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TodayisFriday,January08,2016

RepublicofthePhilippines
SUPREMECOURT
Manila
ENBANC
G.R.No.84818December18,1989
PHILIPPINECOMMUNICATIONSSATELLITECORPORATION,petitioner,
vs.
JOSELUISA.ALCUAZ,asNTCCommissioner,andNATIONALTELECOMMUNICATIONSCOMMISSION,
respondents.
Rilloraza,Africa,DeOcampo&Africaforpetitioner.
VictordelaSernaforrespondentAlcuaz.

REGALADO,J.:
Thiscaseisposedasoneoffirstimpressioninthesensethatitinvolvesthepublicutilityservicesofthepetitioner
PhilippineCommunicationsSatelliteCorporation(PHILCOMSAT,forshort)whichistheonlyonerenderingsuch
servicesinthePhilippines.
ThepetitionbeforeusseekstoannulandsetasideanOrder1issuedbyrespondentCommissionerJoseLuisAlcuazof
theNationalTelecommunicationsCommission(hereafter,NTC),datedSeptember2,1988,whichdirectstheprovisional
reductionoftherateswhichmaybechargedbypetitionerforcertainspecifiedlinesofitsservicesbyfifteenpercent(15%)
withthereservationtomakefurtherreductionslater,forbeingviolativeoftheconstitutionalprohibitionagainstundue
delegationoflegislativepowerandadenialofprocedural,aswellassubstantive,dueprocessoflaw.

Theantecedentalfactsassummarizedbypetitioner2arenotindispute.ByvirtueofRepublicActNo.5514,
PHILCOMSATwasgranted"afranchisetoestablish,construct,maintainandoperateinthePhilippines,atsuchplacesas
thegranteemayselect,stationorstationsandassociatedequipmentandfacilitiesforinternationalsatellitecommunications."
Underthisfranchise,itwaslikewisegrantedtheauthorityto"constructandoperatesuchgroundfacilitiesasneededto
delivertelecommunicationsservicesfromthecommunicationssatellitesystemandgroundterminalorterminals."

Pursuanttosaidfranchise,petitionerputsonrecordthatitundertookthefollowingactivitiesandestablishedthe
followinginstallations:
1.In1967,PHILCOMSATestablisheditsprovisionalearthstationinPinugay,Rizal.
2.In1968,earthstationstandard"A"antenna(PinugayI)wasestablished.PinugayIprovideddirect
satellitecommunicationlinkswiththePacificOceanRegion(theUnitedStates,Australia,Canada,
Hawaii,Guam,Korea,Thailand,China[PROC],NewZealandandBrunei)thruthePacificOcean
INTELSATsatellite.
3.In1971,asecondearthstationstandard"A"antenna(PinugayIII)wasestablished.PinugayII
providedlinkswiththeIndianOceanRegion(majorcitiesinEurope,MiddleEast,Africa,andotherAsia
Pacificcountriesoperatingwithintheregion)thrutheIndianOceanINTELSATsatellite.
4.In1983,athirdearthstationstandard"B"antenna(PinugayIII)wasestablishedtotemporarily
assumethefunctionsofPinugayIandthenPinugayIIwhiletheywerebeingrefurbished.PinugayIII
nowservesasspareorreservedantennaforpossiblecontingencies.
5.In1983,PHILCOMSATconstructedandinstalledastandard"B"antennaatClarkAirField,
PampangaasatelevisionreceiveonlyearthstationwhichprovidestheU.S.Militarybaseswitha24
hourtelevisionservice.
6.In1989,petitionercompletedtheinstallationofathirdstandard"A"earthstation(PinugayIV)totake
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overthelinksinPinugayIduetoobsolescence.3
BydesignationoftheRepublicofthePhilippines,thepetitionerisalsothesolesignatoryforthePhilippinesinthe
AgreementandtheOperatingAgreementrelatingtotheInternationalTelecommunicationsSatelliteOrganization
(INTELSAT)of115membernations,aswellasintheConventionandtheOperatingAgreementoftheInternational
MaritimeSatelliteOrganization(INMARSAT)of53membernations,whichtwoglobalcommercial
telecommunicationssatellitecorporationswerecollectivelyestablishedbyvariousstatesinlinewiththeprinciples
setforthinResolution1721(XVI)oftheGeneralAssemblyoftheUnitedNations.
Since1968,thepetitionerhasbeenleasingitssatellitecircuitsto:
1.PhilippineLongDistanceTelephoneCompany
2.PhilippineGlobalCommunications,Inc.
3.EasternTelecommunicationsPhils.,Inc.
4.GlobeMackayCableandRadioCorp.ITTand
5.CapitolWireless,Inc.
ortheirpredecessorsininterest.Thesatelliteservicesthusprovidedbypetitionerenablesaidinternationalcarriers
toservethepublicwithindispensablecommunicationservices,suchasoverseastelephone,telex,facsimile,
telegrams,highspeeddata,livetelevisioninfullcolor,andtelevisionstandardconversionfromEuropeanto
Americanorviceversa.
UnderSection5ofRepublicActNo.5514,petitionerwasexemptfromthejurisdictionofthethenPublicService
Commission,nowrespondentNTC.However,pursuanttoExecutiveOrderNo.196issuedonJune17,1987,
petitionerwasplacedunderthejurisdiction,controlandregulationofrespondentNTC,includingallitsfacilitiesand
servicesandthefixingofrates.ImplementingsaidExecutiveOrderNo.196,respondentsrequiredpetitionerto
applyfortherequisitecertificateofpublicconvenienceandnecessitycoveringitsfacilitiesandtheservicesit
renders,aswellasthecorrespondingauthoritytochargeratestherefor.
Consequently,underdateofSeptember9,1987,petitionerfiledwithrespondentNTCanapplication4forauthorityto
continueoperatingandmaintainingthesamefacilitiesithasbeencontinuouslyoperatingandmaintainingsince1967,to
continueprovidingtheinternationalsatellitecommunicationsservicesithaslikewisebeenprovidingsince1967,andto
chargethecurrentratesappliedforinrenderingsuchservices.Pendinghearing,italsoappliedforaprovisionalauthorityso
thatitcancontinuetooperateandmaintaintheabovementionedfacilities,providetheservicesandchargethereforthe
aforesaidratesthereinappliedfor.

