August 2005 - Philippine Supreme Court Decisions/Resolutions

Philippine Supreme Court Jurisprudence

Southern Cross Cement Corp v. Cement Manufacturers Assn of the Phils : 158540 : August 3, 2005 : J. Panganiban : En Banc : Separate Opinion

EN BANC

[G.R. NO. 158540 : August 3, 2005]

SOUTHERN CROSS CEMENT CORPORATION, Petitioners, v. CEMENT MANUFACTURERS ASSOCIATION OF THE PHILIPPINES, THE SECRETARY OF THE DEPARTMENT OF TRADE AND INDUSTRY, THE SECRETARY OF THE DEPARTMENT OF FINANCE and THE COMMISSIONER OF THE BUREAU OF CUSTOMS, Respondent.

SEPARATE OPINION
(Concurring and Dissenting)

PANGANIBAN, J.:

As a co-equal body, the judiciary has great respect for determinations of the Chief Executive or his subalterns, especially when the legislature itself has specifically given them enough room on how the law should be effectively enforced.¹ ςrνll

Once again, this Court is faced with a controversy that ultimately affects the economic life of the country. While on its face, the problem appears to be merely one of legal construction of a statute, its consequences and implications dig deep into the ability and power of the Executive Department to protect domestic industries from injurious importations of foreign products.

Indeed, the main substantive issue of this case boils down to the dexterity of the secretary of trade -- the government's principal official empowered to superintend the nation's commercial life and to promote investments -- to impose safeguard measures to protect the local cement industry from the onslaught of unfair foreign competition.

I respectfully submit that, absent any patent violation of laws or grave abuse of discretion, the top trade official should be given the widest discretion to be able to promote the best interest of the country in the field of trade, industry and investments. I believe that this Court should not interfere unnecessarily in commercial and economic policies, but allow our executive officials to meet head-on the vicissitudes of international trade competition spawned by globalization, deregulation and liberalization.

As will be demonstrated later on, I firmly submit that law, justice, equity, reason, logic, national interest and common sense impel the maintenance of this Court's policy of laissez-faire. In short, the judiciary should be deferential to the powers residing in, and respectful of the actions taken by, the top government official who has primary responsibility for the commercial development of the nation.

Background Information

Before the Court en banc are Motions for Reconsideration of the Decision² promulgated by this Court's Second Division, filed by 1) the Office of the Solicitor General (OSG) on behalf of public respondents and 2) the Philippine Cement Manufacturers Corporation (Philcemcor).³ The assailed Decision disposed as follows:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals is DECLARED NULL AND VOID and SET ASIDE. The Decision of the DTI Secretary dated 25 June 2003 is also DECLARED NULL AND VOID and SET ASIDE. No costs.

In a Resolution dated September 15, 2004, the Special Second Division referred to the Court en banc the respective Motions to refer the case to the banc, filed by the solicitor general and private respondent. On September 21, 2004, the full Court resolved to accept the referral.

On March 1, 2005, the 15 members of the Court heard oral arguments on the two main issues involved: 1) whether a decision of the secretary of the Department of Trade and Industry (DTI) denying the imposition of a safeguard measure is appealable to the Court of Tax Appeals (CTA); and 2) whether the DTI secretary may impose a general safeguard measure, only upon a positive final determination by the Tariff Commission (TC).

To recall, the assailed Decision answered both questions in the affirmative.⁴ It held that the CTA, not the Court of Appeals (CA), had the jurisdiction to review the DTI secretary's decision, whether imposing a safeguard measure or not. It explained that the proviso 'in connection with the imposition of a safeguard measure in Section 29⁵ of Republic Act (RA) 8800 pertained to 'all rulings of the DTI [s]ecretary x x x which arise from the time an application or motu proprio initiation for the imposition of a safeguard measure is taken,⁶ including the final decision imposing or not imposing such measure. Because the law clearly provided aggrieved parties with a legal remedy (petition for review with the CTA), a special civil action for certiorari did not avail. Hence, the CA Decision was declared void and set aside.

The Decision of the Second Division also ruled that, pursuant to a literal interpretation of Section 5⁷ of the law (RA 8800), the DTI secretary could impose a safeguard measure only upon a positive final determination by the Tariff Commission. The Decision differentiated between the power to make a final determination of the presence of serious injury or threat to the domestic industry and the authority to impose the safeguard measure. It held that the power to make a final determination was lodged in the Tariff Commission; and the authority to impose the safeguard, in the DTI secretary.

The present Resolution written by the esteemed Justice Dante O. Tinga upholds the assailed Decision in toto. I beg to differ.

While I agree that the CTA has jurisdiction to review the DTI secretary's decision either imposing or not imposing a safeguard measure, I respectfully disagree, however, that the said cabinet official is bound by the recommendations of the Tariff Commission and may thus impose a safeguard measure only when it so recommends. I respectfully submit that the DTI secretary has the power to impose safeguard measures even if the TC does not recommend such imposition.

The First Issue:

Jurisdiction to Review the Secretary's Decisions The OSG's Position

The OSG avers that the Decision, as far as it disposed of the first issue, 'was based solely on an expansive interpretation of x x x Section 29 of [RA] No. 8800. This interpretation allegedly undermines the rule against the presumption of jurisdiction and could bring about erroneous interpretations of provisions on jurisdiction that would result in fatal consequences for the parties or in endless litigation.⁸ ςrνll

Purportedly, Section 29 expressly limits CTA jurisdiction to cases in which a safeguard measure is imposed, not when the DTI secretary does not impose the measure. Thus, the OSG submits that the CTA had no jurisdiction over the April 5, 2002 Decision of the DTI secretary; and that it was proper for herein private respondent to have resorted to a special civil action for certiorari before the CA.

The government counsel further contends that RA 9282,⁹ a new law that was enacted on March 30, 2004, now expressly confers upon the CTA jurisdiction over decisions 'to impose or not to impose safeguard measures. Supposedly, this new explicit provision only shows that RA 8800 did not intend to include a review of DTI decisions involving the non-imposition of the said measures.

Private Respondent's Contentions

Philcemcor similarly contends that Congress limited the power of review of the CTA to the 'single situation of an imposition by the [s]ecretary of safeguard measures to the exclusion of the situation of non-imposition x x x.

Respondent also argues that the TC is not a quasi-judicial body; it neither determines private rights nor decides controversies. Thus, its acts 'are per se administratively reviewable. Otherwise, an error on its part will have far-ranging consequences, 'cut[ting] across sectoral boundaries in the national economy, and across industry boundaries within each sector of the economy. Thus, its recommendations should be subject to review by the DTI secretary whose mandate has a macroeconomic scope x x x and who has the statutory burden of promoting the development of industry and other sectors of the economy.¹⁰ Corollarily, not being a quasi-judicial body, its reports are not appealable to either the CTA or the CA, according to Philcemcor.

Petitioner's Arguments

Petitioner, on the other hand, agrees with the assailed Decision holding that the DTI secretary's ruling in either instance is appealable to the CTA. Petitioner reiterates the interpretation that the phrase 'in connection with in Section 29 of RA 8800 means 'if it has connection with or reference to. Thus, the DTI secretary's Decision not to impose a safeguard measure is reviewable by the CTA, because it relates or has reference to the imposition of that measure.

This interpretation is allegedly confirmed by RA 9282, Section 7(a)(7)¹¹ of which provides that the CTA has exclusive appellate jurisdiction over a decision of the DTI secretary 'to impose or not to impose safeguard measures. Petitioner posits that this provision merely reflects or reiterates Section 29 of RA 8800; it does not constitute an expansion of the CTA jurisdiction. Otherwise, an absurdity would arise: in case the DTI secretary imposes a definitive safeguard measure, the remedy of the aggrieved party would be to appeal to the CTA; but in case the decision is not to impose the measure, the remedy would be to appeal to the CA.¹²

My Submission:

The CTA Has Jurisdiction A CTA Review of the DTI Secretary's Rulings Provided for by RA 8800

On the issue of jurisdiction, I agree with the Court's Resolution penned by Justice Tinga that the DTI secretary's decisions -- whether imposing safeguard measures or not -- are subject to review by the CTA, pursuant to Section 29¹³ of RA 8800.

The meaning of the phrase in connection with the imposition of a safeguard measure is not same as imposing a safeguard measure; otherwise, the law would simply have sufficed without the qualifying connector. Consequently, all final rulings relating to an application for the measure -- whether imposing, extending, terminating or disallowing one -- are in connection with the imposition of a safeguard measure, and thus appealable to the CTA.

Let me clarify, though, a rather loose statement in the Court's Resolution that the 'entire subset of rulings that the DTI [s]ecretary may issue x x x, including those that are provisional, interlocutory x x x are in connection with the imposition of a safeguard measure; and also 'the phrase [in connection with] includes all rulings of the DTI [s]ecretary which arise from the time an application or motu proprio initiation for the imposition of a safeguard measure is taken. Both statements seem to imply that all aforementioned rulings are therefore appealable to the CTA pursuant to Section 29.

