Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 148208             December 15, 2004

CENTRAL BANK (now Bangko Sentral ng Pilipinas) EMPLOYEES ASSOCIATION, INC., petitioner, vs.BANGKO SENTRAL NG PILIPINAS and the EXECUTIVE SECRETARY, respondents.

D E C I S I O N

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.

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:

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(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 rank-and-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:

a. the legislative history of R.A. No. 7653 shows that the questioned proviso does not appear in the original and

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 low-salaried 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 management."

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

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, woman and child should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons merely as

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)

Congress is allowed a wide leeway in providing for a valid classification.15 The equal protection clause is not infringed by

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 EMPLOYEESOF GFIs FROM THE SSL - RENDERS THE CONTINUEDAPPLICATION OF THE CHALLENGED PROVISIONA 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 constitutionally valid as applied to one set of facts and invalid in its application to another.24

A statute valid at one time may become void at another time because of altered circumstances.25 Thus, if a statute in its practical operation becomes arbitrary or confiscatory, its validity, even though affirmed by a former adjudication, is open to inquiry and investigation in the light of changed conditions.26

Demonstrative of this doctrine is Vernon Park Realty v. City of Mount Vernon,27 where the Court of Appeals of New York 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. Later amendments to the ordinance then prohibited the use of the property except for parking and storage of automobiles, and service station within a parking area. The Court found the ordinance to constitute an invasion of property rights which was contrary to constitutional due process. It ruled:

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.28 (citations omitted, emphasis supplied)

In the Philippine setting, this Court declared the continued enforcement of a valid law as unconstitutional as a consequence of significant changes in circumstances. Rutter v. Esteban29 upheld the constitutionality of the

moratorium law - its enactment and operation being a valid exercise by the State of its police power30 - but also ruled that the continued enforcement of the otherwise valid law would be unreasonable and oppressive. It noted the subsequent changes in the country's business, industry and agriculture. Thus, the law was set aside because its continued operation would be grossly discriminatory and lead to the oppression of the creditors. The landmark ruling states:31

The question now to be determined is, is the period of eight (8) years which Republic Act No. 342 grants to 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 Commission reasonable under the present circumstances?

It should be noted that Republic Act No. 342 only extends relief to debtors of prewar obligations who suffered from the ravages of the last war and who filed a claim for their losses with the Philippine War Damage Commission. It is therein provided that said obligation shall not be due and demandable for a period of eight (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 rehabilitate themselves by giving them a reasonable time within which to pay their prewar debts so as to prevent them from being victimized by their creditors. While it is admitted in said law that since liberation conditions have gradually returned to normal, this is not so with regard to those who have suffered the ravages of war and so it was therein declared as a policy that as to them the debt moratorium should be continued in force (Section 1).

But we should not lose sight of the fact that these obligations had been pending since 1945 as a result of the issuance of Executive Orders Nos. 25 and 32 and at present their enforcement is still inhibited because of the enactment of Republic Act No. 342 and would continue to be unenforceable during the eight-year period granted to prewar debtors to afford them an opportunity to rehabilitate themselves, which in plain language means that the creditors would have to observe a vigil of at least twelve (12) years before they could effect a liquidation of their investment dating as

far back as 1941. his period seems to us unreasonable, if not oppressive. While the purpose of Congress is 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)

[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

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);

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

6. R.A. No. 8763 (2000) for Home Guaranty Corporation (HGC);38 and

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

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       xxx       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)

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

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The Small Business Guarantee and Finance Corporation shall:

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(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)

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

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

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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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(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)

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

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

Section 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 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       xxx       xxx

(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)

xxx       xxx       xxx

7. PDIC (R.A. No. 9302)

Section 2. Section 2 of [Republic Act No. 3591, as amended] is hereby further amended to read:

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3.

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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)

Thus, eleven years after the amendment of the BSP charter, the rank-and-file of seven other GFIs were granted the exemption that was specifically denied to the rank-and-file of the BSP. And as if to add insult to petitioner's injury, even the Securities and Exchange Commission (SEC) was granted the same blanket exemption from the SSL in 2000!39

The prior view on the constitutionality of R.A. No. 7653 was confined to an evaluation of its classification between the rank-and-file and the officers of the BSP, found reasonable because there were substantial distinctions that made real differences between the two classes.

The above-mentioned subsequent enactments, however, constitute significant changes in circumstance that considerably alter the reasonability of the continued operation of the last proviso of Section 15(c), Article II of Republic Act No. 7653, thereby exposing the proviso to more serious scrutiny.This time,

the scrutiny relates to the constitutionality of the classification - albeit made indirectly as a consequence of 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

Stated differently, the second level of inquiry deals with the following questions: Given that Congress chose to exempt other GFIs (aside the BSP) from the coverage of the SSL, can the exclusion of the rank-and-file employees of the BSP stand 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 and discriminatory treatment, simply because the inequity manifested itself, not instantly through a single overt act, but gradually and progressively, through seven separate acts of Congress? Is the right to equal protection of the law bounded in time and space that: (a) the right can only be invoked against a classification made directly and deliberately, as opposed to a discrimination that arises indirectly, or as a consequence of several other acts; and (b) is the legal analysis confined to determining the validity within the parameters of the statute or ordinance (where the inclusion or exclusion is articulated), thereby proscribing any evaluation vis-à-vis the grouping, or the lack thereof, among several similar enactments made over a period of time?

In this second level of scrutiny, the inequality of treatment cannot be justified on the mere assertion that each exemption (granted to the seven other GFIs) rests "on a policy determination by the legislature." All legislative enactments necessarily rest on a policy determination - even those that have been declared to contravene the Constitution. Verily, if this could serve as a magic wand to sustain the validity of a statute, then no due process and equal protection challenges would ever prosper. There is nothing inherently sacrosanct in a policy determination made by Congress or by the Executive; it cannot run riot and overrun the ramparts of protection of the Constitution.

In fine, the "policy determination" argument may support the inequality of treatment between the rank-and-file and the officers of the BSP, but it cannot justify the inequality of

treatment between BSP rank-and-file and other GFIs' who are 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 prohibition against enacting laws that allow invidious discrimination, directly or indirectly. If a law has the effect of denying the equal protection of the law, or permits such denial, it is unconstitutional.41

It is against this standard that the disparate treatment of the BSP rank-and-file from the other GFIs cannot stand judicial scrutiny. For as regards the exemption from the coverage of the SSL, there exist no substantial distinctions so as to differentiate, the BSP rank-and-file from the other rank-and-file of the seven GFIs. On the contrary, our legal history shows that GFIs have long been recognized as comprising one distinct class, separate from other governmental entities.

Before the SSL, Presidential Decree (P.D.) No. 985 (1976) declared it as a State policy (1) to provide equal pay for substantially equal work, and (2) to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions. P.D. No. 985 was passed to address disparities in pay among similar or comparable positions which had given rise to dissension among government employees. But even then, GFIs and government-owned and/or controlled corporations (GOCCs) were already identified as a distinct class among government employees. Thus, Section 2 also provided, "[t]hat notwithstanding a standardized salary system established for all employees, additional financial incentives may be established by government corporation and financial institutions for their employees to be supported fully from their corporate funds and for such technical positions as may be approved by the President in critical government agencies."42

The same favored treatment is made for the GFIs and the GOCCs under the SSL. Section 3(b) provides that one of the principles governing the Compensation and Position Classification System of the Government is that: "[b]asic 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."

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

(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.

The Benchmark Position Schedule enumerates the position titles that fall within Salary Grades 1 to 20.

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

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."

The fragility of this argument is manifest. First, the BSP is the central monetary authority,48 and the banker of the government and all its political subdivisions.49 It has the sole power and authority to issue currency;50provide policy directions in the areas of money, banking, and credit; and supervise banks and regulate finance companies and non-bank financial institutions performing quasi-banking functions, including the exempted GFIs.51 Hence, the argument that the rank-and-file employees of the seven GFIs were exempted because of

the importance of their institution's mandate cannot stand any more than an empty sack can stand.

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'être 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-à-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.

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 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 compensation plan that "shall be comparable with the prevailing compensation plan in the [BSP] and other [GFIs],"53 then granted a blanket exemption from the SSL, and its rank-and-file endowed a more preferred treatment than the rank-and-file of the BSP.

The violation to the equal protection clause becomes even more pronounced when we are faced with this undeniable truth: that if Congress had enacted a law for the sole purpose of exempting the eight GFIs from the coverage of the SSL, the exclusion of the BSP

rank-and-file employees would have been devoid of any substantial or material basis. It bears no moment, therefore, that the unlawful discrimination was not a direct result arising from one law. "Nemo potest facere per alium quod non potest facere per directum." No one is allowed to do indirectly what he is prohibited to do directly.

It has also been proffered that "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 qualification 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." Cited is the ruling in Johnson v. Robinson:54 "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."

The reference to Johnson is inapropos. In Johnson, the US Court sustained the validity of the classification as there were quantitative and qualitative distinctions, expressly recognized by Congress, which formed a rational basis for the classification limiting educational benefits to military service veterans as a means of helping them readjust to civilian life. The Court listed the peculiar characteristics as follows:

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…

xxx       xxx       xxx

Second, the disruptions suffered by military veterans and alternative service performers are qualitatively different. Military veterans suffer a far greater loss of personal freedom during their service careers. Uprooted from civilian life, the military veteran becomes part of the military establishment, subject to its discipline and potentially hazardous duty.

Congress was acutely aware of the peculiar disabilities caused by military service, in consequence of which military servicemen have a special need for readjustment benefits…55 (citations omitted)

In the case at bar, it is precisely the fact that as regards the exemption from the SSL, there are no characteristics peculiar only to the seven GFIs or their rank-and-file so as to justify the exemption which BSP rank-and-file employees were denied (not to mention the anomaly of the SEC getting one). The distinction made by the law is not only superficial,56 but also arbitrary. It is not based on substantial distinctions that make real differences between the BSP rank-and-file and the seven other GFIs.

Moreover, the issue in this case is not - as the dissenting opinion of Mme. Justice Carpio-Morales would put it - whether "being an employee of a GOCC or GFI is reasonable and sufficient basis for exemption" from R.A. No. 6758. It is Congress itself that distinguished the GFIs from other government agencies, not once but eight times, through the enactment of R.A. Nos. 7653, 7907, 8282, 8289, 8291, 8523, 8763, and 9302. These laws may have created a "preferred sub-class within government employees," but the present challenge is not directed at the wisdom of these laws. Rather, it is a legal conundrum involving the exercise of legislative power, the validity of which must be measured not only by looking at the specific exercise in and by itself (R.A. No. 7653), but also as to the legal effects brought about by seven separate exercises - albeit indirectly and without intent.

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 even when the constitutionality of the said provision was not squarely raised as an issue, because the issue involved not only the claimant but also others similarly situated and whose claims GSIS would also deny based on the challenged proviso. The Court held that social justice and public interest demanded the resolution of the constitutionality of the proviso. And so it is with the challenged proviso in the case at bar.

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 rank-and-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 ever…But 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

Most, if not all, international human rights instruments include some prohibition on discrimination and/or provisions about equality.75 The general international provisions pertinent to discrimination and/or equality are the International Covenant on Civil and Political Rights (ICCPR);76 the International Covenant on Economic, Social and Cultural Rights (ICESCR); the International Convention on the Elimination of all Forms of Racial Discrimination (CERD);77 the Convention on the Elimination of all Forms of Discrimination against Women (CEDAW); and the Convention on the Rights of the Child (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

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. The Dutch government submitted that discrimination in social security 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 Article 26 could go beyond the rights contained in the Covenant to other civil and political rights, such as discrimination in the field of taxation, but contended that Article 26 did not extend to the social, economic, and cultural rights contained in ICESCR. The Committee rejected this argument. In its view, Article 26 applied to rights beyond the Covenant including the rights in other international treaties such as the right to social security found in ICESCR:

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.

In the workplace, where the relations between capital and labor are often skewed in favor of capital, inequality and discrimination by the employer are all the more reprehensible.

The Constitution specifically provides that labor is entitled to "humane conditions of work." These conditions are not restricted to the physical workplace - the factory, the office or the field - but include as well the manner by which employers treat their employees.

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

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)

Congress retains its wide discretion in providing for a valid classification, and its policies should be accorded recognition and respect by the courts of justice except when they run afoul of the Constitution.94 The deference stops where the classification violates a fundamental right, or prejudices persons accorded special protection by the Constitution. When these violations arise, this Court must discharge its primary role as the vanguard of constitutional guaranties, and require a stricter and more exacting adherence to constitutional limitations. Rational basis should not suffice.

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.

Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble proclaims "equality" as an ideal precisely in protest against crushing inequities in Philippine society. The command to promote social justice in Article II, Section 10, in "all phases of national development," further explicitated in Article XIII, are clear commands to the State to take affirmative action in the direction of greater equality.… [T]here is thus in the Philippine Constitution no lack of doctrinal support for a more vigorous state effort towards achieving a reasonable measure of equality.100

Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized groups of society, including labor.101 Under the policy of social justice, the law bends over backward to accommodate the interests

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 against persons favored by the Constitution with special protection, judicial scrutiny ought to be more strict. A weak and watered down view would call for the abdication of this Court's solemn duty to strike down any law repugnant to the Constitution and the rights it enshrines. This is true whether the actor committing the unconstitutional act is a private person or the government itself or one of its instrumentalities. Oppressive acts will be struck down regardless of the character or nature of the actor. 106

Accordingly, when the grant of power is qualified, conditional or subject to limitations, the issue on whether or not the prescribed qualifications or conditions have been met, or the limitations respected, is justiciable or non-political, the crux of the problem being one of legality or validity of the contested act, not its wisdom. Otherwise, said qualifications, conditions or 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 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 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, Sandoval-Gutierrez, Austria-Martinez, Azcuna, Tinga, and Chico-Nazario, 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

In the instant case, the classification was justified on the need of the BSP to compete in the labor market for economists, accountants, lawyers, experts in security, printing, commercial and rural banking, financial intermediation fund management, and other highly technical and professional personnel,4 which it could not do unless personnel occupying top positions are exempted from the coverage of Rep. Act No. 6758, the Salary Standardization Law.

Under Rep. Act No. 6758, however, professional supervisory positions are covered by SG 9 to SG 33 which includes:

(R)esponsible 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 intense 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 33.5 (Underscoring supplied)

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 completion of a bachelor's degree or higher courses."

Consequently, if BSP needs an exemption from Rep. Act 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.

Under the circumstances, the cut-off point, the great divide, between SG 19 and 20 is entirely arbitrary as it does not have a reasonable or rational foundation. This conclusion finds support in no 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" is "probably" SG 23 and above.7

Moreover, even assuming that the classification is reasonable, nonetheless, its continued operation will result in hostile discrimination against those occupying grades 19 and below.

As pointed out by Mr. Justice Puno, some other government corporations, by law, now exempt all their employees from the coverage of Rep. Act No. 6758. BSP employees occupying SG 19 and below, however, shall remain under Rep. Act No. 6758 considering the rule that the subject classification, to be valid, must not be limited only 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 Rep. Act No. 6758, other government employees of the same class 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.

DISSENTING OPINION

PANGANIBAN, J.:

With all due respect, I dissent. I believe that it would be uncalled for, untimely and imprudent for this Court to void the last proviso of the second paragraph of Section 15(c) of Chapter 1 of Article II of Republic Act (RA) 7653. In the first place, the assailed provision is not unconstitutional, either on its face or as applied, and the theory ofrelative constitutionality finds no application to the case at bar. In the second place, a becoming respect on the part of this Court for Congress as a coequal and coordinate branch of government dictates that Congress should be given ample opportunity to study the situation, weigh its options and exercise its constitutional prerogative to enact whatever legislation it may deem appropriate to address the alleged inequity pointed out by petitioner.

For the record, I am not against the exemption from the Salary Standardization Law of the Bangko Sentral ng Pilipinas (BSP) rank and file employees (with Salary Grade 19 and below). Neither am I against increases in their pay. I simply submit that (1) the factual milieu of this case does not show a denial of equal protection, (2) the theory of relative constitutionality does not come into play, and (3) petitioner should have addressed its plaint, not to this Court, but to Congress in the first instance. I am confident that given sufficient opportunity, the legislature will perform its constitutional duty accordingly. Hence, there is no need or warrant for this Court to intervene in legislative work.

Theory of Relative ConstitutionalityNot 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

be merely compared with those applicable under the Constitution.

From the manner in which it has been utilized in American and 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 pertaining to subjects not directly covered by the former. Thus, the theory applies only when circumstances that were specifically addressed upon the passage of the law change. It does not apply to changes or alterations extraneous to those specifically addressed. To prove my point, allow me then to tackle seriatim the cases relied upon in the ponencia.1

Cited American CasesNot Applicable to andNot in Pari Materia withPresent Facts

Medill.2 The constitutionality issue in Medill v. State was raised by a bankruptcy trustee in regard to a statute exempting 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 any final process issued from any court" (1) general damages and (2) future special damages awarded in rights of action filed for injuries that were caused to the person of a debtor or of a relative.4

The Supreme Court of Minnesota said that the general damages portion of the right of action filed by claimants for personal injuries sustained in fact represented the monetary restoration of the physically and mentally damaged person; hence, claims for such damages could never constitute 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 reasonable to the state's judicial process.6

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 creditors10 -- 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 pre-petition 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 power28 and were intended for the protection of everyone against accidents involving public transportation. Although motor-driven 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 well-considered 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 Amendment49 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

From the foregoing discussion, it is immediately evident that not one of the above-cited cases is either applicable to or in pari materia with the present case.

Medill not only upheld the constitutionality of the contested provision therein, but also categorically stated that the peculiar facts of the case prompted such declaration. General damages were declared exempt; the law allowing their exemption was constitutional. Cook simply affirmed Medill when the same contested provision was applied to an issue similar to that which was raised in the latter case, but then declared that provision unconstitutional when applied to another issue. Thus, while general damages were also declared exempt, the claims for special damages filed prior to the filing of a petition for relief were not, and the law allowing the latter's exemption was unconstitutional.

The court's action was to be expected, because the issue on special damages in Cook was not at all raised inMedill, and there was no precedent on the matter in Minnesota, other than the obiter dictum -- if it can be called one -- in the latter case.57 Had that issue been raised in Medill, a similar conclusion would inevitably have been reached. In fact, that case already stated that while the court "need not decide whether special damages incurred prior to judgment x x x [were] to be exempt in order to decide the question"58 on general damages raised therein, it felt that exempting special damages appeared reasonable and likely to be applied, following an earlier ruling in another case.59

Moreover, the facts of both Medill and Cook are not at all akin to so-called "changed conditions" prompting the declarations of constitutionality in the former and unconstitutionality in the latter. Such "altered circumstances" or "changed conditions" in these two cases refer to the non-exemption of special damages -- a subject matter distinct and separable, although covered by the same assailed statute. In fact, Cook precisely emphasized that "where a statute is not inherently unconstitutional, it may be found constitutional as applied to some separable subject matters, and unconstitutional as applied to others."60 In other words, it was the application of the contested provision therein to an entirely different and separable subject matter -- not the contested provision itself -- that was declared

unconstitutional, but the statute itself was not inherently unconstitutional to begin with.

Equally important, Nashville skirted the issue on constitutionality. The "changed conditions" referred to in that 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 upon railroad companies only, requiring the fencing of their tracks, or solely compelling them to present evidence to rebut the presumption of their negligence. In Vernon, these "changed conditions" were deemed to be the economic changes in the 1950s, through which the normal business use of the land was unduly limited by the zoning ordinance that was intended to address the acute traffic problem in the community.

Nashville simply took judicial notice of the change in conditions which, together with the continued imposition of statutory charges and fees, caused deprivation of property without due process of law. Atlantic, Louisville andVernon all relied upon Nashville, but then went further by rendering their respective contested provisions unconstitutional, because -- in the application of such provisions under "changed conditions" -- those similarly situated were no longer treated alike.

Finally, Murphy -- obviously misplaced because it made no reference at all to the quoted sentence in the ponencia-- even upheld the validity of its contested provision. There was no trace, either, of any "changed conditions." If at all, the legislative classification therein was declared constitutional, because it was in fact a valid economic response to a legislatively perceived crisis concerning the availability and cost of liability insurance.

In the present case, no "altered circumstances" or "changed conditions" in the application of the assailed provision can be found. It verily pertains to only one subject matter, not separable subject matters as earlier pointed out in both Medill and Cook. Hence, its application remains and will remain consistent. Not inherently unconstitutional to begin with, it cannot now be declared unconstitutional. Moreover, herein petitioner miserably fails to demonstrate -- unlike in Nashville, Atlantic, Louisville, and Vernon -- how those similarly situated have not been treated alike in the application of the assailed provision.

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-à-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.

In addition, the rulings in all the above-cited American cases -- although entitled to great weight65 -- are merely of persuasive effect in our jurisdiction66 and cannot be stare decisis.67 These are not direct rulings of our Supreme Court68 that form part of the Philippine legal system.69

Granting gratia argumenti that the cited cases are to be considered binding precedents in our jurisdiction,Nashville -- the only one federal in character -- does not even make a categorical declaration on constitutionality. Furthermore, Murphy maintains that "[s]imply because a legal principle is part of the common law x x x does not give it any greater degree of insulation from legislative change."70 Common law, after all, is "a growing and ever-changing system of legal principles and theories x x x."71

Every statute is presumed constitutional.72 This axiom reflects the respect that must be accorded to the wisdom, integrity and patriotism of the legislature that passed it and to the executive who approved it.73 Understandably, therefore, the judiciary should be reluctant to invalidate laws.74 Medill precisely emphasizes that the "court's power to declare a statute unconstitutional should be exercised with extreme caution and only when absolutely necessary."75 Although that case continues by saying that unless it is inherently unconstitutional, a law "must stand or

fall x x x not upon assumptions" the court may make, the ponencia is still dauntless in relying thereon to support its arguments.

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

Reversing the judgment, this Court invalidated82 the moratorium clause,83 not because the law was unconstitutional, but because both its continued operation and enforcement had become unreasonable and oppressive under postwar circumstances of observable reconstruction, rehabilitation and recovery of the country's general financial condition.84 The forced vigil suffered by prewar creditors was not only unwittingly extended from eight to twelve years, but was also imposed without providing for the payment of the corresponding interest in the interim.85

Thus, the success of their collection efforts, especially when their credits were unsecured, was extremely remote.86 Moreover, the settlement of claims filed with the United States-Philippine War Damage Commission was not only uncertain but was also practically futile, for it depended entirely on the appropriations to be made by the US Congress.

The contested clause in Rutter was definitely a remedial measure passed to accord prewar debtors who suffered the ravages of war an opportunity to rehabilitate themselves within a reasonable time and to pay their prewar debts thereafter, thus preventing them from being victimized in the interim by their prewar creditors. The purpose having been achieved during the eight-year period, there was therefore no more reason for the law. Cessante ratione legis cessat et ipsa lex. When the reason for the law ceases, the law itself ceases. But it does not become unconstitutional.

The altered circumstances or changed conditions in Rutter were specifically the very circumstances that the law addressed at its passage; they were not at all extraneous circumstances like

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.

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 ConstitutionalityNot Based on Positive Law

Applying the concept of relative constitutionality strongly advocated in the ponencia, therefore, not only goes beyond the parameters of traditional constitutionalism, but also finds no express basis in positive law.87 While it has been asserted that "a statute valid when enacted may become invalid by change in conditions to which it is applied,"88 the present case has shown no such change in conditions that would warrant the invalidation of theassailed provision if applied under such conditions. Hence, no semblance of constitutional impuissance, other than its conjured possibility, can be seen. In a constitutional order that commands respect for coequal branches of government, speculation by the judiciary becomes incendiary and deserves no respectable place in our judicial chronicles.

The ponencia further contends that the principles of international law can operate to render a valid law unconstitutional. The generally accepted definition states that international law is a body of legal rules that apply between sovereign states and such other entities as have been granted international personality.89 Government employees at the BSP with salary grades 19 and below are not such entities vested with international personality; any possible discrimination as to them, in the light of the principles and application of international law would be too far-fetched.

The dangerous consequences of the majority's Decision in the present case cannot and should not be ignored. Will there now be an automatic SSL exemption for employees of other GFIs and financial regulatory agencies? Will such exemption not infringe on Congress' prerogative? The ponencia overlooks the fact that the Bangko Sentral is not a GFI, but a regulatory body of GFIs and other financial/banking institutions. Therefore, it should not be compared with them. There is no parity. The Bangko Sentral is more akin to the Insurance Commission, the National Telecommunications Commission, and the Energy Regulatory Commission. Should not more appropriate

comparisons be made with such regulatory bodies and their employees?

Respect forCoequal 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.

