such judgment the property

aforesaid shall become property of the State x x x.
THE FAILURE TO PRESENT AUTHENTICATED
TRANSLATIONS OF THE SWISS DECISIONS
Finally, petitioner Republic contends that the Honorable
Sandiganbayan Presiding Justice Francis Garchitorena
committed grave abuse of discretion in reversing himself on the
ground that the original copies of the authenticated Swiss
decisions and their authenticated translations were not
submitted to the court a quo. Earlier PJ Garchitorena had
quoted extensively from the unofficial translation of one of these
Swiss decisions in hisponencia dated July 29, 1999 when he
denied the motion to release US$150 Million to the human
rights victims.
While we are in reality perplexed by such an incomprehensible
change of heart, there might nevertheless not be any real need
to belabor the issue. The presentation of the authenticated
translations of the original copies of the Swiss decision was
not de rigueur for the public respondent to make findings of fact
and reach its conclusions. In short, the Sandiganbayan's
decision was not dependent on the determination of the Swiss
courts. For that matter, neither is this Court's.
The release of the Swiss funds held in escrow in the PNB is
dependent solely on the decision of this jurisdiction that said
funds belong to the petitioner Republic. What is important is our
own assessment of the sufficiency of the evidence to rule in
favor of either petitioner Republic or respondent Marcoses. In
this instance, despite the absence of the authenticated
translations of the Swiss decisions, the evidence on hand tilts
convincingly in favor of petitioner Republic.
WHEREFORE, the petition is hereby GRANTED. The assailed
Resolution of the Sandiganbayan dated January 31, 2002 is
SET ASIDE. The Swiss deposits which were transferred to and
are now deposited in escrow at the Philippine National Bank in
the estimated aggregate amount of US$658,175,373.60 as of
January 31, 2002, plus interest, are hereby forfeited in favor of
petitioner Republic of the Philippines.
SO ORDERED.

Davide, Jr., C.J., Bellosillo, Panganiban, Ynares-Santiago, AustriaMartinez, Carpio-Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur.
Puno, and Vitug, JJ., in the result
Quisumbing, Sandoval-Gutierrez, J., on official leave.
Carpio, J., no part.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 151445

April 11, 2002

ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners,

vs.
HONORABLE EXECUTIVE SECRETARY as alter ego of
HER EXCELLENCEY GLORIA MACAPAGAL-ARROYO,
and HONORABLE ANGELO REYES in his capacity as
Secretary of National Defense, respondents.
---------------------------------------SANLAKAS and PARTIDO NG
MANGGAGAWA, petitioners-intervenors,
vs.
GLORIA MACAPAGA-ARROYO, ALBERTO ROMULO,
ANGELO REYES, respondents.
DISSENTING OPINION
SEPARATE OPINION

Beginning January of this year 2002, personnel from the armed

forces of the United States of America started arriving in
Mindanao to take part, in conjunction with the Philippine military,
in "Balikatan 02-1." These so-called "Balikatan" exercises are
the largest combined training operations involving Filipino and
American troops. In theory, they are a simulation of joint military
maneuvers pursuant to the Mutual Defense Treaty,1 a bilateral
defense agreement entered into by the Philippines and the
United States in 1951.
Prior to the year 2002, the last "Balikatan" was held in 1995.
This was due to the paucity of any formal agreement relative to
the treatment of United States personnel visiting the Philippines.
In the meantime, the respective governments of the two
countries agreed to hold joint exercises on a reduced scale. The
lack of consensus was eventually cured when the two nations
concluded the Visiting Forces Agreement (V FA) in 1999.
The entry of American troops into Philippine soil is proximately
rooted in the international anti-terrorism campaign declared by
President George W. Bush in reaction to the tragic events that
occurred on September 11, 2001. On that day, three (3)
commercial aircrafts were hijacked, flown and smashed into the
twin towers of the World Trade Center in New York City and the
Pentagon building in Washington, D.C. by terrorists with alleged
links to the al-Qaeda ("the Base"), a Muslim extremist
organization headed by the infamous Osama bin Laden. Of no
comparable historical parallels, these acts caused billions of
dollars worth of destruction of property and incalculable loss of
hundreds of lives.

On February 1, 2002, petitioners Arthur D. Lim and Paulino P.

Ersando filed this petition for certiorari and prohibition, attacking
DE LEON, JR., J.:
the constitutionality of the joint exercise.2 They were joined
subsequently by SANLAKAS and PARTIDO NG
This case involves a petition for certiorari and prohibition as MANGGAGAWA, both party-Iist organizations, who filed a
well as a petition-in-intervention, praying that respondents be petition-in-intervention on February 11, 2002.
restrained from proceeding with the so-called "Balikatan 021" and that after due notice and hearing, that judgment be
Lim and Ersando filed suit in their capacities as citizens, lawyers
rendered issuing a permanent writ of injunction and/or
and taxpayers. SANLAKAS and PARTIDO, on the other hand,
prohibition against the deployment of U.S. troops in Basilan
aver that certain members of their organization are residents of
and Mindanao for being illegal and in violation of the
Zamboanga and Sulu, and hence will be directly affected by the
Constitution.
operations being conducted in Mindanao. They likewise pray for
a relaxation on the rules relative to locus standi citing the
The facts are as follows:
unprecedented importance of the issue involved.

On February 71 2002 the Senate conducted a hearing on the

"Balikatan" exercise wherein Vice-President Teofisto T. Guingona, Jr.,
who is concurrently Secretary of Foreign. Affairs, presented the Draft
Terms of Reference (TOR).3 Five days later, he approved the TOR,
which we quote hereunder:
I. POLICY LEVEL
1. The Exercise shall be consistent with the Philippine
Constitution and all its activities shall be in consonance with
the laws of the land and the provisions of the RP-US Visiting
Forces Agreement (VFA).
2. The conduct of this training Exercise is in accordance with
pertinent United Nations resolutions against global terrorism
as understood by the respective parties.
3. No permanent US basing and support facilities shall be
established. Temporary structures such as those for troop
billeting, classroom instruction and messing may be set up for
use by RP and US Forces during the Exercise.
4. The Exercise shall be implemented jointly by RP and US
Exercise Co-Directors under the authority of the Chief of Staff,
AFP. In no instance will US Forces operate independently
during field training exercises (FTX). AFP and US Unit
Commanders will retain command over their respective forces
under the overall authority of the Exercise Co-Directors. RP
and US participants shall comply with operational instructions
of the AFP during the FTX.
5. The exercise shall be conducted and completed within a
period of not more than six months, with the projected
participation of 660 US personnel and 3,800 RP Forces. The
Chief of Staff, AFP shall direct the Exercise Co-Directors to
wind up and terminate the Exercise and other activities within
the six month Exercise period.
6. The Exercise is a mutual counter-terrorism advising,
assisting and training Exercise relative to Philippine efforts
against the ASG, and will be conducted on the Island of
Basilan. Further advising, assisting and training exercises
shall be conducted in Malagutay and the Zamboanga area.
Related activities in Cebu will be for support of the Exercise.

7. Only 160 US Forces organized in 12-man Special

Forces Teams shall be deployed with AFP field,
commanders. The US teams shall remain at the
Battalion Headquarters and, when approved,
Company Tactical headquarters where they can
observe and assess the performance of the AFP
Forces.
8. US exercise participants shall not engage in
combat, without prejudice to their right of selfdefense.
9. These terms of Reference are for purposes of this
Exercise only and do not create additional legal
obligations between the US Government and the
Republic of the Philippines.
II. EXERCISE LEVEL
1. TRAINING
a. The Exercise shall involve the conduct of
mutual military assisting, advising and
training of RP and US Forces with the
primary objective of enhancing the
operational capabilities of both forces to
combat terrorism.
b. At no time shall US Forces operate
independently within RP territory.
c. Flight plans of all aircraft involved in the
exercise will comply with the local air traffic
regulations.
2. ADMINISTRATION & LOGISTICS

b. RP and US participating forces may share, in

accordance with their respective laws and
regulations, in the use of their resources,
equipment and other assets. They will use their
respective logistics channels.
c. Medical evaluation shall be jointly planned
and executed utilizing RP and US assets and
resources.
d. Legal liaison officers from each respective
party shall be appointed by the Exercise
Directors.
3. PUBLIC AFFAIRS
a. Combined RP-US Information Bureaus shall
be established at the Exercise Directorate in
Zamboanga City and at GHQ, AFP in Camp
Aguinaldo, Quezon City.

CASE OF AN ARMED ATTACK BY AN EXTERNAL

AGGRESSOR, MEANING A THIRD COUNTRY AGAINST
ONE OF THEM.
BY NO STRETCH OF THE IMAGINA TION CAN IT BE SAID
THAT THE ABU SAYYAF BANDITS IN BASILAN
CONSTITUTE AN EXTERNAL ARMED FORCE THAT HAS
SUBJECT THE PHILIPPINES TO AN ARMED EXTERNAL
ATTACK TO WARRANT U.S. MILITARY ASSISTANCE
UNDER THE MDT OF 1951.
II
NEITHER DOES THE VFA OF 1999 AUTHORIZE AMERICAN
SOLDIERS TO ENGAGE IN COMBAT OPERATIONS IN
PHILIPPINE TERRITORY, NOT EVEN TO FIRE BACK "IF
FIRED UPON".
Substantially the same points are advanced by petitioners SANLAKAS
and PARTIDO.

b. Local media relations will be the concern of

In his Comment, the Solicitor General points to infirmities in the
the AFP and all public affairs guidelines shall be petitions regarding, inter alia, Lim and Ersando's standing to file suit,
jointly developed by RP and US Forces.
the prematurity of the action, as well as the impropriety of availing
of certiorari to ascertain a question of fact. Anent their locus standi, the
c. Socio-Economic Assistance Projects shall be Solicitor General argues that first, they may not file suit in their
capacities as, taxpayers inasmuch as it has not been shown that
planned and executed jointly by RP and US
Forces in accordance with their respective laws "Balikatan 02-1 " involves the exercise of Congress' taxing or spending
powers. Second, their being lawyers does not invest them with
and regulations, and in consultation with
sufficient personality to initiate the case, citing our ruling in Integrated
community and local government officials.
Bar of the Philippines v. Zamora.5 Third, Lim and Ersando have
failed to demonstrate the requisite showing of direct personal injury.
Contemporaneously, Assistant Secretary for American Affairs
We agree.
Minerva Jean A. Falcon and United States Charge d'
Affaires Robert Fitts signed the Agreed Minutes of the
discussion between the Vice-President and Assistant Secretary
Kelly.4

Petitioners Lim and Ersando present the following arguments:

a. RP and US participants shall be given a
country and area briefing at the start of the
Exercise. This briefing shall acquaint US
I
Forces on the culture and sensitivities of the
Filipinos and the provisions of the VF A. The
THE PHILIPPINES AND THE UNITED STATES
briefing shall also promote the full
SIGNED THE MUTUAL DEFENSE TREATY (MDT) in
cooperation on the part of the RP and US
1951 TO PROVIDE MUTUAL MILITARY ASSIST ANCE
participants for the successful conduct of the
IN ACCORDANCE WITH THE 'CONSTITUTIONAL
Exercise.
PROCESSE-S' OF EACH COUNTRY ONLY IN THE

It is also contended that the petitioners are indulging in speculation.

The Solicitor General is of the view that since the Terms of Reference
are clear as to the extent and duration of "Balikatan 02-1," the issues
raised by petitioners are premature, as they are based only on a fear
of future violation of the Terms of Reference. Even petitioners' resort to
a special civil action for certiorari is assailed on the ground that the writ
may only issue on the basis of established facts.
Apart from these threshold issues, the Solicitor General claims that
there is actually no question of constitutionality involved. The true
object of the instant suit, it is said, is to obtain an interpretation of the V
FA. The Solicitor General asks that we accord due deference to the

executive determination that "Balikatan 02-1" is covered by

the VFA, considering the President's monopoly in the field of
foreign relations and her role as commander-in-chief of the
Philippine armed forces.
Given the primordial importance of the issue involved, it will
suffice to reiterate our view on this point in a related case:
Notwithstanding, in view of the paramount
importance and the constitutional
significance of the issues raised in the
petitions, this Court, in the exercise of its
sound discretion, brushes aside the
procedural barrier and takes cognizance of
the petitions, as we have done in the early
Emergency Powers Cases, where we had
occasion to rule:
'x x x ordinary citizens and taxpayers were
allowed to question the constitutionality of
several executive orders issued by
President Quirino although they were
involving only an indirect and general
interest shared in common with the public.
The Court dismissed the objection that they
were not proper parties and ruled
that 'transcendental importance to the
public of these cases demands that they
be settled promptly and definitely,
brushing aside, if we must, technicalities
of procedure.' We have since then applied
the exception in many other cases. [citation
omitted]
This principle was reiterated in the subsequent
cases of Gonzales vs. COMELEC, Daza vs.
Singson, and Basco vs. Phil, Amusement and
Gaming Corporation, where we emphatically held:

Court has brushed aside technicalities of

procedure and has taken cognizance of this
petition. xxx'
Again, in the more recent case of Kilosbayan vs.
Guingona, Jr., this Court ruled that in cases of
transcendental importance, the Court may relax the
standing requirements and allow a suit to prosper
even where there is no direct injury to the party
claiming the right of judicial review.
Although courts generally avoid having to decide a
constitutional question based on the doctrine of
separation of powers, which enjoins upon the
department of the government a becoming respect for
each other's act, this Court nevertheless resolves to
take cognizance of the instant petition.6
Hence, we treat with similar dispatch the general objection to
the supposed prematurity of the action. At any rate, petitioners'
concerns on the lack of any specific regulation on the latitude of
activity US personnel may undertake and the duration of their
stay has been addressed in the Terms of Reference.
The holding of "Balikatan 02-1" must be studied in the
framework of the treaty antecedents to which the Philippines
bound itself. The first of these is the Mutual Defense Treaty
(MDT, for brevity). The MDT has been described as the "core" of
the defense relationship between the Philippines and its
traditional ally, the United States. Its aim is to enhance the
strategic and technological capabilities of our armed forces
through joint training with its American counterparts; the
"Balikatan" is the largest such training exercise directly
supporting the MDT's objectives. It is this treaty to which the V
FA adverts and the obligations thereunder which it seeks to
reaffirm.

The lapse of the US-Philippine Bases Agreement in 1992 and

the decision not to renew it created a vacuum in US-Philippine
Considering however the importance to the defense relations, that is, until it was replaced by the Visiting
public of the case at bar, and in keeping with Forces Agreement. It should be recalled that on October 10,
the Court's duty, under the 1987
2000, by a vote of eleven to three, this Court upheld the validity
Constitution, to determine whether or not the of the VFA.7 The V FA provides the "regulatory mechanism" by
other branches of the government have kept which "United States military and civilian personnel [may visit]
themselves within the limits of the
temporarily in the Philippines in connection with activities
Constitution and the laws that they have not approved by the Philippine Government." It contains provisions
abused the discretion given to them, the
relative to entry and departure of American personnel, driving

and vehicle registration, criminal jurisdiction, claims, importation and

exportation, movement of vessels and aircraft, as well as the duration
of the agreement and its termination. It is the VFA which gives
continued relevance to the MDT despite the passage of years. Its
primary goal is to facilitate the promotion of optimal cooperation
between American and Philippine military forces in the event of an
attack by a common foe.
The first question that should be addressed is whether "Balikatan 021" is covered by the Visiting Forces Agreement. To resolve this, it is
necessary to refer to the V FA itself: Not much help can be had
therefrom, unfortunately, since the terminology employed is itself the
source of the problem. The VFA permits United States personnel to
engage, on an impermanent basis, in "activities," the exact meaning of
which was left undefined. The expression is ambiguous, permitting a
wide scope of undertakings subject only to the approval of the
Philippine government.8 The sole encumbrance placed on its definition
is couched in the negative, in that United States personnel must
"abstain from any activity inconsistent with the spirit of this agreement,
and in particular, from any political activity."9 All other activities, in other
words, are fair game.
We are not left completely unaided, however. The Vienna Convention
on the Law of Treaties, which contains provisos governing
interpretations of international agreements, state:
SECTION 3. INTERPRETATION OF TREATIES
Article 31
General rule of interpretation
1. A treaty shall be interpreted in good faith ill accordance with
the ordinary meaning to be given to the tenus of the treaty in
their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty
shall comprise, in addition to the text, including its preamble
and annexes:
(a) any agreement relating to the treaty which was
made between all the parties in connexion with the
conclusion of the treaty;
(b) any instrument which was made by one or more
parties in connexion with the conclusion of the treaty

and accepted by the other parties as an

instrument related to the party .
3. There shall be taken into account, together with
the context:
(a) any subsequent agreement between the
parties regarding the interpretation of the
treaty or the application of its provisions;
(b) any subsequent practice in the
application of the treaty which establishes
the agreement of the parties regarding its
interpretation;
(c) any relevant rules of international law
applicable in the relations between the
parties.
4. A special meaning shall be given to a term if it is
established that the parties so intended.
Article 32
Supplementary means of interpretation
Recourse may be had to supplementary means of
interpretation, including the preparatory work of the
treaty and the circumstances of its conclusion, in
order to confirm the meaning resulting from the
application of article 31, or to determine the meaning
when the interpretation according to article 31 :
(a) leaves the meaning ambiguous or
obscure; or
(b) leads to a result which is manifestly
absurd unreasonable.

into account alongside the aforesaid context. As explained by a

writer on the Convention ,
[t]he Commission's proposals (which were adopted
virtually without change by the conference and are now
reflected in Articles 31 and 32 of the Convention) were
clearly based on the view that the text of a treaty must
be presumed to be the authentic expression of the
intentions of the parties; the Commission accordingly
came down firmly in favour of the view that 'the starting
point of interpretation is the elucidation of the meaning
of the text, not an investigation ab initio into the
intentions of the parties'. This is not to say that
the travauxpreparatoires of a treaty , or the
circumstances of its conclusion, are relegated to a
subordinate, and wholly ineffective, role. As Professor
Briggs points out, no rigid temporal prohibition on resort
to travaux preparatoires of a treaty was intended by the
use of the phrase 'supplementary means of
interpretation' in what is now Article 32 of the Vienna
Convention. The distinction between the general rule of
interpretation and the supplementary means of
interpretation is intended rather to ensure that the
supplementary means do not constitute an alternative,
autonomous method of interpretation divorced from the
general rule.10
The Terms of Reference rightly fall within the context of the
VFA.
After studied reflection, it appeared farfetched that the ambiguity
surrounding the meaning of the word .'activities" arose from
accident. In our view, it was deliberately made that way to give
both parties a certain leeway in negotiation. In this manner,
visiting US forces may sojourn in Philippine territory for
purposes other than military. As conceived, the joint exercises
may include training on new techniques of patrol and
surveillance to protect the nation's marine resources, sea
search-and-rescue operations to assist vessels in distress,
disaster relief operations, civic action projects such as the
building of school houses, medical and humanitarian missions,
and the like.

It is clear from the foregoing that the cardinal rule of

interpretation must involve an examination of the text, which
is presumed to verbalize the parties' intentions. The
Under these auspices, the VFA gives legitimacy to the current
Convention likewise dictates what may be used as aids to
Balikatan exercises. It is only logical to assume that .'Balikatan
deduce the meaning of terms, which it refers to as the
02-1," a "mutual anti- terrorism advising, assisting and training
context of the treaty, as well as other elements may be taken
exercise," falls under the umbrella of sanctioned or allowable

activities in the context of the agreement. Both the history and intent of
the Mutual Defense Treaty and the V FA support the conclusion
that combat-related activities -as opposed to combat itself -such as the
one subject of the instant petition, are indeed authorized.
That is not the end of the matter, though. Granted that "Balikatan 02-1"
is permitted under the terms of the VFA, what may US forces
legitimately do in furtherance of their aim to provide advice, assistance
and training in the global effort against terrorism? Differently phrased,
may American troops actually engage in combat in Philippine territory?
The Terms of Reference are explicit enough. Paragraph 8 of section I
stipulates that US exercise participants may not engage
in combat "except in self-defense." We wryly note that this
sentiment is admirable in the abstract but difficult in implementation.
The target of "Balikatan 02-1 I" the Abu Sayyaf, cannot reasonably be
expected to sit idly while the battle is brought to their very doorstep.
They cannot be expected to pick and choose their targets for they will
not have the luxury of doing so. We state this point if only to signify our
awareness that the parties straddle a fine line, observing the honored
legal maxim "Nemo potest facere per alium quod non potest facere
per directum."11 The indirect violation is actually petitioners' worry, that
in reality, "Balikatan 02-1 " is actually a war principally conducted by
the United States government, and that the provision on self-defense
serves only as camouflage to conceal the true nature of the exercise.
A clear pronouncement on this matter thereby becomes crucial.
In our considered opinion, neither the MDT nor the V FA allow foreign
troops to engage in an offensive war on Philippine territory. We bear in
mind the salutary proscription stated in the Charter of the United
Nations, to wit:
Article 2
The Organization and its Members, in pursuit of the Purposes
stated in Article 1, shall act in accordance with the following
Principles.
xxx

xxx

xxx

xxx

4. All Members shall refrain in their international relations from

the threat or use of force against the territorial integrity or
political independence of any state, or in any other manner
inconsistent with the Purposes of the United Nations.
xxx

xxx

xxx

xxx

In the same manner, both the Mutual Defense Treaty and the
Visiting Forces Agreement, as in all other treaties and
international agreements to which the Philippines is a party,
must be read in the context of the 1987 Constitution. In
particular, the Mutual Defense Treaty was concluded way
before the present Charter, though it nevertheless remains in
effect as a valid source of international obligation. The
present Constitution contains key provisions useful in
determining the extent to which foreign military troops are
allowed in Philippine territory. Thus, in the Declaration of
Principles and State Policies, it is provided that:

shall not be allowed in the Philippines except under a

treaty duly concurred in by the Senate and, when the
Congress so requires, ratified by a majority of the votes
cast by the people in a national referendum held for that
purpose, and recognized as a treaty by the other
contracting state.

(2) Review, revise, reverse, modify, or affirm on appeal

or certiorari, as the law or the Rules of Court may provide,
final judgments and order of lower courts in:
(A) All cases in which the constitutionality or validity of any
treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question.

The aforequoted provisions betray a marked antipathy towards

foreign military presence in the country, or of foreign influence in
general. Hence, foreign troops are allowed entry into the
xxx
xxx
xxx
xxx
Philippines only by way of direct exception. Conflict arises then
between the fundamental law and our obligations arising from
In Ichong v. Hernandez,16 we ruled that the provisions of a treaty are
xxx
xxx
xxx
xxx
international agreements.
always subject to qualification or amendment by a subsequent law, or
that it is subject to the police power of the State. In Gonzales v.
SEC. 2. The Philippines renounces war as an
A rather recent formulation of the relation of international
Hechanova,17
instrument of national policy, adopts the generally
law vis-a-vis municipal law was expressed in Philip Morris,
accepted principles of international law as part of the Inc. v. Court of Appeals,13 to wit:
xxx As regards the question whether an international
law of the land and adheres to the policy of peace,
agreement may be invalidated by our courts, suffice it to say
equality, justice, freedom, cooperation, and amity
xxx Withal, the fact that international law has been
that the Constitution of the Philippines has clearly settled it in
with all nations.
made part of the law of the land does not by any means
the affirmative, by providing, in Section 2 of Article VIII thereof,
imply the primacy of international law over national law
that the Supreme Court may not be deprived "of its jurisdiction
xxx
xxx
xxx
xxx
in the municipal sphere. Under the doctrine of
to review, revise, reverse, modify, or affirm on appeal,
incorporation as applied in most countries, rules of
certiorari, or writ of error as the law or the rules of court may
international law are given a standing equal, not
SEC. 7. The State shall pursue an independent
provide, final judgments and decrees of inferior courts in -( I)
superior, to national legislation.
foreign policy. In its relations with other states the
All cases in which the constitutionality or validity of
paramount consideration shall be national
anytreaty, law, ordinance, or executive order or regulation is in
sovereignty, territorial integrity, national interest, and This is not exactly helpful in solving the problem at hand since
question." In other words, our Constitution authorizes the
the right to self- determination.
in trying to find a middle ground, it favors neither one law nor
nullification of a treaty, not only when it conflicts with the
the other, which only leaves the hapless seeker with an
fundamental law, but, also, when it runs counter to an act of
Congress.
SEC. 8. The Philippines, consistent with the national unsolved dilemma. Other more traditional approaches may offer
valuable insights.
interest, adopts and pursues a policy of freedom
from nuclear weapons in the country.
The foregoing premises leave us no doubt that US forces are
From the perspective of public international law, a treaty is
prohibited / from engaging in an offensive war on Philippine territory.
favored over municipal law pursuant to the principle ofpacta
xxx
xxx
xxx
xxx
sunt servanda. Hence, "[e]very treaty in force is binding upon
Yet a nagging question remains: are American troops actively engaged
the
parties
to
it
and
must
be
performed
by
them
in
good
in combat alongside Filipino soldiers under the guise of an alleged
The Constitution also regulates the foreign relations powers
14
faith."
Further,
a
party
to
a
treaty
is
not
allowed
to
"invoke
the
training and assistance exercise? Contrary to what petitioners would
of the Chief Executive when it provides that "[n]o treaty or
provisions of its internal law as justification for its failure to
have us do, we cannot take judicial notice of the events transpiring
international agreement shall be valid and effective unless
perform a treaty."15
down south,18 as reported from the saturation coverage of the media.
concurred in by at least two-thirds of all the members of the
As a rule, we do not take cognizance of newspaper or electronic
Senate."12 Even more pointedly, the Transitory Provisions
Our Constitution espouses the opposing view. Witness our
reports per se, not because of any issue as to their truth, accuracy, or
state:
jurisdiction as I stated in section 5 of Article VIII:
impartiality, but for the simple reason that facts must be established in
accordance with the rules of evidence. As a result, we cannot accept,
Sec. 25. After the expiration in 1991 of the
in the absence of concrete proof, petitioners' allegation that the Arroyo
The Supreme Court shall have the following powers:
Agreement between the Republic of the Philippines
government is engaged in "doublespeak" in trying to pass off as a
and the United States of America concerning Military
mere training exercise an offensive effort by foreign troops on native
Bases, foreign military bases, troops or facilities
xxx
xxx
xxx
xxx
soil. The petitions invite us to speculate on what is really happening in

Mindanao, to issue I make factual findings on matters well

beyond our immediate perception, and this we are
understandably loath to do.
It is all too apparent that the determination thereof involves
basically a question of fact. On this point, we must concur
with the Solicitor General that the present subject matter is
not a fit topic for a special civil action forcertiorari. We have
held in too many instances that questions of fact are not
entertained in such a remedy. The sole object of the writ is to
correct errors of jurisdiction or grave abuse of discretion: The
phrase "grave abuse of discretion" has a precise meaning in
law, denoting abuse of discretion "too patent and gross as to
amount to an evasion of a positive duty, or a virtual refusal to
perform the duty enjoined or act in contemplation of law, or
where the power is exercised in an arbitrary and despotic
manner by reason of passion and personal hostility." 19
In this connection, it will not be amiss to add that the
Supreme Court is not a trier of facts.20
Under the expanded concept of judicial power under the
Constitution, courts are charged with the duty "to determine
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the government." 21 From the
facts obtaining, we find that the holding of "Balikatan 02-1"
joint military exercise has not intruded into that penumbra of
error that would otherwise call for correction on our part. In
other words, respondents in the case at bar have not
committed grave abuse of discretion amounting to lack or
excess of jurisdiction.
WHEREFORE, the petition and the petition-in-intervention
are hereby DISMISSED without prejudice to the filing of a
new petition sufficient in form and substance in the proper
Regional Trial Court.
SO ORDERED.
Bellosillo, Melo, Mendoza, Quisumbing, Carpio, JJ., concur.
Kapunan, dissenting opinion.
Ynares-Santiago, join the dissenting opinion.