It is a legal truism, however, that interlocutory orders are not subject to an appeal or a Petition for Review until the main case is finally resolved on the merits.¹⁴ RA 8800 does not explicitly state which rulings of the DTI secretary are reviewable by way of a Petition for Review with the CTA. However, the Rules of Court and settled jurisprudence provide that only judgments or final orders disposing of the merits of a case may be the subject of appeals or petitions for review.¹⁵ Since RA 8800 does not amend the extant Rules (assuming arguendo that Congress had the power to amend the Rules of Court), they must be applied to the intended appeals.

In the present case, private respondent did not appeal the DTI secretary's Decision to either the CTA or the CA, but instead invoked the CA's certiorari power under Rule 65 of the Rules of Court, on the ground of grave abuse of discretion. But one of the requisites of a special civil action for certiorari is that there be no appeal; or any plain, speedy and adequate remedy in the ordinary course of law.¹⁶ As discussed, RA 8800 expressly provides for a legal remedy to question the DTI secretary's decisions -- that of filing a Petition for Review to the CTA. Given this expedient and adequate remedy in the ordinary course as provided by law, private respondent's recourse to certiorari before the CA must necessarily fail. As a consequence, it has inopportunely lost its legal route for a judicial review of the DTI ruling.

In any event, as the determination of the case is dependent on current pertinent econometric data and their effects on the domestic industry, the peculiar circumstances make a ruling on the merits inadvisable at this time. The original application for a safeguard measure was filed way back in 2001, and it has been almost four years since the imposition of the provisional safeguard measure.¹⁷ The cement import statistics on record may no longer be relevant at present. I agree with the Resolution that the available remedy at this time is to file a new application for the imposition of a definitive safeguard measure, if warranted under the present circumstances.

The CTA's Essential
Technical Expertise

Moreover, I believe that the CTA is the proper and competent body to review the DTI secretary's decisions involving safeguard measures. By the very nature of its functions, the CTA is a highly specialized court specifically created for the purpose of reviewing tax and customs cases. It is dedicated exclusively to the study and consideration of revenue-related problems and has necessarily developed an expertise on the subject.¹⁸ Thus, as a general rule, its findings and conclusions are accorded great respect and are generally upheld by this Court, unless there is a clear showing of a reversible error or an improvident exercise of authority.

While primarily intended to protect domestic industries, safeguard measures are incidentally revenue-generating and generally in the nature of, though not always equivalent to, tariff impositions. They may consist of a tariff increase, duty, tariff-rate quota, quantitative restriction, adjustment measure or a combination of these.¹⁹ In the determination of their imposition, the following factors are to be taken into consideration: rate and amount of increase in the importation of the product concerned; share of the domestic market taken by the increased imports; and changes in the level of sales, production, productivity, capacity utilization, profits and losses, and employment.²⁰ Most of these factors involve data analysis which, by virtue of the highly specialized technical expertise of the CTA, must be more familiar to it than to the CA.

Thus, as between the two appellate courts, the CTA should have the jurisdiction to review decisions involving safeguard measures, whether imposed or not. In either case, a review will necessarily entail a reappraisal of the facts from which the decisions were based. In both instances, a factual reassessment would encompass the same kind of knowledge and technical expertise. Indeed, it would be absurd if only a positive decision is reviewable by the CTA, while a negative one is passed on to the CA.

Basic is the rule in statutory construction that laws should be given a sensible construction, so as to give effect to their rationale and intent and thus avoid an unjust or absurd interpretation.²¹ Interpretatio talis in ambiguis semper frienda est, ut evitatur inconveniens et absurdum. When there is ambiguity, an interpretation that will avoid inconvenience and absurdity is to be adopted.²² In other words, a rational interpretation must be effectuated.

Contrary to the contention of the solicitor general, Section 7(a)(7) of RA 9282 merely restates in clearer language Section 29 of RA 8800. Undeniably, the imperfect craftsmanship of the latter has spawned some ambiguity. I believe that Congress did not mean to add, via Section 7(a)(7) of RA 9282, a new matter to the jurisdiction of the CTA. For all along, the legislative intent has been to vest in the CTA the power to review the imposition or non-imposition of safeguard measures.

Between the enactment of RA 8800 in 2000 and RA 9282 in 2004, there has been no significant supervening change in circumstances in our economic or trade environments or even in our judicial structure, which would justify Congress to add to the jurisdiction of the CTA the review of the non-imposition of a safeguard measure. The only significant intervening event that seems worth considering is the present proceeding, which precisely reveals an ambiguity that Congress did not intend when it enacted RA 8800. Section 7(a)(7) of RA 9282 now explicitly expresses the law's intent.

Consequences of the CA Decision

Because the CA wrongly exercised its limited certiorari power, its June 5, 2003 Decision was rendered without jurisdiction and, hence, null and void.²³ Held to be dead limbs on the judicial tree are void judgments, which should be disregarded or ignored.²⁴ ςrνll

Likewise, the DTI Decision dated June 25, 2003, issued pursuant to the void CA judgment, is necessarily invalid. A void judgment is worthless and has no legal effect. ²⁵ It cannot be the source of any right or the creator of any obligation. Thus, all acts performed pursuant to it and all claims emanating from it have no legal effect.²⁶ ςrνll

Accordingly, the present Petition, which seeks a review of a void Decision of the CA should, in the ordinary course, also be dismissed. Generally, this Court cannot review a legally inexistent judgment.²⁷

Exceptions When Supreme Court May Exercise Jurisdiction

In not a few cases, though, this Court has exercised its discretionary power to take cognizance of a petition, if compelling reasons or the nature and importance of the issues raised warrant the immediate exercise of its jurisdiction.²⁸ For instance, in Pilipinas Kao, Inc. v. Court of Appeals, ²⁹ while recognizing that the Board of Investments had primary jurisdiction over the merits of the case, this Court nevertheless proceeded to exercise its review powers. It justified its act on the basis of 'procedural expediency and consideration of [the] public interest involved in the questions before us which bear on the certainty and stability of economic policies and proper implementation thereof.³⁰ ςrνll

Also in Chavez v. Presidential Commission on Good Government,³¹ the Court resolved to exercise primary jurisdiction, inasmuch as the petition involved only 'constitutional and legal questions concerning public interest. It noted that cases that had to be remanded or referred to a lower body as the proper forum, or as the one that was better equipped to resolve the issues, generally involved factual questions. Such a remand is merely in accordance with the principle that the Supreme Court is not a trier of facts. But in taking jurisdiction over the petition, 'unnecessary delays and expenses' would be avoided.

In the present case, it is indisputable that the only issues raised are legal in nature. They relate to the ability of the Executive Department to exercise its discretionary powers over an economic policy matter. At the core of the controversy is the correct interpretation of a law enacted to address a primordial concern of the State. That concern is to serve and protect the Filipino people³² by developing a self-reliant and independent national economy effectively controlled by them,³³ in the face of global competition brought about by world trade liberalization. It should also be recalled that the State, in promoting industrialization, is constitutionally mandated to protect Filipino enterprises against unfair foreign competition and trade practices.³⁴ The Safeguard Measures Law was precisely enacted to give life to these constitutional policies.

In addition, if the issues before us are left unresolved, they will most likely crop up again in a similar application under the law. All the parties involved -- the DTI, the Tariff Commission and the private entities -- would then still be in a quandary with respect to whether the DTI head is bound by or may review (and modify or reverse) recommendations of the Commission; as well as whether the latter should make a final determination or simply submit its recommendations. These questions of law would ineludibly be brought before this Court again, creating unnecessary delays and expenses -- the undesirable ills sought to be banished by the Court's oft-repeated policy of administering justice efficiently, effectively and promptly.

Thus, the Court is well within its powers to resolve the main substantive issue at this time, in view of higher public interests; and the speedy, efficient and proper administration of substantial justice.