The remedy against any perceived legislative failure to enact corrective legislation is a resort, not to this Court, but to the bar of public opinion. The electorate can refuse to return to Congress members who, in their view, have been remiss in the discharge of their constitutional duties.94 Our Constitution presumes that, absent any inference of antipathy, improvident legislative decisions "will eventually be rectified by the democratic processes;"95 and that judicial intervention is unwarranted, no matter how unwisely a political branch may have acted.96

It is only the legislature, not the courts, that "must be appealed to for the change."97 If, however, Congress decides to act, the choice of appropriate measure lies within its discretion. Once determined, the measure chosen cannot be

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 shall increase the salary scales of x x x officials and employees of the National Government."104 Legislative reforms of whatever nature or scope may be taken one step at a time, addressing phases of problems that seem to the legislative mind most acute.105 Rightly so, our legislators must have "flexibility and freedom from judicial oversight in shaping and limiting their remedial efforts."106 Where there are plausible reasons for their action, the Court's "inquiry is at an end."107

Under the doctrine of separation of powers and the concomitant respect for coequal and coordinate branches of government, the exercise of prudent restraint by this Court would still be best under the present circumstances.

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 second-guess 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-à-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 Category117 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-à-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.

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

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.

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

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.

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

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.

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 Willingto 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 budget142 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.

No Denial of Equal Protection

Even if the matter of urgency is set aside for the nonce, and the Court exercises its power of judicial review150over acts of the legislature,151 I respectfully submit that the Petition should still be dismissed because the assailed provision's continued operation will not result in a denial of equal protection.

Neither the passage of RA 7653 nor its implementation has been "committed with grave abuse of discretion amounting to lack or excess of jurisdiction."152 Every statute is intended by the legislature to operate "no further than may be necessary to effectuate"153 its specific purpose. In the absence of a clear finding as to its arbitrary, whimsical or capricious application, the assailed provision cannot be struck down as violative of the fundamental law.

Moreover, "[u]nder the 'enrolled bill doctrine,'154 the signing of a bill by the Speaker of the House and the Senate President and the certification of the [s]ecretaries of both Houses of Congress that it was passed, are conclusive"155 "not only of its provisions but also of its due enactment."156 It is therefore futile to welter in the thought that the original and amended versions of the corresponding bill have no reference to the proviso in question.157 Floor deliberations are either expansive or restrictive. Bills filed cannot be expected to remain static; they transmute in form and substance.

Whatever doubts there may be as to the validity of any provision therein must necessarily be resolved in its favor.

Brief Background of theEqual 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 any class to obtain preferred treatment."161 Its original understanding was the proscription only of certain discriminatory acts based on race,162 although its proper construction, when called to the attention of the US Supreme Court in the Slaughter-House Cases, first involved exclusive privileges.163 Eventually, other disfavored bases of governmental action were identified. Labeled as morally irrelevant traits, gender, illegitimacyand alienage were included in this list.

Today, this clause is "the single most important concept x x x for the protection of individual rights."164 It does not, however, create substantive rights.165 Its guaranty is merely "a pledge of the protection of equal laws."166 Its "promise that no person shall be denied the equal protection of the laws must coexist with the practical necessity that most legislation classifies for one purpose or another, with resulting disadvantage to various groups or persons."167

As mirrored in our Constitution,168 this clause enjoys the interpretation given by its American framers169 and magistrates. In fact, a century ago, this Court already enunciated that "the mere act of cession of the Philippines to the United States did not extend the [US] Constitution here, except such parts as fall within the general principles of fundamental limitations in favor of personal rights formulated in the [US] Constitution and its amendments, and which exist rather by inference and the general spirit of the [US] Constitution, and except those express

provisions of the [US] Constitution which prohibit Congress from 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 to our jurisdiction.

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 recognized175 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 TestsPassed 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-à-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

As to suspect classes, non-exempt government employees (those with salary grades below 20) are not a group "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."217 They are a group so much unlike race,218 nationality,219 alienage220 or denominational preference221 -- factors that are "seldom relevant to the achievement of any legitimate state interest that laws grounded in such considerations are deemed to reflect prejudice and antipathy x x x."222

Again, with due respect, the ponencia's223 reference to Yick Wo,224 therefore, is unbefitting. Indeed that case held that "[t]hough 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 an 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 [C]onstitution."225 The facts in Yick Wo clearly point out that the questioned ordinances therein -- regulating the use of wooden buildings in the business of keeping and conducting laundries -- operated in hostility to the race and nationality to which plaintiffs belonged, being aliens and subjects of the Emperor of China.226 To a board of supervisors was given the arbitrary power to withhold permits to carry on a harmless and useful occupation on which the plaintiffs depended for livelihood.227

In contrast, no such arbitrariness is found in the case at bar. Neither is there any allegation of abuse of discretion in the implementation of a human resource development program. There is also no allegation of hostility shown toward employees receiving salaries below grade 20.

In fact, for purposes of equal protection analysis, financial need alone does not identify a suspect class.228 And even if it were to consider government pay to be akin to wealth, it has already been held that "where wealth is involved, the Equal Protection Clause does not require absolute equality or precisely equal advantages."229 After all, a law does not become invalid "because of simple inequality,"230 financial or otherwise.

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 strict scrutiny test. The assailed provision thus cannot be invalidated via the strict scrutiny gauntlet. "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."231

The Intensified Means Test

Under the third tier or the intensified means test, the Court should accept the legislative end, but should closely scrutinize its relationship to the classification made.232 There exist classifications that are subjected to a higher or intermediate degree of scrutiny than the deferential or traditional rational basis test. These classifications, however, have not been deemed to involve suspect classes or fundamental rights; thus, they have not been subjected to the strict scrutiny test. In other words, such classifications must be "substantially related to a sufficiently important governmental interest."233 Examples of these so-called "quasi-suspect" classifications are those based on gender,234 legitimacy under certain circumstances,235 legal residency with regard to availment of free public education, civil service employment preference for armed forces veterans who are state residents upon entry to military service, and the right to practice for compensation the profession for which certain persons have been qualified and licensed.236

Non-exempt government employees may be a sensitive but not a suspect class, and their employment status may be important although not fundamental. Yet, the enactment of the assailed provision is a reasonable means by which the State seeks to advance its interest.237 Since such provision sufficiently serves important governmental interests and is substantially related to the achievement thereof, then, again it stands.

"In the area of economics and social welfare, a State does not violate the Equal Protection Clause merely because the classifications made by its laws are imperfect. If the classification has some 'reasonable basis,' it does not offend the Constitution simply because the classification 'is not made with mathematical nicety or because in practice it results in 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.

Just a final observation at this juncture. It seems to me that when RA 7653 was enacted, the real focus of the second paragraph of Section 15(c) of Chapter 1 of Article II of the statute was to enable the officers and executives of the BSP to enjoy a wider scope of exemption from the Compensation Classification System than that stated in the last part of Section 9 of the Salary Standardization Law. As can be gleaned from the deliberations on the bill, the mention of BSP employees with salary grade 19 and below seems to have been purely incidental in the process of defining who were part of the executive and officer corps. It appears that the "classification" (if we can call it that) of the rank and filers with salary grade 19 and below, via the challenged proviso, came about not by design. And it was only after the later pieces of legislation were promulgated affecting the charters of the LBP, GSIS, SSS, DBP, etc. that the proviso came to be considered as "discriminatory."

In these trying times, I cannot but sympathize with the BSP rank and filers on account of the situation they have found themselves in, and I do not mean to begrudge them the opportunity to receive a higher compensation package than what they are receiving now. However, they are operating on

the simplistic assumption that, being rank and file employees 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 government, which has, not surprisingly, triggered waves of belt tightening measures throughout every part of the bureaucracy. This particular scenario puts Congress somewhat at odds with itself. On the one hand, it is studying HB 00123 with the end in view of precisely addressing the principal concern of the petitioner. On the other hand, it is also looking into how the various exemptions from the Salary Standardization Law can be rationalized or done away with, in the hope of ultimately reducing the gargantuan deficit.

Thankfully, the Court is not the one having to grapple with such a conundrum. It behooves us to give Congress, in the exercise of its constitutional mandate and prerogative, as much elbow room and breathing space as it needs in order to tackle and perhaps vanquish the many headed monster.

And while we all watch from the sidelines, we can all console ourselves and one another that after all, whether we find ourselves classified-out as BSP rank and filers, or officers and executives, or employees and members of the judiciary, we are -- all of us -- in the same boat, for we have all chosen to be in "public service," as the term is correctly understood. And what is public service if it does not entail a certain amount of personal sacrifice on the part of each one of

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").

Second, the majority opinion erroneously classifies the Bangko Sentral ng Pilipinas ("BSP"), a regulatory agency exercising sovereign functions, in the same category as non-regulatory corporations exercising purely commercial functions like Land Bank of the Philippines ("LBP"), Social Security System ("SSS"), Government Service Insurance System ("GSIS"), Development Bank of the Philippines ("DBP"), Small Borrowers Guarantee Fund Corporation ("SBGFC"), and Home Guarantee Corporation ("HGC").

Usurpation of Legislative Power

There is a bill now pending in Congress, House Bill No. 123, seeking to exempt the rank-and-file employees of BSP from 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") like GSIS, LBP, DBP, SSS, SBGFC, HGC and PDIC are now exempt from the SSL. Congress granted the exemptions over the years, for LBP in 1995, SSS in 1997, GSIS in 1997, SBGFC in 1997, DBP in 1998, HGC in 2000, and PDIC in 2004.

Among the GFIs granted exemption from SSL, only PDIC is a regulatory agency. PDIC received its SSL exemption only this year - 2004. PDIC is the first regulatory GFI whose rank-and-file employees are exempt from the SSL. Rank-and-file employees of BSP, a GFI exercising regulatory functions, cannot at this time claim any unreasonable or

oppressive delay in securing legislative exemption from SSL, assuming Congress is disposed to grant an exemption.

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 rank-and-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.

The power of judicial review of legislative acts presumes that Congress has enacted a law that may violate the Constitution. This Court cannot exercise its power of judicial review before Congress has enacted the questioned law. In this case, Congress is still considering the bill exempting BSP rank-and-file employees from the SSL. There is still no opportunity for this Court to exercise its review power because there is nothing to review.

The majority opinion, however, claims that because of the failure of Congress to enact the bill exempting BSP rank-and-file employees from the SSL, this Court should now annul the proviso in Section 15(c) of RA 7653 to totally exempt BSP from the SSL. This is no longer an exercise of the power of judicial review but an exercise of the power of legislation - a power that this Court does not possess. The power to exempt a government agency from the SSL is a legislative power, not a judicial power. By annulling a prior valid law that has the effect of exempting BSP from the SSL, this Court is exercising a legislative power.

The power of judicial review is the power to strike down an unconstitutional act of a department or agency of government, not the power to initiate or perform an act that is lodged in another department or agency of government. If this Court strikes down the law exempting PDIC from the SSL because it is discriminatory against other government agencies similarly situated, this Court is exercising its judicial review power. The effect is torevert PDIC to its previous situation of being subject to the SSL, the same situation governing BSP and other agencies similarly situated.

However, by annulling the proviso in Section 15(c) of RA 7653, BSP is not reverted to its previous situation but

brought to a new situation that BSP cannot attain without a new legislation. Other government agencies similarly situated as BSP remain in their old situation – still being subject to the SSL. This is not an annulment of a legislative act but an enactment of legislation exempting one agency from the SSL without exempting the remaining agencies similarly situated.

The majority opinion cites Rutter v. Esteban2 as precedent for declaring the proviso in Section 15(c) of RA 7653 unconstitutional. Rutter is not applicable to the present case. In Rutter, the Court declared on 18 May 1953 that while the Debt Moratorium Law was valid when enacted on 26 July 1948, its "continued operation and enforcement x x x is unreasonable and oppressive, and should not be prolonged a minute longer." With the discontinuance of the effectivity of the Debt Moratorium Law, the debtors who benefited from the law were returned to their original situation prior to the enactment of the law. This meant that the creditors could resume collecting from the debtors the debts the payment of which was suspended by the Debt Moratorium Law. The creditors and debtors were restored to their original situation before the enactment of the Debt Moratorium Law. No debtor or creditor was placed in a new situation that required the enactment of a new law.

In the present case, declaring the proviso in Section 15(c) of RA 7653 no longer legally effective does not restore the BSP rank-and-file employees to their original situation, which subjected them to the SSL. Instead, the discontinuance of the validity of the proviso brings the BSP rank-and-file employees to a new situation that they are not entitled without the enactment of a new law. The effect of the majority decision is to legislate a new law that brings the BSP rank-and–file employees to a new situation. Clearly, the Rutterdoctrine does not apply to the present case.

Erroneous Classification of BSP as GFISimilar to LBP, DBP and Others

The majority opinion classifies BSP as a GFI just like GSIS, LBP, DBP, SSS, SBGFC, HGC and PDIC. Here lies the basic error of the majority opinion. GSIS, LBP, DBP, SSS, SBGFC and HGC are GFIs but are not regulatory agencies. BSP and PDIC are GFIs but are also regulatory agencies just like other governmental regulatory agencies. The majority opinion is comparing apples with oranges. GFIs that do not exercise regulatory functions operate just like commercial financial institutions. However, GFIs that exercise regulatory

functions, like BSP and PDIC, are unlike commercial financial institutions. BSP and PDIC exercise sovereign functions unlike the other non-regulatory GFIs.

Non-regulatory GFIs derive their income solely from commercial transactions. They compete head on with private financial institutions. Their operating expenses, including employees' salaries, come from their own self-generated income from commercial activities. However, regulatory GFIs like BSP and PDIC derive their income from fees, charges and other impositions that all banks are by law required to pay. Regulatory GFIs have no competitors in the private sector. Obviously, BSP and PDIC do not belong to the same class of GFIs as LBP, SSS, GSIS, SBGFC, DBP and HGC.

Exempting non-regulatory GFIs from the SSL is justified because these GFIs operate just like private commercial entities. Their revenues, from which they pay the salaries of their employees, come solely from commercial operations. None of their revenues comes from mandatory government exactions. This is not the case of GFIs like BSP and PDIC which impose regulatory fees and charges.

Conclusion

Under the Constitution, Congress is an independent department that is a co-equal of the Supreme Court. This Court has always accorded Congress the great respect that it deserves under the Constitution. The power to legislate belongs to Congress. The power to review enacted legislation belongs to the Supreme Court. The Supreme Court has no power to declare a pending bill in Congress as deemed enacted into law. That is not the power to review legislation but the power to usurp a legislative function.

The majority opinion is leading this Court into usurping the primary jurisdiction of Congress to enact laws. The majority opinion brings this Court and Congress into a needless clash of powers - whether the power of judicial review of legislative acts includes the power to initiate legislative acts if this Court becomes impatient with the pace of legislative process. Clearly, this Court does not have the power to legislate. Congress has a right to guard zealously its primary power to enact laws as much as this Court has a right to guard zealously its power to review enacted legislations.

Accordingly, I vote to dismiss the petition.

DISSENTING OPINION

CARPIO MORALES, J.:

Is being an employee of a Government Owned or Controlled Corporation (GOCC) or a Government Financial Institution (GFI) a 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 pre-emption 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 sub-class 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.

The relevant antecedents of this case are as follows:

On August 21, 1989, R.A. No. 6758 (the Salary Standardization Law), amending Presidential Decree No. 985 (the Old Salary Standardization Law), was enacted2 in response to the mandate to provide for a standardized compensation scale for all government employees, including those employed in GOCCs, under Section 5, Article IX-B, of the Constitution:

Sec. 5. 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 was taken from the 1973 Constitution in order to address the wide disparity of compensation between 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

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 responsibilities, and qualification requirements of the positions, while giving due regard to, among others, prevailing rates in the private sector for comparable work:

SECTION 2. Statement of Policy. — It is hereby declared 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. In determining rates of pay, due regard shall be given to, among others, prevailing rates in the private sector for comparable work. For

this purpose, the Department of Budget and Managements (DBM) is hereby directed to establish and administer a unified Compensation and Position Classification System, hereinafter referred to as the System, as provided for in Presidential Decree No. 985, 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)

Nota bene, Section 21 of the Salary Standardization Law provides that "[a]ll provisions of Presidential Decree No. 985, as amended by Presidential Decree No. 1597, which are not inconsistent with this Act and are not expressly modified, revoked or repealed in this Act shall continue to be in full force and effect." Thus, the definition of terms found in Section 3 of P.D. No. 985 continues to be applicable to the Salary Standardization Law, including:

SECTION 3. Definition of Terms. — As used in this Decree, the following shall mean:

x x x

c. Class (of position) — The basic unit of the Position Classification System. A class consists of all those positions in the system which are sufficiently similar as to (1) kind or subject matter of work, (2) level of difficulty and responsibility, 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.

x x x

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.

x x x

m. Position — A set of duties and responsibilities, assigned or delegated by competent authority and performed by an individual either on full-time or part-time basis. A position may be filled or vacant.

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.

o. Position Classification System — A system for classifying positions by occupational groups, series and classes, according to similarities or differences in duties and responsibilities, and qualification requirements. It consists of (1) classes and class specifications and (2) the rules and regulations for its installation and maintenance and for the interpretation, amendment and alternation of the classes and class specifications to keep pace with the changes in the service and the positions therein.

x x x

q. Reclassification or Reallocation — A change in the classification of a position either as a result of a change in its duties and responsibilities sufficient to warrant placing the position in a different class, or as result of a reevaluation of a position without a significant change in duties and responsibilities.

r. Salary or Wage Adjustment — A salary or wage increase towards the minimum of the grade, or an increase from a non-prescribed rate to a prescribed rate within the grade.

s. Salary or Wage Grade — The numerical place on the salary or Wage Schedule representing multiple steps or rates which is assigned to a class.

t. Salary or Wage Schedule — A numerical structure in the Compensation System consisting of several grades, each grade with multiple steps with a percentage differential throughout the pay table. A classified position is assigned a corresponding grade in the Schedule.

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.

x x x

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 exempted government agencies, including GOCCs and GFIs from the coverage of the new Compensation and Position Classification System:

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.

Thus, all exemptions from the integrated Compensation Classification System granted prior to the effectivity of the Salary Standardization Law, including those under Sections 26 and 167 of Presidential Decree No. 985 (the Old Salary Standardization Law) as well as under the 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 GFIs, are covered by the Compensation Classification System provided for by the Salary Standardization Law.

Nonetheless, Congress acknowledged the need of GOCCs and GFIs performing proprietary functions to maintain competitive salaries comparable to the private sector with respect to key top-level positions in order not to lose these personnel to the private sector. Thus, Section 9 of the Salary Standardization Law empowers the President,in truly exceptional cases, to approve higher compensation, exceeding Salary Grade 30, to the chairman, president, general manager, and the board of directors of government-owned or controlled corporations and financial institutions:

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.

x x x

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)

On July 3, 1993, Republic Act. No. 7653, The New Central Bank Act, took effect. Section 15 (c) thereof authorizes the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) to institute a compensation structure based on job evaluation studies and wage surveys as an integral component of the BSP's human resource development program, thereby implicitly providing for a wider scope of exemption from the Compensation Classification System than that found in the last paragraph of Section 9 of the Salary Standardization Law, to wit:

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

x x x

(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. 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.

Thus, on account of the above-quoted provision, BSP rank and file employees with (SG) 19 and below, like their counterparts in the other branches of the civil service, are paid in accordance with the rates prescribed in the New Salary Scale under the Salary Standardization Law, while officers with SG 20 and above are exempt from the coverage of said law, they being paid pursuant to the New Salary Scale containing Salary Grades A to J10 issued by the Monetary Board which took effect on January 1, 2000.

The Case for the Petitioner

The Central Bank (now Bangko Sentral ng Pilipinas) Employees 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 implementing the last proviso of Chapter I, Article II, Section 15 (c) of The New Central Bank Act, which it assails as unconstitutional for violating the equal protection clause,11 hence, null and void.

It is petitioner's allegation that the application of the Compensation Classification System under the Salary Standardization Law to the rank and file employees, but not the BSP's officers, would violate the equal protection clause as the former are placed in a less favorable position compared to the latter.

Petitioner asserts that the classification of BSP employees into two classes based solely on the SG of their positions is not 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 of government financial institutions, the BSP rank and file personnel are also discriminated upon.14

The Case for Respondent Executive Secretary

On the other hand, respondent Executive Secretary, through the Solicitor General, contends that the assailed proviso does not violate the equal protection clause. He submits that the classification of BSP employees relative to compensation structure is based on actual and real differentiation between employees exercising managerial functions and the rank and file,15 even as it strictly adheres to the enunciated policy in The New Central Bank Act to establish professionalism and excellence within the BSP subject to prevailing laws and policies of the national government.16

In addition, he notes that Article II, Section 15 (c) serves as an exemption to the Salary Standardization Law which, for all intents and purposes is a general law applicable to all government employees. As such, the provision exempting certain BSP employees from its coverage must be strictly construed.17

The Case for Respondent Bangko Sentral

Likewise advancing the view that the assailed proviso is constitutional, respondent BSP argues that Congress, in passing the New Central Bank Act, has in fact determined that there are substantial reasons for classifying BSP employees into those covered by the Salary

Standardization Law and those not covered by the Salary Standardization Law.18

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. —

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 power, or of the measures adopted to implement the public policy or to achieve public interest. On the other hand, courts, although zealous guardians of individual liberty and right, have nevertheless evinced a reluctance to interfere with the exercise of the legislative prerogative. They have done so early where there has been a clear, patent or palpable arbitrary and unreasonable abuse of the legislative prerogative. Moreover, courts are not supposed to override legitimate policy, and courts never inquire into the wisdom of the law.31 (Emphasis supplied)

Only by faithful adherence to this principle of judicial review is it possible to preserve to the legislature its prerogatives under the Constitution and its ability to function.32

The presumption of constitutionality notwithstanding, the courts are nevertheless duty bound to strike down any statute which transcends the bounds of the Constitution including any classification which is proven to be unreasonable, arbitrary, capricious or oppressive.

The question that arises then is by what standard(s) should the reasonableness, and therefore the validity, of a legislative classification be measured?

The Rational Basis Test

It may be observed that, in the Philippines, the traditional and oft-applied standard is the so-called "rational basis test," the requisites of which were first summarized by Justice (later Chief Justice) Moran in the case of People v. Cayat33 to wit:

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)

To the foregoing may be added the following observations of the Court in Philippine Judges Association, v. Prado,35 to wit:

The equal protection of the laws is embraced in the concept of due process, as every unfair discrimination offends the requirements of justice and fair play. It has nonetheless been embodied in a separate clause in Article III Sec. 1, of the Constitution to provide for a more specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness in general may be challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protection clause.

According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and unjustly discriminate against others.

The equal protection clause does not require the universal application of the laws on all persons or things without distinction. This might in fact 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 youth but violate the liberty of adults. What the

clause requires is equality among equals as determined according to a valid classification. By classification is meant the grouping of persons or things similar to each other in certain particulars 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."

x x x

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.

x x x

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)

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-à-vis the grant of the franking privilege was "the perceived need of the grantee for the accommodation, which would justify a waiver of substantial revenue by the Corporation in the interest of providing for a smoother flow of communication between the government and the people."54 The Court then went on to state that:

Assuming that basis, we cannot understand why, of all the departments of the government, it is the Judiciary that has been denied the franking privilege. There is no question that if there is any major branch of the government that needs the privilege, it is the Judicial Department, as the respondents themselves point out. Curiously, the respondents would justify the distinction

on the basis precisely of this need and, oh this basis, deny the Judiciary the franking privilege while extending it to others less deserving.

x x x

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.

x x x

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.

This is not a question of wisdom or power into which the Judiciary may not intrude. It is a matter of arbitrariness that this Court has the duty and power to correct.55

More recently, in Government Service Insurance System v. Montesclaros,56 this Court ruled that the proviso in Section 18 of P.D. No.1146,57 which prohibited a dependent spouse from receiving survivorship pension if such dependent spouse married the pensioner within three years before the pensioner qualified for the pension, was unconstitutional for, among others, violating the equal protection clause. Said the Court:

The surviving spouse of a government employee is entitled to receive survivor's benefits under a pension system. However, statutes sometimes require that the spouse should have 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.

A statute based on reasonable classification does not violate the constitutional guaranty of the equal protection of the law. The requirements for a valid and reasonable classification are: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same class. Thus, the law may treat and regulate one class differently from another class provided there are real and substantial differences to distinguish one class from another.

The proviso in question does not satisfy these requirements. The proviso discriminates against the dependent spouse who contracts marriage to the pensioner within three years before the pensioner qualified for the pension. Under the proviso, even if the dependent spouse married the pensioner more than three years before the pensioner's death, the dependent spouse would still not receive survivorship pension if the marriage took place within three years before the pensioner qualified for

pension. The object of the prohibition is vague. There is no reasonable connection between the means employed and the purpose intended. The law itself does not provide any reason or purpose for such a prohibition. If the purpose of the proviso is to prevent "deathbed marriages," then we do not see 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)

Even in the American context, the application of the "deferential" Rational Basis Test has not automatically resulted in the affirmation of the challenged legislation.

