SANIDAD vs.

COMELEC

FACTS: On September 2, 1976, President Ferdinand E. Marcos issued Presidential Decree No. 991
calling for a national referendum on October 16, 1976 for the Citizens Assemblies ("barangays") to
resolve, among other things, the issues of martial law, the assembly, its replacement, the powers of
such replacement, the period of its existence, the length of the period for tile exercise by the President
of his present powers. P.D. 1031 was thereafter issued amending P.D. 991 by declaring the provisions
of P.D. 229 providing for the manner of canvass of votes in barangays applicable to the national
referendum-plebiscite of October 16, 1976. On the same date, P.D. 1031 was issued stating the
questions to be submitted to the people in the referendum-plebiscite.

On September 27, 1976, Pablo and Pablito Sanidad commenced action for Prohibition with Preliminary
injunction seeking to enjoin the COMELEC from holding and conducting the referendum-plebiscite; to
declare without force and effect P.D. 991 and 1033, insofar as they propose amendments to the, and
P.D. 1031, insofar as it directs the COMELEC to supervise, control, hold and conduct the referendum-
plebiscite.

Petitioners contend that under the 1935 and 1973 Constitutions there is no grant to the incumbent
President to exercise the constituent power to propose amendments to the new Constitution. As a
consequence, the Referendum-Plebiscite on October 16 has no constitutional or legal basis.

The Solicitor General principally maintains that petitioners have no standing to sue; the issue raised is
political in nature, beyond judicial cognizance of this Court; at this state of the transition period, only
the incumbent President has the authority to exercise constituent power; the referendum-plebiscite
is a step towards normalization.

Another action for Prohibition and Preliminary Injunction was instituted by Vicente Guzman asserting
that the power to propose amendments to, or revision of the Constitution during the transition period
is expressly conferred on the interim National Assembly under Section 16, Article XVII of the
Constitution.

Still, another petition was instituted by Raul Gonzalez 44714, to restrain the implementation of
Presidential Decrees relative to the forthcoming Referendum-Plebiscite. They argue that even
granting him legislative powers under Martial Law, the incumbent President cannot act as a
constituent assembly to propose amendments to the Constitution; a referendum-plebiscite is
untenable under the Constitutions of 1935 and 1973; the submission of the proposed amendments in
such a short period of time for deliberation renders the plebiscite a nullity; to lift Martial Law, the
President need not consult the people via referendum; and allowing 15-.year olds to vote would
amount to an amendment of the Constitution, which confines the right of suffrage to those citizens of
the Philippines 18 years of age and above.

ISSUE:

1. Whether or not petitioners have Locus Standi.

2. Whether or not the matter is justiciable.

HELD:

1. Yes. Petitioners have Locus Standi.

The valid source of a stature Presidential Decrees are of such nature-may be contested by one
who will sustain a direct injuries as a in result of its enforcement. At the instance of taxpayers,
 laws providing for the disbursement of public funds may be enjoined, upon the theory that
the expenditure of public funds by an officer of the State for the purpose of executing an
unconstitutional act constitutes a misapplication of such funds.

The breadth of Presidential Decree No. 991 carries all appropriation of Five Million Pesos for
the effective implementation of its purposes. 5 Presidential Decree No. 1031 appropriates the
sum of Eight Million Pesos to carry out its provisions. 6 The interest of the aforenamed
petitioners as taxpayers in the lawful expenditure of these amounts of public money
sufficiently clothes them with that personality to litigate the validity of the Decrees
appropriating said funds. Moreover, as regards taxpayer's suits, this Court enjoys that open
discretion to entertain the same or not.

2. Yes. The question lies within the domain of judicial review and not a political one.

The amending process both as to proposal and ratification, raises a judicial question. This is
especially true in cases where the power of the Presidency to initiate the of normally exercised
by the legislature, is seriously doubted.

The power to propose amendments to the constitution resides in the interim National
Assembly in the period of transition. After that period, and the regular National Assembly in
its active session, the power to propose amendments becomes ipso facto the prerogative of
the regular National Assembly. The normal course has not been followed. Rather than calling
the National Assembly to constitute itself into a constituent assembly the incumbent
President undertook the proposal of amendments and submitted the proposed amendments
thru Presidential Decree 1033 to the people in a Referendum-Plebiscite on October 16.
Unavoidably, the regularity regularity of the procedure for amendments, written in lambent
words in the very Constitution sought to be amended, raises a contestable issue. The
implementing Presidential Decree Nos. 991, 1031, and 1033, which commonly purport to have
the force and effect of legislation are assailed as invalid, thus the issue of the validity of said
Decrees is plainly a justiciable one, within the competence of this Court to pass upon. Section
2 (2), Article X of the new Constitution provides: "All cases involving the constitutionality of a
treaty, executive agreement, or law may shall be heard and decided by the Supreme Court en
banc and no treaty, executive agreement, or law may be declared unconstitutional without
the concurrence of at least ten Members.