The Second Issue:

Reviewability of the Tariff Commission's Report The OSG's Position

With respect to the second main issue, the solicitor general avers that the DTI is not bound by the recommendation of the Tariff Commission. A careful scrutiny of Section 5 of RA 8800 allegedly reveals 'no indication whatsoever that it is only upon a positive final determination by the Tariff Commission that a general safeguard may be imposed. x x x. Thus, the law necessarily permits instances when general safeguard measures may be imposed despite the absence of such determination by the Commission.³⁵ ςrνll

The OSG also argues that RA 8800 must be interpreted in congruence with Section 28(2) of Article VI of the Constitution, which provides that Congress may delegate to the President the authority to impose tariff rates. Being a mere agency in the Executive Department whose officials serve at the pleasure of the President, the Tariff Commission could not have been authorized by the law to impose its views on the Chief Executive. Neither could the law have intended a situation in which 'an alter ego of the President would be a mere rubber stamp that would be compelled to enforce the recommendations of a mere agency in the Executive Department.³⁶ ςrνll

Furthermore, the OSG claims that under the charter³⁷ of the Commission (and likewise under RA 8800), the latter's functions are primarily investigatory and, at most, recommendatory. The TC has no power to decide or adjudicate. Hence, the Implementing Rules of RA 8800 required that, after concluding its formal investigation, the TC should submit a report to the DTI. '[T]he act of submitting documents to another body necessarily implies the power of the receiving body to review and [to] evaluate the submitted documents x x x.³⁸ Besides, legislative deliberations also reveal that '[t]he intent of Congress is to vest [the] DTI [s]ecretary with the final authority over recommendations of the Tariff Commission. Even the TC's own chairman³⁹ concedes that the Commission's report, made after public consultations, is only recommendatory.⁴⁰ ςrνll

Finally, the intent and spirit of the law is purportedly to protect domestic industries from the ill effects of import surges.⁴¹ According to the OSG, to hold the DTI secretary bound to the Tariff Commission's negative determination would deprive of any remedy a domestic industry suffering from serious injury.⁴²

Private Respondent's Arguments

Private Respondent Philcemcor essentially agrees with the OSG. The former claims that the Decision misreads Section 5 of RA 8800 when it interprets 'the proposition 'if A, then B as if it stated that 'if A, and only A, then B.⁴³ A textual and contextual analysis of related provisions⁴⁴ allegedly reveals otherwise. Even the record of legislative deliberations does not support the Second Division's reading of the term 'final determination by the Tariff Commission. Similarly, the SMA's implementing rules and regulations⁴⁵ and relevant administrative orders,⁴⁶ as well as the public statement made by the Commission chairman,⁴⁷ uniformly state that the TC's findings and determinations are not binding or conclusive on, but merely recommendatory to, the DTI secretary.

The relationship of the Commission and the DTI, according to Philcemcor, is that of recommending authority and decision-maker, respectively. Accordingly, the DTI secretary may adopt, modify or reject the TC's Report.

The Commission supposedly cannot make a determination, much less a decision, that would oust the secretary of jurisdiction over the application for safeguard measures. For '[t]he law has seen fit to give its findings no more than the legal effect of a report or recommendation.⁴⁸ In contrast, in the scheme of government, the DTI secretary is allegedly the alter ego of the President in the implementation of the State's economic goals and is specifically mandated to achieve the constitutional goals on the national economy and patrimony.⁴⁹ As the President's alter ego in the discharge of the executive power to implement the SMA, the DTI secretary has the power of 'supervision and control over the Commission's functions under the law.

In Philcemcor's view, 'it is unthinkable that the DTI secretary is not free to adopt his own independent judgment on matters that 'he considers as erroneous conclusions arising from a flawed framework and methodology.⁵⁰ The department head's function would then be reduced to performing purely ministerial acts rather than rendering decisions that require the exercise of discretion.⁵¹

Petitioner's Contentions

On the other side of the fence, petitioner insists that the DTI secretary is empowered to impose safeguard measures only if the Tariff Commission makes a positive final determination of the existence of the 'core elements of a safeguard situation.⁵² Petitioner avers that the presence of those elements is a conditio sine qua non for the imposition of a safeguard measure. The final determination of their existence is allegedly conferred by law upon the Commission, which was established and exists mainly to evaluate and impose tariffs. In contrast, the DTI secretary has no competence or institutional experience in dealing with tariff-related matters.⁵³ ςrνll

Petitioner also claims that the Tariff Commission exercises quasi-judicial powers, as RA 8800 requires it 'to make the final determination of the presence or absence of the core elements for the imposition of a safeguard measure.⁵⁴ Such determination supposedly involves the application of the law to the facts and results in the adjudication of the rights and obligations of the affected parties.⁵⁵

My Submission:

DTI Secretary Not Bound by the TC's Recommendations

I agree with the OSG and private respondent.

The Power to Impose Tariffs Is Essentially Legislative; It is Delegable Only to the President

Briefly, my submission, which I shall expound on presently, is as follows. The application of safeguard measures, while primarily intended to protect domestic industries, is essentially in the nature of a tariff imposition. Pursuant to the Constitution, the imposition of tariffs and taxes is a highly prized legislative prerogative.⁵⁶ Pursuant also to the Constitution, such power to fix tariffs may, as an exception, be delegated by Congress to the President.

Section 28 of Article VI of the Constitution provides for that exception, as follows:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

Sec. 28. x x x

(2) The Congress may, by law, authorize the President to fix, within specified limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within the framework of the national development program of the Government.

Under this constitutional provision, to no other official, except the President, is the authority to fix tariff rates, quotas, imposts and other duties allowed to be delegated. However, the Resolution authored by Justice Tinga theorizes that Congress may delegate such power to fix tariffs to both the Tariff Commission and the DTI secretary, 'as agents of Congress. I believe that this theory plainly violates the aforequoted Section 28(2) of Article VI of the Constitution.

I respectfully submit that the only constitutional way to uphold the DTI secretary's imposition of tariffs under RA 8800 is to apply the alter ego principle. In other words, the DTI secretary imposes safeguard measures (like tariffs, import quotas, quantitative restriction, etc.) only in representation and as an alter ego of the President in the field of trade and investment matters. Thus, the law must be construed as delegating to the President -- through the latter's alter ego on trade -- the power to impose safeguard measures.

Under the same Section 28(2) of Article VI of the Constitution, Congress may specify 'limitations and restrictions' on the President's authority to impose tariff rates. However, such statutory limitations and restrictions must themselves conform to the fundamental law. They cannot infringe, restrict, limit, degrade or dilute the constitutional power of the President to control the entire Executive Department.

The power of control includes the right to modify or set aside a decision of a subordinate officer. Since the Tariff Commission is an agency in the Executive Department, it is necessarily subject to the control and supervision of the President. Hence, its decisions and recommendations cannot tie the hands of the Chief Executive with finality. Consequently, the DTI head, acting as the President's agent pursuant to RA 8800, may affirm, modify or reverse the Tariff Commission's recommendation. To repeat, such plenary power of control cannot be restricted by a mere statute passed by Congress.⁵⁷ ςrνll

Let me now discuss my proposition in more detail.

Executive Power Vested Upon the President

For better clarity, there is a need to put our government's administrative structure in perspective. Section 1 of Article VII of the Constitution vests executive power upon the President, the highest official of the land. In the exercise of this power, the President, acting in many capacities, assumes a plenitude of authority.⁵⁸ Because of the sheer multitude of the tasks of the Chief Executive, however, the heads of the various executive agencies act as the former's alter egos or agents in the performance of multifarious executive and administrative functions.

In Villena v. Secretary of Interior,⁵⁹ this Court described the role of the President's top officials thus: 'Without minimizing the importance of the heads of various departments, their personality is in reality but the projection of that of the President. x x x '[E]ach head of a department is, and must be, the President's alter ego in the matters of that department where the President is required by law to exercise authority. x x x [Thus,] their acts, performed and promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive, presumptively the acts of the Chief Executive.

The DTI Head as President's Alter Ego on Trade Matters

Executive Order 292 (the Administrative Code of 1987) outlines the administrative structure and functions of the national government. In the realm of trade, industry and investment-related matters, the President's alter ego is the DTI secretary, to whom is given the following mandate:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

Section 2. Mandate. ' The Department of Trade and Industry shall be the primary coordinative, promotive, facilitative and regulatory arm of the Executive Branch of government in the area of trade, industry and investments. It shall promote and develop an industrialization program effectively controlled by Filipinos and shall act as catalyst for intensified private sector activity in order to accelerate and sustain economic growth through; (a) comprehensive industrial growth strategy, (b) a progressive and socially responsible liberalization program, (c) policies designed for the expansion and diversification of trade, and (d) policies to protect Filipino enterprises against unfair foreign competition and trade practices.⁶⁰ ςrνll

In line with the above mandate, the DTI is tasked under RA 8800 to apply general safeguard measures, when warranted, to protect domestic industries and producers from increased imports.⁶¹ ςrνll

On the other hand, the Tariff Commission is primarily tasked to investigate 'the administration of, and the fiscal and industrial effects of the tariff and customs laws of this country x x x [and,] in general, to investigate the operation of customs and tariff laws, including their relation to the national revenues, their effect upon the industries and labor of the country, and to submit reports of its investigations x x x.⁶² It is also tasked to investigate 'the tariff relations between the Philippines and foreign countries x x x the effect of export bounties and preferential transportation rates; x x x the volume of importations compared with domestic production and consumption; [as well as] conditions, causes and effects relating to competition of foreign industries with those of the Philippines, including dumping and cost of production.⁶³ ςrνll

Whereas the DTI secretary has to carry out a policy mandate for the President, the Tariff Commission is but an investigatory arm that submits reports of its investigations as provided under the law.⁶⁴ Under RA 8800, it is tasked to conduct a formal investigation upon the DTI secretary's referral of an application/a petition for a safeguard measure.⁶⁵ After completion of the investigation, it submits to the secretary a report that contains its findings and recommendations.⁶⁶ Nothing in the law explicitly states that its report or conclusions have the effect of finality and irrefutability that shall bind the DTI head, or the President for that matter.