Thus, in City of Cleburne Texas v. Cleburne Living Center,58 a city's zoning ordinance requiring a special permit for the operation of a group home for the mentally retarded was challenged on equal protection grounds. The American Court, ruling that the Rational Basis Test was applicable and limiting itself to the facts of the particular case, held that there was no rational basis for believing that the mentally retarded condition of those living in the affected group home posed any special threat to the city's legitimate interests any more than those living in boarding houses, nursing homes and hospitals, for which no special permit was required. Thus, it concluded, the permit requirement violated the respondent's right to equal protection.59

And, in Romer v. Evans,60 the U.S. Supreme Court invalidated Amendment 2 of the Colorado State Constitution which precluded all legislative, executive, or judicial action at any level of state or local government designed to protect the status of persons based on their homosexual orientation, conduct, practices or relationships.61

Strict Scrutiny

While in the Philippines the Rational Basis Test has, so far, served as a sufficient standard for evaluating governmental actions against the Constitutional guaranty of equal protection, the American Federal Supreme Court, as pointed out in the main opinion, has developed a more demanding standard as a complement to the traditional deferential test, which it applies in

certain well-defined circumstances. This more demanding standard is often referred to as Strict Scrutiny.

Briefly stated, Strict Scrutiny is applied when the challenged statute either (1) classifies on the basis of an inherently suspect 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 States.64 Like other rights guaranteed by the post-Civil War Amendments, the Equal Protection Clause (also known as the 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 the Equal Protection Clause to discrimination claims brought by African-Americans.65 In Strauder v. West Virginia,66 the American Supreme Court in striking down a West Virginia statute which prohibited a "colored man" from serving in a jury, traced the roots of the Equal Protection Clause:

This is one of a series of constitutional provisions having a common purpose; namely, securing to a race recently emancipated, a race that through many generations had been held in slavery, all the civil rights that the superior race enjoy. The true spirit and meaning of the amendments, as we said in the Slaughter-House Cases (16 Wall. 36), cannot be understood without keeping in view the history of the times when they were adopted, and the general objects they plainly sought to accomplish. At the time when they were incorporated into the Constitution, it required little knowledge of human nature to anticipate that those who had long been regarded as an inferior and subject race would, when suddenly raised to the rank of citizenship, be looked upon with jealousy and positive dislike, and that State laws might be enacted or enforced to perpetuate the distinctions that had before existed, xxx To quote the language used by us in theSlaughter-House Cases, "No one can fail to be impressed with the one pervading purpose found in all the amendments, lying at the foundation of each, and without which none of them would have been suggested,--we mean the freedom of the slave race, the security and firm establishment of that freedom, and the protection of the newly made freeman and

citizen from the oppressions of those who had formerly exercised unlimited dominion over them." So again: "The existence of laws in the States where the newly emancipated negroes resided, which discriminated with gross injustice and 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:

It should be noted, to begin with, that all legal restrictions which curtail the civil rights of a single racial 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. Pressing public necessity may sometimes justify the existence of such restrictions; racial antagonism never can.74 (Emphasis and underscoring supplied)

Racial classifications are generally thought to be "suspect" because throughout the United States' history these have generally been used to discriminate officially against groups which are politically subordinate and subject to private prejudice and discrimination.75 Thus, the U.S. Supreme Court has "consistently repudiated distinctions between citizens solely because of their ancestry as being odious to a free people whose institutions are founded upon the doctrine of equality."76 The underlying rationale of the suspect classification theory is that where legislation affects discrete and insular minorities, the presumption of constitutionality fades because traditional political processes may have broken down.77 Moreover, classifications based on race, alienage or national origin are so seldom relevant to the achievement of any legitimate state interest that laws grounded on such considerations are deemed to reflect prejudice and antipathy - a view that those in the burdened class are not as worthy or deserving as others.78

Almost three decades after Korematsu, in the landmark case of San Antonio Independent School District v. Rodriguez,79 the U.S. Supreme Court in identifying a "suspect class" as a class 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,80 articulated that suspect classifications were not limited to classifications based on race, alienage or national origin but could also be applied to other criteria such as religion.81 Thus, the U.S. Supreme Court has ruled that suspect classifications deserving of Strict Scrutiny include those based on race or national origin82, alienage83 and religion84 while classifications based on gender85, illegitimacy86, financial need87, conscientious objection88 and age89 have been held not to constitute suspect classifications.

As priorly mentioned, the application of Strict Scrutiny has not been limited to statutes which proceed along suspect lines but has been utilized on statutes infringing upon fundamental constitutionally protected rights. Most fundamental rights cases decided in the United States require equal protection analysis because these cases would involve a review of statutes which classify persons and impose differing restrictions on the ability of a certain class of persons to exercise a fundamental right.90 Fundamental rights include only those basic liberties explicitly or implicitly guaranteed by the U.S. Constitution.91 And precisely because these statutes affect fundamental liberties, any experiment involving basic freedoms which the legislature conducts must be critically examined under the lens of Strict Scrutiny.

Fundamental rights which give rise to Strict Scrutiny include the right of procreation,92 the right to marry,93 the right to exercise First Amendment freedoms such as free speech, political expression, press, assembly, and so forth,94 the right to travel,95 and the right to vote.96

Because Strict Scrutiny involves statutes which either classifies on the basis of an inherently suspect characteristic or infringes fundamental constitutional rights, the presumption of constitutionality is reversed; that is, such legislation is assumed to be unconstitutional until the government demonstrates otherwise. The government must show that the statute is supported by a compelling governmental interest and the means chosen to accomplish that interest are narrowly tailored.97 Gerald Gunther explains as follows:

... The intensive review associated with the new equal protection imposed two demands a demand not only as to means but also 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." 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.98

Furthermore, the legislature must adopt the least burdensome or least drastic means available for achieving the governmental objective.99

While Strict Scrutiny has, as yet, not found widespread application in this jurisdiction, the tenet that legislative classifications involving fundamental rights require a more rigorous justification under more stringent standards of analysis has been acknowledged in a number of Philippine cases.100 Since the United States' conception of the Equal Protection Clause was largely influenced by its history of systematically discriminating along racial lines, it is perhaps no surprise that the Philippines which does not have any comparable experience has not found a similar occasion to apply this particular American approach of Equal Protection.

Intermediate Scrutiny

The Rational Basis Test and Strict Scrutiny form what Gerald Gunther termed as the two-tier approach to equal protection analysis - the first tier consisting of the Rational Basis Test (also called by Gunther as the old equal protection) while the second tier consisting of Strict Scrutiny (also called by Gunther as the new equal protection).101 Gunther however described the two-tier approach employed by the U.S. Supreme Court as being rigid, criticizing the aggressive new equal protection for being "strict in theory and fatal in fact"102 and the deferential old equal protection as "minimal scrutiny in theory and virtually none in fact."103

Gunther's sentiments were also shared by certain members of the Burger Court, most notably Justice Marshall who advocated a Sliding Scale Approach which he elaborated on in his dissenting opinion in San Antonio Independent School District v. Rodriguez:104

To begin, I must once more voice my disagreement with the Court's rigidified approach to equal protection analysis. See Dandridge v. Williams, 397 U.S. 471, 519--521, 90 S.Ct. 1153, 1178--1180, 25 L.Ed.2d 491 (1970) (dissenting opinion); Richardson v. Belcher, 404 U.S. 78, 90, 92 S.Ct. 254, 261, 30 L.Ed.2d 231 (1971) (dissenting opinion). The

Court apparently seeks to establish today 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 Court's decisions in the field of equal 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

Shortly before his retirement in 1991, Justice Marshall suggested to the Supreme Court that it adopt a Sliding Scale 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

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 that the discriminatory means employed is substantially related to the achievement of those objectives.113

Summary of the American Supreme CourtApproach 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:

Equal Protection Standards 

Rational Basis Strict Scrutiny

Applicable To

Legislative classifications in

Legislative classificationsaffectingfundamentalsuspect classes.

general, such as those pertaining to economic or social legislation, which do not affect fundamental rights or suspect classes; or is not based on gender or illegitimacy.

Legislative Purpose

Must be legitimate.

Must be compelling.

Relationship of Classification to Purpose

Classification must berationally related to the legislative purpose.

Classification must benecessary and narrowly tailored to achieve the legislative 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 evaluatingcompliance 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 classification between executive and rank and file employees in Section 15 (c) of The New Central Bank Act, the Rational Basis Test 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.

Despite my best efforts, I fail to see the justification for the use of this "double standard" in determining the constitutionality of the questioned proviso. Why a "deferential test" for one comparison (between the executives and rank and file of the BSP) and a "strict test" for the other (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

Assuming that the equal protection standards evolved by the U.S. Supreme Court may be adopted in this jurisdiction, there is no reason why the exclusive manner of their application should not be adopted also.

In the present case, the persons allegedly discriminated against (i.e. the rank and file employees of the BSP) and the rights they are asserting (to be exempted from the Compensation Classification System prescribed by the Salary Standardization Law) remain the same, whether the classification under review is between them and the executive officers of the BSP or the rank and file employees of the LBP, DBP, SSS and GSIS.

It therefore stands to reason that the test or standard — whether Rational Basis, Strict Scrutiny or Intermediate Scrutiny - against which petitioner's claims should be measured should likewise be the same, regardless of whether the evaluation pertains to the constitutionality of (1) the classification expressly made in Section 15 (c) of The New Central Bank Act or (2) the classification resulting from the amendments of the charters of the other GOCCs/GFIs.

To illustrate further, if petitioner's constitutional challenge is premised on the denial of a "fundamental right" or the

perpetuation of prejudice against a "suspect class," as suggested (but not fully explicated) in the closing pages of 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 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.

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 AJustification for the Double Standard

It would appear that the employment of a "double standard" in the present case is sought to be justified somehow by the concept of relative constitutionality invoked by the main opinion. Thus, the main opinion holds that the "subsequent enactments, however, constitute significant changes in circumstance that considerably alter the reasonability of the continued operation of the last proviso of Section 15 (c), Article II of Republic Act No. 7653, and exposes the proviso to more serious scrutiny."

The ponencia likewise invites this Court to reflect on the following questions: "Given that Congress chose to exempt other GFIs (aside the BSP) from the coverage of the SSL, can the exclusion of the rank-and-file employees of the BSP stand 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 unbridled as to sanction unequal and discriminatory treatment, simply because the inequity manifested not instantly through a single overt act, but gradually through seven separate acts? Is the right to equal protection bounded in time and space that: (a) the right can be invoked 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 confined to determining the validity within the parameters of the

statute x x x thereby proscribing any evaluation vis-à-vis the groupings or the lack thereof among several similar enactments made over a period of time?"116

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.

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 regulating the operation of motels and hotels in Manila, held:

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 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)

And in Peralta v. Commission on Elections,123 this Court stated:

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.

x x x

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 upon assumptions this court might [otherwise] make * * *." Grobe v. Oak Center Creamery Co   , 262 Minn. 60, 63, 113 N.W.2d 458, 460 (1962). Moreover, even in the case of an out-of-court settlement, the "inherent" limitation on the right of action still exists; the amount of a settlement is limited to or by the extent of injury, and no party will agree to an "unreasonable" settlement.

The trustee vigorously argues that the court must go considerably beyond the plain language of the statute and rules of statutory construction to impose the required constitutional limit on the exemption provision at issue here. However, the constitutionality of a statute cannot in every instance be determined by a mere comparison of its provisions with the applicable provisions of the constitution. A statute may be constitutional and valid as applied to one set of facts and invalid in its application to another. Grobe , 262 Minn, at 62, 113 N.W.2d at 460. Thus, unless we find the exemption unconstitutional on its face, it must be unconstitutional as applied to the facts of the instant case in order to be stricken.128 (Emphasis supplied)

This does not mean that the factual differences must be prominent for the distinction between two classes to be substantial. Nor are fine distinctions between two classes, otherwise sharing several common attributes, prohibited. Thus, the Court in Peralta, went on to state:

x x x It is, however, conceded that it is almost impossible in some matters to foresee and provide for every imaginable and exceptional case. Exactness in division is impossible and never looked for in applying the legal test. All that is required is that there must be, in general, some reasonable basis on general lines for the division. Classification which has some reasonable basis does not offend the equal protection clause merely because it is not made

with mathematical nicety.(Emphasis supplied; citations omitted)

The pronouncement in Victoriano v. Elizalde Rope Workers' Union,129 is also instructive:

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.130 (Emphasis supplied; citations omitted)

To be sure, this Court has adjudged as valid statutes providing for differences in treatment between: inter-urban buses and provincial buses;131 taxpayers receiving compensation income and other taxpayers;132 male overseas workers and female overseas workers;133 electric cooperatives and other cooperatives;134 businesses inside the secured area of the Subic Special Economic Zone and those outside the secured area;135 public officers with pending criminal cases which have not yet gone to trial and those with cases wherein trial has already commenced;136 and City and Municipal Election Officers of the Commission On Elections (COMELEC) and other COMELEC officials.137

Nevertheless, to be substantial, these distinctions, no matter how finely drawn, must still be rooted on someobjective factual foundation; and cannot be left to the arbitrary, whimsical or capricious imagination of the law maker.

Thus, relative constitutionality, as I understand it, merely acknowledges that the factual circumstances which form the bases for the substantial and real distinctions between two classes may change over time. Thus, it is entirely possible that a legislative classification held to be valid at one time upon a particular state of facts may be subsequently invalidated if the factual basis for the substantial distinctions that existed between

the two classes has ceased to exist. Cessante ratione legis, cessat ipsa lex.138

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 cited141 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

x x x

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)

Finally, in Rutter v. Esteban,151 this Court invalidated Section 2 of R.A. No. 342 providing for an eight-year moratorium period 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

x x x

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

classification and qualifications 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. Neither does the main opinion identify the relevant factual changes which may have occurred vis-à-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.

To assess the validity of the questioned proviso in the light of subsequent legislation, all that need be applied is the familiar rule that statutes that are in pari materia155 should be read together. As this Court declared in City of Naga v. Agna,156 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 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 made therein, should all be read and evaluated together in the light of the equal protection clause. Consequently, the relevant question is whether these statutes, taken together as one uniform system of compensation for government employees, comply with the requisites of the equal protection guaranty.

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 physician-assisted 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.

SECTION 10. The State shall promote social justice in all phases of national development.

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.

ARTICLE III: Bill of 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.

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 and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.

In 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 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 XIII: Social Justice and Human Rights

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.

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 self-organizations, 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 decision-making 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.

Another reason why Strict Scrutiny is inappropriate is the absence of a classification which is based on an inherently suspect characteristic. There is no suspect class involved in the case at bar. By no stretch of the imagination can the rank and file employees of the BSP be considered a suspect class - a class 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. As examined earlier, in applying this definition of suspect class, the U.S. Supreme Court has labeled very few classifications as suspect. In particular, the Court has limited the term suspect class to classifications based on race or national origin, alienage and religion. It is at once apparent that Article II, Section 15 (c) of the New Central Bank Act, in exempting the BSP officers from the coverage of the Salary

Standardization Law and not exempting the rank and file employees of the BSP, does not classify based on race, national origin, alienage or religion.

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 on property within its jurisdiction. A class action suit was brought on behalf of school children said to be members of poor families who reside in school districts having a low property tax base. They argue that the Texas system's reliance on local property taxation favors the more affluent and violates the equal protection clause because of substantial inter-district disparities in per pupil expenditures resulting primarily from differences in the value of assessable property among the districts. The Court held that wealth discrimination alone does not provide adequate basis for invoking strict scrutiny.165

The wealth discrimination discovered by the District Court in this case, and by several other courts that have recently struck down school-financing laws in other States, is quite unlike any of the forms of wealth

discrimination heretofore reviewed by this Court. Rather than focusing on the unique features of the alleged 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.

x x x

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 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

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.

x x x

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. Secretary of State for Work and Pension168 the discrimination in question was based on gender, that is, whether the widowers are entitled to the pension granted by the State to widows. In Abdulaziz, Cabales and Balkandali v. United Kingdom169 the discrimination was based on sex and race; In Wilson and Others v. United Kingdom170 the questioned law allows employers to discriminate against their employees who were trade union members.

Notably, the main opinion, after discussing lengthily the developments in equal protection analysis in the United States and Europe, and finding no support thereto, incongruously concluded that "in 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."171 After an excessive dependence by the main opinion to American jurisprudence it contradicted itself when 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 have only limited persuasive merit."172

Intrinsic Constitutionality of Section 15(c)of the New Central Bank Act

Is the classification between the officers and rank and file employees in Section 15 (c) of the New Central Bank Act in violation of the equal protection clause?

Petitioner, contending that there are no substantial distinctions between these two groups of BSP employees, argues that it is.

On the other hand, the main opinion, applying the Rational Basis Test, finds the classification between the executive level and the rank and file of the BSP to be based on substantial and real differences which are germane to the purpose of the law. Thus, it concludes:

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.

and declines to grant the petition on this ground.

For her part, Justice Chico-Nazario, in her separate concurring opinion, sides with petitioner believing that the difference in treatment is "purely arbitrary" and thus violates the Constitutional guaranty of equal protection of the laws.

On this point, I am in accord with the main opinion.

For ease of reference, Section 15 (c) is reproduced hereunder:

SEC. 15. Exercise of Authority. — In the exercise of its authority, the Monetary Board shall:

x x x

(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. 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)

It is readily apparent that Section 15 (c), by implicitly exempting the executive corps of the BSP (those with SG 20 and above) from the Compensation Classification System under the Salary 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?

MR. JAVIER (E.). The Salary Standardization Law.

MR. ARROYO. So, the Gentleman is now suggesting that the Standardization Law will apply to this?

MR. JAVIER (E.). Yes, Mr. Speaker.173 (Emphasis supplied)

In fact, the deliberations show that, in keeping with the recognition in Section 9174 of the Salary Standardization Law that compensation higher than SG 30 might be necessary in certain exceptional cases to attract and retain competent top-level personnel, the initial intention of the drafters of the House Bill was to exempt only the Governor and the Monetary Board from the coverage of the Compensation Classification System:

MR. LACSON. Mr. Speaker, Section 12 mentions only the remuneration of the governor and the members of the monetary board.

MR. CHAVES. So, it will not cover any other employees of the Central Bank because the limitation set forth under the Salary Standardization Law will apply to them. I just want to make that sure because if it is not clear

in the law, then we can refer to the debates on the floor.

MR. LACSON. Mr. Speaker, Section 12 mentions only the governor and the members of the monetary board. All the rest in the lower echelons are covered by law.

MR. CHAVES. In other words, I just want to make it clear whether or not they are covered by the Salary 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 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 economy with the provisions of the Salary Standardization Law.176 The Senate thus sought to address these concerns by allowing the BSP to determine a separate salary scale for the executive level.

The purpose behind the exemption of officers with SG 20 and above from the Salary Standardization Law was to increase the BSP's competitiveness in the industry's labor market such that by offering attractive salary packages,top executives and officials would be enticed and competent officers would be deterred from leaving.

Senator Maceda. x x x

We have a salary grade range, if I am not mistaken, Mr. President, up to Grade 32. Those executive types are probably between Grade 23 to Grade 32. If we really want to make sure that the vice-president types of the banks will come in, it should be cut off at around Grade 23 level and that the Standardization Act should still refer to those around Grade 22 and below. But if we cut it off at Grade 9 and below, we are just hitting only the drivers, the janitors, the filing clerks, the messengers.

The Gentleman will only be cutting off a part of my heart again if he does that. My heart bleeds for this people, Mr. President.

Senator Osmeña. If that is an amendment, Mr. President, I move that we reconsider the prior approval of my amendment which was accepted by the Sponsor, and I will accept the amendment of Senator Maceda 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:

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:

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 Commissionunder Article IX, 1987 Constitution 31

Member of a Constitutional Commissionunder Article IX, 1987 Constitution 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:

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 Vice-President 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 organizationally equivalent to a Department, and its head to that of a Department Secretary.

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.

Benchmark Position Schedule

Position Title Salary Grades

Laborer I 1

Messenger 2

Clerk I 3

Driver I 3

Stenographer I 4

Mechanic I 4

Carpenter II 5

Electrician II 6

Secretary I 7

Bookkeeper 8

Administrative Assistant 8

Education Research Assistant I 9

Cashier I 10

Nurse I 10

Teacher I 10

Agrarian Reform Program Technologist 10

Budget Officer I 11

Chemist I 11

Agriculturist I 11

Social Welfare Officer I 11

Engineer I 12

Veterinarian I 13

Legal Officer I 14

Administrative Officer II 15

Dentist II 16

Postmaster IV 17

Forester III 18

Associate Professor I 19

Rural Health Physician 20

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)

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 Section 15(c) is based on such economic status.

What is more, the foregoing statement flies in the face of a basis of classification well-established in our law and jurisprudence.

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)

Clearly, classification on the basis of salary grade or between officers and rank and file employees within the civil service are intended to be rationally and objectively based on merit, fitness

and degree of responsibility, and not on economic status. As this Court summarized in Rodrigo v. Sandiganbayan:186

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

x x x

x x x Congress delegated the rest of this tedious task (of fixing Salary Grades) to the DBM, subject to the standards contained in R.A. No. 6758, by authorizing the DBM to "determine the officials who are of equivalent rank to the foregoing officials, where applicable," and to assign them the same Salary Grades subject to a set of guidelines found in said section.

For positions below those mentioned under Section 8, Section 9 directs the DBM to prepare the "Index of Occupational Services" guided by (a) the Benchmark Position prescribed in Section 9, and (b) the following factors:

(1) the education and experience required to perform the duties and responsibilities of the position;

(2) 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.

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)

In view of the foregoing, the statement in the latter portion of the main opinion to the effect that the classification between the officers and the rank and file of the BSP is founded on economic status, and not on the level of difficulty and responsibility as well as the qualification requirements of the work to be performed, must be considered extremely suspect - a conclusion without legal or factual tether bordering on sophistry.

En passant, it may be observed that the distinction between the managerial personnel and the rank and file of the BSP in the New Central Bank Act is similar to the distinction between Justices, Judges and those of equivalent judicial rank on the one hand and other court personnel on the other hand in R.A. No. 9227.188 In furtherance of the declared policy "to guarantee the independence of the Judiciary x x x ensure impartial administration of justice, as well as an effective and efficient system worthy of public trust and confidence,"189 Section 2 of R.A. No. 9227 provides:

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.

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 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 from possible outside influence, nevertheless had to take into consideration the limited resources of the government as well as the primary aim of the law, and consequently prioritized those holding judicial offices or with judicial rank over other court personnel.

The Subsequent Amendment of the Charters of theother GOCCs and GFIs Did Not Alter theConstitutionality of Section 15 (c)

By operation of the equal protection clause, are the rank and file employees of the BSP entitled to exemption from the Compensation Classification System provided for under the Salary Standardization Law as a consequence of the exemption of the rank and file employees of certain other GOCCs and GFIs?

Petitioner argues in the affirmative maintaining that:

This Honorable Court may take judicial notice of the fact that the rank-and-file employees of the other government financial institutions, such as the Government Service 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:

x x x

(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:

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."

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 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

x x x

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.

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:

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

x x x

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 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 "three-time 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

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.

There is no Basis for the Classification ofGFI Employees as a Discrete Class, entitledto "Special Treatment" with respect toCompensation Classification

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 "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)

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...

Senator Romulo. Eventually P34 billion.

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

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 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.

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.

THE CHAIRMAN (Rep. Andaya). But that can be solved, when implemented, you just assign him a higher rate.203 (Underscoring supplied)

x x x

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.

Sometimes there are certain key people, like money market specialists that are difficult to keep because they easily transfer to another company.

x x x

SEC. CARAGUE. In the end, Your Honor, it may be more expensive to limit the salaries of these kind of people because if you don't get good people, the viability of the corporation, the profitability goes down. So you actually, in the end, lose more. You don't see it because it is just loss of revenue, in lack of profitability, but actually it costs you more. And that is the problem of this kind of...204 (Emphasis and underscoring supplied)

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 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 notDeterminative of Exemption from the SalaryStandardization Law

More importantly, an examination of the legislative proceedings leading up to the amendment of the charters of the GOCCs and GFIs exempted from the coverage of the Compensation Classification System discloses that mereemployment in a GFI was not the decisive characteristic which prompted the legislature to provide for such exemption.

Thus, Republic Act No. 3844 (R.A. No. 3844) otherwise known as the "Agrarian Reform Code" created the Land Bank which is mandated to be the financing arm of the Agrarian Reform Program of the government. More specifically, the Land Bank is tasked to be the primary government agency in the mobilization and the provision of credit to the small farmers and fisher folk sector in their various economic activities such as production, processing, storage, transport and the marketing of farm produce. Since its inception, the Land Bank has transformed into a universal bank, seeking to continually fortify the agricultural sector by delivering countryside credit and support services.

