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[G.R. No. 164171. August 22, 2006]

HON. EXECUTIVE SECRETARY, et al. v. SOUTHWING HEAVY INDUSTRIES, INC., et al.

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated AUG. 22, 2006

G.R. No. 164171 (Hon. Executive Secretary, et al. v. Southwing Heavy Industries, Inc., et al.);

G.R. No. 164172 (Hon. Executive Secretary, et al. v. Subic Integrated Macro Ventures Corp., etc.);

G.R. No. 168741 (Hon. Executive Secretary, et al. v. Motor Vehicle Importers Association of Subic Bay Freeport, Inc., etc.)

This resolves the separate Motions for Clarification and Reconsideration filed by respondents Southwing Heavy Industries, Inc., (SOUTHWING), United Auctioneers, Inc. (UNITED AUCTIONEERS), and Microvan, Inc. (MICROVAN); Subic Integrated Macro Ventures Corporation (MACRO VENTURES); and Motor Vehicle Importers Association of Subic Bay Freeport, Inc. (ASSOCIATION). Respondents seek a definite ruling on whether used motor vehicles may now be imported into the Philippines in view of the issuance on April 4, 2005 by the Office of the President of Executive Order (E.O.) No. 418, imposing an import duty of P500,000.00 on used motor vehicles, except trucks, buses and special purpose vehicles. They contend that E.O. No. 418 impliedly repealed E.O. No. 156 which prohibits the importation of used motor vehicles. They thus prayed that the Court's Decision dated February 20, 2006 be reconsidered by clarifying that used motor vehicles may now be imported into the country, subject only to the payment of the additional import duty.

In its Motion for Partial Reconsideration, respondent ASSOCIATION claims that E.O. No. 156 is void because it failed to satisfy the requisites of a valid delegation of legislative power, hence, importation of used motor vehicles should be allowed subject to the payment of additional duties as provided in E.O. No. 418.

The motions are without merit.

In the February 20, 2006 Decision of the Court, we held that E.O. No. 156 which imposes a ban on the importation of used motor vehicles is applicable only in the Philippine territory outside the presently secured fenced-in former Subic Naval Base area as stated in Section 1.1 of E.O. No. 97-A. Simply put, respondents may import used motor vehicles into the presently secured fenced-in former Subic Naval Base area, but since entry of said used motor vehicles is prohibited in other parts of the Philippine territory, they may be stored, used or traded in the presently secured fenced-in former Subic Naval Base area, or exported to other countries, but they cannot be introduced in the other parts of the Philippine territory.

The subsequent issuance of E.O. No. 418 increasing the import duties on used motor vehicles did not alter the policy of the executive department to prohibit the importation of said vehicles. In his Comment, the Executive Secretary through the Solicitor General stated a clear and unequivocal intention to ban the importation of used motor vehicles into the country, notwithstanding the issuance of E.O. No. 418. Moreover, there is nothing in the text of E.O. No. 418 which expressly repeals E.O. No. 156. The Congress, or the Office of the President in this case, is presumed to know the existing laws, such that whenever it intends to repeal a particular or specific provision of law, it does so expressly. The failure to add a specific repealing clause indicates that the intent was not to repeal previous administrative issuances. ^[1] cralaw In order to effect a repeal by implication, the later statute must be so irreconcilably inconsistent and repugnant with the existing law that they cannot be made to reconcile and stand together. The clearest case possible must be made before the inference of implied repeal may be drawn, for inconsistency is never presumed. ^[2] cralaw There must be showing of repugnance clear and convincing in character. The language used in the later statute must be such as to render it irreconcilable with what has been formerly enacted. An inconsistency that falls short of that standard does not suffice. For it is a well settled rule in statutory construction that repeal of statues by implication is not favored. ^[3] cralaw

In the instant case, E.O. No. 156 is very explicit in its prohibition on the importation of used motor vehicles. On the other hand, E.O. No. 418 merely modifies the tariff and nomenclature rates of import duty on used motor vehicles. Nothing therein expressly revokes the importation ban. The full text thereof, reads:

EXECUTIVE ORDER NO. 418

MODIFYING THE TARRIF NOMENCLATURE AND RATES OF IMPORT DUTY ON USED MOTOR VEHICLES UNDER SECTION 104 OF THE TARIFF AND CUSTOMS CODE OF 1978 (PRESIDENTIAL DECREE NO. 1464, AS AMENDED)

WHEREAS, it is the policy of the State to maintain a balance between development and environmental protection, and hence, between motorization and air quality management.

WHEREAS, it is the policy of the State to protect the public against unreasonable risks to injury associated with consumer products;

WHEREAS, there is a need to mitigate the impact of used motor vehicle trading on air quality and road safety;

WHEREAS, Article II:1 (b) of the 1994 General Agreement on Tariffs and Trade allows the unilateral imposition of other duties and charges on tariff items that were not previously the subject of concession;

WHEREAS, motor vehicles were not covered by Schedule LXXV - Philippine Schedule of Concessions and therefore, do not have tariff bindings;

WHEREAS, of Section 401 of the Tariff and Customs Code of 1978, as amended, empowers the President of the Republic of the Philippines to increase, reduce, or remove existing rates of import duty, as well as to modify the form of duty and the tariff nomenclature under Section 104 of the Code;

NOW, THEREFORE, I, GLORIA MACAPAGAL ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order[:]

SECTION 1. The articles specifically listed in Annex "A" hereof, as classified under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be subject to the rates of import duty indicated opposite each article, except for trucks, buses and special purpose vehicles.

SEC. 2. In addition to the regular rates of import duty, the articles specifically listed in Annex "A" hereof, as classified under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be subject to additional specific duty of PhP500,000.00.