Panganiban, separate opinion.

Davide., Jr., C.J., Puno, Sandoval-Gutierrez, join the main and
separate opinion of J. Panganiban.

EN BANC

has identified the Abu Sayyaf Group (ASG) in the Philippines as

a terrorist group forming part of a "terrorist underground" linked
to the al-Qaeda network of Osama bin Laden.

where they can observe and assess the performance of the

troops; and

(g) US exercise participants shall not engage in combat,

Beginning January 21, 2002, American troops started arriving in
without prejudice to their right to self-defense.
Mindanao as part of the total contingent force of 660 soldiers,
160 to be stationed in Basilan, 200 to 250 in Zamboanga, and
Petitioners now seek the issuance of a writ of prohibition/injunction to
250 in the Air Force base in Mactan, Cebu.
prevent US troops from participating in areas of armed conflict on the
ground that such is in gross violation of the Constitution. They argue
The
salient
features
of
the
joint
military
exercises
as
embodied
that:
ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners,
in
the
Terms
of
Reference
(TOR)
are
summarized
as
follows:
vs.
I
HONORABLE EXECUTIVE SECRETARY as alter ego of
(a) The exercise shall be consistent with the
HER EXCELLENCY PRESIDENT GLORIA MACAPAGALConstitution and other Philippine laws, particularly the
ARROYO and HONORABLE ANGELO REYES in his
THE PHILIPPINES AND THE UNITED STATES SIGNED THE
RP-US Visiting Forces Agreement;
official capacity as Secretary of National
MUTUAL DEFENSE TREATY (MDT) IN 1951 TO PROVIDE
Defense, respondents.
MUTUAL MILITARY ASSISTANCE IN ACCORDANCE WITH
SANLAKAS and PARTIDO NG
(b) No permanent US bases and support facilities will
THE CONSTITUTIONAL PROCESSES" OF EACH
MANGGAGAWA, intervenors.
be established;
COUNTRY ONLY IN THE CASE OF AN ARMED ATTACK BY
AN EXTERNAL AGGRESSOR, MEANING A THIRD
COUNTRY AGAINST ONE OF THEM.
DISSENTING OPINION
(c) The exercise shall be implemented jointly by RP and
US Exercise Co-Directors under the direction of the
Chief of Staff of the AFP and in no instance will US
BY NO STRETCH OF THE IMAGINATION CAN IT BE SAID
KAPUNAN, J.:
Forces operate independently during field training
THAT THE ABU SAYYAF BANDITS IN BASILAN
exercises;
CONSTITUTE AN EXTERNAL ARMED FORCE THAT HAS
On September 11, 2001, terrorists, with the use of hijacked
SUBJECTED THE PHILIPPINES TO AN ARMED EXTERNAL
commercial airplanes, attacked the World Trade Center
ATTACK TO WARRANT US MILITARY ASSISTANCE UNDER
(d)
It
shall
be
conducted
and
completed
within
a
period
Building in New York City and the Pentagon Building in
THE MDT OF 1951.
of
not
more
than
six
months,
with
the
projected
Washington D.C., U.S.A., killing thousands of people.
participation of 660 US personnel and 3,800 RP forces,
and the Chief of Staff of the AFP shall direct the
II
Following the attacks, the United States declared a "global
Exercise
Co-Directors
to
wind
up
the
Exercise
and
war" against terrorism and started to bomb and attack
other activities and the withdrawal of US forces within
NEITHER DOES THE VFA OF 1999 AUTHORIZED
Afghanistan to topple the Taliban regime and capture Osama
the
six-month
period;
AMERICAN SOLDIERS TO ENGAGE IN COMBAT
bin Laden, the suspected mastermind of the September 11,
OPERATIONS IN PHILIPPINE TERRITORY, NOT EVEN TO
2001 attacks. With the Northern Alliance mainly providing the
(e) The exercise "is a mutual counter-terrorism advising,
FIRE BACK "IF FIRED UPON."
ground forces, the Taliban regime fell in a few months,
assisting and training exercise" relative to Philippine
without Osama bin Laden having been captured. He is
efforts against the Abu Sayyaf Group and will be
believed either to be still in Afghanistan or has crossed the
Sanlakas and Partido ng Manggagawa as intervenors seek the same
conducted on the Island of Basilan. Further advising,
border into Pakistan.
relief as petitioners, stressing that the Constitution prohibits the
assisting and training exercises shall be conducted in
presence of foreign military troops or facilities in the country, except
Malagutay and the Zamboanga area. Related activities under a treaty duly concurred in by the Senate and recognized as a
In line with President Gloria Macapagal-Arroyo's pledge to
in Cebu will also be conducted in support of the
treaty by the other state.
render all-out aid to the US in its campaign against "global
Exercise;
terrorism," an arrangement for a. joint military exercises
known as "RP-US Balikatan 02-1 Exercises" was entered
The petition is impressed with merit.
(f) Only 160 US troops organized in 12-man Special
into between the US and Philippine authorities, allegedly
Forces Teams shall be deployed in Basilan, with the US There is no treaty allowing
within the ambit of the Visiting Forces Agreement (V FA) with
Team remaining at the Company Tactical Headquarters US troops to engage in combat.
the main objective of enhancing the operational capabilities
of the countries in combating terrorism. The US government
G.R. No. 151445

April 11, 2002

The Constitution prohibits foreign military bases, troops or

There is no empirical basis for the allegation that the "terrorism"
facilities unless a treaty permits the same. Section 25, Article which the ASG is accused of constitutes an "external armed
XVIII of the Constitution provides:
attack." The ASG has committed mostly crimes of kidnapping
for ransom and murder - common crimes that are punishable
under the penal code but which, by themselves, hardly
After the expiration in 1991 of the Agreement
constitute "terrorism."
between the Republic of the Philippines and the
United States of America concerning Military Bases,
foreign military bases, troops, or facilities shall not
Parenthetically, there is lack of agreement as to the precise
be allowed in the Philippines except under a treaty
definition of terrorism. Indeed, one man's terrorist may be
duly concurred in by the Senate and, when the
another man's freedom fighter. The divergent interests of States
Congress so requires, ratified by a majority of the
have caused contradicting definitions and conflicting
votes cast by the people in a national referendum
perceptions of what constitutes "terrorist acts" that make it
held for that purpose, and recognized as a treaty by difficult for the United Nations to reach a decision on the
the other contracting State.
definition of terrorism. Because of this "definitional
predicament," the power of definition is easily exercised by a
superpower which, by reason of its unchallenged hegemony,
There is no treaty allowing foreign military troops to engage
could draw lists of what it considers terrorist organizations or
in combat with internal elements.
states sponsoring terrorism based on criteria determined by the
hegemon's own strategic interests.1
The Mutual Defense Treaty (MDT) between the Republic of
the Philippines and the United States of America does not
authorize US military troops to engage the ASG in combat.
The MDT contemplates only an "external armed attack."
Article III of the treaty cannot be more explicit:
The Parties, through their Foreign Ministers or their
deputies, will consult together from time to time
regarding the implementation of this treaty and
whenever in the opinion of either of them the
territorial integrity, political independence or security
of either of the Parties is threatened
by external armed attack in the Pacific. [Emphasis
supplied.]
Supporting this conclusion is the third paragraph of the MDT
preamble where the parties express their desire
to declare publicly and formally their sense of unity
and their common determination to defend
themselves against external armed attack, so that
no potential aggressor could be under the illusion
that either of them stands alone in the Pacific area.
[Emphasis supplied.]
There is no evidence that
the ASG is connected with
"global terrorism."

In any case, ties between the ASG and so-called international

"terrorist" organizations have not been established. 2Even
assuming that such ties do exist, it does not necessarily make
the "attacks" by the ASG "external" as to fall within the ambit of
the MDT.

auspices of the Mutual Defense Treaty. It provided the legal framework

under which American soldiers will be treated while they remain in the
country.
The military exercises contemplated in the VFA are those in
accordance with the National Defense Plan (NDP) of the Philippines.
The NDP was previously approved and adopted by the Mutual
Defense Board, jointly chaired by the Chief of Staff of the Armed
Forces of the Philippines and the Commander in the Pacific of the
United States Armed Forces.
The NDP is directed against potential foreign aggressors, not
designed to deal with internal disorders. This was what the Senate
understood when it ratified the VFA in Senate Resolution No. 18,
which reads:
The VFA shall serve as the legal mechanism to promote
defense cooperation between the two countries, enhancing
the preparedness of the Armed Forces of the Philippines
against external threats; and enabling the Philippines to
bolster the stability of the Pacific Area in a shared effort with
its neighbor states.

The VFA's ambiguous reference to "activities"3 is not a loophole that

legitimizes the presence of US troops in Basilan. In the treaty's
preamble, the parties "reaffirm their obligations under the Mutual
Balikatan exercises are
Defense Treaty of August 30, 1951." As the preamble comprises part
not covered by VFA as
of a treaty's context for the purpose of interpretation, the VFA must be
US troops are not
read in light of the provisions of the MDT. As stated earlier, the MDT
allowed to engage in combat.
contemplates only an external armed attack; consequently, the
"activities" referred to in the V FA cannot thus be interpreted to include
Neither is the present situation covered by the so-called Visiting armed confrontation with or suppression of the ASG members who
Forces Agreement (VFA). The V FA was concluded after the
appear to be mere local bandits, mainly engaged in kidnapping for
removal of the US military bases, troops and facilities in the
ransom and murder -even arson, extortion and illegal possession of
aftermath of the termination of the treaty allowing the presence firearms, all of which are common offenses under our criminal laws.
of American military bases in the Philippines. The VF A is
These activities involve purely police matters and domestic law and
nothing more than what its formal name suggests: an
order problems; they are hardly "external" attacks within the
"Agreement between the Government of the Republic of the
contemplation of the MDT and the V FA. To construe the vagueness of
Philippines and the Government of the United States of America the term "activities" in the V FA as authorizing American troops to
regarding the Treatment of United States Armed Forces Visiting confront the ASG in armed conflict would, therefore, contravene both
the Philippines. "The last paragraph of the V FA preamble also
spirit and letter of the MDT.
"recogniz[es] the desirability of defining the treatmentof United
States personnel visiting the Republic of the Philippines."
Respondents maintain that the American troops are not here to fight
the ASG but merely to engage in "training exercises." To allay fears
The VFA was entered into to enable American troops to enter
that the American troops are here to engage the ASG in combat, the
the country again after the removal of the American military
TOR professes that the present exercise "is a mutual counter-terrorism
bases so they can participate in military exercises under the
advising, assisting and training Exercise relative to Philippine efforts

against the ASG, and will be conducted on the Island of

Basilan." The TOR further provides that the "exercise" shall
involve the conduct of "mutual
military assisting, advising and training of RP and US
Forces with the primary objective of enhancing the
operational capabilities of both forces to combat terrorism."

Significantly, the TOR does not define the parameters of "selfdefense." Militarily, a pre-emptive strike could be interpreted as
an act of self -defense.

What I fear most is that the country would be dragged into a

more devastating and protracted conflict as a result of the
continued presence of US military troops in Basilan. A single
These avowals of assistance, advice, and training, however, ASG sniper's bullet felling an American soldier could be used as
fly in the face of the presence of US troops in the heart of the an excuse for massive retaliation by US ground and air forces to
ASG's stronghold. Such presence is an act of provocation
attack and bomb out every suspected ASG lair, all in the name
that makes an armed confrontation between US soldiers and of "self -defense.
ASG members inevitable.
Apprehensions over possible catastrophic consequence of US
The US troops in Basilan have been described as being "on military involvement in our country are not without historical
a slippery slope between training and fighting."Their very basis.
presence makes them a target for terrorist and for the local
Moslem populace, which has been bitterly anti-American
The US experience in Vietnam, for example, began as an
since colonial times. Though they are called advisers, the
expression of support for the establishment of South Vietnam
Americans win be going on risky missions deep into the
under Bao Dai's leadership in 1949 to. counteract the support
jungle. A former Green Beret who is an analyst of
given by communist China and the Soviet Union to North
Washington's Center for Strategies and Budgetary
Vietnam. In 1950, the US began providing military assistance in
Assessments notes that "when troops go out on patrol, they fighting North Vietnam by sending military advisors as well as
come as close as they can to direct combat."4
US tanks, planes, artillery and other supplies. The US became
more involved in the Vietnam conflict when in 1961, it sent the
"Advising" or "training" Filipino soldiers hardly describes the first 400 Green Beret "Special Advisors" to South Vietnam to
involvement of US troops (unaccompanied by Filipino
train the latter's soldiers in methods of counter-insurgency
counterparts) on board combat helicopters which land on the against the Viet Cong guerillas. It clarified that the American
battlegrounds to evacuate Filipino soldiers wounded while
soldiers were not in Vietnam to engage in combat.6
fighting the ASG. For example, on April 5,2002, US troops on
board a Pave Hawk helicopter flew to the scene of a night
However, due to the increased success of the Viet Cong
battle on Basilan Island to evacuate a wounded Filipino
guerillas, assisted by the Northern Vietnamese Army, the US
soldier. This was reportedly the third time in recent weeks
eventually began to run covert operations using South
that chopper-borne US forces had evacuated Filipino
Vietnamese commandos in speed boats to harass radar sites
soldiers fighting the ASG.5
along the coastline of North Vietnam. In 1964, after an alleged
torpedo attack by North Vietnam of the American destroyers
Whatever euphemisms may be conjured to characterize USS. Maddox and USS. C. Turner Joy in the Gulf of Tonkin, the
American involvement, the RP-US Balikatan 02-1
US decided to retaliate by conducting bombing raids in North
Exercises are aimed at seeking out the ASG and
Vietnam.7
exterminating it.
The Vietnam War resulted in the death of two million
The prohibition contained in the TOR against US exercise
Vietnamese and injuries to three million others. Twelve million
participants from engaging in combat but "without prejudice
Vietnamese became refugees and thousands of children
to their right to self- defense" provides little consolation.
became orphaned.8 Millions of acres of Vietnam's forests were
Combat muddles the distinction between aggression and
defoliated by a herbicide called Agent Orange, dropped from the
self-defense. US troops can always say they did not fire first air. Millions of mines and unexploded bombs and artillery shells
and no one would dare say otherwise. The ASG has been so are still scattered in the countryside, posing constant danger to
demonized that no one cares how it is exorcised.
life and limb.

US militarv presence is
essentially indefinite
and open-ended.
Already, there are indications that the US intends to reestablish a
more enduring presence in the country. Defense Secretary Angelo
Reyes was quoted to have declared on March 20, 2002 that 2,665 US
soldiers will take part in the RP-US Balikatan 02-2 starting next month
in Central Luzon and that 10 more military exercises will be held this
year.9 How many more war exercises are needed for "training and
advising" Filipino soldiers? What conditions must be satisfied for the
United States to consider the "war against terrorism" in Mindanao
terminated? The endless frequency and successive repetition of the
war exercises covering the two largest islands of the country amount,
in a real sense, to the permanent presence of foreign military troops
heresans a treaty in blatant violation of the constitutional proscription.
US President George w. Bush in his January 30, 2002 speech
declared:
The men and women of our armed-forces have delivered a
message to every enemy of the United States. You shall not
escape the justice of this nation. x x x.
Should any country be timid in the face of terror, if they do not
act, America will.
President Arroyo, in a speech at the Regis Hotel in New York City on
February 1, 2002, pledged her "full support" to US President George
W. Bush in the fight against international terrorism. She declared that
"the Philippines will continue to be a partner of the United States in the
war to end terrorism" and that "(t)he anti-terrorism partnership will
continue after the whole world is secure against the terrorist." 10
In his speech on the White House Laws on March 11, 2002, President
Bush exhorted:
America encourages and expects governments everywhere to
help remove the terrorist parasites that threaten their own
countries and the peace of the world. x x x. We are helping
right now in the Philippines, where terrorist with links to Al
Qaeda are trying to seize the southern part of the country to
establish a military regime.
They are oppressing local peoples, and have kidnapped both
American and Filipino citizens."11

The Philippine Daily Inquirer in its March 17, 2002

issue carried the following report:

been widely circulated in all channels of the media. Neither

have they been denied.

The United States wants to bring in more troops for

the controversial Balikatan 02-1 training exercise
aimed at wiping out the Abu Sayyaf bandits in
Basilan.

US military intervention
is not the solution to the
Mindanao problem.

The US military last week began calling the wargames "Operation Enduring Freedom-Philippines,"
giving credence to claims that the country has
become, after Afghanistan, the second front of the
US-led global war on terrorism.
Today's issue of April 1, 2002 reporting as its source New
York News Service, quoted a senior Bush administration
official as saying:
We are looking at prolonged training. x x x. It takes
more to build up capabilities than saying here are
some night vision goggles.
The declarations of the two Presidents on the war against
terrorism and their avowal to secure the world against the
terrorists would ineluctably suggest a long-drawn conflict
without a foreseeable end. Worse, it is not unlikely that
this war could expand and escalate to include as
protagonists the Moro Islamic Liberation Front and the
Moro National Liberation Front and -not improbably -the
National People's Army, all lumped-up as "terrorists" in
a unilateral characterization.
No less than US Deputy Defense Secretary Paul Wolfowitz
declared that the proposed $48-billion increase to the US
defense budget for 2003 is intended to sustain the war on
terrorism,12 including that fought in this country, thus: .
Deputy Defense Secretary Paul Wolfowitz on
Wednesday said the Pentagon needs a big budget
increase next year on terrorism, which has
expanded from Afghanistan to the Philippines and
now appears to be moving to Georgia.13
The Court can take judicial notice of the foregoing
pronouncements as they are of public knowledge,14 having

Assuming that the ASG is a terrorist organization, U.S. military

intervention is not the solution to achieve peace. The
annihilation of the rebel bandits would be a futile quest so long
at the root causes of their criminality are not addressed. A
study15 by the United Nations Secretariat, however,
acknowledges that international terrorism springs from "misery,
frustration, grievance and 'despair," elements which, many
believe, are present in Basilan. Two veteran Philippine
journalists have described the province as Mindanao's "war
laboratory," where lawlessness, government neglect, religious
strife, poverty, and power struggle are rampant.16

foreign friends to address a problem that has been and will be

the making of its own home grown armies.17
The presence of US troops in Basilan, whether from the legal,
philosophical-or even from the practical perspective cannot be
justified, On the contrary, it is counterproductive. It serves to fuel an
already volatile situation. US troops are likely less able, if not less
willing, to distinguish between the innocent and the enemy. The
inevitable "collateral damage," the killing of women and children,
Muslims and Christians, the destruction of homes, schools and
hospitals would fan the flames of fanaticism and transform mere
rogues into martyrs.

The Filipino soldier has proven himself brave, courageous, fearless

and tenacious in the field of battle as shown in Bataan and Corregidor,
in the four long years of guerilla warfare thereafter against the
Japanese, and in the struggle for independence against Spain and the
United States at the turn of the last century. The local army and police
have successfully battled in the past against Communist and other
If indeed acts of terrorism are cries of desperation, if terrorism is insurgents which were more organized and numerous, operating in
larger parts of the country and fighting for their political beliefs. If our
but a symptom of the greater maladies of "misery, frustration,
troops need training by us advisers or have to conduct joint exercises
grievance and despair," then it cannot be remedied alone by
ASG's physical extermination, which appears to be the object of with US troops to improve their fighting capability, these could be more
effectively achieved if done outside Basilan or away from the danger
President Bush and President Macapagal- Arroyo's joint
zones. Instead of bringing troops to the combat zones, the US can do
campaign against global terrorism." Admittedly, the State has
more by supplying our soldiers with modern and high tech weaponry.
the right to use force as a means of self-preservation. But
perhaps we should all consider that a military solution is but a
first-aid measure, not the prescription to these diseases. It has Prescinding from the foregoing disquisitions, it is totally erroneous to
been opined that:
argue that petitioners do not have legal standing or that the issues
raised by them are premature and not based on sufficient facts. The
The issue of terrorism in the Philippines should be dealt issues raised are of transcendental importance.18
with not from the perspective of Manila-Washington ties The Balikatan exercises pose direct injury to some of the petitioners
but from a serious study of how terrorism figures in the (intervenors) who live in the affected areas. The presence of us troops
minds of leaders and armed men belonging to the large in the combat zones "assisting" and "advising" our troops in combat
against the ASG is a blatant violation of the Constitutional proscription
but deeply factionalized guerrilla movements in the
against the stationing of foreign troops to fight a local insurgency and
country. Terrorism can never be dissociated from
puts the country in peril of becoming a veritable killing field. If the time
guerrilla warfare and the separatist movement in
Mindanao. From these movements would arise religious is not ripe to challenge the continuing affront against the Constitution
and the safety of the people, when is the right time? When the
extremists or millennarian groups. With the right
countryside has been devastated and numerous lives lost?
resources and the right agenda, these movements will
continue to attract men-skilled, intelligent, and
experienced-who will come to grasp the practical
I therefore vote to give due course to the petition.
realities of waging a war with the minimum of resources
but maximum public impact.
The government does not have to look for foreign
connections-and be motivated by the desire to help

sgd. SANTIAGO M. KAPUNAN

Associate Justice

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 138570

October 10, 2000

BAYAN (Bagong Alyansang Makabayan), a JUNK VFA

MOVEMENT, BISHOP TOMAS MILLAMENA (Iglesia
Filipina Independiente), BISHOP ELMER BOLOCAN
(United Church of Christ of the Phil.), DR. REYNALDO
LEGASCA, MD, KILUSANG MAMBUBUKID NG
PILIPINAS, KILUSANG MAYO UNO, GABRIELA,
PROLABOR, and the PUBLIC INTEREST LAW
CENTER, petitioners,
vs.
EXECUTIVE SECRETARY RONALDO ZAMORA,
FOREIGN AFFAIRS SECRETARY DOMINGO SIAZON,
DEFENSE SECRETARY ORLANDO MERCADO, BRIG.
GEN. ALEXANDER AGUIRRE, SENATE PRESIDENT
MARCELO FERNAN, SENATOR FRANKLIN DRILON,
SENATOR BLAS OPLE, SENATOR RODOLFO BIAZON,
and SENATOR FRANCISCO TATAD, respondents.

vs.
JOSEPH E. ESTRADA, RONALDO B. ZAMORA, DOMINGO
L. SIAZON, JR., ORLANDO B. MERCADO, MARCELO B.
FERNAN, FRANKLIN M. DRILON, BLAS F. OPLE and
RODOLFO G. BIAZON, respondents.
x-----------------------x
G.R. No. 138680

October 10, 2000

between the Republic of the Philippines and the United States of

America -the Visiting Forces Agreement.
The antecedents unfold.
On March 14, 1947, the Philippines and the United States of America
forged a Military Bases Agreement which formalized, among others,
the use of installations in the Philippine territory by United States
military personnel. To further strengthen their defense and security
relationship, the Philippines and the United States entered into a
Mutual Defense Treaty on August 30, 1951. Under the treaty, the
parties agreed to respond to any external armed attack on their
territory, armed forces, public vessels, and aircraft.1

PHILIPPINE CONSTITUTION ASSOCIATION, INC.

(PHILCONSA), EXEQUIEL B. GARCIA, AMADOGAT
INCIONG, CAMILO L. SABIO, AND RAMON A.
GONZALES, petitioners,
vs.
HON. RONALDO B. ZAMORA, as Executive Secretary,
HON. ORLANDO MERCADO, as Secretary of National
Defense, and HON. DOMINGO L. SIAZON, JR., as
Secretary of Foreign Affairs, respondents.

INTEGRATED BAR OF THE PHILIPPINES, Represented by

its National President, Jose Aguila Grapilon,petitioners,
vs.
JOSEPH EJERCITO ESTRADA, in his capacity as President,
Republic of the Philippines, and HON. DOMINGO SIAZON,
In view of the impending expiration of the RP-US Military Bases
in his capacity as Secretary of Foreign Affairs, respondents. Agreement in 1991, the Philippines and the United States negotiated
for a possible extension of the military bases agreement. On
September 16, 1991, the Philippine Senate rejected the proposed RPx-----------------------x
US Treaty of Friendship, Cooperation and Security which, in effect,
would have extended the presence of US military bases in the
G.R. No. 138698
October 10, 2000
Philippines.2 With the expiration of the RP-US Military Bases
Agreement, the periodic military exercises conducted between the two
JOVITO R. SALONGA, WIGBERTO TAADA, ZENAIDA
countries were held in abeyance. Notwithstanding, the defense and
QUEZON-AVENCEA, ROLANDO SIMBULAN, PABLITO V.
security relationship between the Philippines and the United States of
SANIDAD, MA. SOCORRO I. DIOKNO, AGAPITO A. AQUINO, America continued pursuant to the Mutual Defense Treaty.
JOKER P. ARROYO, FRANCISCO C. RIVERA JR., RENE A.V.
SAGUISAG, KILOSBAYAN, MOVEMENT OF ATTORNEYS
FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. On July 18, 1997, the United States panel, headed by US Defense
Deputy Assistant Secretary for Asia Pacific Kurt Campbell, met with
(MABINI), petitioners,
the Philippine panel, headed by Foreign Affairs Undersecretary
vs.
Rodolfo Severino Jr., to exchange notes on "the complementing
THE EXECUTIVE SECRETARY, THE SECRETARY OF
strategic interests of the United States and the Philippines in the AsiaFOREIGN AFFAIRS, THE SECRETARY OF NATIONAL
Pacific region." Both sides discussed, among other things, the
DEFENSE, SENATE PRESIDENT MARCELO B. FERNAN,
SENATOR BLAS F. OPLE, SENATOR RODOLFO G. BIAZON, possible elements of the Visiting Forces Agreement (VFA for brevity).
Negotiations by both panels on the VFA led to a consolidated draft
AND ALL OTHER PERSONS ACTING THEIR CONTROL,
text, which in turn resulted to a final series of conferences and
SUPERVISION, DIRECTION, AND INSTRUCTION IN
negotiations3 that culminated in Manila on January 12 and 13, 1998.
RELATION TO THE VISITING FORCES AGREEMENT
Thereafter, then President Fidel V. Ramos approved the VFA, which
(VFA), respondents.
was respectively signed by public respondent Secretary Siazon and
Unites States Ambassador Thomas Hubbard on February 10, 1998.
DECISION

x-----------------------x

BUENA, J.:

G.R. No. 138587

Confronting the Court for resolution in the instant consolidated

petitions for certiorari and prohibition are issues relating to, and
borne by, an agreement forged in the turn of the last century

x-----------------------x
G.R. No. 138572

October 10, 2000

October 10, 2000

TEOFISTO T. GUINGONA, JR., RAUL S. ROCO, and

SERGIO R. OSMEA III, petitioners,

On October 5, 1998, President Joseph E. Estrada, through respondent

Secretary of Foreign Affairs, ratified the VFA.4
On October 6, 1998, the President, acting through respondent
Executive Secretary Ronaldo Zamora, officially transmitted to the
Senate of the Philippines,5 the Instrument of Ratification, the letter of
the President6 and the VFA, for concurrence pursuant to Section 21,

Article VII of the 1987 Constitution. The Senate, in turn,

referred the VFA to its Committee on Foreign Relations,
chaired by Senator Blas F. Ople, and its Committee on
National Defense and Security, chaired by Senator Rodolfo
G. Biazon, for their joint consideration and recommendation.
Thereafter, joint public hearings were held by the two
Committees.7
On May 3, 1999, the Committees submitted Proposed
Senate Resolution No. 4438 recommending the concurrence
of the Senate to the VFA and the creation of a Legislative
Oversight Committee to oversee its implementation. Debates
then ensued.
On May 27, 1999, Proposed Senate Resolution No. 443 was
approved by the Senate, by a two-thirds (2/3) vote 9of its
members. Senate Resolution No. 443 was then re-numbered
as Senate Resolution No. 18.10
On June 1, 1999, the VFA officially entered into force after
an Exchange of Notes between respondent Secretary
Siazon and United States Ambassador Hubbard.
The VFA, which consists of a Preamble and nine (9) Articles,
provides for the mechanism for regulating the circumstances
and conditions under which US Armed Forces and defense
personnel may be present in the Philippines, and is quoted
in its full text, hereunder:
"Article I
Definitions
"As used in this Agreement, United States personnel means
United States military and civilian personnel temporarily in
the Philippines in connection with activities approved by the
Philippine Government.