OnSeptember16,1987,petitionerwasgrantedaprovisionalauthoritytocontinueoperatingitsexistingfacilities,to
rendertheservicesitwasthenoffering,andtochargetheratesitwasthencharging.Thisauthoritywasvalidforsix
(6)monthsfromthedateofsaidorder.5WhensaidprovisionalauthorityexpiredonMarch17,1988,itwasextendedfor
anothersix(6)months,oruptoSeptember16,1988.

TheNTCordernowincontroversyhadfurtherextendedtheprovisionalauthorityofthepetitionerforanothersix(6)
months,countedfromSeptember16,1988,butitdirectedthepetitionertochargemodifiedreducedratesthrougha
reductionoffifteenpercent(15%)onthepresentauthorizedrates.RespondentCommissionerorderedsaid
reductiononthefollowingground:
TheCommissioninitsongoingreviewofpresentserviceratestakesnotethatafteraninitial
evaluationbytheRatesRegulationDivisionoftheCommonCarriersAuthorizationDepartmentofthe
financialstatementsofapplicant,thereismeritinaREDUCTIONinsomeofapplicant'srates,subject
tofurtherreductions,shouldtheCommissionfinds(sic)initsfurtherevaluationthatmorereduction
shouldbeeffectedeitheronthebasisofaprovisionalauthorizationorinthefinalconsiderationofthe
case.6
PHILCOMSATassailstheabovequotedorderforthefollowingreasons:
1.Theenablingact(ExecutiveOrderNo.546)ofrespondentNTCempoweringittofixratesforpublicservice
communicationsdoesnotprovidethenecessarystandardsconstitutionallyrequired,hencethereisanundue
delegationoflegislativepower,particularlytheadjudicatorypowersofNTC
2.Assumingarguendothattheratefixingpowerwasproperlyandconstitutionallyconferred,thesamewas
exercisedinanunconstitutionalmanner,henceitisultravires,inthat(a)thequestionedorderviolatesprocedural
dueprocessforhavingbeenissuedwithoutpriornoticeandhearingand(b)theratereductionitimposesisunjust,
unreasonableandconfiscatory,thusconstitutiveofaviolationofsubstantivedueprocess.
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I.PetitionerasseveratesthatnowhereintheprovisionsofExecutiveOrderNo.546,providingforthecreationof
respondentNTCandgrantingitsratefixingpowers,norofExecutiveOrderNo.196,placingpetitionerunderthe
jurisdictionofrespondentNTC,canitbeinferredthatrespondentNTCisguidedbyanystandardintheexerciseof
itsratefixingandadjudicatorypowers.Whilepetitionerinitspetitioninchiefraisedtheissueofunduedelegationof
legislativepower,itsubsequentlyclarifieditssaidsubmissiontomeanthattheordermandatingareductionof
certainratesisunduedelegationnotoflegislativebutofquasijudicialpowertorespondentNTC,theexerciseof
whichallegedlyrequiresanexpressconfermentbythelegislativebody.
Whicheverwayitispresented,petitionerisineffectquestioningtheconstitutionalityofExecutiveOrdersNos.546
and196onthegroundthatthesamedonotfixastandardfortheexerciseofthepowerthereinconferred.
Weholdotherwise.
Fundamentalistherulethatdelegationoflegislativepowermaybesustainedonlyuponthegroundthatsome
standardforitsexerciseisprovidedandthatthelegislatureinmakingthedelegationhasprescribedthemannerof
theexerciseofthedelegatedpower.Therefore,whentheadministrativeagencyconcerned,respondentNTCinthis
case,establishesarate,itsactmustbothbenonconfiscatoryandmusthavebeenestablishedinthemanner
prescribedbythelegislatureotherwise,intheabsenceofafixedstandard,thedelegationofpowerbecomes
unconstitutional.Incaseofadelegationofratefixingpower,theonlystandardwhichthelegislatureisrequiredto
prescribefortheguidanceoftheadministrativeauthorityisthattheratebereasonableandjust.However,ithas
beenheldthatevenintheabsenceofanexpressrequirementastoreasonableness,thisstandardmaybeimplied.
7