In order to continue performing its mandate of providing non-traditional 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

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 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)

x x x

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.

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 socio-economic objectives and fill the gaps left by the private sector which might be unwilling or unprepared to take on critical projects and programs.

The bottom line of this bill which seeks to amend the existing charter of the Development Bank of the Philippines is to enable the DBP as the country's premier development bank to effectively contribute to the nation's attainment of its socio-economic objectives, such as the alleviation of poverty, creation of employment opportunities, and provision of basic needs such as food, shelter, health and education.

Given the present state of financial intermediation and capital markets in the Philippines, economic activities and projects still remain which private financial institutions may not be willing to finance because of the risks involves. And even if some of these private institutions are willing to do so, they may not have the capability to assist such projects and activities. Development lending is much more than simply providing medium to long-term funds to economically viable projects.

The proposed DBP charter amendment will help remodel DBP in the financial community as a predominantly development bank that works closely with individuals, institutions and associations which can provide resources and other types of assistance to projects with clearly-defined development impact.212

In order to achieve DBP's vision as the country's premier development bank in a rapidly growing economic environment, the legislature sought to (1) increase the authorized capital of DBP from P5 billion to P10 billion; and (2) restructure DBP's organization into one which is market-responsive, product focused, horizontally aligned, and with a lean, highly motivated work force by removing the DBP from the coverage of the

Salary Standardization Law. The DBP's exemption from the Salary Standardization Law was justified by the fact that it is an institution engaged in development activities which should be given the same opportunities as the private sector to compete.213

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 financial burden. Republic Act No. 8282 amended R.A. No. 1161 by providing for better benefit packages, expansion of coverage, flexibility in investments, stiffer penalties for violators of the law, condonation of penalties of delinquent employers and the establishment of a voluntary provident fund for members.

The fund that the SSS administers comes from the compulsory remittances of the employer on behalf of his employees. The House of Representatives noted that the fund in 1996 amounted 5.5 billion dollars, the sheer enormity of which necessitated that it be exempt from the Salary Standardization Law in order for it to attract quality personnel to ensure that the funds will not be mismanaged, abused or dissipated due to the negligence of its personnel. Moreover, the SSS, like the Land Bank and the DBP, was facing a massive exodus of its personnel who were migrating to greener pastures.

MR. VALENCIA. x x x Now, the other law refers to the law on salary standardization. Again, we are in a situation where we are competing for personnel with the private sector, especially the financial institutions. We compete with banks, we compete with insurance companies for people. So what happens invariably is we lost our people after we have trained them, after they have proven themselves with a track record, with the very low pay that is being given to our people. We believe that with the magnitude of 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 funds...and the pay out by the billions of pesos in terms of benefits and we collect by the billions of pesos, we believe that the magnitude of money and accountability we have is even higher than that of the local financial institutions. And the pay, for example, of the Administrator is similar to a small branch in a bank. So, I don't think our pay

will be very competitive but certainly it's too low considering the accountability that is on the shoulder of the employees. If we end up with poor quality of personnel, what would happen is these funds could be mismanaged, abused or just out of pure negligence could be dissipated.

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 mid-year 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 & FileEmployees 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 beConsidered Oppressive or Discriminatoryin 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.

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?

Moreover, Congressional records show that House Bill 123 has been filed with the present Thirteenth Congress219 seeking to amend The New Central Bank Act by, among other things, exempting all positions in the BSP from the Salary Standardization Law. Thus, it cannot be said that Congress has closed its mind to all possibility of amending the New Central Bank Act to provide for the exemption of the BSP rank and file from the Compensation Classification System of the Salary Standardization Law.

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.

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.

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.

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 Court is naturally hesitant to intrude too readily into the domain of another co-equal branch of government where the absence of reason and the vice of arbitrariness are not clearly and unmistakably established.

The contention in the main opinion that herein petitioner represents the "politically powerless," and therefore should not be compelled to seek a political solution, rings hollow.

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. 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

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

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

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

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.

x x x

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

May this Court depart from established rules in equal protection analysis to grant a group of government employees, the Bangko Sentral ng Pilipinas' rank and file, adjustments in their salaries and wages? Can the exemption from a law mandating the salary standardization of all government employees be justified based on the economic and financial needs of the employees, and on the assertion that those who have less in life should have more in law? Can the social justice provisions in the Constitution override the strong presumption of constitutionality of the law and place the burden, under the test of "strict scrutiny", upon the government to demonstrate that its classification has been narrowly tailored to further compelling governmental interests?

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.

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

At the same time, the General Provisions of the Salary Standardization Law clearly incorporate the spirit and intent of the social justice provisions cited in the main opinion, 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.

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.

x x x

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:

x x x

'"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.

x x x

"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)."

x x x

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. Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but 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. 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 extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored 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 nature of the responsibilities pertaining to, and the qualifications required for their positions."

WHEREFORE, I vote to deny the instant petition.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 152154            July 15, 2003

REPUBLIC OF THE PHILIPPINES, petitioner, vs.HONORABLE SANDIGANBAYAN (SPECIAL FIRST DIVISION), FERDINAND E. MARCOS (REPRESENTED BY HIS ESTATE/HEIRS: IMELDA R. MARCOS, MARIA IMELDA [IMEE] MARCOS-MANOTOC, FERDINAND R. MARCOS, JR. AND IRENE MARCOS-ARANETA) AND IMELDA ROMUALDEZ MARCOS, respondents.

CORONA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court seeking to (1) set aside the Resolution dated January 31, 2002 issued by the Special First Division of the Sandiganbayan in Civil Case No. 0141 entitledRepublic of the Philippines vs. Ferdinand E. Marcos, et. al., and (2) reinstate its earlier decision dated September 19, 2000 which forfeited in favor of petitioner Republic of the Philippines (Republic) the amount held in escrow in the Philippine National Bank (PNB) in the aggregate amount of US$658,175,373.60 as of January 31, 2002.

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

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-Spinus- Avertina Foundation accounts;

(3) Trinidad-Rayby-Palmy Foundation accounts;

(4) Rosalys-Aguamina Foundation accounts and

(5) Maler Foundation accounts.

In addition, the petition sought the forfeiture of US$25 million and US$5 million in treasury notes which exceeded the Marcos couple's salaries, other lawful income as well as income from legitimately acquired property. The treasury notes are frozen at the Central Bank of the Philippines, now Bangko Sentral ng Pilipinas, by virtue of the freeze order issued by the PCGG.

On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and Ferdinand R. Marcos, Jr. filed their answer.

Before the case was set for pre-trial, a General Agreement and the Supplemental Agreements6 dated December 28, 1993 were executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of the Marcos family. Subsequently, respondent Marcos children 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

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.

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.

V

PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR OBJECTION TO THE

AUTHENTICITY OF THE SWISS FEDERAL SUPREME COURT DECISIONS.13

Petitioner, in the main, asserts that nowhere in the respondents' motions for reconsideration and supplemental motion for reconsideration were the authenticity, accuracy and admissibility of the Swiss decisions ever challenged. Otherwise stated, it was incorrect for the Sandiganbayan to use the issue of lack of authenticated translations of the decisions of the Swiss Federal Supreme Court as the basis for reversing itself because respondents themselves never raised this issue in their motions for reconsideration and supplemental motion for reconsideration. Furthermore, this particular issue relating to the translation of the Swiss court decisions could not be resurrected anymore because said decisions had been previously utilized by the Sandiganbayan itself in resolving a "decisive issue" before it.

Petitioner faults the Sandiganbayan for questioning the non-production of the authenticated translations of the Swiss Federal Supreme Court decisions as this was a marginal and technical matter that did not diminish by any measure the conclusiveness and strength of what had been proven and admitted before the Sandiganbayan, that is, that the funds deposited by the Marcoses constituted ill-gotten wealth and thus belonged to the Filipino people.

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.

THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN SETTING THE CASE FOR FURTHER PROCEEDINGS.14

Mrs. Marcos contends that petitioner has a plain, speedy and adequate remedy in the ordinary course of law in view of the resolution of the Sandiganbayan dated January 31, 2000 directing petitioner to submit the authenticated translations of the Swiss decisions. Instead of availing of said remedy, petitioner now elevates the matter to this Court. According to Mrs. Marcos, a petition for certiorari which does not comply with the requirements of the rules may be dismissed. Since petitioner has a plain, speedy and adequate remedy, that is, to proceed to trial and submit authenticated translations of the Swiss decisions, its petition before this Court must be dismissed. Corollarily, the Sandiganbayan's ruling to set the case for further proceedings cannot and should not be considered a capricious and whimsical exercise of judgment.

Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment, prayed for the dismissal of the petition on the grounds that:

(A)

BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY JUDGMENT ON 10 MARCH 2000, IT WAS ALREADY BARRED FROM DOING SO.

(1) The Motion for Summary Judgment was based on private respondents' Answer and other documents that had long been in the records of the case. Thus, by the time the Motion was 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.

(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.

(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.

(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,

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.

PROPRIETY OF PETITIONER'S ACTION FOR CERTIORARI

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.

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

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.

ISSUES BEFORE THIS COURT

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.

(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:

SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a claim, counterclaim, or cross-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 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:

x x x

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. x x x

xxx           xxx           xxx

11. At the outset, however, it must be pointed out that based on the Official Report of the Minister of Budget,

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.

ANALYSIS OF RESPONDENTS LEGITIMATE INCOME

x x x

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:

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:

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 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

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.

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-SCOLARI-VALAMO-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 dollar-denominated 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 Malacañang 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 12-31-83 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.

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 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

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 Malacañang 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 Malacañang 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.

x x x           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

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 the facts in issue and then, brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust.

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.

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

To elucidate, the allegation of petitioner Republic in paragraph 23 of the petition for forfeiture stated:

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.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:

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, 41 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 transactions they were privy to, they cannot remember with exactitude the same having occurred a long time ago, except as to respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully acquired.

25. Respondents specifically DENY paragraphs 42, 43, 45, and 46 of the petition for lack of knowledge or information sufficient to from 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 and 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.

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.

The allegations in paragraphs 4737 and 4838 of the petition for forfeiture referring to the creation and amount of the deposits of the Rosalys-Aguamina Foundation as well as the averment in paragraph 52-a39 of the said petition with respect to the sum of the Swiss bank deposits estimated to be US$356 million were again not specifically denied by respondents in their answer. The respondents did not at all respond to the issues raised in these paragraphs and the existence, nature and amount of the Swiss funds were therefore deemed admitted by them. As held in Galofa vs. Nee Bon Sing,40 if a defendant's denial is a negative pregnant, it is equivalent to an admission.

Moreover, respondents' denial 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 respondents were not privy to the transactions" was just a pretense. Mrs. Marcos' privity to the transactions was in fact evident from her signatures on some of the vital documents41 attached to the petition for forfeiture which Mrs. Marcos failed to specifically deny as required by the rules.42

It is worthy to note that the pertinent documents attached to the petition for forfeiture were even signed personally by respondent Mrs. Marcos and her late husband, Ferdinand E. Marcos, indicating that said documents were within their knowledge. As correctly pointed out by Sandiganbayan Justice Francisco Villaruz, Jr. in his dissenting opinion:

The pattern of: 1) creating foundations, 2) use of pseudonyms and dummies, 3) approving regulations of the Foundations for the distribution of capital and income of the Foundations to the First and Second beneficiary (who are no other than FM and his family), 4) opening of bank accounts for the Foundations, 5) 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.

•             PRE-TRIAL BRIEF DATED OCTOBER 18, 1993

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:

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:

x x x

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

x x x

(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:

x x x

WITNESSES

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.

x x x

DOCUMENTARY EVIDENCE

5.1 Respondent Imelda reserves the right to present and introduce in evidence documents as may be necessary in the course of the trial.

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 compañeros here, Your Honor.

x x x

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.

•             Manifestation dated May 26, 1998 filed by MRS.              Marcos; General/Supplemental Compromise              Agreement dated December 28, 1993

These pleadings of respondent Marcoses presented nothing but feigned defenses. In their earlier pleadings, respondents alleged either that they had no knowledge of the existence of the Swiss deposits or that they could no longer remember anything as it happened a long time ago. As to Mrs. Marcos, she remembered that it was lawfully acquired.

In her Manifestation dated May 26, 1998, Mrs. Marcos stated that:

COMES NOW undersigned counsel for respondent Imelda R. Marcos, and before this Honorable Court, most respectfully manifests:

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.

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 such issues are not genuine, then summary judgment as prescribed by the rules must ensue as a matter of law.56

In sum, mere denials, if unaccompanied by any fact which will be 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 summary judgment is one granted upon motion of a party for an expeditious settlement of the case, it appearing from the pleadings, depositions, admissions and affidavits that there are no important 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 premised on the assumption that the issues presented need not be tried either because these are patently devoid of substance or that 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 action where there exists no serious controversy.58 Summary judgment is a procedural device for the prompt disposition of actions in which the pleadings raise only a legal issue, not a genuine issue as to any 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 established by affidavits, depositions or admissions that those issues are not genuine but fictitious, the Court is justified in dispensing with the trial and rendering summary judgment for petitioner.59

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.

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 disposition and gain time. It is certainly not in the interest of justice to allow respondent Marcoses to avail of the appellate remedies accorded by the Rules of Court to litigants in good faith, to the prejudice of the Republic and ultimately of the Filipino people. From the beginning, a candid demonstration 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 long time ago.

Since 1991, when the petition for forfeiture was first filed, up to the present, all respondents have offered are foxy responses like "lack of sufficient knowledge or lack of privity" or "they cannot recall because it happened a long time ago" or, as to Mrs. Marcos, "the funds were lawfully acquired." But, whenever it suits them, they also claim ownership of 90% of the funds and allege that only 10% belongs to the Marcos estate. It has been an incredible charade from beginning to end.

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

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

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.

Rule 35 of the 1997 Rules of Civil Procedure provides:

Rule 35

Summary Judgment

Section 1. Summary judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or cross-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 admissions for a summary judgment in his favor upon all or any part thereof.

Section 2. Summary judgment for defending party. - A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting affidavits, depositions or admissions for a summary judgment in his favor as to all or any part thereof. (Emphasis ours)61

Under the rule, the plaintiff can move for summary judgment "at any time after the pleading in answer thereto (i.e., in answer to the claim, counterclaim or cross-claim) has been served." No fixed reglementary period is provided by the Rules. How else does one construe the phrase "any time after the answer has been served?"

This issue is actually one of first impression. No local jurisprudence or authoritative work has touched upon this matter. This being so, an examination of foreign laws and jurisprudence, particularly those of the United States where many of our laws and rules were copied, is in order.

Rule 56 of the Federal Rules of Civil Procedure provides that a party seeking to recover upon a claim, counterclaim or cross-claim may move for summary judgment at any time after the expiration of 20 days from the commencement of the action or

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.

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.

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 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 York rules, ours do not provide for a fixed reglementary period within which to move for summary judgment.

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 interpretation of Section 1, Rule 35, of our 1997 Rules of Civil Procedure.

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.

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 trial."68

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.

The law looks with disfavor on long, protracted and expensive litigation and encourages the speedy and prompt disposition of cases. That is why the law and the rules provide for a number of devices to ensure the speedy disposition of cases. Summary judgment is one of them.

Faithful therefore to the spirit of the law on summary judgment which seeks to avoid unnecessary expense and loss of time in a trial, we hereby rule that petitioner Republic could validly move for summary judgment any time after the respondents' answer was filed or, for that matter, at any subsequent stage of the litigation. The fact that petitioner agreed to proceed to trial did not in any way prevent it from moving for summary judgment, as indeed no genuine issue of fact was ever validly raised by respondent Marcoses.

This interpretation conforms with the guiding principle enshrined in Section 6, Rule 1 of the 1997 Rules of Civil Procedure that the "[r]ules should be liberally construed in order to promote their objective of securing a just, speedy and inexpensive disposition of every action and proceeding."69

Respondents further allege that the motion for summary judgment was based on respondents' answer and other documents that had long been in the records of the case. Thus, by the time the motion was filed on March 10, 2000, estoppel by laches had already set in against petitioner.

We disagree. Estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier, warranting a presumption that the person has abandoned his right or declined to assert it.70 In effect, therefore, the principle of laches is one of estoppel because "it prevents people who have slept on their rights from prejudicing the rights of third parties who have placed reliance on the inaction of the original parties and their successors-in-interest".71

A careful examination of the records, however, reveals that petitioner was in fact never remiss in pursuing its case against

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 during the pre-trial conference, the Marcoses denied ownership of the Swiss funds, prompting petitioner to file another motion for summary judgment now under consideration by this Court. It was the subsequent events that transpired after the answer was filed, 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' answer to the petition for forfeiture.

In invoking the doctrine of estoppel by laches, respondents must show not only unjustified inaction but also that some unfair injury to them might result unless the action is barred.72

This, respondents failed to bear out. In fact, during the pre-trial conference, the Marcoses disclaimed ownership of the Swiss deposits. Not being the owners, as they claimed, respondents did not have any vested right or interest which could be adversely affected by petitioner's alleged inaction.

But even assuming for the sake of argument that laches had already set in, the doctrine of estoppel or laches does not apply when the government sues as a sovereign or asserts governmental rights.73 Nor can estoppel validate an act that contravenes law or public policy.74

As a final point, it must be emphasized that laches is not a mere question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be enforced or asserted.75 Equity demands that petitioner Republic should not be barred from pursuing the people's case against the Marcoses.

(2) The Propriety of Forfeiture

The matter of summary judgment having been thus settled, the issue of whether or not petitioner Republic was able to prove its case for forfeiture in accordance with the requisites of Sections 2 and 3 of RA 1379 now takes center stage.

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:

x x x           x x x

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.

x x x           x x x

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.

Article IX, Sec. 7 – The Prime Minister and Members of the Cabinet shall be subject to the provision of Section 11, Article VIII hereof and may not appear as counsel before any court or administrative body, or manage any business, or practice any profession, and shall also be subject to such other disqualification as may be provided by law.

Their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for determining the existence of a prima facie case of forfeiture of the Swiss funds.

Respondents argue that petitioner was not able to establish a prima facie case for the forfeiture of the Swiss funds since it failed to prove the essential elements under Section 3, paragraphs (c), (d) and (e) of RA 1379. As the Act is a penal statute, its provisions are mandatory and should thus be construed strictly against the petitioner and liberally in favor of respondent Marcoses.

We hold that it was not for petitioner to establish the Marcoses' other lawful income or income from legitimately acquired property for the presumption to apply because, as between petitioner and respondents, the latter were in a better position to know if there were such other sources of lawful income. And if indeed there was such other lawful income, respondents should have specifically stated the same in their answer. Insofar as petitioner Republic was

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.

Further, contrary to the claim of respondents, the admissions made by them in their various pleadings and documents were valid. It is of record that respondents judicially admitted that the money deposited with the Swiss banks belonged to them.

We agree with petitioner that respondent Marcoses made judicial admissions of their ownership of the subject Swiss bank deposits in their answer, the General/Supplemental Agreements, Mrs. Marcos' Manifestation and Constancia dated May 5, 1999, and the Undertaking dated February 10, 1999. We take note of the fact that the Associate Justices of the Sandiganbayan were unanimous in holding that respondents had made judicial admissions of their ownership of the Swiss funds.

In their answer, aside from admitting the existence of the subject funds, respondents likewise admitted ownershipthereof. Paragraph 22 of respondents' answer stated:

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. (emphasis supplied)

By qualifying their acquisition of the Swiss bank deposits as lawful, respondents unwittingly admitted their ownership thereof.

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 886 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.

While the Supplemental Agreement warranted, inter alia, that:

In consideration of the foregoing, the parties hereby agree that the PRIVATE PARTY shall be entitled to the equivalent of 25% of the amount that may be eventually withdrawn from said $356 million Swiss deposits.

The stipulations set forth in the General and Supplemental Agreements undeniably indicated the manifest intent of respondents to enter into a compromise with petitioner. Corollarily, respondents' willingness to agree to an amicable settlement with the Republic only affirmed their ownership of the Swiss deposits for the simple reason that no person would acquiesce to any concession over such huge dollar deposits if he did not in fact own them.

Respondents make much capital of the pronouncement by this Court that the General and Supplemental Agreements were null and void.89 They insist that nothing in those agreements could thus be admitted in evidence against them because they stood on the same ground as an accepted offer which, under Section 27, Rule 13090of the 1997 Rules of Civil Procedure, provides that "in civil cases, an offer of compromise is not an admission of any liability and is not admissible in evidence against the offeror."

We find no merit in this contention. The declaration of nullity of said 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.

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

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:

ATTY. FERNANDO:

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.

ATTY. FERNANDO:

Would you recall when the first meeting occurred?

PJ GARCHITORENA:

In connection with what?

ATTY. FERNANDO:

In connection with the ongoing talks to compromise the various cases initiated by PCGG against your family?

F. MARCOS, JR.:

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           xxx

ATTY. FERNANDO:

What was your reaction when Atty. Mesina informed you of this possibility?

F. MARCOS, JR.:

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

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           xxx

ATTY. FERNANDO:

Basically, what were the true amounts of the assets in the bank?

PJ GARCHITORENA:

So, we are talking about liquid assets here? Just Cash?

F. MARCOS, JR.:

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

xxx           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;

xxx           xxx           xxx

Respondents' ownership of the Swiss bank accounts as borne out by Mrs. Marcos' manifestation is as bright as sunlight. And her claim that she is merely a beneficiary of the Swiss deposits is belied by her own signatures on the appended copies of the documents substantiating her ownership of the funds in the name of the foundations. As already mentioned, she failed to specifically deny under oath the authenticity of such documents, especially those involving "William Saunders" and "Jane Ryan" which actually referred to Ferdinand Marcos and Imelda Marcos, respectively. That failure of Imelda Marcos to specifically deny the existence, much less the genuineness and due execution, of the instruments bearing her signature, was tantamount to a judicial admission of the genuineness and

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:

xxx           xxx           xxx

2. The Republic's cause of action over the full amount is its forfeiture in favor of the government if found to be ill-gotten. On the other hand, the Marcoses defend that it is a legitimate asset. Therefore, both parties have an inchoate right of ownership over the account. If it turns out that the account is of lawful origin, the Republic may yield to the Marcoses. Conversely, the Marcoses must yield to the Republic. (underscoring supplied)

xxx           xxx           xxx

3. Consistent with the foregoing, and the Marcoses 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.

Again, the above statements were indicative of Imelda's admission of the Marcoses' ownership of the Swiss deposits as in fact "the Marcoses defend that it (Swiss deposits) is a legitimate (Marcos) asset."

On the other hand, respondents Maria Imelda Marcos-Manotoc, Ferdinand Marcos, Jr. and Maria Irene Marcos-Araneta filed a motion102 on May 4, 1998 asking the Sandiganbayan to place the res (Swiss deposits) in custodia legis:

7. Indeed, the prevailing situation is fraught with danger! Unless the aforesaid Swiss deposits are placed in custodia legis or within the Court's protective mantle, its

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 Marcos foundations on February 10, 1999, confirmed the Marcoses' ownership of the Swiss bank deposits. The subject Undertaking brought to light their readiness to pay the human rights victims out of the funds held in escrow in the PNB. It stated:

WHEREAS, the Republic of the Philippines sympathizes with the plight of the human rights victims-plaintiffs in the aforementioned litigation through the Second Party, desires to assist in the satisfaction of the judgment awards of said 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 Republic is not obligated to do so under final judgments of the Swiss courts dated December 10 and 19, 1997, and January 8, 1998;

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 victims-plaintiffs.

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 statements made by private respondents out of context that petitioner was able to treat these as judicial admissions." The Court is fully aware of the relevance, materiality and implications of every pleading and document submitted in this case. This Court carefully scrutinized the proofs presented by the parties. We analyzed, assessed and weighed them to ascertain if each piece of evidence rightfully qualified as an admission. Owing to the far-reaching historical and political implications of this case, we considered and examined, individually and totally, the evidence of the parties, even if it might have bordered on factual adjudication which, by authority of the rules and jurisprudence, is not usually done by this Court. There is no doubt in our mind that respondent Marcoses admitted ownership of the Swiss bank deposits.

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:

SEC. 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.105

In the absence of a compelling reason to the contrary, respondents' judicial admission of ownership of the Swiss deposits is definitely binding on them.

The individual and separate admissions of each respondent bind all of them pursuant to Sections 29 and 31, Rule 130 of the Rules of Court:

SEC. 29. Admission by co-partner or agent. ─ The act or declaration of a partner or agent of the party within the scope of his authority and during the existence of the partnership or agency, may be given in evidence against such party after the partnership or agency is shown by evidence other than such act or declaration. The same rule applies to the act or declaration of a joint owner, joint debtor, or other person jointly interested with the party.106

SEC. 31. Admission by privies. ─ Where one derives title to property from another, the act, declaration, or omission of the latter, while holding the title, in relation to the property, is evidence against the former.107

The declarations of a person are admissible against a party whenever a "privity of estate" exists between the declarant and the party, the term "privity of estate" generally denoting a succession in rights.108 Consequently, an admission of one in privity with a party to the record is competent.109 Without doubt, privity exists among the respondents in this case. And where several co-parties to the record are jointly interested

in the subject matter of the controversy, the admission of one is competent against all.110

Respondents insist that the Sandiganbayan is correct in ruling that petitioner Republic has failed to establish aprima facie case for the forfeiture of the Swiss deposits.