United States armed forces or who are accompanying

the United States armed forces, such as employees of
the American Red Cross and the United Services
Organization.
"Article II
Respect for Law
"It is the duty of the United States personnel to respect the laws
of the Republic of the Philippines and to abstain from any
activity inconsistent with the spirit of this agreement, and, in
particular, from any political activity in the Philippines. The
Government of the United States shall take all measures within
its authority to ensure that this is done.
"Article III
Entry and Departure
"1. The Government of the Philippines shall facilitate the
admission of United States personnel and their
departure from the Philippines in connection with
activities covered by this agreement.
"2. United States military personnel shall be exempt
from passport and visa regulations upon entering and
departing the Philippines.
"3. The following documents only, which shall be
presented on demand, shall be required in respect of
United States military personnel who enter the
Philippines:
"(a) personal identity card issued by the
appropriate United States authority showing full
name, date of birth, rank or grade and service
number (if any), branch of service and
photograph;

"Within this definition:

"1. The term military personnel refers to military
members of the United States Army, Navy, Marine
Corps, Air Force, and Coast Guard.
"2. The term civilian personnel refers to individuals
who are neither nationals of, nor ordinary residents
in the Philippines and who are employed by the

"(b) individual or collective document issued by

the appropriate United States authority,
authorizing the travel or visit and identifying the
individual or group as United States military
personnel; and
"(c) the commanding officer of a military aircraft
or vessel shall present a declaration of health,

and when required by the cognizant representative of

the Government of the Philippines, shall conduct a
quarantine inspection and will certify that the aircraft
or vessel is free from quarantinable diseases. Any
quarantine inspection of United States aircraft or
United States vessels or cargoes thereon shall be
conducted by the United States commanding officer in
accordance with the international health regulations
as promulgated by the World Health Organization,
and mutually agreed procedures.
"4. United States civilian personnel shall be exempt from visa
requirements but shall present, upon demand, valid passports
upon entry and departure of the Philippines.
"5. If the Government of the Philippines has requested the
removal of any United States personnel from its territory, the
United States authorities shall be responsible for receiving the
person concerned within its own territory or otherwise
disposing of said person outside of the Philippines.
"Article IV
Driving and Vehicle Registration
"1. Philippine authorities shall accept as valid, without test or
fee, a driving permit or license issued by the appropriate
United States authority to United States personnel for the
operation of military or official vehicles.
"2. Vehicles owned by the Government of the United States
need not be registered, but shall have appropriate markings.
"Article V
Criminal Jurisdiction
"1. Subject to the provisions of this article:
(a) Philippine authorities shall have jurisdiction over United
States personnel with respect to offenses committed within the
Philippines and punishable under the law of the Philippines.
(b) United States military authorities shall have the right to
exercise within the Philippines all criminal and disciplinary
jurisdiction conferred on them by the military law of the United
States over United States personnel in the Philippines.

"2. (a) Philippine authorities exercise exclusive jurisdiction

over United States personnel with respect to offenses,
including offenses relating to the security of the Philippines,
punishable under the laws of the Philippines, but not under
the laws of the United States.
(b) United States authorities exercise exclusive
jurisdiction over United States personnel with
respect to offenses, including offenses relating to the
security of the United States, punishable under the
laws of the United States, but not under the laws of
the Philippines.
(c) For the purposes of this paragraph and
paragraph 3 of this article, an offense relating to
security means:
(1) treason;
(2) sabotage, espionage or violation of any
law relating to national defense.
"3. In cases where the right to exercise jurisdiction is
concurrent, the following rules shall apply:
(a) Philippine authorities shall have the primary right
to exercise jurisdiction over all offenses committed
by United States personnel, except in cases
provided for in paragraphs 1(b), 2 (b), and 3 (b) of
this Article.
(b) United States military authorities shall have the
primary right to exercise jurisdiction over United
States personnel subject to the military law of the
United States in relation to.
(1) offenses solely against the property or
security of the United States or offenses
solely against the property or person of
United States personnel; and
(2) offenses arising out of any act or
omission done in performance of official
duty.

(c) The authorities of either government may

request the authorities of the other government
to waive their primary right to exercise
jurisdiction in a particular case.
(d) Recognizing the responsibility of the United
States military authorities to maintain good
order and discipline among their forces,
Philippine authorities will, upon request by the
United States, waive their primary right to
exercise jurisdiction except in cases of
particular importance to the Philippines. If the
Government of the Philippines determines that
the case is of particular importance, it shall
communicate such determination to the United
States authorities within twenty (20) days after
the Philippine authorities receive the United
States request.

authorities of the other government as soon as

possible.
(g) The authorities of the Philippines and the United
States shall notify each other of the disposition of all
cases in which both the authorities of the Philippines
and the United States have the right to exercise
jurisdiction.
"4. Within the scope of their legal competence, the authorities of the
Philippines and United States shall assist each other in the arrest of
United States personnel in the Philippines and in handling them over
to authorities who are to exercise jurisdiction in accordance with the
provisions of this article.

"5. United States military authorities shall promptly notify Philippine

authorities of the arrest or detention of United States personnel who
are subject of Philippine primary or exclusive jurisdiction. Philippine
authorities shall promptly notify United States military authorities of the
(e) When the United States military commander arrest or detention of any United States personnel.
determines that an offense charged by
authorities of the Philippines against United
"6. The custody of any United States personnel over whom the
states personnel arises out of an act or
Philippines is to exercise jurisdiction shall immediately reside with
omission done in the performance of official
United States military authorities, if they so request, from the
duty, the commander will issue a certificate
commission of the offense until completion of all judicial proceedings.
setting forth such determination. This certificate United States military authorities shall, upon formal notification by the
will be transmitted to the appropriate authorities Philippine authorities and without delay, make such personnel
of the Philippines and will constitute sufficient
available to those authorities in time for any investigative or judicial
proof of performance of official duty for the
proceedings relating to the offense with which the person has been
purposes of paragraph 3(b)(2) of this Article. In charged in extraordinary cases, the Philippine Government shall
those cases where the Government of the
present its position to the United States Government regarding
Philippines believes the circumstances of the
custody, which the United States Government shall take into full
case require a review of the duty certificate,
account. In the event Philippine judicial proceedings are not completed
United States military authorities and Philippine within one year, the United States shall be relieved of any obligations
authorities shall consult immediately. Philippine under this paragraph. The one-year period will not include the time
authorities at the highest levels may also
necessary to appeal. Also, the one-year period will not include any
present any information bearing on its validity.
time during which scheduled trial procedures are delayed because
United States military authorities shall take full
United States authorities, after timely notification by Philippine
account of the Philippine position. Where
authorities to arrange for the presence of the accused, fail to do so.
appropriate, United States military authorities
will take disciplinary or other action against
"7. Within the scope of their legal authority, United States and
offenders in official duty cases, and notify the
Philippine authorities shall assist each other in the carrying out of all
Government of the Philippines of the actions
necessary investigation into offenses and shall cooperate in providing
taken.
for the attendance of witnesses and in the collection and production of
evidence, including seizure and, in proper cases, the delivery of
(f) If the government having the primary right
objects connected with an offense.
does not exercise jurisdiction, it shall notify the

"8. When United States personnel have been tried in

accordance with the provisions of this Article and have been
acquitted or have been convicted and are serving, or have
served their sentence, or have had their sentence remitted
or suspended, or have been pardoned, they may not be tried
again for the same offense in the Philippines. Nothing in this
paragraph, however, shall prevent United States military
authorities from trying United States personnel for any
violation of rules of discipline arising from the act or omission
which constituted an offense for which they were tried by
Philippine authorities.
"9. When United States personnel are detained, taken into
custody, or prosecuted by Philippine authorities, they shall
be accorded all procedural safeguards established by the
law of the Philippines. At the minimum, United States
personnel shall be entitled:
(a) To a prompt and speedy trial;
(b) To be informed in advance of trial of the specific
charge or charges made against them and to have
reasonable time to prepare a defense;
(c) To be confronted with witnesses against them
and to cross examine such witnesses;
(d) To present evidence in their defense and to have
compulsory process for obtaining witnesses;
(e) To have free and assisted legal representation of
their own choice on the same basis as nationals of
the Philippines;
(f) To have the service of a competent interpreter;
and
(g) To communicate promptly with and to be visited
regularly by United States authorities, and to have
such authorities present at all judicial proceedings.
These proceedings shall be public unless the court,
in accordance with Philippine laws, excludes
persons who have no role in the proceedings.
"10. The confinement or detention by Philippine authorities of
United States personnel shall be carried out in facilities

agreed on by appropriate Philippine and United States

authorities. United States Personnel serving sentences in the
Philippines shall have the right to visits and material assistance.
"11. United States personnel shall be subject to trial only in
Philippine courts of ordinary jurisdiction, and shall not be subject
to the jurisdiction of Philippine military or religious courts.
"Article VI
Claims
"1. Except for contractual arrangements, including
United States foreign military sales letters of offer and
acceptance and leases of military equipment, both
governments waive any and all claims against each
other for damage, loss or destruction to property of
each others armed forces or for death or injury to their
military and civilian personnel arising from activities to
which this agreement applies.
"2. For claims against the United States, other than
contractual claims and those to which paragraph 1
applies, the United States Government, in accordance
with United States law regarding foreign claims, will pay
just and reasonable compensation in settlement of
meritorious claims for damage, loss, personal injury or
death, caused by acts or omissions of United States
personnel, or otherwise incident to the non-combat
activities of the United States forces.
"Article VII
Importation and Exportation
"1. United States Government equipment, materials,
supplies, and other property imported into or acquired in
the Philippines by or on behalf of the United States
armed forces in connection with activities to which this
agreement applies, shall be free of all Philippine duties,
taxes and other similar charges. Title to such property
shall remain with the United States, which may remove
such property from the Philippines at any time, free
from export duties, taxes, and other similar charges.
The exemptions provided in this paragraph shall also
extend to any duty, tax, or other similar charges which
would otherwise be assessed upon such property after
importation into, or acquisition within, the Philippines.
Such property may be removed from the Philippines, or

disposed of therein, provided that disposition of such property

in the Philippines to persons or entities not entitled to
exemption from applicable taxes and duties shall be subject to
payment of such taxes, and duties and prior approval of the
Philippine Government.
"2. Reasonable quantities of personal baggage, personal
effects, and other property for the personal use of United
States personnel may be imported into and used in the
Philippines free of all duties, taxes and other similar charges
during the period of their temporary stay in the Philippines.
Transfers to persons or entities in the Philippines not entitled
to import privileges may only be made upon prior approval of
the appropriate Philippine authorities including payment by the
recipient of applicable duties and taxes imposed in
accordance with the laws of the Philippines. The exportation of
such property and of property acquired in the Philippines by
United States personnel shall be free of all Philippine duties,
taxes, and other similar charges.
"Article VIII
Movement of Vessels and Aircraft
"1. Aircraft operated by or for the United States armed forces
may enter the Philippines upon approval of the Government of
the Philippines in accordance with procedures stipulated in
implementing arrangements.
"2. Vessels operated by or for the United States armed forces
may enter the Philippines upon approval of the Government of
the Philippines. The movement of vessels shall be in
accordance with international custom and practice governing
such vessels, and such agreed implementing arrangements
as necessary.
"3. Vehicles, vessels, and aircraft operated by or for the United
States armed forces shall not be subject to the payment of
landing or port fees, navigation or over flight charges, or tolls
or other use charges, including light and harbor dues, while in
the Philippines. Aircraft operated by or for the United States
armed forces shall observe local air traffic control regulations
while in the Philippines. Vessels owned or operated by the
United States solely on United States Government noncommercial service shall not be subject to compulsory pilotage
at Philippine ports.

"Article IX
Duration and Termination

IV

"x x x it is exigent that the taxpayer-plaintiff sufficiently show that he

would be benefited or injured by the judgment or entitled to the avails
of the suit as a real party in interest. Before he can invoke the power of
Does the VFA violate:
judicial review, he must specifically prove that he has sufficient interest
"This agreement shall enter into force on the date on which
the parties have notified each other in writing through the
a. the equal protection clause under Section 1, Article III in preventing the illegal expenditure of money raised by taxation and
that he will sustain a direct injury as a result of the enforcement of the
diplomatic channel that they have completed their
of the Constitution?
questioned statute or contract. It is not sufficient that he has merely a
constitutional requirements for entry into force. This
general interest common to all members of the public."
agreement shall remain in force until the expiration of 180
b. the Prohibition against nuclear weapons under Article
days from the date on which either party gives the other
II, Section 8?
party notice in writing that it desires to terminate the
Clearly, inasmuch as no public funds raised by taxation are involved in
agreement."
this case, and in the absence of any allegation by petitioners that
c. Section 28 (4), Article VI of the Constitution granting
public funds are being misspent or illegally expended, petitioners, as
the exemption from taxes and duties for the equipment, taxpayers, have no legal standing to assail the legality of the VFA.
Via these consolidated11 petitions for certiorari and
materials supplies and other properties imported into or
prohibition, petitioners - as legislators, non-governmental
acquired in the Philippines by, or on behalf, of the US
organizations, citizens and taxpayers - assail the
Similarly, Representatives Wigberto Taada, Agapito Aquino and Joker
Armed Forces?
constitutionality of the VFA and impute to herein respondents
Arroyo, as petitioners-legislators, do not possess the requisite locus
grave abuse of discretion in ratifying the agreement.
standi to maintain the present suit. While this Court, in Phil.
LOCUS STANDI
Constitution Association vs. Hon. Salvador Enriquez,18 sustained
the legal standing of a member of the Senate and the House of
We have simplified the issues raised by the petitioners into
At the outset, respondents challenge petitioners standing to
Representatives to question the validity of a presidential veto or a
the following:
sue, on the ground that the latter have not shown any interest in condition imposed on an item in an appropriation bull, we cannot, at
the case, and that petitioners failed to substantiate that they
this instance, similarly uphold petitioners standing as members of
I
have sustained, or will sustain direct injury as a result of the
Congress, in the absence of a clear showing of any direct injury to
operation of the VFA.12 Petitioners, on the other hand, counter
their person or to the institution to which they belong.
Do petitioners have legal standing as concerned citizens,
that the validity or invalidity of the VFA is a matter of
taxpayers, or legislators to question the constitutionality of
transcendental importance which justifies their standing. 13
Beyond this, the allegations of impairment of legislative power, such as
the VFA?
the delegation of the power of Congress to grant tax exemptions, are
A party bringing a suit challenging the constitutionality of a law, more apparent than real. While it may be true that petitioners pointed
II
act, or statute must show "not only that the law is invalid, but
to provisions of the VFA which allegedly impair their legislative powers,
also that he has sustained or in is in immediate, or imminent
petitioners failed however to sufficiently show that they have in fact
Is the VFA governed by the provisions of Section 21, Article
danger of sustaining some direct injury as a result of its
suffered direct injury.
VII or of Section 25, Article XVIII of the Constitution?
enforcement, and not merely that he suffers thereby in some
indefinite way." He must show that he has been, or is about to
In the same vein, petitioner Integrated Bar of the Philippines (IBP) is
be, denied some right or privilege to which he is lawfully
III
stripped of standing in these cases. As aptly observed by the Solicitor
entitled, or that he is about to be subjected to some burdens or General, the IBP lacks the legal capacity to bring this suit in the
penalties by reason of the statute complained of.14
absence of a board resolution from its Board of Governors authorizing
Does the VFA constitute an abdication of Philippine
its National President to commence the present action. 19
sovereignty?
In the case before us, petitioners failed to show, to the
Notwithstanding, in view of the paramount importance and the
a. Are Philippine courts deprived of their jurisdiction satisfaction of this Court, that they have sustained, or are in
danger of sustaining any direct injury as a result of the
constitutional significance of the issues raised in the petitions, this
to hear and try offenses committed by US military
enforcement of the VFA. As taxpayers, petitioners have not
Court, in the exercise of its sound discretion, brushes aside the
personnel?
established that the VFA involves the exercise by Congress of
procedural barrier and takes cognizance of the petitions, as we have
its taxing or spending powers.15 On this point, it bears stressing done in the early Emergency Powers Cases,20 where we had
b. Is the Supreme Court deprived of its jurisdiction
that a taxpayers suit refers to a case where the act complained occasion to rule:
over offenses punishable by reclusion perpetua or
of directly involves the illegal disbursement of public funds
higher?
derived from taxation.16 Thus, in Bugnay Const. &
"x x x ordinary citizens and taxpayers were allowed to question the
Development Corp. vs. Laron17, we held:
constitutionality of several executive orders issued by President

Quirino although they were involving only an indirect and

general interest shared in common with the public. The
Court dismissed the objection that they were not proper
parties and ruled that transcendental importance to the
public of these cases demands that they be settled
promptly and definitely, brushing aside, if we must,
technicalities of procedure. We have since then applied
the exception in many other cases. (Association of Small
Landowners in the Philippines, Inc. v. Sec. of Agrarian
Reform, 175 SCRA 343)." (Underscoring Supplied)
This principle was reiterated in the subsequent cases
of Gonzales vs. COMELEC,21 Daza vs.
Singson,22 andBasco vs. Phil. Amusement and Gaming
Corporation,23 where we emphatically held:
"Considering however the importance to the public of the
case at bar, and in keeping with the Courts duty, under the
1987 Constitution, to determine whether or not the other
branches of the government have kept themselves within the
limits of the Constitution and the laws and that they have not
abused the discretion given to them, the Court has brushed
aside technicalities of procedure and has taken cognizance
of this petition. x x x"
Again, in the more recent case of Kilosbayan vs.
Guingona, Jr.,24 thisCourt ruled that in cases of
transcendental importance, the Court may relax the
standing requirements and allow a suit to prosper even
where there is no direct injury to the party claiming the
right of judicial review.

Philippines. Respondents, on the contrary, maintain that Section

21, Article VII should apply inasmuch as the VFA is not a basing
arrangement but an agreement which involves merely the
temporary visits of United States personnel engaged in joint
military exercises.

"foreign military bases, troops, or facilities" may be allowed in the

Philippines only by virtue of a treaty duly concurred in by the Senate,
ratified by a majority of the votes cast in a national referendum held for
that purpose if so required by Congress, and recognized as such by
the other contracting state.

The 1987 Philippine Constitution contains two provisions

requiring the concurrence of the Senate on treaties or
international agreements. Section 21, Article VII, which herein
respondents invoke, reads:

It is our considered view that both constitutional provisions, far from

contradicting each other, actually share some common ground. These
constitutional provisions both embody phrases in the negative and
thus, are deemed prohibitory in mandate and character. In particular,
Section 21 opens with the clause "No treaty x x x," and Section 25
"No treaty or international agreement shall be valid and effective contains the phrase "shall not be allowed." Additionally, in both
unless concurred in by at least two-thirds of all the Members of instances, the concurrence of the Senate is indispensable to render
the treaty or international agreement valid and effective.
the Senate."
Section 25, Article XVIII, provides:

To our mind, the fact that the President referred the VFA to the Senate
under Section 21, Article VII, and that the Senate extended its
concurrence under the same provision, is immaterial. For in either
case, whether under Section 21, Article VII or Section 25, Article XVIII,
the fundamental law is crystalline that the concurrence of the Senate is
mandatory to comply with the strict constitutional requirements.

"After the expiration in 1991 of the Agreement between the

Republic of the Philippines and the United States of America
concerning Military Bases, foreign military bases, troops, or
facilities shall not be allowed in the Philippines except under a
treaty duly concurred in by the senate and, when the Congress
so requires, ratified by a majority of the votes cast by the people On the whole, the VFA is an agreement which defines the treatment of
United States troops and personnel visiting the Philippines. It provides
in a national referendum held for that purpose, and recognized
for the guidelines to govern such visits of military personnel, and
as a treaty by the other contracting State."
further defines the rights of the United States and the Philippine
government in the matter of criminal jurisdiction, movement of vessel
Section 21, Article VII deals with treatise or international
and aircraft, importation and exportation of equipment, materials and
agreements in general, in which case, the concurrence of at
supplies.
least two-thirds (2/3) of all the Members of the Senate is

required to make the subject treaty, or international agreement,

valid and binding on the part of the Philippines. This provision
lays down the general rule on treatise or international
Although courts generally avoid having to decide a
agreements and applies to any form of treaty with a wide variety
constitutional question based on the doctrine of separation of of subject matter, such as, but not limited to, extradition or tax
powers, which enjoins upon the departments of the
treatise or those economic in nature. All treaties or international
government a becoming respect for each others acts,25 this agreements entered into by the Philippines, regardless of
Court nevertheless resolves to take cognizance of the
subject matter, coverage, or particular designation or
instant petitions.
appellation, requires the concurrence of the Senate to be valid
and effective.
APPLICABLE CONSTITUTIONAL PROVISION
In contrast, Section 25, Article XVIII is a special provision that
One focal point of inquiry in this controversy is the
applies to treaties which involve the presence of foreign military
determination of which provision of the Constitution applies, bases, troops or facilities in the Philippines. Under this
with regard to the exercise by the senate of its constitutional provision, the concurrence of the Senate is only one of the
power to concur with the VFA. Petitioners argue that Section requisites to render compliance with the constitutional
25, Article XVIII is applicable considering that the VFA has
requirements and to consider the agreement binding on the
for its subject the presence of foreign military troops in the
Philippines. Section 25, Article XVIII further requires that

Undoubtedly, Section 25, Article XVIII, which specifically deals with

treaties involving foreign military bases, troops, or facilities, should
apply in the instant case. To a certain extent and in a limited sense,
however, the provisions of section 21, Article VII will find applicability
with regard to the issue and for the sole purpose of determining the
number of votes required to obtain the valid concurrence of the
Senate, as will be further discussed hereunder.
It is a finely-imbedded principle in statutory construction that a special
provision or law prevails over a general one.Lex specialis derogat
generali. Thus, where there is in the same statute a particular
enactment and also a general one which, in its most comprehensive
sense, would include what is embraced in the former, the particular
enactment must be operative, and the general enactment must be
taken to affect only such cases within its general language which are
not within the provision of the particular enactment. 26

In Leveriza vs. Intermediate Appellate Court,27 we

enunciated:
"x x x that another basic principle of statutory construction
mandates that general legislation must give way to a special
legislation on the same subject, and generally be so
interpreted as to embrace only cases in which the special
provisions are not applicable (Sto. Domingo vs. de los
Angeles, 96 SCRA 139), that a specific statute prevails over
a general statute (De Jesus vs. People, 120 SCRA 760) and
that where two statutes are of equal theoretical application to
a particular case, the one designed therefor specially should
prevail (Wil Wilhensen Inc. vs. Baluyot, 83 SCRA 38)."
Moreover, it is specious to argue that Section 25, Article
XVIII is inapplicable to mere transient agreements for the
reason that there is no permanent placing of structure for the
establishment of a military base. On this score, the
Constitution makes no distinction between "transient and
"permanent". Certainly, we find nothing in Section 25, Article
XVIII that requires foreign troops or facilities to be stationed
or placed permanently in the Philippines.
It is a rudiment in legal hermenuetics that when no
distinction is made by law, the Court should not
distinguish- Ubi lex non distinguit nec nos distinguire
debemos.
In like manner, we do not subscribe to the argument that
Section 25, Article XVIII is not controlling since no foreign
military bases, but merely foreign troops and facilities, are
involved in the VFA. Notably, a perusal of said constitutional
provision reveals that the proscription covers "foreign
military bases, troops, or facilities." Stated differently, this
prohibition is not limited to the entry of troops and facilities
without any foreign bases being established. The clause
does not refer to "foreign military bases, troops, or facilities"
collectively but treats them as separate and independent
subjects. The use of comma and the disjunctive word "or"
clearly signifies disassociation and independence of one
thing from the others included in the enumeration, 28 such
that, the provision contemplates three different situations - a
military treaty the subject of which could be either (a) foreign
bases, (b) foreign troops, or (c) foreign facilities - any of the
three standing alone places it under the coverage of Section
25, Article XVIII.

To this end, the intention of the framers of the Charter, as

manifested during the deliberations of the 1986 Constitutional
Commission, is consistent with this interpretation:
"MR. MAAMBONG. I just want to address a question or two to
Commissioner Bernas.
This formulation speaks of three things: foreign military bases,
troops or facilities. My first question is: If the country does
enter into such kind of a treaty, must it cover the threebases, troops or facilities-or could the treaty entered into
cover only one or two?
FR. BERNAS. Definitely, it can cover only one. Whether it
covers only one or it covers three, the requirement will be
the same.
MR. MAAMBONG. In other words, the Philippine
government can enter into a treaty covering not bases but
merely troops?
FR. BERNAS. Yes.
MR. MAAMBONG. I cannot find any reason why the
government can enter into a treaty covering only troops.
FR. BERNAS. Why not? Probably if we stretch our imagination
a little bit more, we will find some. We just want to cover
everything."29 (Underscoring Supplied)
Moreover, military bases established within the territory of
another state is no longer viable because of the alternatives
offered by new means and weapons of warfare such as nuclear
weapons, guided missiles as well as huge sea vessels that can
stay afloat in the sea even for months and years without
returning to their home country. These military warships are
actually used as substitutes for a land-home base not only of
military aircraft but also of military personnel and facilities.
Besides, vessels are mobile as compared to a land-based
military headquarters.