As the cabinet official and alter ego of the President on trade, industry and investment-related matters, the DTI head necessarily has sufficient latitude and discretion in the pursuit of the Department's mandate. On the other hand, being primarily a fact-finder, the Tariff Commission is limited to submitting its report and recommendations to the referring agency. In this scheme of tasking, absent any clear and direct provision of the Constitution, the TC's mere recommendation cannot bind the cabinet official, much less the President. As the solicitor general aptly suggests, RA 8800 could not have intended that the alter ego of the President be a mere rubber stamp who would be compelled to enforce the recommendations of a purely investigatory agency in the Executive Department.⁶⁷ ςrνll

As Chief Executive of the Republic, the President exercises control over all executive departments, bureaus and offices.⁶⁸ Control is defined as 'the power of an officer to alter or modify or nullify or set aside what a subordinate officer ha[s] done in the performance of his duties and to substitute the judgment of the former for that of the latter.⁶⁹ The President's power extends to 'all executive officers from cabinet member to the lowliest clerk. It is at the heart of the meaning of 'Chief Executive.⁷⁰ ςrνll

Pursuant to the power of control over subalterns, the President may modify or set aside a recommended action of a subordinate office. Indeed, in accordance with its investigatory findings, the Tariff Commission may recommend to the National Economic Development Authority (NEDA) an increase in tariff rates in general; and the latter may in turn endorse the tariff increase to the President who, however, is not bound to impose such increase. The Chief Executive may, in the interest of the public, choose not to follow the recommended action. So, too, may the alter ego, who merely acts as an extension of the President.

The Tinga Resolution states -- erroneously, I submit -- that I advocate the President's exercise of absolute and plenary control over subordinates, such that the Chief Executive could order them to perform illegal or irregular acts. I do not, and I have made no such preposterous statement. Needless to state, the exercise of any power must be within the bounds of the Constitution and law. True, Congress may reorganize the offices under the Executive Department. It may even abolish or merge some of them. However, it cannot abolish or restrict the President's constitutional power of control over executive agencies and officials. The control power of the Chief Executive emanates from the Constitution; no act of Congress may validly curtail it.

Neither am I asserting that the President's subalterns may control actions of subordinate officials or agencies over which they have no direct functional relationship as established by law. Such outlandish proposition would truly produce absurd results. Indeed, the secretary of the Department of Science and Technology (DOST) has no right to reverse the rulings of the Civil Aeronautics Board (CAB) or the issuances of the Philippine Coconut Authority (PCA), because there is no law granting the DOST secretary any power to do so.

But, it cannot be denied that the secretary of the Department of Transportation and Communications may review the rulings of the CAB; of the Department of Agriculture, those of the PCA; and of the Department of Environment and Natural Resources, the decisions of the Mines and Geosciences Bureau. In doing so, the heads of these departments act as the agents or alter egos of the President in their respective spheres of authority.

That the TC was placed under the administrative supervision of the NEDA does not give the latter the sole power to review the Commission's reports. Precisely, RA 8800 creates a functional relationship between the Commission and the DTI secretary. It provides for the administrative interplay between the two agencies - but only with regard to the application of general safeguard measures. More precisely, when the DTI secretary reviews (and ultimately affirms, modifies or reverses) the recommendation of the Commission, he or she does so, not as one who is higher than the Commission in the administrative stratum, but as the alter ego of the President who, by constitutional fiat, is the only official to whom the authority to impose such measures may be delegated by Congress.

Authority to Impose Tariffs Allowed to be Delegated Only to the President and Subalterns

Elementary is the rule that the power to tax is inherent upon the State, but can be exercised only by Congress, unless allowed by the Constitution to be conferred upon another qualified government instrumentality.⁷¹ The power to fix tariff rates also lies in the legislature. However, the delegation of that power to the President is permissible, under Section 28 of Article VI of the Constitution, as earlier mentioned.

RA 8800 must be construed in harmony with the said constitutional provision. In delegating to the DTI secretary the power to impose safeguard measures, Congress could have done so only within the constitutional restriction. The legislature could not have simply chosen the DTI secretary and the Tariff Commission as its agents in imposing the measure. Its delegation of the power to impose tariffs to whomsoever it chose (other than the President) was beyond its constitutional authority. To read the law in such a manner would inevitably result in the statute's unconstitutionality.

To be consistent with the constitutional clause, the law must be understood to mean that in delegating the authority to impose safeguard measures, Congress designated the DTI secretary, being the President's subaltern or alter ego on trade matters. Again, Congress could not have directly constituted the cabinet official as its own agent, because the Constitution categorically limited the delegation of such authority to the President. The fundamental law expressly states that Congress may authorize the President (and names no other official) to impose (subject to limitations and restrictions that it may specify) tariffs, quotas, duties and other imposts. For the legislature to delegate the authority to another official or entity, such as the Tariff Commission, and to completely disregard or do away with the President would be a blatant contravention of the Constitution.

The constitutionality of RA 8800 on this ground has, however, not been raised by the parties. Besides, courts should hesitate to rule upon a constitutional question if the controversy may be resolved on other justifiable grounds.⁷² In any case, I submit that the law is susceptible of interpretation in such a manner as to remain consistent with the Constitution.

To reiterate, RA 8800 delegates to the trade secretary, as subaltern of the Chief Executive -- not Congress' own agent -- the power to prescribe safeguard measures.

Clearly then, in imposing a safeguard measure, the DTI secretary acts as the President's alter ego. Because the President's power of control over any office in the Executive Department cannot be restricted or degraded by Congress, by the same reasoning the exercise by the alter ego of such power of control over actions of the Tariff Commission cannot be constitutionally curtailed by Congress. Otherwise stated, the President -- through the constitutional power of control over the Executive Department -- has the prerogative to affirm, modify or reverse any action of the Tariff Commission. Thus, the DTI secretary -- as the President's alter ego on trade matters -- may exercise, in the President's stead, the same prerogative of affirmation, modification or reversal over any action of the Commission.

Congress' Restrictions on the Imposition of Safeguards

Needless to state, the President's (and the subalterns') power of control surely cannot be exercised on mere whim or caprice. Indeed, in exercising the authority delegated to impose tariffs or other safeguard measures, the President (and the subalterns) may not do so without rhyme or reason or just to appease external pressures or political forces. The Chief Executive is indeed bound by the valid restrictions or limitations laid down in RA 8800.

Section 5 of that law specifies the conditions for the application of safeguard measures, as follows: (1) the importation of a product in increased quantities, whether absolute or relative to the domestic production; (2) an actual or a threatened serious injury⁷³ to the domestic industry as a result of increased importation; and, (3) most important, application of the safeguard measure to serve the public interest.

These are the substantial conditions or limitations specified by the law for the imposition by the DTI head (or, principally, the President) of a safeguard measure.⁷⁴ The Tariff Commission is tasked to determine the presence of the first two conditions -- matters that may be ascertained by factual examination. The final factor is left to the discretion of the DTI secretary. Public interest is something in which the public or community at large has some pecuniary interest affecting their legal rights or liabilities.⁷⁵ Because it concerns the general public, its determination is not quantifiable in exact terms. There are no definite parameters by which it may be established solely by judicial authorities. Its determination is indubitably a political question; thus, it is addressed to a policy maker who is answerable to the people, not a fact finder or investigatory body that has no electoral mandate.

To emphasize, the congressional limitation on the exercise of the delegated authority to impose safeguards does NOT refer to the final determination or recommendation of the Tariff Commission that the first two factual conditions are present or absent. Of course, these are important considerations that are verifiable from the records of the proceedings undertaken by the Commission. These data must be weighed accordingly. In the same vein, many immeasurable and indirect variables have to be assessed in ensuring that public interest is subserved. In the final analysis, the decision to impose a safeguard measure hinges on public interest, which is a political question best addressed by our people's elected officials led by the President.