The Supreme Court has the last word in the construction not only of treaties and statutes, but
also of the Constitution itself The amending, like all other powers organized in the
Constitution, is in form a delegated and hence a limited power, so that the Supreme Court is
vested with that authorities to determine whether that power has been discharged within its
limits.

Political questions are neatly associated with the wisdom, of the legality of a particular act.
Where the vortex of the controversy refers to the legality or validity of the contested act, that
matter is definitely justiciable or non-political. What is in the heels of the Court is not the
wisdom of the act of the incumbent President in proposing amendments to the Constitution,
but his constitutional authority to perform such act or to assume the power of a constituent
assembly. Whether the amending process confers on the President that power to propose
amendments is therefore a downright justiciable question. Should the contrary be found, the
actuation of the President would merely be a brutum fulmen. If the Constitution provides how
it may be amended, the judiciary as the interpreter of that Constitution, can declare whether
the procedure followed or the authority assumed was valid or not.

Is it not that the people themselves, by their sovereign act, provided for the authority and
procedure for the amending process when they ratified the present Constitution in 1973?
Whether, therefore, the constitutional provision has been followed or not is the proper
subject of inquiry, not by the people themselves of course who exercise no power of judicial
but by the Supreme Court in whom the people themselves vested that power, a power which
includes the competence to determine whether the constitutional norms for amendments
have been observed or not. And, this inquiry must be done a prior not a posterior i.e., before
the submission to and ratification by the people.
MANILA PRINCE HOTEL vs. GSIS

FACTS: The controversy arose when respondent Government Service Insurance System (GSIS),
pursuant to the privatization program of the Philippine Government, decided to sell through public
bidding 30% to 51% of the issued and outstanding shares of respondent Manila Hotel Corporation
(MHC). The winning bidder, or the eventual “strategic partner,” will provide management expertise
or an international marketing/reservation system, and financial support to strengthen the profitability
and performance of the Manila Hotel.

In a close bidding held on 18 September 1995 only two (2) bidders participated: petitioner Manila
Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or 15,300,000
shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel
operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid of
petitioner. Prior to the declaration of Renong Berhard as the winning bidder, petitioner Manila Prince
Hotel matched the bid price and sent a manager’s check as bid security, which GSIS refused to accept.

Apprehensive that GSIS has disregarded the tender of the matching bid and that the sale may be
consummated with Renong Berhad, petitioner filed a petition before the Court.

ISSUES:

1. Whether or not Sec. 10, second par., Art. XII, of the 1987 Constitution is a self-executing
provision.
2. Whether or not the Manila Hotel forms part of the national patrimony.
3. Whether or not the submission of matching bid is premature
4. Whether or not there was grave abuse of discretion on the part of the respondents in refusing
the matching bid of the petitioner.

HELD: In the resolution of the case, the Court held that:

It is a self-executing provision.

Since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed
written in every statute and contract. A provision which lays down a general principle, such as those
found in Art. II of the 1987 Constitution, is usually not self-executing. But a provision which is complete
in itself and becomes operative without the aid of supplementary or enabling legislation, or that which
supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is self-
executing.

A constitutional provision is self-executing if the nature and extent of the right conferred and the
liability imposed are fixed by the constitution itself, so that they can be determined by an examination
and construction of its terms, and there is no language indicating that the subject is referred to the
legislature for action. Unless it is expressly provided that a legislative act is necessary to enforce a
constitutional mandate, the presumption now is that all provisions of the constitution are self-
executing. If the constitutional provisions are treated as requiring legislation instead of self-executing,
the legislature would have the power to ignore and practically nullify the mandate of the fundamental
law.

10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete
in itself and which needs no further guidelines or implementing laws or rules for its enforcement. From
its very words the provision does not require any legislation to put it in operation. It is per se judicially
enforceable. When our Constitution mandates that in the grant of rights, privileges, and concessions
covering national economy and patrimony, the State shall give preference to qualified Filipinos, it
means just that – qualified Filipinos shall be preferred. And when our Constitution declares that a right
exists in certain specified circumstances an action may be maintained to enforce such right
notwithstanding the absence of any legislation on the subject; consequently, if there is no statute
especially enacted to enforce such constitutional right, such right enforces itself by its own inherent
potency and puissance, and from which all legislations must take their bearings. Where there is a right
there is a remedy. Ubi jus ibi remedium.

The Court agree.