ItbecomesimportantthentoascertainthenatureofthepowerdelegatedtorespondentNTCandthemanner
requiredbythestatuteforthelawfulexercisethereof.
PursuanttoExecutiveOrdersNos.546and196,respondentNTCisempowered,amongothers,todetermineand
prescriberatespertinenttotheoperationofpublicservicecommunicationswhichnecessarilyincludethepowerto
promulgaterulesandregulationsinconnectiontherewith.And,underSection15(g)ofExecutiveOrderNo.546,
respondentNTCshouldbeguidedbytherequirementsofpublicsafety,publicinterestandreasonablefeasibilityof
maintainingeffectivecompetitionofprivateentitiesincommunicationsandbroadcastingfacilities.Likewise,in
Section6(d)thereof,whichprovidesforthecreationoftheMinistryofTransportationandCommunicationswith
controlandsupervisionoverrespondentNTC,itisspecificallyprovidedthatthenationaleconomicviabilityofthe
entirenetworkorcomponentsofthecommunicationssystemscontemplatedthereinshouldbemaintainedat
reasonablerates.Weneednotgointoanindepthanalysisofthepertinentprovisionsofthelawinorderto
concludethatrespondentNTC,intheexerciseofitsratefixingpower,islimitedbytherequirementsofpublicsafety,
publicinterest,reasonablefeasibilityandreasonablerates,whichconjointlymorethansatisfytherequirementsofa
validdelegationoflegislativepower.
II.Onanothertack,petitionersubmitsthatthequestionedorderviolatesproceduraldueprocessbecauseitwas
issuedmotuproprio,withoutnoticetopetitionerandwithoutthebenefitofahearing.Petitionerlamentsthatsaid
orderwasbasedmerelyonan"initialevaluation,"whichisaunilateralevaluation,buthadpetitionerbeengivenan
opportunitytopresentitssidebeforetheorderinquestionwasissued,theconfiscatorynatureoftheratereduction
andtheconsequentdeteriorationofthepublicservicecouldhavebeenshownanddemonstratedtorespondents.
PetitionerarguesthatthefunctioninvolvedintheratefixingpowerofNTCisadjudicatoryandhencequasijudicial,
notquasilegislativethus,noticeandhearingarenecessaryandtheabsencethereofresultsinaviolationofdue
process.
Respondentsadmitthattheapplicationofapolicylikethefixingofratesasexercisedbyadministrativebodiesis
quasijudicialratherthanquasilegislative:thatwherethefunctionoftheadministrativeagencyislegislative,notice
andhearingarenotrequired,butwhereanorderappliestoanamedperson,asintheinstantcase,thefunction
involvedisadjudicatory.8Nonetheless,theyinsistthatunderthefactsobtainingtheorderinquestionneednotbe
precededbyahearing,notbecauseitwasissuedpursuanttorespondentNTC'slegislativefunctionbutbecausetheassailed
orderismerelyinterlocutory,itbeinganincidentintheongoingproceedingsonpetitioner'sapplicationforacertificateof
publicconvenienceandthatpetitionerisnottheonlyprimarysourceofdataorinformationsincerespondentiscurrently
engagedinacontinuingreviewoftheratescharged.