Contemporaneous Administrative Construction Prevailing

The interpretation of an administrative government agency, which is tasked to implement a statute, is generally accorded great respect and ordinarily controls the construction of the courts.⁷⁶ ςrνll

The crafting of the implementing rules and regulations (IRR) of RA 8800 was a joint undertaking of several executive agencies -- the Departments of Agriculture, Trade and Industry, and Finance; the Bureau of Customs; the NEDA; and the Tariff Commission -- after consultations with domestic industries.⁷⁷ Rule 13.2 of the final IRR expressly states as follows:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

Rule 13.2. Final Determination by the Secretary

Rule 13.2.a. Within fifteen (15) days from receipt of the Report of the Commission, the Secretary shall make a decision, taking into consideration the measures recommended by the Commission.

x x x

Indeed, the very administrative government agencies tasked under the same law to implement its provisions clearly understood that it is the DTI secretary who makes the final determination or decision. In making a decision, the secretary merely takes into consideration the recommendations of the Tariff Commission. On the other hand, the latter, in making its recommendations, does not determine in an adjudicative manner the rights, privileges and duties of private parties. Hence, its functions, even under RA 8800, cannot be classified as quasi-judicial.⁷⁸ ςrνll

If RA 8800 intended to transform the Tariff Commission into a quasi-judicial body, as private respondent asserts, I think no less than the Commission would have been happiest to don the new vest. But, aptly, it has shown no such presumptuousness. In its own TC Order No. 00-02, it described its task as 'fact-finding and administrative in nature.⁷⁹ In interpreting the requirement of the law, it fully understood that '[b]ased on its findings, the Commission shall submit to the [s]ecretary x x x [its] Investigation Report [and] proposed recommendations' x x x, among others.

Commission Chairman Edgardo Abon was clearly cognizant of the TC's role in the proceedings on the original application for a safeguard measure. As the solicitor general submits, during the public consultation conducted by the Commission in relation to this case, its chairman categorically stated that their (TC members') 'recommendation is but recommendatory. x x x. That's why the Tariff Commission's investigation is called fact-finding. x x x. [B]ut of course the recommendation can be persuasive because the [s]ecretary will have a strong argument, must really have a very, very strong arguments (sic) for him to overturn the recommendations. 'It has a persuasive effect, that's what [Im] saying, but at the end of the day[,] you know - the [s]ecretary has, for reason I think in the law the matter of public interest is left to the discretion of the [s]ecretary x x x.⁸⁰ ςrνll

Chairman Abon could not have been more precise. Indeed, 1) the role of the Commission is fact-finding and recommendatory; 2) its recommendation is persuasive (being based on public consultations); and 3) the secretary must have very strong and substantial reasons to overturn the Commission's proposed action.

The last item is important. The DTI secretary could not issue a decision arbitrarily, without substantial factual and legal bases. In making a final decision -- whether to impose or not to impose a safeguard measure -- the secretary is still bound by the conditions laid down in Section 5 of RA 8800. As earlier mentioned, those limitations are as follows: the importation of a product in increased quantities, whether absolute or relative to the domestic production; an actual or a threatened serious injury to the domestic industry as a result of increased importation; and the application of the safeguard measure in the public interest.

These parameters should allay petitioner's fear of a violation of due process in case of a reversal by the secretary of the negative determination by the Commission. Both may have the same factual moorings on the basis of which they may, however, have contrasting conclusions on the need for a safeguard measure.

In addition, the decision of the secretary, as I have stated at the outset and as provided under RA 8800, is reviewable by the CTA.

In contrast, under petitioner's submission (upheld by the Second Division) that the DTI secretary may impose the measure only upon a positive determination by the Tariff Commission, a violation of due process would be more probable in case of a negative determination by the latter. Following the ponencia's literal interpretation of the law, the aggrieved party (the applicant) in such a situation would be left with absolutely no recourse. A negative report will then be not reviewable by anyone -- not by the DTI secretary who is bound by it; not by the President, who has no direct role in the proceeding defined under the law; and not by the courts, which may review only the DTI secretary's decisions. Such a scheme of things constitutes an utter disregard of the guarantee of due process under the Constitution.

The ponencia even goes further by declaring that 'nothing in the SMA obliges the DTI [s]ecretary to adopt the recommendations made by the Tariff Commission.⁸¹ If the trade secretary can reject a positive final determination of the Commission, what is the rationale behind binding him to a negative determination by the same body? I cannot think of more illogic.

Giving Meaning to the Intent and Purpose of the Law

Moreover, the object and purpose of RA 8800 should be given utmost consideration and effect. The law was enacted primarily to protect or safeguard local industries and producers from increased importation of foreign products, which cause or threaten to cause serious domestic injury. RA 8800 was intended to secure our local industry from the ill effects of global trade liberalization. It was aimed at protecting Filipino interests vis--vis international trade policies.

Toward these ends, I believe this Court must give domestic industries every opportunity to seek redress through the most expeditious means possible. On matters concerning policy questions, it must allow the political departments ample chances to make the proper determinations within their respective spheres of competencies. Be it remembered that in the imposition of safeguard measures, not only the analysis of technical data is involved but likewise, and perhaps in a more crucial sense, the determination that it serves the public interest. The proceeding does not merely relate to the settlement of conflicting claims of private parties but, more important, the achievement of the national policy to promote the competitiveness of domestic industries as a whole. In short, we must give essence to the aim of the law to advance the industrial development of the country.

In line with this aim, the doctrine on the exhaustion of administrative remedies should be made to work out. After all, the administrative agencies of the government, particularly the Department of Trade and Industry with respect to safeguard measures, possess the necessary knowledge and expertise linked up with policy concerns. The Department heads, especially because they serve as alter egos of the President, should not be needlessly restricted in the exercise of their discretion. It is they who best know how to address properly the nonjudicial interests of the people. Thus, before resorting to courts, all possible administrative means should be exhausted.

While on the topic of exhaustion of administrative remedies, may I add my personal belief that the Decision of the secretary of trade should be appealable to the President.⁸² After all, the President cannot be deprived of the power to review, modify or reverse actions of his or her alter egos. In the present case, the Constitution expressly mentions the 'President as the official whom 'Congress may, by law, authorize to impose 'tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imports. Thus, in the Executive Department, the President should have the final say on such matters. However, I shall not dwell at length on this point because it was not raised as an issue by the parties.

Peripheral Issue: Forum Shopping

With respect to the question on forum shopping, I also agree with the Resolution of the Court that petitioner must answer for its failure to give timely information to the Court of the Petition for Review that the former filed with the CTA while the present case was pending here. But there being no showing of willful and deliberate forum shopping, the Petition does not deserve outright dismissal.

It should be recalled that pursuant to the June 5, 2003 Decision of the CA, the DTI secretary immediately issued on June 25, 2003, a new Decision (this time imposing a definitive safeguard measure), notwithstanding the Petition for Review filed just two days earlier by Southern Cross Cement before this Court. Hence, in view of its pending Petition here, petitioner filed with this Court on July 7, 2003, a Very Urgent Application for a Temporary Restraining Order or Writ of Preliminary Injunction, seeking to enjoin the DTI secretary from enforcing his new Decision. In addition, pursuant to Section 29 of RA 8800, petitioner filed before the CTA a Petition for Review of the June 25, 2003 DTI Decision. Petitioner did not, however, give timely information to this Court of the CTA Petition, in which the parties, causes of action, and reliefs sought were indeed the same as those in the instant Petition.⁸³ Hence, private respondent filed a Manifestation and Motion to Dismiss this Petition, on the ground of forum shopping.

Section 5, Rule 7 of the Rules of Court, provides as follows:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

Sec. 5. Certification against forum shopping.The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions.

The foregoing Rule behooved petitioner to inform this Court of any similar action pending before any court, tribunal or agency within five days from knowledge of the proceeding. Yet, petitioner did so only after 11 days, without a satisfactory and justifiable explanation.

Forum shopping has been characterized as an act of malpractice that is prohibited, and condemned as trifling with the courts and abusing their processes. It constitutes improper conduct, because it tends to degrade the administration of justice. It has also been aptly described as deplorable, because it adds to the congestion of the already heavily burdened court dockets.⁸⁴ ςrνll

Failure to comply with the non-forum shopping requirements in Section 5 of Rule 7 does not, however, automatically warrant the dismissal of the case with prejudice. The Rule states that the dismissal is without prejudice;⁸⁵ with prejudice, only upon motion and after hearing. And there must be evidence that the erring party and counsel committed willful and deliberate acts amounting to forum shopping as to warrant the summary dismissal of the case and the imposition of direct contempt and the appropriate administrative sanctions.⁸⁶ In previous cases, the penalties imposed upon erring lawyers who engaged in forum shopping ranged from severe censure to suspension from the practice of law, in order to make them realize the seriousness of the consequences and implications of their abuse of the judicial process and disrespect for judicial authority. ⁸⁷ ςrνll

Based on the foregoing tenets, I believe that petitioner's counsels should be sanctioned with severe censure.