In its plain and ordinary meaning, the term patrimony pertains to heritage. When the Constitution
speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the
Constitution could have very well used the term natural resources, but also to the cultural heritage of
the Filipinos.

It also refers to Filipino’s intelligence in arts, sciences and letters. In the present case, Manila Hotel
has become a landmark, a living testimonial of Philippine heritage. While it was restrictively an
American hotel when it first opened in 1912, a concourse for the elite, it has since then become the
venue of various significant events which have shaped Philippine history.

Verily, Manila Hotel has become part of our national economy and patrimony. For sure, 51% of the
equity of the MHC comes within the purview of the constitutional shelter for it comprises the majority
and controlling stock, so that anyone who acquires or owns the 51% will have actual control and
management of the hotel. In this instance, 51% of the MHC cannot be disassociated from the hotel
and the land on which the hotel edifice stands.

It is not premature.

In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the
grant of rights, privileges and concessions covering the national economy and patrimony, thereby
exceeding the bid of a Filipino, there is no question that the Filipino will have to be allowed to match
the bid of the foreign entity. And if the Filipino matches the bid of a foreign firm the award should go
to the Filipino. It must be so if the Court is to give life and meaning to the Filipino First Policy provision
of the 1987 Constitution. For, while this may neither be expressly stated nor contemplated in the
bidding rules, the constitutional fiat is omnipresent to be simply disregarded. To ignore it would be to
sanction a perilous skirting of the basic law.

The Court does not discount the apprehension that this policy may discourage foreign investors. But
the Constitution and laws of the Philippines are understood to be always open to public scrutiny. These
are given factors which investors must consider when venturing into business in a foreign jurisdiction.
Any person therefore desiring to do business in the Philippines or with any of its agencies or
instrumentalities is presumed to know his rights and obligations under the Constitution and the laws
of the forum.

There was grave abuse of discretion.

To insist on selling the Manila Hotel to foreigners when there is a Filipino group willing to match the
bid of the foreign group is to insist that government be treated as any other ordinary market player,
and bound by its mistakes or gross errors of judgement, regardless of the consequences to the Filipino
people. The miscomprehension of the Constitution is regrettable. Thus, the Court would rather
remedy the indiscretion while there is still an opportunity to do so than let the government develop
the habit of forgetting that the Constitution lays down the basic conditions and parameters for its
actions.

Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the
bidding rules, respondent GSIS is left with no alternative but to award to petitioner the block of shares
of MHC and to execute the necessary agreements and documents to effect the sale in accordance not
only with the bidding guidelines and procedures but with the Constitution as well. The refusal of
respondent GSIS to execute the corresponding documents with petitioner as provided in the bidding
rules after the latter has matched the bid of the Malaysian firm clearly constitutes grave abuse of
discretion.

Hence, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION,

COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are
directed to CEASE and DESIST from selling 51% of the shares of the Manila Hotel Corporation to
RENONG BERHAD, and to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL
CORPORATION to purchase the subject 51% of the shares of the Manila Hotel Corporation at P44.00
per share and thereafter to execute the necessary agreements and documents to effect the sale, to
issue the necessary clearances and to do such other acts and deeds as may be necessary for the
purpose.
PAMATONG vs COMELEC

FACTS: Petitioner Pamatong filed his Certificate of Candidacy (COC) for President. Respondent
COMELEC declared petitioner and 35 others as nuisance candidates who could not wage a nationwide
campaign and/or are not nominated by a political party or are not supported by a registered political
party with a national constituency.

Pamatong filed a Petition For Writ of Certiorari with the Supreme Court claiming that the COMELEC
violated his right to "equal access to opportunities for public service" under Section 26, Article II of
the 1987 Constitution, by limiting the number of qualified candidates only to those who can afford to
wage a nationwide campaign and/or are nominated by political parties. The COMELEC supposedly
erred in disqualifying him since he is the most qualified among all the presidential candidates, i.e., he
possesses all the constitutional and legal qualifications for the office of the president, he is capable of
waging a national campaign since he has numerous national organizations under his leadership, he
also has the capacity to wage an international campaign since he has practiced law in other countries,
and he has a platform of government.

ISSUES: Is there a Constitutional Right to run for or hold public office?

HELD: No. What is recognized in Section 26, Article II of the Constitution is merely a privilege subject
to limitations imposed by law. It neither bestows such a right nor elevates the privilege to the level of
an enforceable right. There is nothing in the plain language of the provision which suggests such a
thrust or justifies an interpretation of the sort.

The "equal access" provision is a subsumed part of Article II of the Constitution, entitled "Declaration
of Principles and State Policies." The provisions under the Article are generally considered not self-
executing, and there is no plausible reason for according a different treatment to the "equal access"
provision. Like the rest of the policies enumerated in Article II, the provision does not contain any
judicially enforceable constitutional right but merely specifies a guideline for legislative or executive
action. The disregard of the provision does not give rise to any cause of action before the courts.