Section 25, Article XVIII disallows foreign military bases, troops, or

facilities in the country, unless the following conditions are sufficiently
met, viz: (a) it must be under a treaty; (b) the treaty must be duly
concurred in by the Senate and, when so required by congress,
ratified by a majority of the votes cast by the people in a national
referendum; and (c) recognized as a treaty by the other contracting
state.
There is no dispute as to the presence of the first two requisites in the
case of the VFA. The concurrence handed by the Senate through
Resolution No. 18 is in accordance with the provisions of the
Constitution, whether under the general requirement in Section 21,
Article VII, or the specific mandate mentioned in Section 25, Article
XVIII, the provision in the latter article requiring ratification by a
majority of the votes cast in a national referendum being unnecessary
since Congress has not required it.
As to the matter of voting, Section 21, Article VII particularly requires
that a treaty or international agreement, to be valid and effective, must
be concurred in by at least two-thirds of all the members of the
Senate. On the other hand, Section 25, Article XVIII simply provides
that the treaty be "duly concurred in by the Senate."
Applying the foregoing constitutional provisions, a two-thirds vote of all
the members of the Senate is clearly required so that the concurrence
contemplated by law may be validly obtained and deemed present.
While it is true that Section 25, Article XVIII requires, among other
things, that the treaty-the VFA, in the instant case-be "duly concurred
in by the Senate," it is very true however that said provision must be
related and viewed in light of the clear mandate embodied in Section
21, Article VII, which in more specific terms, requires that the
concurrence of a treaty, or international agreement, be made by a two
-thirds vote of all the members of the Senate. Indeed, Section 25,
Article XVIII must not be treated in isolation to section 21, Article, VII.
As noted, the "concurrence requirement" under Section 25, Article
XVIII must be construed in relation to the provisions of Section 21,
Article VII. In a more particular language, the concurrence of the
Senate contemplated under Section 25, Article XVIII means that at
least two-thirds of all the members of the Senate favorably vote to
concur with the treaty-the VFA in the instant case.

At this juncture, we shall then resolve the issue of whether or

Under these circumstances, the charter provides that the Senate shall
not the requirements of Section 25 were complied with when the be composed of twenty-four (24) Senators.30 Without a tinge of doubt,
Senate gave its concurrence to the VFA.
two-thirds (2/3) of this figure, or not less than sixteen (16) members,
favorably acting on the proposal is an unquestionable compliance with
the requisite number of votes mentioned in Section 21 of Article VII.

The fact that there were actually twenty-three (23) incumbent

Senators at the time the voting was made,31 will not alter in
any significant way the circumstance that more than twothirds of the members of the Senate concurred with the
proposed VFA, even if the two-thirds vote requirement is
based on this figure of actual members (23). In this regard,
the fundamental law is clear that two-thirds of the 24
Senators, or at least 16 favorable votes, suffice so as to
render compliance with the strict constitutional mandate of
giving concurrence to the subject treaty.

under international law, an executive agreement is as binding as "x x x x x x x x x

a treaty.35 To be sure, as long as the VFA possesses the
elements of an agreement under international law, the said
"Furthermore, the United States Supreme Court has expressly
agreement is to be taken equally as a treaty.
recognized the validity and constitutionality of executive agreements
entered into without Senate approval. (39 Columbia Law Review, pp.
A treaty, as defined by the Vienna Convention on the Law of
753-754) (See, also, U.S. vs. Curtis Wright Export Corporation,
Treaties, is "an international instrument concluded between
299 U.S. 304, 81 L. ed. 255; U.S. vs. Belmont, 301 U.S. 324, 81 L.
States in written form and governed by international law,
ed. 1134; U.S. vs. Pink, 315 U.S. 203, 86 L. ed. 796; Ozanic vs. U.S.
whether embodied in a single instrument or in two or more
188 F. 2d. 288; Yale Law Journal, Vol. 15 pp. 1905-1906; California
related instruments, and whatever its particular
Law Review, Vol. 25, pp. 670-675; Hyde on International Law
designation."36 There are many other terms used for a treaty or [revised Edition], Vol. 2, pp. 1405, 1416-1418; willoughby on the
Having resolved that the first two requisites prescribed in
international agreement, some of which are: act, protocol,
U.S. Constitution Law, Vol. I [2d ed.], pp. 537-540; Moore,
Section 25, Article XVIII are present, we shall now pass upon agreement, compromis d arbitrage, concordat, convention,
International Law Digest, Vol. V, pp. 210-218; Hackworth,
and delve on the requirement that the VFA should be
declaration, exchange of notes, pact, statute, charter
International Law Digest, Vol. V, pp. 390-407). (Italics
recognized as a treaty by the United States of America.
and modus vivendi. All writers, from Hugo Grotius onward, have Supplied)" (Emphasis Ours)
pointed out that the names or titles of international agreements
Petitioners content that the phrase "recognized as a treaty," included under the general term treaty have little or no legal
The deliberations of the Constitutional Commission which drafted the
significance. Certain terms are useful, but they furnish little
embodied in section 25, Article XVIII, means that the VFA
1987 Constitution is enlightening and highly-instructive:
more than mere description.37
should have the advice and consent of the United States
Senate pursuant to its own constitutional process, and that it
"MR. MAAMBONG. Of course it goes without saying that as far as
should not be considered merely an executive agreement by Article 2(2) of the Vienna Convention provides that "the
ratification of the other state is concerned, that is entirely their concern
the United States.
provisions of paragraph 1 regarding the use of terms in the
under their own laws.
present Convention are without prejudice to the use of those
terms, or to the meanings which may be given to them in the
In opposition, respondents argue that the letter of United
FR. BERNAS. Yes, but we will accept whatever they say. If they say
States Ambassador Hubbard stating that the VFA is binding internal law of the State."
that we have done everything to make it a treaty, then as far as we are
on the United States Government is conclusive, on the point
concerned, we will accept it as a treaty." 41
that the VFA is recognized as a treaty by the United States of Thus, in international law, there is no difference between
America. According to respondents, the VFA, to be binding,
treaties and executive agreements in their binding effect upon
The records reveal that the United States Government, through
must only be accepted as a treaty by the United States.
states concerned, as long as the negotiating functionaries have Ambassador Thomas C. Hubbard, has stated that the United States
remained within their powers.38 International law continues to
government has fully committed to living up to the terms of the
make no distinction between treaties and executive
This Court is of the firm view that the phrase "recognized
VFA.42 For as long as the united States of America accepts or
39
as a treaty" means that the other contracting partyaccepts agreements: they are equally binding obligations upon nations. acknowledges the VFA as a treaty, and binds itself further to comply
or acknowledges the agreement as a treaty.32 To require the
with its obligations under the treaty, there is indeed marked
other contracting state, the United States of America in this
In our jurisdiction, we have recognized the binding effect of
compliance with the mandate of the Constitution.
case, to submit the VFA to the United States Senate for
executive agreements even without the concurrence of the
concurrence pursuant to its Constitution,33 is to accord strict Senate or Congress. In Commissioner of Customs vs.
Worth stressing too, is that the ratification, by the President, of the VFA
meaning to the phrase.
Eastern Sea Trading,40 we had occasion to pronounce:
and the concurrence of the Senate should be taken as a clear an
Well-entrenched is the principle that the words used in the
Constitution are to be given their ordinary meaning except
where technical terms are employed, in which case the
significance thus attached to them prevails. Its language
should be understood in the sense they have in common
use.34
Moreover, it is inconsequential whether the United States
treats the VFA only as an executive agreement because,

"x x x the right of the Executive to enter into binding

agreements without the necessity of subsequent congressional
approval has been confirmed by long usage. From the earliest
days of our history we have entered into executive agreements
covering such subjects as commercial and consular relations,
most-favored-nation rights, patent rights, trademark and
copyright protection, postal and navigation arrangements and
the settlement of claims. The validity of these has never been
seriously questioned by our courts.

unequivocal expression of our nations consent to be bound by said

treaty, with the concomitant duty to uphold the obligations and
responsibilities embodied thereunder.
Ratification is generally held to be an executive act, undertaken by the
head of the state or of the government, as the case may be, through
which the formal acceptance of the treaty is proclaimed. 43 A State may
provide in its domestic legislation the process of ratification of a treaty.
The consent of the State to be bound by a treaty is expressed by

ratification when: (a) the treaty provides for such ratification,

(b) it is otherwise established that the negotiating States
agreed that ratification should be required, (c) the
representative of the State has signed the treaty subject to
ratification, or (d) the intention of the State to sign the treaty
subject to ratification appears from the full powers of its
representative, or was expressed during the negotiation. 44
In our jurisdiction, the power to ratify is vested in the
President and not, as commonly believed, in the legislature.
The role of the Senate is limited only to giving or withholding
its consent, or concurrence, to the ratification.45
With the ratification of the VFA, which is equivalent to final
acceptance, and with the exchange of notes between the
Philippines and the United States of America, it now
becomes obligatory and incumbent on our part, under the
principles of international law, to be bound by the terms of
the agreement. Thus, no less than Section 2, Article II of the
Constitution,46 declares that the Philippines adopts the
generally accepted principles of international law as part of
the law of the land and adheres to the policy of peace,
equality, justice, freedom, cooperation and amity with all
nations.
As a member of the family of nations, the Philippines agrees
to be bound by generally accepted rules for the conduct of
its international relations. While the international obligation
devolves upon the state and not upon any particular branch,
institution, or individual member of its government, the
Philippines is nonetheless responsible for violations
committed by any branch or subdivision of its government or
any official thereof. As an integral part of the community of
nations, we are responsible to assure that our government,
Constitution and laws will carry out our international
obligation.47 Hence, we cannot readily plead the Constitution
as a convenient excuse for non-compliance with our
obligations, duties and responsibilities under international
law.
Beyond this, Article 13 of the Declaration of Rights and
Duties of States adopted by the International Law
Commission in 1949 provides: "Every State has the duty to
carry out in good faith its obligations arising from treaties
and other sources of international law, and it may not invoke
provisions in its constitution or its laws as an excuse for
failure to perform this duty."48

Equally important is Article 26 of the convention which provides

that "Every treaty in force is binding upon the parties to it and
must be performed by them in good faith." This is known as the
principle of pacta sunt servandawhich preserves the sanctity of
treaties and have been one of the most fundamental principles
of positive international law, supported by the jurisprudence of
international tribunals.49

ratification and entering into a treaty and those necessary or incidental

to the exercise of such principal acts - squarely fall within the sphere of
his constitutional powers and thus, may not be validly struck down,
much less calibrated by this Court, in the absence of clear showing of
grave abuse of power or discretion.

It is the Courts considered view that the President, in ratifying the VFA
and in submitting the same to the Senate for concurrence, acted within
NO GRAVE ABUSE OF DISCRETION
the confines and limits of the powers vested in him by the Constitution.
It is of no moment that the President, in the exercise of his wide
latitude of discretion and in the honest belief that the VFA falls within
In the instant controversy, the President, in effect, is heavily
the ambit of Section 21, Article VII of the Constitution, referred the VFA
faulted for exercising a power and performing a task conferred
to the Senate for concurrence under the aforementioned provision.
upon him by the Constitution-the power to enter into and ratify
Certainly, no abuse of discretion, much less a grave, patent and
treaties. Through the expediency of Rule 65 of the Rules of
whimsical abuse of judgment, may be imputed to the President in his
Court, petitioners in these consolidated cases impute grave
act of ratifying the VFA and referring the same to the Senate for the
abuse of discretion on the part of the chief Executive in
ratifying the VFA, and referring the same to the Senate pursuant purpose of complying with the concurrence requirement embodied in
the fundamental law. In doing so, the President merely performed a
to the provisions of Section 21, Article VII of the Constitution.
constitutional task and exercised a prerogative that chiefly pertains to
On this particular matter, grave abuse of discretion implies such the functions of his office. Even if he erred in submitting the VFA to the
capricious and whimsical exercise of judgment as is equivalent Senate for concurrence under the provisions of Section 21 of Article
VII, instead of Section 25 of Article XVIII of the Constitution, still, the
to lack of jurisdiction, or, when the power is exercised in an
President may not be faulted or scarred, much less be adjudged guilty
arbitrary or despotic manner by reason of passion or personal
hostility, and it must be so patent and gross as to amount to an of committing an abuse of discretion in some patent, gross, and
evasion of positive duty enjoined or to act at all in contemplation capricious manner.
of law.50
For while it is conceded that Article VIII, Section 1, of the Constitution
By constitutional fiat and by the intrinsic nature of his office, the has broadened the scope of judicial inquiry into areas normally left to
the political departments to decide, such as those relating to national
President, as head of State, is the sole organ and authority in
security, it has not altogether done away with political questions such
the external affairs of the country. In many ways, the President
as those which arise in the field of foreign relations. 54 The High
is the chief architect of the nations foreign policy; his
Tribunals function, as sanctioned by Article VIII, Section 1, "is merely
"dominance in the field of foreign relations is (then)
(to) check whether or not the governmental branch or agency has
51
conceded." Wielding vast powers an influence, his conduct in
gone beyond the constitutional limits of its jurisdiction, not that it erred
the external affairs of the nation, as Jefferson describes, is
or has a different view. In the absence of a showing (of) grave
52
"executive altogether."
abuse of discretion amounting to lack of jurisdiction, there is no
occasion for the Court to exercise its corrective powerIt has no
As regards the power to enter into treaties or international
power to look into what it thinks is apparent error." 55
agreements, the Constitution vests the same in the President,
subject only to the concurrence of at least two-thirds vote of all
As to the power to concur with treaties, the constitution lodges the
the members of the Senate. In this light, the negotiation of the
same with the Senate alone. Thus, once the Senate56 performs that
VFA and the subsequent ratification of the agreement are
exclusive acts which pertain solely to the President, in the lawful power, or exercises its prerogative within the boundaries prescribed by
the Constitution, the concurrence cannot, in like manner, be viewed to
exercise of his vast executive and diplomatic powers granted
constitute an abuse of power, much less grave abuse thereof.
him no less than by the fundamental law itself. Into the field of
Corollarily, the Senate, in the exercise of its discretion and acting
negotiation the Senate cannot intrude, and Congress itself is
within the limits of such power, may not be similarly faulted for having
53
powerless to invade it. Consequently, the acts or judgment
calls of the President involving the VFA-specifically the acts of
1wphi1

simply performed a task conferred and sanctioned by no less

than the fundamental law.
For the role of the Senate in relation to treaties is essentially
legislative in character;57 the Senate, as an independent
body possessed of its own erudite mind, has the prerogative
to either accept or reject the proposed agreement, and
whatever action it takes in the exercise of its wide latitude of
discretion, pertains to the wisdom rather than the legality of
the act. In this sense, the Senate partakes a principal, yet
delicate, role in keeping the principles of separation of
powers and of checks and balances alive and vigilantly
ensures that these cherished rudiments remain true to their
form in a democratic government such as ours. The
Constitution thus animates, through this treaty-concurring
power of the Senate, a healthy system of checks and
balances indispensable toward our nations pursuit of
political maturity and growth. True enough, rudimentary is
the principle that matters pertaining to the wisdom of a
legislative act are beyond the ambit and province of the
courts to inquire.
In fine, absent any clear showing of grave abuse of
discretion on the part of respondents, this Court- as the final
arbiter of legal controversies and staunch sentinel of the
rights of the people - is then without power to conduct an
incursion and meddle with such affairs purely executive and
legislative in character and nature. For the Constitution no
less, maps out the distinct boundaries and limits the metes
and bounds within which each of the three political branches
of government may exercise the powers exclusively and
essentially conferred to it by law.
WHEREFORE, in light of the foregoing disquisitions, the
instant petitions are hereby DISMISSED.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Kapunan, Quisumbing, Purisima,
Pardo, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr.,
JJ., concur.
Melo, and Vitug, JJ., join the dissent of J. Puno.
Puno , J., see dissenting opinion.
Mendoza, J., in the result.
Panganiban, J., no part due to close personal and former
professional relations with a petitioner, Sen. J.R. Salonga.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 139465

January 18, 2000

SECRETARY OF JUSTICE, petitioner,

vs.
HON. RALPH C. LANTION, Presiding Judge, Regional
Trial Court of Manila, Branch 25, and MARK B.
JIMENEZ, respondents.
MELO, J.:
The individual citizen is but a speck of particle or
molecule vis--vis the vast and overwhelming powers of
government. His only guarantee against oppression and
tyranny are his fundamental liberties under the Bill of Rights
which shield him in times of need. The Court is now called to
decide whether to uphold a citizen's basic due process
rights, or the government's ironclad duties under a treaty.
The bugle sounds and this Court must once again act as the
faithful guardian of the fundamental writ.
The petition at our doorstep is cast against the following
factual backdrop:
On January 13, 1977, then President Ferdinand E. Marcos
issued Presidential Decree No. 1069 "Prescribing the
Procedure for the Extradition of Persons Who Have
Committed Crimes in a Foreign Country". The Decree is
founded on: the doctrine of incorporation under the
Constitution; the mutual concern for the suppression of crime
both in the state where it was committed and the state where
the criminal may have escaped; the extradition treaty with
the Republic of Indonesia and the intention of the Philippines
to enter into similar treaties with other interested countries;
and the need for rules to guide the executive department
and the courts in the proper implementation of said treaties.
On November 13, 1994, then Secretary of Justice Franklin
M. Drilon, representing the Government of the Republic of
the Philippines, signed in Manila the "Extradition Treaty

Between the Government of the Republic of the Philippines and

the Government of the United States of America" (hereinafter
referred to as the RP-US Extradition Treaty). The Senate, by
way of Resolution No. 11, expressed its concurrence in the
ratification of said treaty. It also expressed its concurrence in the
Diplomatic Notes correcting Paragraph (5)(a), Article 7 thereof
(on the admissibility of the documents accompanying an
extradition request upon certification by the principal diplomatic
or consular officer of the requested state resident in the
Requesting State).
On June 18, 1999, the Department of Justice received from the
Department of Foreign Affairs U.S. Note Verbale No. 0522
containing a request for the extradition of private respondent
Mark Jimenez to the United States. Attached to the Note
Verbale were the Grand Jury Indictment, the warrant of arrest
issued by the U.S. District Court, Southern District of Florida,
and other supporting documents for said extradition. Based on
the papers submitted, private respondent appears to be
charged in the United States with violation of the following
provisions of the United States Code (USC):
A) 18 USC 371 (Conspiracy to commit offense or to
defraud the United States; two [2] counts; Maximum
Penalty 5 years on each count);
B) 26 USC 7201 (Attempt to evade or defeat tax; four
[4] counts; Maximum Penalty 5 years on each
count);
C) 18 USC 1343 (Fraud by wire, radio, or television; two
[2] counts; Maximum Penalty 5 years on each
count);
D) 18 USC 1001 (False statement or entries; six [6]
counts; Maximum Penalty 5 years on each count);
E) 2 USC 441f (Election contributions in name of
another; thirty-three [33] counts; Maximum Penalty
less than one year).
(p. 14, Rollo.)
On the same day, petitioner issued Department Order No. 249
designating and authorizing a panel of attorneys to take charge
of and to handle the case pursuant to Section 5(1) of

Presidential Decree No. 1069. Accordingly, the panel began with the
"technical evaluation and assessment" of the extradition request and
the documents in support thereof. The panel found that the "official
English translation of some documents in Spanish were not attached
to the request and that there are some other matters that needed to be
addressed" (p. 15, Rollo).
Pending evaluation of the aforestated extradition documents, private
respondent, through counsel, wrote a letter dated July 1, 1999
addressed to petitioner requesting copies of the official extradition
request from the U.S. Government, as well as all documents and
papers submitted therewith; and that he be given ample time to
comment on the request after he shall have received copies of the
requested papers. Private respondent also requested that the
proceedings on the matter be held in abeyance in the meantime.
Later, private respondent requested that preliminary, he be given at
least a copy of, or access to, the request of the United States
Government, and after receiving a copy of the Diplomatic Note, a
period of time to amplify on his request.
In response to private respondent's July 1, 1999 letter, petitioner, in a
reply-letter dated July 13, 1999 (but received by private respondent
only on August 4, 1999), denied the foregoing requests for the
following reasons:
1. We find it premature to furnish you with copies of the
extradition request and supporting documents from the United
States Government, pending evaluation by this Department of
the sufficiency of the extradition documents submitted in
accordance with the provisions of the extradition treaty and
our extradition law. Article 7 of the Extradition Treaty between
the Philippines and the United States enumerates the
documentary requirements and establishes the procedures
under which the documents submitted shall be received and
admitted as evidence. Evidentiary requirements under our
domestic law are also set forth in Section 4 of P.D. No. 1069.
Evaluation by this Department of the aforementioned
documents is not a preliminary investigation nor akin to
preliminary investigation of criminal cases. We merely
determine whether the procedures and requirements under
the relevant law and treaty have been complied with by the
Requesting Government. The constitutionally guaranteed
rights of the accused in all criminal prosecutions are therefore
not available.

It is only after the filing of the petition for extradition

when the person sought to be extradited will be
furnished by the court with copies of the petition,
request and extradition documents and this
Department will not pose any objection to a request
for ample time to evaluate said documents.

Secretary of Justice, the Secretary of Foreign Affairs, and the

counsels for the parties herein, is set on August 17, 1999 at
Director of the National Bureau of Investigation,
9:00 o'clock in the morning. The respondents are, likewise,
for mandamus (to compel herein petitioner to furnish private
ordered to file their written comment and/or opposition to the
respondent the extradition documents, to give him access
issuance of a Preliminary Injunction on or before said date.
thereto, and to afford him an opportunity to comment on, or
oppose, the extradition request, and thereafter to evaluate the
SO ORDERED.
request impartially, fairly and objectively);certiorari (to set aside
herein petitioner's letter dated July 13, 1999); and prohibition (to
2. The formal request for extradition of the United
(pp. 110-111, Rollo.)
restrain petitioner from considering the extradition request and
States contains grand jury information and
from filing an extradition petition in court; and to enjoin the
documents obtained through grand jury process
Forthwith, petitioner initiated the instant proceedings, arguing that:
Secretary of Foreign Affairs and the Director of the NBI from
covered by strict secrecy rules under United States
law. The United States had to secure orders from the performing any act directed to the extradition of private
PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS
respondent to the United States), with an application for the
concerned District Courts authorizing the United
OF JURISDICTION OR WITH GRAVE ABUSE OF
issuance
of
a
temporary
restraining
order
and
a
writ
of
States to disclose certain grand jury information to
DISCRETION AMOUNTING TO LACK OR EXCESS OF
preliminary
injunction
(pp.
104-105,
Rollo).
Philippine government and law enforcement
JURISDICTION IN ISSUING THE TEMPORARY
personnel for the purpose of extradition of Mr.
RESTRAINING ORDER BECAUSE:
Jimenez. Any further disclosure of the said
The aforementioned petition was docketed as Civil Case No.
information is not authorized by the United States
99-94684 and thereafter raffled to Branch 25 of said regional
I.
District Courts. In this particular extradition request
trial court stationed in Manila which is presided over by the
the United States Government requested the
Honorable Ralph C. Lantion.
Philippine Government to prevent unauthorized
BY ORDERING HEREIN PETITIONER TO REFRAIN FROM
disclosure of the subject information. This
COMMITTING THE ACTS COMPLAINED OF, I.E., TO
After due notice to the parties, the case was heard on August 9,
Department's denial of your request is consistent
DESIST FROM REFUSING PRIVATE RESPONDENT
1999. Petitioner, who appeared in his own behalf, moved that
with Article 7 of the RP-US Extradition Treaty which he be given ample time to file a memorandum, but the same
ACCESS TO THE OFFICIAL EXTRADITION REQUEST AND
provides that the Philippine Government must
DOCUMENTS AND FROM DENYING PRIVATE
was denied.
represent the interests of the United States in any
RESPONDENT AN OPPORTUNITY TO FILE A COMMENT
proceedings arising out of a request for extradition.
ON, OR OPPOSITION TO, THE REQUEST, THE MAIN
On August 10, 1999, respondent judge issued an order dated
The Department of Justice under P.D. No. 1069 is
PRAYER FOR A WRIT OF MANDAMUSIN THE PETITION
the previous day, disposing:
the counsel of the foreign governments in all
FOR MANDAMUS, CERTIORARI AND PROHIBITION WAS,
extradition requests.
IN EFFECT, GRANTED SO AS TO CONSTITUTE AN
WHEREFORE, this Court hereby Orders the
ADJUDICATION ON THE MERITS OF
respondents, namely: the Secretary of Justice, the
THE MANDAMUS ISSUES;
3. This Department is not in a position to hold in
Secretary of Foreign Affairs and the Director of the
abeyance proceedings in connection with an
National Bureau of Investigation, their agents and/or
extradition request. Article 26 of the Vienna
II.
representatives to maintain the status quo by refraining
Convention on the Law of Treaties, to which we are
from committing the acts complained of; from
a party provides that "[E]very treaty in force is
PETITIONER WAS UNQUALIFIEDLY PREVENTED FROM
conducting further proceedings in connection with the
binding upon the parties to it and must be performed
PERFORMING LEGAL DUTIES UNDER THE EXTRADITION
request of the United States Government for the
by them in good faith". Extradition is a tool of
TREATY AND THE PHILIPPINE EXTRADITION LAW;
extradition of the petitioner; from filing the
criminal law enforcement and to be effective,
corresponding Petition with a Regional Trial court; and
requests for extradition or surrender of accused or
from performing any act directed to the extradition of
III.
convicted persons must be processed expeditiously.
the petitioner to the United States, for a period of twenty
(20) days from service on respondents of this Order,
THE PETITION FOR (MANDAMUS), CERTIORARI AND
(pp. 77-78, Rollo.)
pursuant to Section 5, Rule 58 of the 1997 Rules of
PROHIBITION IS, ON ITS FACE, FORMALLY AND
Court.
SUBSTANTIALLY DEFICIENT; AND
Such was the state of affairs when, on August 6, 1999,
private respondent filed with the Regional Trial Court of the
The hearing as to whether or not this Court shall issue
IV.
National Capital Judicial Region a petition against the
the preliminary injunction, as agreed upon by the

PRIVATE RESPONDENT HAS NO RIGHT IN

ESSE THAT NEEDS PROTECTION AND
ENFORCEMENT, AND WILL NOT SUFFER ANY
IRREPARABLE INJURY.
(pp. 19-20, Rollo.)
On August 17, 1999, the Court required private respondent
to file his comment. Also issued, as prayed for, was a
temporary restraining order (TRO) providing:
NOW, THEREFORE, effective immediately and
continuing until further orders from this Court, You,
Respondent Judge Ralph C. Lantion, your agents,
representatives or any person or persons acting in
your place or stead are hereby ORDERED to
CEASE and DESIST from enforcing the assailed
order dated August 9, 1999 issued by public
respondent in Civil Case No. 99-94684.
GIVEN by the Honorable HILARIO G. DAVIDE, JR.,
Chief Justice, Supreme Court of the Philippines, this
17th day of August 1999.
(pp. 120-121, Rollo.)
The case was heard on oral argument on August 31, 1999,
after which the parties, as directed, filed their respective
memoranda.
From the pleadings of the opposing parties, both procedural
and substantive issues are patent. However, a review of
these issues as well as the extensive arguments of both
parties, compel us to delineate the focal point raised by the
pleadings: During the evaluation stage of the extradition
proceedings, is private respondent entitled to the two basic
due process rights of notice and hearing? An affirmative
answer would necessarily render the proceedings at the trial
court, moot and academic (the issues of which are
substantially the same as those before us now), while a
negative resolution would call for the immediate lifting of the
TRO issued by this Court dated August 24, 1999, thus
allowing petitioner to fast-track the process leading to the
filing of the extradition petition with the proper regional trial
court. Corollarily, in the event that private respondent is
adjudged entitled to basic due process rights at the

evaluation stage of the extradition proceedings, would this

entitlement constitute a breach of the legal commitments and
obligations of the Philippine Government under the RP-US
Extradition Treaty? And assuming that the result would indeed
be a breach, is there any conflict between private respondent's
basic due process rights and the provisions of the RP-US
Extradition Treaty?

3. The text of the applicable law or a statement of the contents

of said law, and the designation or description of the offense
by the law, sufficient for evaluation of the request; and
4. Such other documents or information in support of the
request.

(Sec. 4. Presidential Decree No. 1069.)