Summary

In sum, I submit that the CTA has jurisdiction over the DTI secretary's decisions issued pursuant to RA 8800. Accordingly, the CA acted arbitrarily in giving due course to private respondent's Petition for Certiorari seeking to set aside the DTI secretary's April 5, 2002 Decision. Therefore, its June 5, 2003 Decision is void and has no legal effect.

Having ruled the CA Decision void, this Court should normally dismiss the present Petition. However, because the remaining issue before it is purely legal and imbued with public interest -- touching as it does upon the economic security of our domestic industries -- it is proper for the Court to resolve it once and for all, as an exception to the general rule. The resolution of this legal issue now would avoid unnecessary delays and costs, consistent with the Court's policy of prompt and proper administration of substantial justice.

The application of a safeguard measure, while primarily intended to protect domestic industries, is essentially in the nature of a tariff imposition. Pursuant to the Constitution, the imposition of tariffs and taxes may be exercised only by Congress. However, Section 28 of Article VI of the Constitution provides for an exception: it allows Congress to authorize the President to fix -- subject to such limitations and restrictions as it may impose -- tariff rates, quotas and other duties. To no official, other than the President, is that power allowed to be delegated.

Consistent with the foregoing principle, RA 8800 must be construed as having delegated the power to apply safeguard measures to the President, through the alter ego on trade and investment matters -- the DTI secretary.

While Congress may specify limitations in the President's authority to impose tariffs, such legislative restrictions must operate within the bounds of the Constitution. These limitations cannot impinge upon, restrict or overturn the President's constitutional power of control over the entire Executive Department.

The power of control includes the right to modify or set aside a decision of a subordinate officer. The Tariff Commission, being a mere agency in the Executive Department, is necessarily subject to the control and supervision of the President. Hence, its decisions and recommendations cannot tie the hands of the Chief Executive with finality. Consequently, the DTI head, acting as the President's alter ego pursuant to RA 8800, may affirm, modify or reverse the Tariff Commission's recommendation.

As I have said at the outset, the DTI secretary, as the prime mover of the country's trade and commercial affairs, must be given broad latitude in the pursuit of the agency's mandate. The country's topmost trade official, handpicked by the President, is presumed to possess the competence and the erudition to steer the Department towards the achievement of State goals within the DTI's sphere. As the Chief Executive's alter ego in the area of trade, the secretary must be allowed to exercise ample discretion on matters vested in the position. And so long as the Department head's decisions are not reversed or modified by the President, they should be accorded the highest respect by the courts.

The principal duty of the judiciary is to adjudicate actual controversies involving rights and obligations of persons; it has no business interfering in the realm of policy making. Basic is the rule that courts should adopt a hands-off approach with respect to non-judicial concerns of government. The only ground upon which they can review apparently policy questions is when an act of an agency or instrumentality of government, including the Presidency and Congress, is blatantly contrary to law or the Constitution or clearly tainted with grave abuse of discretion.⁸⁸ In these exceptional instances, it becomes the bounden duty of the Court to nullify the act.⁸⁹ ςrνll

Otherwise, the official acts of the Executive and the Legislative Departments are presumed to be regular and done in good faith. Unless clear and convincing proof is presented to overthrow such presumption, the Court will resolve every doubt in their favor.⁹⁰ ςrνll

Whether such acts are beneficial or viable is outside the realm of judicial inquiry and review. That matter is between the elected policy makers and the people.⁹¹ To repeat, the Court's judicial role comes into play only when those acts are clearly unlawful or unconstitutional or performed with grave abuse of discretion. In nullifying them, the Court does so merely to uphold the rule of law. For indeed there can be no meaningful economic and social progress without an effective rule of law in place.⁹² ςrνll

This Court should maintain its deferential stance respecting acts emanating from government agencies, especially those involving the economy. Far from being an unwanted interloper in economic matters not within its field of expertise, the Court, in recent Decisions nullifying government contracts,⁹³ steadfastly upholds one of the most revered policy axioms in the business community -- the 'leveling of the playing field.⁹⁴ To paraphrase what the Court said in a recent case,⁹⁵ the 'Constitution and the law should be read in broad, life-giving strokes. They should not be used to strangulate economic growth or to serve narrow, parochial interests. Rather, they should be construed to grant the President and his or her alter egos sufficient discretion and reasonable leeway to enable them to secure for our people and our posterity the blessings of prosperity and peace.

WHEREFORE, I vote to GRANT the Motion in part and to REVERSE the assailed Decision, insofar as it held that the secretary of the Department of Trade and Industry (DTI) was bound by the recommendations of the Tariff Commission. More emphatically, I vote to UPHOLD the authority of the secretary to impose safeguard measures, even if the Tariff Commission does not recommend their imposition. I also vote that, for violation of the anti-forum shopping rule, petitioner's counsels should be sanctioned with SEVERE CENSURE.

Endnotes:

---

¹ Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386, 393, June 30, 1988, per Sarmiento, J.

² 434 SCRA 65, July 8, 2004.

³ Now the Cement Manufacturers Association of the Philippines.

⁴ In brief, the antecedents of the Second Division's Decision are as follows:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

1. May 22, 2001 - Private respondent Philcemcor filed before the DTI an application for the imposition of a safeguard measure on the importation of gray Portland cement.

2. Nov. 7, 2001 - DTI issued an Order imposing a provisional measure equivalent to P20.60 per 40-kg bag of imported gray Portland cement, effective for 200 days from issuance by the Bureau of Customs (BOC) of the implementing Customs Memorandum Order.

3. Dec. 10, 2001 - BOC issued the pertinent Customs Memorandum Order.

4. Mar. 13, 2002 - The Tariff Commission came out with its Formal Investigation Report, in which it concluded that '[t]he elements of serious injury and imminent threat of serious injury not having been established, it is hereby recommended that no definitive general safeguard measure be imposed on the importation of gray Portland cement.

5. Apr. 5, 2002 - After noting that it was in disagreement with the TC's recommendation, the DTI issued its Decision denying the application for a safeguard measure, in accordance with that recommendation.

6. Apr. 22, 2002 - Philcemcor filed before the CA a Petition for Certiorari, Prohibition and Mandamus, praying that the DTI Decision and TC Report be set aside; and that the DTI secretary be directed to render an independent judgment.

7. June 5, 2003 - The CA promulgated its Decision holding that (a) it had jurisdiction over the Petition for Certiorari, allegedly because of grave abuse of discretion; and (b) the DTI secretary was not bound by the factual findings of the TC, which were merely recommendatory. The CA remanded the case to the DTI secretary for the latter to render a final decision in accordance with RA 8800 and the Implementing Rules.

8. June 23, 2003 - Southern Cross filed the present Petition, grounded on the following: (1) the CA had no jurisdiction, the proper remedy being a Petition for Review with the CTA; and (2) the TC's factual findings are binding upon the DTI secretary.

9. June 25, 2003 - the DTI secretary issued a new Decision, prescinding from the CA Decision that it was not bound by the TC recommendation imposing a safeguard duty of P20.60 per 40-kg bag of imported gray Portland cement for 3 years.

10. July 7, 2003 - Southern Cross filed with the SC a Very Urgent Application for a TRO or Writ of Preliminary Injunction, seeking to enjoin the DTI secretary from enforcing the Department's June 25, 2003 Decision, in view of the pending Petition before this Court.

11. Aug. 1, 2003 - Southern Cross filed with CTA a Petition for Review of the June 25, 2003 DTI Decision.

12. Subsequently, Philcemcor filed before this Court a Manifestation and Motion to Dismiss this Petition, on the ground of forum shopping.

⁵ 'SEC. 29. Judicial Review. -- Any interested party who is adversely affected by the ruling of the Secretary in connection with the imposition of a safeguard measure may file with the Court of Tax Appeals, a Petition for Review of such ruling within thirty (30) days from receipt thereof: Provided, however, That the filing of such Petition for Review shall not in any way stop, suspend or otherwise toll the imposition or collection of the appropriate tariff duties or the adoption of other appropriate safeguard measures, as the case may be.

'The Petition for Review shall comply with the same requirements and shall follow the same rules of procedure and shall be subject to the same disposition as in appeals in connection with adverse rulings on tax matters to the Court of Appeals.

⁶ Emphasis in the original.

⁷ 'SEC. 5. Conditions for the Application of General Safeguard Measures. 'The Secretary shall apply a general safeguard measure upon a positive final determination of the Commission that a product is being imported into the country in increased quantities, whether absolute or relative to the domestic production, as to be a substantial cause of serious injury or threat thereof to the domestic industry; however, in the case of non-agricultural products, the Secretary shall first establish that the application of such safeguard measures will be in the public interest.