Obviously, the provision is not intended to compel the State to enact positive measures that would
accommodate as many people as possible into public office. Moreover, the provision as written leaves
much to be desired if it is to be regarded as the source of positive rights. It is difficult to interpret the
clause as operative in the absence of legislation since its effective means and reach are not properly
defined. Broadly written, the myriad of claims that can be subsumed under this rubric appear to be
entirely open-ended. Words and phrases such as "equal access," "opportunities," and "public service"
are susceptible to countless interpretations owing to their inherent impreciseness. Certainly, it was
not the intention of the framers to inflict on the people an operative but amorphous foundation from
which innately unenforceable rights may be sourced.

The privilege of equal access to opportunities to public office may be subjected to limitations. Some
valid limitations specifically on the privilege to seek elective office are found in the provisions of the
Omnibus Election Code on "Nuisance Candidates.” As long as the limitations apply to everybody
equally without discrimination, however, the equal access clause is not violated. Equality is not
sacrificed as long as the burdens engendered by the limitations are meant to be borne by any one who
is minded to file a certificate of candidacy. In the case at bar, there is no showing that any person is
exempt from the limitations or the burdens which they create.

The rationale behind the prohibition against nuisance candidates and the disqualification of
candidates who have not evinced a bona fide intention to run for office is easy to divine. The State has
a compelling interest to ensure that its electoral exercises are rational, objective, and orderly. Towards
this end, the State takes into account the practical considerations in conducting elections. Inevitably,
the greater the number of candidates, the greater the opportunities for logistical confusion, not to
mention the increased allocation of time and resources in preparation for the election. The
organization of an election with bona fide candidates standing is onerous enough. To add into the mix
candidates with no serious intentions or capabilities to run a viable campaign would actually impair
the electoral process. This is not to mention the candidacies which are palpably ridiculous so as to
constitute a one-note joke. The poll body would be bogged by irrelevant minutiae covering every step
of the electoral process, most probably posed at the instance of these nuisance candidates. It would
be a senseless sacrifice on the part of the State.

The question of whether a candidate is a nuisance candidate or not is both legal and factual. The basis
of the factual determination is not before this Court. Thus, the remand of this case for the reception
of further evidence is in order. The SC remanded to the COMELEC for the reception of further
evidence, to determine the question on whether petitioner Elly Velez Lao Pamatong is a nuisance
candidate as contemplated in Section 69 of the Omnibus Election Code.

Obiter Dictum: One of Pamatong's contentions was that he was an international lawyer and is thus
more qualified compared to the likes of Erap, who was only a high school dropout. Under the
Constitution (Article VII, Section 2), the only requirements are the following: (1) natural-born citizen
of the Philippines; (2) registered voter; (3) able to read and write; (4) at least forty years of age on the
day of the election; and (5) resident of the Philippines for at least ten years immediately preceding
such election.
MAGALLONA vs ERMITA

FACTS: In 1961, Congress passed R.A. 3046 demarcating the maritime baselines of the Philippines as
an Archepelagic State pursuant to UNCLOS I of 9158, codifying the sovereignty of State parties over
their territorial sea. Then in 1968, it was amended by R.A. 5446, correcting some errors in R.A. 3046
reserving the drawing of baselines around Sabah.

In 2009, it was again amended by R.A. 9522, to be compliant with the UNCLOS III of 1984. The
requirements complied with are: to shorten one baseline, to optimize the location of some basepoints
and classify KIG and Scarborough Shoal as ‘regime of islands’.

Petitioner now assails the constitutionality of the law for three main reasons:

1. it reduces the Philippine maritime territory under Article 1;

2. it opens the country’s waters to innocent and sea lanes passages hence undermining our
sovereignty and security; and
3. treating KIG and Scarborough as ‘regime of islands’ would weaken our claim over those
territories.

ISSUES: Whether R.A. 9522 is constitutional?

HELD:

1. UNCLOS III has nothing to do with acquisition or loss of territory. it is just a codified norm that
regulates conduct of States. On the other hand, RA 9522 is a baseline law to mark out
basepoints along coasts, serving as geographic starting points to measure. it merely notices
the international community of the scope of our maritime space.
2. If passages is the issue, domestically, the legislature can enact legislation designating routes
within the archipelagic waters to regulate innocent and sea lanes passages. but in the absence
of such, international law norms operate.
the fact that for archipelagic states, their waters are subject to both passages does not place
them in lesser footing vis a vis continental coastal states. Moreover, RIOP is a customary
international law, no modern state can invoke its sovereignty to forbid such passage.