We disagree. The sudden turn-around of the Sandiganbayan was really strange, to say the least, as its findings and conclusions were not borne out by the voluminous records of this case.

Section 2 of RA 1379 explicitly states that "whenever any public officer or employee has acquired during his incumbency an amount of 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. x x x"

The elements which must concur for this prima facie presumption to apply are:

(1) the offender is a public officer or employee;

(2) he must have acquired a considerable amount of money or property during his incumbency; and

(3) said amount 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.

It is undisputed that spouses Ferdinand and Imelda Marcos were former public officers. Hence, the first element is clearly extant.

The second element deals with the amount of money or property acquired by the public officer during his incumbency. The Marcos couple indubitably acquired and owned properties during their term of office. In fact, the five groups of Swiss accounts were admittedly owned by them. There is proof of the existence and ownership of these assets and properties and it suffices to comply with the second element.

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 been established in this case.

Petitioner Republic presented not only a schedule indicating the lawful income of the Marcos spouses during their incumbency but also evidence that they had huge deposits beyond such lawful income in Swiss banks under the names of five different foundations. We believe petitioner was able to establish the prima facie presumption that the assets and properties acquired by the Marcoses were manifestly and patently disproportionate to their aggregate salaries as public officials. Otherwise stated, petitioner presented enough evidence to convince us that the Marcoses had dollar deposits amounting to US $356 million representing the balance of the Swiss accounts of the five foundations, an amount way, way beyond their aggregate legitimate income of only US$304,372.43 during their incumbency as government officials.

Considering, therefore, that the total amount of the Swiss deposits was considerably out of proportion to the known lawful income of the Marcoses, the presumption that said dollar deposits were unlawfully acquired was duly established. It was sufficient for the petition for forfeiture to state the approximate amount of money and property acquired by the respondents, and their total government salaries. Section 9 of the PCGG Rules and Regulations states:

Prima Facie Evidence. – Any accumulation of assets, properties, and other material possessions of those persons covered by Executive Orders No. 1 and No. 2, whose value is out of proportion to their known lawful income is prima facie deemed ill-gotten wealth.

Indeed, the burden of proof was on the respondents to dispute this presumption and show by clear and convincing evidence that the Swiss deposits were lawfully acquired and that they had other legitimate sources of income. A presumption is prima facie proof of the fact presumed and, unless the fact thus prima facie established by legal presumption is disproved, it must stand as proved.111

Respondent Mrs. Marcos argues that the foreign foundations should have been impleaded as they were indispensable parties without whom no complete determination of the issues could be made. She asserts that the failure of petitioner Republic to implead the foundations rendered the judgment void as the joinder of indispensable parties was a sine qua non exercise of judicial power. Furthermore, the non-inclusion of the foreign foundations violated the

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

An indispensable party115 has been defined as one:

[who] must have a direct interest in the litigation; and if this interest is such that it cannot be separated from that of the parties to the suit, if the court cannot render justice between the parties in his absence, if the decree will have an injurious effect upon his interest, or if the final determination of the controversy in his absence will be inconsistent with equity and good conscience.

There are two essential tests of an indispensable party: (1) can relief be afforded the plaintiff without the presence of the other party? and (2) can the case be decided on its merits without prejudicing the rights of the other party?116 There is, however, no fixed formula for determining who is an indispensable party; this can only be determined in the 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.

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 had in the assets as formal owners. But inasmuch as their ownership was subsequently repudiated by Imelda Marcos, they could no longer be considered as indispensable parties and their participation in the proceedings became unnecessary.

In Republic vs. Sandiganbayan,119 this Court ruled that impleading the firms which are the res of the action was unnecessary:

"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 themselves are not the object or thing involved in the action, the res thereof – there is no need to implead them either. Indeed, their impleading is not proper on the strength alone of their having been formed with ill-gotten funds, absent any other particular wrongdoing on their part…

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, Austria-Martinez, Carpio-Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur.Puno, and Vitug, JJ., in the resultQuisumbing, Sandoval-Gutierrez, J., on official leave.Carpio, J., no part.

Republic of the PhilippinesSUPREME 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

DE LEON, JR., J.:

This case involves a petition for certiorari and prohibition as well as a petition-in-intervention, praying that respondents be restrained from proceeding with the so-called "Balikatan 02-1" and that after due notice and hearing, that judgment be rendered issuing a permanent writ of injunction and/or prohibition against the deployment of U.S. troops in Basilan and Mindanao for being illegal and in violation of the Constitution.

The facts are as follows:

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 the constitutionality of the joint exercise.2 They were joined subsequently by SANLAKAS and PARTIDO NG MANGGAGAWA, both party-Iist organizations, who filed a petition-in-intervention on February 11, 2002.

Lim and Ersando filed suit in their capacities as citizens, lawyers and taxpayers. SANLAKAS and PARTIDO, on the other hand, aver that certain members of their organization are residents of Zamboanga and Sulu, and hence will be directly affected by the operations being conducted in Mindanao. They likewise pray for a relaxation on the rules relative to locus standi citing the 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 self-defense.

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

a. RP and US participants shall be given a country and area briefing at the start of the Exercise. This briefing shall acquaint US Forces on the culture and sensitivities of the Filipinos and the provisions of the VF A. The briefing shall also promote the full cooperation on the part of the RP and US participants for the successful conduct of the Exercise.

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.

b. Local media relations will be the concern of the AFP and all public affairs guidelines shall be jointly developed by RP and US Forces.

c. Socio-Economic Assistance Projects shall be planned and executed jointly by RP and US Forces in accordance with their respective laws and regulations, and in consultation with community and local government officials.

Contemporaneously, Assistant Secretary for American Affairs 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:

I

THE PHILIPPINES AND THE UNITED STATES SIGNED THE MUTUAL DEFENSE TREATY (MDT) in 1951 TO PROVIDE MUTUAL MILITARY ASSIST ANCE IN ACCORDANCE WITH THE 'CONSTITUTIONAL PROCESSE-S' OF EACH

COUNTRY ONLY IN THE 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.

In his Comment, the Solicitor General points to infirmities in the petitions regarding, inter alia, Lim and Ersando's standing to file suit, 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 Solicitor General argues that first, they may not file suit in their capacities as, taxpayers inasmuch as it has not been shown that "Balikatan 02-1 " involves the exercise of Congress' taxing or spending powers. Second, their being lawyers does not invest them with sufficient personality to initiate the case, citing our ruling in Integrated Bar of the Philippines v. Zamora.5 Third, Lim and Ersando have failed to demonstrate the requisite showing of direct personal injury. We agree.

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:

Considering however the importance to the public of the case at bar, and in keeping with the Court's 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 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. 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 defense relations, that is, until it was replaced by the Visiting Forces Agreement. It should be recalled that on October 10, 2000, by a vote of eleven to three, this Court upheld the validity of the VFA.7 The V FA provides the "regulatory mechanism" by which "United States military and civilian personnel [may visit] temporarily in the Philippines in connection with activities approved by the Philippine Government." It contains provisions 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 02-1" 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.

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 Convention likewise dictates what may be used as aids to deduce the meaning of terms, which it refers to as the context of the treaty, as well as other elements may be taken

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.

Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only logical to assume that .'Balikatan 02-1," a "mutual anti- terrorism advising, assisting and training 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:

xxx      xxx      xxx      xxx

SEC. 2. The Philippines renounces war as an instrument of national policy, 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.

xxx      xxx      xxx      xxx

SEC. 7. The State shall pursue an independent foreign policy. In its relations with other states the paramount consideration shall be national sovereignty, territorial integrity, national interest, and the right to self- determination.

SEC. 8. The Philippines, consistent with the national interest, adopts and pursues a policy of freedom from nuclear weapons in the country.

xxx      xxx      xxx      xxx

The Constitution also regulates the foreign relations powers of the Chief Executive when it provides that "[n]o treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the members of the Senate."12 Even more pointedly, the Transitory Provisions state:

Sec. 25. 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 in a national referendum held for that purpose, and recognized as a treaty by the other contracting state.

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 Philippines only by way of direct exception. Conflict arises then between the fundamental law and our obligations arising from international agreements.

A rather recent formulation of the relation of international law vis-a-vis municipal law was expressed in Philip Morris, Inc. v. Court of Appeals,13 to wit:

xxx Withal, the fact that international law has been made part of the law of the land does not by any means imply the primacy of international law over national law in the municipal sphere. Under the doctrine of incorporation as applied in most countries, rules of international law are given a standing equal, not superior, to national legislation.

This is not exactly helpful in solving the problem at hand since in trying to find a middle ground, it favors neither one law nor the other, which only leaves the hapless seeker with an unsolved dilemma. Other more traditional approaches may offer valuable insights.

From the perspective of public international law, a treaty is favored over municipal law pursuant to the principle ofpacta sunt servanda. Hence, "[e]very treaty in force is binding upon the parties to it and must be performed by them in good faith."14 Further, a party to a treaty is not allowed to "invoke the provisions of its internal law as justification for its failure to perform a treaty."15

Our Constitution espouses the opposing view. Witness our jurisdiction as I stated in section 5 of Article VIII:

The Supreme Court shall have the following powers:

xxx      xxx      xxx      xxx

(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.

xxx      xxx      xxx      xxx

In Ichong v. Hernandez,16 we ruled that the provisions of a treaty are 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. Hechanova,17

xxx As regards the question whether an international agreement may be invalidated by our courts, suffice it to say that the Constitution of the Philippines has clearly settled it in the affirmative, by providing, in Section 2 of Article VIII thereof, that the Supreme Court may not be deprived "of its jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari, or writ of error as the law or the rules of court may provide, final judgments and decrees of inferior courts in -( I) All cases in which the constitutionality or validity of anytreaty, law, ordinance, or executive order or regulation is in question." In other words, our Constitution authorizes the nullification of a treaty, not only when it conflicts with the fundamental law, but, also, when it runs counter to an act of Congress.

The foregoing premises leave us no doubt that US forces are prohibited / from engaging in an offensive war on Philippine territory.

Yet a nagging question remains: are American troops actively engaged in combat alongside Filipino soldiers under the guise of an alleged training and assistance exercise? Contrary to what petitioners would have us do, we cannot take judicial notice of the events transpiring down south,18 as reported from the saturation coverage of the media. As a rule, we do not take cognizance of newspaper or electronic reports per se, not because of any issue as to their truth, accuracy, or impartiality, but for the simple reason that facts must be established in accordance with the rules of evidence. As a result, we cannot accept, in the absence of concrete proof, petitioners' allegation that the Arroyo government is engaged in "doublespeak" in trying to pass off as a mere training exercise an offensive effort by foreign troops on native 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

G.R. No. 151445      April 11, 2002

ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners, vs.HONORABLE EXECUTIVE SECRETARY as alter ego of HER EXCELLENCY PRESIDENT GLORIA MACAPAGAL-ARROYO and HONORABLE ANGELO REYES in his official capacity as Secretary of National Defense, respondents.SANLAKAS and PARTIDO NG MANGGAGAWA, intervenors.

DISSENTING OPINION

KAPUNAN, J.:

On September 11, 2001, terrorists, with the use of hijacked commercial airplanes, attacked the World Trade Center Building in New York City and the Pentagon Building in Washington D.C., U.S.A., killing thousands of people.

Following the attacks, the United States declared a "global war" against terrorism and started to bomb and attack Afghanistan to topple the Taliban regime and capture Osama bin Laden, the suspected mastermind of the September 11, 2001 attacks. With the Northern Alliance mainly providing the ground forces, the Taliban regime fell in a few months, without Osama bin Laden having been captured. He is believed either to be still in Afghanistan or has crossed the border into Pakistan.

In line with President Gloria Macapagal-Arroyo's pledge to render all-out aid to the US in its campaign against "global terrorism," an arrangement for a. joint military exercises known as "RP-US Balikatan 02-1 Exercises" was entered into between the US and Philippine authorities, allegedly within the ambit of the Visiting Forces Agreement (V FA) with the main objective of enhancing the operational capabilities of the countries in combating terrorism. The US government

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.

Beginning January 21, 2002, American troops started arriving in Mindanao as part of the total contingent force of 660 soldiers, 160 to be stationed in Basilan, 200 to 250 in Zamboanga, and 250 in the Air Force base in Mactan, Cebu.

The salient features of the joint military exercises as embodied in the Terms of Reference (TOR) are summarized as follows:

(a) The exercise shall be consistent with the Constitution and other Philippine laws, particularly the RP-US Visiting Forces Agreement;

(b) No permanent US bases and support facilities will be established;

(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 Forces operate independently during field training exercises;

(d) It 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, and the Chief of Staff of the AFP shall direct the Exercise Co-Directors to wind up the Exercise and other activities and the withdrawal of US forces within the six-month period;

(e) The exercise "is a mutual counter-terrorism advising, assisting and training exercise" relative to Philippine efforts against the Abu Sayyaf Group 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 also be conducted in support of the Exercise;

(f) Only 160 US troops organized in 12-man Special Forces Teams shall be deployed in Basilan, with the US Team remaining at the Company Tactical Headquarters

where they can observe and assess the performance of the troops; and

(g) US exercise participants shall not engage in combat, without prejudice to their right to self-defense.

Petitioners now seek the issuance of a writ of prohibition/injunction to prevent US troops from participating in areas of armed conflict on the ground that such is in gross violation of the Constitution. They argue that:

I

THE PHILIPPINES AND THE UNITED STATES SIGNED THE MUTUAL DEFENSE TREATY (MDT) IN 1951 TO PROVIDE MUTUAL MILITARY ASSISTANCE IN ACCORDANCE WITH THE CONSTITUTIONAL PROCESSES" OF EACH COUNTRY ONLY IN THE CASE OF AN ARMED ATTACK BY AN EXTERNAL AGGRESSOR, MEANING A THIRD COUNTRY AGAINST ONE OF THEM.

BY NO STRETCH OF THE IMAGINATION CAN IT BE SAID THAT THE ABU SAYYAF BANDITS IN BASILAN CONSTITUTE AN EXTERNAL ARMED FORCE THAT HAS SUBJECTED THE PHILIPPINES TO AN ARMED EXTERNAL ATTACK TO WARRANT US MILITARY ASSISTANCE UNDER THE MDT OF 1951.

II

NEITHER DOES THE VFA OF 1999 AUTHORIZED AMERICAN SOLDIERS TO ENGAGE IN COMBAT OPERATIONS IN PHILIPPINE TERRITORY, NOT EVEN TO FIRE BACK "IF FIRED UPON."

Sanlakas and Partido ng Manggagawa as intervenors seek the same relief as petitioners, stressing that the Constitution prohibits the presence of foreign military troops or facilities in the country, except under a treaty duly concurred in by the Senate and recognized as a treaty by the other state.

The petition is impressed with merit.

There is no treaty allowingUS troops to engage in combat.

The Constitution prohibits foreign military bases, troops or facilities unless a treaty permits the same. Section 25, Article XVIII of the Constitution provides:

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 in a national referendum held for that purpose, and recognized as a treaty by the other contracting State.

There is no treaty allowing foreign military troops to engage in combat with internal elements.

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 thatthe ASG is connected with"global terrorism."

There is no empirical basis for the allegation that the "terrorism" which the ASG is accused of constitutes an "external armed 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 constitute "terrorism."

Parenthetically, there is lack of agreement as to the precise definition of terrorism. Indeed, one man's terrorist may be another man's freedom fighter. The divergent interests of States have caused contradicting definitions and conflicting perceptions of what constitutes "terrorist acts" that make it difficult for the United Nations to reach a decision on the 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, could draw lists of what it considers terrorist organizations or states sponsoring terrorism based on criteria determined by the hegemon's own strategic interests.1

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.

Balikatan exercises arenot covered by VFA asUS troops are notallowed to engage in combat.

Neither is the present situation covered by the so-called Visiting Forces Agreement (VFA). The V FA was concluded after the removal of the US military bases, troops and facilities in the aftermath of the termination of the treaty allowing the presence of American military bases in the Philippines. The VF A is nothing more than what its formal name suggests: an "Agreement between the Government of the Republic of the Philippines and the Government of the United States of America regarding the Treatment of United States Armed Forces Visiting the Philippines. "The last paragraph of the V FA preamble also "recogniz[es] the desirability of defining the treatmentof United States personnel visiting the Republic of the Philippines."

The VFA was entered into to enable American troops to enter the country again after the removal of the American military

bases so they can participate in military exercises under the 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 Defense Treaty of August 30, 1951." As the preamble comprises part of a treaty's context for the purpose of interpretation, the VFA must be read in light of the provisions of the MDT. As stated earlier, the MDT contemplates only an external armed attack; consequently, the "activities" referred to in the V FA cannot thus be interpreted to include armed confrontation with or suppression of the ASG members who appear to be mere local bandits, mainly engaged in kidnapping for ransom and murder -even arson, extortion and illegal possession of firearms, all of which are common offenses under our criminal laws. These activities involve purely police matters and domestic law and order problems; they are hardly "external" attacks within the contemplation of the MDT and the V FA. To construe the vagueness of the term "activities" in the V FA as authorizing American troops to confront the ASG in armed conflict would, therefore, contravene both spirit and letter of the MDT.

Respondents maintain that the American troops are not here to fight the ASG but merely to engage in "training exercises." To allay fears that the American troops are here to engage the ASG in combat, the TOR professes that the present 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." 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."

These avowals of assistance, advice, and training, however, fly in the face of the presence of US troops in the heart of the ASG's stronghold. Such presence is an act of provocation that makes an armed confrontation between US soldiers and ASG members inevitable.

The US troops in Basilan have been described as being "on a slippery slope between training and fighting."Their very presence makes them a target for terrorist and for the local Moslem populace, which has been bitterly anti-American since colonial times. Though they are called advisers, the Americans win be going on risky missions deep into the jungle. A former Green Beret who is an analyst of Washington's Center for Strategies and Budgetary Assessments notes that "when troops go out on patrol, they come as close as they can to direct combat."4

"Advising" or "training" Filipino soldiers hardly describes the involvement of US troops (unaccompanied by Filipino counterparts) on board combat helicopters which land on the battlegrounds to evacuate Filipino soldiers wounded while fighting the ASG. For example, on April 5,2002, US troops on board a Pave Hawk helicopter flew to the scene of a night battle on Basilan Island to evacuate a wounded Filipino soldier. This was reportedly the third time in recent weeks that chopper-borne US forces had evacuated Filipino soldiers fighting the ASG.5

Whatever euphemisms may be conjured to characterize American involvement, the RP-US Balikatan 02-1 Exercises are aimed at seeking out the ASG and exterminating it.

The prohibition contained in the TOR against US exercise participants from engaging in combat but "without prejudice to their right to self- defense" provides little consolation. Combat muddles the distinction between aggression and self-defense. US troops can always say they did not fire first and no one would dare say otherwise. The ASG has been so

demonized that no one cares how it is exorcised. Significantly, the TOR does not define the parameters of "self-defense." 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 ASG sniper's bullet felling an American soldier could be used as an excuse for massive retaliation by US ground and air forces to attack and bomb out every suspected ASG lair, all in the name of "self -defense.

Apprehensions over possible catastrophic consequence of US military involvement in our country are not without historical basis.

The US experience in Vietnam, for example, began as an expression of support for the establishment of South Vietnam under Bao Dai's leadership in 1949 to. counteract the support given by communist China and the Soviet Union to North Vietnam. In 1950, the US began providing military assistance in fighting North Vietnam by sending military advisors as well as US tanks, planes, artillery and other supplies. The US became more involved in the Vietnam conflict when in 1961, it sent the first 400 Green Beret "Special Advisors" to South Vietnam to train the latter's soldiers in methods of counter-insurgency against the Viet Cong guerillas. It clarified that the American soldiers were not in Vietnam to engage in combat.6

However, due to the increased success of the Viet Cong guerillas, assisted by the Northern Vietnamese Army, the US eventually began to run covert operations using South Vietnamese commandos in speed boats to harass radar sites along the coastline of North Vietnam. In 1964, after an alleged torpedo attack by North Vietnam of the American destroyers USS. Maddox and USS. C. Turner Joy in the Gulf of Tonkin, the US decided to retaliate by conducting bombing raids in North Vietnam.7

The Vietnam War resulted in the death of two million Vietnamese and injuries to three million others. Twelve million Vietnamese became refugees and thousands of children became orphaned.8 Millions of acres of Vietnam's forests were defoliated by a herbicide called Agent Orange, dropped from the air. Millions of mines and unexploded bombs and artillery shells

are still scattered in the countryside, posing constant danger to life and limb.

US militarv presence isessentially 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:

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.

The US military last week began calling the war-games "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 been widely circulated in all channels of the media. Neither have they been denied.

US military interventionis not the solution to theMindanao problem.

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

If indeed acts of terrorism are cries of desperation, if terrorism is but a symptom of the greater maladies of "misery, frustration, grievance and despair," then it cannot be remedied alone by ASG's physical extermination, which appears to be the object of President Bush and President Macapagal- Arroyo's joint campaign against global terrorism." Admittedly, the State has 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 been opined that:

The issue of terrorism in the Philippines should be dealt with not from the perspective of Manila-Washington ties but from a serious study of how terrorism figures in the minds of leaders and armed men belonging to the large but deeply factionalized guerrilla movements in the country. Terrorism can never be dissociated from guerrilla warfare and the separatist movement in Mindanao. From these movements would arise religious extremists or millennarian groups. With the right resources and the right agenda, these movements will continue to attract men-skilled, intelligent, and experienced-who will come to grasp the practical 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 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 insurgents which were more organized and numerous, operating in larger parts of the country and fighting for their political beliefs. If our troops need training by us advisers or have to conduct joint exercises with US troops to improve their fighting capability, these could be more effectively achieved if done outside Basilan or away from the danger zones. Instead of bringing troops to the combat zones, the US can do more by supplying our soldiers with modern and high tech weaponry.

Prescinding from the foregoing disquisitions, it is totally erroneous to argue that petitioners do not have legal standing or that the issues raised by them are premature and not based on sufficient facts. The issues raised are of transcendental importance.18 The Balikatan exercises pose direct injury to some of the petitioners (intervenors) who live in the affected areas. The presence of us troops in the combat zones "assisting" and "advising" our troops in combat against the ASG is a blatant violation of the Constitutional proscription against the stationing of foreign troops to fight a local insurgency and puts the country in peril of becoming a veritable killing field. If the time is not ripe to challenge the continuing affront against the Constitution and the safety of the people, when is the right time? When the countryside has been devastated and numerous lives lost?

I therefore vote to give due course to the petition.

sgd. SANTIAGO M. KAPUNANAssociate Justice

Republic of the PhilippinesSUPREME 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.

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

G.R. No. 138572               October 10, 2000

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.

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

G.R. No. 138587               October 10, 2000

TEOFISTO T. GUINGONA, JR., RAUL S. ROCO, and SERGIO R. OSMEÑA III, petitioners, 

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

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 his capacity as Secretary of Foreign Affairs, respondents.

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

G.R. No. 138698               October 10, 2000

JOVITO R. SALONGA, WIGBERTO TAÑADA, ZENAIDA QUEZON-AVENCEÑA, ROLANDO SIMBULAN, PABLITO V. SANIDAD, MA. SOCORRO I. DIOKNO, AGAPITO A. AQUINO, JOKER P. ARROYO, FRANCISCO C. RIVERA JR., RENE A.V. SAGUISAG, KILOSBAYAN, MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. (MABINI), petitioners, vs.THE EXECUTIVE SECRETARY, THE SECRETARY OF FOREIGN AFFAIRS, THE SECRETARY OF NATIONAL DEFENSE, SENATE PRESIDENT MARCELO B. FERNAN, SENATOR BLAS F. OPLE, SENATOR RODOLFO G. BIAZON, AND ALL OTHER PERSONS ACTING THEIR CONTROL, SUPERVISION, DIRECTION, AND INSTRUCTION IN RELATION TO THE VISITING FORCES AGREEMENT (VFA), respondents.

D E C I S I O N

BUENA, J.:

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

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

In view of the impending expiration of the RP-US Military Bases 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 RP-US Treaty of Friendship, Cooperation and Security which, in effect, would have extended the presence of US military bases in the Philippines.2 With the expiration of the RP-US Military Bases Agreement, the periodic military exercises conducted between the two countries were held in abeyance. Notwithstanding, the defense and security relationship between the Philippines and the United States of America continued pursuant to the Mutual Defense Treaty.