The issues having transcendental importance, the Court has
elected to go directly into the substantive merits of the case,
Sec. 5 of the Presidential Decree, which sets forth the duty of the
brushing aside peripheral procedural matters which concern the Secretary of Foreign Affairs, pertinently provides
proceedings in Civil Case No. 99-94684, particularly the
propriety of the filing of the petition therein, and of the issuance
. . . (1) Unless it appears to the Secretary of Foreign Affairs
of the TRO of August 17, 1999 by the trial court.
that the request fails to meet the requirements of this law and
the relevant treaty or convention, he shall forward the request
To be sure, the issues call for a review of the extradition
together with the related documents to the Secretary of
procedure. The RP-US Extradition Treaty which was executed
Justice, who shall immediately designate and authorize an
only on November 13, 1994, ushered into force the
attorney in his office to take charge of the case.
implementing provisions of Presidential Decree No. 1069, also
called as the Philippine Extradition Law. Section 2(a) thereof
The above provision shows only too clearly that the executive authority
defines extradition as "the removal of an accused from the
given the task of evaluating the sufficiency of the request and the
Philippines with the object of placing him at the disposal of
foreign authorities to enable the requesting state or government supporting documents is the Secretary of Foreign Affairs. What then is
to hold him in connection with any criminal investigation directed the coverage of this task?
against him or the execution of a penalty imposed on him under
the penal or criminal law of the requesting state or government." In accordance with Paragraphs 2 and 3, Article 7 of the RP-US
Extradition Treaty, the executive authority must ascertain whether or
The portions of the Decree relevant to the instant case which
involves a charged and not convicted individual, are abstracted not the request is supported by:
as follows:
1. Documents, statements, or other types of information which
describe the identity and probable location of the person
The Extradition Request
sought;
The request is made by the Foreign Diplomat of the Requesting
State, addressed to the Secretary of Foreign Affairs, and shall
be accompanied by:
1. The original or an authentic copy of the criminal
charge and the warrant of arrest issued by the authority
of the Requesting State having jurisdiction over the
matter, or some other instruments having equivalent
legal force;
2. A recital of the acts for which extradition is requested,
with the fullest particulars as to the name and identity of
the accused, his whereabouts in the Philippines, if
known, the acts or omissions complained of, and the
time and place of the commission of these acts;

2. A statement of the facts of the offense and the procedural

history of the case;
3. A statement of the provisions of the law describing the
essential elements of the offense for which extradition is
requested;
4. A statement of the provisions of law describing the
punishment for the offense;
5. A statement of the provisions of the law describing any time
limit on the prosecution or the execution of punishment for the
offense;

6. Documents, statements, or other types of

information specified in paragraph 3 or paragraph 4
of said Article, as applicable.
(Paragraph 2, Article 7, Presidential Decree
No. 1069.)
7. Such evidence as, according to the law of the
Requested State, would provide probable cause for
his arrest and committal for trial if the offense had
been committed there;
8. A copy of the warrant or order of arrest issued by
a judge or other competent authority; and
9. A copy of the charging document.
(Paragraph 3, ibid.)
The executive authority (Secretary of Foreign Affairs) must
also see to it that the accompanying documents received in
support of the request had been certified by the principal
diplomatic or consular officer of the Requested State
resident in the Requesting State (Embassy Note No. 052
from U. S. Embassy; Embassy Note No. 951309 from the
Department of Foreign Affairs).
In this light, Paragraph 3, Article 3 of the Treaty provides that
"[e]xtradition shall not be granted if the executive authority of
the Requested State determines that the request is politically
motivated, or that the offense is a military offense which is
not punishable under non-military penal legislation."
The Extradition Petition
Upon a finding made by the Secretary of Foreign Affairs that
the extradition request and its supporting documents are
sufficient and complete in form and substance, he shall
deliver the same to the Secretary of Justice, who shall
immediately designate and authorize an attorney in his office
to take charge of the case (Paragraph [1], Section 5, P.D.
No. 1069). The lawyer designated shall then file a written
petition with the proper regional trial court of the province or
city, with a prayer that the court take the extradition request
under consideration (Paragraph [2], ibid.).

The presiding judge of the regional trial court, upon receipt of

the petition for extradition, shall, as soon as practicable, issue
an order summoning the prospective extraditee to appear and
to answer the petition on the day and hour fixed in the order.
The judge may issue a warrant of arrest if it appears that the
immediate arrest and temporary detention of the accused will
best serve the ends of justice (Paragraph [1], Section 6, ibid.),
particularly to prevent the flight of the prospective extraditee.
The Extradition Hearing
The Extradition Law does not specifically indicate whether the
extradition proceeding is criminal, civil, or a special proceeding.
Nevertheless, Paragraph [1], Section 9 thereof provides that in
the hearing of the extradition petition, the provisions of the
Rules of Court, insofar as practicable and not inconsistent with
the summary nature of the proceedings, shall apply. During the
hearing, Section 8 of the Decree provides that the attorney
having charge of the case may, upon application by the
Requesting State, represent the latter throughout the
proceedings.

A strict observance of the Extradition Law indicates that the only duty
of the Secretary of Justice is to file the extradition petition after the
request and all the supporting papers are forwarded to him by the
Secretary of Foreign Affairs. It is the latter official who is authorized to
evaluate the extradition papers, to assure their sufficiency, and under
Paragraph [3], Article 3 of the Treaty, to determine whether or not the
request is politically motivated, or that the offense is a military offense
which is not punishable under non-military penal legislation. Ipso facto,
as expressly provided in Paragraph [1], Section 5 of the Extradition
Law, the Secretary of Justice has the ministerial duty of filing the
extradition papers.

However, looking at the factual milieu of the case before us, it would
appear that there was failure to abide by the provisions of Presidential
Decree No. 1069. For while it is true that the extradition request was
delivered to the Department of Foreign Affairs on June 17, 1999, the
following day or less than 24 hours later, the Department of Justice
received the request, apparently without the Department of Foreign
Affairs discharging its duty of thoroughly evaluating the same and its
accompanying documents. The statement of an assistant secretary at
the Department of Foreign Affairs that his Department, in this regard,
is merely acting as a post office, for which reason he simply forwarded
the request to the Department of Justice, indicates the magnitude of
Upon conclusion of the hearing, the court shall render a
decision granting the extradition and giving the reasons therefor the error of the Department of Foreign Affairs in taking lightly its
responsibilities. Thereafter, the Department of Justice took it upon
upon a showing of the existence of a prima facie case, or
itself to determine the completeness of the documents and to evaluate
dismiss the petition (Section 10, ibid.). Said decision is
the same to find out whether they comply with the requirements laid
appealable to the Court of Appeals, whose decision shall be
down in the Extradition Law and the RP-US Extradition Treaty.
final and immediately executory (Section 12, ibid.). The
Petitioner ratiocinates in this connection that although the Department
provisions of the Rules of Court governing appeal in criminal
cases in the Court of Appeals shall apply in the aforementioned of Justice had no obligation to evaluate the extradition documents, the
Department also had to go over them so as to be able to prepare an
appeal, except for the required 15-day period to file brief
extradition petition (tsn, August 31, 1999, pp. 24-25). Notably, it was
(Section 13, ibid.).
also at this stage where private respondent insisted on the following;
(1) the right to be furnished the request and the supporting papers; (2)
The trial court determines whether or not the offense mentioned the right to be heard which consists in having a reasonable period of
in the petition is extraditable based on the application of the
time to oppose the request, and to present evidence in support of the
dual criminality rule and other conditions mentioned in Article 2 opposition; and (3) that the evaluation proceedings be held in
of the RP-US Extradition Treaty. The trial court also determines abeyance pending the filing of private respondent's opposition to the
whether or not the offense for which extradition is requested is a request.
political one (Paragraph [1], Article 3, RP-US Extradition
Treaty).
The two Departments seem to have misread the scope of their duties
and authority, one abdicating its powers and the other enlarging its
With the foregoing abstract of the extradition proceedings as
commission. The Department of Foreign Affairs, moreover, has,
backdrop, the following query presents itself: What is the nature through the Solicitor General, filed a manifestation that it is adopting
of the role of the Department of Justice at the evaluation stage
the instant petition as its own, indirectly conveying the message that if
of the extradition proceedings?
it were to evaluate the extradition request, it would not allow private
respondent to participate in the process of evaluation.
1wphi1.nt

Plainly then, the record cannot support the presumption of

regularity that the Department of Foreign Affairs thoroughly
reviewed the extradition request and supporting documents
and that it arrived at a well-founded judgment that the
request and its annexed documents satisfy the requirements
of law. The Secretary of Justice, eminent as he is in the field
of law, could not privately review the papers all by himself.
He had to officially constitute a panel of attorneys. How then
could the DFA Secretary or his undersecretary, in less than
one day, make the more authoritative determination?

The power of investigation consists in gathering, organizing,

and analyzing evidence, which is a useful aid or tool in an
administrative agency's performance of its rule-making or quasijudicial functions. Notably, investigation is indispensable to
prosecution.

In Ruperto v. Torres (100 Phil. 1098 [1957], unreported), the

Court had occasion to rule on the functions of an investigatory
body with the sole power of investigation. It does not exercise
judicial functions and its power is limited to investigating the
facts and making findings in respect thereto. The Court laid
The evaluation process, just like the extradition proceedings down the test of determining whether an administrative body is
proper, belongs to a class by itself. It is sui generis. It is not a exercising judicial functions or merely investigatory functions:
criminal investigation, but it is also erroneous to say that it is Adjudication signifies the exercise of power and authority to
purely an exercise of ministerial functions. At such stage, the adjudicate upon the rights and obligations of the parties before
executive authority has the power: (a) to make a technical
it. Hence, if the only purpose for investigation is to evaluate
assessment of the completeness and sufficiency of the
evidence submitted before it based on the facts and
extradition papers; (b) to outrightly deny the request if on its circumstances presented to it, and if the agency is not
face and on the face of the supporting documents the crimes authorized to make a final pronouncement affecting the parties,
indicated are not extraditable; and (c) to make a
then there is an absence of judicial discretion and judgment.
determination whether or not the request is politically
motivated, or that the offense is a military one which is not
The above description in Ruperto applies to an administrative
punishable under non-military penal legislation (tsn, August
body authorized to evaluate extradition documents. The body
31, 1999, pp. 28-29; Article 2 & and Paragraph [3], Article 3, has no power to adjudicate in regard to the rights and
RP-US Extradition Treaty). Hence, said process may be
obligations of both the Requesting State and the prospective
characterized as an investigative or inquisitorial process in
extraditee. Its only power is to determine whether the papers
contrast to a proceeding conducted in the exercise of an
comply with the requirements of the law and the treaty and,
administrative body's quasi-judicial power.
therefore, sufficient to be the basis of an extradition petition.
Such finding is thus merely initial and not final. The body has no
In administrative law, a quasi-judicial proceeding involves:
power to determine whether or not the extradition should be
(a) taking and evaluation of evidence; (b) determining facts
effected. That is the role of the court. The body's power is
based upon the evidence presented; and (c) rendering an
limited to an initial finding of whether or not the extradition
order or decision supported by the facts proved (De Leon,
petition can be filed in court.
Administrative Law: Text and Cases, 1993 ed., p. 198, citing
Morgan vs. United States, 304 U.S. 1). Inquisitorial power,
It is to be noted, however, that in contrast to ordinary
which is also known as examining or investigatory power, is investigations, the evaluation procedure is characterized by
one or the determinative powers of an administrative body
certain peculiarities. Primarily, it sets into motion the wheels of
which better enables it to exercise its quasi-judicial authority the extradition process. Ultimately, it may result in the
(Cruz, Phil. Administrative Law, 1996 ed., p. 26). This power deprivation of liberty of the prospective extraditee. This
allows the administrative body to inspect the records and
deprivation can be effected at two stages: First, the provisional
premises, and investigate the activities, of persons or entities arrest of the prospective extraditee pending the submission of
coming under its jurisdiction (Ibid., p. 27), or to require
the request. This is so because the Treaty provides that in case
disclosure of information by means or accounts, records,
of urgency, a contracting party may request the provisional
reports, testimony of witnesses, production of documents, or arrest of the person sought pending presentation of the request
otherwise (De Leon, op. cit., p. 64).
(Paragraph [1], Article 9, RP-US Extradition Treaty), but he shall
be automatically discharged after 60 days if no request is
submitted (Paragraph 4). Presidential Decree No. 1069

provides for a shorter period of 20 days after which the arrested

person could be discharged (Section 20[d]). Logically, although the
Extradition Law is silent on this respect, the provisions only mean that
once a request is forwarded to the Requested State, the prospective
extraditee may be continuously detained, or if not, subsequently
rearrested (Paragraph [5], Article 9, RP-US Extradition Treaty), for he
will only be discharged if no request is submitted. Practically, the
purpose of this detention is to prevent his possible flight from the
Requested State. Second, the temporary arrest of the prospective
extraditee during the pendency of the extradition petition in court
(Section 6, Presidential Decree No. 1069).
Clearly, there is an impending threat to a prospective extraditee's
liberty as early as during the evaluation stage. It is not only an
imagined threat to his liberty, but a very imminent one.
Because of these possible consequences, we conclude that the
evaluation process is akin to an administrative agency conducting an
investigative proceeding, the consequences of which are essentially
criminal since such technical assessment sets off or commences the
procedure for, and ultimately, the deprivation of liberty of a prospective
extraditee. As described by petitioner himself, this is a "tool" for
criminal law enforcement (p. 78,Rollo). In essence, therefore, the
evaluation process partakes of the nature of a criminal investigation. In
a number of cases, we had occasion to make available to a
respondent in an administrative case or investigation certain
constitutional rights that are ordinarily available only in criminal
prosecutions. Further, as pointed out by Mr. Justice Mendoza during
the oral arguments, there are rights formerly available only at the trial
stage that had been advanced to an earlier stage in the proceedings,
such as the right to counsel and the right against self-incrimination
(tsn, August 31, 1999, p. 135; Escobedo vs. Illinois, 378 U.S. 478;
Gideon vs. Wainwright, 372 U.S. 335; Miranda vs. Arizona, 384 U.S.
436).
In Pascual v. Board of Medical Examiners (28 SCRA 344 [1969]), we
held that the right against self-incrimination under Section 17, Article III
of the 1987 Constitution which is ordinarily available only in criminal
prosecutions, extends to administrative proceedings which possess a
criminal or penal aspect, such as an administrative investigation of a
licensed physician who is charged with immorality, which could result
in his loss of the privilege to practice medicine if found guilty. The
Court, citing the earlier case of Cabal vs. Kapunan (6 SCRA 1059
[1962]), pointed out that the revocation of one's license as a medical
practitioner, is an even greater deprivation than forfeiture of property.

Cabal vs. Kapunan (supra) involved an administrative

charge of unexplained wealth against a respondent which
was filed under Republic Act No. 1379, or the Anti-Graft Law.
Again, we therein ruled that since the investigation may
result in forfeiture of property, the administrative proceedings
are deemed criminal or penal, and such forfeiture partakes
the nature of a penalty. There is also the earlier case
of Almeda, Sr. vs. Perez (5 SCRA 970 [1962]), where the
Court, citing American jurisprudence, laid down the test to
determine whether a proceeding is civil or criminal: If the
proceeding is under a statute such that if an indictment is
presented the forfeiture can be included in the criminal case,
such proceeding is criminal in nature, although it may be civil
in form; and where it must be gathered from the statute that
the action is meant to be criminal in its nature, it cannot be
considered as civil. If, however, the proceeding does not
involve the conviction of the wrongdoer for the offense
charged, the proceeding is civil in nature.
The cases mentioned above refer to an impending threat of
deprivation of one's property or property right. No less is this
true, but even more so in the case before us, involving as it
does the possible deprivation of liberty, which, based on the
hierarchy of constitutionally protected rights, is placed
second only to life itself and enjoys precedence over
property, for while forfeited property can be returned or
replaced, the time spent in incarceration is irretrievable and
beyond recompense.
By comparison, a favorable action in an extradition request
exposes a person to eventual extradition to a foreign
country, thus saliently exhibiting the criminal or penal aspect
of the process. In this sense, the evaluation procedure is
akin to a preliminary investigation since both procedures
may have the same result the arrest and imprisonment of
the respondent or the person charged. Similar to the
evaluation stage of extradition proceedings, a preliminary
investigation, which may result in the filing of an information
against the respondent, can possibly lead to his arrest, and
to the deprivation of his liberty.
Petitioner's reliance on Wright vs. Court of Appeals (235
SCRA 241 [1992]) (p. 8, petitioner's Memorandum) that the
extradition treaty is neither a piece of criminal legislation nor
a criminal procedural statute is not well-taken.Wright is not
authority for petitioner's conclusion that his preliminary
processing is not akin to a preliminary investigation. The

characterization of a treaty in Wright was in reference to the

applicability of the prohibition against an ex post facto law. It
had nothing to do with the denial of the right to notice,
information, and hearing.
As early as 1884, the United States Supreme Court ruled that
"any legal proceeding enforced by public authority, whether
sanctioned by age or custom, or newly devised in the discretion
of the legislative power, in furtherance of the general public
good, which regards and preserved these principles of liberty
and justice, must be held to be due process of law" (Hurtado vs.
California, 110 U.S. 516). Compliance with due process
requirements cannot be deemed non-compliance with treaty
commitments.
The United States and the Philippines share a mutual concern
about the suppression and punishment of crime in their
respective jurisdictions. At the same time, both States accord
common due process protection to their respective citizens.

basic rights of notice and hearing, as well as the guarantee of being

heard by an impartial and competent tribunal (Cruz, Constitutional
Law, 1993 Ed., pp. 102-106).
True to the mandate of the due process clause, the basic rights of
notice and hearing pervade not only in criminal and civil proceedings,
but in administrative proceedings as well. Non-observance of these
rights will invalidate the proceedings. Individuals are entitled to be
notified of any pending case affecting their interests, and upon notice,
they may claim the right to appear therein and present their side and
to refute the position of the opposing parties (Cruz, Phil. Administrative
Law, 1996 ed., p. 64).
In a preliminary investigation which is an administrative investigatory
proceeding, Section 3, Rule 112 of the Rules of Court guarantees the
respondent's basic due process rights, granting him the right to be
furnished a copy of the complaint, the affidavits, and other supporting
documents, and the right to submit counter-affidavits and other
supporting documents within ten days from receipt thereof. Moreover,
the respondent shall have the right to examine all other evidence
submitted by the complainant.

The due process clauses in the American and Philippine

Constitutions are not only worded in exactly identical language
and terminology, but more importantly, they are alike in what
These twin rights may, however, be considered dispensable in certain
their respective Supreme Courts have expounded as the spirit
instances, such as:
with which the provisions are informed and impressed, the
elasticity in their interpretation, their dynamic and resilient
1. In proceeding where there is an urgent need for immediate
character which make them capable of meeting every modern
action, like the summary abatement of a nuisance per
problem, and their having been designed from earliest time to
se (Article 704, Civil Code), the preventive suspension of a
the present to meet the exigencies of an undefined and
public servant facing administrative charges (Section 63, Local
expanding future. The requirements of due process are
Government Code, B.P. Blg. 337), the padlocking of filthy
interpreted in both the United States and the Philippines as not
restaurants or theaters showing obscene movies or like
denying to the law the capacity for progress and improvement.
establishments which are immediate threats to public health
Toward this effect and in order to avoid the confines of a legal
and decency, and the cancellation of a passport of a person
straitjacket, the courts instead prefer to have the meaning of the
sought for criminal prosecution;
due process clause "gradually ascertained by the process of
inclusion and exclusion in the course of the decisions of cases
2. Where there is tentativeness of administrative action, that
as they arise" (Twining vs. New Jersey, 211 U.S. 78).
is, where the respondent is not precluded from enjoying the
Capsulized, it refers to "the embodiment of the sporting idea of
right to notice and hearing at a later time without prejudice to
fair play" (Ermita-Malate Hotel and Motel Owner's Association
the person affected, such as the summary distraint and levy of
vs. City Mayor of Manila, 20 SCRA 849 [1967]). It relates to
the property of a delinquent taxpayer, and the replacement of
certain immutable principles of justice which inhere in the very
a temporary appointee; and
idea of free government (Holden vs. Hardy, 169 U.S. 366).
Due process is comprised of two components substantive
due process which requires the intrinsic validity of the law in
interfering with the rights of the person to his life, liberty, or
property, and procedural due process which consists of the two

3. Where the twin rights have previously been offered but the
right to exercise them had not been claimed.

Applying the above principles to the case at bar, the query

may be asked: Does the evaluation stage of the extradition
proceedings fall under any of the described situations
mentioned above?
Let us take a brief look at the nature of American extradition
proceedings which are quite noteworthy considering that the
subject treaty involves the U.S. Government.
American jurisprudence distinguishes between interstate
rendition or extradition which is based on the Extradition
Clause in the U.S. Constitution (Art. IV, 2 cl 2), and
international extradition proceedings. In interstate rendition
or extradition, the governor of the asylum state has the duty
to deliver the fugitive to the demanding state. The Extradition
Clause and the implementing statute are given a liberal
construction to carry out their manifest purpose, which is to
effect the return as swiftly as possible of persons for trial to
the state in which they have been charged with crime
(31A Am Jur 2d 754-755). In order to achieve extradition of
an alleged fugitive, the requisition papers or the demand
must be in proper form, and all the elements or jurisdictional
facts essential to the extradition must appear on the face of
the papers, such as the allegation that the person demanded
was in the demanding state at the time the offense charged
was committed, and that the person demanded is charged
with the commission of the crime or that prosecution has
been begun in the demanding state before some court or
magistrate (35 C.J.S. 406-407). The extradition documents
are then filed with the governor of the asylum state, and
must contain such papers and documents prescribed by
statute, which essentially include a copy of the instrument
charging the person demanded with a crime, such as an
indictment or an affidavit made before a magistrate.
Statutory requirements with respect to said charging
instrument or papers are mandatory since said papers are
necessary in order to confer jurisdiction on the government
of the asylum state to effect extradition (35 C.J.S. 408410). A statutory provision requiring duplicate copies of the
indictment, information, affidavit, or judgment of conviction
or sentence and other instruments accompanying the
demand or requisitions be furnished and delivered to the
fugitive or his attorney is directory. However, the right being
such a basic one has been held to be a right mandatory on
demand (Ibid., p. 410, citing Ex parte Moore, 256 S.W. 2d
103, 158 Tex. Cr. 407 andEx parte Tucker, Cr., 324, S.W.2d
853).

In international proceedings, extradition treaties generally

provide for the presentation to the executive authority of the
Requested State of a requisition or demand for the return of the
alleged offender, and the designation of the particular officer
having authority to act in behalf of the demanding nation
(31A Am Jur 2d 815).
In petitioner's memorandum filed on September 15, 1999, he
attached thereto a letter dated September 13, 1999 from the
Criminal Division of the U.S. Department of Justice,
summarizing the U.S. extradition procedures and principles,
which are basically governed by a combination of treaties (with
special reference to the RP-US Extradition Treaty), federal
statutes, and judicial decisions, to wit:
1. All requests for extradition are transmitted through
the diplomatic channel. In urgent cases, requests for
the provincial arrest of an individual may be made
directly by the Philippine Department of Justice to the
U.S. Department of Justice, and vice-versa. In the event
of a provisional arrest, a formal request for extradition is
transmitted subsequently through the diplomatic
channel.

hearing; (b) the defendant is being sought for offenses for

which the applicable treaty permits extradition; and (c) there is
probable cause to believe that the defendant is the person
sought and that he committed the offenses charged (Ibid.)
5. The judge or magistrate judge is vested with jurisdiction to
certify extraditability after having received a "complaint made
under oath, charging any person found within his jurisdiction"
with having committed any of the crimes provided for by the
governing treaty in the country requesting extradition (Ibid.) [In
this regard, it is noted that a long line of American decisions
pronounce that international extradition proceedings partake
of the character of a preliminary examination before a
committing magistrate, rather than a trial of the guilt or
innocence of the alleged fugitive (31A Am Jur 2d 826).]
6. If the court decides that the elements necessary for
extradition are present, it incorporates its determinations in
factual findings and conclusions of law and certifies the
person's extraditability. The court then forwards this
certification of extraditability to the Department of State for
disposition by the Secretary of State. The ultimate decision
whether to surrender an individual rests with the Secretary of
State (18 U.S.C. 3186).

2. The Department of State forwards the incoming

Philippine extradition request to the Department of
7. The subject of an extradition request may not litigate
Justice. Before doing so, the Department of State
questions concerning the motives of the requesting
prepares a declaration confirming that a formal request
government in seeking his extradition. However, a person
has been made, that the treaty is in full force and effect,
facing extradition may present whatever information he deems
that under Article 17 thereof the parties provide
relevant to the Secretary of State, who makes the final
reciprocal legal representation in extradition
determination whether to surrender an individual to the foreign
proceedings, that the offenses are covered as
government concerned.
extraditable offenses under Article 2 thereof, and that
the documents have been authenticated in accordance From the foregoing, it may be observed that in the United States,
with the federal statute that ensures admissibility at any extradition begins and ends with one entity the Department of State
subsequent extradition hearing.
which has the power to evaluate the request and the extradition
documents in the beginning, and, in the person of the Secretary of
3. A judge or magistrate judge is authorized to issue a
State, the power to act or not to act on the court's determination of
warrant for the arrest of the prospective extraditee (18
extraditability. In the Philippine setting, it is the Department of Foreign
U.S.C. 3184). Said judge or magistrate is authorized to Affairs which should make the initial evaluation of the request, and
hold a hearing to consider the evidence offered in
having satisfied itself on the points earlier mentioned (see pp. 10-12),
support of the extradition request (Ibid.)
then forwards the request to the Department of Justice for the
preparation and filing of the petition for extradition. Sadly, however, the
4. At the hearing, the court must determine whether the Department of Foreign Affairs, in the instant case, perfunctorily turned
over the request to the Department of Justice which has taken over
person arrested is extraditable to the foreign country.
The court must also determine that (a) it has jurisdiction the task of evaluating the request as well as thereafter, if so warranted,
preparing, filing, and prosecuting the petition for extradition.
over the defendant and jurisdiction to conduct the

Private respondent asks what prejudice will be caused to the

U.S. Government should the person sought to be extradited
be given due process rights by the Philippines in the
evaluation stage. He emphasizes that petitioner's primary
concern is the possible delay in the evaluation process.

guaranteed under Article III of the Constitution is a

majority of one even as against the rest of the nation
who would deny him that right (Association of Small
Landowners in the Philippines, Inc. vs. Secretary of
Agrarian Reform, 175 SCRA 343, 375-376 [1989]).

urgently necessitates immediate and prompt action where notice and

hearing can be dispensed with?