3. On the KIG issue, RA 9522 merely followed the basepoints mapped by RA 3046 and in fact, it
increased the Phils.’ total maritime space. Moreover, the itself commits the Phils.’ continues
claim of sovereignty and jurisdiction over KIG.

If not, it would be a breach to 2 provisions of the UNCLOS III:

Art. 47 (3): ‘drawing of basepoints shall not depart to any appreciable extent from the general
configuration of the archipelago’.

Art 47 (2): the length of baselines shall not exceed 100 mm.

KIG and SS are far from our baselines, if we draw to include them, we’ll breach the rules: that
it should follow the natural configuration of the archipelago.
PROVINCE OF NORTH COTABATO vs GOEVRNMENT OF THE REPUBLIC OF THE PHILIPPINES

FACTS: President Gloria Macapagal-Arroyo, in line with the government‘s policy of pursuing peace
negotiations with the Moro Islamic Liberation Front (MILF), asked Prime Minister Mahathir
Mohammad to convince the MILF to continue negotiating with the government. MILF, thereafter,
convened its Central Committee and decided to meet with the Government of the Republic of the
Philippines (GRP). Formal peace talks were held in Libya which resulted to the crafting of the GRP-
MILF Tripoli Agreement on Peace (Tripoli Agreement 2001) which consists of three (3) aspects: a.)
security aspect; b.) rehabilitation aspect; and c.) ancestral domain aspect. Various negotiations were
held which led to the finalization of the Memorandum of Agreement on the Ancestral Domain (MOA-
AD). The said memorandum was set to be signed last August 5, 2008. In its body, it grants ―the
authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the Bangsamoro to the
Bangsamoro Juridical Entity (BJE). The latter, in addition, has the freedom to enter into any economic
cooperation and trade relation with foreign countries. ―The sharing between the Central
Government and the BJE of total production pertaining to natural resources is to be 75:25 in favor of
the BJE. The MOA-AD further provides for the extent of the territory of the Bangsamoro. It describes
it as ―the land mass as well as the maritime, terrestrial, fluvial and alluvial domains, including the
aerial domain and the atmospheric space above it, embracing the Mindanao-Sulu-Palawan geographic
region. With regard to governance, on the other hand, a shared responsibility and authority between
the Central Government and BJE was provided. The relationship was described as ―associative. With
the formulation of the MOA-AD, petitioners aver that the negotiation and finalization of the MOA-AD
violates constitutional and statutory provisions on public consultation, as mandated by Executive
Order No. 3, and right to information. They further contend that it violates the Constitution and laws.
Hence, the filing of the petition.

ISSUES:

1. Whether or not the MOA-AD violates constitutional and statutory provisions on public
consultation and right to information
2. Whether or not the MOA-AD violates the Constitution and the laws.
HELD: The MOA-AD subject of the present cases is of public concern, involving as it does the
sovereignty and territorial integrity of the State, which directly affects the lives of the public at large.
Intended as a ―splendid symmetry to the right to information under the Bill of Rights is the policy of
public disclosure under Section 28, Article II of the Constitution which provides that subject to
reasonable conditions prescribed by law, the State adopts and implements a policy of full public
disclosure of all its transactions involving public interest. Moreover, the policy of full public disclosure
enunciated in above-quoted Section 28 complements the right of access to information on matters of
public concern found in the Bill of Rights. The right to information guarantees the right of the people
to demand information, while Section 28 recognizes the duty of officialdom to give information even
if nobody demands. The policy of public disclosure establishes a concrete ethical principle for the
conduct of public affairs in a genuinely open democracy, with the people‘s right to know as the
centerpiece. It is a mandate of the State to be accountable by following such policy. These provisions
are vital to the exercise of the freedom of expression and essential to hold public officials at all times
accountable to the people. Indubitably, the effectivity of the policy of public disclosure need not await
the passing of a statute. As Congress cannot revoke this principle, it is merely directed to provide for
―reasonable safeguards.‖ The complete and effective exercise of the right to information necessitates
that its complementary provision on public disclosure derive the same self-executory nature. Since
both provisions go hand-in-hand, it is absurd to say that the broader right to information on matters
of public concern is already enforceable while the correlative duty of the State to disclose its
transactions involving public interest is not enforceable until there is an enabling law. Respondents
cannot thus point to the absence of an implementing legislation as an excuse in not effecting such
policy. An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that the government may perceive and
be responsive to the people‘s will. Envisioned to be corollary to the twin rights to information and
disclosure is the design for feedback mechanisms. The imperative of a public consultation, as a species
of the right to information, is evident in the ―marching orders‖ to respondents. The mechanics for
the duty to disclose information and to conduct public consultation regarding the peace agenda and
process is manifestly provided by E.O. No. 3. The preambulatory clause of E.O. No. 3 declares that
there is a need to further enhance the contribution of civil society to the comprehensive peace process
by institutionalizing the people‘s participation. One of the three underlying principles of the
comprehensive peace process is that it ―should be community-based, reflecting the sentiments,
values and principles important to all Filipinos and ―shall be defined not by the government alone,
nor by the different contending groups only, but by all Filipinos as one community. Included as a
component of the comprehensive peace process is consensus-building and empowerment for peace,
which includes ―continuing consultations on both national and local levels to build consensus for a
peace agenda and process, and the mobilization and facilitation of people‘s participation in the peace
process.Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to effectuate “continuing”
consultations, contrary to respondents’ position that plebiscite is “more than sufficient
consultation.Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP, one of
which is to ―conduct regular dialogues with the National Peace Forum (NPF) and other peace partners
to seek relevant information, comments, recommendations as well as to render appropriate and
timely reports on the progress of the comprehensive peace process. E.O. No. 3 mandates the
establishment of the NPF to be ―the principal forum for the Presidential Adviser on Peace Progress
(PAPP) to consult with and seek advi[c]e from the peace advocates, peace partners and concerned
sectors of society on both national and local levels, on the implementation of the comprehensive
peace process, as well as for government[-]civil society dialogue and consensus-building on peace
agenda and initiatives. In fine, E.O. No. 3 establishes petitioners’ right to be consulted on the peace
agenda, as a corollary to the constitutional right to information and disclosure. In general, the
objections against the MOA-AD center on the extent of the powers conceded therein to the BJE.
Petitioners assert that the powers granted to the BJE exceed those granted to any local government
under present laws, and even go beyond those of the present ARMM. Before assessing some of the
specific powers that would have been vested in the BJE, however, it would be useful to turn first to a
general idea that serves as a unifying link to the different provisions of the MOA-AD, namely, the
international law concept of association. Significantly, the MOA-AD explicitly alludes to this concept,
indicating that the Parties actually framed its provisions with it in mind. Association is referred to in
paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and paragraph 4 on GOVERNANCE. It is in
the last mentioned provision, however, that the MOA-AD most clearly uses it to describe the
envisioned relationship between the BJE and the Central Government.

4. The relationship between the Central Government and the Bangsamoro juridical entity shall be
associative characterized by shared authority and responsibility with a structure of governance based
on executive, legislative, judicial and administrative institutions with defined powers and functions in
the comprehensive compact. A period of transition shall be established in a comprehensive peace
compact specifying the relationship between the Central Government and the BJE. The nature of the
―associative relationship may have been intended to be defined more precisely in the still to be
forged Comprehensive Compact. Nonetheless, given that there is a concept of ―association in
international law, and the MOA-AD – by its inclusion of international law instruments in its TOR–
placed itself in an international legal context, that concept of association may be brought to bear in
understanding the use of the term ―associative in the MOA-AD. The MOA-AD contains many
provisions which are consistent with the international legal concept of association, specifically the
following: the BJE‘s capacity to enter into economic and trade relations with foreign countries, the
commitment of the Central Government to ensure the BJE‘s participation in meetings and events in
the ASEAN and the specialized UN agencies, and the continuing responsibility of the Central
Government over external defense. Moreover, the BJE‘s right to participate in Philippine official
missions bearing on negotiation of border agreements, environmental protection, and sharing of
revenues pertaining to the bodies of water adjacent to or between the islands forming part of the
ancestral domain, resembles the right of the governments of FSM and the Marshall Islands to be
consulted by the U.S. government on any foreign affairs matter affecting them. These provisions of
the MOA indicate, among other things, that the Parties aimed to vest in the BJE the status of an
associated state or, at any rate, a status closely approximating it. The concept of association is not
recognized under the present Constitution. No province, city, or municipality, not even the ARMM, is
recognized under our laws as having an ―associative‖ relationship with the national government.
Indeed, the concept implies powers that go beyond anything ever granted by the Constitution to any
local or regional government. It also implies the recognition of the associated entity as a state. The
Constitution, however, does not contemplate any state in this jurisdiction other than the Philippine
State, much less does it provide for a transitory status that aims to prepare any part of Philippine
territory for independence.

Even the mere concept animating many of the MOA-AD‘s provisions, therefore, already requires for
its validity the amendment of constitutional provisions, specifically the following provisions of Article
X:

SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are the
provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim
Mindanao and the Cordilleras as hereinafter provided. SECTION 15. There shall be created
autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities,
municipalities, and geographical areas sharing common and distinctive historical and cultural heritage,
economic and social structures, and other relevant characteristics within the framework of this
Constitution and the national sovereignty as well as territorial integrity of the Republic of the
Philippines.