On July 18, 1997, the United States panel, headed by US Defense Deputy Assistant Secretary for Asia Pacific Kurt Campbell, met with the Philippine panel, headed by Foreign Affairs Undersecretary Rodolfo Severino Jr., to exchange notes on "the complementing strategic interests of the United States and the Philippines in the Asia-Pacific region." Both sides discussed, among other things, the possible elements of the Visiting Forces Agreement (VFA for brevity). Negotiations by both panels on the VFA led to a consolidated draft text, which in turn resulted to a final series of conferences and negotiations3 that culminated in Manila on January 12 and 13, 1998. Thereafter, then President Fidel V. Ramos approved the VFA, which was respectively signed by public respondent Secretary Siazon and Unites States Ambassador Thomas Hubbard on February 10, 1998.

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) vote9of 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 IDefinitions

"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.

"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

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 IIRespect 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 IIIEntry 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;

"(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 VCriminal 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.

(e) When the United States military commander determines that an offense charged by authorities of the Philippines against United states personnel arises out of an act or omission done in the performance of official duty, the commander will issue a certificate setting forth such determination. This certificate will be transmitted to the appropriate authorities of the Philippines and will constitute sufficient proof of performance of official duty for the purposes of paragraph 3(b)(2) of this Article. In those cases where the Government of the Philippines believes the circumstances of the case require a review of the duty certificate, United States military authorities and Philippine authorities shall consult immediately. Philippine authorities at the highest levels may also present any information bearing on its validity. United States military authorities shall take full account of the Philippine position. Where appropriate, United States military authorities will take disciplinary or other action against offenders in official duty cases, and notify the Government of the Philippines of the actions taken.

(f) If the government having the primary right does not exercise jurisdiction, it shall notify the

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 arrest or detention of any United States personnel.

"6. The custody of any United States personnel over whom the Philippines is to exercise jurisdiction shall immediately reside with United States military authorities, if they so request, from the commission of the offense until completion of all judicial proceedings. United States military authorities shall, upon formal notification by the Philippine authorities and without delay, make such personnel available to those authorities in time for any investigative or judicial proceedings relating to the offense with which the person has been charged in extraordinary cases, the Philippine Government shall present its position to the United States Government regarding custody, which the United States Government shall take into full account. In the event Philippine judicial proceedings are not completed within one year, the United States shall be relieved of any obligations under this paragraph. The one-year period will not include the time necessary to appeal. Also, the one-year period will not include any time during which scheduled trial procedures are delayed because United States authorities, after timely notification by Philippine authorities to arrange for the presence of the accused, fail to do so.

"7. Within the scope of their legal authority, United States and Philippine authorities shall assist each other in the carrying out of all necessary investigation into offenses and shall cooperate in providing for the attendance of witnesses and in the collection and production of evidence, including seizure and, in proper cases, the delivery of objects connected with an offense.

"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 VIClaims

"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 other’s 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 VIIImportation 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 VIIIMovement 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 non-commercial service shall not be subject to compulsory pilotage at Philippine ports.

"Article IXDuration and Termination

"This agreement shall enter into force on the date on which the parties have notified each other in writing through the diplomatic channel that they have completed their constitutional requirements for entry into force. This agreement shall remain in force until the expiration of 180 days from the date on which either party gives the other party notice in writing that it desires to terminate the agreement."

Via these consolidated11 petitions for certiorari and prohibition, petitioners - as legislators, non-governmental organizations, citizens and taxpayers - assail the constitutionality of the VFA and impute to herein respondents grave abuse of discretion in ratifying the agreement.

We have simplified the issues raised by the petitioners into the following:

I

Do petitioners have legal standing as concerned citizens, taxpayers, or legislators to question the constitutionality of the VFA?

II

Is the VFA governed by the provisions of Section 21, Article VII or of Section 25, Article XVIII of the Constitution?

III

Does the VFA constitute an abdication of Philippine sovereignty?

a. Are Philippine courts deprived of their jurisdiction to hear and try offenses committed by US military personnel?

b. Is the Supreme Court deprived of its jurisdiction over offenses punishable by reclusion perpetua or higher?

IV

Does the VFA violate:

a. the equal protection clause under Section 1, Article III of the Constitution?

b. the Prohibition against nuclear weapons under Article II, Section 8?

c. Section 28 (4), Article VI of the Constitution granting the exemption from taxes and duties for the equipment, materials supplies and other properties imported into or acquired in the Philippines by, or on behalf, of the US Armed Forces?

LOCUS STANDI

At the outset, respondents challenge petitioner’s standing to sue, on the ground that the latter have not shown any interest in the case, and that petitioners failed to substantiate that they have sustained, or will sustain direct injury as a result of the operation of the VFA.12 Petitioners, on the other hand, counter that the validity or invalidity of the VFA is a matter of transcendental importance which justifies their standing.13

A party bringing a suit challenging the constitutionality of a law, act, or statute must show "not only that the law is invalid, but also that he has sustained or in is in immediate, or imminent danger of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite way." He must show that he has been, or is about to be, denied some right or privilege to which he is lawfully entitled, or that he is about to be subjected to some burdens or penalties by reason of the statute complained of.14

In the case before us, petitioners failed to show, to the satisfaction of this Court, that they have sustained, or are in danger of sustaining any direct injury as a result of the enforcement of the VFA. As taxpayers, petitioners have not established that the VFA involves the exercise by Congress of its taxing or spending powers.15 On this point, it bears stressing that a taxpayer’s suit refers to a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation.16 Thus, in Bugnay Const. & Development Corp. vs. Laron17, we held:

"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 judicial review, he must specifically prove that he has sufficient interest 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 questioned statute or contract. It is not sufficient that he has merely a general interest common to all members of the public."

Clearly, inasmuch as no public funds raised by taxation are involved in this case, and in the absence of any allegation by petitioners that public funds are being misspent or illegally expended, petitioners, as taxpayers, have no legal standing to assail the legality of the VFA.

Similarly, Representatives Wigberto Tañada, Agapito Aquino and Joker Arroyo, as petitioners-legislators, do not possess the requisite locus standi to maintain the present suit. While this Court, in Phil. Constitution Association vs. Hon. Salvador Enriquez,18 sustained the legal standing of a member of the Senate and the House of Representatives to question the validity of a presidential veto or a condition imposed on an item in an appropriation bull, we cannot, at this instance, similarly uphold petitioners’ standing as members of Congress, in the absence of a clear showing of any direct injury to their person or to the institution to which they belong.

Beyond this, the allegations of impairment of legislative power, such as the delegation of the power of Congress to grant tax exemptions, are more apparent than real. While it may be true that petitioners pointed to provisions of the VFA which allegedly impair their legislative powers, petitioners failed however to sufficiently show that they have in fact suffered direct injury.

In the same vein, petitioner Integrated Bar of the Philippines (IBP) is stripped of standing in these cases. As aptly observed by the Solicitor General, the IBP lacks the legal capacity to bring this suit in the absence of a board resolution from its Board of Governors authorizing its National President to commence the present action.19

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,20 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. (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 Court’s 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.

Although courts generally avoid having to decide a constitutional question based on the doctrine of separation of powers, which enjoins upon the departments of the government a becoming respect for each others’ acts,25 this Court nevertheless resolves to take cognizance of the instant petitions.

APPLICABLE CONSTITUTIONAL PROVISION

One focal point of inquiry in this controversy is the determination of which provision of the Constitution applies, with regard to the exercise by the senate of its constitutional power to concur with the VFA. Petitioners argue that Section 25, Article XVIII is applicable considering that the VFA has for its subject the presence of foreign military troops in the

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.

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:

"No treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate."

Section 25, Article XVIII, provides:

"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 in a national referendum held for that purpose, and recognized as a treaty by the other contracting State."

Section 21, Article VII deals with treatise or international agreements in general, in which case, the concurrence of at 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 agreements and applies to any form of treaty with a wide variety of subject matter, such as, but not limited to, extradition or tax treatise or those economic in nature. All treaties or international agreements entered into by the Philippines, regardless of subject matter, coverage, or particular designation or appellation, requires the concurrence of the Senate to be valid and effective.

In contrast, Section 25, Article XVIII is a special provision that applies to treaties which involve the presence of foreign military bases, troops or facilities in the Philippines. Under this provision, the concurrence of the Senate is only one of the requisites to render compliance with the constitutional requirements and to consider the agreement binding on the Philippines. Section 25, Article XVIII further requires that

"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.

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 contains the phrase "shall not be allowed." Additionally, in both instances, the concurrence of the Senate is indispensable to render the treaty or international agreement valid and effective.

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.

On the whole, the VFA is an agreement which defines the treatment of United States troops and personnel visiting the Philippines. It provides for the guidelines to govern such visits of military personnel, and further defines the rights of the United States and the Philippine government in the matter of criminal jurisdiction, movement of vessel and aircraft, importation and exportation of equipment, materials and supplies.

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 three-bases, 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.

At this juncture, we shall then resolve the issue of whether or not the requirements of Section 25 were complied with when the Senate gave its concurrence to the VFA.

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.

Under these circumstances, the charter provides that the Senate shall be composed of twenty-four (24) Senators.30 Without a tinge of doubt, 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 two-thirds 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.

Having resolved that the first two requisites prescribed in Section 25, Article XVIII are present, we shall now pass upon and delve on the requirement that the VFA should be recognized as a treaty by the United States of America.

Petitioners content that the phrase "recognized as a treaty," embodied in section 25, Article XVIII, means that the VFA should have the advice and consent of the United States Senate pursuant to its own constitutional process, and that it should not be considered merely an executive agreement by the United States.

In opposition, respondents argue that the letter of United States Ambassador Hubbard stating that the VFA is binding on the United States Government is conclusive, on the point that the VFA is recognized as a treaty by the United States of America. According to respondents, the VFA, to be binding, must only be accepted as a treaty by the United States.

This Court is of the firm view that the phrase "recognized as a treaty" means that the other contracting partyaccepts or acknowledges the agreement as a treaty.32 To require the other contracting state, the United States of America in this case, to submit the VFA to the United States Senate for concurrence pursuant to its Constitution,33 is to accord strict meaning to the phrase.

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, under international law, an executive agreement is as binding as a treaty.35 To be sure, as long as the VFA possesses the elements of an agreement under international law, the said agreement is to be taken equally as a treaty.

A treaty, as defined by the Vienna Convention on the Law of Treaties, is "an international instrument concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments, and whatever its particular designation."36 There are many other terms used for a treaty or international agreement, some of which are: act, protocol, agreement, compromis d’ arbitrage, concordat, convention, declaration, exchange of notes, pact, statute, charter and modus vivendi. All writers, from Hugo Grotius onward, have pointed out that the names or titles of international agreements included under the general term treaty have little or no legal significance. Certain terms are useful, but they furnish little more than mere description.37

Article 2(2) of the Vienna Convention provides that "the provisions of paragraph 1 regarding the use of terms in the present Convention are without prejudice to the use of those terms, or to the meanings which may be given to them in the internal law of the State."

Thus, in international law, there is no difference between treaties and executive agreements in their binding effect upon states concerned, as long as the negotiating functionaries have remained within their powers.38 International law continues to make no distinction between treaties and executive agreements: they are equally binding obligations upon nations.39

In our jurisdiction, we have recognized the binding effect of executive agreements even without the concurrence of the Senate or Congress. In Commissioner of Customs vs. Eastern Sea Trading,40 we had occasion to pronounce:

"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.

"x x x x x x x x x

"Furthermore, the United States Supreme Court has expressly recognized the validity and constitutionality of executive agreements entered into without Senate approval. (39 Columbia Law Review, pp. 753-754) (See, also, U.S. vs. Curtis Wright Export Corporation, 299 U.S. 304, 81 L. ed. 255; U.S. vs. Belmont, 301 U.S. 324, 81 L. ed. 1134; U.S. vs. Pink, 315 U.S. 203, 86 L. ed. 796; Ozanic vs. U.S. 188 F. 2d. 288; Yale Law Journal, Vol. 15 pp. 1905-1906; California Law Review, Vol. 25, pp. 670-675; Hyde on International Law [revised Edition], Vol. 2, pp. 1405, 1416-1418; willoughby on the U.S. Constitution Law, Vol. I [2d ed.], pp. 537-540; Moore, International Law Digest, Vol. V, pp. 210-218; Hackworth, International Law Digest, Vol. V, pp. 390-407). (Italics Supplied)" (Emphasis Ours)

The deliberations of the Constitutional Commission which drafted the 1987 Constitution is enlightening and highly-instructive:

"MR. MAAMBONG. Of course it goes without saying that as far as ratification of the other state is concerned, that is entirely their concern under their own laws.

FR. BERNAS. Yes, but we will accept whatever they say. If they say that we have done everything to make it a treaty, then as far as we are concerned, we will accept it as a treaty."41

The records reveal that the United States Government, through Ambassador Thomas C. Hubbard, has stated that the United States government has fully committed to living up to the terms of the VFA.42 For as long as the united States of America accepts or acknowledges the VFA as a treaty, and binds itself further to comply with its obligations under the treaty, there is indeed marked compliance with the mandate of the Constitution.

Worth stressing too, is that the ratification, by the President, of the VFA and the concurrence of the Senate should be taken as a clear an unequivocal expression of our nation’s 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

NO GRAVE ABUSE OF DISCRETION

In the instant controversy, the President, in effect, is heavily faulted for exercising a power and performing a task conferred upon him by the Constitution-the power to enter into and ratify treaties. Through the expediency of Rule 65 of the Rules of Court, petitioners in these consolidated cases impute grave abuse of discretion on the part of the chief Executive in ratifying the VFA, and referring the same to the Senate pursuant to the provisions of Section 21, Article VII of the Constitution.

On this particular matter, grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or, when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty enjoined or to act at all in contemplation of law.50

By constitutional fiat and by the intrinsic nature of his office, the President, as head of State, is the sole organ and authority in the external affairs of the country. In many ways, the President is the chief architect of the nation’s foreign policy; his "dominance in the field of foreign relations is (then) conceded."51 Wielding vast powers an influence, his conduct in the external affairs of the nation, as Jefferson describes, is "executive altogether."52

As regards the power to enter into treaties or international agreements, the Constitution vests the same in the President, subject only to the concurrence of at least two-thirds vote of all the members of the Senate. In this light, the negotiation of the VFA and the subsequent ratification of the agreement are exclusive acts which pertain solely to the President, in the lawful

exercise of his vast executive and diplomatic powers granted him no less than by the fundamental law itself. Into the field of negotiation the Senate cannot intrude, and Congress itself is powerless to invade it.53 Consequently, the acts or judgment calls of the President involving the VFA-specifically the acts of 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 Court’s considered view that the President, in ratifying the VFA and in submitting the same to the Senate for concurrence, acted within 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 the ambit of Section 21, Article VII of the Constitution, referred the VFA to the Senate for concurrence under the aforementioned provision. Certainly, no abuse of discretion, much less a grave, patent and whimsical abuse of judgment, may be imputed to the President in his act of ratifying the VFA and referring the same to the Senate for the purpose of complying with the concurrence requirement embodied in the fundamental law. In doing so, the President merely performed a constitutional task and exercised a prerogative that chiefly pertains to the functions of his office. Even if he erred in submitting the VFA to the Senate for concurrence under the provisions of Section 21 of Article VII, instead of Section 25 of Article XVIII of the Constitution, still, the President may not be faulted or scarred, much less be adjudged guilty of committing an abuse of discretion in some patent, gross, and capricious manner.

For while it is conceded that Article VIII, Section 1, of the Constitution has broadened the scope of judicial inquiry into areas normally left to the political departments to decide, such as those relating to national security, it has not altogether done away with political questions such as those which arise in the field of foreign relations.54 The High Tribunal’s function, as sanctioned by Article VIII, Section 1, "is merely (to) check whether or not the governmental branch or agency has gone beyond the constitutional limits of its jurisdiction, not that it erred or has a different view. In the absence of a showing… (of) grave abuse of discretion amounting to lack of jurisdiction, there is no occasion for the Court to exercise its corrective power…It has no power to look into what it thinks is apparent error."55

As to the power to concur with treaties, the constitution lodges the same with the Senate alone. 1âwphi1 Thus, once the Senate56 performs that power, or exercises its prerogative within the boundaries prescribed by the Constitution, the concurrence cannot, in like manner, be viewed to

constitute an abuse of power, much less grave abuse thereof. Corollarily, the Senate, in the exercise of its discretion and acting within the limits of such power, may not be similarly faulted for having 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 nation’s 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 PhilippinesSUPREME 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-à-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.

2. The formal request for extradition of the United States contains grand jury information and documents obtained through grand jury process covered by strict secrecy rules under United States law. The United States had to secure orders from the concerned District Courts authorizing the United States to disclose certain grand jury information to Philippine government and law enforcement personnel for the purpose of extradition of Mr. Jimenez. Any further disclosure of the said information is not authorized by the United States District Courts. In this particular extradition request the United States Government requested the Philippine Government to prevent unauthorized disclosure of the subject information. This Department's denial of your request is consistent with Article 7 of the RP-US Extradition Treaty which provides that the Philippine Government must represent the interests of the United States in any proceedings arising out of a request for extradition. The Department of Justice under P.D. No. 1069 is the counsel of the foreign governments in all extradition requests.

3. This Department is not in a position to hold in abeyance proceedings in connection with an extradition request. Article 26 of the Vienna Convention on the Law of Treaties, to which we are a party provides that "[E]very treaty in force is binding upon the parties to it and must be performed by them in good faith". Extradition is a tool of criminal law enforcement and to be effective, requests for extradition or surrender of accused or convicted persons must be processed expeditiously.

(pp. 77-78, Rollo.)

Such was the state of affairs when, on August 6, 1999, private respondent filed with the Regional Trial Court of the National Capital Judicial Region a petition against the

Secretary of Justice, the Secretary of Foreign Affairs, and the Director of the National Bureau of Investigation, for mandamus (to compel herein petitioner to furnish private respondent the extradition documents, to give him access thereto, and to afford him an opportunity to comment on, or oppose, the extradition request, and thereafter to evaluate the request impartially, fairly and objectively);certiorari (to set aside herein petitioner's letter dated July 13, 1999); and prohibition (to restrain petitioner from considering the extradition request and from filing an extradition petition in court; and to enjoin the Secretary of Foreign Affairs and the Director of the NBI from performing any act directed to the extradition of private respondent to the United States), with an application for the issuance of a temporary restraining order and a writ of preliminary injunction (pp. 104-105, Rollo).

The aforementioned petition was docketed as Civil Case No. 99-94684 and thereafter raffled to Branch 25 of said regional trial court stationed in Manila which is presided over by the Honorable Ralph C. Lantion.

After due notice to the parties, the case was heard on August 9, 1999. Petitioner, who appeared in his own behalf, moved that he be given ample time to file a memorandum, but the same was denied.

On August 10, 1999, respondent judge issued an order dated the previous day, disposing:

WHEREFORE, this Court hereby Orders the respondents, namely: the Secretary of Justice, the Secretary of Foreign Affairs and the Director of the National Bureau of Investigation, their agents and/or representatives 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 a Regional Trial court; and from performing any act directed to the extradition of the petitioner to the United States, for a period of twenty (20) days from service on respondents of this Order, pursuant to Section 5, Rule 58 of the 1997 Rules of Court.

The hearing as to whether or not this Court shall issue the preliminary injunction, as agreed upon by the

counsels for the parties herein, is set on August 17, 1999 at 9:00 o'clock in the morning. The respondents are, likewise, ordered to file their written comment and/or opposition to the issuance of a Preliminary Injunction on or before said date.

SO ORDERED.

(pp. 110-111, Rollo.)

Forthwith, petitioner initiated the instant proceedings, arguing that:

PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE TEMPORARY RESTRAINING ORDER BECAUSE:

I.

BY ORDERING HEREIN PETITIONER TO REFRAIN FROM COMMITTING THE ACTS COMPLAINED OF, I.E., TO DESIST FROM REFUSING PRIVATE RESPONDENT ACCESS TO THE OFFICIAL EXTRADITION REQUEST AND DOCUMENTS AND FROM DENYING PRIVATE RESPONDENT AN OPPORTUNITY TO FILE A COMMENT ON, OR OPPOSITION TO, THE REQUEST, THE MAIN PRAYER FOR A WRIT OF MANDAMUSIN THE PETITION FOR MANDAMUS, CERTIORARI AND PROHIBITION WAS, IN EFFECT, GRANTED SO AS TO CONSTITUTE AN ADJUDICATION ON THE MERITS OF THE MANDAMUS ISSUES;

II.

PETITIONER WAS UNQUALIFIEDLY PREVENTED FROM PERFORMING LEGAL DUTIES UNDER THE EXTRADITION TREATY AND THE PHILIPPINE EXTRADITION LAW;

III.

THE PETITION FOR (MANDAMUS), CERTIORARI AND PROHIBITION IS, ON ITS FACE, FORMALLY AND SUBSTANTIALLY DEFICIENT; AND

IV.

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?

The issues having transcendental importance, the Court has elected to go directly into the substantive merits of the case, brushing aside peripheral procedural matters which concern the proceedings in Civil Case No. 99-94684, particularly the propriety of the filing of the petition therein, and of the issuance of the TRO of August 17, 1999 by the trial court.

To be sure, the issues call for a review of the extradition procedure. The RP-US Extradition Treaty which was executed only on November 13, 1994, ushered into force the implementing provisions of Presidential Decree No. 1069, also called as the Philippine Extradition Law. Section 2(a) thereof defines extradition as "the removal of an accused from the Philippines with the object of placing him at the disposal of foreign authorities to enable the requesting state or government to hold him in connection with any criminal investigation directed against him or the execution of a penalty imposed on him under the penal or criminal law of the requesting state or government." The portions of the Decree relevant to the instant case which involves a charged and not convicted individual, are abstracted as follows:

The Extradition Request

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;

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.)

Sec. 5 of the Presidential Decree, which sets forth the duty of the Secretary of Foreign Affairs, pertinently provides

. . . (1) Unless it appears to the Secretary of Foreign Affairs that the request fails to meet the requirements of this law and the relevant treaty or convention, he shall forward the request together with the related documents to the Secretary of Justice, who shall immediately designate and authorize an attorney in his office to take charge of the case.

The above provision shows only too clearly that the executive authority given the task of evaluating the sufficiency of the request and the supporting documents is the Secretary of Foreign Affairs. What then is the coverage of this task?

In accordance with Paragraphs 2 and 3, Article 7 of the RP-US Extradition Treaty, the executive authority must ascertain whether or not the request is supported by:

1. Documents, statements, or other types of information which describe the identity and probable location of the person sought;

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.

Upon conclusion of the hearing, the court shall render a decision granting the extradition and giving the reasons therefor upon a showing of the existence of a prima facie case, or dismiss the petition (Section 10, ibid.). Said decision is appealable to the Court of Appeals, whose decision shall be final and immediately executory (Section 12, ibid.). The provisions of the Rules of Court governing appeal in criminal cases in the Court of Appeals shall apply in the aforementioned appeal, except for the required 15-day period to file brief (Section 13, ibid.).

The trial court determines whether or not the offense mentioned in the petition is extraditable based on the application of the dual criminality rule and other conditions mentioned in Article 2 of the RP-US Extradition Treaty. The trial court also determines whether or not the offense for which extradition is requested is a political one (Paragraph [1], Article 3, RP-US Extradition Treaty).1âwphi1.nêt

With the foregoing abstract of the extradition proceedings as backdrop, the following query presents itself: What is the nature of the role of the Department of Justice at the evaluation stage of the extradition 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 the error of the Department of Foreign Affairs in taking lightly its responsibilities. Thereafter, the Department of Justice took it upon itself to determine the completeness of the documents and to evaluate the same to find out whether they comply with the requirements laid down in the Extradition Law and the RP-US Extradition Treaty. Petitioner ratiocinates in this connection that although the Department 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 extradition petition (tsn, August 31, 1999, pp. 24-25). Notably, it was 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 right to be heard which consists in having a reasonable period of time to oppose the request, and to present evidence in support of the opposition; and (3) that the evaluation proceedings be held in abeyance pending the filing of private respondent's opposition to the request.

The two Departments seem to have misread the scope of their duties and authority, one abdicating its powers and the other enlarging its commission. The Department of Foreign Affairs, moreover, has, through the Solicitor General, filed a manifestation that it is adopting the instant petition as its own, indirectly conveying the message that if it were to evaluate the extradition request, it would not allow private respondent to participate in the process of evaluation.

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 evaluation process, just like the extradition proceedings proper, belongs to a class by itself. It is sui generis. It is not a criminal investigation, but it is also erroneous to say that it is purely an exercise of ministerial functions. At such stage, the executive authority has the power: (a) to make a technical assessment of the completeness and sufficiency of the extradition papers; (b) to outrightly deny the request if on its face and on the face of the supporting documents the crimes indicated are not extraditable; and (c) to make a determination whether or not the request is politically motivated, or that the offense is a military one which is not punishable under non-military penal legislation (tsn, August 31, 1999, pp. 28-29; Article 2 & and Paragraph [3], Article 3, RP-US Extradition Treaty). Hence, said process may be characterized as an investigative or inquisitorial process in contrast to a proceeding conducted in the exercise of an administrative body's quasi-judicial power.