Wefindmeritinpetitioner'scontention.
InViganElectricLightCo.,Inc.vs.PublicServiceCommission,9wemadeacategoricalclassificationastowhenthe
ratefilingpowerofadministrativebodiesisquasijudicialandwhenitislegislative,thus:

Moreover,althoughtherulemakingpowerandeventhepowertofixrateswhensuchrulesand/or
ratesaremeanttoapplytoallenterprisesofagivenkindthroughoutthePhilippinesmaypartakeofa
legislativecharacter,suchisnotthenatureoftheordercomplainedof.Indeed,thesameapplies
exclusivelytopetitionerherein.Whatismore,itispredicateduponthefindingoffactbasedupona
reportsubmittedbytheGeneralAuditingOfficethatpetitionerismakingaprofitofmorethan12%ofits
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investedcapital,whichisdeniedbypetitioner.Obviously,thelatterisentitledtocrossexaminethe
makerofsaidreport,andtointroduceevidencetodisprovethecontentsthereofand/orexplainor
complementthesame,aswellastorefutetheconclusiondrawntherefrombytherespondent.Inother
words,inmakingsaidfindingoffact,respondentperformedafunctionpartakingofaquasijudicial
character,thevalidexerciseofwhichdemandspreviousnoticeandhearing.
ThisrulewasfurtherexplainedinthesubsequentcaseofTheCentralBankofthePhilippinesvs.Cloribel,etal.10
towit:

Itisalsoclearfromtheauthoritiesthatwherethefunctionoftheadministrativebodyislegislative,
noticeofhearingisnotrequiredbydueprocessoflaw(SeeOppenheimer,AdministrativeLaw,2Md.
L.R.185,204,supra,whereitissaid:'Ifthenatureoftheadministrativeagencyisessentially
legislative,therequirementsofnoticeandhearingarenotnecessary.Thevalidityofaruleoffuture
actionwhichaffectsagroup,ifvestedrightsoflibertyorpropertyarenotinvolved,isnotdetermined
accordingtothesameruleswhichapplyinthecaseofthedirectapplicationofapolicytoaspecific
individual)...Itissaidin73C.J.S.PublicAdministrativeBodiesandProcedure,sec.130,pages452
and453:'Asidefromstatute,thenecessityofnoticeandhearinginanadministrativeproceeding
dependsonthecharacteroftheproceedingandthecircumstancesinvolved.Insofarasgeneralization
ispossibleinviewofthegreatvarietyofadministrativeproceedings,itmaybestatedasageneralrule
thatnoticeandhearingarenotessentialtothevalidityofadministrativeactionwheretheadministrative
bodyactsintheexerciseofexecutive,administrative,orlegislativefunctionsbutwhereapublic
administrativebodyactsinajudicialorquasijudicialmatter,anditsactsareparticularandimmediate
ratherthangeneralandprospective,thepersonwhoserightsorpropertymaybeaffectedbytheaction
isentitledtonoticeandhearing.11
TheorderinquestionwhichwasissuedbyrespondentAlcuaznodoubtcontainsalltheattributesofaquasijudicial
adjudication.Foremostisthefactthatsaidorderpertainsexclusivelytopetitionerandtonoother.Further,itis
premisedonafindingoffact,althoughpatentlysuperficial,thatthereismeritinareductionofsomeoftherates
chargedbasedonaninitialevaluationofpetitioner'sfinancialstatementswithoutaffordingpetitionerthebenefitof
anexplanationastowhatparticularaspectoraspectsofthefinancialstatementswarrantedacorrespondingrate
reduction.Norationalizationwasofferednorweretheattendingcontingencies,ifany,discussed,whichprompted
respondentstoimposeasmuchasafifteenpercent(15%)ratereduction.Itisnotfarfetchedtoassumethat
petitionercouldbeinabetterpositiontorationalizeitsratesvisavistheviabilityofitsbusinessrequirements.The
ratesitchargesresultfromanexhaustiveanddetailedstudyitconductsofthemultifacetedintricaciesattendantto
apublicserviceundertakingofsuchnatureandmagnitude.Weare,therefore,inclinedtolendgreatercredenceto
petitioner'sratiocinationthatanimmediatereductioninitsrateswouldadverselyaffectitsoperationsandthequality
ofitsservicetothepublicconsideringthemaintenancerequirements,theprojectsitstillhastoundertakeandthe
financialoutlayinvolved.Notably,petitionerwasnotevenaffordedtheopportunitytocrossexaminetheinspector
whoissuedthereportonwhichrespondentNTCbaseditsquestionedorder.
Atanyrate,thereremainsthecategoricaladmissionmadebyrespondentNTCthatthequestionedorderwasissued
pursuanttoitsquasijudicialfunctions.It,however,insiststhatnoticeandhearingarenotnecessarysincethe
assailedorderismerelyincidentaltotheentireproceedingsand,therefore,temporaryinnature.Thispostulateis
bereftofmerit.
Whilerespondentsmayfixatemporaryratependingfinaldeterminationoftheapplicationofpetitioner,suchrate
fixingorder,temporarythoughitmaybe,isnotexemptfromthestatutoryproceduralrequirementsofnoticeand
hearing,aswellastherequirementofreasonableness.AssumingthatsuchpowerisvestedinNTC,itmaynot
exercisethesameinanarbitraryandconfiscatorymanner.Categorizingsuchanorderastemporaryinnaturedoes
notperforceentailtheapplicabilityofadifferentruleofstatutoryprocedurethanwouldotherwisebeappliedtoany
otherorderonthesamematterunlessotherwiseprovidedbytheapplicablelaw.Inthecaseatbar,theapplicable
statutoryprovisionisSection16(c)ofthePublicServiceActwhichprovides:
Section16.ProceedingsoftheCommission,uponnoticeandhearingtheCommissionshallhave
power,uponpropernoticeandhearinginaccordancewiththerulesandprovisionsofthisAct,subject
tothelimitationsandexceptionsmentionedandsavingprovisionstothecontrary:
xxxxxxxxx
(c)Tofixanddetermineindividualorjointrates,...whichshallbeimposed,observedandfollowed
thereafterbyanypublicservice...
ThereisnoreasontoassumethattheaforesaidprovisiondoesnotapplytorespondentNTC,therebeingno
limiting,excepting,orsavingprovisionstothecontraryinExecutiveOrdersNos.546and196.
Itisthusclearthatwithregardtoratefixing,respondenthasnoauthoritytomakesuchorderwithoutfirstgiving
petitionerahearing,whethertheorderbetemporaryorpermanent,anditisimmaterialwhetherthesameismade
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uponacomplaint,asummaryinvestigation,oruponthecommission'sownmotionasinthepresentcase.Thatsuch
ahearingisrequiredisevidentinrespondents'orderofSeptember16,1987inNTCCaseNo.8794whichgranted
PHILCOMSATaprovisionalauthority"tocontinueoperatingitsexistingfacilities,torendertheservicesitpresently
offers,andtochargetheratesasreducedbythem"undertheconditionthat"(s)ubjecttohearingandthefinal
considerationofthemeritofthisapplication,theCommissionmaymodify,reviseoramendtherates..."12
Whileitmaybetruethatforpurposesofratefixingrespondentsmayhaveothersourcesofinformationordata,still,
sinceahearingisessential,respondentNTCshouldactsolelyonthebasisoftheevidencebeforeitandnoton
knowledgeorinformationotherwiseacquiredbyitbutwhichisnotofferedinevidenceor,evenifsoadduced,
petitionerwasgivennoopportunitytocontrovert.
Again,theorderrequiresthenewreducedratestobemadeeffectiveonaspecifieddate.Itbecomesafinal
legislativeactastotheperiodduringwhichithastoremaininforcependingthefinaldeterminationofthecase.13
AnorderofrespondentNTCprescribingreducedrates,evenforatemporaryperiod,couldbeunjust,unreasonableoreven
confiscatory,especiallyiftheratesareunreasonablylow,sincetheutilitypermanentlylosesitsjustrevenueduringthe
prescribedperiod.Infact,suchorderisineffectfinalinsofarastherevenueduringtheperiodcoveredbytheorderis
concerned.Uponashowing,therefore,thattheorderrequiringareducedrateisconfiscatory,andwillundulydeprive
petitionerofareasonablereturnuponitsproperty,adeclarationofitsnullitybecomesinductible,whichbringsustotheissue
onsubstantivedueprocess.