⁸ Citing Arevalo v. Benedicto, 58 SCRA 186, July 31, 1974, the solicitor general claims as follows:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

'x x x. For the want of jurisdiction by a court over the subject matter renders the judgment void and a mere nullity. Considering that a void judgment is in legal effect no judgment, by which no rights are divested, from which no rights can be obtained, which neither binds nor bars anyone, and under which all acts performed and all claims flowing out of are void, and considering, further, that the decision, for want of jurisdiction of the court, is not a decision in contemplation of law, and hence, can never become executory, it follows that such a void judgment cannot constitute a bar to another case by reason of res judicata. Not being barred by res judicata, there can be no end to litigation and thus, the administration of justice will severely be prejudiced. OSG's Motion for Reconsideration, p. 9.

⁹ An Act Expanding the Jurisdiction of the CTA.

¹⁰ Philcemcor's Memorandum, p. 50.

¹¹ 'SEC. 7. Jurisdiction. 'The CTA shall exercise:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

(a) Exclusive appellate jurisdiction to review by appeal, as herein provided:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

x x x

'(7) Decisions of the Secretary of Trade and Industry, in the case of nonagricultural product, commodity or article, and the Secretary of Agriculture in the case of agricultural product, commodity or article, involving dumping and counter vailing duties under Sections 301 and 302, respectively, of the Tariff and Customs Code, and safeguard measures under Republic Act No. 8800, where either party may appeal the decision to impose or not to impose said duties.

¹² The following reasons are mentioned. First, both instances involve a tax aspect or the propriety of enforcing a safeguard measure. Second, in either case, a private party will be aggrieved. Third, the same issues -- the factual basis of and/or the methodology used in the determination -- will be raised in either case. Fourth, the CTA has specialized expertise in tax and customs laws. Fifth, the parties' right to equal protection of the law would in effect be violated by the difference between the proceedings before the CTA, which are in the nature of trial de novo; and those in the CA, which are not. Lastly, there is no sound and cogent reason to split the jurisdiction over appeals from the DTI secretary's decision and, indeed, the legislature did not intend any distinction. Philcemcor's Memorandum, pp. 48-51.

¹³ See footnote 5.

¹⁴ Villegas v. Fernando, 27 SCRA 1119, April 28, 1969; Go v. Court of Appeals, 358 Phil. 214, October 8, 1998; Indiana Aerospace University v. Commission on Higher Education, 356 SCRA 767, April 4, 2001.

¹⁵ Augusto v. Risos, 417 SCRA 408, December 10, 2003.

¹⁶ Cuison v. Court of Appeals, 351 Phil. 1089, April 15, 1998; Del Mar v. Court of Appeals, 429 Phil. 19, March 13, 2002.

¹⁷ Under '15 of RA 8800, '[t]he duration of the period of an action taken under the General Safeguard Provisions of [the] Act shall not exceed four (4) years, including the period in which a provisional safeguard relief under Section 8 was in effect. In the present case, the provisional safeguard measure took effect on December 10, 2001.

¹⁸ Commissioner of Internal Revenue v. Court of Appeals, 338 Phil. 322, April 18, 1997 (citing Philippine Refining Company v. Court of Appeals, 256 SCRA 667, May 8, 1996; Commissioner of Internal Revenue v. Wander Philippines, Inc., 160 SCRA 573, April 15, 1988); Commissioner of Internal Revenue v. General Foods (Phils.), Inc., 401 SCRA 545, April 24, 2003.

¹⁹ See 8 & 13, RA 8800.

²⁰ '12, ibid.

²¹ Cosico Jr. v. NLRC, 338 Phil. 1080, May 23, 1997.

²² Ibid. (citing Commissioner of Internal Revenue v. TMX Sales, Inc., 205 SCRA 184, 187, January 15, 1992).

²³ Philippine-Singapore Ports Corp. v. NLRC, 218 SCRA 77, January 29, 1993; Velasco v. Ople, 191 SCRA 636, November 26, 1990; Solid Homes, Inc. v. Payawal, 177 SCRA 72, August 29, 1989; Republic of the Philippines v. Sangalang, 159 SCRA 515, April 8, 1988; Goodrich Employees Association v. Flores, 73 SCRA 297, October 5, 1976.

²⁴ Soliweg v. Workmen's Compensation Commission, 88 SCRA 569, February 27, 1979.

²⁵ Ibid.

²⁶ AFP Mutual Benefit Association, Inc. v. NLRC, 267 SCRA 47, January 28, 1997.

²⁷ Velarde v. Social Justice System, 428 SCRA 283, April 28, 2004.

²⁸ Del Mar v. Philippine Amusement and Gaming Corporation, 346 SCRA 485, November 29, 2000 (citing Fortich v. Corona, 289 SCRA 624, April 24, 1998; Tano v. Socrates, 278 SCRA 154, August 21, 1997; Ramos v. CA, 269 SCRA 34, March 3, 1997).

²⁹ 372 SCRA 548, December 18, 2001.

³⁰ Id., p. 565, per Kapunan, J.

³¹ 307 SCRA 394, May 19, 1999, per Panganiban, J.

³² '4, Art. II of the Constitution.

³³ '19, ibid.

³⁴ '1, par. 2, Art. XII, ibid.

³⁵ OSG's Motion for Reconsideration, p. 27. Emphasis in the original.

³⁶ Id., p. 46. Original in boldface and underlined.

³⁷ See '505, Tariff and Customs Code.

³⁸ OSG's Motion for Reconsideration, p. 36 (citing Sharp International Marketing v. Court of Appeals, 201 SCRA 299, September 4, 1991). See also Philcemcor's Memorandum, p. 4.

³⁹ Then Chairman Edgardo Abon.

⁴⁰ OSG's Memorandum, p. 50.

⁴¹ 'SEC. 2. Declaration of Policy. 'The State shall promote the competitiveness of domestic industries and producers based on sound industrial and agricultural development policies, and efficient use of human, natural and technical resources. In pursuit of this goal and in the public interest, the State shall provide safeguard measures to protect domestic industries and producers from increased imports which cause or threaten to cause serious injury to those domestic industries and producers.

⁴² Other reasons proffered by the OSG are the following. First, the Decision emasculates the principle behind safeguard measures; it violates the Constitution, specifically, Section 12 of Article XII, which exhorts the State to favor local labor, industries and products over foreign ones. RA 8800 gives local industries and the agricultural sector a temporary breathing space to adjust to imports; yet, the Decision 'effectively creates higher, more stringent standards for the availment of safeguard measures' x x x. This argument has also been raised by Philcemcor. (See its Motion for Reconsideration, pp. 41-44; and Memorandum, pp. 35-36.) Second, Section 13 of RA 8800 is the controlling provision with respect to 'negative final determinations. Nowhere in this provision is it stated that the Tariff Commission would render such determinations; on the contrary, the provision mentions the DTI secretary only; hence, it is to the secretary that the law grants the power to render a final decision. Third, Section 19 of the law empowers the DTI head to extend the effectivity of a safeguard measure; this power is merely incidental to the general power of making the final decision on whether to impose definitive safeguard measures. It would be illogical if the Department secretary were authorized to exercise only incidental functions, while another body possesses the general power over the same matter.

⁴³ Philcemcor's (or CMAP's) Motion for Reconsideration, p. 11; rollo, Vol. IV, p. 2398.

⁴⁴ 5, 6, 7, 8, 13 & 17.

⁴⁵ Joint Administrative Order No. 3, Series of 2000, issued by the secretaries of Agriculture, Trade and Industry, and Finance; the Bureau of Customs commissioner and the Tariff Commission chair.

⁴⁶ E.g. TC Order No. 00-02.

⁴⁷ Philcemcor's Motion for Reconsideration, p. 17; rollo, Vol. IV, p. 2404.

⁴⁸ Id., p. 16.

⁴⁹ 1 & 2, Title X, Book IV of the Administrative Code; Article XII, Constitution.

⁵⁰ Philcemcor's Motion for Reconsideration, supra, pp. 34-35 (citing an official statement of the DTI secretary issued on April 1, 2002); rollo, pp. 2421-2422.

⁵¹ Other arguments of Philcemcor include the following. First, Congress delegated to the DTI secretary the authority to prescribe safeguard measures, while assigning to the Commission the task of providing the necessary support for that function; but the ultimate responsibility for the proper exercise of the delegated authority is lodged in the DTI head. (Motion for Reconsideration, p. 24; rollo, Vol. IV, p. 2411; and Memorandum, p. 14;) Second, under the doctrine of implied grant of powers, 'all powers necessary for the discharge of the express powers are also granted, unless expressly withheld. (Memorandum, p. 7.) The power of the DTI secretary to impose safeguard measures is not legally conditioned on a positive recommendation by the Commission; referral to the latter of the application and the holding of public hearings are only part of the due process guarantee. Third, the imposition of safeguard measures is primarily an exercise of the police power, not the taxing power, of the State. The law's singular objective is to protect local industries; thus, prior to the imposition of the measure by the DTI, the Tariff Commission is tasked to ascertain the existence of injury or serious threat to the local industry.