It is not merely an expanded version of the ARMM, the status of its relationship with the national
government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but
name as it meets the criteria of a state laid down in the Montevideo Convention, namely, a permanent
population, a defined territory, a government, and a capacity to enter into relations with other states.

The defining concept underlying the relationship between the national government and the BJE being
itself contrary to the present Constitution, it is not surprising that many of the specific provisions of
the M OA-AD on the formation and powers of the BJE are in conflict with the Constitution and the
laws. Article X, Section 18 of the Constitution provides that ―[t]he creation of the autonomous region
shall be effective when approved by a majority of the votes cast by the constituent units in a plebiscite
called for the purpose, provided that only provinces, cities, and geographic areas voting favorably in
such plebiscite shall be included in the autonomous region.
The BJE is more of a state than an autonomous region. But even assuming that it is covered by the
term ―autonomous region in the constitutional provision just quoted, the MOA-AD would still be in
conflict with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the present geographic
area of the ARMM and, in addition, the municipalities of Lanao del Norte which voted for inclusion in
the ARMM during the 2001 plebiscite – Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal – are
automatically part of the BJE without need of another plebiscite, in contrast to the areas under
Categories A and B mentioned earlier in the overview. That the present components of the ARMM
and the above-mentioned municipalities voted for inclusion therein in 2001, however, does not render
another plebiscite unnecessary under the Constitution, precisely because what these areas voted for
then was their inclusion in the ARMM, not the BJE.

Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in the MOA-
AD is to be effected. That constitutional provision states: ―The State recognizes and promotes the
rights of indigenous cultural communities within the framework of national unity and development.
An associative arrangement does not uphold national unity. While there may be a semblance of unity
because of the associative ties between the BJE and the national government, the act of placing a
portion of Philippine territory in a status which, in international practice, has generally been a
preparation for independence, is certainly not conducive to national unity.

The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific
provisions but the very concept underlying them, namely, the associative relationship envisioned
between the GRP and the BJE, are unconstitutional, for the concept presupposes that the associated
entity is a state and implies that the same is on its way to independence.

While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the present
legal framework will not be effective until that framework is amended, the same does not cure its
defect. The inclusion of provisions in the MOA-AD establishing an associative relationship between
the BJE and the Central Government is, itself, a violation of the Memorandum of Instructions from the
President dated March 1, 2001, addressed to the government peace panel. Moreover, as the clause is
worded, it virtually guarantees that the necessary amendments to the Constitution and the laws will
eventually be put in place. Neither the GRP Peace Panel nor the President herself is authorized to
make such a guarantee. Upholding such an act would amount to authorizing a usurpation of the
constituent powers vested only in Congress, a Constitutional Convention, or the people themselves
through the process of initiative, for the only way that the Executive can ensure the outcome of the
amendment process is through an undue influence or interference with that process.
REPUBLIC OF THE PHILIPPINES vs SANDIGANBAYAN

FACTS: The PCGG cannot vote sequestered shares to elect the ETPI Board of Directors or to amend the
Articles of Incorporation for the purpose of increasing the authorized capital stock unless there is a
prima facie evidence showing that said shares are ill-gotten and there is an imminent danger of
dissipation.

Two sets of board and officers of Eastern Telecommunications, Philippines, Inc. (ETPI) were elected,
one by the Presidential Commission on Good Government (PCGG) and the other by the registered ETPI
stockholders.Victor Africa, a stockholder of ETPI filed a petition for Certiorari before the
Sandiganbayan alleging that the PCGG had been “illegally exercising the rights of stockholders of ETPI,”
in the election of the members of the board of directors. The Sandiganbayan ruled that only the
registered owners, their duly authorized representatives or their proxies may vote their corresponding
shares. The PCGG filed a petition for certiorari, mandamus and prohibition before the Court which
was granted. The Court referred the PCGG’s petition to hold the special stockholders’ meeting to the
Sandiganbayan for reception of evidence and resolution. The Sandiganbayan granted the PCGG
“authority to cause the holding of a special stockholders’ meeting of ETPI and held that there was an
urgent necessity to increase ETPI’s authorized capital stock; there existed a prima facie factual
foundation for the issuance of the writ of sequestration covering the Class “A” shares of stock; and
the PCGG was entitled to vote the sequestered shares of stock. The PCGG-controlled ETPI board of
directors held a meeting and the increase in ETPI’s authorized capital stock from P250 Million to P2.6
Billion was “unanimously approved”. Africa filed a motion to nullify the stockholders meeting,
contending that only the Court, and not the Sandiganbayan, has the power to authorize the PCGG to
call a stockholders meeting and vote the sequestered shares. The Sandiganbayan denied the motions
for reconsideration of prompting Africa to file before the Court a second petition, challenging the
Sandiganbayan Resolutions authorizing the holding of a stockholders meeting and the one denying
the motion for reconsideration.