In administrative law, a quasi-judicial proceeding involves: (a) taking and evaluation of evidence; (b) determining facts based upon the evidence presented; and (c) rendering an order or decision supported by the facts proved (De Leon, Administrative Law: Text and Cases, 1993 ed., p. 198, citing Morgan vs. United States, 304 U.S. 1). Inquisitorial power, which is also known as examining or investigatory power, is one or the determinative powers of an administrative body which better enables it to exercise its quasi-judicial authority (Cruz, Phil. Administrative Law, 1996 ed., p. 26). This power allows the administrative body to inspect the records and premises, and investigate the activities, of persons or entities coming under its jurisdiction (Ibid., p. 27), or to require disclosure of information by means or accounts, records, reports, testimony of witnesses, production of documents, or otherwise (De Leon, op. cit., p. 64).

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 quasi-judicial 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 down the test of determining whether an administrative body is exercising judicial functions or merely investigatory functions: Adjudication signifies the exercise of power and authority to adjudicate upon the rights and obligations of the parties before it. Hence, if the only purpose for investigation is to evaluate evidence submitted before it based on the facts and circumstances presented to it, and if the agency is not authorized to make a final pronouncement affecting the parties, then there is an absence of judicial discretion and judgment.

The above description in Ruperto applies to an administrative body authorized to evaluate extradition documents. The body has no power to adjudicate in regard to the rights and obligations of both the Requesting State and the prospective extraditee. Its only power is to determine whether the papers comply with the requirements of the law and the treaty and, therefore, sufficient to be the basis of an extradition petition. Such finding is thus merely initial and not final. The body has no power to determine whether or not the extradition should be effected. That is the role of the court. The body's power is limited to an initial finding of whether or not the extradition petition can be filed in court.

It is to be noted, however, that in contrast to ordinary investigations, the evaluation procedure is characterized by certain peculiarities. Primarily, it sets into motion the wheels of the extradition process. Ultimately, it may result in the deprivation of liberty of the prospective extraditee. This deprivation can be effected at two stages: First, the provisional arrest of the prospective extraditee pending the submission of the request. This is so because the Treaty provides that in case of urgency, a contracting party may request the provisional arrest of the person sought pending presentation of the request (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.

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 their respective Supreme Courts have expounded as the spirit with which the provisions are informed and impressed, the elasticity in their interpretation, their dynamic and resilient character which make them capable of meeting every modern problem, and their having been designed from earliest time to the present to meet the exigencies of an undefined and expanding future. The requirements of due process are interpreted in both the United States and the Philippines as not denying to the law the capacity for progress and improvement. Toward this effect and in order to avoid the confines of a legal straitjacket, the courts instead prefer to have the meaning of the due process clause "gradually ascertained by the process of inclusion and exclusion in the course of the decisions of cases as they arise" (Twining vs. New Jersey, 211 U.S. 78). Capsulized, it refers to "the embodiment of the sporting idea of fair play" (Ermita-Malate Hotel and Motel Owner's Association vs. City Mayor of Manila, 20 SCRA 849 [1967]). It relates to certain immutable principles of justice which inhere in the very 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

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.

These twin rights may, however, be considered dispensable in certain instances, such as:

1. In proceeding where there is an urgent need for immediate action, like the summary abatement of a nuisance per se (Article 704, Civil Code), the preventive suspension of a public servant facing administrative charges (Section 63, Local Government Code, B.P. Blg. 337), the padlocking of filthy restaurants or theaters showing obscene movies or like establishments which are immediate threats to public health and decency, and the cancellation of a passport of a person sought for criminal prosecution;

2. Where there is tentativeness of administrative action, that is, where the respondent is not precluded from enjoying the right to notice and hearing at a later time without prejudice to the person affected, such as the summary distraint and levy of the property of a delinquent taxpayer, and the replacement of a temporary appointee; and

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. 408-410). 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.

2. The Department of State forwards the incoming Philippine extradition request to the Department of Justice. Before doing so, the Department of State prepares a declaration confirming that a formal request has been made, that the treaty is in full force and effect, that under Article 17 thereof the parties provide reciprocal legal representation in extradition proceedings, that the offenses are covered as extraditable offenses under Article 2 thereof, and that the documents have been authenticated in accordance with the federal statute that ensures admissibility at any subsequent extradition hearing.

3. A judge or magistrate judge is authorized to issue a warrant for the arrest of the prospective extraditee (18 U.S.C. §3184). Said judge or magistrate is authorized to hold a hearing to consider the evidence offered in support of the extradition request (Ibid.)

4. At the hearing, the court must determine whether the person arrested is extraditable to the foreign country. The court must also determine that (a) it has jurisdiction over the defendant and jurisdiction to conduct the

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).

7. The subject of an extradition request may not litigate questions concerning the motives of the requesting government in seeking his extradition. However, a person facing extradition may present whatever information he deems relevant to the Secretary of State, who makes the final determination whether to surrender an individual to the foreign government concerned.

From the foregoing, it may be observed that in the United States, extradition begins and ends with one entity — the Department of State — which has the power to evaluate the request and the extradition documents in the beginning, and, in the person of the Secretary of State, the power to act or not to act on the court's determination of extraditability. In the Philippine setting, it is the Department of Foreign Affairs which should make the initial evaluation of the request, and having satisfied itself on the points earlier mentioned (see pp. 10-12), then forwards the request to the Department of Justice for the preparation and filing of the petition for extradition. Sadly, however, the Department of Foreign Affairs, in the instant case, perfunctorily turned over the request to the Department of Justice which has taken over the task of evaluating the request as well as thereafter, if so warranted, preparing, filing, and prosecuting the petition for extradition.

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.

We agree with private respondent's citation of an American Supreme Court ruling:

The establishment of prompt efficacious procedures to achieve legitimate state ends is a proper state interest worthy of cognizance in constitutional adjudication. But the Constitution recognizes higher values than speed and efficiency. Indeed, one might fairly say of the Bill of Rights in general, and the Due Process Clause, in particular, that they were designed to protect the fragile values of a vulnerable citizenry from the overbearing concern for efficiency and efficacy that may characterize praiseworthy government officials no less, and perhaps more, than mediocre ones.

(Stanley vs. Illinois, 404 U.S. 645, 656)

The United States, no doubt, shares the same interest as the Philippine Government that no right — that of liberty — secured not only by the Bills of Rights of the Philippines Constitution but of the United States as well, is sacrificed at the altar of expediency.

(pp. 40-41, Private Respondent's Memorandum.)

In the Philippine context, this Court's ruling is invoked:

One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a person invoking a right

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]).

There can be no dispute over petitioner's argument that extradition is a tool of criminal law enforcement. To be effective, requests for extradition or the surrender of accused or convicted persons must be processed expeditiously. Nevertheless, accelerated or fast-tracked proceedings and adherence to fair procedures are, however, not always incompatible. They do not always clash in discord. Summary does not mean precipitous haste. It does not carry a disregard of the basic principles inherent in "ordered liberty."

Is there really an urgent need for immediate action at the evaluation stage? At that point, there is no extraditee yet in the strict sense of the word. Extradition may or may not occur. In interstate extradition, the governor of the asylum state may not, in the absence of mandatory statute, be compelled to act favorably (37 C.J.S. 387) since after a close evaluation of the extradition papers, he may hold that federal and statutory requirements, which are significantly jurisdictional, have not been met (31 Am Jur 2d 819). Similarly, under an extradition treaty, the executive authority of the requested state has the power to deny the behest from the requesting state. Accordingly, if after a careful examination of the extradition documents the Secretary of Foreign Affairs finds that the request fails to meet the requirements of the law and the treaty, he shall not forward the request to the Department of Justice for the filing of the extradition petition since non-compliance with the aforesaid requirements will not vest our government with jurisdiction to effect the extradition.

In this light, it should be observed that the Department of Justice exerted notable efforts in assuring compliance with the requirements of the law and the treaty since it even informed the U.S. Government of certain problems in the extradition papers (such as those that are in Spanish and without the official English translation, and those that are not properly authenticated). In fact, petitioner even admits that consultation meetings are still supposed to take place between the lawyers in his Department and those from the U.S. Justice Department. With the meticulous nature of the evaluation, which cannot just be completed in an abbreviated period of time due to its intricacies, how then can we say that it is a proceeding that

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? Here lies the peculiarity and deviant characteristic of the evaluation procedure. On one hand there is yet no extraditee, but ironically on the other, it results in an administrative if adverse to the person involved, may cause his immediate incarceration. The grant of the request shall lead to the filing of the extradition petition in court. The "accused" (as Section 2[c] of Presidential Decree No. 1069 calls him), faces the threat of arrest, not only after the extradition petition is filed in court, but even during the evaluation proceeding itself by virtue of the provisional arrest allowed under the treaty and the implementing law. The prejudice to the "accused" is thus blatant and manifest.

Plainly, the notice and hearing requirements of administrative due process cannot be dispensed with and shelved aside.

Apart from the due process clause of the Constitution, private respondent likewise invokes Section 7 of Article III which reads:

Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.

The above provision guarantees political rights which are available to citizens of the Philippines, namely: (1) the right to information on matters of public concern, and (2) the corollary right of access to official records documents. The general right guaranteed by said provision is the right to information on matters of public concern. In its implementation, the right of access to official records is likewise conferred. These cognate or related rights are "subject to limitations as may be provided by law" (Bernas, The 1987 Phil. Constitution A Reviewer-Primer, 1997 ed., p. 104) and rely on the premise that ultimately it is an informed and critical public opinion which alone can protect the values of democratic government (Ibid.).

Petitioner argues that the matters covered by private respondent's letter-request dated July 1, 1999 do not fall under the guarantee of the foregoing provision since the matters contained in the documents 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.

The concept of matters of public concerns escapes exact definition. Strictly speaking, every act of a public officer in the conduct of the governmental process is a matter of public concern (Bernas, The 1987 Constitution of the Republic of the Philippines, 1996 ed., p. 336). This concept embraces a broad spectrum of subjects which the public may want to know, either because these directly affect their lives or simply because such matters arouse the interest of an ordinary citizen (Legaspi v. Civil Service Commission, 150 SCRA 530 [1987]). Hence, the real party in interest is the people and any citizen has "standing".

When the individual himself is involved in official government action because said action has a direct bearing on his life, and may either cause him some kind of deprivation or injury, he actually invokes the basic right to be notified under Section 1 of the Bill of Rights and not exactly the right to information on matters of public concern. As to an accused in a criminal proceeding, he invokes Section 14, particularly the right to be informed of the nature and cause of the accusation against him.

The right to information is implemented by the right of access to information within the control of the government (Bernas, The 1987 Constitution of the Republic of the Philippines, 1996 ed., p. 337). Such information may be contained in official records, and in documents and papers pertaining to official acts, transactions, or decisions.

In the case at bar, the papers requested by private respondent pertain to official government action from the U.S. Government. No official action from our country has yet been taken. Moreover, the papers have some relation to matters of foreign relations with the U.S. Government. Consequently, if a third party invokes this constitutional provision, stating that the extradition papers are matters of public concern since they may result in the extradition of a Filipino, we are afraid that the balance must be tilted, at such particular time, in favor of the interests necessary for the

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.

We now pass upon the final issue pertinent to the subject matter of the instant controversy: Would private respondent's entitlement to notice and hearing during the evaluation stage of the proceedings constitute a breach of the legal duties of the Philippine Government under the RP-Extradition Treaty? Assuming the answer is in the affirmative, is there really a conflict between the treaty and the due process clause in the Constitution?

First and foremost, let us categorically say that this is not the proper time to pass upon the constitutionality of the provisions of the RP-US Extradition Treaty nor the Extradition Law implementing the same. We limit ourselves only to the effect of the grant of the basic rights of notice and hearing to private respondent on foreign relations.

The rule of pacta sunt servanda, one of the oldest and most fundamental maxims of international law, requires the parties to a treaty to keep their agreement therein in good faith. The observance of our country's legal duties under a treaty is also compelled by Section 2, Article II of the Constitution which provides that "[t]he Philippines renounces war as an instrument of national policy, 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 nations." Under the doctrine of incorporation, rules of international law form part of the law of the and land no further legislative action is needed to make such rules applicable in the domestic sphere (Salonga & Yap, Public International Law, 1992 ed., p. 12).

The doctrine of incorporation is applied whenever municipal tribunals (or local courts) are confronted with situations in which there appears to be a conflict between a rule of international law and the provisions of the constitution or statute of the local state. Efforts should first be exerted to harmonize them, so as to give effect to both since it is to be presumed that municipal law was enacted with proper regard for the generally accepted

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 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 land does not pertain to or imply the primacy of international law over national or municipal law in the municipal sphere. The doctrine of incorporation, as applied in most countries, decrees that rules of international law are given equal standing with, but are not superior to, national legislative enactments. Accordingly, the principle lex posterior derogat priori takes effect — a treaty may repeal a statute and a statute may repeal a treaty. In states where the constitution is the highest law of the land, such as the Republic of the Philippines, both statutes and treaties may be invalidated if they are in conflict with the constitution (Ibid.).

In the case at bar, is there really a conflict between international law and municipal or national law? En contrario, these two components of the law of the land are not pined against each other. There is no occasion to choose which of the two should be upheld. Instead, we see a void in the provisions of the RP-US Extradition Treaty, as implemented by Presidential Decree No. 1069, as regards the basic due process rights of a prospective extraditee at the evaluation stage of extradition proceedings. From the procedures earlier abstracted, after the filing of the extradition petition and during the judicial determination of the propriety of extradition, the rights of notice and hearing are clearly granted to the prospective extraditee. However, prior thereto, the law is silent as to these rights. Reference to the U.S. extradition procedures also manifests this silence.

Petitioner interprets this silence as unavailability of these rights. Consequently, he describes the evaluation procedure as an "ex parte technical assessment" of the sufficiency of the extradition request and the supporting documents.

We disagree.

In the absence of a law or principle of law, we must apply the rules of fair play. An application of the basic twin due process rights of notice and hearing will not go against the treaty or the implementing law. 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).

Petitioner contends that the United States requested the Philippine Government to prevent unauthorized disclosure of confidential information. Hence, the secrecy surrounding the 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 available at this stage would be obtainable during trial. The Department of Justice states that the U.S. District Court concerned has authorized the disclosure of certain grand jury information. If the information is truly confidential, the veil of secrecy cannot be lifted at any stage of the extradition proceedings. Not even during trial.

A libertarian approach is thus called for under the premises.

One will search in vain the RP-US Extradition Treaty, the Extradition Law, as well as American jurisprudence and procedures on extradition, for any prohibition against the conferment of the two basic due process rights of notice and hearing during the evaluation stage of the extradition proceedings. We have to consider similar situations in 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

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 virtue of a treaty and hence affecting foreign relations, the aforestated guarantees in the Bill of Rights could thus be subservient thereto?

The basic principles of administrative law instruct us that "the essence of due process in administrative proceeding is an opportunity to explain one's side or an opportunity to seek reconsideration of the actions or ruling complained of (Mirano vs. NLRC, 270 SCRA 96 [1997]; Padilla vs. NLRC, 273 SCRA 457 [1997]; PLDT vs. NLRC, 276 SCRA 1 [1997]; Helpmate, Inc. vs. NLRC, 276 SCRA 315 [1997]; Aquinas School vs. Magnaye, 278 SCRA 602 [1997]; Jamer vs. NLRC, 278 SCRA 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 [1997]). This Court will not tolerate the least disregard of constitutional guarantees in the enforcement of a law or treaty. Petitioner's fears that the Requesting State may have valid objections to the Requested State's non-performance of its commitments under the Extradition Treaty are insubstantial and should not be given paramount consideration.

How then do we implement the RP-US Extradition Treaty? Do we limit ourselves to the four corners of Presidential Decree No. 1069?

Of analogous application are the rulings in Government Service Insurance System vs. Court of Appeals (201 SCRA 661 [1991]) and Go vs. National Police Commission (271 SCRA 447 [1997]) where we ruled that in summary proceedings under Presidential Decree No. 807 (Providing for the Organization of the Civil Service Commission in Accordance with Provisions of the Constitution, Prescribing its Powers and Functions and for Other Purposes), and Presidential Decree No. 971 (Providing Legal Assistance for Members of the Integrated National Police who may be charged for Service-Connected Offenses and Improving the Disciplinary System in the Integrated National Police, Appropriating Funds Therefor and for other purposes),

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 only in the absence of, and never against, statutory law or judicial pronouncements (Smith Bell & Co., Inc. vs. Court of Appeals, 267 SCRA 530 [1997]; David-Chan vs. Court of Appeals, 268 SCRA 677 [1997]). The constitutional issue in the case at bar does not even call for "justice outside legality," since private respondent's due process rights, although not guaranteed by statute or by treaty, are protected by constitutional guarantees. We would not be true to the organic law of the land if we choose strict construction over guarantees against the deprivation of liberty. That would not be in keeping with the principles of democracy on which our Constitution is premised.

Verily, as one traverses treacherous waters of conflicting and opposing currents of liberty and government authority, he must ever hold the oar of freedom in the stronger arm, lest an errant and wayward course be laid.

WHEREFORE, in view of the foregoing premises, the instant petition is hereby DISMISSED for lack of merit. Petitioner is ordered to furnish private respondent copies of the extradition request and its supporting papers, and to grant him a reasonable period within which to file his comment with supporting evidence. The incidents in Civil Case No. 99-94684 having been rendered moot and academic by this decision, the same is hereby ordered dismissed.

SO ORDERED.

Bellosillo, Purisima, Buena and De Leon, Jr., JJ., concur.Davide, Jr., C.J., I join Mr. Justice Puno in his dissent.Puno, J., please see dissent.Vitug, J., see separate opinion.Kapunan, J., see separate concurring opinion.Panganiban, J., please see my dissenting opinion.Mendoza, J., I join the dissents of Puno and Panganiban, JJ.Quisumbing, J., with concurring opinion.Pardo, J., I join J. Puno & J. Panganiban.Gonzaga-Reyes, J., I join the dissent of Justices Puno & Panganiban.Ynares-Santiago, J., please see separate concurring opinion.

Separate Opinions

VITUG, J., separate opinion;

The only real issue before the Court, I would take it, is whether or not private respondent can validly ask for copies of pertinent documents while the application for extradition against him is still undergoing process by the Executive Department.

There is, I agree with the majority, a right of access to such extradition documents conformably with the provisions of Article III, Section 7, of the Philippine Constitution.1 The constitutional right to free access to information of public concern is circumscribed only by the fact that the desired information is not among the species exempted by law from

the operation of the constitutional guaranty and that the exercise of the right conforms with such reasonable conditions as may be prescribed by law.

There is no hornbook rule to determine whether or not an information is of public concern. The term "public concern" eludes exactitude, and it can easily embrace a broad spectrum of matters which the public may want to know either because the subject thereof can affect their lives or simply because it arouses concern.2

I am not convinced that there is something so viciously wrong with, as to deny, the request of private respondent to be furnished with copies of the extradition documents.

I add. The constitutional right to due process secures to everyone an opportunity to be heard, presupposing foreknowledge of what he may be up against, and to submit any evidence that he may wish to proffer in an effort to clear himself. This right is two-pronged — substantive and procedural due process — founded, in the first instance, on Constitutional or statutory provisions, and in the second instance, on accepted rules of procedure.3Substantive due process looks into the extrinsic and intrinsic validity of the law that figures to interfere with the right of a person to his life, liberty and property. Procedural due process — the more litigated of the two — focuses on the rules that are established in order to ensure meaningful adjudication in the enforcement and implementation 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 by history, reason, the past course of decisions, and stout confidence in the democratic faith."4 The framers of our own Constitution, it would seem, have deliberately intended, to make it malleable to the ever-changing milieu of society. Hitherto, it is dynamic and resilient, adaptable to every situation calling for its application that makes it appropriate to accept an enlarged concept of the term as and when there is a possibility that the right of an individual to life, liberty and property might be diffused.5 Verily, whenever there is an imminent threat to the life, liberty or property of any person in any proceeding conducted by or under the auspices of the State, his right to due process of law, when demanded, must not be ignored.

A danger to the liberty of the extraditee, the private respondent, is real. Article 9 of the Extradition Treaty between the 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

Assuming that the present case has not become moot and academic, still, it should be dismissed for lack of merit.

The substantive issues raised in this case are: (a) whether a person whose extradition is sought by a foreign state has due process rights under Section 2, Article III of the 1997 Constitution before the Department of Justice as the request for extradition is being evaluated, or whether due process rights maybe invoked only upon the filing of a petition for extradition before a regional trial court; and (b) whether or not private respondent has a right of access to extradition documents under Section 7, Article III of the 1997 Constitution.

Petitioner contends that due process rights such as the right to be informed of the basis of the request for extradition and to have an opportunity to controvert are not provided in the extradition treaty or in P.D. 1069 and therefore does not exist in this stage of the proceedings. Further, he argues that the documents sought to be furnished to private respondent only involve private concerns, and not matters of public concern to which the people have a constitutional right to access.

While the evaluation process conducted by the Department of Justice is not exactly a preliminary investigation of criminal cases, it is akin to a preliminary investigation because it involves the basic constitutional rights of the person sought to be extradited. A person ordered extradited is arrested, forcibly taken from his house, separated from his family and delivered to a foreign state. His rights of abode, to privacy, liberty and pursuit of happiness are taken away from him — a fate as harsh and cruel as a conviction of a criminal offense. For this reason, he is entitled to have access to the evidence against him and the right to controvert them.

While the extradition treaty and P.D. 1069 do not provide for a preliminary investigation, neither does either prohibit it.

The right to due process is a universal basic right which is deemed written into our laws and treaties with foreign countries.

Like a preliminary investigation, the evaluation by the Department of Justice of the extradition request and its accompanying documents is to establish probable cause and to secure the innocent against hasty, malicious and oppressive prosecution.

In this connection, it should be stressed that the evaluation procedure of the extradition request and its accompanying documents by the Department of Justice cannot be characterized as a mere "ex-parte technical assessment of the sufficiency" thereof. The function and responsibilities of the Department of Justice in evaluating the extradition papers involve the exercise of judgment. They involve a determination whether the request for extradition conforms fully to the requirements of the extradition treaty and whether the offense is extraditable. These include, among others, whether the offense for which extradition is requested is a political or military offense (Article 3); whether the documents and other informations required under Article 7(2) have been provided (Article 7); and whether the extraditable offense is punishable under the laws of both contracting parties by deprivation of liberty for a period of more than one year (Article 2). Consequently, to arrive at a correct judgment, the parties involved are entitled to be heard if the requirements of due process and equal protection are to be observed.

With respect to petitioner's claim that private respondent has no right to demand access to the documents relating to the request for extradition, suffice it to say, that any document used in a proceeding that would jeopardize a person's constitutional rights is matter of public concern. As Martin Luther King said, "injustice anywhere is a threat to justice everywhere," so any violation of one's rights guaranteed by the Bill of Rights is everybody's concern because they, one way or another, directly or indirectly, affect the rights of life and liberty of all the citizens as a whole.

Due process rights in a preliminary investigation is now an established principle. The respondent has a right of access to all of the evidence. He has the right to submit controverting evidence. The prosecuting official who conducts the preliminary investigation is required to be neutral, objective, and impartial in resolving the issue of probable cause. I see no reason why the same rights may not be accorded a person sought to be

extradited at the stage where the Department of Justice evaluates whether a petition for extradition would be filed before a regional trial court. If denied such rights, not only denial of due process rights but of equal protection may be raised.

It is suggested that after a petition for extradition is filed with a regional trial court, the person sought to be extradited may exercise all due process rights. He may then have access to all the records on the basis of which the request for extradition has been made. He may controvert that evidence and raise all defenses he may consider appropriate. That, it is urged, meets the due process requirement.

But why must he wait until the petition for extradition is filed? As succinctly expressed, if the right to notice and hearing is to serve its full purpose, then, it is clear that it must be granted at a time when the deprivation can still be prevented.4 Like the filing of an information in a criminal case, the mere filing of a petition for extradition causes immediate impairment of the liberty of the person sought to be extradited and a substantial curtailment of other rights. His arrest may be immediately ordered by the regional trial court. He would be compelled to face an open and public trial. He will be constrained to seek the assistance of counsel and incur other expenses of litigation. The public eye would be directed at him with all the concomitant intrusions to his right to privacy. Where the liberty of a person is at risk, and extradition strikes at the very core of liberty, invocation of due process rights can never be too early.

QUISUMBING, J., concurring opinion;

As I concur in the result reached by the ponencia of Justice Melo, may I just add my modest observations.