III.Petitionercontendsthattheratereductionisconfiscatoryinthatitsimplementationwouldvirtuallyresultina
cessationofitsoperationsandeventualclosureofbusiness.Ontheotherhand,respondentsassertthatsince
petitionerisoperatingitscommunicationssatellitefacilitiesthroughalegislativefranchise,assuchgranteeithasno
vestedrighttherein.WhatithasismerelyaprivilegeorlicensewhichmayberevokedatwillbytheStateatany
timewithoutnecessarilyviolatinganyvestedpropertyrightofhereinpetitioner.Whilepetitionerconcedesthisthesis
ofrespondent,itcountersthatthewithdrawalofsuchprivilegeshouldneverthelessbeneitherwhimsicalnor
arbitrary,butitmustbefairandreasonable.
Thereisnoquestionthatpetitionerisameregranteeofalegislativefranchisewhichissubjecttoamendment,
alteration,orrepealbyCongresswhenthecommongoodsorequires.14Apparently,therefore,suchgrantcannotbe
unilaterallyrevokedabsentashowingthattheterminationoftheoperationofsaidutilityisrequiredbythecommongood.

TheruleisthatthepoweroftheStatetoregulatetheconductandbusinessofpublicutilitiesislimitedbythe
considerationthatitisnottheownerofthepropertyoftheutility,orclothedwiththegeneralpowerofmanagement
incidenttoownership,sincetheprivaterightofownershiptosuchpropertyremainsandisnottobedestroyedby
theregulatorypower.Thepowertoregulateisnotthepowertodestroyusefulandharmlessenterprises,butisthe
powertoprotect,foster,promote,preserve,andcontrolwithdueregardfortheinterest,firstandforemost,ofthe
public,thenoftheutilityandofitspatrons.Anyregulation,therefore,whichoperatesasaneffectiveconfiscationof
privatepropertyorconstitutesanarbitraryorunreasonableinfringementofpropertyrightsisvoid,becauseitis
repugnanttotheconstitutionalguarantiesofdueprocessandequalprotectionofthelaws.15
Hence,theinherentpowerandauthorityoftheState,oritsauthorizedagent,toregulatetherateschargedbypublic
utilitiesshouldbesubjectalwaystotherequirementthattheratessofixedshallbereasonableandjust.A
commissionhasnopowertofixrateswhichareunreasonableortoregulatethemarbitrarily.Thisbasicrequirement
ofreasonablenesscomprehendssuchrateswhichmustnotbesolowastobeconfiscatory,ortoohighastobe
oppressive.16
Whatisajustandreasonablerateisnotaquestionofformulabutofsoundbusinessjudgmentbaseduponthe
evidence17itisaquestionoffactcallingfortheexerciseofdiscretion,goodsense,andafair,enlightenedandindependent
judgment.18Indeterminingwhetherarateisconfiscatory,itisessentialalsotoconsiderthegivensituation,requirements
andopportunitiesoftheutility.Amethodoftenemployedindeterminingreasonablenessisthefairreturnuponthevalueof
thepropertytothepublicutility.Competitionisalsoaveryimportantfactorindeterminingthereasonablenessofratessince
acarrierisallowedtomakesuchratesasarenecessarytomeetcompetition.19