ISSUES:

1. Whether or not the Sandiganbayan gravely abused its discretion in ordering the
holding of a stockholders meeting to elect the ETPI board of directors without first
setting in place, through the amendment of the articles of incorporation and the by-
laws of ETPI
2. Whether the PCGG can vote the sequestered ETPI Class “A” shares in the stockholders
meeting for the election of the board of directors.
HELD:

First Issue :

On the PCGG’s imputation of grave abuse of discretion upon the Sandiganbayan for ordering the
holding of a stockholders meeting to elect the ETPI board of directors without first setting in place,
through the amendment of the articles of incorporation and the by-laws of ETPI, the safeguards
prescribed in Cojuangco, Jr. v. Roxas. The Court laid down those safeguards because of the obvious
need to reconcile the rights of the stockholder whose shares have been sequestered and the duty of
the conservator to preserve what could be ill-gotten wealth. There is nothing in the Cojuangco case
that would suggest that the above measures should be incorporated in the articles and by-laws before
a stockholders meeting for the election of the board of directors is held. The PCGG nonetheless insists
that those measures should be written in the articles and by-laws before such meeting, “otherwise,
the {Marcos] cronies will elect themselves or their representatives, control the corporation, and for
an appreciable period of time, have every opportunity to disburse funds, destroy or alter corporate
records, and dissipate assets.” That could be a possibility, but the peculiar circumstances of the case
require that the election of the board of directors first be held before the articles of incorporation are
amended. Section 16 of the Corporation Code requires the majority vote of the board of directors to
amend the articles of incorporation. At the time Africa filed his motion for the holding of the annual
stockholders meeting, there were two sets of ETPI directors, one controlled by the PCGG and the other
by the registered stockholders. Which of them is the legitimate board of directors? Which of them
may rightfully vote to amend the articles of incorporation and integrate the safeguards laid down in
Cojuangco? It is essential, therefore, to cure the aberration of two boards of directors sitting in a single
corporation before the articles of incorporation are amended to set in place the Cojuangco safeguards.
The danger of the so-called Marcos cronies taking control of the corporation and dissipating its assets
is, of course, a legitimate concern of the PCGG, charged as it is with the duties of a conservator.
Nevertheless, such danger may be averted by the “substantially contemporaneous” amendment of
the articles after the election of the board.

Second Issue :

The principle laid down in Baseco vs. PCGG was further enhanced in the subsequent cases of
Cojuangco v. Calpo and Presidential Commission on Good Government v. Cojuangco, Jr., where the
Court developed a “two-tiered” test in determining whether the PCGG may vote sequestered shares.
The issue of whether PCGG may vote the sequestered shares in SMC necessitates a determination of
at least two factual matters: a.) whether there is prima facie evidence showing that the said shares
are ill-gotten and thus belong to the state; and b.) whether there is an immediate danger of dissipation
thus necessitating their continued sequestration and voting by the PCGG while the main issue pends
with the Sandiganbayan. The two-tiered test, however, does not apply in cases involving funds of
“public character.” In such cases, the government is granted the authority to vote said shares, namely:
(1) Where government shares are taken over by private persons or entities who/which registered
them in their own names, and (2) Where the capitalization or shares that were acquired with public
funds somehow landed in private hands. In short, when sequestered shares registered in the names
of private individuals or entities are alleged to have been acquired with ill-gotten wealth, then the
two-tiered test is applied. However, when the sequestered shares in the name of private individuals
or entities are shown, prima facie, to have been (1) originally government shares, or (2) purchased
with public funds or those affected with public interest, then the two-tiered test does not apply. The
rule in the jurisdiction is, therefore, clear. The PCGG cannot perform acts of strict ownership of
sequestered property. It is a mere conservator. It may not vote the shares in a corporation and elect
members of the board of directors. The only conceivable exception is in a case of a takeover of a
business belonging to the government or whose capitalization comes from public funds, but which
landed in private hands as in BASECO. In short, the Sandiganbayan held that the public character
exception does not apply, in which case it should have proceeded to apply the two-tiered test. This it
failed to do. The questions thus remain if there is prima facie evidence showing that the subject shares
are ill- gotten and if there is imminent danger of dissipation. The Court is not, however, a trier of facts,
hence, it is not in a position to rule on the correctness of the PCGG’s contention. Consequently, the
issue must be remanded to the Sandiganbayan for resolution.