Worthy of inquiry is the issue of whether or not there is tentativeness

of administrative action. Is private respondent precluded from enjoying
the right to notice and hearing at a later time without prejudice to him?
We agree with private respondent's citation of an American
There can be no dispute over petitioner's argument that
Here lies the peculiarity and deviant characteristic of the evaluation
Supreme Court ruling:
extradition is a tool of criminal law enforcement. To be effective, procedure. On one hand there is yet no extraditee, but ironically on the
requests for extradition or the surrender of accused or convicted other, it results in an administrative if adverse to the person involved,
may cause his immediate incarceration. The grant of the request shall
The establishment of prompt efficacious procedures persons must be processed expeditiously. Nevertheless,
accelerated
or
fast-tracked
proceedings
and
adherence
to
fair
lead to the filing of the extradition petition in court. The "accused" (as
to achieve legitimate state ends is a proper state
procedures
are,
however,
not
always
incompatible.
They
do
not
Section 2[c] of Presidential Decree No. 1069 calls him), faces the
interest worthy of cognizance in constitutional
threat of arrest, not only after the extradition petition is filed in court,
adjudication. But the Constitution recognizes higher always clash in discord. Summary does not mean precipitous
but even during the evaluation proceeding itself by virtue of the
values than speed and efficiency. Indeed, one might haste. It does not carry a disregard of the basic principles
provisional arrest allowed under the treaty and the implementing law.
fairly say of the Bill of Rights in general, and the Due inherent in "ordered liberty."
The prejudice to the "accused" is thus blatant and manifest.
Process Clause, in particular, that they
were designed to protect the fragile values of a
Is there really an urgent need for immediate action at the
vulnerable citizenry from the overbearing concern
evaluation stage? At that point, there is no extraditee yet in the
Plainly, the notice and hearing requirements of administrative due
for efficiency and efficacy that may characterize
strict sense of the word. Extradition may or may not occur. In
process cannot be dispensed with and shelved aside.
praiseworthy government officials no less, and
interstate extradition, the governor of the asylum state may not,
perhaps more, than mediocre ones.
in the absence of mandatory statute, be compelled to act
Apart from the due process clause of the Constitution, private
favorably (37 C.J.S. 387) since after a close evaluation of the
respondent likewise invokes Section 7 of Article III which reads:
extradition papers, he may hold that federal and statutory
(Stanley vs. Illinois, 404 U.S. 645, 656)
requirements, which are significantly jurisdictional, have not
Sec. 7. The right of the people to information on matters of
The United States, no doubt, shares the same interest as the been met (31 Am Jur 2d 819). Similarly, under an extradition
public concern shall be recognized. Access to official records,
treaty, the executive authority of the requested state has the
Philippine Government that no right that of liberty
and to documents and papers pertaining to official acts,
power to deny the behest from the requesting state.
secured not only by the Bills of Rights of the Philippines
transactions, or decisions, as well as to government research
Accordingly, if after a careful examination of the extradition
Constitution but of the United States as well, is sacrificed at
data used as basis for policy development, shall be afforded
documents the Secretary of Foreign Affairs finds that the
the altar of expediency.
the citizen, subject to such limitations as may be provided by
request fails to meet the requirements of the law and the treaty,
law.
he shall not forward the request to the Department of Justice for
(pp. 40-41, Private Respondent's Memorandum.)
the filing of the extradition petition since non-compliance with
The above provision guarantees political rights which are available to
the aforesaid requirements will not vest our government with
citizens of the Philippines, namely: (1) the right to information on
In the Philippine context, this Court's ruling is invoked:
jurisdiction to effect the extradition.
matters of public concern, and (2) the corollary right of access to
official records documents. The general right guaranteed by said
One of the basic principles of the democratic system In this light, it should be observed that the Department of
provision is the right to information on matters of public concern. In its
is that where the rights of the individual are
Justice exerted notable efforts in assuring compliance with the
implementation, the right of access to official records is likewise
concerned, the end does not justify the means. It is
requirements of the law and the treaty since it even informed
conferred. These cognate or related rights are "subject to limitations as
not enough that there be a valid objective; it is also
the U.S. Government of certain problems in the extradition
may be provided by law" (Bernas, The 1987 Phil. Constitution A
necessary that the means employed to pursue it be papers (such as those that are in Spanish and without the
Reviewer-Primer, 1997 ed., p. 104) and rely on the premise that
in keeping with the Constitution. Mere expediency
official English translation, and those that are not properly
ultimately it is an informed and critical public opinion which alone can
will not excuse constitutional shortcuts. There is no
authenticated). In fact, petitioner even admits that consultation
protect the values of democratic government (Ibid.).
question that not even the strongest moral
meetings are still supposed to take place between the lawyers
conviction or the most urgent public need, subject
in his Department and those from the U.S. Justice Department.
Petitioner argues that the matters covered by private respondent's
only to a few notable exceptions, will excuse the
With the meticulous nature of the evaluation, which cannot just
letter-request dated July 1, 1999 do not fall under the guarantee of the
bypassing of an individual's rights. It is no
be completed in an abbreviated period of time due to its
foregoing provision since the matters contained in the documents
exaggeration to say that a person invoking a right
intricacies, how then can we say that it is a proceeding that
requested are not of public concern. On the other hand, private

respondent argues that the distinction between matters

vested with public interest and matters which are of purely
private interest only becomes material when a third person,
who is not directly affected by the matters requested,
invokes the right to information. However, if the person
invoking the right is the one directly affected thereby, his
right to information becomes absolute.

proper functioning of the government. During the evaluation

procedure, no official governmental action of our own
government has as yet been done; hence the invocation of the
right is premature. Later, and in contrast, records of the
extradition hearing would already fall under matters of public
concern, because our government by then shall have already
made an official decision to grant the extradition request. The
extradition of a fellow Filipino would be forthcoming.

principles of international law in observance of the observance of the

Incorporation Clause in the above-cited constitutional provision (Cruz,
Philippine Political Law, 1996 ed., p. 55). In a situation, however,
where the conflict is irreconcilable and a choice has to be made
between a rule of international law and municipal law, jurisprudence
dictates that municipal law should be upheld by the municipal courts
(Ichong vs. Hernandez, 101 Phil. 1155 [1957]; Gonzales vs.
Hechanova, 9 SCRA 230 [1963]; In re: Garcia, 2 SCRA 984 [1961]) for
the reason that such courts are organs of municipal law and are
The concept of matters of public concerns escapes exact
definition. Strictly speaking, every act of a public officer in
We now pass upon the final issue pertinent to the subject matter accordingly bound by it in all circumstances (Salonga & Yap, op. cit.,
p. 13). The fact that international law has been made part of the law of
the conduct of the governmental process is a matter of
of the instant controversy: Would private respondent's
public concern (Bernas, The 1987 Constitution of the
entitlement to notice and hearing during the evaluation stage of the land does not pertain to or imply the primacy of international law
over national or municipal law in the municipal sphere. The doctrine of
Republic of the Philippines, 1996 ed., p. 336). This concept
the proceedings constitute a breach of the legal duties of the
incorporation, as applied in most countries, decrees that rules of
embraces a broad spectrum of subjects which the public
Philippine Government under the RP-Extradition Treaty?
international law are given equal standing with, but are not superior to,
may want to know, either because these directly affect their
Assuming the answer is in the affirmative, is there really a
national legislative enactments. Accordingly, the principle lex posterior
lives or simply because such matters arouse the interest of
conflict between the treaty and the due process clause in the
derogat priori takes effect a treaty may repeal a statute and a
an ordinary citizen (Legaspi v. Civil Service Commission,
Constitution?
statute may repeal a treaty. In states where the constitution is the
150 SCRA 530 [1987]). Hence, the real party in interest is
highest law of the land, such as the Republic of the Philippines, both
the people and any citizen has "standing".
First and foremost, let us categorically say that this is not the
statutes and treaties may be invalidated if they are in conflict with the
proper time to pass upon the constitutionality of the provisions
constitution (Ibid.).
When the individual himself is involved in official government of the RP-US Extradition Treaty nor the Extradition Law
action because said action has a direct bearing on his life,
implementing the same. We limit ourselves only to the effect of
In the case at bar, is there really a conflict between international law
and may either cause him some kind of deprivation or injury, the grant of the basic rights of notice and hearing to private
and municipal or national law? En contrario, these two components of
he actually invokes the basic right to be notified under
respondent on foreign relations.
the law of the land are not pined against each other. There is no
Section 1 of the Bill of Rights and not exactly the right to
occasion to choose which of the two should be upheld. Instead, we
information on matters of public concern. As to an accused
The rule of pacta sunt servanda, one of the oldest and most
in a criminal proceeding, he invokes Section 14, particularly fundamental maxims of international law, requires the parties to see a void in the provisions of the RP-US Extradition Treaty, as
implemented by Presidential Decree No. 1069, as regards the basic
the right to be informed of the nature and cause of the
a treaty to keep their agreement therein in good faith. The
due process rights of a prospective extraditee at the evaluation stage
accusation against him.
observance of our country's legal duties under a treaty is also
of extradition proceedings. From the procedures earlier abstracted,
compelled by Section 2, Article II of the Constitution which
The right to information is implemented by the right of
provides that "[t]he Philippines renounces war as an instrument after the filing of the extradition petition and during the judicial
determination of the propriety of extradition, the rights of notice and
access to information within the control of the government
of national policy, adopts the generally accepted principles of
hearing are clearly granted to the prospective extraditee. However,
(Bernas, The 1987 Constitution of the Republic of the
international law as part of the law of the land, and adheres to
prior thereto, the law is silent as to these rights. Reference to the U.S.
Philippines, 1996 ed., p. 337). Such information may be
the policy of peace, equality, justice, freedom, cooperation and
contained in official records, and in documents and papers
amity with nations." Under the doctrine of incorporation, rules of extradition procedures also manifests this silence.
pertaining to official acts, transactions, or decisions.
international law form part of the law of the and land no further
legislative action is needed to make such rules applicable in the Petitioner interprets this silence as unavailability of these rights.
domestic sphere (Salonga & Yap, Public International Law, 1992 Consequently, he describes the evaluation procedure as an "ex
In the case at bar, the papers requested by private
parte technical assessment" of the sufficiency of the extradition
ed., p. 12).
respondent pertain to official government action from the
request and the supporting documents.
U.S. Government. No official action from our country has yet
been taken. Moreover, the papers have some relation to
The doctrine of incorporation is applied whenever municipal
matters of foreign relations with the U.S. Government.
tribunals (or local courts) are confronted with situations in which We disagree.
Consequently, if a third party invokes this constitutional
there appears to be a conflict between a rule of international law
provision, stating that the extradition papers are matters of
and the provisions of the constitution or statute of the local
In the absence of a law or principle of law, we must apply the rules of
public concern since they may result in the extradition of a
state. Efforts should first be exerted to harmonize them, so as to fair play. An application of the basic twin due process rights of notice
Filipino, we are afraid that the balance must be tilted, at such give effect to both since it is to be presumed that municipal law and hearing will not go against the treaty or the implementing law.
particular time, in favor of the interests necessary for the
was enacted with proper regard for the generally accepted
Neither the Treaty nor the Extradition Law precludes these rights from

a prospective extraditee. Similarly, American jurisprudence

and procedures on extradition pose no proscription. In fact,
in interstate extradition proceedings as explained above, the
prospective extraditee may even request for copies of the
extradition documents from the governor of the asylum state,
and if he does, his right to be supplied the same becomes a
demandable right (35 C.J.S. 410).

since Presidential Decree No. 1069 does not provide therefor,

notwithstanding Section 13, Article III of the Constitution which
provides that "[a]ll persons, except those charged with offenses
punishable by reclusion perpetua when evidence of guilt is
strong, shall, before conviction, be bailable by sufficient
sureties, or be released on recognizance as may be provided by
law. The right to bail shall not be impaired even when the
privilege of the writ of habeas corpus is suspended. . ." Can
petitioner validly argue that since these contraventions are by
Petitioner contends that the United States requested the
Philippine Government to prevent unauthorized disclosure of virtue of a treaty and hence affecting foreign relations, the
confidential information. Hence, the secrecy surrounding the aforestated guarantees in the Bill of Rights could thus be
subservient thereto?
action of the Department of Justice Panel of Attorneys. The
confidentiality argument is, however, overturned by
petitioner's revelation that everything it refuses to make
The basic principles of administrative law instruct us that "the
available at this stage would be obtainable during trial. The
essence of due process in administrative proceeding is an
Department of Justice states that the U.S. District Court
opportunity to explain one's side or an opportunity to seek
concerned has authorized the disclosure of certain grand
reconsideration of the actions or ruling complained of (Mirano
jury information. If the information is truly confidential, the
vs. NLRC, 270 SCRA 96 [1997]; Padilla vs. NLRC, 273 SCRA
veil of secrecy cannot be lifted at any stage of the extradition 457 [1997]; PLDT vs. NLRC, 276 SCRA 1 [1997]; Helpmate,
proceedings. Not even during trial.
Inc. vs. NLRC, 276 SCRA 315 [1997]; Aquinas School vs.
Magnaye, 278 SCRA 602 [1997]; Jamer vs. NLRC, 278 SCRA
A libertarian approach is thus called for under the premises. 632 [1997]). In essence, procedural due process refers to the
method or manner by which the law is enforced (Corona vs.
United Harbor Pilots Association of the Phils., 283 SCRA 31
One will search in vain the RP-US Extradition Treaty, the
[1997]). This Court will not tolerate the least disregard of
Extradition Law, as well as American jurisprudence and
constitutional guarantees in the enforcement of a law or treaty.
procedures on extradition, for any prohibition against the
conferment of the two basic due process rights of notice and Petitioner's fears that the Requesting State may have valid
objections to the Requested State's non-performance of its
hearing during the evaluation stage of the extradition
commitments under the Extradition Treaty are insubstantial and
proceedings. We have to consider similar situations in
should not be given paramount consideration.
jurisprudence for an application by analogy.
Earlier, we stated that there are similarities between the
evaluation process and a preliminary investigation since both
procedures may result in the arrest of the respondent or the
prospective extraditee. In the evaluation process, a
provisional arrest is even allowed by the Treaty and the
Extradition Law (Article 9, RP-US Extradition Treaty; Sec.
20, Presidential Decree No. 1069). Following petitioner's
theory, because there is no provision of its availability, does
this imply that for a period of time, the privilege of the writ
of habeas corpus is suspended, despite Section 15, Article
III of the Constitution which states that "[t]he privilege of the
writ or habeas corpus shall not be suspended except in
cases of invasion or rebellion when the public safety requires
it"? Petitioner's theory would also infer that bail is not
available during the arrest of the prospective extraditee
when the extradition petition has already been filed in court

How then do we implement the RP-US Extradition Treaty? Do

we limit ourselves to the four corners of Presidential Decree No.
1069?

as amended by Presidential Decree No. 1707, although summary

dismissals may be effected without the necessity of a formal
investigation, the minimum requirements of due process still operate.
As held in GSIS vs. Court of Appeals:
. . . [I]t is clear to us that what the opening sentence of Section
40 is saying is that an employee may be removed or
dismissed even without formal investigation, in certain
instances. It is equally clear to us that an employee must be
informed of the charges preferred against him, and that the
normal way by which the employee is so informed is by
furnishing him with a copy of the charges against him. This is
a basic procedural requirement that a statute cannot dispense
with and still remain consistent with the constitutional provision
on due process. The second minimum requirement is that the
employee charged with some misfeasance or malfeasance
must have a reasonable opportunity to present his side of the
matter, that is to say, his defenses against the charges
levelled against him and to present evidence in support of his
defenses. . . .
(at p. 671)
Said summary dismissal proceedings are also non-litigious in nature,
yet we upheld the due process rights of the respondent.
In the case at bar, private respondent does not only face a clear and
present danger of loss of property or employment, but of liberty itself,
which may eventually lead to his forcible banishment to a foreign land.
The convergence of petitioner's favorable action on the extradition
request and the deprivation of private respondent's liberty is easily
comprehensible.

We have ruled time and again that this Court's equity jurisdiction,
which is aptly described as "justice outside legality," may be availed of
Of analogous application are the rulings in Government Service only in the absence of, and never against, statutory law or judicial
Insurance System vs. Court of Appeals (201 SCRA 661 [1991]) pronouncements (Smith Bell & Co., Inc. vs. Court of Appeals, 267
and Go vs. National Police Commission (271 SCRA 447 [1997]) SCRA 530 [1997]; David-Chan vs. Court of Appeals, 268 SCRA 677
where we ruled that in summary proceedings under Presidential [1997]). The constitutional issue in the case at bar does not even call
Decree No. 807 (Providing for the Organization of the Civil
for "justice outside legality," since private respondent's due process
Service Commission in Accordance with Provisions of the
rights, although not guaranteed by statute or by treaty, are protected
Constitution, Prescribing its Powers and Functions and for
by constitutional guarantees. We would not be true to the organic law
Other Purposes), and Presidential Decree No. 971 (Providing
of the land if we choose strict construction over guarantees against the
Legal Assistance for Members of the Integrated National Police deprivation of liberty. That would not be in keeping with the principles
who may be charged for Service-Connected Offenses and
of democracy on which our Constitution is premised.
Improving the Disciplinary System in the Integrated National
Police, Appropriating Funds Therefor and for other purposes),

Verily, as one traverses treacherous waters of conflicting and the operation of the constitutional guaranty and that the
opposing currents of liberty and government authority, he
exercise of the right conforms with such reasonable conditions
must ever hold the oar of freedom in the stronger arm, lest
as may be prescribed by law.
an errant and wayward course be laid.
There is no hornbook rule to determine whether or not an
WHEREFORE, in view of the foregoing premises, the instant information is of public concern. The term "public concern"
petition is hereby DISMISSED for lack of merit. Petitioner is eludes exactitude, and it can easily embrace a broad spectrum
ordered to furnish private respondent copies of the
of matters which the public may want to know either because
extradition request and its supporting papers, and to grant
the subject thereof can affect their lives or simply because it
him a reasonable period within which to file his comment
arouses concern.2
with supporting evidence. The incidents in Civil Case No. 9994684 having been rendered moot and academic by this
I am not convinced that there is something so viciously wrong
decision, the same is hereby ordered dismissed.
with, as to deny, the request of private respondent to be
furnished with copies of the extradition documents.
SO ORDERED.
I add. The constitutional right to due process secures to
Bellosillo, Purisima, Buena and De Leon, Jr., JJ., concur.
everyone an opportunity to be heard, presupposing
Davide, Jr., C.J., I join Mr. Justice Puno in his dissent.
foreknowledge of what he may be up against, and to submit any
Puno, J., please see dissent.
evidence that he may wish to proffer in an effort to clear himself.
Vitug, J., see separate opinion.
This right is two-pronged substantive and procedural due
Kapunan, J., see separate concurring opinion.
process founded, in the first instance, on Constitutional or
Panganiban, J., please see my dissenting opinion.
statutory provisions, and in the second instance, on accepted
Mendoza, J., I join the dissents of Puno and Panganiban, JJ. rules of procedure.3Substantive due process looks into the
Quisumbing, J., with concurring opinion.
extrinsic and intrinsic validity of the law that figures to interfere
Pardo, J., I join J. Puno & J. Panganiban.
with the right of a person to his life, liberty and property.
Gonzaga-Reyes, J., I join the dissent of Justices Puno &
Procedural due process the more litigated of the two
Panganiban.
focuses on the rules that are established in order to ensure
Ynares-Santiago, J., please see separate concurring
meaningful adjudication in the enforcement and implementation
opinion.
of the law. Like "public concern," the term due process does not
admit of any restrictive definition. Justice Frankfurter has viewed
this flexible concept, aptly I believe, as being ". . . compounded
Separate Opinions
by history, reason, the past course of decisions, and stout
confidence in the democratic faith."4 The framers of our own
VITUG, J., separate opinion;
Constitution, it would seem, have deliberately intended, to make
it malleable to the ever-changing milieu of society. Hitherto, it is
The only real issue before the Court, I would take it, is
dynamic and resilient, adaptable to every situation calling for its
whether or not private respondent can validly ask for copies application that makes it appropriate to accept an enlarged
of pertinent documents while the application for extradition
concept of the term as and when there is a possibility that the
against him is still undergoing process by the Executive
right of an individual to life, liberty and property might be
Department.
diffused.5 Verily, whenever there is an imminent threat to the
life, liberty or property of any person in any proceeding
There is, I agree with the majority, a right of access to such
conducted by or under the auspices of the State, his right to due
extradition documents conformably with the provisions of
process of law, when demanded, must not be ignored.
Article III, Section 7, of the Philippine Constitution. 1 The
constitutional right to free access to information of public
A danger to the liberty of the extraditee, the private respondent,
concern is circumscribed only by the fact that the desired
is real. Article 9 of the Extradition Treaty between the
information is not among the species exempted by law from Government of the Republic of the Philippines and the

Government of the United States of America provides that in case of

urgency, a Contracting Party may request the provisional arrest of the
person prior to the presentation of the request for extradition. I see
implicit in this provision that even after the request for extradition is
made and before a petition for extradition is filed with the courts, the
possibility of an arrest being made on the basis of a mere evaluation
by the Executive on the request for extradition by the foreign State
cannot totally be discounted.
The conclusion reached by the majority, I hasten to add, does not
mean that the Executive Department should be impeded in its
evaluation of the extradition request. The right of the extraditee to be
furnished, upon request, with a copy of the relevant documents and to
file his comment thereon is not necessarily anathema to the
proceedings duly mandated by the treaty to be made.
I vote to deny the petition.
KAPUNAN, J., separate concurring opinion;
I vote to dismiss the petition, both on technical and substantial
grounds.
The petition in the case at bar raises one and only issue, which is the
validity of the Temporary Restraining Order (TRO) issued by
respondent Judge Ralph C. Lantion on August 9, 1999 in Civil Case
No. 99-94684. The TRO directed respondents in said case to:
. . . maintain the status quo by refraining from committing the
acts complained of; from conducting further proceedings in
connection with the request of the United States Government
for the extradition of the petitioner; from filing the
corresponding Petition with the Regional Trial Court; and from
performing any act directed to the extradition of the petitioner
to the United States, for a period of twenty days from the
service on respondents of this Order, pursuant to Section 5,
Rule 58 of the 1997 Rules of Court.1 (Emphasis ours.)
The petition itself categorically states that "(t)he issue sought to be
presented and litigated here is solely-the validity of the TRO." 2
Notably, there is no allegation in the petition that respondent Judge is
without jurisdiction to hear the case below or that he has exceeded his
jurisdiction in hearing the same. Nor is there any other act, ruling,
order, or decision, apart from the TRO already mentioned, of
respondent Judge that is being challenged in the petition before us.

Since, as alleged in the petition, a copy of the TRO was

served on respondents below on August 10, 1999, the TRO
ceased to be effective on August 30, 1999; consequently, the
instant petition has become moot and academic. This Court
does not exercise jurisdiction over cases which are
moot and academic or those not ripe for judicial
consideration.3

The right to due process is a universal basic right which is

evaluates whether a petition for extradition would be filed before a
deemed written into our laws and treaties with foreign countries. regional trial court. If denied such rights, not only denial of due process
rights but of equal protection may be raised.
Like a preliminary investigation, the evaluation by the
Department of Justice of the extradition request and its
It is suggested that after a petition for extradition is filed with a regional
accompanying documents is to establish probable cause and to trial court, the person sought to be extradited may exercise all due
secure the innocent against hasty, malicious and oppressive
process rights. He may then have access to all the records on the
prosecution.
basis of which the request for extradition has been made. He may
Assuming that the present case has not become moot and
controvert that evidence and raise all defenses he may consider
academic, still, it should be dismissed for lack of merit.
appropriate. That, it is urged, meets the due process requirement.
In this connection, it should be stressed that the evaluation
procedure of the extradition request and its accompanying
The substantive issues raised in this case are: (a) whether a documents by the Department of Justice cannot be
But why must he wait until the petition for extradition is filed? As
person whose extradition is sought by a foreign state has
characterized as a mere "ex-parte technical assessment of the
succinctly expressed, if the right to notice and hearing is to serve its
due process rights under Section 2, Article III of the 1997
sufficiency" thereof. The function and responsibilities of the
full purpose, then, it is clear that it must be granted at a time when the
Constitution before the Department of Justice as the request Department of Justice in evaluating the extradition papers
deprivation can still be prevented.4 Like the filing of an information in a
for extradition is being evaluated, or whether due process
involve the exercise of judgment. They involve a determination
criminal case, the mere filing of a petition for extradition causes
rights maybe invoked only upon the filing of a petition for
whether the request for extradition conforms fully to the
immediate impairment of the liberty of the person sought to be
extradition before a regional trial court; and (b) whether or
requirements of the extradition treaty and whether the offense is extradited and a substantial curtailment of other rights. His arrest may
not private respondent has a right of access to extradition
extraditable. These include, among others, whether the offense be immediately ordered by the regional trial court. He would be
documents under Section 7, Article III of the 1997
for which extradition is requested is a political or military offense compelled to face an open and public trial. He will be constrained to
Constitution.
(Article 3); whether the documents and other informations
seek the assistance of counsel and incur other expenses of litigation.
required under Article 7(2) have been provided (Article 7); and
The public eye would be directed at him with all the concomitant
whether
the
extraditable
offense
is
punishable
under
the
laws
of
intrusions to his right to privacy. Where the liberty of a person is at risk,
Petitioner contends that due process rights such as the right
both
contracting
parties
by
deprivation
of
liberty
for
a
period
of
and extradition strikes at the very core of liberty, invocation of due
to be informed of the basis of the request for extradition and
more
than
one
year
(Article
2).
Consequently,
to
arrive
at
a
process rights can never be too early.
to have an opportunity to controvert are not provided in the
extradition treaty or in P.D. 1069 and therefore does not exist correct judgment, the parties involved are entitled to be heard if
the requirements of due process and equal protection are to be QUISUMBING, J., concurring opinion;
in this stage of the proceedings. Further, he argues that the
documents sought to be furnished to private respondent only observed.
involve private concerns, and not matters of public
As I concur in the result reached by the ponencia of Justice Melo, may
concern to which the people have a constitutional right to
With respect to petitioner's claim that private respondent has no I just add my modest observations.
access.
right to demand access to the documents relating to the request
for extradition, suffice it to say, that any document used in a
The human rights of person, whether citizen or alien, and the rights of
proceeding that would jeopardize a person's constitutional rights the accused guaranteed in our Constitution should take precedence
While the evaluation process conducted by the Department
of Justice is not exactly a preliminary investigation of criminal is matter of public concern. As Martin Luther King said, "injustice over treaty rights claimed by a contracting state. Stated otherwise, the
anywhere is a threat to justice everywhere," so any violation of
cases, it is akin to a preliminary investigation because it
constitutionally mandated duties of our government to the individual
one's rights guaranteed by the Bill of Rights is everybody's
involves the basic constitutional rights of the person sought
deserve preferential consideration when they collide with its treaty
concern because they, one way or another, directly or indirectly, obligations to the government of another state. This is so although we
to be extradited. A person ordered extradited is arrested,
forcibly taken from his house, separated from his family and affect the rights of life and liberty of all the citizens as a whole.
recognize treaties as a source of binding obligations under generally
delivered to a foreign state. His rights of abode, to privacy,
accepted principles of international law incorporated in our
liberty and pursuit of happiness are taken away from him Due process rights in a preliminary investigation is now an
Constitution as part of the law of the land.
a fate as harsh and cruel as a conviction of a criminal
established principle. The respondent has a right of access to
offense. For this reason, he is entitled to have access to the all of the evidence. He has the right to submit controverting
For this primordial reason, I vote to DENY the petition.
evidence against him and the right to controvert them.
evidence. The prosecuting official who conducts the preliminary
investigation is required to be neutral, objective, and impartial in
Moreover, considering that the Extradition Treaty between the USA
While the extradition treaty and P.D. 1069 do not provide for resolving the issue of probable cause. I see no reason why the
and Philippines appears mute on the specific issue before us, the
same rights may not be accorded a person sought to be
a preliminary investigation, neither does either prohibit it.
Court in the exercise of its judicial power to find and state what the
extradited at the stage where the Department of Justice

law is has this rare opportunity of setting a precedent that

enhances respect for human rights and strengthens due
process of law.
As both majority and dissenting colleagues in the Court will
recognize, American authorities follow two tracks in
extradition proceedings: (1) the interstate practice where,
pursuant to statute, the state Executive upon demand
furnishes the would be extraditee or counsel copies of
pertinent documents as well as the request for extradition;
and (2) the international practice where the Executive
department need not initially grant notice and hearing at all.
Rules of reciprocity and comity, however, should not bar us
from applying internationally now what appears the more
reasonable and humane procedure, that is, the interstate
practice among Americans themselves. For in this case the
American people should be among the most interested
parties.
Truly, what private respondent is asking our Executive
department (notice, copies of documents, and the
opportunity to protect himself at the earliest time against
probable peril) does not, in my view, violate our Extradition
Treaty with the USA. His request if granted augurs well for
transparency in interstate or intergovernmental relations
rather than secrecy which smacks of medieval diplomacy
and the inquisition discredited long ago.
That private respondent is a Filipino citizen is not decisive of
the issue here, although it is obviously pertinent. Even if he
were a resident alien (other than American perhaps), he is,
in my view, entitled to our full protection against the hazards
of extradition (or deportation, similarly) from the very start.
More so because, looking at the facts adduced at the
hearing and on the record of this case, the charges against
him involve or are co-mingled with, if not rooted in, certain
offenses of a political nature or motivation such as the ones
involving alleged financial contributions to a major American
political party. If so, long established is the principle that
extradition could not be utilized for political offenses or
politically motivated charges.

fodder there is not far-fetched, hence the need here for cautious
but comprehensive deliberation on the matter at bar. For, above
all, it is not only a Treaty provision we are construing; it is about
constitutional and human rights we are most concerned.
YNARES-SANTIAGO, J., concurring opinion;
I concur in the ponencia of Mr. Justice Jose A.R. Melo with its
conceptive analysis of a citizen's right to be given what is due to
him. I join in his exposition of this Court's constitutional duty to
strike the correct balance between overwhelming Government
power and the protection of individual rights where only one
person is involved.