The human rights of person, whether citizen or alien, and the rights of the accused guaranteed in our Constitution should take precedence over treaty rights claimed by a contracting state. Stated otherwise, the constitutionally mandated duties of our government to the individual deserve preferential consideration when they collide with its treaty obligations to the government of another state. This is so although we recognize treaties as a source of binding obligations under generally accepted principles of international law incorporated in our Constitution as part of the law of the land.

For this primordial reason, I vote to DENY the petition.

Moreover, considering that the Extradition Treaty between the USA and Philippines appears mute on the specific issue before us, the

Court — in the exercise of its judicial power to find and state what the 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.

There may, of course, be other charges against private respondent in the USA. But then they are, in my view, 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 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.

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 policy and objectives.

I see no reason why respondent Mark Jimenez, or other citizens not as controversial or talked about, should first be exposed to the indignity, expense, and anxiety of a public denunciation in court before he may be informed of what the contracting states in an extradition treaty have against him. There is no question that everything which respondent Jimenez now requests will be given to him during trial. Mr. Jimenez is only petitioning that, at this stage, he should be informed why he may be deported from 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 why he is denying respondent Jimenez's requests. In short, the reasons are:

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.

I respectfully submit that any apprehensions in the Court arising from a denial of the petition — "breach of an international obligation, rupture of states relations, forfeiture of confidence, national embarrassment, and a plethora of other equally undesirable consequences" — are more illusory than real. Our country is not denying the extradition of a person who must be extradited. Not one provision of the extradition treaty is violated. I cannot imagine the United States taking issue over what, to it, would be a minor concession, perhaps a slight delay, 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 the context of a treaty obligation, of rights expressly guaranteed by the Philippine Constitution.

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.

The right to be informed of charges which may lead to court proceedings and result in a deprivation of liberty is ordinarily routine. It is readily available to one against whom the state's coercive power has already been focused. I fail to see how 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 right or privilege may be granted. It is not the other way around.

The second reason alleging the need for secrecy and confidentiality is even less convincing. The explanation of petitioner is self-contradictory. On one hand, petitioner asserts that the United States Government requested the Philippine Government to prevent unauthorized disclosure of certain information. On the other hand, petitioner declares that the United States has already secured orders from concerned District Courts authorizing the disclosure of the same grand jury information to the Philippine Government and its law enforcement personnel.

Official permission has been given. The United States has no cause to complain about the disclosure of information furnished to the Philippines.

Moreover, how can grand jury information and documents be considered confidential if they are going to be introduced as evidence in adversely proceedings before a trial court? The only issue is whether or not Mr. Jimenez should be 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 States believed in a total non-divulging of information prior to court hearings, they would have so provided in the extradition treaty. A positive provision making certain rights unavailable cannot be implied from silence.

I cannot believe that the United States and the Philippines with identical constitutional provisions on due process and basic rights should sustain such a myopic view in a situation where the grant of a right would not result in any serious setbacks to criminal law enforcement.

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 when in America, the issue of whether or not the prospective extraditee truly is the person charged in the United States becomes a valid question. It is not only identity of the person which is involved. The crimes must also be unmistakably identified and their essential elements clearly stated.

There are other preliminary matters in which respondent is interested. I see nothing in our laws or in the Treaty which prohibits the prospective extraditee from knowing until after the start of trial whether or not the extradition treaty applies to him.

Paraphrasing Hasmin vs. Boncan, 71 Phil. 216; Trocio vs. Manta, 118 SCRA 241 (1941); and Salonga vs. Hon. Paño, 134 SCRA 438 (1985), the purpose of a preliminary evaluation is to secure an innocent person against hasty, faulty and, therefore, oppressive proceedings; to protect him from an open and extensively publicized accusation of crimes; to spare him the trouble, expense, and anxiety of a public trial; and also to protect the state from useless and expensive trails. Even if the 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 with ordinary crimes in the Philippines.

The third reason given by petitioner is the avoidance of delay. Petitioner views the request to be informed as part of undesirable delaying tactics. This is most unfortunate. Any request for extradition must be viewed objectively and impartially without any predisposition to granting it and, therefore, hastening the extradition process.

In the first place, any assistance which the evaluating official may get from the participation of respondent may well point out deficiencies and insufficiencies in the extradition documents. It would incur greater delays if these are discovered only during 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 shortcoming, there would be no delays during trial. An unnecessary trial with all its complications would be avoided.

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. 1âwphi1.nêt

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.

A brief review of the history of extradition law will illumine our labor. Possibly the most authoritative commentator on extradition today, M. Cherif Bassiouni, divides the history of extradition into four (4) periods: "(1) ancient times to seventeenth century — a period revealing almost exclusive concern for political and religious offenders; (2) the eighteenth century and half of the nineteenth century — a period of treaty-making chiefly concerned with military offenders characterizing the condition of Europe during that period; (3) from 1833 to 1948 — a period of collective concern in suppressing common criminality; and (4) post-1948 developments which ushered in a greater concern for protecting the human rights of persons and revealed an awareness of the need to have international due process of law regulate international relations."2

It is also rewarding to have a good grip on the changing slopes in the landscape of extradition during these different periods. Extradition was first practiced by the Egyptians, Chinese, Chaldeans and Assyro-Babylonians but their basis for allowing extradition was unclear. Sometimes, it was granted due to pacts; at other times, due to plain good will.3 The classical commentators on international law thus focused their early views on the nature of the dutyto surrender an extraditee — whether the duty is legal or moral in character. Grotius and de Vattel led the school of thought that international law imposed a legal duty called civitas maxima to extradite criminals.4 In sharp contrast, Puffendorf and Billot led the school of thought that the so-called duty was but an "imperfect obligationwhich could become enforceable only by a contract or agreement between states.5

Modern nations tilted towards the view of Puffendorf and Billot that under international law there is no duty to extradite

in the absence of treaty, whether bilateral or multilateral. 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 the subject of international law. The 20th century saw the dramatic rise and fall of different types and hues of authoritarianism — the fascism of Italy's Mussolini and Germany's Hitler, the militarism of Japan's Hirohito and the communism of Russia's Stalin, etc. The sinking of these isms led to the elevation of the rights of the individual against the state. Indeed, some species of human rights have already been accorded universal recognition.7 Today, the drive to internationalize rights of women and children is also on high gear.8 The higher rating given to human rights in the hierarchy of values necessarily led to the re-examination of rightful place of the individual in international law. Given the harshest eye is the moss-covered doctrine that international law deals only with States and that individuals are not its subject. For its 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 fugitive is a mere object and not a subject of international law, he is bereft of rights. An extraditee, so it was held, is a mere "object transported from one state to the other as an exercise of the sovereign will of the two states involved."9 The re-examination consigned this pernicious doctrine to the museum of ideas.10 The new thinkers of international law then gave a significant shape to the role and rights of the individual in state-concluded treaties and other international agreements. So it was declared by then US Ambassador Philip C. Jessup in audible italics: "A very large part of international affairs and, thus, of the process of international accommodation, concerns the relations between legal persons known as states. This is necessarily so. But it is no longer novel for the particular interest of the human being to break through the mass of interstate relationship."11 The clarion call to re-engineer a new world order whose dominant interest would transcend the parochial confines of national states was not unheeded. Among the world class scholars who joined the search for the elusive ideological underpinnings of a new world order were Yale 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.

These are some of the dominant policy considerations in international law that the Court must balance against the claim of the private respondent that he has a right to be given the extradition documents against him and to comment thereon even while they are still at the evaluation stage by the petitioner Secretary of Justice, an alter ego of the President. The delicate questions of what constitutional rights and to what degree they can be claimed by an extraditee do not admit of easy answers and have resulted in discrete approaches the world over.15 On one end of the pole is the more liberal European approach. The European Court of Human Rights embraces the view that an extraditee is entitled to the benefit of all relevant provisions of the European Convention for the Protection of Human Rights and Fundamental Freedoms. It has held that ". . . in so far as a measure of the extradition has consequences adversely affecting the enjoyment of a convention right, it may, assuming that the consequences are not too remote, attract the obligations of a Contracting State under the relevant convention guarantee."16 At the other end of the pole is the more cautious approach of the various Courts of Appeal in the United States. These courts have been more conservative in light of the principle of separation of powers and their faith in the presumptive validity of executive decisions. By and large, they adhere to the rule of non-inquiry under which theextraditing court refuses to examine the requesting country's criminal justice system or consider

allegations that the extraditee will be mistreated or denied a fair trial in that country.17

The case at bar, I respectfully submit, does not involve an irreconcilable conflict between the RP-US Extradition Treaty and our Constitution where we have to choose one over the other. Rather, it calls for a harmonizationbetween said treaty and our Constitution. To achieve this desirable objective, the Court should consider whether the constitutional rights invoked by the private respondent have truly been violated and even assuming so, whether he will be denied fundamental fairness. It is only when their violation will destroy the respondent's right to fundamental fairness that his constitutional claims should be given primacy.

Given this balancing approach, it is my humble submission that considering all the facts and facets of the case, the private respondent has not proved entitlement to the right he is claiming. The majority holds that the Constitution, the RP-US extradition and P.D. No. 1069 do not prohibit respondent's claims, hence, it should be allowed. This is too simplistic an approach. Rights do not necessarily arise from a vacuum. Silence of the law can even mean an implied denial of a right. Also, constitutional litigations do not always involve a clear cut choice between right and wrong. Sometimes, they involve a difficult choice between right against right. In these situations, there is need to balance the contending rights and primacy is given to the right that will serve the interest of the nation at that particular time. In such instances, the less compelling right is subjected to soft restraint but without smothering its essence. Proceeding from this premise of relativism of rights, I venture the view that even assuming arguendorespondent's weak claim, still, the degree of denial of private respondent's rights to due process and to information is too slight to warrant the interposition of judicial power. As admitted in the ponencia itself, an extradition proceeding is sui generis. It is, thus, futile to determine what it is. What is certain is that it is not a criminal proceeding where there is an accused who claim the entire array of rights guaranteed by the Bill of Rights. Let it be stressed that in an extradition proceeding, there is no accused and the guilt or innocence of the extraditee will not be passed upon by our executive officials nor by the extradition judge. Hence, constitutional rights that are only relevant do determine the guilt or innocence of an accused cannot be invoked by an extraditee. Indeed, an extradition proceeding is summary in nature which is untrue of criminal proceedings.18 Even the rules of evidence are different in an extradition proceeding. Admission of evidence is less stringent, again because the guilt

of the 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 extradited "upon showing of the existed of a prima faciecase."21 If more need be said, the nature of an extradition decision is different from a judicial decision whose finality cannot be changed by executive fiat. Our courts22 may hold an individual extraditable but the ultimate decision to extradite the individual lies in the hands of the Executive. Section 3, Article 3 of the RP-US Extradition Treaty specifically provides that "extradition shall not be granted if the executive authority of the Requested State determined that the request was politically motivated, or that the offense is a military offense which is not punishable under non-military penal legislation." In the United States, the Secretary of State exercises this ultimate power and is conceded considerable discretion. He balances the equities of the case and the demands of the nation's foreign relations.23 In sum, he is not straitjacketed by strict legal considerations like an ordinary court.

The type of issue litigated in extradition proceedings which does not touch on the guilt or innocence of the extraditee, the limited nature of the extradition proceeding, the availability of adequate remedies in favor of the extraditee, and the traditional leeway given to the Executive in the conduct of foreign affairs have compelled courts to put a high threshold before considering claims of individuals that enforcement of an extradition treaty will violate their constitutional rights. Exemplifying such approach is the Supreme Court of Canada which has adopted ahighly deferential standard that emphasizes international comity and the executive's experience in international matters.24 It continues to deny Canada's charter protection to extraditees unless the violation can be considered shocking to the conscience.

In the case, at bar and with due respect, the ponencia inflates with too much significance the threat to liberty of the private respondent to prop us its thesis that his constitutional rights to due process and access to information must immediately be vindicated. Allegedly, respondent Jimenez stands in danger of provisional arrest, hence, the need for him to be immediately furnished copies of documents accompanying the request for his extradition.Respondent's fear of provisional arrest is not real. It is a self-imagined fear for the realities on the ground show that the United States authorities have not manifested any desire to request for his arrest. On the contrary, they filed the extradition request through the regular channel and, even with the pendency of the case at bar, they have not moved for respondent's arrest on the ground of probable delay in the proceedings. To be sure, the issue of whether respondent Jimenez will be provisionally arrested is now

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:

PROVISIONAL ARREST

1. In case of urgency, a Contracting Party may request the provisional arrest of the person sought pending presentation of the request for extradition. A request for provisional arrest may be transmitted through the diplomatic channel or directly between the Philippine Department of Justice and the United States Department of Justice.

2. The application for provisional arrest shall contain:

a) a description of the person sought;

b) the location of the person sought, if known;

c) a brief statements of the facts of the case, including, if possible, the time and location of the offense;

d) a description of the laws violated;

e) a statement of the existence of a warrant of a warrant of arrest or finding of guilt or judgment of conviction against the person sought; and

f) a statement that a request for extradition for the person sought will follow.

3. The Requesting State shall be notified without delay of the disposition of its application and the reasons for any denial.

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.

In relation to the above, Section 20 of P.D. No. 1069 provides:

Sec. 20. Provisional Arrest. — (a) In case of urgency, the requesting state may, pursuant to the relevant treaty or convention and while the same remains in force, request for the provisional arrest of the accused, pending receipt of the request for extradition made in accordance with Section 4 of this Decree.

(b) A request for provisional arrest shall be sent to the Director of the National Bureau of Investigation, Manila, either through the diplomatic channels or direct by post or telegraph.

(c) The Director of the National Bureau of Investigation or any official acting on his behalf shall upon receipt of the request immediately secure a warrant for the provisional arrest of the accused from the presiding judge of the Court of First Instance of the province or city having jurisdiction of the place, who shall issue the warrant for the provisional arrest of the accused. The Director of the National Bureau of Investigation through the Secretary of Foreign Affairs shall inform the requesting state of the result of its request.

(d) If within a period of 20 days after the provisional arrest, the Secretary of Foreign Affairs has not received the request for extradition and the documents mentioned in Section 4 of this Decree, the accused shall be released from custody.

The due process protection of the private-respondent against arbitrary arrest is written in cyrillic letters in these two (2) related provisions. It is self-evident under these provisions that a request for provisional arrest does not mean it will be granted ipso facto. The request must comply with certain requirements. It must be based on an "urgent" factor. This is subject to verification and evaluation by our executive authorities. The request can be denied if not based on a real exigency of if the supporting documents are insufficient. The

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 Constitution which provides that "no . . . warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the . . . persons or things to be seized." The message that leaps to the eye is that compliance with this requirements precludes any arbitrary arrest.

In light of all these considerations, I respectfully submit that denying respondent's constitutional claim to be furnished all documents relating to the request for his extradition by the US authorities during their evaluation stage will not subvert his right to fundamental fairness. It should be stressed that this is not a case where the respondent will not be given an opportunity to know the basis of the request for his extradition. In truth, and contrary to the impression of the majority, P.D. No. 1069 fixes the specific time when he will be given the papers constituting the basis for his extradition. The time is when he is summoned by the extradition court and required to answer the petition for extradition. Thus, Section 6 of P.D. No. 1069 provides:

Sec. 6. Issuance of Summons; Temporary Arrest; Hearing, Service of Notices. — (1) Immediately upon receipt of the petition, the presiding judge of the court shall, as soon as practicable, summon the accused to appear and to answer the petition on the day and hour fixed in the order. He may issue a warrant for the immediate arrest of the accused which may be served anywhere within the Philippines if it appears to the presiding judge that the immediate arrest and temporary detention of the accused will best serve the ends of justice. Upon receipt of the answer within the time fixed, the presiding judge shall hear the case or set another date for the hearing thereof.

(2) The order and notice as well as a copy of the warrant of arrest, if issued, shall be promptly served each upon the accused and the attorney having charge of the case.

Upon receipt of the summons and the petition, respondent is free to foist all defense available to him. Such an opportunity does not deny him fairness which is the essence of due process of law.

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 forward-looking 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:

No person shall be deprived of life, liberty or property without due process of law.

He claims that this right arises immediately, because of the possibility that he may be provisionally arrested pursuant to Article 9 of the RP-US Treaty, which reads:

In case of urgency, a Contracting Party may request the provisional arrest of the person sought pending presentation of the request for extradition. A request for provisional arrest may be transmitted through the diplomatic channel or directly between the Philippine Department of Justice and the United States Department of Justice.

x x x           x x x           x x x

Justice Melo's ponencia supports private respondent's contention. It states that there are two occasions wherein the prospective extraditee may be deprived of liberty: (1) in case of a provisional arrest pending the submission of the extradition request and (2) his temporary arrest during the pendency of the extradition petition in court.4 The second instance is not in issue here, because no petition has yet been filed in court.

However, the above-quoted Article 9 on provisional arrest is not automatically operative at all times, and in enforcement does not depend solely on the discretion of the requested state. From the wordings of the provision itself, there are at least three requisites: (1) there must be an urgency, and (2) there is a corresponding request (3) which must be made 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

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

Under the outlined facts of this case, there is no open door for the application of Article 9, contrary to the apprehension of private respondent. In other words, there is no actual danger that Jimenez will be provisionally arrested or deprived of his liberty. There is as yet no threat that his rights would be trampled upon, pending the filing in court of the petition for his extradition. Hence, there is no substantial gain to be achieved in requiring the foreign affairs (or justice) secretary to notify and hear him during the preliminary stage, which basically involves only the exercise of the ministerial power of checking the sufficiency of the documents attached to the extradition request.

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 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, not the executive authority, to determine whether there is sufficient evidence to establish probable cause that the extraditee committed the crimes charged.8 The sufficiency of the evidence of criminality is to be determined based on the laws of the requested state.9 Private Respondent Jimenez will, therefore, definitely have his full opportunity before the court, in case an extradition petition will indeed be filed, to be heard on all issues including the sufficiency of the documents supporting the extradition request.10

Private respondent insists that the United States may still request his provisional arrest at any time. That is purely speculative. It is elementary that this Court does not declare judgments or grant reliefs based on speculations, surmises or conjectures.

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. 1âwphi1.nêt

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 PhilippinesSUPREME 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.

D E C I S I O N

PUNO J.:

This is a petition for mandamus filed by petitioners to compel the Office of the Executive Secretary and the Department of Foreign Affairs to transmit the signed copy of the Rome Statute of the International Criminal Court to the Senate of the Philippines for its concurrence in accordance with Section 21, Article VII of the 1987 Constitution.

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,

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.

It is the theory of the petitioners that ratification of a treaty, under both domestic law and international law, is a function of the Senate. Hence, it is the duty of the executive department to transmit the signed copy of the Rome Statute to the Senate to allow it to exercise its discretion with respect to ratification of treaties. Moreover, petitioners submit that the Philippines has a ministerial duty to ratify the Rome Statute under treaty law and customary international law. Petitioners invoke the Vienna Convention on the Law of Treaties enjoining the states to refrain from acts which would defeat the object and purpose of a treaty when they have signed the treaty prior to ratification unless they have made their intention clear not to become parties to the treaty.5

The Office of the Solicitor General, commenting for the respondents, questioned the standing of the petitioners to file the instant suit. It also contended that the petition at bar violates the rule on hierarchy of courts. On the substantive issue raised by petitioners, respondents argue that the executive department has no duty to transmit the Rome Statute to the Senate for concurrence.

A petition for mandamus may be filed when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station.6 We have held that to be given due course, a petition for mandamus must have been instituted by a party aggrieved by the alleged inaction of any tribunal, corporation, board or person which unlawfully excludes said party from the enjoyment of a legal right. The petitioner in every case must therefore be an aggrieved party in the sense that he possesses a clear legal right to be enforced and a direct interest in the duty or act to be performed.7 The Court will exercise its power of judicial review only if the case is

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 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 dedicated to the Philippine ratification of the Rome Statute; the Task Force Detainees of the Philippines, a juridical entity with the avowed purpose of promoting the cause of human rights and human rights victims in the country; the Families of Victims of Involuntary Disappearances, a juridical entity duly organized and existing pursuant to Philippine Laws with the avowed purpose of promoting the cause of families and victims of human rights violations in the country; Bianca Hacintha Roque and Harrison Jacob Roque, aged two (2) and one (1), respectively, at the time of filing of the instant petition, and suing under the doctrine of inter-generational rights enunciated in the case of Oposa vs. Factoran, Jr.;9 and a group of fifth year working law students from the University of the Philippines College of Law who are suing as taxpayers.

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 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 they will be deprived of their remedies for the protection and enforcement of their rights does not persuade. The Rome Statute is intended to complement national criminal laws and courts. Sufficient remedies are available under our national laws to protect our citizens against human rights violations and petitioners can always seek redress for any abuse in our domestic courts.

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.

We now go to the substantive issue.

The core issue in this petition for mandamus is whether the Executive Secretary and the Department of Foreign Affairs have a ministerial duty to transmit to the Senate the copy of the Rome Statute signed by a member of the Philippine Mission to the United Nations even without the signature of the President.

We rule in the negative.

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 country’s sole representative with foreign nations.12 As the chief architect of foreign policy, the President acts as the country’s 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

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:

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.

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 concurrence of the legislature in the treaties entered into by the President, the Constitution ensures a healthy system of checks and balance necessary in the nation’s pursuit of political maturity and growth.15

In filing this petition, the petitioners interpret Section 21, Article VII of the 1987 Constitution to mean that the power to ratify treaties belongs to the Senate.

We disagree.

Justice Isagani Cruz, in his book on International Law, describes the treaty-making process in this wise:

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

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.

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.

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.

x x x

The last step in the treaty-making process is the exchange of the instruments of ratification, which usually also signifies the effectivity of the treaty unless a different date has been agreed upon by the parties. Where ratification is dispensed with and no effectivity clause is embodied in the treaty, the instrument is deemed effective upon its signature.16 [emphasis supplied]

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 state’s 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:

Sec. 7. Domestic Requirements for the Entry into Force of a Treaty or an Executive Agreement. — The domestic requirements for the entry into force of a treaty or an executive agreement, or any amendment thereto, shall be as follows:

A. Executive Agreements.

i. All executive agreements shall be transmitted to the Department of Foreign Affairs after their signing for the preparation of the ratification papers. The transmittal shall include the highlights of the agreements and the benefits which will accrue to the Philippines arising from them.

ii. The Department of Foreign Affairs, pursuant to the endorsement by the concerned agency, shall transmit the agreements to the President of the Philippines for his ratification. The original signed instrument of ratification shall then be returned to the Department of Foreign Affairs for appropriate action.

B. Treaties.

i. All treaties, regardless of their designation, shall comply with the requirements provided in sub-paragraph[s] 1 and 2, item A (Executive Agreements) of this Section. In addition, the Department of Foreign Affairs shall submit the treaties to the Senate of the Philippines for concurrence in the ratification by the President. A certified true copy of the treaties, in such numbers as may be required by the Senate, together with a certified true copy of the ratification instrument, shall accompany the submission of the treaties to the Senate.

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.

Petitioners’ submission that the Philippines is bound under treaty law and international law to ratify the treaty which it has signed is without basis. The signature does not signify the final consent of the state to the treaty. It is the ratification that binds the state to the provisions thereof. In fact, the Rome Statute itself requires that the signature of the representatives of the 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 ratifying a treaty signed in its behalf, a state expresses its willingness to be bound by the provisions of such treaty. After the treaty is signed by the state’s representative, the President, being accountable to the people, is burdened with the 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 even after the signing of the treaty by the Philippine representative whether or not to ratify the same. The Vienna Convention on the Law of Treaties does not contemplate to defeat or even restrain this power of the head of states. If that were so, the requirement of ratification of treaties would be pointless and futile. It has been held that a state has no legal or even moral duty to ratify a treaty which has been signed by its plenipotentiaries.18 There is no legal obligation to ratify a treaty, but it goes without saying that the refusal must be based on substantial grounds and not on superficial or whimsical reasons. Otherwise, the other state would be justified in taking offense.19

It should be emphasized that under our Constitution, the power to ratify is vested in the President, subject to the concurrence of the Senate. The role of the Senate, however, is limited only to giving or withholding its consent, or concurrence, to the ratification.20 Hence, it is within the authority of the President to refuse to submit a treaty to the Senate or, having secured its consent for its ratification, refuse to ratify it.21 Although the refusal of a state to ratify a treaty which has been signed in its behalf is a serious step that should not be taken lightly,22 such decision is within the competence of the President alone, which cannot be encroached by this Court via a writ ofmandamus. This Court has no jurisdiction over actions seeking to enjoin the President in the performance of his official duties.23 The Court, therefore, cannot issue the writ of mandamus prayed for by the petitioners as it is beyond its jurisdiction to compel the executive

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

IN VIEW WHEREOF, the petition is DISMISSED.

SO ORDERED.

REYNATO S. PUNO

Associate Justice