Acursoryperusaloftheassailedorderrevealsthattheratereductionissolelyandprimarilybasedontheinitial
evaluationmadeonthefinancialstatementsofpetitioner,contrarytorespondentNTC'sallegationthatithasseveral
othersourcesofinformationwithout,however,divulgingsuchsources.Furthermore,itdidnotasmuchasmakean
attempttoelaborateonhowitarrivedattheprescribedrates.Itjustperfunctorilydeclaredthatbasedonthe
financialstatements,thereismeritforaratereductionwithoutanyelucidationonwhatimplicationsandconclusions
werenecessarilyinferredbyitfromsaidstatements.Nordiditdeigntoexplainhowthedatareflectedinthefinancial
statementsinfluenceditsdecisiontoimposearatereduction.
Ontheotherhand,petitionermaylikelysufferaseveredrawback,withtheconsequentdetrimenttothepublic
service,shouldtheorderofrespondentNTCturnouttobeunreasonableandimprovident.Thebusinessinwhich
petitionerisengagedisuniqueinthatitsmachineryandequipmenthavealwaystobetakeninrelationtothe
equipmentontheotherendofthetransmissionarrangement.Anylack,aging,acquisition,rehabilitation,or
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refurbishmentofmachineryandequipmentnecessarilyentailsamajoradjustmentorinnovationonthebusinessof
petitioner.Aspointedoutbypetitioner,anychangeinthesendingendabroadhastobematchedwiththe
correspondingchangeinthereceivingendinthePhilippines.Conversely,anyinthereceivingendabroadhastobe
matchedwiththecorrespondingchangeinthesendingendinthePhilippines.Aninabilityonthepartofpetitionerto
meetthevariegationsdemandedbetechnologycouldresultinadeteriorationortotalfailureoftheserviceof
satellitecommunications.
Atpresent,petitionerisengagedinseveralprojectsaimedatrefurbishing,rehabilitating,andrenewingitsmachinery
andequipmentinordertokeepupwiththecontinuingchargesofthetimesandtomaintainitsfacilitiesata
competitivelevelwiththetechnologicaladvancesabroad.Thereprojectedundertakingswereformulatedonthe
premisethatratesaremaintainedattheirpresentoratreasonablelevels.Hence,anunduereductionthereofmay
practicallyleadtoacessationofitsbusiness.Whileweconcedetheprimacyofthepublicinterestinanadequate
andefficientservice,thesameisnotnecessarilytobeequatedwithreducedrates.Reasonablenessintherates
assumesthatthesameisfairtoboththepublicutilityandtheconsumer.
Consequently,weholdthatthechallengedorder,particularlyontheissueofratesprovidedtherein,beingviolative
ofthedueprocessclauseisvoidandshouldbenullified.Respondentsshouldnowproceed,astheyshould
heretoforehavedone,withthehearinganddeterminationofpetitioner'spendingapplicationforacertificateofpublic
convenienceandnecessityandinwhichproceedingthesubjectofratesinvolvedinthepresentcontroversy,aswell
asothermatterinvolvedinsaidapplication,bedulyadjudicatedwithreasonabledispatchandwithdueobservance
ofourpronouncementsherein.
WHEREFORE,thewritprayedforisGRANTEDandtheorderofrespondents,datedSeptember2,1988,inNTC
CaseNo.8794isherebySETASIDE.ThetemporaryrestrainingorderissuedunderourresolutionofSeptember
13,1988,asspecificallydirectedagainsttheaforesaidorderofrespondentsonthematterofexistingrateson
petitioner'spresentauthorizedservices,isherebymadepermanent.
SOORDERED.
Fernan,(C.J.),Narvasa,MelencioHerrera,Cruz,Paras,Feliciano,Gancayco,Bidin,Sarmiento,Cortes,Grio
AquinoandMedialdea,JJ.,concur.
Padilla,J.,tooknopart.

SeparateOpinions

GUTIERREZ,JR.,J.,concurring:
IconcurintheponenciaofJusticeRegaladoandjoinhimintheeruditeandthoroughdiscussionoftherespondent's
authority.However,Ihavereservationsaboutourcontinuingtoabidebythedictumthatintheexerciseofquasi
legislativepower,noticeandhearingarenotrequired.Ibelievethatthisdoctrineisripeforreexamination.
SenatorsandCongressmenaredirectlyelectedbythepeople.Administrativeofficialsarenot.Ifthemembersofan
administrativebodyare,asissooftenthecase,appointednotonthebasisofcompetenceandqualificationsbutout
ofpoliticalorpersonalconsiderations,itisnotonlythesenseofpersonalresponsibilitytotheelectorateaffectedby
legislationwhichismissing.Theexpertiseandexperienceneededfortheissuanceofsoundrulesandregulations
wouldalsobesorelylacking.
Congressneverpassestrulyimportantlegislationwithoutholdingpublichearings.Yet,administrativeofficialswho
arenotdirectlyattunedtothepublicpulseseenoneedforhearings.Theyissuerulesandcircularswithfarreaching
effectsonoureconomyandournation'sfutureontheassumptionthattheheadofanagencyknowsbestwhatis
goodforthepeople.Ibelievethatintheexerciseofquasilegislativepowers,administrativeagencies,much,much
morethanCongress,shouldholdhearingsandshouldbegivenguidelinesastowhennoticesandhearingsare
essentialeveninquasilegislation.