⁵² Petitioner quotes the following from private respondent Philcemcor's Memorandum:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

The basic obligations of WTO Members under the Agreement on Safeguards are the OBSERVANCE OF DUE PROCESS in the adoption and application of any safeguard measure, AND THE NEC ESSI TY OF A PRI NCI PLED FINDING ON THE PRESENCE OF THREE CORE ELEMENTS OF A SAFEGUARD SITUATION. These core elements are the following: (a) that products from one Member (the exporting country) of the WTO are being imported into the territory of another Member of the WTO (the importing country) in such increased quantities, absolute or relative to domestic production, and (b) under such conditions as to cause or threaten to cause serious injury to the domestic industry that produces like or directly competitive products; and (c) the causal link between increased imports and serious injury or threat thereof (Art. 2, para. 1, and Art. 4, para. 2(b), Agreement on Safeguards. x x x.). (Emphasis supplied by petitioner.) Petitioner's Memorandum, p. 9.

⁵³ Petitioner's Memorandum, p. 16.

⁵⁴ Id., p. 39. Underscoring in the original.

⁵⁵ Petitioner submits these other contentions:ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

1) To allow the DTI secretary to reject the positive final determination of the Commission would result in an anomalous situation when it is the former who initiates the proceeding pursuant to Section 6 of RA 8800. In that event, the secretary will become the complainant and reviewing body at the same time, a situation declared abhorrent by the Supreme Court. (Petitioner's Memorandum, p. 16 [citing Corona v. Court of Appeals, 214 SCRA 378, September 30, 1992]).

2) A modification or reversal by the DTI head of the Commission's final determination will be a deprivation of the due process rights of the concerned parties, who will not have the opportunity to be heard prior to the DTI's action.

3) Making a distinction as to whether the imposition of a safeguard measure is an exercise of police power or the power of taxation only serves to muddle the issues, 'for it has been settled that the taxing power may be used as an implement of police power. (Id., p. 22 [citing Lutz v. Araneta, 98 Phil. 148, December 22, 1955]. Emphasis in the original). In any event, 'police power is lodged primarily in Congress, not the Executive, and x x x it is only by virtue of a valid delegation by Congress that it may be exercised by the President

x x x. (Id., p. 28 [citing Cruz, Isagani A, Constitutional Law, 1995, p. 44]).

⁵⁶ City Government of San Pablo, Laguna v. Reyes, 305 SCRA 353, March 25, 1999; Mactan Cebu International Airport Authority v. Marcos, 261 SCRA 667, September 11, 1996.

⁵⁷ Bernas, Joaquin G., SJ, The Constitution of the Republic of the Philippines, A Commentary (1988), Vol. II, p. 205. (Since the Constitution has given the President the power of control, with all its awesome implications, it is the Constitution alone which can curtail such power. ')

⁵⁸ Cruz, Isagani A, Political Law (1998), pp. 185-186.

⁵⁹ 67 Phil. 451, 463, 464, April 21, 1939, per Laurel, J.

⁶⁰ Title X, Chapter 1, Book IV of EO 292.

⁶¹ '2, RA 8800.

⁶² '505(a) & (h), Tariff and Customs Code. Emphasis supplied.

⁶³ '505(e), (f) & (g); ibid.

⁶⁴ For instance, under Section 506 of the Tariff and Customs Code, the Commission is tasked to give information and assistance to the President and Congress; under Section 401, to recommend to the NEDA a tariff rate increase.

⁶⁵ 7 & 9, RA 8800.

⁶⁶ 9 & 14, ibid.

⁶⁷ OSG's Motion for Reconsideration, p. 46.

⁶⁸ '17, Art. VII of the Constitution.

⁶⁹ Cruz, supra (citing Mondano v. Silvosa, 97 Phil. 143, May 30, 1955, per Padilla, J.).

⁷⁰ Bernas, supra, p. 204.

⁷¹ City of Ozamiz v. Lumapas, 65 SCRA 33, July 15, 1975. For instance, under '5, Art. X of the Constitution, on local governments are directly conferred the power of taxation within their respective area jurisdictions.

⁷² People v. Pinca, 318 SCRA 270, November 17, 1999 (citing Sotto v. Comelec, 76 Phil 516, 522, April 16, 1946); Pimentel Jr. v. House of Representatives Electoral Tribunal, 393 SCRA 227, November 29, 2002.

⁷³ '4(o) of RA 8800 defines serious injury as 'a significant impairment in the position of a domestic industry after evaluation by competent authorities of all relevant factors of an objective and quantifiable nature having a bearing on the situation of the industry concerned, in particular, the rate and amount of the increase of imports of the product concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in levels of sales, production, productivity, capacity utilization, profit and losses, and employment.

⁷⁴ Procedure-wise, the requirements are stated in 6, 7, 9 & 10. For other limitations, see '15.

⁷⁵ F.B. Moreno, Philippine Legal Dictionary, 3^rd ed. (citing Banco Filipino v. Monetary Board, 142 SCRA 533, July 8, 1986).

⁷⁶ Republic v. Sandiganbayan, 355 Phil. 181, July 31, 1998.

⁷⁷ See '32, RA 8800.

⁷⁸ See Cario v. Commission on Human Rights, 204 SCRA 483, December 2, 1991; Presidential Anti-Dollar Salting Task Force v. Court of Appeals, 171 SCRA 348, March 16, 1989.

⁷⁹ '2.

⁸⁰ The OSG's Memorandum, pp. 28-29. See also Philcemcor's Memorandum, pp. 21-22.

⁸¹ Resolution, p. 32.

⁸² See Valencia v. Court of Appeals, 401 SCRA 666, April 29, 2003.

⁸³ 'x x x [T]o determine whether a party violated the rule against forum shopping, the most important factor to ask is whether the elements of litis pendentia are present, or whether a final judgment in one case will amount to res judicata in another. Otherwise stated, the test for determining forum shopping is whether in the two (or more) cases pending, there is identity of parties, rights or causes of action, and reliefs sought. Young v. Keng Seng, 398 SCRA 629, March 5, 2003. See also First Philippine International Bank v. Court of Appeals, 252 SCRA 259, January 24, 1996.

⁸⁴ Chemphil Export & Import Corp. v. Court of Appeals, 251 SCRA 257, 291-292, December 12, 995; Ong v. Court of Appeals, 384 SCRA 139, July 5, 2002.

⁸⁵ Barroso v. Ampig Jr., 328 SCRA 530, March 17, 2000; Sto. Domingo-David v. Guerrero, 296 SCRA 277, September 25, 1998.

⁸⁶ Barroso v. Ampig Jr., supra.

⁸⁷ Top Rate Construction & General Services, Inc. v. Paxton Development Corporation, 410 SCRA 604, September 11, 2003 (citing Benguet Electric Cooperative, Inc. v. National Electrification Administration, 193 SCRA 250, January 23, 1991; Villanueva v. Adre, 172 SCRA 876, April 27, 1989; Vda. de Tolentino v. De Guzman, 172 SCRA 555, April 19, 1989.

⁸⁸ There is grave abuse of discretion when an act is done contrary to the Constitution, the law or jurisprudence; or when it is executed whimsically, capriciously or arbitrarily out of malice, ill will or personal bias. Information Technology Foundation of the Philippines v. Commission on Elections, 419 SCRA 141, January 13, 2004 (citing Republic v. Cocofed, 372 SCRA 462, 493, December 14, 2001; and Taada v. Angara, 272 SCRA 18, 79, May 2, 1997.

⁸⁹ See Tatad v. Secretary of Energy, 346 Phil 321, November 5, 1997; Chavez v. Public Estates Authority, 433 Phil. 506, July 9, 2002; Agan v. Philippine International Air Terminals Co., Inc., 402 SCRA 84, May 5, 2003, and 420 SCRA 575, January 21, 2004; Francisco Jr. v. House of Representatives, 415 SCRA 45, November 10, 2003; Information Technology Foundation of the Philippines v. Commission on Elections, supra.

⁹⁰ Taada v. Angara, 338 Phil. 546, 604-605, May 2, 1997.

⁹¹ Ibid.

⁹² See Panganiban, Liberty and Prosperity, a speech delivered before the 10^th National Convention of the Integrated Bar of the Philippines in Baguio City on April 20, 2005.

⁹³ Chavez v. Public Estates Authority, supra; Agan v. Philippine International Air Terminals Co., Inc., supra; Information Technology Foundation of the Philippines v. Commission on Elections, supra.

⁹⁴ See Panganiban, Leveling the Playing Field, 2004 ed., pp. 46-59.

⁹⁵ La Bugal Blaan v. Ramos, GR No. 127882, December 1, 2004, per Panganiban, J.

Back to Home | Back to Main