1. In evaluating the documents, the Department merely

determines whether the procedures and requirements under
the relevant law and treaty have been complied with by the
Requesting Government. The constitutional rights of the
accused in all criminal prosecutions are, therefore, not
available.
2. The United States Government has requested the
Philippine Government to prevent unauthorized disclosure of
certain grand jury information.
3. The petitioner cannot hold in abeyance proceedings in
connection with an extradition request. For extradition to be an
effective tool of criminal law enforcement, requests for
surrender of accused or convicted persons must be processed
expeditiously.

However, I am constrained to write this short concurrence if only

to pose the question of why there should be any debate at all on
a plea for protection of one's liberty which, if granted, will not
result in any meaningful impediment of thwarting any state
I respectfully submit that any apprehensions in the Court arising from a
policy and objectives.
denial of the petition "breach of an international obligation, rupture
of states relations, forfeiture of confidence, national embarrassment,
I see no reason why respondent Mark Jimenez, or other citizens and a plethora of other equally undesirable consequences" are
more illusory than real. Our country is not denying the extradition of a
not as controversial or talked about, should first be exposed to
person who must be extradited. Not one provision of the extradition
the indignity, expense, and anxiety of a public denunciation in
court before he may be informed of what the contracting states treaty is violated. I cannot imagine the United States taking issue over
what, to it, would be a minor concession, perhaps a slight delay,
in an extradition treaty have against him. There is no question
that everything which respondent Jimenez now requests will be accorded in the name of human rights. On the other hand, the issue is
fundamental in the Philippines. A citizen is invoking the protection, in
given to him during trial. Mr. Jimenez is only petitioning that, at
this stage, he should be informed why he may be deported from the context of a treaty obligation, of rights expressly guaranteed by the
Philippine Constitution.
his own country.
I see no ill effects which would arise if the extradition request
and supporting documents are shown to him now, instead of
later.
Petitioner Secretary of Justice states that his action on the
extradition request and its supporting documents will merely
determine whether or not the Philippines is complying with its
treaty obligations. He adds that, therefore, the constitutional
rights of an accused in all criminal prosecutions are not
available to the private respondent.

The July 13, 1999 reply-letter from petitioner states the reasons
There may, of course, be other charges against private
why he is denying respondent Jimenez's requests. In short, the
respondent in the USA. But then they are, in my view,
reasons are:
already tainted there with political color due to the highly
charged partisan campaign atmosphere now prevailing. That
private respondent's cases will be exploited as political

Until proved to be a valid subject for extradition, a person is presumed

innocent or not covered by the sanctions of either criminal law or
international treaty. At any stage where a still prospective extraditee
only seeks to know so that he can prepare and prove that he should
not be extradited, there should be no conflict over the extension to him
of constitutional protections guaranteed to aliens and citizens alike.
Petitioner cites as a reason for the denial of respondent's requests,
Article 7 of the Treaty. Article 7 enumerates the required documents
and establishes the procedures under which the documents shall be
submitted and admitted as evidence. There is no specific provision on
how that Secretary of Foreign Affairs should conduct his evaluation.
The Secretary of Justice is not even in the picture at this stage. Under
petitioner's theory, silence in the treaty over a citizen's rights during the
evaluation stage is interpreted as deliberate exclusion by the
contracting states of the right to know. Silence is interpreted as the
exclusion of the right to a preliminary examination or preliminary

investigation provided by the laws of either one of the two

states.

It is obvious that any prospective extraditee wants to know if his

identity as the person indicated has been established.
Considering the penchant of Asians to adopt American names
The right to be informed of charges which may lead to court when in America, the issue of whether or not the prospective
proceedings and result in a deprivation of liberty is ordinarily extraditee truly is the person charged in the United States
routine. It is readily available to one against whom the state's becomes a valid question. It is not only identity of the person
which is involved. The crimes must also be unmistakably
coercive power has already been focused. I fail to see how
identified and their essential elements clearly stated.
silence can be interpreted as exclusion. The treaty is silent
because at this stage, the preliminary procedure is still an
internal matter. And when a law or treaty is silent, it means a There are other preliminary matters in which respondent is
right or privilege may be granted. It is not the other way
interested. I see nothing in our laws or in the Treaty which
around.
prohibits the prospective extraditee from knowing until after the
start of trial whether or not the extradition treaty applies to him.
The second reason alleging the need for secrecy and
confidentiality is even less convincing. The explanation of
Paraphrasing Hasmin vs. Boncan, 71 Phil. 216; Trocio vs.
petitioner is self-contradictory. On one hand, petitioner
Manta, 118 SCRA 241 (1941); and Salonga vs. Hon. Pao, 134
asserts that the United States Government requested the
SCRA 438 (1985), the purpose of a preliminary evaluation is to
Philippine Government to prevent unauthorized disclosure of secure an innocent person against hasty, faulty and, therefore,
certain information. On the other hand, petitioner declares
oppressive proceedings; to protect him from an open and
that the United States has already secured orders from
extensively publicized accusation of crimes; to spare him the
concerned District Courts authorizing the disclosure of the
trouble, expense, and anxiety of a public trial; and also to
same grand jury information to the Philippine Government
protect the state from useless and expensive trails. Even if the
and its law enforcement personnel.
purpose is only to determine whether or not the respondent is a
proper subject for extradition, he is nonetheless entitled to the
guarantees of fairness and freedom accorded to those charged
Official permission has been given. The United States has
with ordinary crimes in the Philippines.
no cause to complain about the disclosure of information
furnished to the Philippines.
The third reason given by petitioner is the avoidance of delay.
Moreover, how can grand jury information and documents be Petitioner views the request to be informed as part of
considered confidential if they are going to be introduced as undesirable delaying tactics. This is most unfortunate. Any
request for extradition must be viewed objectively and
evidence in adversely proceedings before a trial court? The
impartially without any predisposition to granting it and,
only issue is whether or not Mr. Jimenez should be
therefore, hastening the extradition process.
extradited. His innocence or guilt of any crime will be
determined in an American court. It is there where
prosecution strategies will be essential. If the Contracting
In the first place, any assistance which the evaluating official
States believed in a total non-divulging of information prior to may get from the participation of respondent may well point out
court hearings, they would have so provided in the
deficiencies and insufficiencies in the extradition documents. It
extradition treaty. A positive provision making certain rights
would incur greater delays if these are discovered only during
unavailable cannot be implied from silence.
court trial. On the other hand, if, from respondent's participation,
the evaluating official discovers a case of mistaken identity,
insufficient pleadings, inadequate complaints, or any ruinous
I cannot believe that the United States and the Philippines
shortcoming, there would be no delays during trial. An
with identical constitutional provisions on due process and
basic rights should sustain such a myopic view in a situation unnecessary trial with all its complications would be avoided.
where the grant of a right would not result in any serious
setbacks to criminal law enforcement.
The right to be informed is related to the constitutional right to a
speedy trial. The constitutional guarantee extends to the speedy
disposition of cases before all quasi-judicial and administrative

bodies (Constitution, Art. III, Sec. 16). Speedy disposition, however,

does not mean the deliberate exclusion of the defendant or
respondent from the proceedings. As this Court rules in Acebedo vs.
Sarmiento, 36 SCRA 247 (1970), "the right to a speedy trial, means
one free from vexatious, capricious and oppressive delays, its salutary
objective being to assure that an innocent person may be free from the
anxiety and expense of a court litigation or, if otherwise, of having his
guilt (in this case, his being extradited) determined within the shortest
possible time compatible with the presentation and consideration of
whatsoever legitimate defense he may interpose."
The right to be informed and the right to a preliminary hearing are not
merely for respondent. They also serve the interests of the State.
1wphi1.nt

In closing, I maintain that the paramount consideration of guaranteeing

the constitutional rights of individual respondent override the concerns
of petitioner. There should be no hurried or indifferent effort to routinely
comply with all requests for extradition. I understand that this is truer in
the United States than in other countries. Proposed extraditees are
given every legal protection available from the American justice
system before they are extradited. We serve under a government of
limited powers and inalienable rights. Hence, this concurrence.
PUNO, J., dissenting opinion;
If the case at bar was strictly a criminal case which involves alone the
right of an accused to due process, I would have co-signed
the ponencia of our esteemed colleague, Mr. Justice Jose A.R. Melo,
without taking half a pause.But the case at bar does not involve the
guilt or innocence of an accused but the interpretation of an extradition
treaty where at stake is our government's international obligation to
surrender to a foreign state a citizen of its own so he can be tried for
an alleged offense committed within that jurisdiction. The issues are of
first impression and the majority opinion dangerously takes us to
unknown shoals in constitutional and international laws, hence this
dissenting opinion.
Extradition is a well-defined concept and is more a problem in
international law. It is the "process by which persons charged with or
convicted of crime against the law of a State and found in a foreign
State are returned by the latter to the former for trial or punishment.
It applies to those who are merely charged with an offense but have
not been brought to trial; to those who have been tried and convicted
and have subsequently escaped from custody; and those who have
been convicted in absentia. It does not apply to persons merely
suspected of having committed an offense but against who no charge
has been laid or to a person whose presence is desired as a witness

or for obtaining or enforcing a civil judgment."1 The definition

covers the private respondent who is charged with two (2)
counts of conspiracy to commit offense or to defraud the
United States, four (4) counts of attempt to evade or defeat
tax, two (2) counts of fraud by wire, radio or television, six (6)
counts of false statements or entries and thirty-three (33)
counts of election contributions in the name of another.
There is an outstanding warrant of arrest against the private
respondent issued by the US District Court, Southern District
of Florida.

Thus, the US Supreme Court in US v.Rauscher,6 held: ". . . . it

is only in modern times that the nations of the earth have
imposed upon themselves the obligation of delivering up these
fugitives from justice to the states where their crimes were
committed, for trial and punishment. This has been done
generally by treaties . . . Prior to these treaties, and apart from
them there was no well-defined obligation on one country to
deliver up such fugitives to another; and though such delivery
was often made it was upon the principle of comity . . ."

Then came the long and still ongoing debate on what should be
A brief review of the history of extradition law will illumine our the subject of international law. The 20th century saw the
labor. Possibly the most authoritative commentator on
dramatic rise and fall of different types and hues of
extradition today, M. Cherif Bassiouni, divides the history of
authoritarianism the fascism of Italy's Mussolini and
extradition into four (4) periods: "(1) ancient times to
Germany's Hitler, the militarism of Japan's Hirohito and the
seventeenth century a period revealing almost exclusive
communism of Russia's Stalin, etc. The sinking of these isms
concern for political and religious offenders; (2) the
led to the elevation of the rights of the individual against the
eighteenth century and half of the nineteenth century a
state. Indeed, some species of human rights have already been
period of treaty-making chiefly concerned with military
accorded universal recognition.7 Today, the drive to
offenders characterizing the condition of Europe during that
internationalize rights of women and children is also on high
period; (3) from 1833 to 1948 a period of collective
gear.8 The higher rating given to human rights in the hierarchy of
concern in suppressing common criminality; and (4) postvalues necessarily led to the re-examination of rightful place of
1948 developments which ushered in a greater concern for
the individual in international law. Given the harshest eye is the
protecting the human rights of persons and revealed an
moss-covered doctrine that international law deals only with
awareness of the need to have international due process of
States and that individuals are not its subject. For its
law regulate international relations."2
undesirable corrally is the sub-doctrine that an individual's right
in international law is a near cipher. Translated in extradition
law, the view that once commanded a consensus is that since a
It is also rewarding to have a good grip on the changing
fugitive is a mere object and not a subject of international law,
slopes in the landscape of extradition during these different
he is bereft of rights. An extraditee, so it was held, is a mere
periods. Extradition was first practiced by the Egyptians,
Chinese, Chaldeans and Assyro-Babylonians but their basis "object transported from one state to the other as an exercise of
the sovereign will of the two states involved." 9 The refor allowing extradition was unclear. Sometimes, it was
examination consigned this pernicious doctrine to the museum
granted due to pacts; at other times, due to plain good
3
of ideas.10 The new thinkers of international law then gave a
will. The classical commentators on international law thus
significant shape to the role and rights of the individual in statefocused their early views on the nature of the dutyto
surrender an extraditee whether the duty is legal or moral concluded treaties and other international agreements. So it
was declared by then US Ambassador Philip C. Jessup in
in character. Grotius and de Vattel led the school of thought
audible italics: "A very large part of international affairs and,
that international law imposed a legal duty called civitas
maxima to extradite criminals.4 In sharp contrast, Puffendorf thus, of the process of international accommodation, concerns
the relations between legal persons known as states. This is
and Billot led the school of thought that the so-called duty
necessarily so. But it is no longer novel for the particular
was but an "imperfect obligationwhich could
interest of the human being to break through the mass of
become enforceable only by a contract or agreement
5
interstate relationship."11 The clarion call to re-engineer a new
between states.
world order whose dominant interest would transcend the
parochial confines of national states was not unheeded. Among
Modern nations tilted towards the view of Puffendorf and
Billot that under international law there is no duty to extradite the world class scholars who joined the search for the elusive
ideological underpinnings of a new world order were Yale
in the absence of treaty, whether bilateral or multilateral.
Professor Myres McDougal and Mr. Justice Florentino Feliciano.

In their seminal work. Law and Minimum World Public Order, they
suggested that the object of the new world should be "to obtain in
particular situations and in the aggregate flow of situations the
outcome of a higher degree of conformity with the security goals of
preservation, deterrence, restoration, rehabilitation and reconstruction
of all societies comprising the world community." 12 Needless to
stress, all these prescient theses accelerated the move to recognize
certain rights of the individual in international law.
We have yet to see the final and irrevocable place of individual rights,
especially the rights of an extraditee, in the realm of international law.
In careful language, Bassiouni observes that today, "institutionalized
conflicts between states are still rationalized in terms of sovereignty,
national interest, and national security, while human interests continue
to have limited, though growing impact on the decision-making
processes which translate national values and goals into specific
national and international policy." 13
I belabor the international law aspect of extradition as the majority
opinion hardly gives it a sideglance. It is my humble submission that
the first consideration that should guide us in the case at bar is that a
bilateral treaty the RP-US Extradition Treaty is the subject matter
of the litigation. In our constitutional scheme, the making of a treaty
belongs to the executive and legislative departments of our
government. Between these two departments,the executive has a
greater say in the making of a treaty. Under Section 21, Article VII of
our Constitution, thePresident has the sole power to negotiate treaties
and international agreements although to be effective, they must be
concurred in by at least two thirds of all the members of the Senate.
Section 20 of the same Article empowers the President to contract or
guarantee foreign loans with the prior concurrence of the Monetary
Board. Section 16 of the same Article gives the President the power to
appoint ambassadors, other public ministers and consuls subject to
confirmation by the Commission on Appointments. In addition, the
President has the power to deport undesirable aliens. The
concentration of these powers in the person of the President is not
without a compelling consideration. The conduct of foreign relations is
full of complexities and consequences, sometimes with life and death
significance to the nation especially in times of war. It can only be
entrusted to that department of government which can act on the
basis of the best available information and can decide with
decisiveness. Beyond debate, the President is the single most
powerful official in our land for Section 1 of Article VII provides that
"the executive power shall be vested in the President of the
Philippines," whereas Section 1 of Article VI states that "the legislative
power shall be vested in the Congress of the Philippines which shall
consist of a Senate and a House of Representatives . . . except to the
extent reserved to the people by the provision on initiative and

referendum," while Section 1 of Article VIII provides that

"judicial power shall be vested in one Supreme Court and in
such lower courts as may be established by law." Thus, we
can see that executive power is vested in the President
alone whereas legislative and judicial powers are shared
and scattered. It is also the President who possesses the
most comprehensive and the most confidential information
about foreign countries for our diplomatic and consular
officials regularly brief him on meaningful events all over the
world. He has also unlimited access to ultra-sensitive military
intelligence data.14 In fine, the presidential role in foreign
affairs is dominant andthe President is traditionally accorded
a wider degree of discretion in the conduct of foreign affairs.
The regularity, nay, validity of his actions are adjudged
under less stringent standards, lest their judicial repudiation
lead to breach of an international obligation, rupture of state
relations, forfeiture of confidence, national embarrassment
and a plethora of other problems with equally undesirable
consequences.

allegations that the extraditee will be mistreated or denied a fair

trial in that country.17

extraditee is not under litigation.19 It is not only the quality but even the
quantum of evidence in extradition proceeding is different. In a criminal
case, an accused can only be convicted by proof beyond reasonable
doubt.20In an extradition proceeding, an extraditee can be ordered
The case at bar, I respectfully submit, does not involve an
21
irreconcilable conflict between the RP-US Extradition Treaty and extradited "upon showing of the existed of a prima faciecase." If more
need be said, the nature of an extradition decision is different from a
our Constitution where we have to choose one over the other.
judicial decision whose finality cannot be changed by executive fiat.
Rather, it calls for a harmonizationbetween said treaty and our
Our courts22 may hold an individual extraditable but the ultimate
Constitution. To achieve this desirable objective, the
Court should consider whether the constitutional rights invoked decision to extradite the individual lies in the hands of the Executive.
Section 3, Article 3 of the RP-US Extradition Treaty specifically
by the private respondent have truly been violated and even
assuming so, whether he will be denied fundamental fairness. It provides that "extradition shall not be granted if the executive authority
is only when their violation will destroy the respondent's right to of the Requested State determined that the request was politically
motivated, or that the offense is a military offense which is not
fundamental fairness that his constitutional claims should be
punishable under non-military penal legislation." In the United States,
given primacy.
the Secretary of State exercises this ultimate power and is conceded
equities of the case and the
Given this balancing approach, it is my humble submission that considerable discretion. He balances the 23
demands
of
the
nation's
foreign
relations.
In sum, he is not
considering all the facts and facets of the case, the private
straitjacketed
by
strict
legal
considerations
like
an ordinary court.
respondent has not proved entitlement to the right he is
claiming. The majority holds that the Constitution, the RP-US
The type of issue litigated in extradition proceedings which does not
extradition and P.D. No. 1069 do not prohibit respondent's
These are some of the dominant policy considerations in
touch on the guilt or innocence of the extraditee, the limited nature of
claims, hence, it should be allowed. This is too simplistic an
international law that the Court must balance against the
the extradition proceeding, the availability of adequate remedies in
approach. Rights do not necessarily arise from a vacuum.
claim of the private respondent that he has a right to be
favor of the extraditee, and the traditional leeway given to the
Silence of the law can even mean an implied denial of a right.
given the extradition documents against him and to comment Also, constitutional litigations do not always involve a clear cut
Executive in the conduct of foreign affairs have compelled courts to
thereon even while they are still at the evaluation stage by
put a high threshold before considering claims of individuals that
choice between right and wrong. Sometimes, they involve a
the petitioner Secretary of Justice, an alter ego of the
enforcement of an extradition treaty will violate their constitutional
difficult choice between right against right. In these situations,
President. The delicate questions of what constitutional
rights. Exemplifying such approach is the Supreme Court of
there is need to balance the contending rights and primacy is
rights and to what degree they can be claimed by an
given to the right that will serve the interest of the nation at that Canada which has adopted ahighly deferential standard that
extraditee do not admit of easy answers and have resulted
emphasizes international comity and the executive's experience in
particular time. In such instances, the less compelling right is
in discrete approaches the world over.15 On one end of the
international matters.24 It continues to deny Canada's charter
subjected to soft restraint but without smothering its essence.
pole is the more liberal European approach. The European
protection to extraditees unless the violation can be considered
Proceeding from this premise of relativism of rights, I venture
Court of Human Rights embraces the view that an extraditee the view that even assuming arguendorespondent's weak claim, shocking to the conscience.
is entitled to the benefit of all relevant provisions of the
still, the degree of denial of private respondent's rights to due
European Convention for the Protection of Human Rights
process and to information is too slight to warrant the
In the case, at bar and with due respect, the ponencia inflates with too
and Fundamental Freedoms. It has held that ". . . in so far as interposition of judicial power. As admitted in the ponencia itself, much significance the threat to liberty of the private respondent to prop
a measure of the extradition has consequences adversely
an extradition proceeding is sui generis. It is, thus, futile to
us its thesis that his constitutional rights to due process and access to
affecting the enjoyment of a convention right, it may,
determine what it is. What is certain is that it is not a criminal
information must immediately be vindicated. Allegedly, respondent
assuming that the consequences are not too remote, attract proceeding where there is an accused who claim the entire
Jimenez stands in danger of provisional arrest, hence, the need for
the obligations of a Contracting State under the relevant
array of rights guaranteed by the Bill of Rights. Let it be
him to be immediately furnished copies of documents accompanying
convention guarantee."16 At the other end of the pole is
stressed that in an extradition proceeding, there is no accused
the request for his extradition.Respondent's fear of provisional arrest
the more cautious approach of the various Courts of Appeal and the guilt or innocence of the extraditee will not be passed
is not real. It is a self-imagined fear for the realities on the ground
in the United States. These courts have been more
upon by our executive officials nor by the extradition judge.
show that the United States authorities have not manifested any desire
conservative in light of the principle of separation of powers Hence, constitutional rights that are only relevant do determine to request for his arrest. On the contrary, they filed the extradition
and their faith in the presumptive validity of executive
the guilt or innocence of an accused cannot be invoked by an
request through the regular channel and, even with the pendency of
decisions. By and large, they adhere to the rule of nonextraditee. Indeed, an extradition proceeding is summary in
the case at bar, they have not moved for respondent's arrest on the
inquiry under which theextraditing court refuses to examine
nature which is untrue of criminal proceedings.18 Even the rules ground of probable delay in the proceedings. To be sure, the issue of
the requesting country's criminal justice system or consider
of evidence are different in an extradition proceeding. Admission whether respondent Jimenez will be provisionally arrested is now
of evidence is less stringent, again because the guilt of the
moot. Under Section 1 of Article 9 of the RP-US Extradition Treaty, in

relation to Section 20(a) of PD No. 1069, the general

principle is enunciated that a request for provisional arrest
must be made pending receipt of the request for extradition.
By filing the request for extradition, the US authorities have
implicitly decided not to move for respondent's provisional
arrest. But more important, a request for respondent's arrest
does not mean he will be the victim of an arbitrary arrest. He
will be given due process before he can be arrested. Article
9 of the treaty provides:

4. A person who is provisionally arrested may be

discharged from custody upon the expiration of sixty
(60) days from the date of arrest pursuant to this Treaty
if the executive authority of the Requested State has
not received the formal request for extradition and the
supporting documents required in Article 7.

protection of the respondent against arbitrary provisional arrest does

not stop on the administrative level. For even if the Director of the
National Bureau of Investigation agrees with the request for the
provisional arrest of the respondent, still he has to apply for a judicial
warrant from the "presiding judge of the Court of First Instance (now
RTC) of the province of city having jurisdiction of the place. . . . ." It is
a judge who will issue a warrant for the provisional arrest of the
respondent. The judge has comply with Section 2, Article III of the
In relation to the above, Section 20 of P.D. No. 1069 provides:
Constitution which provides that "no . . . warrant of arrest shall issue
except upon probable cause to be determined personally by the judge
Sec. 20. Provisional Arrest. (a) In case of urgency,
PROVISIONAL ARREST
the requesting state may, pursuant to the relevant treaty after examination under oath or affirmation of the complainant and the
witnesses he may produce, and particularly describing the . . . persons
or convention and while the same remains in force,
or things to be seized." The message that leaps to the eye is that
1. In case of urgency, a Contracting Party may
request for the provisional arrest of the accused,
compliance with this requirements precludes any arbitrary arrest.
request the provisional arrest of the person sought
pending receipt of the request for extradition made in
pending presentation of the request for extradition. A
accordance with Section 4 of this Decree.
In light of all these considerations, I respectfully submit that denying
request for provisional arrest may be transmitted
respondent's constitutional claim to be furnished all documents
through the diplomatic channel or directly between
(b) A request for provisional arrest shall be sent to the
the Philippine Department of Justice and the United
Director of the National Bureau of Investigation, Manila, relating to the request for his extradition by the US authorities during
States Department of Justice.
either through the diplomatic channels or direct by post their evaluation stage will not subvert his right to fundamental
fairness. It should be stressed that this is not a case where the
or telegraph.
respondent will not be given an opportunity to know the basis of the
2. The application for provisional arrest shall contain:
request for his extradition. In truth, and contrary to the impression of
(c) The Director of the National Bureau of Investigation the majority, P.D. No. 1069 fixes the specific time when he will be
a) a description of the person sought;
or any official acting on his behalf shall upon receipt of
given the papers constituting the basis for his extradition. The time is
the request immediately secure a warrant for the
when he is summoned by the extradition court and required to answer
provisional arrest of the accused from the presiding
b) the location of the person sought, if
the petition for extradition. Thus, Section 6 of P.D. No. 1069 provides:
judge of the Court of First Instance of the province or
known;
city having jurisdiction of the place, who shall issue the
Sec. 6. Issuance of Summons; Temporary
warrant for the provisional arrest of the accused. The
c) a brief statements of the facts of the case,
Arrest; Hearing, Service of Notices. (1) Immediately upon
Director of the National Bureau of Investigation through
including, if possible, the time and location
receipt of the petition, the presiding judge of the court shall, as
the Secretary of Foreign Affairs shall inform the
of the offense;
soon as practicable, summon the accused to appear and to
requesting state of the result of its request.
answer the petition on the day and hour fixed in the order. He
may issue a warrant for the immediate arrest of the accused
d) a description of the laws violated;
(d) If within a period of 20 days after the provisional
which may be served anywhere within the Philippines if it
arrest, the Secretary of Foreign Affairs has not received
appears to the presiding judge that the immediate arrest and
e) a statement of the existence of a warrant
the request for extradition and the documents
temporary detention of the accused will best serve the ends of
of a warrant of arrest or finding of guilt or
mentioned in Section 4 of this Decree, the accused
justice. Upon receipt of the answer within the time fixed, the
judgment of conviction against the person
shall be released from custody.
presiding judge shall hear the case or set another date for the
sought; and
hearing thereof.
The due process protection of the private-respondent against
f) a statement that a request for extradition
arbitrary arrest is written in cyrillic letters in these two (2) related
(2) The order and notice as well as a copy of the warrant of
for the person sought will follow.
provisions. It is self-evident under these provisions that a
arrest, if issued, shall be promptly served each upon the
request for provisional arrest does not mean it will be
accused and the attorney having charge of the case.
3. The Requesting State shall be notified without
granted ipso facto. The request must comply with certain
delay of the disposition of its application and the
requirements. It must be based on an "urgent" factor. This is
Upon receipt of the summons and the petition, respondent is free to
reasons for any denial.
subject to verification and evaluation by our executive
foist all defense available to him. Such an opportunity does not deny
authorities. The request can be denied if not based on a real
him fairness which is the essence of due process of law.
exigency of if the supporting documents are insufficient. The