SEC. 3. The amount of specific duty will be indexed by the Secretary of Finance once every two (2) years if the change in the exchange rate of the Philippine peso against the United States (U.S.) dollar is more than ten percent (10%) from the date of the effectivity of this Order, in the case of initial adjustment and from the last revision date in the case of subsequent adjustments.

In case the change in the exchange rate of the Philippine peso against the US dollar is more than twenty percent (20%) at any time within the two-year period referred to above, the Secretary of Finance shall index the amount by the full rate of depreciation or appreciation, as the case may be.

SEC. 4. The following motor vehicles shall be considered "used" and shall be subject to the duties herein prescribed: (a) all motor vehicles that have been sold, registered and operated in the roads/highways of any foreign state or country; or (b) all imported motor vehicles that has a mileage of more than 200 kilometers regardless of year model.

SEC. 5. Upon the effectivity of this Executive Order, the articles, specifically listed in the aforesaid Annex, which are entered and withdrawn from warehouses in the Philippines, shall be levied the rates of import and specific duties herein prescribed.

SEC. 6. All Presidential issuances, administrative rules and regulations, or parts thereof, which are inconsistent with this Executive Order are hereby revoked or modified accordingly.

SEC. 7. This Executive Order shall take effect thirty (30) days following its complete publication in two (2) newspapers of general circulation in the Philippines.

X X X X

The positive and categorical language of the proscription on the importation of used motor vehicles and the clear intent of the executive department to enforce the ban can only be superseded by another issuance revoking the same in terms so certain and unmistakable that needs no further interpretation or construction. Since no such express repeal is stated in E.O. No. 418, the conclusion is that the said executive issuance did not supersede E.O. No. 156.

Where it is possible to do so, it is the duty of courts, in the construction of statutes, to harmonize and reconcile them, and to adopt a construction which reconciles them with other statutory provisions. The fact that a later enactment may relate to the same subject matter as that of an earlier statute is not of itself sufficient cause of an implied repeal. ^[4] cralaw As asserted by petitioners, E.O. No. 418 is only a temporary measure to address the influx of used motor vehicles in the country while E.O. No. 156 is under legal challenge. With the categorical intent of the Office of the President to ban the importation of used motor vehicles, E.O. No. 418 should be made operative only pending the finality of this decision upholding the power of the President to ban the importation of used motor vehicles. This way, we can give efficacy not only to the executive policy proscribing the importation of used motor vehicles but also to the executive issuance increasing the applicable import duties that would discourage the entry into the country of the same vehicles pending the finality of this decision sustaining the power of the President to issue an importation ban to protect the local automotive industry.

Likewise, the Motion for Partial Reconsideration of respondent ASSOCIATION must fail. It argues that E.O. No. 156 is in effect extended to the Freeport because motor vehicle importers can no longer continue their respective business if they cannot bring the imported used motor vehicles into other parts of the Philippine territory. Respondent, however, totally misses the point. While the presently secured fenced-in former Subic Naval Base area enjoys the privilege of being considered as a "foreign territory," and therefore, entry of used motor vehicles cannot be proscribed by E.O. No. 156, such privilege should be construed as operative only within said area. Any movement or entry of used motor vehicles to other parts of the Philippine territory would logically subject said vehicles to the laws of the customs territory, specifically the importation ban. To rule otherwise would be to put premium on the interest of a few businessmen and to deprive the Congress or the President of the power to issue measures protective of our domestic markets and air quality.

As exhaustively discussed in our February 20, 2006 Decision, the issuance of E.O. No. 156 has constitutional and statutory bases and the issuance thereof was in accordance with the prescribed procedure. We also held therein that issuance of the ban to protect the domestic industry and the environment including its air sheds against pollution from mobile sources is a reasonable exercise of police power. Respondent ASSOCIATION's contention that petitioners failed to prove that the importation of used motor vehicles caused the deterioration of the local automotive industry lacks merit. Laws and other administrative issuance enjoy the presumption of validity and the burden of proving its invalidity rests upon those who assert the contrary. ^[5] cralaw It is therefore the obligation of respondents and not of petitioners to show factual basis in support of their allegation that E.O. No. 156 is void. However, respondents failed to do this because they moved for rendition of summary judgment on the ground that there are no issues of facts necessary to be resolved in the instant controversy. ^[6] cralaw Estoppel in presenting factual basis in support of their argument operates against respondents. This Court is not a trier of facts and the allegation of factual matters by the ASSOCIATION can no longer be entertained.

ACCORDINGLY, respondents' separate motions for clarification and reconsideration are DENIED. Notwithstanding the issuance of E.O. No. 418, used motor vehicles imported via the presently secured fenced-in former Subic Naval Base area cannot further be imported into the other parts of the Philippine territory. Used motor vehicles may be imported into, stored, used, and traded within the presently secured fenced-in former Subic Naval Base area, or exported to other countries, but entry thereof into the other parts of the Philippine territory is prohibited pursuant to E.O. No. 156. (Corona, J., On leave)

Very truly yours,

(Sgd.) MA. LUISA D. VILLARAMA
Clerk of Court

Endnotes:

^[1] cralaw Gayo v. Verceles , G.R. No. 150477, February 28, 2005, 452 SCRA 504, 518.

^[2] cralaw Agujetas v. Court of Appeals, 329 Phil. 721, 745-746 (1996).

^[3] cralaw Id.

^[4] cralaw Philippine Trading International Corporation v. Angeles, 331 Phil. 723, 748 (1996).

^[5] cralaw Heirs of Ardona v. Reyes, 210 Phil. 187, 207 (1983).

^[6] cralaw Decision, rollo of G.R. No. 164171, p. 12; Motion for Summary Judgment, rollo of 164172, pp. 255-256; Decision, rollo G.R. No. 168741, p. 17.

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