SeparateOpinions
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GUTIERREZ,JR.,J.,concurring:
IconcurintheponenciaofJusticeRegaladoandjoinhimintheeruditeandthoroughdiscussionoftherespondent's
authority.However,Ihavereservationsaboutourcontinuingtoabidebythedictumthatintheexerciseofquasi
legislativepower,noticeandhearingarenotrequired.Ibelievethatthisdoctrineisripeforreexamination.
SenatorsandCongressmenaredirectlyelectedbythepeople.Administrativeofficialsarenot.Ifthemembersofan
administrativebodyare,asissooftenthecase,appointednotonthebasisofcompetenceandqualificationsbutout
ofpoliticalorpersonalconsiderations,itisnotonlythesenseofpersonalresponsibilitytotheelectorateaffectedby
legislationwhichismissing.Theexpertiseandexperienceneededfortheissuanceofsoundrulesandregulations
wouldalsobesorelylacking.
Congressneverpassestrulyimportantlegislationwithoutholdingpublichearings.Yet,administrativeofficialswho
arenotdirectlyattunedtothepublicpulseseenoneedforhearings.Theyissuerulesandcircularswithfarreaching
effectsonoureconomyandournation'sfutureontheassumptionthattheheadofanagencyknowsbestwhatis
goodforthepeople.Ibelievethatintheexerciseofquasilegislativepowers,administrativeagencies,much,much
morethanCongress,shouldholdhearingsandshouldbegivenguidelinesastowhennoticesandhearingsare
essentialeveninquasilegislation.

SeparateOpinions
GUTIERREZ,JR.,J.,concurring:
IconcurintheponenciaofJusticeRegaladoandjoinhimintheeruditeandthoroughdiscussionoftherespondent's
authority.However,Ihavereservationsaboutourcontinuingtoabidebythedictumthatintheexerciseofquasi
legislativepower,noticeandhearingarenotrequired.Ibelievethatthisdoctrineisripeforreexamination.
SenatorsandCongressmenaredirectlyelectedbythepeople.Administrativeofficialsarenot.Ifthemembersofan
administrativebodyare,asissooftenthecase,appointednotonthebasisofcompetenceandqualificationsbutout
ofpoliticalorpersonalconsiderations,itisnotonlythesenseofpersonalresponsibilitytotheelectorateaffectedby
legislationwhichismissing.Theexpertiseandexperienceneededfortheissuanceofsoundrulesandregulations
wouldalsobesorelylacking.
Congressneverpassestrulyimportantlegislationwithoutholdingpublichearings.Yet,administrativeofficialswho
arenotdirectlyattunedtothepublicpulseseenoneedforhearings.Theyissuerulesandcircularswithfarreaching
effectsonoureconomyandournation'sfutureontheassumptionthattheheadofanagencyknowsbestwhatis
goodforthepeople.Ibelievethatintheexerciseofquasilegislativepowers,administrativeagencies,much,much
morethanCongress,shouldholdhearingsandshouldbegivenguidelinesastowhennoticesandhearingsare
essentialeveninquasilegislation.
Footnotes
1AnnexA,Petition:Rollo,37.
2Rollo,611,137139,148150.
3Ibid.,149.
4AnnexC,PetitionRollo,48.
5AnnexB,Id.,Ibid.,41.
6Rollo,37.
742Am.Jur.357358.
8MemorandumforPrivateRespondents,910Rollo,181182.
9SCRA46(1964).
1044SCRA307(1972).
11CitingAlbertvs.PublicServiceCommission,120A.2d.346,350351.

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12Rollo,44.
13WilliamA.Predergast,et.al.vs.NewYorkTel.Co.,67L.Ed.853,858.
14Sec.11.Art.XII,1987Constitution.
1573C.J.S1005.
16Op.cit.,1010.
17StatePublicUtilitiesCommissionex.rel.CityofSpringfieldvs.SpringfieldGas&ElectricCo.,125
N.E.891.
1873C.J.S.1010.
19ManilaRailroadCo.vs.A.L.AmmenTransportationCo.,Inc.,48Phil.900(1926).
TheLawphilProjectArellanoLawFoundation

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