Thus, with due respect, I submit that the ponencia failed to

accord due importance to the international law aspect of an
extradition treaty as it unduly stressed its constitutional law
dimension. This goes against the familiar learning that in
balancing the clashing interests involved in extradition
treaty, national interest is more equal than the others. While
lately, humanitarian considerations are being factored in the
equation, still the concept of extradition as a national act is
the guiding idea. Requesting and granting extradition
remains a power and prerogative of the national government
of a State. The process still involves relations between
international personalities.25Needless to state, a more
deferential treatment should be given to national interest
than to individual interest. Our national interest in extraditing
persons who have committed crimes in a foreign country are
succinctly expressed in the whereas clauses of P.D. No.
1069, viz:
WHEREAS, the Constitution of the Philippines
adopts the generally accepted principles of
international law as part of law of the land, and
adheres to the policy of peace, equality, justice,
freedom, cooperation and amity with all nations;
WHEREAS, the suppression of crime is the concern
not only of the state where it is committed but also of
any other state to which the criminal may have
escaped, because it saps the foundation of social
life and is an outrage upon humanity at large, and it
is in the interest of civilized communities that crimes
should not go unpunished. . . . .
The increasing incidence of international and transnational
crimes, the development of new technologies of death,and
the speed and scale of improvement of communication are
factors which have virtually annihilated time and
distance. They make more compelling the vindication of
national interest to insure that the punishment of criminals
should not be frustrated by the frontiers of territorial
sovereignty. This overriding national interest must be upheld
as against respondent's weak constitutional claims which in
no way amount to denial of fundamental fairness.
At bottom, this case involves the respect that courts should
accord to the Executive that concluded the RP-US
Extradition Treaty in the conduct of our foreign affairs. As
early as 1800, the legendary John Marshall, then a

congressman, has opined that the power to extradite pursuant

to a treaty rests in the executive branch as part of its power to
conduct foreign affairs.26 Courts have validated this forwardlooking opinion in a catena of unbroken cases. They defer to the
judgment of the Executive on the necessities of our foreign
affairs and on its view of the requirements of international
comity. The deferential attitude is dictated by the robust reality
that of the three great branches of our government, it is the
Executive that is most qualified to guide the ship of the state on
the known and unknown continents of foreign relations. It is also
compelled by considerations of the principle of separation of
powers for the Constitution has clearly allocated the power to
conduct our foreign affairs to the Executive. I respectfully submit
that the majority decision has weakened the Executive by
allowing nothing less than an unconstitutional headbutt on the
power of the Executive to conduct our foreign affairs. The
majority should be cautions in involving this Court in the
conduct of the nation's foreign relations where the inviolable
rule dictated by necessity is that the nation should speak with
one voice. We should not overlook the reality that courts by
their nature, are ill-equipped to fully comprehend the foreign
policy dimension of a treaty, some of which are hidden in
shadows and silhouettes.
I vote to grant the petition.
PANGANIBAN, J., dissenting opinion;
With due respect, I dissent.
The main issue before us is whether Private Respondent Mark
B. Jimenez is entitled to the due process rights of notice and
hearing during the preliminary or evaluation stage of the
extradition proceeding against him.
Two Staged in Extradition
There are essentially two stages in extradition proceedings: (1)
the preliminary or evaluation stage, whereby the executive
authority of the requested state ascertains whether the
extradition request is supported by the documents and
information required under the Extradition Treaty; and (2) the
extradition hearing, whereby the petition for extradition is heard
before a court of justice, which determines whether the accused
should be extradited.

The instant petition refers only to the first stage. Private respondent
claims that he has a right to be notified and to be heard at this early
stage. However, even the ponencia admits that neither the RP-US
Extradition Treaty nor PD 1069 (the Philippine Extradition Law)
expressly requires the Philippine government, upon receipt of the
request for extradition, to give copies thereof and its supporting
documents to the prospective extraditee, much less to give him an
opportunity to be heard prior to the filing of the petition in court.
Notably, international extradition proceedings in the United States do
not include the grant by the executive authority of notice and hearing
to the prospective extraditee at this initial stage. It is the judge or
magistrate who is authorized to issue a warrant of arrest and to hold a
hearing to consider the evidence submitted in support of the
extradition request. In contrast, in interstate rendition, the governor
must, upon demand, furnish the fugitive or his attorney copies of the
request and its accompanying documents, pursuant to statutory
provisions.1 In the Philippines, there is no similar statutory provision.
Evaluation Stage Essentially Ministerial
The evaluation stage simply involves the ascertainment by the foreign
affairs secretary of whether the extradition request is accompanied by
the documents stated in paragraphs 2 and 3, Article 7 of the Treaty,
relating to the identity and the probable location of the fugitive; the
facts of the offense and the procedural history of the case; provisions
of the law describing the essential elements of the offense charged
and the punishment therefor; its prescriptive period; such evidence as
would provide probable cause for the arrest and the committal for trial
of the fugitive; and copies of the warrant or order of arrest and
charging document. The foreign affairs secretary also sees to it that
these accompanying documents have been certified by the principal
diplomatic or consular officer of the Philippines in the United States,
and that they are in English language or have English translations.
Pursuant to Article 3 of the Treaty, he also determines whether the
request is politically motivated, and whether the offense charged is a
military offense not punishable under non-military penal legislation. 2
Upon a finding of the secretary of foreign affairs that the extradition
request and its supporting documents are sufficient and complete in
form and substance, he shall deliver the same to the justice secretary,
who shall immediately designate and authorize an attorney in his office
to take charge of the case. The lawyer designated shall then file a
written petition with the proper regional trial court, with a prayer that
the court take the extradition request under consideration. 3
When the Right to Notice and Hearing Becomes Available

According to private Respondent Jimenez, his right to due

process during the preliminary stage emanates from our
Constitution, particularly Section 1, Article III thereof, which
provides:

respondent.5 Finally, the formal request for extradition has

already been made; therefore, provisional arrest is not likely, as
it should really come before the extradition request.6
Mark Jimenez Not in Jeopardy of Arrest

No person shall be deprived of life, liberty or

property without due process of law.

Under the outlined facts of this case, there is no open door for
the application of Article 9, contrary to the apprehension of
He claims that this right arises immediately, because of the
private respondent. In other words, there is no actual danger
possibility that he may be provisionally arrested pursuant to that Jimenez will be provisionally arrested or deprived of his
Article 9 of the RP-US Treaty, which reads:
liberty. There is as yet no threat that his rights would be
trampled upon, pending the filing in court of the petition for his
In case of urgency, a Contracting Party may request extradition. Hence, there is no substantial gain to be achieved in
requiring the foreign affairs (or justice) secretary to notify and
the provisional arrest of the person sought pending
presentation of the request for extradition. A request hear him during the preliminary stage, which basically involves
for provisional arrest may be transmitted through the only the exercise of the ministerial power of checking the
diplomatic channel or directly between the Philippine sufficiency of the documents attached to the extradition request.
Department of Justice and the United States
Department of Justice.
It must be borne in mind that during the preliminary stage, the
foreign affairs secretary's determination of whether the offense
charged is extraditable or politically motivated is
xxx
xxx
xxx
merely preliminary. The same issue will be resolved by the trial
court.7 Moreover, it is also the power and the duty of the court,
Justice Melo's ponencia supports private respondent's
contention. It states that there are two occasions wherein the not the executive authority, to determine whether there is
that the
prospective extraditee may be deprived of liberty: (1) in case sufficient evidence to establish probable cause
8
extraditee
committed
the
crimes
charged.
The
sufficiency of the
of a provisional arrest pending the submission of the
evidence
of
criminality
is
to
be
determined
based
on the laws of
extradition request and (2) his temporary arrest during the
9
the
requested
state.
Private
Respondent
Jimenez
will,
pendency of the extradition petition in court.4 The second
therefore,
definitely
have
his
full
opportunity
before
the court, in
instance is not in issue here, because no petition has yet
case
an
extradition
petition
will
indeed
be
filed,
to
be
heard on
been filed in court.
all issues including the sufficiency of the documents supporting
the extradition request.10
However, the above-quoted Article 9 on provisional arrest is
not automatically operative at all times, and in enforcement
Private respondent insists that the United States may still
does not depend solely on the discretion of the requested
request his provisional arrest at any time. That is purely
state. From the wordings of the provision itself, there are at
least three requisites: (1) there must be an urgency, and (2) speculative. It is elementary that this Court does not declare
judgments or grant reliefs based on speculations, surmises or
there is a corresponding request (3) which must be made
conjectures.
prior to the presentation of the request for extradition.
In the instant case, there appears to be no urgency
characterizing the nature of the extradition of private
respondent. Petitioner does not claim any such urgency.
There is no request from the United States for the
provisional arrest of Mark Jimenez either. And the secretary
of justice states during the Oral Argument that he had no
intention of applying for the provisional arrest of private

In any event, even granting that the arrest of Jimenez is sought

at any time despite the assurance of the justice secretary that
no such measure will be undertaken, our local laws and rules of
procedure respecting the issuance of a warrant of arrest will
govern, there being no specific provision under the Extradition
Treaty by which such warrant should issue. Therefore, Jimenez
will be entitled to all the rights accorded by the Constitution and
the laws to any person whose arrest is being sought.
1wphi1.nt

The right of one state to demand from another the return of an alleged
fugitive from justice and the correlative duty to surrender the fugitive to
the demanding country exist only when created by a treaty between
the two countries. International law does not require the voluntary
surrender of a fugitive to a foreign government, absent any treaty
stipulation requiring it.11 When such a treaty does exist, as between the
Philippines and the United States, it must be presumed that the
contracting states perform their obligations under it with uberrimae
fidei, treaty obligations being essentially characterized internationally
by comity and mutual respect.
The Need for Respondent Jimenez to Face Charges in the US
One final point. Private respondent also claims that from the time the
secretary of foreign affairs gave due course to the request for his
extradition, incalculable prejudice has been brought upon him. And
because of the moral injury caused, he should be given the
opportunity at the earliest possible time to stop his extradition. I
believe that any moral injury suffered by private respondent had not
been caused by the mere processing of the extradition request. And it
will not cease merely by granting him the opportunity to be heard by
the executive authority. The concrete charges that he has allegedly
committed certain offenses already exist. These charges have been
filed in the United States and are part of public and official records
there. Assuming the existence of moral injury, the only means by
which he can restore his good reputation is to prove before the proper
judicial authorities in the US that the charges against him are
unfounded. Such restoration cannot be accomplished by simply
contending that the documents supporting the request for his
extradition are insufficient.
Conclusion
In the context of the factual milieu of private respondent, there is really
no threat of any deprivation of his liberty at the present stage of the
extradition process. Hence, the constitutional right to due process
particularly the right to be heard finds no application. To grant
private respondent's request for copies of the extradition documents
and for an opportunity to comment thereon will constitute "over-due
process" and unnecessarily delay the proceedings.
WHEREFORE, I vote to grant the Petition.

Republic of the Philippines

SUPREME COURT
EN BANC
G.R. No. 158088 July 6, 2005
SENATOR AQUILINO PIMENTEL, JR., REP. ETTA
ROSALES, PHILIPPINE COALITION FOR THE
ESTABLISHMENT OF THE INTERNATIONAL CRIMINAL
COURT, TASK FORCE DETAINEES OF THE
PHILIPPINES, FAMILIES OF VICTIMS OF INVOLUNTARY
DISAPPEARANCES, BIANCA HACINTHA R. ROQUE,
HARRISON JACOB R. ROQUE, AHMED PAGLINAWAN,
RON P. SALO,* LEAVIDES G. DOMINGO, EDGARDO
CARLO VISTAN, NOEL VILLAROMAN, CELESTE
CEMBRANO, LIZA ABIERA, JAIME ARROYO, MARWIL
LLASOS, CRISTINA ATENDIDO, ISRAFEL FAGELA, and
ROMEL BAGARES, Petitioners,
vs.
OFFICE OF THE EXECUTIVE SECRETARY, HON.
ALBERTO ROMULO, and the DEPARTMENT OF
FOREIGN AFFAIRS, represented by HON. BLAS OPLE,
Respondents.
DECISION

1998 and had remained open for signature until December 31,
2000 at the United Nations Headquarters in New York. The
Philippines signed the Statute on December 28, 2000
through Charge d AffairsEnrique A. Manalo of the Philippine
Mission to the United Nations.3 Its provisions, however, require
that it be subject to ratification, acceptance or approval of the
signatory states.4
Petitioners filed the instant petition to compel the respondents
the Office of the Executive Secretary and the Department of
Foreign Affairs to transmit the signed text of the treaty to the
Senate of the Philippines for ratification.

The petition at bar was filed by Senator Aquilino Pimentel, Jr. who
asserts his legal standing to file the suit as member of the Senate;
Congresswoman Loretta Ann Rosales, a member of the House of
Representatives and Chairperson of its Committee on Human Rights;
the Philippine Coalition for the Establishment of the International
Criminal Court which is composed of individuals and corporate entities
It is the theory of the petitioners that ratification of a treaty,
dedicated to the Philippine ratification of the Rome Statute; the Task
under both domestic law and international law, is a function of
the Senate. Hence, it is the duty of the executive department to Force Detainees of the Philippines, a juridical entity with the avowed
purpose of promoting the cause of human rights and human rights
transmit the signed copy of the Rome Statute to the Senate to
victims in the country; the Families of Victims of Involuntary
allow it to exercise its discretion with respect to ratification of
treaties. Moreover, petitioners submit that the Philippines has a Disappearances, a juridical entity duly organized and existing pursuant
to Philippine Laws with the avowed purpose of promoting the cause of
ministerial duty to ratify the Rome Statute under treaty law and
families and victims of human rights violations in the country; Bianca
customary international law. Petitioners invoke the Vienna
Convention on the Law of Treaties enjoining the states to refrain Hacintha Roque and Harrison Jacob Roque, aged two (2) and one (1),
from acts which would defeat the object and purpose of a treaty respectively, at the time of filing of the instant petition, and suing under
when they have signed the treaty prior to ratification unless they the doctrine of inter-generational rights enunciated in the case
of Oposa vs. Factoran, Jr.;9 and a group of fifth year working law
have made their intention clear not to become parties to the
students from the University of the Philippines College of Law who are
treaty.5
suing as taxpayers.

The Office of the Solicitor General, commenting for the

respondents, questioned the standing of the petitioners to file
PUNO J.:
the instant suit. It also contended that the petition at bar violates
the rule on hierarchy of courts. On the substantive issue raised
This is a petition for mandamus filed by petitioners to compel by petitioners, respondents argue that the executive department
the
has no duty to transmit the Rome Statute to the Senate for
Office of the Executive Secretary and the Department of
concurrence.
Foreign Affairs to transmit the signed copy of the Rome
Statute of the International Criminal Court to the Senate of
A petition for mandamus may be filed when any tribunal,
the Philippines for its concurrence in accordance with
corporation, board, officer or person unlawfully neglects the
Section 21, Article VII of the 1987 Constitution.
performance of an act which the law specifically enjoins as a
The Rome Statute established the International Criminal
Court which "shall have the power to exercise its jurisdiction
over persons for the most serious crimes of international
concern xxx and shall be complementary to the national
criminal jurisdictions."1 Its jurisdiction covers the crime of
genocide, crimes against humanity, war crimes and the
crime of aggression as defined in the Statute.2 The Statute
was opened for signature by all states in Rome on July 17,

brought before it by a party who has the legal standing to raise the
constitutional or legal question. "Legal standing" means a personal
and substantial interest in the case such that the party has sustained
or will sustain direct injury as a result of the government act that is
being challenged. The term "interest" is material interest, an interest in
issue and to be affected by the decree, as distinguished from mere
interest in the question involved, or a mere incidental interest. 8

The question in standing is whether a party has alleged such a

personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination of difficult
constitutional questions.10

We find that among the petitioners, only Senator Pimentel has the
legal standing to file the instant suit. The other petitioners maintain
their standing as advocates and defenders of human rights, and as
citizens of the country. They have not shown, however, that they have
duty resulting from an office, trust, or station. 6 We have held that sustained or will sustain a direct injury from the non-transmittal of the
signed text of the Rome Statute to the Senate. Their contention that
to be given due course, a petition for mandamus must have
they will be deprived of their remedies for the protection and
been instituted by a party aggrieved by the alleged inaction of
enforcement of their rights does not persuade. The Rome Statute is
any tribunal, corporation, board or person which unlawfully
intended to complement national criminal laws and courts. Sufficient
excludes said party from the enjoyment of a legal right. The
petitioner in every case must therefore be an aggrieved party in remedies are available under our national laws to protect our citizens
against human rights violations and petitioners can always seek
the sense that he possesses a clear legal right to be enforced
7
redress for any abuse in our domestic courts.
and a direct interest in the duty or act to be performed. The
Court will exercise its power of judicial review only if the case is

As regards Senator Pimentel, it has been held that "to the

extent the powers of Congress are impaired, so is the power
of each member thereof, since his office confers a right to
participate in the exercise of the powers of that
institution."11 Thus, legislators have the standing to maintain
inviolate the prerogatives, powers and privileges vested by
the Constitution in their office and are allowed to sue to
question the validity of any official action which they claim
infringes their prerogatives as legislators. The petition at bar
invokes the power of the Senate to grant or withhold its
concurrence to a treaty entered into by the executive branch,
in this case, the Rome Statute. The petition seeks to order
the executive branch to transmit the copy of the treaty to the
Senate to allow it to exercise such authority. Senator
Pimentel, as member of the institution, certainly has the legal
standing to assert such authority of the Senate.

agreement shall be valid and effective unless concurred in by at

least two-thirds of all the Members of the Senate." The 1935
and the 1973 Constitution also required the concurrence by the
legislature to the treaties entered into by the executive. Section
10 (7), Article VII of the 1935 Constitution provided:

treaty which, together with the counter-proposals, becomes the basis

of the subsequent negotiations. The negotiations may be brief or
protracted, depending on the issues involved, and may even
"collapse" in case the parties are unable to come to an agreement on
the points under consideration.

Sec. 10. (7) The President shall have the power, with the
concurrence of two-thirds of all the Members of the Senate, to
make treaties xxx.

If and when the negotiators finally decide on the terms of the treaty,
the same is opened for signature. This step is primarily intended as a
means of authenticating the instrument and for the purpose of
symbolizing the good faith of the parties; but, significantly, it does not
indicate the final consent of the state in cases where ratification
of the treaty is required. The document is ordinarily signed in
accordance with the alternat, that is, each of the several negotiators is
allowed to sign first on the copy which he will bring home to his own
state.

Section 14 (1) Article VIII of the 1973 Constitution stated:

Sec. 14. (1) Except as otherwise provided in this Constitution,
no treaty shall be valid and effective unless concurred in by a
majority of all the Members of the Batasang Pambansa.

The participation of the legislative branch in the treaty-making

process was deemed essential to provide a check on the
executive in the field of foreign relations.14 By requiring the
The core issue in this petition for mandamus is whether the
concurrence of the legislature in the treaties entered into by the
Executive Secretary and the Department of Foreign Affairs
President, the Constitution ensures a healthy system of checks
have a ministerial duty to transmit to the Senate the copy of and balance necessary in the nations pursuit of political
the Rome Statute signed by a member of the Philippine
maturity and growth.15
Mission to the United Nations even without the signature of
the President.
In filing this petition, the petitioners interpret Section 21, Article
VII of the 1987 Constitution to mean that the power to ratify
We rule in the negative.
treaties belongs to the Senate.
We now go to the substantive issue.

In our system of government, the President, being the head

of state, is regarded as the sole organ and authority in
external relations and is the countrys sole representative
with foreign nations.12 As the chief architect of foreign policy,
the President acts as the countrys mouthpiece with respect
to international affairs. Hence, the President is vested with
the authority to deal with foreign states and governments,
extend or withhold recognition, maintain diplomatic relations,
enter into treaties, and otherwise transact the business of
foreign relations.13 In the realm of treaty-making, the
President has the sole authority to negotiate with other
states.
Nonetheless, while the President has the sole authority to
negotiate and enter into treaties, the Constitution provides a
limitation to his power by requiring the concurrence of 2/3 of
all the members of the Senate for the validity of the treaty
entered into by him. Section 21, Article VII of the 1987
Constitution provides that "no treaty or international

Ratification, which is the next step, is the formal act by which a state
confirms and accepts the provisions of a treaty concluded by its
representatives. The purpose of ratification is to enable the
contracting states to examine the treaty more closely and to give
them an opportunity to refuse to be bound by it should they find
it inimical to their interests. It is for this reason that most treaties
are made subject to the scrutiny and consent of a department of
the government other than that which negotiated them.
xxx

The last step in the treaty-making process is the exchange of the

instruments of ratification, which usually also signifies the effectivity of
We disagree.
the treaty unless a different date has been agreed upon by the parties.
Where ratification is dispensed with and no effectivity clause is
Justice Isagani Cruz, in his book on International Law, describes embodied in the treaty, the instrument is deemed effective upon its
the treaty-making process in this wise:
signature.16 [emphasis supplied]
The usual steps in the treaty-making process are: negotiation,
signature, ratification, and exchange of the instruments of
ratification. The treaty may then be submitted for registration
and publication under the U.N. Charter, although this step is not
essential to the validity of the agreement as between the
parties.
Negotiation may be undertaken directly by the head of state but
he now usually assigns this task to his authorized
representatives. These representatives are provided with
credentials known as full powers, which they exhibit to the other
negotiators at the start of the formal discussions. It is standard
practice for one of the parties to submit a draft of the proposed

Petitioners arguments equate the signing of the treaty by the

Philippine representative with ratification. It should be underscored
that the signing of the treaty and the ratification are two separate and
distinct steps in the treaty-making process. As earlier discussed, the
signature is primarily intended as a means of authenticating the
instrument and as a symbol of the good faith of the parties. It is usually
performed by the states authorized representative in the diplomatic
mission. Ratification, on the other hand, is the formal act by which a
state confirms and accepts the provisions of a treaty concluded by its
representative. It is generally held to be an executive act, undertaken
by the head of the state or of the government. 17 Thus, Executive Order
No. 459 issued by President Fidel V. Ramos on November 25, 1997
provides the guidelines in the negotiation of international agreements

and its ratification. It mandates that after the treaty has been
signed by the Philippine representative, the same shall be
transmitted to the Department of Foreign Affairs. The
Department of Foreign Affairs shall then prepare the
ratification papers and forward the signed copy of the treaty
to the President for ratification. After the President has
ratified the treaty, the Department of Foreign Affairs shall
submit the same to the Senate for concurrence. Upon
receipt of the concurrence of the Senate, the Department of
Foreign Affairs shall comply with the provisions of the treaty
to render it effective. Section 7 of Executive Order No. 459
reads:

ii. Upon receipt of the concurrence by the Senate, the

Department of Foreign Affairs shall comply with the provision of
the treaties in effecting their entry into force.

branch of the government to transmit the signed text of Rome Statute

to the Senate.

IN VIEW WHEREOF, the petition is DISMISSED.

Petitioners submission that the Philippines is bound under
treaty law and international law to ratify the treaty which it has
SO ORDERED.
signed is without basis. The signature does not signify the final
consent of the state to the treaty. It is the ratification that binds
REYNATO S. PUNO
the state to the provisions thereof. In fact, the Rome Statute
itself requires that the signature of the representatives of the
Associate Justice
states be subject to ratification, acceptance or approval of the
signatory states. Ratification is the act by which the provisions
of a treaty are formally confirmed and approved by a State. By
Sec. 7. Domestic Requirements for the Entry into Force ratifying a treaty signed in its behalf, a state expresses its
of a Treaty or an Executive Agreement. The domestic
willingness to be bound by the provisions of such treaty. After
requirements for the entry into force of a treaty or an
the treaty is signed by the states representative, the President,
executive agreement, or any amendment thereto, shall be as being accountable to the people, is burdened with the
follows:
responsibility and the duty to carefully study the contents of the
treaty and ensure that they are not inimical to the interest of the
state and its people. Thus, the President has the discretion
A. Executive Agreements.
even after the signing of the treaty by the Philippine
representative whether or not to ratify the same. The Vienna
i. All executive agreements shall be transmitted to the
Convention on the Law of Treaties does not contemplate to
Department of Foreign Affairs after their signing for the
defeat or even restrain this power of the head of states. If that
preparation of the ratification papers. The transmittal shall
were so, the requirement of ratification of treaties would be
include the highlights of the agreements and the benefits
pointless and futile. It has been held that a state has no legal or
which will accrue to the Philippines arising from them.
even moral duty to ratify a treaty which has been signed by its
plenipotentiaries.18 There is no legal obligation to ratify a treaty,
ii. The Department of Foreign Affairs, pursuant to the
but it goes without saying that the refusal must be based on
endorsement by the concerned agency, shall transmit the
substantial grounds and not on superficial or whimsical reasons.
agreements to the President of the Philippines for his
Otherwise, the other state would be justified in taking offense. 19
ratification. The original signed instrument of ratification shall
then be returned to the Department of Foreign Affairs for
It should be emphasized that under our Constitution, the power
appropriate action.
to ratify is vested in the President, subject to the concurrence of
the Senate. The role of the Senate, however, is limited only to
B. Treaties.
giving or withholding its consent, or concurrence, to the
ratification.20 Hence, it is within the authority of the President to
i. All treaties, regardless of their designation, shall comply
refuse to submit a treaty to the Senate or, having secured its
with the requirements provided in sub-paragraph[s] 1 and 2, consent for its ratification, refuse to ratify it.21 Although the
item A (Executive Agreements) of this Section. In addition,
refusal of a state to ratify a treaty which has been signed in its
the Department of Foreign Affairs shall submit the treaties to behalf is a serious step that should not be taken lightly,22 such
the Senate of the Philippines for concurrence in the
decision is within the competence of the President alone, which
ratification by the President. A certified true copy of the
cannot be encroached by this Court via a writ ofmandamus.
treaties, in such numbers as may be required by the Senate, This Court has no jurisdiction over actions seeking to enjoin the
together with a certified true copy of the ratification
President in the performance of his official duties. 23 The Court,
instrument, shall accompany the submission of the treaties
therefore, cannot issue the writ of mandamus prayed for by the
to the Senate.
petitioners as it is beyond its jurisdiction to compel the executive